Stock Code:1503

2025

Annual Report

Shihlin Electric

Published Date:May 8, 2026

Post System:http://mops.twse.com.tw

Company Website:http://www.seec.com.tw

Spokesperson

Name/ Lee, Ying-Chu

Title / Senior Vice President

Tel / (02)2834-2662

E-mail : [email protected]

Acting Spokesperson

Name / Kuo, Yueh-She	Name / Cheng, Hsiang-Chih	Name / Chu, Wen-Ping
Title / President	Title / President	Title / Senior Vice President
Tel / (02)2834-2662	Tel / (02)2834-2662	Tel / (02)2834-2662
E-mail: [email protected]	E-mail: [email protected]	E-mail: [email protected]

Share Transfer Agent and Registrar

CTBC Bank Co., Ltd. / Transfer Agent

Address : 5F., No. 83, Sec. 1, Chongqing S. Rd., Taipei City, Taiwan

Tel: (02) 6636-5566

Website: https://www.ctbcbank.com

Auditors

Deloitte & Touche (Taiwan)

Auditors / Huang, Yao-Lin · Chuang, Yeh-Wei

Address / 20F, NO.100 Songren Road, Xinyi District, Taipei City, Taiwan (R.O.C)

Tel / (02) 2725-9988

Website / https://www.deloitte.com.tw

Corporate Website

http://www.seec.com.tw

Overseas Securities Exchange Corporation Listing: N/A

Headquarter

Address /16F., No.88, Sec.6, Zhongshan N. Rd., Taipei City, Taiwan (R.O.C)

Tel / (02) 2834-2662 Fax/ (02) 2836-6187

Xin Feng Factory

Address /No.234, Zhonglun Village, Xinfeng Township, Hsinchu County, Taiwan (R.O.C)

Tel / (03) 599-5111 Fax/ (03) 599-5259

Heavy Electric Factory

Address / No.23, Zhonghua Road, Hukou Township, Hsinchu County, Taiwan (R.O.C)

Tel / (03) 598-1921 Fax/ (03) 598-1480

Automobile Equipment Factory

Address / No. 17, Zhonghua Road, Fengshan Village, Hukou Township, Hsinchu County, Taiwan (R.O.C)

Tel / (03) 598-6951 Fax/ (03) 598-6950

Taiwan Branch Office

Taipei Branch Office

Address / 3F, No.9, Changan E. Rd., Zhongshan Dist.,

Taipei City, Taiwan (R.O.C)

Tel / (02) 2541-9822

Fax/ (03) 2581-2665

Hsinchu Branch Office

Address / No.23, Zhonghua Rd., Hukou Township,

Hsinchu County, Taiwan (R.O.C)

Tel / (03) 598-1210

Fax/ (03) 598-5200

Taichung Branch Office

Address /No.1338, Sec. 4, Taiwan Blvd., Xitun Dist.,

Taichung City, Taiwan (R.O.C)

Tel / (04) 2461-0466

Fax/ (04) 2461-0468

Tainan Branch Office

Address / No.198, Sec. 1, Zhonghua E. Rd., Tainan City,

Taiwan (R.O.C)

Tel / (06) 237-1246

Fax/ (06) 237-1279

Kaohsiung Branch Office

Address / No.250, Zhonghua 2nd Rd., Sanmin Dist.,

Kaohsiung City, Taiwan (R.O.C)

Tel / (07) 316-0228

Fax/ (07) 316-0226

Contents

I. Letter to Shareholders

Business Report ... 1
Summary of Business Operation Plans for Current Fiscal Year ... 3

II. Corporate Governance Report

Information on the Company Directors, President/General Manager, Senior Vice President/Vice General Manager, Assistant General Manager and Heads of All Company Divisions and Branch Units ... 6
Operation of Corporate Governance ... 27
Information on CPA Professional Fees ... 82
CPA Replacement Information in the Recent Two Years ... 83
Information Regarding the Chairman, President/General Manager, and Financial or Accounting Manager of the Company Who Has Worked with the CPA firm Which Conducts the Audit of the Company or An Affiliate of Said Firm in the Recent Year ... 84
Shareholding Information for the Most Recent Year and Up to the Date of the Annual Report Publication ... 84
Information on the Top Ten Shareholders by Shareholding Ratio, Indicating Whether They are Related Parties or Have Spousal or Second-Degree Kinship Relationships ... 86
The Number of Shares Held by the Company, its Directors, Managers, and the Enterprises Directly or Indirectly Controlled by the Company in the Same Reinvested Business Shall be Calculated Together to Determine the Combined Shareholding Ratio ... 87

III. Capital Overview

Capital and Shares ... 89
Issuance of Corporate Bonds ... 92
Issuance of Preferred Stock ... 92
Issuance of Global Depository Receipts ... 92
Issuance of Employee Stock Option Certificates and New Shares with Restricted Employee Rights ... 92
Issuance of New Shares in Connection with Mergers or Acquisitions or with Acquisitions of Shares of Other Companies ... 92
Implementation Status of the Capital Utilization Plan ... 92

Shihlin Electric

IV. Operation Overview

Business Activities ... 93
Sales and Marketing Overview ... 104
Employee Information for the Most Recent Two Years and Up to the Date of the Annual Report Publication ... 112
Environmental Protection Expenditure ... 112
Labor Relations ... 114
Information Security Management ... 118
Important Contracts ... 122

V. Review and Analysis of Financial Status and Performance and Risk Management

Analysis of Financial Status ... 123
Financial Performance ... 124
Cash Flow ... 125
The Effect upon Financial Operations of Any Major Capital Expenditures in the Most Recent Years ... 125
Reinvestment Policy in the Most Recent Years, the Main Reasons for the Profits/Losses Generated Thereby, the Plan for Improving Reinvestment Profitability, and Investment Plans for the Coming Year ... 126
Risk Management and Assessment ... 127
Other Important Matters ... 128

VI. Special Disclosure

Affiliated Companies ... 129
Status of Private Placement of Securities for the Most Recent Year and Up to the Date of the Annual Report Publication ... 129
Any Matters of Material Significance That Could Have Affected Shareholder Equity or Securities Price Last Year and Up to the Date of Publication of the Annual Report, Pursuant to the Regulation of Article 36-3-2 of Securities Laws ... 129
Evaluation Basis and Foundation for the Allowance Practice of Balance Sheet Valuation Account ... 129
Key Performance Indicators of Industry Differentiation ... 130
Other Matters That Require Additional Description ... 130

Letter to Shareholders

I. Letter to Shareholders

Ladies and Gentlemen, Dear Shareholders:

Amid easing global inflation and strong demand for artificial intelligence (AI), the global economy achieved a growth rate of 3.3%. With the concerted efforts of the management team and all employees, the Company delivered outstanding results in the year 2025, recording consolidated revenue of NT$37.178 billion, representing a growth of 6.01%, and consolidated pre-tax profit of NT$4.27 billion, an increase of 6.67%. We sincerely thank all directors and shareholders for their continued support.

Looking ahead, in response to the global trend toward net-zero carbon emissions and the government's energy policies, the Company is actively expanding its business by developing products related to green energy, energy conservation, digitalization, and intelligence, to seize opportunities in the emerging energy market. We aim to secure projects such as Taipower's grid resilience enhancement program, turnkey infrastructure projects in transportation and public sectors, and power infrastructure opportunities under U.S. infrastructure initiatives, striving for stable growth. On the production front, we are promoting intelligent manufacturing and quality inspection systems to strengthen our core technological capabilities. Organizationally, we are recruiting talent in green energy, digitalization, engineering, and international sales to build a more efficient structure that supports future growth. In corporate governance, we are committed to implementing ESG sustainability initiatives, enforcing ethical and legal compliance, strengthening risk management, and fulfilling corporate social responsibility to ensure sustainable business operations and maximize shareholder value. We earnestly look forward to the continued guidance and support of our shareholders.

1. Business Report

(1) Implementation Results of Previous Year's Business Plan:

In response to the net-zero carbon emission goals and government energy policies, the Company is dedicated to developing new products and exploring new markets to drive revenue growth. The business performance of each operating division is summarized as follows:

A. Power Distribution Department

Driven by strong demand in both domestic and international power distribution markets, the Company delivered outstanding revenue performance this year. In the domestic power market, beyond the replacement and upgrading of aging equipment, the Company continued to expand its system engineering business and actively participated in solar power and energy storage system projects in alignment with the government's green energy policies, leading to a steady increase in market share. Additionally, the Company aggressively expanded into overseas markets, including North America and Southeast Asia. In the power distribution market, during a period of adjustment in the housing construction sector, the Company actively leveraged demand arising from existing building renovations, public works projects, and industrial investment expansions, while simultaneously concentrating on market opportunities generated by new energy policies. Government initiatives advocating for green electricity and energy transition have stimulated sustained growth in demand for electromechanical products related to solar energy and energy storage. The Company's products have been effectively integrated into solar power projects and extended to applications in energy storage equipment, thereby promoting stable sales of associated switchgear products and enhancing overall operational momentum and market competitiveness. On the international front, the Company has been actively expanding into markets such as North America, Southeast Asia, Saudi Arabia, resulting in strong export sales. Furthermore, the Company continues to invest in the R&D of green energy, intelligent, and miniaturized products while promoting international product certifications. These efforts ensure that the Company remains highly competitive in the face of market challenges.

Shihlin Electric

B. Automobile Parts Department:

In year 2025, the domestic automobile market declined by 9%. The Company's main clients for automotive electronic components are domestic car manufacturers. In addition to maintaining a stable presence in existing markets, the Company is actively launching products related to electric vehicle (EV) powertrains and charging stations. The domestic motorcycle market saw 6% decline, nevertheless, the Company continues to invest in R&D to capture future opportunities. In terms of components, the Company is developing energy-saving integrated starter generator (ISG) products and adopting a cross-strait division of labor to enhance product competitiveness. It is also aggressively expanding into export markets in Europe and the United States, while steadily building its presence in mainland China and Vietnam, with the goal of becoming a key supplier to major international automakers.

C. Automation Equipment and Components Departments and Others

Benefiting from the recovery of domestic industries such as semiconductors and machine tools, and the Company's long-term commitment to developing new products—such as servo motors and inverters—significant results continued to be achieved. In other divisions, revenue was primarily derived from the sales and leasing of digital products.

Overall, thanks to the management team's flexible and responsive strategic approach, the Company maintained stable profitability amid the rapidly changing global economic landscape, both in terms of core business revenue and pre-tax profit. For the year 2025, the Company achieved consolidated pre-tax profit of NT$4.27 billion.

(2) Budget Implementation:

Not applicable since the Company does not disclose the consolidated financial forecast.

(3) Analysis to Consolidated Financial Balance and Profitability

Unit: NT$ Millions
except additionally specified

Years		2025	2024
Analytical Items
Financial Balance	Net Operating Revenue	37,178	35,071
	Gross Profit	7,768	6,813
	Profit after Tax	3,378	3,144
Profitability	ROA (%)	5.70	5.63
	ROE (%)	8.95	8.79
	Profit Before Tax to paid-in Capital (%)	81.96	76.84
	Profit Margin (%)	9.09	8.96
	EPS (NT$)	6.27	5.81

(4) Consolidated Progress of R&D of the Company:

Details of R&D Expenses for the Most Recent Two Years

Unit: NT$ Millions

Items	2025	2024
R&D Expense	629	671
Revenue	37,178	35,071
Share (%)	1.69	1.91

Letter to Shareholders

2. Summary of Business Operation Plans for Current Fiscal Year

(1) Guidelines for Business Operation

In response to the international trend of "Net Zero Carbon Emissions", actively seizing energy transition opportunities:
(1) Promote "Green Power" branded products
(2) Capture market opportunities in green energy, energy storage, and energy-saving
Fully strive for turnkey projects in green energy, transportation and public works, and Taipower's resilience plans:
(1) Turnkey projects for wind, solar, and storage engineering
(2) Small turnkey projects for behind-the-meter battery energy storage systems (BESS)
(3) Turnkey projects related to transportation, public works, and Taipower
Focus on strategic products with core advantages, expanding domestic and international markets:
(1) Deepen the expansion of strategic products with a selective and focused strategy
(2) Strengthen resource investment in core strategic products
(3) Actively expand export markets (e.g., North America, Europe, the Middle East, Southeast Asia)
(4) Consolidate partnerships with Japanese partners and integrate with domestic strategic partners to enhance competitive advantages
Promote digital transformation:
(1) Develop digital and intelligent products
(2) Implement intelligent manufacturing systems (e.g., AIOT, MES, e-Factory)
Comprehensive optimization of organization and talent:
(1) Build a more efficient organization in response to future growth
(2) Recruit talent in green energy, digitalization, engineering, and export-related fields
Committed to sustainable operations (ESG):
(1) Implement sustainable ESG plans
(2) Uphold ethical compliance
(3) Strengthen risk management

Shihlin Electric

(2) Expected Sales Volume and Basis

Unit: Million sets

Year Products	2026 (Note 1)	2025 (Note 2)	Descriptions
Electric Distribution Products	11.97	11.40	In 2026, the global economic landscape remains overshadowed by uncertainties such as inflation, trade wars, and geopolitical conflicts. Unresolved supply chain issues and rising raw material prices may further impact global economic performance.
Automobile Parts	18.23	17.36
Automation Equipment and Parts	0.93	0.88	Domestically, the growing momentum around AI, along with inventory adjustments in the semiconductor and electronics industries, is expected to lead to a recovery from the bottom. In addition, the government continues to promote initiatives related to grid resilience, green energy, and infrastructure projects such as rail and transportation, which are expected to strengthen the overall economic outlook.
Others	0.05	0.05
Total	31.18	29.69

Note 1: It is the estimated value. Note 2: It is the actual value.

(3) Major Production and Marketing Policies:

A. Sales Aspects:

(a) Accelerate the development of private branded brands to meet market demand.
(b) Establish long-term relations with customers and expand the scale and scope of cooperation.
(c) Integrate domestic and overseas resources to consolidate the domestics market and expand the overseas market.
(d) Enhance the operation department with comprehensive and professional knowledge and commit to integrated marketing.
(e) Strengthen investment in the green energy market to seize opportunities.
(f) Actively participate in resilient power grid and rail engineering construction in line with government policies.
(g) Expand in a diversity of export markets to grasp the growing opportunities and diversify risks.

B. Production Aspects:

(a) Continue to green, smart, high-efficiency, and safe electric products.
(b) Upgrade R&D capacity and increase the complexity and the coverage of product lines.
(c) Improve production efficiency and strengthen the competitiveness in product costs.
(d) Optimize manufacturing technology, invest in smart production and quality control, and upgrade efficiency and quality standards.
(e) Complete international certification and achieve international-grade product standards.
(f) Optimize investment in productivity and equipment to cope with expanded demand in sales.
(g) Establish a diversity of supplier sources, lower costs and diversify risks.

Letter to Shareholders

Steady management, proactive innovation, and the relentless pursuit of excellence and growth are our core beliefs! The Company strives not only for stable annual growth in revenue and profit but also invests diligently in product innovation and talent development. In addition to focusing on research and development and workforce performance, the Company place a high value on sustainable development and corporate social responsibility, ensuring the continuous pursuit of excellence and maintaining competitiveness.

Employees are our most valuable assets! Customers are the driving force behind our progress! Shareholders are our strongest support! The Company sincerely thank all our colleagues for their long-term efforts and contributions, as well as all stakeholders, especially our shareholders, for their recognition and support. In the future, the Company will continue to push ourselves to grow and thrive on a solid foundation, striving to increase the Company’s revenue and profits while committing to corporate social responsibility. The Company will actively give back to society, making the Company a leading benchmark enterprise in the industry. Finally, we extend our best wishes to all our shareholders.

Health, Peace, and Prosperity.

Chairman: Hsu, Yu-Jui

II. Corporate Governance Report

Information on the Company Directors, President/General Manager, Senior Vice President/Vice General Manager, Assistant General Manager and Heads of All Company Divisions and Branch Units:

A. Directors

Information Regarding Board Members

April 19, 2026

Job Title (Note.1)	Nationality or Record of Birth	Name	Gender Age (Note 2)	Date of Assignment	Term of Office	Date of First Assignment (Note.3)	Shares Held When Appointed		Shares Held Currently		Shares Held By Spouses And Minor Children		Shares Held In Another Person's Name		Significant Experience & Education (Note 4)	Concurrently Serving Position	Executives or Directors Who Are Spouses or Within Two Degrees of Kinship		Remarks (Note 5)
							Number of Shares	%	Number of Shares	%	Number of Shares	%	Number of Shares	%			Title	Name		Relation
Chairman	R.O.C.	Yeung Der Investment Co., Ltd. Representative / Hsu, Yu-Jui	Male 61-70	June 21, 2023	3	April 17, 1987	27,556,494	5.29	27,556,494	5.29	-	-	-	-	Chairman of Shihlin Electric & Engineering Corp.	Chairman of the Board & CEO of Shihlin Electric & Engineering Corp. Chairman of the Ambassador Hotel Co., Ltd. \ HCT Logistics \ Sankyo Transportation Co., Ltd. \ Yeung Der Entertainment Co., Ltd. \ Chiastar Co., Ltd.	Managing Director	Bryant Hsu	father-son relationship	(Note 5)
							732,735	0.14	732,735	0.14	0	0.00	0	0.00
Managing Director	Japan	Mitsubishi Electric Corporation (Japan) Representative / Kawai Toshio (Note 6)	Male 61-70	June 21, 2023	3	April 01, 2022	110,242,966	21.16	110,242,966	21.16	-	-	-	-	Mitsubishi Electric Corporation (Japan)	N/A	N/A	N/A	N/A
							0	0.00	0	0.00	0	0.00	0	0.00
Managing & Independent Director	R.O.C.	Lin, Hsin-I	Male 71-80	June 21, 2023	3	June 15, 2017	0	0.00	0	0.00	0	0.00	0	0.00	Managing & Independent Director of Shihlin Electric & Engineering Corp.	Convener of the Audit Committee, Member of the Remuneration Committee and Sustainability Development Committee of the Shihlin Electric & Engineering Corp. \ Director of China Motor Corp. \ Director of Yulon Motor Co., Ltd. \ Chairman of Guangyuan Investment Co., Ltd. \ Chairman of Guangxin Venture Capital Co., Ltd.	N/A	N/A	N/A
Managing Director	R.O.C.	Yeung Der Investment Co., Ltd. Representative / Hsieh, Han-Chang	Male 61-70	June 21, 20213	3	January 03, 2003	27,556,494	5.29	27,556,494	5.29	-	-	-	-	Senior Managing Director / Shihlin Electric & Engineering Corp.	Senior Managing Director of the Shihlin Electric & Engineering Corp. \ Chairman of Hsin Lin Electric Machinery Co., Ltd. Director of the Ambassador Hotel Co., Ltd. \ HCT Logistics \ Sankyo Transportation Co., Ltd. \ Ruei Lin Electric & Engineering Corp. \ Chuan Lin Scien-Technical Corp. \ Shihlin Electric (Suehou) Power Equipment Co., Ltd. \ SEEC International Holdings Ltd. \ Yeung Der Entertainment Co., Ltd. \ ACES Electronics Co., Ltd. Supervisor of Yeung Der Investment Co., Ltd. \ Yeung Der Security Management Consultant Co., Ltd.	N/A	N/A	N/A
							45,443	0.01	959,443	0.18	0	0.00	0	0.00

Corporate Governance Report

| Job Title
(Note 1) | Nationality
or Record
of Birth | Name | Gender
Age
(Note 2) | Date of
Assignment | Term
of
Office | Date of
First
Assignment
(Note 3) | Shares Held
When Appointed | | Shares Held
Currently | | Shares Held By
Spouses And Minor
Children | | Shares Held In
Another Person's
Name | | Significant
Experience &
Education
(Note 4) | Concurrently Serving Position | Executives or Directors
Who Are Spouses or Within
Two Degrees of
Kinship | | Remarks
(Note 5) | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Managing
Director | R.O.C. | Yeung Der Investment
Co., Ltd.
Representative /
Bryant Hsu | Male
31-40 | June 21,
2023 | 3 | September 01,
2016 | Number of
Shares | % | Number of
Shares | % | Number of
Shares | % | Number of
Shares | % | Senior Vice
President /
Shihlin Electric
& Engineering
Corp. | -Senior Vice President of the Shihlin
Electric & Engineering Corp.
-Director & General Manager of the
Ambassador Hotel Co., Ltd. \ Yeung
Der Entertainment Co., Ltd.
Director of HCT Logistics \ Yeung
Der Investment Co., Ltd. \ Kerry Tj
Logistics Co., Limited | Chairman
& C.E.O. | Hsu,
Yu-Jui | father-son
relationship | (Note 5) |
| | | | | | | | 27,556,494 | 5.29 | 27,556,494 | 5.29 | - | - | - | - | | | | | | |
| Director | R.O.C. | Chunching Co., Ltd.
Representative /
Kan, Ming-Hung | Male
31-40 | April 01,
2024 | 3 | April 01,
2024 | 1,021,000 | 0.20 | 1,021,000 | 0.20 | - | - | - | - | Chairman of
Chunching Co.,
Ltd. | -Chairman of
Chunching Co., Ltd. \ Jun
Rong Motor Co., Ltd. | N/A | N/A | N/A | |
| Director | Japan | Mitsubishi Electric
Corporation (Japan)
Representative /
Komura Hideaki | Male
51-60 | June 21,
2023 | 3 | April 01,
2023 | 110,242,966 | 21.16 | 110,242,966 | 21.16 | - | - | - | - | Mitsubishi
Electric
Corporation
(Japan) | Minister of the Business of Power
Distribution Systems / Energy
Systems Business Division,
Mitsubishi Electric Corporation
(Japan) | N/A | N/A | N/A | |
| Director | Japan | Mitsubishi Electric
Corporation (Japan)
Representative /
Kunieda Masayuki
(Note 6) | Male
51-60 | June 21,
2023 | 3 | April 01,
2023 | 110,242,966 | 21.16 | 110,242,966 | 21.16 | - | - | - | - | Mitsubishi
Electric
Corporation
(Japan) | N/A | N/A | N/A | N/A | |
| Director | Japan | Mitsubishi Electric
Corporation (Japan)
Representative /
Uchiyama Akira
(Note 6) | Male
51-60 | April 01,
2024 | 3 | April 01,
2024 | 110,242,966 | 21.16 | 110,242,966 | 21.16 | - | - | - | - | Mitsubishi
Electric
Corporation
(Japan) | N/A | N/A | N/A | N/A | |
| Director | R.O.C. | Yeung Der Investment
Co., Ltd.
Representative /
Cheng,
Hsiang-Chih | Male
61-70 | Feb 01,
2024 | 3 | September 01,
2021 | 27,556,494 | 5.29 | 27,556,494 | 5.29 | - | - | - | - | President of
Shihlin Electric
& Engineering
Corp. | -President of Shihlin Electric &
Engineering Corp.
-Chairman of Xiamen Shilin Electric &
Engineering Co., Ltd. \ Xiamen
Chen-Jeu Transportation Implements
Co., Ltd. \ SEEC International
Holdings Ltd. \ Shihlin Electric Green
Power Corp.
-Vice Chairman of Mitsubishi Electric
Low Voltage Equipment (Xiamen)
Co., Ltd. | N/A | N/A | N/A | |
| Managing
Director | Japan | Mitsubishi Electric
Corporation (Japan)
Representative /
Okochi Kazuhiko
(Note 7) | Male
51-60 | April 01,
2025 | 3 | April 01,
2025 | 110,242,966 | 21.16 | 110,242,966 | 21.16 | - | - | - | - | Mitsubishi
Electric
Corporation
(Japan) | -Chairman & General Manager of
Mitsubishi Electric Taiwan Co., Ltd. | N/A | N/A | N/A | |
| Director | Japan | Mitsubishi Electric
Corporation (Japan)
Representative /
Masuda Katsumi
(Note 8) | Male
61-70 | April 01,
2025 | 3 | April 01,
2025 | 110,242,966 | 21.16 | 110,242,966 | 21.16 | - | - | - | - | Mitsubishi
Electric
Corporation
(Japan) | -Manager \ Power Train Solution
Business Unit of Mitsubishi Electric
Mobility Corporation (Japan) | N/A | N/A | N/A | |

Shihlin Electric
| Job Title
(Note 1) | Nationality
or Record
of Birth | Name | Gender
Age
(Note 2) | Date of
Assignment | Term
of
Office | Date of
First
Assignment
(Note 3) | Shares Held
When Appointed | | Shares Held
Currently | | Shares Held By
Spouses And Minor
Children | | Shares Held In
Another Person's
Name | | Significant
Experience &
Education
(Note 4) | Concurrently Serving Position | Executives or Directors
Who Are Spouses or Within
Two Degrees of
Kinship | | Remarks
(Note 5) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Director | Japan | Mitsubishi Electric
Corporation (Japan)
Representative /
Kitamura
Yasunori (Note7) | Male
51-60 | April 01,
2025 | 3 | April 01,
2025 | Number of
Shares | % | Number of
Shares | % | Number of
Shares | % | Number of
Shares | % | Mitsubishi
Electric
Corporation
(Japan) | Mitsubishi
Electric
Corporation
(Japan) | N/A | N/A | N/A |
| | | | | | | | 110,242,966 | 21.16 | 110,242,966 | 21.16 | - | - | - | - | | | | | |
| Director | Japan | Mitsubishi Electric
Corporation (Japan)
Representative /
Masahiro Nakano
(Note9) | Male
51-60 | April 01,
2026 | 3 | April 01,
2026 | 110,242,966 | 21.16 | 110,242,966 | 21.16 | - | - | - | - | Mitsubishi
Electric
Corporation
(Japan) | Minister of the Marketing and Sales
Division, Mitsubishi Electric Mobility
Corporation (Japan) | N/A | N/A | N/A |
| | | | | | | | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | | | | | |
| Director | R.O.C. | Yeung Dor Investment
Co., Ltd.
Representative /
Kuo, Yueh-She | Male
61-70 | February 01,
2024 | 3 | February 01,
2024 | 27,556,494 | 5.29 | 27,556,494 | 5.29 | - | - | - | - | President /
Shihlin Electric
& Engineering
Corp. | -President of Shihlin Electric &
Engineering Corp.
-Chairman of Chuan Lin
Scien-Technical Corp.
-Vice Chairman of Suzhou Shihlin
Electric & Engineering Co., Ltd.
Director of Hsin Lin Electric
Machinery Co., Ltd. \ Ruei Lin
Electric & Engineering Corp. \ Shihlin
Electric Engineering Equipment
Vietnam Company Limited. | N/A | N/A | N/A |
| | | | | | | | 194,479 | 0.04 | 215,479 | 0.04 | 0 | 0.00 | 0 | 0.00 | | | | | |
| Director | R.O.C. | Yeung Dor Investment
Co., Ltd.
Representative /
Lee, Shui-Yuan | Male
61-70 | October 01,
2024 | 3 | October 01,
2024 | 27,556,494 | 5.29 | 27,556,494 | 5.29 | - | - | - | - | General
Manager of
Business
Groups /
Shihlin Electric
& Engineering
Corp. | -General Manager of Shihlin Electric &
Engineering Corp.
-Director of Jeen-Lin Industrial Co.,
Ltd. \ Wuxi Shihlin Electric &
Engineering Co., Ltd. \ Shihlin
Electrical Engineering Ltd. of
Vietnam \ Mitsubishi Electric Shihlin
Automotive Changehou Co., Ltd. \
Mitsuba Shihlin Electric (Wuhan)
Co., Ltd. \ ChangZhou Shihlin
Mitsuba Electric & Engineering Co.,
Ltd. \ ChangZhou Shihlin Auto Parts
Co., Ltd. \ SEEC International
Holdings Ltd. of the British Virgin
Islands
-Chairman of Shilin Star Power
Corporation | N/A | N/A | N/A |
| | | | | | | | 0 | 0.00 | 82,000 | 0.02 | 0 | 0.00 | 0 | 0.00 | | | | | |

| Job Title
(Note 1) | Nationality
or Record
of Birth | Name | Gender
Age
(Note 2) | Date of
Assignment | Term
of
Office | Date of First
Assignment
(Note 3) | Shares Held
When Appointed | Shares Held
Currently | Shares Held By
Spouses And Minor
Children | Shares Held In
Another Person's
Name | Significant
Experience &
Education
(Note 4) | Concurrently Serving Position | Executives or Directors
Who Are Spouses or Within
Two Degrees of
Kinship | Remarks
(Note 5) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Number of
Shares | % | Number of
Shares | % | Number of
Shares | % | Number of
Shares | % | Title | Name | Relation |
| Director | R.O.C. | Shin-Po Investment
Co., Ltd.
Representative /
Lin, Po-Fong | Male
71-80 | June 21,
2023 | 3 | December 11,
2018 | 131,000 | 0.03 | 131,000 | 0.03 | - | - | - | - | Chairman of
Taiwan
Security Co.,
Ltd. | -Chairman of Taiwan Security Co.,
Ltd. \ Yi-Kong Security Co., Ltd.
\ Yi-Kong International Apartment
Building Management & Maintenance Co., Ltd.
-Director of Taiwan Shin Kong
Security Co., Ltd. \ New Light
International Co., Ltd. \ Shin Shin
Natural Gas Co., Ltd. \ Shinkong
Communication Co., Ltd. \ Yilna
Biotech Corp. \ Shincluster
Electronics Co., Ltd.
-Independent Director of AEWIN
Technologies Co., Ltd. | N/A | N/A | N/A |
| 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 |
| Independent Director | R.O.C. | Yan, Cherng Jan | Male
81-90 | June 21,
2023 | 3 | June 15,
2017 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | Independent Director
\ Shihlin
Electric &
Engineering
Corp. | Convener of the Remuneration
Committee, Member of the Audit
Committee and Sustainability
Development Committee of the Shihlin
Electric & Engineering Corp. | N/A | N/A | N/A |
| Independent Director | R.O.C. | Hu, Chao Fong | Male
71-80 | June 21,
2023 | 3 | June 15,
2017 | 110,006 | 0.02 | 110,006 | 0.02 | 8,740 | 0.00 | 0 | 0.00 | Independent Director
\ Shihlin
Electric &
Engineering
Corp. | Member of the Remuneration
Committee, Audit Committee and
Sustainability Development Committee
of the Shihlin Electric & Engineering
Corp. | N/A | N/A | N/A |

Note 1: Institutional shareholders are to have the name of institutional shareholders and representatives presented separately (for the representative of institutional shareholders, the name of the institutional shareholders should be indicated) and fill in the Table below.

Note 2: Please list the actual age and express it in intervals, such as 41-50 years old or 51-60 years old.

Note 3: Fill in the date of being elected as the director or supervisor for the first time and with the discontinuity stated, if any.

Note 4: An experience relevant to the current position, such as, employed by the independent auditor’s firm or its affiliated companies throughout the time period referred to above, please state the job title and the job responsibilities.

Note 5: The chairman of the Company and the general manager or equivalent (the top manager) are the same person, are relatives of each other, such as spouse or one parent, should explain the reasons, rationality, necessity, and corresponding measures (such as increasing the number of independent directors and should More than half of the directors have not served as employees or managers, etc.) related information: N/A

Note 6: April 01, 2025 resigned

Note 7: April 01, 2025 newly appointed

Note 8: April 01, 2025 newly appointed, April 01, 2026 resigned

Note 9: April 01, 2026 newly appointed

Shihlin Electric

Major Shareholders of Institutional Shareholders
On the Book closure date: April 19, 2026

Names of Institutional Shareholders (Note 1)	Major Stockholders of Institutional Shareholders (Note 2)
Yeang Der Investment Co., Ltd.	Kuo, Tun-Yu 53.79% 、Memorial Foundation of Mr. Ching-Teh Hsu 29.88% 、Zhenjie Investment Co., Ltd. 11.34% 、Hsu, Shu-Wan 4.27% 、Lin, Hsin-Yi 0.72%
Mitsubishi Electric Corporation (Japan)	Note 4
Chanching Co., Ltd.	Kan, Ming-Hung 29.20% 、Kan, Ming-Sheng 29.15% 、Kan, Ming-Cheng 29.15% 、Kan Wang, Mei-Ling 5.50% 、Kan, Chin-Yu 3.00%, Kan, Chen-Yi 2.00%, Kan, Chen-Yun 2.00%
Shin-Po Investment Co., Ltd.	Taiwan Shin Kong Security Co., Ltd. 84.22% 、Yi Kong Security Co., Ltd. 15.77% 、Taiwan Shin Kong Security Foundation for Arts and Culture 0.01%

Note 1: If the director or supervisor is the representative of the institutional shareholders, the name of the institutional shareholders should be indicated.
Note 2: Fill in the name and shareholding ratio of the major shareholders (with the top-ten shareholding ratio) of the institutional shareholders. If the major shareholders are institutional shareholders, please fill out Table below.
Note 3: If a legal person shareholder is not a company organizer, the name and shareholding ratio of the shareholder that should be disclosed beforehand is the name of the funder or donor (Please refer to the announcement of the Judicial Yuan for inquiries) and its contribution or contribution ratio. Donor deceased, with the note "deceased".
Note 4: Foreign company.

Major Shareholder of the Major Institutional Shareholders
On the Book closure date: April 19, 2026

Names of Institutional Shareholders (Note 1)	Major Shareholders of Institutional Shareholders (Note 2)
Memorial Foundation of Mr. Ching-Teh Hsu	Hsu, Ching-Teh (deceased) 2.34% 、Hsu, Shu-Chen (deceased) 97.66%
Zhenjie Investment Co., Ltd.	(Samoa) Broad Choice Limited (99%) 、Kao, Mei-Feng (1%)
Taiwan Shin Kong Security Co., Ltd.	Sohgo Security Service Co., Ltd (9.23%), Chunghwa Post Co., Ltd (4.60%), Shin Kong Medical Foundation (4.21%), Bo Ruei Co., Ltd. (3.85%), Wu, Tung-Chin (3.27%), Shin Kong Life Insurance Co., Ltd. (2.81%), Shin Kong Life Insurance Employee Pension Fund Management Committee (1.99%), Tung Ying Investment Co., Ltd (1.75%), iShare Emerging Markets ETF under the custody of Standard Chartered Bank (Taiwan) Ltd. (1.69%), Shin Kong Construction and Development Co., Ltd. (1.53%)
Yi Kong Security Co., Ltd.	Taiwan Shin Kong Security Co., Ltd. (69.00%) 、Shin-Kong Life Real Estate Service Co., Ltd.(15.50%) 、Shin Kong Construction and Development Co., Ltd.(15.00%) 、Shin Kong Wu Ho-Su Culture and Education Foundation (0.50%)
Taiwan Shin Kong Security Culture and Art foundation	Taiwan Shin Kong Security Co., Ltd. (100.00%)

Note 1: If the major shareholders in Table 2 are institutional shareholders, please state the name of the institutional shareholders.
Note 2: Fill in the name and shareholding ratio of the major shareholders (with the top-ten shareholding ratio) of the institutional shareholders.
Note 3: If a legal person shareholder is not a company organizer, the name and shareholding ratio of the shareholder that should be disclosed beforehand is the name of the funder or donor (Please refer to the announcement of the Judicial Yuan for inquiries) and its contribution or contribution ratio. Donor deceased, with the note "deceased".

Corporate Governance Report

Disclosure of Professional Qualifications of Directors and Independence of Independent Directors
April 19, 2026

Qualification Name	Professional Qualifications and Experience (Note 1)	Independence (Note 2)	Numbers of Concurrently Serving as an Independent Director of Another listed Company
Hsu, Yu-Jui	Chairman of Shihlin Electric & Engineering Corp. / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Chairman	0
Okochi Kazuhiko	Chairman of Taiwan Mitsubishi Electric Corporation / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	0
Hsieh, Han-Chang	Senior Managing Director of Shihlin Electric & Engineering Corp. / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	0
Bryant Hsu	Senior Vice President of Shihlin Electric & Engineering Corp. / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	0
Komura Hideaki	Minister of the Business of Power Distribution Systems / Energy Systems Business Division, Mitsubishi Electric Corporation (Japan). / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	0
Masahiro Nakano	Minister of the Marketing and Sales Division, Mitsubishi Electric Mobility Corporation (Japan) / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	0
Kitamura Yasunori	Minister of Relationship Department of Mitsubishi Electric Corporation (Japan) / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	0
Kuo, Yueh-She	President of Shihlin Electric & Engineering Corp. / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	0
Cheng, Hsiang-Chih	President of Shihlin Electric & Engineering Corp. / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	0
Lee, Shui-Yuan	General Manager of Shihlin Electric & Engineering Corp. / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	0
Kan, Ming-Hung	Chairman of Chanching Co., Ltd. / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	0
Lin, Po-Fong	Chairman of Taiwan Security Co., Ltd. / There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	Director	1
Lin, Hsin-I	Minister of Economic Affairs / Vice President of the Executive Yuan / Chairman of the Economic Construction Association
There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	1. None of the director himself, his spouse and relative of second degree are employed by the Company or its affiliated companies, nor serve as their directors or supervisors.
2. The number and proportion of company shares held by the director himself, his spouse and relative of second degree (or in the name of others): 0 shares/ 0%
3. Not serving as a director, supervisor or employee of a company that has a specific relationship with the company (refer to the provisions of Article 3, Paragraph 1, Subparagraphs 5 to 8 of the Regulations on the Establishment and Compliance of Independent Directors of Public Companies)
4. None remuneration for providing commercial, legal, financial, accounting or related services to the company or any affiliate of the company in the last two years	0

11 -

Shihlin Electric

Qualification Name	Professional Qualifications and Experience (Note 1)	Independence (Note 2)	Numbers of Concurrently Serving as an Independent Director of Another listed Company
Yan, Cherng Jau	Director of Shihlin Electric & Engineering Corp./
There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	1. None of the director himself, his spouse and relative of second degree are employed by the Company or its affiliated companies, nor serve as their directors or supervisors.
2. The number and proportion of company shares held by the director himself, his spouse and relative of second degree (or in the name of others): 0 shares/ 0%
3. Not serving as a director, supervisor or employee of a company that has a specific relationship with the company (refer to the provisions of Article 3, Paragraph 1, Subparagraphs 5 to 8 of the Regulations on the Establishment and Compliance of Independent Directors of Public Companies)
4. None remuneration for providing commercial, legal, financial, accounting or related services to the company or any affiliate of the company in the last two years	0
Hu, Chao Fong	Senior Vice President of Shihlin Electric & Engineering Corp./
There are no matters involved in any of the circumstances described in the subparagraphs of Article 30 of the Company Act.	1. None of the director himself, his spouse and relative of second degree are employed by the Company or its affiliated companies, nor serve as their directors or supervisors.
2. The number and proportion of company shares held by the director himself, his spouse and relative of second degree (or in the name of others): 118,746 shares/ 0.02%
3. Not serving as a director, supervisor or employee of a company that has a specific relationship with the company (refer to the provisions of Article 3, Paragraph 1, Subparagraphs 5 to 8 of the Regulations on the Establishment and Compliance of Independent Directors of Public Companies)
4. No remuneration for providing commercial, legal, financial, accounting or related services to the company or any affiliate of the company in the last two years	0

Diversity and Independence of the Board of Directors

A. Diversity of the Board:

In line with the policy of membership diversification for the board of directors, except the directors who also serve as managers of the company should not exceed one-third of the number of directors. An appropriate diversity policy should be formulated according to their own operation, operation type and development needs. Include but not restrict the following two standards:

(1) Basic condition: age, nationality and culture, etc.
(2) Professional knowledge and skill: professional background, professional skill and industrial experience.

Corporate Governance Report

The members of the board of directors are all outstanding figures in the knowledge, skill and qualities necessary to perform their duties. In order to achieve the ideal goals of corporate governance, the board of directors all should have the following capabilities:

Operational judgment ability. 2. Accounting and financial analysis skills. 3. Management ability. 4. Ability of crisis handling. 5. Industry knowledge. 6. View of international market. 7. Leadership. 8. Decision-making ability.

Implement the policy of diversification in the current board member is as follows:

Name	Nationality	Employer of the Company	Age				Seniority of Tenure / Independent Directors		Industry Knowledge and Experience		Professional Background/Experience
			50 ↓	51–60	61–70	71 ↑	3 years ↓	3–9 years	Electric Motor	Others	Accounting	Legal	Information Technology	Sustainable Development	Risk Management
Hsu, Yu-Jui	R.O.C.	V			V				V	V	V	V	V	V	V
Okochi Kazuhiko	Japan			V					V		V				V
Lin, Hsin-I	R.O.C					V		V	V	V	V	V	V	V	V
Hsieh, Han-Chang	R.O.C	V			V				V	V	V	V	V	V	V
Bryant Hsu	R.O.C	V	V						V	V	V	V	V	V	V
Kan, Ming-Hung	R.O.C		V							V					V
Komura Hideaki	Japan			V					V			V			V
Masahiro Nakano	Japan			V					V			V			V
Kitamura Yasunori	Japan			V					V		V				V
Kuo, Yueh-She	R.O.C	V			V				V	V			V		V
Cheng, Hsiang-Chih	R.O.C	V			V				V	V			V		V
Lee, Shui-Yuan	R.O.C	V			V				V	V					V
Lin, Po-Fong	R.O.C					V				V	V	V	V		V
Yan, Cherng-Jau	R.O.C					V		V	V					V	V
Hu, Chao-Fong	R.O.C					V		V	V					V	V

(1) Reviewing the list of the 15 directors of the 21th BOD of the Company (including 3 independent directors), the proportion of directors with employee status is 40%, independent directors account for 20%, foreign directors account for 27%.

(2) The tenure of those 3 independent directors is 7 to 9 years. 2 directors are under 50 years old, 9 director is between 51 to 70 years old, and 4 directors are over 71 years old.

(3) In consideration of business development and diversification needs, the Company places importance on the professional experience, knowledge, and skills of its board members. Currently, nine directors (60%) have backgrounds outside the electrical engineering industry. Additionally, to enhance gender diversity on the board, the Company has set a goal to appoint at least one female director.

(4) If the board of directors of a TWSE/TPEx-listed company has less than one-third of its seats held by directors of either gender, the reasons and measures to improve gender diversity must be stated:

Explanation: The current board term has not yet expired, and due to the characteristics of the industry, it is challenging to identify suitable candidates within a short period.

Planned Measures: Prior to the expiration of the current board term and the subsequent re-election, the Company will actively seek candidate recommendations through industry networks and other diverse channels to enhance corporate governance effectiveness and implement the board diversity policy.

Shihlin Electric

B. Independence of the Board

There are 3 independent directors in the company, accounting for one-fifth of the seats on the board. There are 2 directors with spouses or relatives within the second degree of kinship (Chairman Hsu, Yu-Jui and Managing Director Bryant Hsu are father-son relationship), no more than half of the seats are in line with securities Items 3 and 4 of Article 26-3 of the Exchange Act.

Note 1: Professional Qualifications and Experience: Detail the professional qualifications and experience of individual directors and supervisors. For those who are members of the audit committee and possess accounting or financial expertise, specify their accounting or financial background and work experience. Additionally, state whether they are free from any circumstances listed under Article 30 of the Company Act.

Note 2: Independent Directors should specify compliance with independence criteria, including but not limited to whether they, their spouse, or relatives within the second degree of kinship serve as directors, supervisors, or employees of the company or its affiliates; the number and percentage of shares held by themselves, their spouse, or relatives within the second degree of kinship (or held in another's name); and whether they serve as directors, supervisors, or employees of companies having a specific relationship with the company (as referenced in Article 3, Paragraph 1, Subparagraphs 5 to 8 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies). Additionally, state the amount of remuneration received in the past two years for providing business, legal, financial, or accounting services to the company or its affiliates.

14 -

B. Information on President/General Manager, Senior Vice President /Vice General Manager, Assistant General Manager, and Heads of All the Company Divisions

Unit: shares : % April 19 ,2026

Job Title (Note.1)	Nationality or Record of Birth	Name	Gender	Elected (Inauguration) Date	Shares		Shareholding of Spouse and Underage Children		Shareholdings in the Names of Others		Work Experience (Academic Degree) (Note 2)	Position(s) Held Concurrently in the Company and/or in Any Other Company	Managers who are Spouses or Within Two Degrees of Kinship			Remarks
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
C.E.O.	R.O.C.	Hsu, Yu-Jui	male	April 17, 1987	732,735	0.14	0	0.00	0	0.00	Chairman of Shihlin Electric & Engineering Corp.	Please review the information on the Company directors	Senior Vice President	Bryant Hsu	father-son relationship	[Note 3]
Senior Managing Director	R.O.C.	Hsieh, Han-Chang	male	January 03, 2005	959,443	0.18	0	0.00	0	0.00	Senior Managing Director of Shihlin Electric & Engineering Corp.	Please review the information on the Company directors	N/A	N/A	N/A
President	R.O.C.	Kao, Yueh-She	male	September 01, 2011	215,479	0.04	0	0.00	0	0.00	President of Shihlin Electric & Engineering Corp.	Please review the information on the Company directors	N/A	N/A	N/A
President	R.O.C.	Chang, Hsiang-Chih	male	September 01, 2021	168,000	0.03	0	0.00	0	0.00	President of Shihlin Electric & Engineering Corp.	Please review the information on the Company directors	N/A	N/A	N/A
General Manager of Business Groups (Note 4)	R.O.C.	Chang, Chin-Wen	male	September 01, 2012	120,000	0.02	0	0.00	0	0.00	General Manager of Business Groups of Shihlin Electric & Engineering Corp.	Chairman & President of Ruei Lin Electric & Engineering Corp. Chairman of Shihlin Electric Engineering Equipment Vietnam Company Limited Director of Hsin Lin Electric Machinery Co., Ltd. \ Chuan Lin Scien-Technical Corp. \ Director of Shihlin Electric (Suzhou) Power Equipment Co., Ltd.	N/A	N/A	N/A
General Manager of Business Groups	R.O.C.	Wu, Tsang-Ming	male	March 15, 2017	189,488	0.04	0	0.00	0	0.00	General Manager of Business Groups of Shihlin Electric & Engineering Corp.	Chairman & President of Tingling Enterprise Co., Ltd.	N/A	N/A	N/A
General Manager of Business Groups	R.O.C.	Lin, Teng-Fu	male	August 06, 2021	165,000	0.03	0	0.00	0	0.00	General Manager of Business Groups of Shihlin Electric & Engineering Corp.	None	N/A	N/A	N/A
General Manager of Business Groups	R.O.C.	Lee, Shui-Yuan	male	July 01, 2018	82,000	0.02	0	0.00	0	0.00	General Manager of Business Groups of Shihlin Electric & Engineering Corp.	Please review the information on the Company directors	N/A	N/A	N/A
General Manager of Business Groups	R.O.C.	Yang, Tsang-Hsien	male	January 01, 2011	213,000	0.04	0	0.00	0	0.00	General Manager of Business Groups of Shihlin Electric & Engineering Corp.	Director of Shihlin Technology (Shenzhen) Co., Ltd.	N/A	N/A	N/A
Vice General Manager	R.O.C.	Fang, Yu-Jung	male	February 16, 2014	175,448	0.03	0	0.00	0	0.00	Vice General Manager of Shihlin Electric & Engineering Corp.	Chairman & General Manager of Xiamen Shilin Electric & Engineering Co., Ltd. \ Xiamen Chen-leu Transportation Implements Co., Ltd. \ Director of Mitsubishi Electric Low Voltage Equipment (Xiamen) Co., Ltd.	N/A	N/A	N/A
Vice General Manager	R.O.C.	Lin, Yu-Liang	male	March 15, 2017	184,799	0.04	0	0.00	0	0.00	Vice General Manager of Shihlin Electric & Engineering Corp.	Director of Ruei Lin Electric & Engineering Corp. \ Deputy Chairman & President of Shihlin Electric Engineering Equipment Vietnam Company Limited	N/A	N/A	N/A

16 -

| Job Title
(Note.1) | Nationality
or Record
of Birth | Name | Gender | Elected
(Inauguration)
Date | Shares | | Shareholding of Spouse
and Underage Children | | Shareholdings
in the Names of
Others | | Work Experience
(Academic Degree)
(Note 2) | Position(s) Held Concurrently in
the Company and/or in Any
Other Company | Managers who are Spouses
or Within Two Degrees of
Kinship | | | Remarks |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | Shares | % | Shares | % | Shares | % | | | Title | Name | Relation | |
| Senior Vice President | R.O.C.. | Bryant Hsu | male | July 01, 2018 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | Senior Vice President of Shihlin Electric & Engineering Corp. | Please review the information on the company directors | C.E.O.. | Hsu, Yu-Jui | father-son relationship | (Note 3) |
| Senior Vice President | R.O.C. | Chu, Wen-Ping | male | August 08, 2023 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | Senior Vice President of Shihlin Electric & Engineering Corp. | Chairman of Shihlin Electric USA Company Limited | N/A | N/A | N/A | |
| Vice General Manager | R.O.C. | Liu, Ta-Wei | male | August 06, 2021 | 21,000 | 0.01 | 0 | 0.00 | 0 | 0.00 | Vice General Manager of Shihlin Electric & Engineering Corp. | Chairman of Wuxi Shihlin Electric & Engineering Co., Ltd. \ Vietnam Shihlin Electrical Engineering Ltd. \ ChangZhou Shihlin Auto Parts Co., Ltd.
Vice Chairman of ChangZhou Mitsubishi Electric Shihlin Automotive Co., Ltd. \ Mitsuba Shihlin Electric (Wuhan) Co., Ltd.
Director of Jeen-Lin Industrial Co., Ltd. \ ChangZhou Shihlin Mitsuba Electric &Engineering Co., Ltd. | N/A | N/A | N/A | |
| Vice General Manager | R.O.C. | Chen, Wen-Hsiang | male | August 08, 2023 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | Vice General Manager of Shihlin Electric & Engineering Corp. | Chairman of Suzhou Shihlin Electric & Engineering Co., Ltd. | N/A | N/A | N/A | |
| Senior Vice President | R.O.C. | Shih, Chin-Yi | male | July 01, 2018 | 167,110 | 0.03 | 0 | 0.00 | 0 | 0.00 | Senior Vice President of Shihlin Electric & Engineering Corp. | Director of Tingling Enterprise Co., Ltd.
Supervisor of Yeang Der Entertainment Co., Ltd. \ Gochabar Co., Ltd. | N/A | N/A | N/A | |
| Senior Vice President | R.O.C. | Lee, Ying-Chu | male | August 05, 2022 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | Senior Vice President of Shihlin Electric & Engineering Corp. | Director of HCT Logistics \ Taicon Corp. \ Sankyo Transportation Co., Ltd. \ Chiastar Co., Ltd. | N/A | N/A | N/A | |
| Senior Assistant General Manager | R.O.C. | Tien, Chia-Wen | male | July 01, 2018 | 150,799 | 0.03 | 0 | 0.00 | 0 | 0.00 | Senior Assistant General Manager of Shihlin Electric & Engineering Corp. | Chairman of Shihlin Technology (Shenzhen) Co., Ltd. | N/A | N/A | N/A | |
| Senior Assistant General Manager | R.O.C. | Liao, Feng-Liang | male | August 08, 2023 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | Senior Assistant General Manager of Shihlin Electric & Engineering Corp. | Chairman of Jeen-Lin Industrial Co., Ltd.
President & Director of Shilin Star Power Corporation
Director of New Star Charging Technology Corp. | N/A | N/A | N/A | |
| Senior Assistant General Manager | R.O.C. | Hou, Kuan-Liang | male | August 08, 2023 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | Senior Assistant General Manager of Shihlin Electric & Engineering Corp. | Director of Suzhou Shihlin Electric & Engineering Co., Ltd. | N/A | N/A | N/A | |
| Senior Assistant General Manager | R.O.C. | Chang, Kuei-Feng | male | August 07, 2024 | 70,000 | 0.01 | 0 | 0.00 | 0 | 0.00 | Senior Assistant General Manager of Shihlin Electric & Engineering Corp. | Director of 968 Digital Information Co., Ltd. | N/A | N/A | N/A | |
| Assistant General Manager (Note 5) | R.O.C. | Yeh, Sang-Yuan | male | August 12, 2020 | 365,000 | 0.07 | 0 | 0.00 | 0 | 0.00 | Assistant General Manager of Shihlin Electric & Engineering Corp. | None | N/A | N/A | N/A | |
| Assistant General Manager | R.O.C. | Hsu, Yao-Chou | male | August 07, 2024 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | Assistant General Manager of Shihlin Electric & Engineering Corp. | None | N/A | N/A | N/A | |

Corporate Governance Report

Note 1: It should include the information disclosure of the General Manager, Senior Vice President, Assistant General Manager, department heads, and branch officers; also, the position equivalent to General Manager, Senior Vice President, or Assistant General Manager.

Note 2: An experience relevant to the current position, such as, employed by the independent auditor’s firm or its affiliated companies throughout the time period referred to the above, please state the job title and the job responsibilities.

Note 3: The general manager or equivalent (the top manager) and the chairman of the company are the same person, are relatives of each other, such as spouse or one parent, should explain the reasons, rationality, necessity and corresponding measures (such as increasing the number of independent directors and should More than half of the directors have not served as employees or managers, etc.) related information: N/A

Note 4: January 05,2026 Resigned.

Note 5: June 30,2025 Resigned.

Note 6: August 06,2025 New Appointed.

Note 7: November 07,2025 New Appointed.

Note 8: October 15,2025 Resigned.

Note 9: December 31,2025 Resigned.

Corporate Governance Report

C. Remuneration Paid to Directors (Independent Director included), President/General Manager, Senior Vice President /Vice General Manager in the Most Recent Year

Remuneration of Directors (Independent Directors included)

Unit: NTD thousand / Dec.31,2025

Job Title	Name	Remuneration of Director	The Sum of A, B, C, and D in Proportion to Earnings (Note 10)	Remuneration in the Capacity of Employee	The Sum of A, B, C, D, E, F, and G to Earnings (Note 10)
Remuneration (A) (Note 2)	Pension (B)	Retained Earnings Distribution (C) (Note 3)	Professional Practice (D) (Note 4)	Salaries, Bonuses, and Special Subsidies (E) (Note 5)	Pension (F)	Employee Bonus from Earnings (G) (Note 6)
the Company	Companies included in the financial statement (Note 7)	the Company	Companies included in the financial statement (Note 7)	the Company	Companies included in the financial statement (Note 7)	the Company	Companies included in the financial statement (Note 7)
Chairman	Yeang Der Investment Co., Ltd. Representative / Hsu, Yu-Jui	0	0	0	0	100,000 (Note 12)	100,000 (Note 12)
Managing Director	Mitsubishi Electric Corporation (Japan) Representative / Kawai Toshio(Note14)
Managing Director	Mitsubishi Electric Corporation (Japan) Representative/ Okochi Kazuhiko (Note15)
Managing & Independent Director	Lin, Hsin-I
Managing Director	Yeang Der Investment Co., Ltd. Representative / Hsieh, Han-Chang
Managing Director	Yeang Der Investment Co., Ltd. Representative / Bryant Hsu
Director	Chunching Co., Ltd. Representative / Kan, Ming-Hung
Director	Mitsubishi Electric Corporation (Japan) Representative / Komura Hideaki
Director	Mitsubishi Electric Corporation (Japan) Representative / Uchiyama Akira (Note14)
Director	Mitsubishi Electric Corporation (Japan) Representative / Kunieda Masayuki (Note14)

Job Title	Name	Remuneration of Director							The Sum of A, B, C, and D in Proportion to Earnings (Note 10)	Remuneration in the Capacity of Employee							The Sum of A, B, C, D, E, F, and G to Earnings (Note 10)
		Remuneration (A) (Note 2)		Pension (B)		Retained Earnings Distribution (C) (Note 3)		Professional Practice (D) (Note 4)			Salaries, Bonuses, and Special Subsidies (E) (Note 5)		Pension (F)		Employee Bonus from Earnings (G) (Note 6)
		the Company	Companies included in the financial statement (Note 7)	the Company	Companies included in the financial statement (Note 7)	the Company	Companies included in the financial statement (Note 7)	the Company	Companies included in the financial statement (Note 7)	the Company	Companies included in the financial statement (Note 7)	the Company	Companies included in the financial statement (Note 7)	the Company	Companies included in the financial statement (Note 7)	Cash	Stock	Cash	Stock	Companies included in the financial statement	Whether remuneration from any reinvested other than subsidiaries is received? (J) (Note 11)

Director	Mitsubishi Electric Corporation (Japan) Representative / Masuda Katsumi (Note15)
Director	Mitsubishi Electric Corporation (Japan) Representative / Kitamura Yasunori (Note15)
Director	Yeung Der Investment Co., Ltd. Representative / Kuo, Yuch-She
Director	Yeung Der Investment Co., Ltd. Representative / CHeng, Hsiang-Chih
Director	Yeung Der Investment Co., Ltd. Representative / Lee, Shui-Yuan
Director	Shin-Po Investment Co., Ltd. Representative / Lin, Po-Fung
Independent Director	Yan, Cherng-Jau
Independent Director	Hu, Chao-Fong

Please describe the policy, system, standards, and structure of independent directors' compensation and the correlation with the amount of compensation paid based on the responsibilities, risks, and time commitment.
(1) Various salary and remuneration systems do not guide directors and managers to pursue behaviors that exceed company risk appetite in pursuit of remuneration.
(2) After evaluating and measuring the current company's operating scale, performance, and distribution over the years, various salary and compensation projects are planned to be handled in accordance with the current system.
(3) The company does not issue fixed salary to the directors, only the carriage fee (30,000 to 300,000/person)
(4) The remuneration of directors is stipulated in Article 24 of the company's articles of association, "If the company makes a profit in the current year, it should be allocated: 1. When the director's remuneration is 4% but the company still has accumulated losses, the amount of compensation should be reserved in advance. The so-called profit refers to the pre-tax interest minus the benefits before directors' compensation and employees' compensation. In addition, according to Article 196 of the Company Law and its letter, the directors are elected by Article 27 of the Company Law. All directors of the company are legal representatives. They are selected by the second paragraph of Article 27 of the Company Law. Therefore, all-natural persons represented by legal persons do not receive surplus distribution remuneration.
(5) Independent directors of the company do not participate in the distribution of remuneration.
Besides the above disclosure, if any of the Director provided service (as non-employee sort of consultant and the like) with rewarded remuneration to all the listed companies in the financial statement in the last year: None

Breakdown of Remuneration

Breakdown of remuneration of Directors	Name of Director
	Total (A+B+C+D)		Total (A+B+C+D+E+F+G)
	the Company (Note 8)	Companies included in the financial statement H (Note 9)	the Company (Note 8)	All investees I (Note 9)
Less than NT$1,000,000	1. Independent Director / Yan, Cheng-Jau
2. Independent Director / Hu, Chao-Fong	1. Independent Director / Yan, Cheng-Jau
2. Independent Director / Hu, Chao-Fong	1. Independent Director / Yan, Cheng-Jau
2. Independent Director / Hu, Chao-Fong	1. Independent Director / Yan, Cheng-Jau
2. Independent Director / Hu, Chao-Fong
NT$1,000,000 (inclusive)–NT$2,000,000	1. Representative of Mitsubishi Electric Corporation (Japan) / Uchiyama Akira
2. Representative of Mitsubishi Electric Corporation (Japan) / Kunieda Masayuki	1. Representative of Mitsubishi Electric Corporation (Japan) / Uchiyama Akira
2. Representative of Mitsubishi Electric Corporation (Japan) / Kunieda Masayuki	1. Representative of Mitsubishi Electric Corporation (Japan) / Uchiyama Akira
2. Representative of Mitsubishi Electric Corporation (Japan) / Kunieda Masayuki	1. Representative of Mitsubishi Electric Corporation (Japan) / Uchiyama Akira
2. Representative of Mitsubishi Electric Corporation (Japan) / Kunieda Masayuki
NT$2,000,000 (inclusive)–NT$3,500,000	1. Managing & Independent Director / Lin, Hsin-I
2. Representative of Mitsubishi Electric Corporation (Japan) / Kawai Toshio	1. Managing & Independent Director / Lin, Hsin-I
2. Representative of Mitsubishi Electric Corporation (Japan) / Kawai Toshio	1. Managing & Independent Director / Lin, Hsin-I
2. Representative of Mitsubishi Electric Corporation (Japan) / Kawai Toshio	1. Managing & Independent Director / Lin, Hsin-I
2. Representative of Mitsubishi Electric Corporation (Japan) / Kawai Toshio
NT$3,500,000 (inclusive)–NT$50,000,000	1. Representative of Mitsubishi Electric Corporation (Japan) / Masuda Katsumi
2. Representative of Mitsubishi Electric Corporation (Japan) / Kitamura Yasunori	1. Representative of Mitsubishi Electric Corporation (Japan) / Masuda Katsumi
2. Representative of Mitsubishi Electric Corporation (Japan) / Kitamura Yasunori	1. Representative of Mitsubishi Electric Corporation (Japan) / Masuda Katsumi
2. Representative of Mitsubishi Electric Corporation (Japan) / Kitamura Yasunori	1. Representative of Mitsubishi Electric Corporation (Japan) / Masuda Katsumi
2. Representative of Mitsubishi Electric Corporation (Japan) / Kitamura Yasunori
NT$5,000,000 (inclusive)–NT$10,000,000	1. Representative of Mitsubishi Electric Corporation (Japan) / Okochi Kazuhiko
2. Representative of Mitsubishi Electric Corporation (Japan) / Komura Hideaki
3. Representative of Chan Ching Co., Ltd. / Kan, Ming-Hung
4. Representative of Shin-Po Investment Co., Ltd. / Lin, Po-Fong
5. Representative of Yeang Der Investment Co., Ltd. / Cheng, Hsiang-Chih
6. Representative of Yeang Der Investment Co., Ltd. / Kuo, Yueh-She
7. Representative of Yeang Der Investment Co., Ltd. / Lee, Shui-Yuan	1. Representative of Mitsubishi Electric Corporation (Japan) / Okochi Kazuhiko
2. Representative of Mitsubishi Electric Corporation (Japan) / Komura Hideaki
3. Representative of Chan Ching Co., Ltd. / Kan, Ming-Hung
4. Representative of Shin-Po Investment Co., Ltd. / Lin, Po-Fong
5. Representative of Yeang Der Investment Co., Ltd. / Cheng, Hsiang-Chih
6. Representative of Yeang Der Investment Co., Ltd. / Kuo, Yueh-She
7. Representative of Yeang Der Investment Co., Ltd. / Lee, Shui-Yuan	1. Representative of Mitsubishi Electric Corporation (Japan) / Okochi Kazuhiko
2. Representative of Mitsubishi Electric Corporation (Japan) / Komura Hideaki
3. Representative of Chan Ching Co., Ltd. / Kan, Ming-Hung
4. Representative of Shin-Po Investment Co., Ltd. / Lin, Po-Fong	1. Representative of Mitsubishi Electric Corporation (Japan) / Okochi Kazuhiko
2. Representative of Mitsubishi Electric Corporation (Japan) / Komura Hideaki
3. Representative of Chan Ching Co., Ltd. / Kan, Ming-Hung
4. Representative of Shin-Po Investment Co., Ltd. / Lin, Po-Fong
NT$10,000,000 (inclusive)–NT$15,000,000	1. Representative of Yeang Der Investment Co., Ltd. / Hsieh, Han-Chang
2. Representative of Yeang Der Investment Co., Ltd. / Bryant Hsu	1. Representative of Yeang Der Investment Co., Ltd. / Hsieh, Han-Chang
2. Representative of Yeang Der Investment Co., Ltd. / Bryant Hsu	1. Representative of Yeang Der Investment Co., Ltd. / Cheng, Hsiang-Chih
2. Representative of Yeang Der Investment Co., Ltd. / Kuo, Yueh-She
3. Representative of Yeang Der Investment Co., Ltd. / Lee, Shui-Yuan	1. Representative of Yeang Der Investment Co., Ltd. / Cheng, Hsiang-Chih
2. Representative of Yeang Der Investment Co., Ltd. / Kuo, Yueh-She
3. Representative of Yeang Der Investment Co., Ltd. / Lee, Shui-Yuan
NT$15,000,000 (inclusive)–NT$30,000,000	1. Representative of Yeang Der Investment Co., Ltd. / Hsu, Yu-Jui / NT$ 23,974,219	1. Representative of Yeang Der Investment Co., Ltd. / Hsu, Yu-Jui / NT$ 23,974,219	1. Representative of Yeang Der Investment Co., Ltd. / Hsieh, Han-Chang / NT$ 19,476,213
2. Representative of Yeang Der Investment Co., Ltd. / Bryant Hsu / NT$ 16,249,511	1. Representative of Yeang Der Investment Co., Ltd. / Hsieh, Han-Chang / NT$ 19,476,213
2. Representative of Yeang Der Investment Co., Ltd. / Bryant Hsu / NT$ 16,249,511
NT$30,000,000 (inclusive)–NT$50,000,000			1. Representative of Yeang Der Investment Co., Ltd. / Hsu, Yu-Jui / NT$ 47,671,625	1. Representative of Yeang Der Investment Co., Ltd. / Hsu, Yu-Jui / NT$ 47,671,625
NT$50,000,000 (inclusive)–NT$100,000,000
NT$100,000,000 above
Total	18 persons	18 persons	18 persons	18 persons

Note 1: Names of directors should be separately disclosed (Institutional shareholders should disclose the names of the institutional shareholders and representatives separately). The amount of remuneration should be disclosed in summary. If a director concurrently serves as the President/General Manager or Senior Vice President /Vice General Manager, this Form and Form (3-1) or (3-2-1) and (3-2-2) must be filled out.
Note 2: It refers to the directors' compensation received for the recent year (including salaries of the directors, special responsibility allowance, severance pay, various bonuses, incentives, etc.).
Note 3: It refers to the remuneration of directors to be distributed in accordance with the proposal for distributing the recent year's earnings adopted at a meeting of board of directors and such proposal has not yet been submitted to the Shareholders' Meeting for approval.
Note 4: It refers to the relevant expenses for business operations paid to directors for the recent year (including transportation allowance, special allowance, various allowances and the provision of dormitory and vehicle, etc.). When a car, house and other transportation or personal expense are provided, the nature and cost of the assets provided, the actual or estimated rental expense based on a fair market price, gas expense, and other payments should be disclosed. Further, if a chauffeur is assigned, please also disclose the relevant compensation paid to such chauffeur in the Note. However, such amount shall not be included in the remuneration.
Note 5: It refers to the salaries, special responsibility allowance, severance pay, various bonuses, incentives, transportation allowance, special allowance, and the provision of dormitory and vehicle received by the director(s) who concurrently serve(s) as employee(s) (including President/General Manager or Senior Vice President /Vice General Manager, and other managerial officers and employees) in the recent year. When a house, car, and other transportation or personal expense are provided, the nature and cost of the assets provided, the

actual or estimated rental expense based on a fair market price, gas expense, and other payments should be disclosed. Further, if a chauffeur is assigned, please also describe the relevant compensation paid to such chauffeur in the Note. However, such amount shall not be included in the remuneration. In addition, the salary expense recognized in accordance with IFRS 2 "Share-based payment" includes the acquisition of employee stock warrant, employee restricted stock, and subscription of new shares from cash capitalization.

Note 6: It refers to the employee remuneration (including stock and cash) received by the directors who concurrently serve(s) as employee(s) (including concurrent President-General Manager or Senior Vice President -Vice General Manager, and other managerial officers and employees) in the recent year. It is required to disclose the amount of employee remuneration to be distributed in accordance with the proposal for distributing the recent year's earnings adopted at a meeting of board of directors and such proposal has not been submitted to the Shareholders' Meeting for approval. If such amount is unable to be estimated, the amount can be determined in accordance with the actual distribution ratio for last year. Form 1-3 shall be filled out as well. For a company listed on the stock exchange or an OTC market, the stock remuneration shall be measured at fair value (i.e., the closing price on the balance sheet date) in accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers; for a non-listed company, the stock remuneration shall be measured at the net value on the last date of the fiscal year that the earnings are generated.

Note 7: Disclose the total amount of remuneration paid to the directors by all the companies included in the consolidated financial statements (including the Company).

Note 8: Disclose the name of the directors in the respective range of total remuneration received from the Company.

Note 9: Disclose the name of the directors in the respective range of total remuneration received from all the companies included in the consolidated financial statements (including the Company).

Note 10: It refers to the net income of the recent year. After the adoption of IFRS.

Note 11: a. It is required to specify in this column the relevant remuneration amount the directors of the Company received from the reinvested companies other than the subsidiaries.

b. If the Company's director has received the relevant remuneration from the reinvested companies other than the subsidiaries, the received amount should be included in Column J. In addition, the column title shall be revised as "All reinvested companies".

c. Compensation shall mean the remuneration, reward, employee bonus, and expense for business operation paid to the Company's director(s) by the reinvested companies other than the subsidiaries and such directors concurrently serve(s) as director(s), supervisor(s), or managerial officer(s) of the reinvested companies.

Note 12: The 2025 distribution of employees' compensation has been approved at the Board of Directors and shall report at the Annual General Shareholders' Meeting.

Note 13: The amount of imputed rent is NT$ 3,405 thousand to provide the rental car for the Directors being also the employees.

Note 14: April 01,2025 Resigned.

Note 15: April 01,2025 New Appointed.

The concept of the "compensation" disclosed in this Form is different from the income defined under the Income Tax Law. Therefore, the purpose of this Form is for information disclosure not for taxation.

Shihlin Electric
2. Remuneration of President/General Manager, Senior Vice President/Vice General Manager
Unit: NTD thousands
December 31, 2025

Job title	Name	Salary (A) (Note 2)		Pension (B)		Salaries, Bonus and Special Subsidies (C) (Note 3)		Employee Bonus Allocated From Earnings (D) (Note 4)				The Sum of A, B, C and D in Proportion to Earnings (Note 8)		Whether remuneration from any reinvested other than subsidiaries is received? (Note9)
		the Company	Companies included in the financial statement (Note 5)	the Company	Companies included in the financial statement (Note 5)	the Company	Companies included in the financial statement (Note 5)	the Company		Companies included in the financial statement (Note 5)	the Company	Companies included in the financial statement	Companies included in the financial statement
								Cash	Stock	Cash
C.E.O.	Hsu, Yu-Jui	71,728	71,728	2,031	2,031	8,251 (Note 10)	10,144 (Note 10)	21,400 (Note 11)	0	21,400 (Note 11)	0	103,410 3.16%	105,303 3.22%	N/A
Senior Managing Director	Hsieh, Han-Chang
President	Kuo, Yueh-She
President	Cheng, Hsiang-Chih
General Manager of Business Groups	Wu, Tsung-Ming
General Manager of Business Groups	Lin, Teng-Fu
General Manager of Business Groups	Lee, Shui-Yuan
General Manager of Business Groups	Yang, Tsung-Hsien
General Manager of Business Groups	Chang, Chin-Wen
Senior Vice President	Bryant Hsu
Senior Vice President	Chu, Wen-Ping
Vice General Manager	Fang, Yu-Jung
Vice General Manager	Lin, Yu-Liang
Vice General Manager	Liu, Ta-Wei
Vice General Manager	Chen, Wen-Hsiang
Senior Vice President	Shih, Chin-Yi
Senior Vice President	Lee, Ying-Chu

It should include the information disclosure of the President/General Manager or Senior Vice President /Vice General Manager and Assistant General Manager , department heads, and branch officers; also, the position equivalent to General Manager, Senior Vice President, or Assistant General Manager .

Breakdown of Remuneration

Breakdown Of Remuneration Of General Manager & Senior Vice President	Name of President/General Manager, Senior Vice President/Vice General Manager
	the Company (Note 6)	Companies included in the financial statement (Note 7)
Less than NT$1,000,000
NT$1,000,000 (inclusive)-NT$2,000,000
NT$2,000,000 (inclusive)-NT$3,500,000	1.Senior Vice President / Lee, Ying-Chu	1.Senior Vice President / Lee, Ying-Chu
NT$3,500,000 (inclusive)-NT$5,000,000	1.General Manager of Business Groups / Yang, Tsung-Hsien
2.General Manager of Business Groups / Lin, Teng-Fu
3.General Manager of Business Groups / Lee, Shui-Yuan
4.Vice General Manager / Fang, Yu-Jung
5.Senior Vice President / Chu, Wen-Ping
6.Senior Vice President / Bryant Hsu
7.Vice General Manager / Chen, Wen-Hsiang
8.Vice General Manager / Liu, Ta-Wei
9.Senior Vice President / Shih, Chin-Yi	1.General Manager of Business Groups / Yang, Tsung-Hsien
2.General Manager of Business Groups / Lin, Teng-Fu
3.General Manager of Business Groups / Lee, Shui-Yuan
4.Vice General Manager / Fang, Yu-Jung
5.Senior Vice President / Chu, Wen-Ping
6.Senior Vice President / Bryant Hsu
7.Vice General Manager / Chen, Wen-Hsiang
8.Vice General Manager / Liu, Ta-Wei
9.Senior Vice President / Shih, Chin-Yi
NT$5,000,000 (inclusive)-NT$10,000,000	1.Senior Managing Director / Hsieh, Han-Chang
2.President / Cheng, Hsiang-Chih
3.President / Kuo, Yueh-She
4.General Manager of Business Groups / Chang, Chin-Wen
5.General Manager of Business Groups / Wu, Tsung-Ming
6.Vice General Manager / Lin, Yu-Liang	1.Senior Managing Director / Hsieh, Han-Chang
2.President / Cheng, Hsiang-Chih
3.President / Kuo, Yueh-She
4.General Manager of Business Groups / Chang, Chin-Wen
5.General Manager of Business Groups / Wu, Tsung-Ming
6.Vice General Manager / Lin, Yu-Liang
NT$10,000,000 (inclusive)-NT$15,000,000
NT$15,000,000 (inclusive)-NT$30,000,000	1.C.E.O. / Hsu, Yu-Jui	1.C.E.O. / Hsu, Yu-Jui
NT$30,000,000 (inclusive)-NT$50,000,000
NT$50,000,000 (inclusive)-NT$100,000,000
NT$100,000,000 above
Total	17 persons	17 persons

Note 1: Names of General Manager and Senior Vice President should be separately disclosed. The amount of remunerations should be disclosed in summary. If a director concurrently serves as the General Manager or Senior Vice President, this Form and Form (1-1) or (1-2) must be filled out.
Note 2: It refers to the General Manager and Senior Vice President's salary, special responsibility allowance, and severance pay.
Note 3: It refers to the bonuses, incentives, transportation allowance, special allowance, the provision of dormitory and vehicle, and other compensations received by the General Manager and Senior Vice President in the recent year. When a house, car, and other transportation or personal expense are provided, the nature and cost of the assets provided, the actual or estimated rental expense based on a fair market price, gas expense, and other payments should be disclosed. Further, if a chauffeur is assigned, please also describe the relevant compensation paid to such chauffeur in the Note. However, such amount shall not be included in the remuneration. In addition, the salary expense recognized in accordance with IFRS 2 "Share-based payment" includes the acquisition of employee stock warrant, employee restricted stock, and subscription of new shares from cash capitalization.
Note 4: It refers to the employee remuneration (including stock and cash) received by the General Manager and Senior Vice President that is distributed in accordance with the proposal for distributing the recent year's earnings adopted at a meeting of the board of directors and such proposal has not been submitted to the Shareholders' Meeting for approval. If such an amount is unable to be estimated, the amount can be determined in accordance with the actual distribution ratio for last year. Form 1-3 shall be filled out as well. For a company listed on the stock exchange or an OTC market, the stock remuneration shall be measured at fair value (i.e., the closing price on the balance sheet date) in accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers; for a non-listed company, the stock remuneration shall be measured at the net value on the last date of the fiscal year that the earnings are generated. It refers to the net income of the recent year. After the adoption of IFRS, it refers to the net income in the individual or independent financial statements of the recent year.
Note 5: Disclose the total amount of remuneration paid to the General Manager and Senior Vice President by all the companies (including the Company) included in the consolidated financial statements.
Note 6: Disclose the name of the General Manager and Senior Vice President in the respective range of total remuneration received from all the Company.
Note 7: Disclose the total amount of remuneration paid to the General Manager and Senior Vice President by all the companies (including the Company) included in the consolidated financial statements. Disclose the name of the General Manager and Senior Vice President in the respective range of total remuneration received.
Note 8: It refers to the net income of the recent year. After the adoption of IFRS, it refers to the net income in the individual or independent financial statements of the recent year.

Note 9: a. It is required to specify in this column the relevant remuneration amount the General Manager and Senior Vice President of the Company received from the reinvested companies other than the subsidiaries.
b. If the General Manager and Senior Vice President have received the relevant remuneration from the reinvested companies other than the subsidiaries, the received amount should be included in Column E. In addition, the column title shall be revised as "All reinvested companies."
c. Remuneration shall mean the compensation, reward, employee bonus, and expense for business operation paid to the Company's the General Manager and Senior Vice President by the reinvested companies other than the subsidiaries, and such the General Manager and Senior Vice President concurrently serve(s) as director(s), supervisor(s), or managerial officer(s) of the reinvested companies.

Note 10: The amount of imputed rent is NT$ 8,251 thousand to provide the rental car.

Note 11: The 2025 distribution of employees' compensation has been approved by the Board of Directors and shall report at the Annual Shareholders' Meeting.

The concept of the "compensation" disclosed in this Form is different from the income defined under the Income Tax Law. Therefore, the purpose of this Form is for information disclosure not for taxation.

3. Employee bonus amount paid to managerial officers

December 31, 2025

Unit: NT$ thousands

	Job title (Note 1)	Name (Note 1)	Stock	Cash
Managerial officer	C.E.O.	Hsu, Yu-Jui	0	26,050
(Note 5)	26,050	0.80%
	Senior Managing Director	Hsieh, Han-Chang
	President	Kuo, Yueh-She
	President	Cheng, Hsiang-Chih
	General Manager of Business Groups	Wu, Tsung-Ming
	General Manager of Business Groups	Lin, Teng-Fu
	General Manager of Business Groups	Lee, Shui-Yuan
	General Manager of Business Groups	Yang, Tsung-Hsien
	General Manager of Business Groups	Chang, Chin-Wen
	Senior Vice President	Bryant Hsu
	Senior Vice President	Chu, Wen-Ping
	Vice General Manager	Lin, Yu-Liang
	Vice General Manager	Fang, Yu-Jung
	Vice General Manager	Chen, Wen-Hsiang
	Vice General Manager	Liu, Ta-Wei
	Senior Vice President	Lee, Ying-Chu
	Senior Assistant General Manager	Tien, Chia-Wen
	Senior Assistant General Manager	Liao, Feng-Liang
	Senior Assistant General Manager	Hou, Kuan-Liang
	Senior Assistant General Manager	Chang, Kuei-Feng
	Assistant General Manager	Hsu, Yao-Chou
	Assistant General Manager	Yang, Tien-Shu
	Assistant General Manager	Tzeng, Chi-Chong
	Assistant General Manager	Chen, Ming-Chih
	Assistant General Manager	Chang, Zhi-Hong
	Assistant General Manager	Chang, Yu-Ping
Assistant General Manager	Huang, Jen-Ts
Senior Vice President
Financial Officer
Chief Accountant
Chief of Corporate Governance	Shih, Chin-Yi

Note 1: Names and job title of each person should be separately disclosed. The amount of remunerations can be disclosed in summary.
Note 2: It refers to the employee remuneration (including stock and cash) received by the managerial officers that is distributed in accordance with the proposal for distributing the recent year's earnings adopted at a meeting of board of directors and such proposal has not been submitted to the Shareholders' Meeting for approval. If such amount is unable to be estimated, the amount can be determined

in accordance with the actual distribution ratio for last year. It refers to the net income of the recent year. After the adoption of IFRS, it refers to the net income in the individual or independent financial statements of the recent year.

Note 3: The scope of application for managers is defined in accordance with the Tai.Chai.Cheng (III) No. 0920001301 Letter dated March 27, 2003 by the SEC as follows:

(1) President, General Manager and the equals
(2) Senior Vice President, Vice General Manager and the equals
(3) Assistant General Manager and the equals
(4) General Manager of Finance Department
(5) General Manager of Accounting Department
(6) Managerial officers and the individuals authorized to sign

Note 4: If Directors, General Manager and Senior Vice President* have collected employee remuneration (including stock and cash), in addition to filling out Form 1-2, please fill out this Form too.

Note 5: The 2025 distribution of employees' compensation has been approved at the Board of Directors and shall be reported at the shareholders' meeting.

Corporate Governance Report

25 -

Shihlin Electric

D. Specify and compare the remuneration of Directors, Manager and Senior Vice President of the Company in proportion to the earnings after tax from the Company and companies included in the consolidated financial statements over the last two years, and specify the policies, standards, combinations, and procedures of decision-making for remuneration and their correlation with business performance and future risk:

The ratio of total remuneration paid by the Company to Directors, General Manager, and Senior Vice President / Net income (%):

Unit: NT$ thousand

Title	2025 (Note 1)				2024 (Note 1)
	Total remuneration		Remuneration / standalone net income ratio (%)		Total remuneration		Remuneration / standalone net income ratio (%)
	The Company	All Consolidated Entities	The Company	All Consolidated Entities	The Company	All Consolidated Entities	The Company	All Consolidated Entities
Director	110,632	110,632	3.39	3.39	94,592	94,592	3.13	3.13
General Manager Senior Vice President	103,410	105,303	3.16	3.22	78,443	79,021	2.59	2.61
Total	214,042	215,935	6.55	6.61	173,035	173,613	5.72	5.74

Note 1 Analysis of the ratio of total remuneration paid by the Company and by all companies included in consolidated financial report to Directors, Supervisors, General Manager, and Senior Vice President / Net income (%) for the most recent two years.
The total amount of remuneration paid by the company to directors, general managers and Senior Vice Presidents in 2025, decreased as a percentage of net profit after tax, which was mainly due to the increase in net profit before tax in 2025.

The policies, standards, combinations, procedures of decision-making of remunerations and their correlation with business performance and future risk:

(1) Policies, standard and combinations of compensation

(a) In accordance with Article 20 of the Articles of Association of the Company, the compensation of directors (including independent directors) shall be put into consideration of the operation performance as well as the recommendations of the industry reference and shall be submitted to the board of directors for review and approval.
(b) According to Article 5 of the Guide to Regulations Governing Independent Directors, the compensation of independent directors may also be determined as a fixed monthly payment through relevant legal procedures, without participating in the disposition of net earnings.
(c) The compensation, including salaries and various bonuses of the General Manager and Senior Vice President shall refer to the salary level of external similar enterprises.

(2) Procedure for setting compensation

(a) In accordance with the current policies and procedures, the salary and compensation items of the General Manager and Senior Vice Presidents shall be proposed based on their participation in the company's operation and the value of their contribution and with reference to the salary level of external similar enterprises. After being approved by the Chairman, it will be submitted to the compensation committee for deliberation and implemented after the approval of the board of directors.
(b) To fully demonstrate the achievement of management performance indicators, the performance measurement criteria for the Chairman are based on the Company's annual business indicators related to operations, governance, and financial results. The assessment scope includes pre-tax net profit, corporate governance evaluation, and sustainability performance indicators. The performance assessment scope for the General Manager includes operational safety management, supervision of financial plan execution, revenue management, strengthening of internal controls, implementation of quality assurance and management, and sustainability performance, among other key performance objectives related to their main job responsibilities.

Corporate Governance Report

(3) Relevance to business performance and risks

(a) All compensation policies and procedures do not guide Directors and Managers to engage in behavior that exceeds the company's risk appetite in pursuit of individual benefits.

(b) After evaluating and measuring the current company's business scale, performance and the situation of payment over the years, various salary and remuneration items are planned to be handled in accordance with the current system.

(4) For the payment procedure of employee and director compensation, please refer to item (E) of the compensation of employees and directors on page 92.

2. Operation of Corporate Governance

A. Operation of Board of Directors

The Board held 5 (A) meetings in 2025. The attendance record of the Directors is listed below:

Job title	Name (Note 1)	Actual attendance (B)	Attendance by proxy	Actual attendance rate (%) (B/A) (Note2)	Remark
Chairman	Yeang Der Investment Co., Ltd.
Hsu, Yu-Jui	2	3	40%	Reelected on 2023/06/21
Managing Director	Mitsubishi Electric Corporation (Japan)
Kawai Toshio	1	0	100%	2025/04/01 resigned.
The board of directors held 1 meeting during his term of office
Managing Director	Mitsubishi Electric Corporation (Japan)
Okochi Kazuhiko	4	0	100%	2025/04/01 took over.
The board of directors held 4 meeting during his term of office
Managing & Independent Director	Lin, Hsin-I	5	0	100%	Reelected on 2023/06/21
Managing Director	Yeang Der Investment Co., Ltd.
Hsieh, Han-Chang	5	0	100%	Reelected on 2023/06/21
Managing Director	Yeang Der Investment Co., Ltd.
Bryant Hsu	0	5	0%	2024/11/08 took over.
Managing Director
Director	Chanching Co., Ltd.
Kan, Ming-Hung	5	0	100%	2024/04/01 took over.
Director	Mitsubishi Electric Corporation (Japan)
Komura Hideaki	5	0	100%	Reelected on 2023/06/21
Director	Mitsubishi Electric Corporation (Japan)
Kunieda Masayuki	1	0	100%	2025/04/01 resigned.
The board of directors held 1 meeting during his term of office
Director	Mitsubishi Electric Corporation (Japan)
Uchiyama Akira	1	0	100%	2025/04/01 resigned.
The board of directors held 1 meeting during his term of office
Director	Mitsubishi Electric Corporation (Japan)
Masuda Katsumi	4	0	100%	2025/04/01 took over.
The board of directors held 4 meeting during his term of office
Director	Mitsubishi Electric Corporation (Japan)
Kitamura Yasunori	4	0	100%	2025/04/01 took over.
The board of directors held 4 meeting during his term of office
Director	Yeang Der Investment Co., Ltd.
Kuo, Yueh-She	5	0	100%	2024/02/01 took over.
Director	Yeang Der Investment Co., Ltd.
Cheng, Hsiang-Chih	5	0	100%	2024/02/01 took over.
Director	Yeang Der Investment Co., Ltd.
Lee, Shui-Yuan	5	0	100%	2024/10/01 took over
Director	Shin-Po Investment Co., Ltd.
Lin, Po-Fong	5	0	100%	Reelected on 2023/06/21
Independent Director	Yan, Cherng-Jau	5	0	100%	Reelected on 2023/06/21
Independent Director	Hu, Chao-Fong	5	0	100%	Reelected on 2023/06/21

Shihlin Electric

| Job title | Name
(Note 1) | Actual attendance
(B) | Attendance by proxy | Actual attendance rate (%) (B/A)
(Note2) | Remark |
| --- | --- | --- | --- | --- | --- |
| Other items to be specified: | | | | | |
| 1. Should one of the following occur, the meeting date, period, content of the resolution, opinions of all Independent Directors, and the Company’s handling of the opinions of the Independent Directors shall be clearly stated:
(1) All the listed items in Article 14-3 of the Securities and Exchange Act: Refer to page.80, item (L), for important resolutions of the shareholders’ meeting and the board of directors.
(2) In addition to the afore mentioned, the items in board resolutions regarding which Independent Directors have voiced opposing or qualified opinions on the record or in writing: None. | | | | | |
| 2. In instances where a Director’s circumvention due to the conflict of interest, the minutes shall clearly state the Director’s name, contents of the motion and resolution thereof, reason for such circumvention and the voting status:
(1) It is planned to donate to Memorial Foundation of Mr. Ching-Teh Hsu. Chairman / Hsu, Yu-Jui, Managing Director / Hsieh, Han-Chang and Managing Director / Bryant Hsu and Cheng, Hsiang-Chih did not participate in the discussion and vote because of the interest avoidance. | | | | | |
| 3. TWSE/GTSM-Listed Companies shall disclose the information of Self-Evaluation (or Peer) Evaluation of the Board of Directors, including general evaluation cycle, evaluation period, scope and method of evaluation and content of evaluation. Fill in sequence the assessment of implementation status in the Attachment (2). | | | | | |
| 4. Measures undertaken during the current year and past year (including the establishment of the Audit Committee, improvement of info transparency, etc.) in order to strengthen the functions of the Board of Directors and assessment of such implementation: Please refer to items (A) to (F) on page. 27 for the operation of corporate governance. | | | | | |

Note 1: The names of corporate shareholders and names of representatives shall be disclosed in case the director and Independent Director are corporate organizations.
Note 2: (1) In case any director or supervisor resigns before the end of the year, mark the date of resignation on the remarks and the actual attendance rate (%) is calculated by the number of meetings attended during his/her term at the Board of the Directors and the number of actual attendances for calculation.
(2) In case of any director and supervisor reelection before the end of the year, fill in the new and former directors and supervisors in addition to marking the director and supervisor as new or former term, and the date of reelection. The actual attendance rate (%) is calculated by the number of meetings attended during his/her term at the Board of the Directors and the number of actual attendances for calculation.

28 -

Corporate Governance Report

B. Evaluation Implementation Status of the Board of Directors and Various Functional Committees

Assessment Circle(Note 1)	Assessment Period(Note 2)	Assessment Scope(Note 3)	Assessment Measure (Note 4)	Assessment Content (Note 5)
Execute once a year	January 01,2025 ~ December 31, 2025	Overall Board of Director	Director’s self-appraisal	➢ Involvement in the Company’s operation
➢ Quality improvement of the Board’s decision-making
➢ The composition and structure of the Board
➢ The assignment and continual education of Directors
➢ Internal control
➢ Sustainable Operation and Social Responsibility	1. Evaluation metrics:45 items
2. Scoring result: 4.75
Between 5 "strongly agree" and 4 "agree"
Execute once a year	January 01,2025 ~ December 31, 2025	Individual Director	Director’s self-appraisal	➢ Control of the corporate goal and mission
➢ Cognition of Director’s duty
➢ Involvement in the Company’s operation
➢ Internal relation management and communication
➢ The assignment and continual education of Directors
➢ Internal control
➢ Sustainable Operation and Social Responsibility	1. Evaluation Metrics:23 items
2. Scoring result: 4.79
Between 5 "strongly agree" and 4 "agree"
Execute once a year	January 01,2025 ~ December 31, 2025	Audit Committee	Member’s self-appraisal	➢ Involvement in the Company’s operation
➢ Cognition of functional committee’s duty
➢ Quality improvement of the Board’s decision-making
➢ The composition and assignment of the functional committee
➢ Internal control	1. Evaluation Metrics:25 items
2. Scoring results: 5
5 "strongly agree"
Execute once a year	January 01,2025 ~ December 31, 2025	Remuneration Committee	Member’s self-appraisal	➢ Involvement in the Company’s operation
➢ Cognition of functional committee’s duty
➢ Quality improvement of the Board’s decision-making
➢ The composition and assignment of the functional committee
➢ Internal control	1. Evaluation Metrics:25 items
2. Scoring results: 4.95
Between 5 "strongly agree" and 4 "agree"

29 -

Shihlin Electric

Assessment Circle(Note 1)	Assessment Period(Note 2)	Assessment Scope(Note 3)	Assessment Measure (Note 4)	Assessment Content (Note 5)
Execute once a year	January 01,2025 ~ December 31, 2025	Sustainability Committee	Member’s self-appraisal	➢ Involvement in the Company’s operation
➢ Cognition of functional committee’s duty
➢ Quality improvement of the Board’s decision-making
➢ The composition and assignment of the functional committee
➢ Internal control	1. Evaluation Metrics:25 items
2. Scoring results: 5
5 "strongly agree"

Note 1: Indicates the execution cycle of the board performance evaluation, e.g., conducted once per year.
Note 2: Indicates the period covered by the board performance evaluation, e.g., assessing the board's performance from January 1 to December 31 of the year 2019.
Note 3: The scope of the evaluation includes performance assessments of the board as a whole, individual board members, and functional committees.
Note 4: Evaluation methods include internal self-evaluation by the board, self-assessments by board members, peer evaluations, or performance evaluations conducted by an external professional institution, expert, or other appropriate methods.
Note 5: Evaluation content, depending on the scope, should include at least the following items:(1) Board performance evaluation: Should include participation in company operations, quality of board decisions, board composition and structure, director selection and continuing education, and internal controls. (2) Individual director performance evaluation: Should include understanding of company goals and missions, awareness of director responsibilities, participation in company operations, internal relationship management and communication, professionalism and continuing education, and internal controls. (3) Functional committee performance evaluation: Should include participation in company operations, awareness of committee responsibilities, quality of committee decisions, committee composition and member selection, and internal controls.
Note 6: Evaluation results are presented on a 5-level scale, with the following explanations:
1 = Strongly Disagree (Very Poor) 2 = Disagree (Poor) 3 = Neutral (Average) 4 = Agree (Good)
5 = Strongly Agree (Excellent)
Note 7: The Company completed the performance evaluations of the board and all functional committees in January 2026 and reported the evaluation results of the Year 2025 board performance at the board meeting held on March 12, 2026. The overall board performance evaluation results for Year 2025 ranged between 5 (Strongly Agree) and 4 (Agree). Most directors strongly agreed with the operation of each evaluation indicator. The evaluation concluded that the board and its functional committees operate effectively, meet corporate governance requirements, and successfully enhance board functions while protecting shareholder rights.

Corporate Governance Report

C. Annual Work Priorities and Operations of the Audit Committee

To assist the Board of Directors in fulfilling its role in overseeing the quality and integrity of the Company’s accounting, auditing, financial reporting processes and financial controls, the Audit Committee’s terms of reference are as follows:
Formulate or amend the internal control system based on Article 14-1 of the Securities and Exchange Act.
Review and audit the effectiveness of the internal control system.
Formulate or amend the regulations governing acquisition and disposal of assets, derivatives transactions, loaning of funds and making of endorsements/guarantees based on Article 36-1 of the Securities and Exchange Act.
Review matters involving the Director's own interests.
Review major assets or derivatives transactions.
Review major fund loaning, endorsements or guarantees made.
Review the raise, issuance or private placement of securities with equity.
Review the appointment, dismissal or remuneration of CPAs.
Review the appointment of Chief of financial, accounting or internal audit.
Review the financial report required to be approved by the Board of Directors based on regulations by the competent authority.
Review other major issues regulated by the Company or the competent authorities.
The audit committee of the company is composed of 3 independent directors. The audit committee aims to assist the board of directors in supervising the quality and integrity of the company's implementation of accounting, auditing, financial reporting procedures and financial control.

The Audit Committee held 5 meetings in 2025, and the main items considered include:

Formulate or amend the internal control system based on Article 14-1 of the Securities and Exchange Act.
Review and audit the effectiveness of the internal control system.
Formulate or amend the regulations governing acquisition and disposal of assets, derivatives transactions, loaning of funds and making of endorsements/guarantees based on Article 36-1 of the Securities and Exchange Act.
Matters involving the director's own interests.
Major assets or derivatives transactions.
Major fund loaning, endorsements or guarantees made.
The raise, issuance or private placement of securities with equity.
The appointment, dismissal or remuneration of CPAs.
The appointment of Chief of financial, accounting or internal audit.
The financial report required to be approved by the Board of Directors based on regulations by the competent authority.
Other major issues regulated by the Company or the competent authorities.

> Review the financial reports

The Board of Directors has prepared and submitted the Company’s 2025 Business Report, Financial Statements (including the Consolidated Financial Statements), and the Proposal for Earnings Distribution. The above-mentioned Business Report, Financial Statements (including the Consolidated Financial Statements), and Earnings Distribution Proposal have been reviewed and verified by the Audit Committee, which found no discrepancies.

> Assess the effectiveness of the internal control system

The audit committee evaluates the effectiveness of the company’s internal control system policies and procedures (including financial, operational, risk management, information security, outsourcing, legal compliance and other control measures), and reviews the Company’s audit department, certified accountants, and management’s regular reports, including risk management and compliance with laws and regulations. The audit committee believes that the company's risk management and internal control systems are effective, and the company has adopted necessary control mechanisms to monitor and correct violations.

Shihlin Electric

> Appointment of the certified accountant

The audit committee is given the responsibility of supervising the independence of the certified public accountant firm to ensure the fairness of the financial statements. Generally speaking, except for tax-related services or specially approved items, visa accounting firms are not allowed to provide other services of the company. All services provided by the Certified Public Accountants must be approved by the Audit Committee. In order to ensure the independence of the certified public accountant firm, the audit committee developed an independence evaluation form in accordance with Article 47 of the Accountants Act and the Bulletin of the Professional Ethics of Accountants No. 10 "Integrity, impartiality, objectivity, and independence" to assess the independence of accountants. Professional and competency assessment, assess whether the Company is a related party, mutual business or financial interests and other projects. On August 6, 2025, during the 9th meeting of the 3rd Audit Committee and the 10th meeting of the 21st Board of Directors, it was resolved and approved that CPA Huang, Yao-Lin and CPA Lee, Tung-Feng of Deloitte & Touche meet the independence assessment criteria and are qualified to serve as the Company's financial and tax attestation accountants. On November 7, 2025, the 11th meeting of the 3rd Audit Committee and the 12th meeting of the 21st Board of Directors reviewed and approved the change of the signing accountants. To accommodate the internal adjustments of Deloitte & Touche, Certified Public Accountants, CPAs Huang, Yao-Lin and Chuang, Yeh-Wei were appointed as the Company's financial and tax signing accountants. On May 8, 2026, the 13th meeting of the 3rd Audit Committee and the 14th meeting of the 21st Board of Directors reviewed and approved that CPAs Huang, Yao-Lin and Chuang, Yeh-Wei of Deloitte & Touche met the independence assessment standards and are qualified to serve as the Company's financial and tax signing accountants.

32 -

Corporate Governance Report

The Member Information of Audit Committee

April, 19, 2026

| separate
(Note1) | Qualification
Name | Professional Qualifications and Experience
(Note 2) | Independence
(Note3) | Number of Concurrently Serving as an Audit Committee of Another Listed Company |
| --- | --- | --- | --- | --- |
| Independent-Director
Convener | Lin, Hsin-I | • Management ability
• Cross-cultural leadership
• Motor industry knowledge and experience
• Sustainable Development
• Risk Management
• Minister of Economic Affairs, Vice President of the Executive Yuan and Chairman of the Economic Construction Association
• Please refer to page 6–9 for director information | 1. The self, spouse, or relatives within the second degree of relatives do not serve as directors, supervisors or employees of the company or its affiliated companies.
2. The number and proportion of the company's shares held by the person, spouse, relatives within the second degree (or in the name of others): 0 shares/0%.
3. Not serving as a director, supervisor or employee of a company that has a specific relationship with the company (refer to the provisions of Article 6, Paragraph 1, Subparagraphs 5 to 8 of the Regulations Governing the Appointment and Exercise of Powers by the Audit Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange).
4. No amount of remuneration for providing business, legal, financial, accounting and other services to the company or its affiliates in the last two years. | No concurrently serving on the audit committee of other public offering companies. |
| Independent-Director | Yan, Cherng-Jau | • Management ability
• Motor industry knowledge and experience
• Sustainable Development
• Risk Management
• Director of Shilin Electric Machinery Co., Ltd.
• Please refer to page 6–9 for director information | 1. The self, spouse, or relatives within the second degree of relatives do not serve as directors, supervisors or employees of the company or its affiliated companies.
2. The number and proportion of the company's shares held by the person, spouse, relatives within the second degree (or in the name of others): 0 shares/0%.
3. Not serving as a director, supervisor or employee of a company that has a specific relationship with the company (refer to the provisions of Article 6, Paragraph 1, Subparagraphs 5 to 8 of the Regulations Governing the Appointment and Exercise of Powers by the Audit Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange).
4. No amount of remuneration for providing business, legal, financial, accounting and other services to the company or its affiliates in the last two years. | No concurrently serving on the audit committee of other public offering companies. |
| Independent-Director | Hu, Chao-Fong | • Management ability
• Motor industry knowledge and experience
• Sustainable Development
• Risk Management
• Vice president of Shilin Electric Machinery Co., Ltd.
• Please refer to page 6–9 for director information | 1. The self, spouse, or relatives within the second degree of relatives do not serve as directors, supervisors or employees of the company or its affiliated companies.
2. The number and proportion of the company's shares held by the person, spouse, relatives within the second degree (or in the name of others): 118,746 shares/0.02%.
3. Not serving as a director, supervisor or employee of a company that has a specific relationship with the company (refer to the provisions of Article 6, Paragraph 1, Subparagraphs 5 to 8 of the Regulations Governing the Appointment and Exercise of Powers by the Audit Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange).
4. No amount of remuneration for providing business, legal, financial, accounting and other services to the company or its affiliates in the last two years. | No concurrently serving on the audit committee of other public offering companies. |

Note1: Please specify in the form the relevant working years, professional qualifications and experience and independence of the members of each audit committee. If they are independent directors, please refer to Appendix 1 on page OO for information on directors and supervisors (1) related information. Please fill in the series as independent directors or others respectively (if it is the convener, please add a Note).
Note 2: Professional Qualifications and Experience: Describe the professional qualifications and experience of individual audit committee members.
Note 3: Condition of independence: state that the members of the audit committee meet the conditions of independence, including but not limited to whether I, my spouse, or relatives within the second degree of The number and proportion of shares held by relatives within the kinship (or in the name of others); whether they act as a company that has a specific relationship with the company (refer to the establishment of the audit committee and the exercise of functions and powers of the company listed on the stock market or the business office of the securities firm) Article 6 Paragraph 1 Items 5 to 8) of the director, supervisor or employee; the amount of remuneration received for providing the company or its affiliates with business, legal, financial, accounting and other services in the last two years.

Shihlin Electric

The Audit Committee held 5 (A) meetings in 2025. The attendance record of Independent Directors is listed below:

Job Title	Name	Actual attendance (B)	Attendance by proxy	Actual attendance rate (%) (B/A)
Managing & Independent Director	Lin, Hsin-I	5	0	100%
Independent Director	Yan, Cherng-Jau	5	0	100%
Independent Director	Hu, Chao-Fong	5	0	100%
Other items to be recorded:
1. The Audit Committee shall record the convene date, the term, the content of the proposal the Audit Committee Meeting, and the resolution of Audit Committee and the Company's treatment to the resolution of the Audit Committee if any of the following circumstances occurs.
(1) Items listed in Article 14-5 of the Securities and Exchange Act: Please refer to item (C) on page.31 for Annual Work Priorities and Operations of the Audit Committee.
(2) In addition to the preceding matters, other matters that have not been approved by the Audit Committee and have been approved by more than two-thirds of all Directors: None.
2. The names of Independent Directors, the contents of the proposals, the reasons for avoidance of conflicts of interest and the participation of voting shall be clearly recorded if there is any implementation of avoidance of conflicts of interest to any Independent Director: None.
3. Communication between the Independent Directors and the internal audit directors and CPAs (please record the covered major issues, methods and results of the communication for the Company's financial and business conditions):
(1) The Company regularly calls meetings of the Audit Committee and invites CPAs, audit directors and relevant supervisors to attend if necessary.
(2) The internal audit directors regularly submit the audit summary report according to the annual audit plan. The Audit Committee also regularly makes assessment to the Company's internal control system, the internal auditors and their work performance.
(3) The Audit Committee regularly communicates with the Company's CPAs on the quarterly financial statements for review or examines the results and other related laws and regulations and reviews the independence of the CPAs.

Note 1: If an independent director resigned before the end of the fiscal year, the resignation date shall be specified in the remarks column. The actual attendance rate (%) shall be calculated based on the number of Audit Committee meetings held and attended during their term of service.
Note 2: If a re-election of independent directors occurred before the end of the fiscal year, both the outgoing and incoming independent directors shall be listed. The remarks column shall indicate whether each director is outgoing, newly appointed, or reappointed, along with the date of re-election. The actual attendance rate (%) shall be calculated based on the number of Audit Committee meetings held and attended during their respective terms.

Operation of Current Year

Audit Committee Meeting	Discussions and Resolutions	Matters Specified in Article 14-5 of Securities and Exchange Act
3rd Session, 7th Meeting Mar. 06, 2025	1. Proposal of distribution of 2024 employee remuneration and Director compensation.
	2. Proposal of 2024 business report and financial statement.	V
	3. Proposal of distribution of 2024 surplus.
	4. Amend the "Company Incorporation"
	5. It is hereby requested that the Shareholders' Meeting approve the removal of the non-compete restriction imposed on the legal representative of the Company's directors.
	6. Proposal of convene date, location, and agenda of 2025 Shareholders' Meeting, location for reception and acceptance of shareholders' proposals, periods of reception and acceptance and e-voting.
	7. Proposed Capital Increase for Cheng Lin Investments Co., Ltd.

Corporate Governance Report

Audit Committee Meeting	Discussions and Resolutions	Matters Specified in Article 14-5 of Securities and Exchange Act
	8. Changes in the Company's managerial personnel.
	9. Consent to lift the restrictions on the prohibition of competition for managers of the Company.
	10. Issuance of the "Statement on Internal Control System" for the year 2024 based on the results of the self-assessment.	V
	Resolutions: Approved by all members of the Audit Committee without any objection.
	Treatment by the Company to the resolutions of the Audit Committee: All Directors had attended and approved without any objection.
	Resolution: All the directors present had no objection, and the proposal was passed.
3rd Session, 8th Meeting May. 08, 2025	1. Proposal of consolidated financial statement of January-March of 2025.	V
	2. Provide financing endorsement guarantee to Changzhou Shihlin Auto Parts Co., Ltd.	V
	3. Proposal for the 2024 ESG Report.
	4. Proposal of 2025 compensation to CPAs.	V
	5. Revise the "Code of Integrity in Business Operations."
	6. Revise the "Detailed Rules for the Implementation of Internal Control Systems - Payroll Cycle" and the "Detailed Rules for the Implementation of Internal Audits - Payroll Cycle."	V
	Resolutions: Approved by all members of the Audit Committee without any objection.
	Treatment by the Company to the resolutions of the Audit Committee: All Directors had attended and approved without any objection.
	Resolution: All the directors present had no objection, and the proposal was passed.
3rd Session, 9th Meeting Aug. 06, 2025	1. Proposal of consolidated financial statement of January-June of 2025.	V
	2. Australian Solar Energy Investment Project
	3. Provide financing endorsement guarantee to Changzhou Shihlin Auto Parts Co., Ltd. and Shihlin Electrical Engineering Ltd. of Vietnam	V
	4. Evaluation of the independence of the Company's attesting certified public accountants.	V
	5. Change in the Company's managerial personnel.
	6. Change in Company Audit Manager	V
	Resolutions: Approved by all members of the Audit Committee without any objection.
	Treatment by the Company to the resolutions of the Audit Committee: All Directors had attended and approved without any objection.
	Resolution: All the directors present had no objection, and the proposal was passed.
3rd Session, 10th Meeting Sep. 10, 2025	1. Modification in the Appointment of the President of the Company.
	2. Modification in the Appointment of the Managers of the Company.
	Resolutions: Approved by all members of the Audit Committee without any objection.
	Treatment by the Company to the resolutions of the Audit Committee: All Directors had attended and approved without any objection.
	Resolution: All the directors present had no objection, and the proposal was passed.
3rd Session, 11th Meeting	1. Proposal of consolidated financial statement of January-September of 2025.	V
	2. 2026 operating plan and profit and loss budget.

35 -

Shihlin Electric

Audit Committee Meeting	Discussions and Resolutions	Matters Specified in Article 14-5 of Securities and Exchange Act
Nov. 07, 2025	3. Audit plan for the year 2026.
	4. Credit facility arrangements with financial institutions for the year 2026.
	5. Proposed to provide a financing endorsement guarantee to Wuxi Shihlin Electric & Engineering Co., Ltd.	V
	6. Proposed capital increase for "Shang Lin Investment Co., Ltd."
	7. Proposal to donate to "Memorial Foundation of Mr. Ching-Teh Hsu"
	8. In coordination with the internal adjustments of Deloitte Touche Tohmatsu Limited, replace the signing accountant.	V
	9. Changes in the company's management personnel.
	10. Remuneration of directors and managers.	V
	Resolutions:Approved by all members of the Audit Committee without any objection.
	Treatment by the Company to the resolutions of the Audit Committee:All Directors had attended and approved without any objection.
	Resolution: All the directors present had no objection, and the proposal was passed.

Audit Committee Review Report of the Financial Statements for the Most Recent Year

Audit Committee Review Report

To the 2026 General Shareholders' Meeting of Shihlin Electric & Engineering Corporation,

The Board of Directors has prepared and submitted the Company's 2025 Business Report, Financial Statements (including Consolidated Financial Statements), and the Earnings Distribution Proposal. The aforementioned documents have been reviewed and verified by the Audit Committee, which found no discrepancies. In accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, this report has been prepared for your review and approval.

The Convener of the Audit Committee: Lin, Hsin-I

March 12, 2026

Corporate Governance Report

D. The State of the Company's Implementation of Corporate Governance, Any Discrepancy of Such Implementation from the Corporate Governance Best-practice Principles for TWSE/Tpex Listed Companies, and the Reason for Any Such Discrepancy:

Item	Implementation Status			Deviations from "Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies" and reasons
	Yes	No	Summary
1. Does the company comply disclose corporate governance practice principles in compliance with Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies?	V		The company has developed and disclosed its corporate governance practice principles on the company website in compliance with the "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies."	None
2. Shareholding Structure & Shareholders' Rights
(1) Has the Company established internal operating procedures to handle shareholder proposals, doubts, disputes, and litigation-related issues and practically implemented such procedures?	V		◆ The company offers spokesperson and proxy spokesperson to handle shareholders' suggestions or disputes. The consolidated individual companies also set up full-time management departments to process relevant matters.	None
(2) Has the Company kept the lists of its major shareholders and the ultimate owners of such major shareholders?	V		◆ The equity affairs specialist of the company is in charge of the actual control of the major shareholders of the company and the ultimate control list of major shareholders while consolidated individual companies also set up share affairs specialist in charge of processing the relevant matters.	None
(3) Has the Company established risks control and firewall mechanism with its affiliates?	V		◆ The competent management of HR, asset and finance, and sales between the Company and affiliated enterprises are independent with dedicated department in assessment of risks.	None
(4) Has the Company established the internal rules to prohibit its insiders from trading securities by using info not yet disclosed to the market?	V		◆ The company strictly prohibits insiders with the use of private information in securities trading to prevent insider trading.	None
3. Composition and Responsibilities of the Board of Directors
(1) Have the Board members formulated diverse policies and implemented them accordingly?	V		◆ The Company's purpose is to make the structure of Board of Directors more diversified to effectively perform the function. During the selection processes, the Company shall further consider the professional backgrounds, experiences, skills of each candidate and much of diversified nationality, unless otherwise permitted by the Articles and the guidelines on nomination; the Company will periodically evaluate members' performance and eligibility. Each board member of the Company, the professional talent from each business group and different area of field, will have absolute assistance to the	None

Shihlin Electric

Item	Implementation Status			Deviations from "Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies" and reasons
	Yes	No	Summary
			Company's development and operations.
For the implementation of diversity of board members, please refer to 5. Diversity and Independence of the Board of Directorss on page 12.
In order to strengthen corporate governance and promote the sound development of the composition and structure of the board of directors, the company revised in 2022 "Corporate Governance Code of Practice" Article 20 board members generally possess the knowledge, skills and literacy necessary to perform their duties. In order to achieve the ideal goal of corporate governance, the overall capabilities of the board of directors are as follows: 1. Operational judgment ability. 2. Accounting and financial analysis capabilities. 3. Operation and management capabilities. 4. Crisis handling capabilities. 5. Industry knowledge. 6. The international market outlook. 7. Leadership ability. 8. Decision-making ability.
Looking at the 15 board members of the Company's 21st Board of Directors (including 3 independent directors), 40% are employees, 20% are independent directors, and 27% are foreign directors. The 3 independent directors have served 7-9 years, 2 are under 50 years old, 9 are between 51 and 70 years old, and 4 are over 71 years old. Considering the needs of operational development and diversified operations, the Company emphasizes the professional experience, knowledge, and skills of its board members. For the time being, 9 directors have backgrounds outside the electrical machinery industry, representing 60% of the board. Furthermore, to enhance gender diversity on the board, the goal is to have at least one female director. Please refer to page 12 for Board Diversity and Independence.
(2) In addition to Remuneration Committee and Audit Committee, has the Company established any other types of functional committee?	V		The Company has established Audit Committee, Remuneration Committee and set up Sustainable Development Committee on May 11, 2023.	None

Corporate Governance Report

| Item | Implementation Status | | | Deviations from
“Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and reasons |
| --- | --- | --- | --- | --- |
| | Yes | No | Summary | |
| (3) Has the Company established Board performance assessment method and has the performance evaluated annually? | V | | ◆ The Board performance assessment regulation has been approved by the Board member in May 2020. The company regularly evaluates the professionalism and relevant responsibility competence of all directors in pursuit of maximum interests of the company and shareholders. | None |
| (4) Has the Company evaluated the independence of CPAs on a regular basis? | V | | ◆ The Company’s attesting certified public accountants are CPA Yao-Lin Huang and CPA Yeh-Wei Chuang of Deloitte & Touche. The Company has established an Independence Assessment Form and “Audit Quality Indicators (AQIs)” based on Article 47 of the CPA Act and Statement No. 10 of the Code of Professional Ethics for Certified Public Accountants, titled “Integrity, Objectivity, and Independence.” An assessment was conducted on the independence, professionalism, and suitability of the CPAs. The evaluation of the attesting CPAs’ independence was approved by the Board of Directors on May 8, 2026, and the Company has also obtained a written declaration of independence from the attesting CPAs. The criteria for assessing the independence of certified public accountants are as follows: | None |
| | | | CPA Independence Assessment Procedure | Independence |
| | | | Financial Interest Evaluation | Yes |
| | | | Has it been confirmed that the CPA does not have any direct financial interest or significant indirect financial interest in the Company? | |
| | | | Financing and Guarantees | Yes |
| | | | Has it been confirmed that there are no mutual financing or guarantee arrangements between the Company and the accounting firm, its affiliated entities, or members of the audit engagement team | |
| | | | Business Relationships | Yes |
| | | | Has it been confirmed that the accounting firm, its affiliated entities, and members of the audit engagement team do not have any close business relationships with the Company or with its directors and managerial personnel? | |

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Shihlin Electric

Item	Implementation Status				Deviations from "Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies" and reasons
	Yes	No	Summary
			Family and Personal Relationships	Yes
			Have the relatives of members of the audit engagement team been confirmed as not holding positions as directors, managerial personnel, or any roles that would have a direct and material impact on the audit work within the Company, nor having held such positions during the audit period?
			Employment Relationships	Yes
			Has it been confirmed that neither the accounting firm nor any member of the audit engagement team holds a position as a director, managerial personnel, or any role that would have a direct and material impact on the audit work within the Company?
			Gifts and Special Favors	Yes
			Have any gifts or special favors provided by the Company to members of the audit engagement team been confirmed as consistent with normal social etiquette or business customs, of insignificant value, and free of any intent to influence professional judgment or obtain confidential information?
			Non-Audit Services	Yes
			Has the CPA been inquired regarding the details of non-audit services provided to the Company and the potential impact of such services on their independence?
			CPA Independence Declaration	Yes
			Obtain a written declaration of independence from the CPA addressed to the Audit Committee (or an equivalent governance body, if no Audit Committee exists)
4. Has the Company established a fully dedicated or concurrent unit or personnel in charge of the corporate governance related business, which includes but not limited to the provision of Directors and Supervisors' execution info, the proceeding of Board and Shareholders' meetings and the related pursuant to the regulation, corporate registry and change, the producing of the Board and Shareholders' meetings minutes, and so on?	V	◆ The company's corporate governance-related affairs are coordinated and handled by the general manager's office. In addition, the financial unit is also co-organized and responsible for the implementation, including the matters related to the Board of Director and Shareholders' Meetings by session by law, preparation of BOD and shareholders' meeting minutes, application of corporate change registration, regular examination and revision of the company's corporate governance best practice principles and relevant regulations, supply of information needed for the practice of affairs by directors, regular schedule of directors' advancement courses, and			None

Corporate Governance Report

| Item | Implementation Status | | | Deviations from
“Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and reasons |
| --- | --- | --- | --- | --- |
| | Yes | No | Summary | |
| | | | annual reporting to the Board of Directors for status of corporate governance operations. In order to strengthen corporate governance, on May 12, 2021, the Board of Directors of the Company has passed a resolution to appoint Senior Vice President as the director of corporate governance to protect the rights and interests of shareholders and strengthen the functions of the Board of Directors. The terms of reference of the Head of Corporate Governance are as follows:
1. Handle matters related to the meetings of the board of directors and shareholders' meeting in accordance with the law.
2. Prepare the minutes of the board of directors and shareholders' meetings.
3. Assist directors in their appointment and continuing education.
4. Provide the information required by the directors to carry out their business.
5. Assist directors in complying with laws and regulations.
6. Other matters stipulated in the company's articles of association or contracts, etc. | |
| 5. Has the Company established a communication channel for the stakeholders (including but not limited to the shareholders, employees, clients and suppliers, etc.), a company website dedicated to stakeholders, and responded appropriately to the social responsibility issues which are critical to stakeholders? | V | | ◆ The company offers adequate financial information for determination on the company website for transaction with the banks and other creditors.
◆ The company offers the address, phone number and toll-free numbers of the service offices in Taiwan to consumers on the company website so the consumers can communicate with the company immediately.
◆ The company conducts regular customer and distributor satisfaction questionnaire with incorporation into the CRM system for continual improvement and follow-up.
◆ The company holds employee satisfaction questionnaire each year for the company and business division supervisors to implement execution and optimize suggestions from employees.
◆ The company offers peer opinion box on the internal website for employees to directly reflect problems and communicate with the management.
◆ The Human Resources Department regularly holds forums to understand the employee needs.
◆ The service departments of the remaining consolidated individual companies also maintain unobstructed communication channel for the scope of responsibility and with stakeholders. | None |

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Shihlin Electric

| Item | Implementation Status | | | Deviations from
“Corporate Governance
Best-Practice Principle
for TWSE/GTSM Listed
Companies” and reasons |
| --- | --- | --- | --- | --- |
| | Yes | No | Summary | |
| 6. Has the Company commissioned a professional stock agent to handle shareholders affair? | V | | ◆ Since 2023, the company has appointed CTBC Bank Co., Ltd. (Transfer Agency) to handle shareholders affair. | None |
| 7. Information Disclosure
(1) Has the Company established a website for info disclosure on financial, business and corporate governance? | V | | ◆ The Company’s website includes a dedicated section for the disclosure of financial reports (in both Chinese and English), business information, and corporate governance information. | None |
| (2) Has the Company also adopted other disclosure measures such as English website, dedicated personnel for collecting & disclosing of company info, implemented spokesman system, and uploaded the institutional investor conference presentations on the Company’s website? | V | | ◆ The Company has established an English website and a designated unit responsible for gathering and disclosing company information. The Company has also implemented the “Spokesperson and Deputy Spokesperson Operating Procedures” to ensure effective spokesperson practices. In the Investor Relations section of the official website, a dedicated page for investor conferences is provided to facilitate stakeholders’ understanding of relevant information. | None |
| (3) Has the Company announced and declared the annual financial report within two months after end of the fiscal year, and announced Q1, Q2, Q3 financial report and monthly operating performance within prescribed time limit? | V | | ◆ The Company complies with the Taiwan Stock Exchange’s schedule for the public announcement and filing of annual financial reports, quarterly financial reports for the first, second, and third quarters, and monthly operational results. | None |
| 8. Does the Company have other critical information which can help others to understand the implementation of corporate governance (including but not limited to, employee welfare, staff care, investor relations, supplier relations, stakeholder rights, Director training status, risk management policies and risk measurement standard implementation progress, customer policy implementation progress, and the Company’s purchase of liability insurance for Directors)? | V | | (1) Employee Rights and Welfare:
1. The consolidated entities are committed to providing a challenging, enjoyable, and fairly rewarded work environment. To foster such an environment, competitive compensation and benefits are offered to both domestic and international employees, alongside a variety of work-life balance programs that support employees' physical and mental well-being. Through comprehensive training systems and employee development plans, the Company helps employees enhance their professional skills and personal growth, becoming a vital force in driving sustainable development.
2. During recruitment, the consolidated entities base hiring decisions solely on an individual’s capabilities, treating all candidates equally regardless of gender, religion, ethnicity, nationality, or political affiliation. Fair and transparent recruitment channels are used, and industry-academia collaborations with domestic and | None |

42 -

Corporate Governance Report

| Item | Implementation Status | | | Deviations from
“Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and reasons |
| --- | --- | --- | --- | --- |
| | Yes | No | Summary | |
| | | | international educational institutions are regularly conducted.
3. The consolidated entities place great importance on two-way communication and strive to enhance open and transparent communication between supervisors and employees as well as among employees themselves, promoting labor-management harmony and mutual success. Regular executive communication meetings and cross-level forums are held to promptly address employee concerns, with follow-up on investigations and discussion outcomes.
4. A diverse array of training programs is provided to strengthen employees’ workplace competencies across all levels (including management, professional, and language skills). In addition to external training courses, internally designed tier-based training programs, English and Japanese language classes, and online learning resources are available to encourage continuous self-development. Overseas subsidiaries also regularly conduct training for managerial staff to enhance their professional capabilities.
5. To maintain the competitiveness of the overall compensation structure, salary surveys are conducted annually both domestically and internationally. These help the Company assess market salary benchmarks and macroeconomic indicators to make appropriate base salary adjustments for employees.
6. Regular performance evaluations are conducted to support career planning, and a dual-track career development system—covering both managerial and professional tracks—is in place to ensure suitable advancement opportunities and optimal role placements for employees.
7. A comprehensive grievance mechanism is available to help employees address personal rights issues or unfair treatment in the workplace, thereby fostering labor-management harmony and safeguarding labor rights.
8. The consolidated entities provide a healthy, safe, and comfortable working environment, with continuous efforts to enhance and improve workplace | |

43 -

Shihlin Electric

| Item | Implementation Status | | | Deviations from
“Corporate Governance
Best-Practice Principle
for TWSE/GTSM Listed
Companies” and reasons |
| --- | --- | --- | --- | --- |
| | Yes | No | Summary | |
| | | | conditions. Work-life balance and employee well-being are considered the foundation of productivity. Various health care programs, wellness promotion activities, and improvements to employee fitness facilities are carried out to create a healthy and supportive work environment.

(2) Investor Relations:
The company has long valued public information disclosure. The company website offers Chairman’s words on shareholders’ report, financial report, articles of corporate governance, stock price and dividend information, and the public financial service information conforming to the scope of law and regulation, apart from the description of corporate briefing.

(3) Supplier Relations:
The company has always treated the supplier as partners with commitment in guiding long-term cooperation with the supplier, in order to establish a sustainable supply chain with stable development. The company not only takes consideration of the quality, lead time and costs of products from suppliers but also advocate for protection of environment, improvement of safety and health, human right valuation in suppliers, thereby jointly fulfill the social responsibility of enterprises, in addition to conducting risk management and operation renewal plan.

(4) Rights of Stakeholders: Established communication channel with stakeholders.

(5) Director Training Status:
All Company directors have completed the required training hours in compliance with regulatory requirements. The details of director training status in 2025 have been disclosed in the summary table of directors’ and supervisors’ attendance at board meetings and training status on the Market Observation Post System(MOPS). URL : https://mops.twse.com.tw/mops/#/web/t93sef13_1

(6) Risk management policy and risk measurement standards execution: Please refer to page 127.

(7) Implementation of customer policies: The customer policies have been put into place.

(8) Directors’ Liability Insurance Coverage: | |

44 -

Corporate Governance Report

| Item | Implementation Status | | | Deviations from
“Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and reasons |
| --- | --- | --- | --- | --- |
| | Yes | No | Summary | |
| | | | The Company has purchased directors’ liability insurance effective January 1, 2025 and has disclosed the details of the insurance coverage for directors and supervisors on the Market Observation Post System (MOPS). URL : https://mopsov.twse.com.tw/mops/web/t135sb03

(9) Social Contribution:
1. The Company regards environmental protection as a key responsibility, not only fully complying with environmental regulations at all operating locations, but also staying attuned to global environmental issues and proactively adopting environmentally friendly practices.
2. Pollution prevention is considered one of the Company’s primary responsibilities. Accordingly, it is integrated into the ISO 14001 Environmental Management System and promoted through a P-D-C-A (Plan-Do-Check-Act) management model for continuous improvement. By reducing the generation of pollutants and waste, the Company aims to achieve both cost efficiency and environmental protection.
3. The Company strives to optimize and implement various ESG (Environmental, Social, and Governance) indicators to realize its vision of sustainable operations.
4. Through ongoing research and development, the Company enhances product performance to offer customers more advanced, energy-saving, and eco-friendly solutions.
5. The Company actively fosters talent in the fields of electromechanics by engaging with schools, regularly hosting campus seminars, offering scholarships, and providing semester-long internships.
6. Long-term collaboration projects with university professors are promoted to advance industry-academic research cooperation, contributing to the knowledge economy and social progress.
7. Each of the consolidated entities also regularly partners with local government agencies or social organizations to participate in public welfare activities. | |

45 -

Shihlin Electric

| Item | Implementation Status | | | Deviations from
“Corporate Governance
Best-Practice Principle
for TWSE/GTSM Listed
Companies” and reasons |
| --- | --- | --- | --- | --- |
| | Yes | No | Summary | |
| | | | 8. Shihlin Electric actively fosters a friendly workplace environment and diverse labor participation. It has not only been awarded the certification for a friendly workplace for middle-aged and elderly people, but has also announced its membership in the Taiwan Talent Sustainability Action Alliance. It is committed to creating a diverse and inclusive work environment and participated in the HR Asia selection, winning the "Best Employer in Asia Award" and the " DEI (Diversity, Equity and Inclusion) Awards " in 2025.

(10) Community Engagement:
1. Regular sponsorship of community gatherings and events in Lanxing Village, Zhongcheng Village, and Dexing Village of Taipei City.
2. Long-term adoption and maintenance of street trees and sidewalks along Section 6 of Zhongshan North Road (between Dexing West Road and Zhongcheng Road).
3. Long-term adoption and care of Dexing Park in Shilin District, including landscaping and cleaning.
4. Participation in and sponsorship of the Child Welfare League Foundation’s “Dream Fulfillment Program” for children.
5. Occasional organization of ecological conservation activities for both local residents and employees.
6. Occasional hosting of local cultural and artistic events to support and deepen engagement with community-based education and culture.
7. Regular training sessions on basic CPR and AED usage to enhance emergency response skills for employees and tenants.
8. Occasional health seminars and related activities for building tenants to strengthen positive relationships.
9. Regularly held “Fire Safety Awareness Seminars” and practical training sessions with building tenants. | |

46 -

Corporate Governance Report

| Item | Implementation Status | | | Deviations from
“Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and reasons |
| --- | --- | --- | --- | --- |
| | Yes | No | Summary | |
| 9. Please state the improvement status quo of the latest Corporate Governance Evaluation results announced by the Corporate Governance Center of TWSE, and the prioritized items and measures to be adopted:

On May 8, 2026, the Company submitted a board report approving the "Enterprise Value Enhancement Plan" and uploaded it to the Public Information Observation Station.
The Company have fully disclosed the annual emissions of the three categories of greenhouse gases over the past year in the ESG Report of 2025.
In accordance with Article 14, Paragraph 6 of the Securities and Exchange Act, the Company has proposed to amend the Articles of Association to specify the percentage of profits to be allocated to the remuneration or salary adjustment of entry-level employees. The proposal was approved by the Board of Directors on March 6, 2025, and was discussed and approved by the Shareholders' Meeting on June 13, 2025. | | | | |
47 -

Shihlin Electric

E. Establishment, Functions, and Operations of the Remuneration Committee:

Members of the Remuneration Committee
April, 19, 2026

| Qualification
separate
(Note1) | Name | Professional Qualifications and Experience
(Note 2) | Independence
(Note3) | Number of Concurrently Serving as a Remuneration Committee of Another Listed Company |
| --- | --- | --- | --- | --- |
| Independent-Director
Convener | Yan, Cherng-Jau | • Management ability
• Motor industry knowledge and experience
• Sustainable Development
• Risk Management
• Director of Shilin Electric Machinery Co., Ltd.
• Please refer to page 6~9 for director information | 1. Neither the Independent Directors, their spouse, nor any relative within the second degree of kinship serves as a director or supervisor of this company or its affiliated enterprises.
2. The number and percentage of company shares held by the director, their spouse, or any relative within the second degree of kinship (or through nominees) are: 0 shares / 0%.
3. The Independent Director does not serve as a director, supervisor, or employee of any company with a specific relationship to this company (refer to Article 6, Paragraph 1, Subparagraphs 5 to 8 of the Regulations Governing the Establishment and Exercise of Powers of Audit Committees of Public Companies).
4. In the past two years, the Independent Director has not received any remuneration for providing business, legal, financial, accounting, or other services to this company or its affiliated enterprises. | No concurrently serving on the remuneration committee of other public offering companies. |
| Independent-Director | Lin, Hsin-I | • Management ability
• Cross-cultural leadership
• Motor industry knowledge and experience
• Sustainable Development
• Risk Management
• Minister of Economic Affairs, Vice President of the Executive Yuan and Chairman of the Economic Construction Association
• Please refer to page 6~9 for director information | 1. Neither the Independent Directors, their spouse, nor any relative within the second degree of kinship serves as a director or supervisor of this company or its affiliated enterprises.
2. The number and percentage of company shares held by the director, their spouse, or any relative within the second degree of kinship (or through nominees) are: 0 shares / 0%.
3. The Independent Director does not serve as a director, supervisor, or employee of any company with a specific relationship to this company (refer to Article 6, Paragraph 1, Subparagraphs 5 to 8 of the Regulations Governing the Establishment and Exercise of Powers of Audit Committees of Public Companies).
4. In the past two years, the Independent Director has not received any remuneration for providing business, legal, financial, accounting, or other services to this company or its affiliated enterprises. | No concurrently serving on the remuneration committee of other public offering companies. |
| Independent-Director | Hu, Chao-Fong | • Management ability
• Motor industry knowledge and experience
• Sustainable Development
• Risk Management
• Senior Vice President of Shilin Electric Machinery Co., Ltd.
• Please refer to page 6~9 for director information | 1. Neither the Independent Directors, their spouse, nor any relative within the second degree of kinship serves as a director or supervisor of this company or its affiliated enterprises.
2. The number and percentage of company shares held by the director, their spouse, or any relative within the second degree of kinship (or through nominees) are: 118,746 shares/0.02%
3. The Independent Director does not serve as a director, supervisor, or employee of any company with a specific relationship to this company (refer to Article 6, Paragraph 1, Subparagraphs 5 to 8 of the Regulations Governing the Establishment and Exercise of Powers of Audit Committees of Public Companies).
4. In the past two years, the Independent Director has not received any remuneration for providing business, legal, financial, accounting, or other services to this company or its affiliated enterprises. | No concurrently serving on the remuneration committee of other public offering companies. |

48 -

Corporate Governance Report

Note1: Please specify in the form the relevant working years, professional qualifications and experience and independence of the members of each remuneration committee. If they are independent directors, please refer to Appendix 1 on page OO for information on directors and supervisors (1) related information. Please fill in the series as independent directors or others respectively (if it is the convener, please add a Note).

Note 2: Professional Qualifications and Experience: Describe the professional qualifications and experience of individual remuneration committee members.

Note 3: Condition of independence: state that the members of the remuneration committee meet the conditions of independence, including but not limited to whether I, my spouse, or relatives within the second degree of The number and proportion of shares held by relatives within the kinship (or in the name of others); whether they act as a company that has a specific relationship with the company (refer to the establishment of the audit committee and the exercise of functions and powers of the company listed on the stock market or the business office of the securities firm) Article 6 Paragraph 1 Items 5 to 8) of the director, supervisor or employee; the amount of remuneration received for providing the company or its affiliates with business, legal, financial, accounting and other services in the last two years.

2. Operations of the Remuneration Committee

(1) The Company's Remuneration Committee consists of 3 members.
(2) Current term of office: June 21, 2023~June 20, 2026.

The Committee held 4 (A) meetings in the 2025 and the attendance of the Committee members is summarized as follows:

Job title	Name	Actual attendance (B)	Attendance by proxy	Actual attendance rate (%) (B/A) (Note)
Convener	Yan, Cherng-Jau	4	0	100%
Member	Lin, Hsin-I	3	0	75%
Member	Hu, Chao-Fong	4	0	100%
Other notes: 1. If the Board of Directors does not adopt, or amends, the Remuneration Committee’s suggestions, please specify the meeting date, term, contents of motion, resolution of the Board of Directors, and the Company’s handling of the Remuneration Committee’s opinions (If the remuneration ratified by the Board of Directors is superior than that suggested by the Remuneration Committee, please specify the deviation and reasons thereof): N/A 2. For resolution(s) made by the Remuneration Committee with the Committee members voicing opposing or qualified opinions on the record or in writing, please state the meeting date, term, contents of motion, opinions of all members and the Company’s handling of the said opinions: N/A 3. Scope of responsibilities: a. Stipulate and regularly review the policies, systems, standards, and structure of performance assessment, salaries, and remunerations of directors and managerial officers. b. Regularly review and stipulate the salaries and remunerations of directors and managerial officers.

Note 1. Where a Remuneration committee's member may be relieved from duties before the end of the fiscal year, please specify their Resignation date in the 'Remarks' Section. Their actual attendance rate (%) to Remuneration committee session shall be calculated on the basis of the number of meetings called and actual number of sessions he/she attended, during his/her term of office.

Where an election may be held for filling the vacancies of Remuneration committee's member before the end of the fiscal year, please list out both the new and the discharged Remuneration committee's member and specify the new, the discharged and the reelected Independent Directors and the election date in the 'Remarks' Section. Their actual attendance rate (%) of the Remuneration Committee's meetings shall be calculated on the basis of the number of meetings called and actual number of sessions he/she attended, during his/her term of office.
49 -

Shihlin Electric

The proposals and resolutions of the Remuneration Committee meetings in 2025

Term of the Remuneration Committee Meeting	Discussions and Resolutions	Committee Members' Opinions	Remuneration Committee's Resolution Results and the Company's Opinion on the Follow-up
5^{th} Session, 6^{th} Meeting Feb. 27, 2025	1. Change in the Company’s managerial personnel.
2. Review of the Company’s 2024 employee remuneration and director compensation distribution proposal.	All Committee's had attended and approved without any objection.	Items 1 and 2 were submitted to the Board of Directors for discussion and approval, and were passed as proposed.
5^{th} Session, 7^{th} Meeting Jul. 25, 2025	1. Change in the Company’s managerial personnel and adjustment of their remuneration.
2 Proposal for the distribution of Year 2024 managerial and employee remuneration in 2025.	All Committee's had attended and approved without any objection.	Items 1 was submitted to the Board of Directors for discussion and approval, and were passed as proposed.
5^{th} Session, 8^{th} Meeting Sep. 10, 2025	1. Change in the Company’s managerial personnel.	All Committee's had attended and approved without any objection.	Items 1 was submitted to the Board of Directors for discussion and approval, and were passed as proposed.
5^{th} Session, 9^{th} Meeting Oct. 30, 2025	1. Review of the Company’s director remuneration proposal for the year 2026.
2. Review of the Company’s managerial remuneration proposal for the year 2026.
3. Proposed meeting schedule of the Company’s Compensation Committee for the year 2026.	All Committee's had attended and approved without any objection.	Items 1 and 2 were submitted to the Board of Directors for discussion and approval, and were passed as proposed.

50 -

Corporate Governance Report

F. Establishment, Functions, and Operations of the Sustainability Committee:

Members of the Sustainability Committee

| separate
(Note1) | Name | Professional Qualifications and Experience
(Note 2) | Independence
(Note3) | Number of Concurrently Serving as a Sustainability Committee of Another Listed Company |
| --- | --- | --- | --- | --- |
| Independent-Director
Convener | Lin, Hsin-I | • Management ability
• Cross-cultural leadership
• Motor industry knowledge and experience
• Sustainable Development
• Risk Management
• Minister of Economic Affairs, Senior Vice President of the Executive Yuan and Chairman of the Economic Construction Association
• Please refer to page 6~9 for director information | 1. Neither the Independent Directors, their spouse, nor any relative within the second degree of kinship serves as a director or supervisor of this Company or its affiliated enterprises.
2. The number and percentage of company shares held by the director, their spouse, or any relative within the second degree of kinship (or through nominees) are: 0 shares / 0%.
3. The Independent Director does not serve as a director, supervisor, or employee of any company with a specific relationship to this Company (refer to Article 6, Paragraph 1, Subparagraphs 5 to 8 of the Regulations Governing the Establishment and Exercise of Powers of Audit Committees of Public Companies).
4. In the past two years, the Independent Director has not received any remuneration for providing business, legal, financial, accounting, or other services to this company or its affiliated enterprises. | No concurrently serving on the Sustainability committee of other public offering companies. |
| Independent-Director | Yan, Cherng-Jau | • Management ability
• Motor industry knowledge and experience
• Sustainable Development
• Risk Management
• Director of Shilin Electric Machinery Co., Ltd.
• Please refer to page 6~9 for director information | 1. Neither the Independent Directors, their spouse, nor any relative within the second degree of kinship serves as a director or supervisor of this Company or its affiliated enterprises.
2. The number and percentage of Company shares held by the director, their spouse, or any relative within the second degree of kinship (or through nominees) are: 0 shares / 0%.
3. The Independent Director does not serve as a director, supervisor, or employee of any company with a specific relationship to this company (refer to Article 6, Paragraph 1, Subparagraphs 5 to 8 of the Regulations Governing the Establishment and Exercise of Powers of Audit Committees of Public Companies).
4. In the past two years, the Independent Director has not received any remuneration for providing business, legal, financial, accounting, or other services to this company or its affiliated enterprises. | No concurrently serving on the Sustainability committee of other public offering companies. |
| Independent-Director | Hu, Chao-Fong | • Management ability
• Motor industry knowledge and experience
• Sustainable Development
• Risk Management
• Senior Vice President of Shilin Electric Machinery Co., Ltd.
• Please refer to page 6~9 for director information | 1. Neither the Independent Directors, their spouse, nor any relative within the second degree of kinship serves as a director or supervisor of this company or its affiliated enterprises.
2. The number and percentage of company shares held by the director, their spouse, or any relative within the second degree of kinship (or through nominees) are: 118,746 shares/0.02%
3. The Independent Director does not serve as a director, supervisor, or employee of any company with a specific relationship to this company (refer to Article 6, Paragraph 1, Subparagraphs 5 to 8 of the Regulations Governing the Establishment and Exercise of Powers of Audit Committees of Public Companies).
4. In the past two years, the Independent Director has not received any remuneration for providing business, legal, financial, accounting, or other services to this company or its affiliated enterprises. | No concurrently serving on the Sustainability committee of other public offering companies. |

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Shihlin Electric

Note1: Please specify in the form the relevant working years, professional qualifications and experience and independence of the members of each sustainability committee. If they are independent directors, please refer to Appendix 1 on page OO for information on directors and supervisors (1) related information. Please fill in the series as independent directors or others respectively (if it is the convener, please add a Note).

Note 2: Professional Qualifications and Experience: Describe the professional qualifications and experience of individual sustainability committee members.

Note 3: Condition of independence: state that the members of the sustainability committee meet the conditions of independence, including but not limited to whether I, my spouse, or relatives within the second degree of The number and proportion of shares held by relatives within the kinship (or in the name of others); whether they act as a company that has a specific relationship with the company (refer to the establishment of the audit committee and the exercise of functions and powers of the company listed on the stock market or the business office of the securities firm) Article 6 Paragraph 1 Items 5 to 8) of the director, supervisor or employee; the amount of Sustainability received for providing the company or its affiliates with business, legal, financial, accounting and other services in the last two years.

2. Operations of the Sustainability Committee

(1) The Company's Sustainability Committee consists of 3 members.
(2) Current term of office: May 11, 2023~June 20, 2026.

The Committee held 1 (A) meetings in the 2025 and the attendance of the Committee members is summarized as follows:

Job title	Name	Actual attendance (B)	Attendance by proxy	Actual attendance rate (%) (B/A) (Note)
Convener	Lin, Hsin-I	1	0	100%
Member	Yan, Cherng-Jau	1	0	100%
Member	Hu, Chao-Fong	1	0	100%
Other notes: 1. If the Board of Directors does not adopt, or amends, the Sustainability Committee’s suggestions, please specify the meeting date, term, contents of motion, resolution of the Board of Directors, and the Company’s handling of the Sustainability Committee’s opinions (If the Sustainability ratified by the Board of Directors is superior than that suggested by the Sustainability Committee, please specify the deviation and reasons thereof): N/A 2. For resolution(s) made by the Sustainability Committee with the Committee members voicing opposing or qualified opinions on the record or in writing, please state the meeting date, term, contents of motion, opinions of all members and the Company’s handling of the said opinions: N/A

Note 1. Where a Sustainability committee's member may be relieved from duties before the end of the fiscal year, please specify their Resignation date in the "Remarks" Section. Their actual attendance rate (%) to Sustainability committee session shall be calculated on the basis of the number of meetings called and actual number of sessions he/she attended, during his/her term of office.
2. Where an election may be held for filling the vacancies of Sustainability committee's member before the end of the fiscal year, please list out both the new and the discharged Sustainability committee's member and specify the new, the discharged and the reelected Independent Directors and the election date in the 'Remarks' Section. Their actual attendance rate (%) of the Sustainability Committee's meetings shall be calculated on the basis of the number of meetings called and actual number of sessions he/she attended, during his/her term of office.

3. The proposals and resolutions of the Sustainability Committee meetings in 2025.

Term of the Sustainability Committee Meeting	Discussions and Resolutions	Committee Members' Opinions	Sustainability Committee's Resolution Results and the Company's Opinion on the Follow-up
1st Session, 3rd Meeting Nov 7, 2025	1. The annual work priorities of the Sustainability Development Office.	All Committee's had attended and approved without any objection.	This case was approved after the chairman consulted all members present and had no objections.

Corporate Governance Report

G. The Implementation Status and Variance Analysis of the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies

Item	Implementation Status
	Yes	No	Summary
1. Whether the company has established a governance structure to promote sustainable development, and set up a dedicated (part-time) unit to promote sustainable development, which is authorized by the Board of Directors to handle senior management, and the supervision of the Board of Directors.	V		1. The Company's sustainability policy regards the Board of Directors as the highest decision-making unit for sustainable development issues and has established a "Sustainability Committee" composed of all independent directors to review mid- and long-term sustainable development plans together with various management directors.
2. In May 2023, the Company established a functional committee, the "Sustainability Committee". The Sustainability Committee is under the jurisdiction of the Sustainability Department, and has a Chief Sustainability Officer. Six working groups are set up in the three major aspects of ESG Report preparation, sustainability risk assessment, and greenhouse gas inventory so as to promote ESG tasks, formulate corresponding strategies and work guidelines through quarterly meetings, jointly track the implementation results, and regularly report the operation status to the Board of Directors in order to practice corporate sustainable management and follow the concepts of honest management, steady growth, and sustainable development.
3. The significant accomplishments in sustainable development for the year 2025 were presented to the Board of Directors and the Sustainability Development Committee on November 7, 2025. This encompassed the continuous monitoring of the completion status of the greenhouse gas inventory, verification, and disclosure schedule. The Company finalized the greenhouse gas inventory and assurance for the merged companies in 2025. Moreover, in compliance with the Financial Supervisory Commission's "Sustainable Development Roadmap for Listed Companies," the Company commenced the "IFRS Sustainability Disclosure Standards Implementation Plan" beginning in 2025, with progress updates submitted to the Board on a quarterly basis.
4. The management team of the Company regularly proposes the Company strategy to the Board of Directors. The Board of Directors evaluates the success probability of the strategy and reviews the progress of the strategy and urges the management team to make adjustments when necessary.	None

Shihlin Electric

Item	Implementation Status
	Yes	No	Summary
2. Does the Company conduct the risk assessment on environmental, social and corporate governance issues related to corporate operation? And any establishment of relevant risk management policy or strategies? (Materiality principle means there will be material impact of the environmental, social and corporate governance issues as a whole on corporate investors and other stakeholders.)	V		1. This data disclosure covers the period from January 1, 2025, to December 31, 2025, primarily encompassing the operational regions of Shihlin Electric in Taiwan, including the Taipei Headquarters, four major business groups, and various local branches.
2. The Company is dedicated to the establishment of a robust risk management system. In November 2022, the Board of Directors sanctioned the "Risk Management Practice Code," which categorizes risks according to their characteristics. The Sustainable Risk Assessment Team is tasked with coordinating all matters related to risk management, while general operational risks are regularly identified, assessed, and controlled by each business unit. This approach is intended to enhance the efficiency of the risk management organization’s command, dispatch, self-assessment, and execution. The status of risk assessment and risk management operations for the year 2025 is anticipated to be submitted to the Board of Directors and the Audit Committee in the latter half of 2026. This report will provide a summary of the various risks encountered by the Company in 2025, along with corresponding risk response measures, to ensure the effective operation and implementation of the Company’s risk management. In accordance with the materiality principle outlined in the Sustainable Report, the Company has conducted risk assessments on significant issues and, based on these evaluations, has established the following pertinent risk management policies or strategies:
(1) Environment:
Climate Change: The Company actively promotes energy conservation and carbon reduction, develops and promotes energy-saving and carbon-reducing products, continuously monitors changes in domestic and international environmental regulations, and participates in public hearings on new (revised) environmental regulations through industry associations. This collaboration with the government and enterprises aims to promote net-zero emissions and mitigate the impacts of climate change.
(2) Society:
Occupational Safety: The Company has implemented an occupational health and safety management system that complies with ISO 45001 standards to ensure the physical and	None
			economy, environmental, and environmental safety.
(3) Environment:
Environmental Safety: The Company has implemented an environmental protection and protection program to ensure the safety of the environment.
(4) Environment:
Environmental Safety: The Company has implemented a risk assessment system to ensure the safety of the environment.
(5) Society:
Environmental Safety: The Company has implemented a risk response system to ensure the safety of the environment.
3. Does the Company conduct a risk assessment on environmental, social and corporate governance issues related to corporate operation? And any establishment of relevant risk management policy or strategies? (Materiality principle means there will be material impact of the environmental, social and corporate governance issues as a whole on corporate investors and other stakeholders.)	V		1. This data disclosure covers the period from January 1, 2025, to December 31, 2025, primarily encompassing the operational regions of Shihlin Electric in Taiwan, including the Taipei Headquarters, four major business groups, and various local branches.
2. The Company is dedicated to the establishment of a robust risk management system. In November 2022, the Board of Directors sanctioned the "Risk Management Practice Code," which categorizes risks according to their characteristics. The Sustainable Risk Assessment Team is tasked with coordinating all matters related to risk management, while general operational risks are regularly identified, assessed, and controlled by each business unit. This approach is intended to enhance the efficiency of the risk management organization’s command, dispatch, self-assessment, and execution. The status of risk assessment and risk management operations for the year 2025 is anticipated to be submitted to the Board of Directors and the Audit Committee in the latter half of 2026. This report will provide a summary of the various risks encountered by the Company in 2025, along with corresponding risk response measures, to ensure the effective operation and implementation of the Company’s risk management. In accordance with the materiality principle outlined in the Sustainable Report, the Company has conducted risk assessments on significant issues and, based on these evaluations, has established the following pertinent risk management policies or strategies:
(1) Environment:
Climate Change: The Company actively promotes energy conservation and carbon reduction, develops and promotes energy-saving and carbon-reducing products, continuously monitors changes in domestic and international environmental regulations, and participates in public hearings on new (revised) environmental regulations through industry associations. This collaboration with the government and enterprises aims to promote net-zero emissions and mitigate the impacts of climate change.
(2) Society:
Occupational Safety: The Company has implemented an occupational health and safety management system that complies with ISO 45001 standards to ensure the physical and

54 -

Corporate Governance Report

Item	Implementation Status
	Yes	No	Summary
			mental safety and health of employees and stakeholders. Each plant adheres to human rights policies, establishes comprehensive welfare and training systems, and actively promotes sports clubs.
(3) Corporate Governance:
The Company reviews and improves its practical operations in all aspects based on the latest "Corporate Governance Evaluation" items, continuously enhancing the quality of corporate governance. By leveraging information from regulatory authorities and external consultants, the Company appropriately adjusts its internal management mechanisms to incorporate the latest trends in corporate governance into its daily operations.
3. Environmental Issues
(1) Does the Company establish a suitable environmental management system according to its industrial characteristics?	V		(1) The Company has created the dedicated development unit to aggressively develop high energy -efficient power consumption products of various transmission and distribution, enhance the power usage effectiveness of using energy resource by customers, as well as to lower the impact on environmental load.
All factories and subsidiaries of the Company follow the government's policies of energy-saving and environmental protection, actively promote greening, environmental protection and carbon reduction in factories and offices, use energy-saving appliances, and use green environmental protection materials, and require third-party manufacturers to cooperate in implementation. The company has passed ISO14001, RoHS, IATF 16949, ISO9001, conducted annual greenhouse gas inventory with reference to GHG Protocol specifications, and other factory verification or product certification, and continues to effectively use resources, urge all employees, suppliers and customers, to jointly contribute to energy conservation and environmental protection.	None
(2) Does the Company dedicate to enhancing the use efficiency of various resources and use the recycled materials with low impact on environmental load?	V		(2) The Company presently implements a carbon reduction plan applicable to individual entities, encompassing the parent company and grounded in data from 2022.
The Company actively advocates for a range of energy conservation and emission reduction initiatives:	None

55 -

Shihlin Electric

Item	Implementation Status	Deviations from “Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and Reasons
Yes	No	Summary

Power saving	960MWh	2,244MWh
Reduced water consumption	660Ton	12,515Ton (Note)
Waste Recycling	175Ton	177Ton
Note: Mainly because the cold forging factory of the electrical equipment plant was closed starting from September 2024, and the process changed, water usage has significantly decreased. For details on the greenhouse gas reduction base year and data, reduction targets, strategies, specific action plans, and achievement of reduction targets, please refer to the Climate-Related Information of TWSE/TPEx Listed Company on page 67 (H) or the Company’s ESG Report. Regarding recycled materials, the Company actively responds to environmental protection and reduces carbon emissions throughout the product lifecycle by continuously promoting the application of recycled materials, eco-friendly packaging, low-carbon logistics, and collaborating with suppliers to optimize raw material sources and promote higher standards of green procurement. In 2025, a total of 99.5 metric tons of recycled materials were provided to manufacturers for remanufacturing. For more details on recycled materials, please refer to the Company's ESG Report. The Company has proposed improvement plans to reduce waste liquid. It is estimated that the washing equipment consumes 50 tons of tap water per month. Through paint sludge collection and wastewater filtration, clean water is recycled back to the production process for continuous use, which can reduce water consumption by 600 tons annually, equivalent to a reduction of 97.2 kilograms of CO2 emissions. The Company continues to improve internal processes and strengthen cooperation with suppliers to fully implement sustainable raw material management and continues to strive for energy saving and carbon reduction to fulfill the company's mission for energy conservation and environmental protection.

Corporate Governance Report

Item	Implementation Status			Deviations from “Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and Reasons
	Yes	No	Summary
(3) Does the Company evaluate the current and future potential risks and opportunities of the enterprises brought about by climate change and adopt relevant countermeasures?	V		(3) The Company’s sustainability policy designates the Board of Directors as the highest decision-making body for sustainability matters and has established a “Sustainability Committee” composed of all independent directors, working in conjunction with senior management to review the Company’s mid- to long-term sustainability plans. Each year, the Company convenes a TCFD Risk and Opportunity Identification Meeting, led by Senior Vice President and Chief Sustainability Officer Mr. Shih Chin-Yi, with participation from cross-functional working groups within the secretariat. These groups discuss and evaluate transition risks, physical risks, and opportunity sources as defined by the TCFD framework. In 2025, the Company assessed a total of 13 risk topics and 11 opportunity topics under the TCFD framework, identifying 6 key risks and 6 key opportunities as priorities for strategy development, serving as a reference for operational strategy adjustments. For detailed information on the Company’s assessment and response to potential risks and opportunities related to climate change, please refer to page 67(H) of the " Climate-Related Information of TWSE/TPEx Listed Company " or the Company’s ESG Report.	None
(4) Does the Company tabulate the greenhouse gas emissions, water consumption and total weight of waste over the past two years and formulate policies regarding greenhouse gas reduction, less water consumption or other waste management?	V		(4) Greenhouse gas emissions: For the Company’s greenhouse gas emissions results, assurance status, and reduction policies, please refer to page 67(H) of the " Climate-Related Information of TWSE/TPEx Listed Company " or the Company’s ESG Report.

Water Usage: The Company’s primary water usage includes process water, domestic water, and plant irrigation. The water is sourced from Taiwan Water Corporation, with the headwaters from Touqian River. According to the World Resources Institute’s "Water Risk Atlas," the water stress level in the company’s location is classified as "Low - Medium Risk (1-2)," and the water extraction has not significantly impacted the local water sources. For detailed information on water usage and the assurance statement, please refer to the Company’s ESG Report. The water usage over the past three years is shown in the table below: | None |

57 -

Shihlin Electric

Item	Implementation Status	Deviations from “Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and Reasons
Yes	No	Summary

Plants Site	Total Water Withdrawal - Tap Water	204.00
Total Water Withdrawal - Groundwater	0.79	0.22
Total Discharge Volume	83.78	75.71
Total Water Consumption	121.01	114.30
Taipei Headqu arters	Total Water Withdrawal	6.80
Revenue (NTD million)	25,524	28,537
Water Withdrawal Intensity (million liters/NTD million)	0.0083	0.0069
Note 1 The disclosure scope mainly covers the four major business groups, excluding the Taipei headquarter and various branches. Note 2 Water Consumption = Water Withdrawal - Water Discharge. Note 3 The discharge volume is the actual measured value by the plant's flow meter. Waste Management: In 2025, the total weight of waste generated was approximately 952 metric tons, including 933 metric tons of general industrial waste and 19.1 metric tons of hazardous industrial waste. All waste was treated off-site with no on-site disposal. Of this, 218 metric tons of waste were recycled, accounting for approximately 22.9% of the total waste, demonstrating the company's continued efforts to promote resource recycling and waste reduction management measures to reduce environmental impact and improve resource utilization efficiency.
Year	Processing	2023
Hazardous Waste (metric tons)	Directly Disposed	10.3
Non-Hazardous Industrial Waste	Recycled	160.5
Directly Disposed	720.4	724.8
Total Weight (metric tons)	891.2	906.7
Revenue	25,524	28,537
Waste density (ton/million dollars in revenue)	0.0349	0.0318
At the end of 2023, the Sustainable Development Office promoted the formulation of four sustainable management policies by various functional departments at each plant. These policies are: (1) Operational Continuity Management Policy, (2) Energy Management

Corporate Governance Report

Item	Implementation Status			Deviations from “Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and Reasons
	Yes	No	Summary
			Policy, (3) Greenhouse Gas Management Policy, and (4) Water Resource Management Policy. These policies were signed by the Chairman in 2024 and were officially approved by the Board of Directors in March of the same year. For detailed descriptions of the management policies on greenhouse gas emissions, water usage, and total waste weight, please refer to the Company's ESG Report.
4. Social Issues
(1) Does the Company follow relevant laws and regulations as well as the International Bill of Human Rights to establish related management policies and procedures?	V		(1) The Company acknowledges and voluntarily complies with the spirit and fundamental principles of human rights protection proclaimed in international human rights conventions such as the “United Nations Universal Declaration of Human Rights”, the “United Nations Global Compact”, and the “International Labour Conventions”. The Company respects the protections established by these human rights conventions and publish them on the Company's website. This policy applies to all employees, affiliated enterprises, partners, customers, and other stakeholders, aiming to eliminate any human rights violations. Annually, the Company regularly reviews its operations, value chains, and other related activities through attention to significant social issues and surveys to identify and assess at-risk groups and potential human rights risks. Based on the identified risks, we develop human rights issue control plans and continuously monitor and improve the implementation results of these plans. In the year 2025, training achievements related to human rights protection included occupational safety training, labor safety and hygiene, fire safety, first aid care, civil defense training, health care knowledge, prevention of sexual harassment and workplace bullying, and human rights protection, with 2,398 participants totaling 13,868 hours. Moving forward, we will continue to focus on human rights protection issues, promote related education and training to raise awareness of human rights protection, and reduce the likelihood of related risks. To ensure the effective promotion and implementation of this policy, human rights-related policies, plans, and management matters are overseen by the Human Resources Department, which is responsible for managing and executing human rights-related issues.
(2) Detailed description is listed as follows:
1. Employee benefits	None
(2) Does the Company establish and implement the rational employee	V			None

59 -

Shihlin Electric

Item	Implementation Status
	Yes	No	Summary
benefit measures (including Sustainability, paid vacation and other benefits...etc.)? And any reflection on the corporate business performance or achievements in the employee Sustainability?			The Company has set up an Employee Welfare Committee to plan and provide various premium benefits for colleagues, such as: subsidies for club activities, employee travel and various welfare-related subsidy measures such as weddings, funerals, celebrations, and employee children's scholarships. In addition, the Company implements employee group insurance, and all employees are covered by the insurance. Allowances and bonuses are awarded according to work performance and responsibilities: year-end bonus, three-festival bonuses, dividend, proposal bonus, and business bonus, R&D allowance, R&D achievement bonus and internal lecturer allowance, etc. As for the annual leave, on top of the basis of a fixed two-day weekend holidays every week, employees will be given annual leaves according to the Labor Standards Act. Colleagues can also apply for leave without pay in case of childcare, serious injury, major accident, etc. and need a longer period of time off, so as to take into account the needs of personal and family care.
2. Workplace Diversity and Equality
Realize that men and women have equal pay for equal work and equal opportunities for promotion, and promote sustainable and inclusive economic growth. In 2025, the average proportion of female staff is 30%, and the average proportion of female supervisors is 10%.
The Company places great importance on employee rights and welfare, sharing profits with employees and maintaining a positive work environment. This includes comprehensive physical, mental, and emotional care for all employee groups: (1) The Company employs 23 individuals with disabilities and 24 indigenous employees, with roles and workplace facilities tailored to meet their specific needs. For any shortfall in the required number of hires, the Company has made the necessary compensatory payments to the “Employment Fund for Persons with Disabilities” in accordance with the People with Disabilities Rights Protection Act and local labor authority regulations. (2) The Company actively promotes a gender-friendly workplace,
			and a social media presence. (3) The Company has made the necessary compensatory payments to the “Employment Fund for Persons with Disabilities” in accordance with the People with Disabilities Rights Protection Act and local labor authority regulations. (4) The Company actively promotes a gender-friendly workplace,
benefit measures (including the use of social media, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e-mail, e			1. Workplace Diversity and Equality
Realize that men and women have equal pay for equal work and equal opportunities for promotion, and promote sustainable and inclusive economic growth. In 2025, the average proportion of female staff is 30%, and the average proportion of female supervisors is 10%.
2. Workplace Diversity and Equality
Realize that men and women have equal pay for equal work and equal opportunities for promotion, and promote sustainable and inclusive economic growth. In 2025, the average proportion of female staff is 30%, and the average proportion of female supervisors is 10%.
3. Workplace Diversity and Equality
Realize that men and women have equal pay for equal work and equal opportunities for promotion, and promote sustainable and inclusive economic growth. In 2025, the average proportion of female staff is 30%, and the average proportion of female supervisors is 10%.
4. Workplace Diversity and Equality
Realize that men and women have equal pay for equal work and equal opportunities for promotion, and promote sustainable and inclusive economic growth. In 2025, the average proportion of female staff is 30%, and the average proportion of female supervisors is 10%.

Corporate Governance Report

Item	Implementation Status
	Yes	No	Summary
(3) Does the Company provide a safe and healthy working environment to employees? And any regular implementation on safety and health education for employees?	V		empowering women and ensuring a safe and inclusive environment for all genders.
3.Business performance is reflected in employee compensation
(1) According to Article 24 of the Articles of Incorporation of the Company: If the Company makes a profit in the current year, it shall allocate and distribute:
a. Director's Sustainability capped at 4%
b. Staff Sustainability 1% to 8%.
However, when the company still has accumulated losses, it should reserve the amount to make up in advance. Employee Sustainability is issued to employees of the company who meet certain conditions.
(2) Overall Compensation Policy:
The Company participates in market compensation surveys every year and adjusts compensation structure according to market salary levels, economic trends and personal performance to maintain overall compensation competitiveness. In 2025, the average annual salary increase was 4% for both supervisory and non-supervisory positions in the Taiwan region. According to the 2025 “salaries of full-time employees who are not in supervisory positions” by listed companies announced by the Stock Exchange in 2024, the average salary of non-supervisory employees is 1.25 times that of their peers
(3) Safety Education and Training
1. The Company has implemented an Occupational Health and Safety Management System (ISO 14001 and ISO 45001) and undergoes annual audits by professional verification bodies to ensure workplace environment, operational safety, and the effectiveness of occupational health and safety practices. Please visit our company website for the latest certification validity period.
2. The company enhance awareness of operational safety by conducting relevant education and training courses annually in accordance with legal requirements. These include general safety education, on-the-job occupational health and safety education,	None

61 -

Shihlin Electric

Item	Implementation Status			Deviations from “Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and Reasons
	Yes	No	Summary
(4) Does the Company build the efficient training programs of career planning ability for employees?	V		supervisor-level occupational health and safety education, supervisors for organic solvent operations, supervisors for oxygen-deficient operations, supervisors for specific chemical substance operations, supervisors for dust operations, fixed crane and forklift operators, boiler operators training, subcontractor safety and health education, first aid personnel training, etc.3. After obtaining certifications, employees undergo regular on-the-job training every 2 to 3 years. Considering the number of participants and convenience, larger groups are trained in-house by training institutions (with assessments conducted by supervisory authorities), while others obtain relevant qualifications through external training.4. Health management: Annual employee health check-ups are conducted, and health management and care initiatives are implemented to ensure employee well-being.5. Number of occupational accidents in the company in 2025: NoneMajor occupational hazards in 2025: None6. Number of fires in 2025: None	None
(5) For customer health and safety, customer privacy, marketing and labeling regarding the Company’s products and services, does the Company follow relevant laws,	V		(4) The Company has planned complete functional training for supervisors and colleagues at all levels and has set up an education and training development committee to plan the company-wide education and training plan, including new employee orientation, advanced training for professional groups, and training for supervisors. Assist colleagues in continuous learning and growth through multiple learning methods and introduce training courses related to corporate ethics and belief development to cultivate key competencies of colleagues. The development indicators related to education and training The development indicators related to education and training in 2025, the average training hours of all employees is 17.8 hours /person, and the average training time was 3.2 times/person, a total of 2,256 persons, 7,331 person-times, 40,255 person-hours.	None

62 -

Corporate Governance Report

Item	Implementation Status			Deviations from “Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and Reasons
	Yes	No	Summary
regulations and international guidelines? And any establishment of policies on consumer rights and interests as well as procedures for accepting consumer complaints?

(6) Does the Company establish the supplier management policy and ask the suppliers to follow the related rules for the issues such as environmental protection, occupational safety and health or labor and human rights? And any implementation status? | V | | for continuous improvement and tracking. Furthermore, we have established personal data protection management policy to protect customer privacy. Through the internal audit of personal information, external verification, crisis prevention and education and training, the Company will safeguard the customer's information.

(6) The Company attaches great importance to environmental and social protection, and also regards environmental and social protection as one of the screening criteria for suppliers, and regularly visits them to confirm their suitability. The company require suppliers to meet the needs of environmental protection, industrial safety and human rights, as well as the public security qualifications of relevant manufacturers stipulated by the state, sign a letter of commitment on environment, safety and health, and include issues related to corporate social responsibility into the selection criteria of supplier. Violation of social welfare development and other related acts will affect the subsequent business and cooperative relationship with the Company.

● Supplier Evaluation
Stage 1: Documentary Review
New suppliers are requested by the managers of the procurement department to fill in the "Vendor Questionnaire" so as to initially get the supplier's information, such as operation status, organization, scale, type, products, customers, production and testing equipment, quality status, environmental protection, and safety and health related certifications. In addition, the procurement department tracks the supplier's dynamics at any time. If there is any change, it will re-check the data in the "Vendor Questionnaire" and follow the principle of tracking and revising once every three years.
Stage 2: Field Audit
Taking the procurement department as the operation center, convene personnel from related departments such as research and development, quality control, biotechnology and finance to form an evaluation team to conduct the evaluation on the spot, and integrate the results of the on-site evaluation into a "supplier evaluation" for relevant supervisor review. | None |

63 -

Shihlin Electric

Item	Implementation Status			Deviations from "Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies" and Reasons
	Yes	No	Summary
			Supplier Assessment The Company conducts cooperative factory counseling, monthly and annual assessment. In addition to the above-mentioned monthly assessment items, combined with the annual assessment of the cooperative factory, weighted evaluation for rewards and punishments; according to the assessment results, can be divided into four levels, A, B, C, D, etc. This evaluation result can also be used as a reference of supplier risk evaluation. Supplier Incentives and Risk Control The quality and delivery time of the materials (pieces) provided by the suppliers are the focus of basic management. To effectively manage, the Company have formulated the "Management Measures for Third-Party Manufacturers" to control related operations. In accordance with the measures, the procurement department will conduct monthly audit and feedback to the quality assurance department for reference.
5. Does the Company prescribe the report on nonfinancial information disclosure such as ESG Report by referring to international reports to prescribe the standards or guidelines? Does the Company obtain a third-party assurance or verification for the foregoing reports?	V		1. The Company's ESG Report is prepared in accordance with the Global Reporting Initiative (GRI) Standards: Core Option, with additional reference to the SASB guidelines - Electrical and Electronic Equipment Sustainability Index, the Climate-Related Financial Disclosure Recommendation (TCFD), the four core frameworks of IFRS S2, and the United Nations Sustainable Development Goals (SDGs), and is publicly available on the Company's official website. 2. The 2025 ESG Report was verified by an independent third-party assurance provider, the British Standards Institution (BSI), Taiwan Branch, to ensure the accuracy of the disclosed information. For details of the verification, please refer to the Company's ESG Report. All historical ESG Reports are not only uploaded to the Market Observation Post System (MOPS) but are also published on the Company's website.	None
6. If the Company has established its corporate social responsibility best-practice principles in accordance with the Corporate Social Responsibility Best-Practice Principles for TWSE/GTSM Listed Companies, please clearly describe the functioning of such principles and any discrepancies: In November 2015, the Board of Directors of the Company approved the "Code of Practice for Corporate Social Responsibility". In May 2022, the Board of Directors approved the amendment and changed its name to "Code of Practice for Sustainable Development" to strengthen the implementation of sustainable development. The Company regularly reviews the implementation of this code and makes improvements accordingly. So far, there is no discrepancy in implementation.

Corporate Governance Report

| Item | Implementation Status | | | Deviations from
“Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies” and Reasons |
| --- | --- | --- | --- | --- |
| | Yes | No | Summary | |
| 7. Other important information to facilitate a better understanding of the Company’s corporate social responsibility practices:

(1) Social contribution:
1. Taking valuation of environmental protection as responsibility by not only fully complying with the environmental protection law of local operation office but also paying attention to the latest environmental issues worldwide to lead in taking environmental friendly practice.
2. Pollution prevention is one of the foremost important responsibilities of enterprises and thereby pollution prevention will be built on ISO 14001 environmental management system, to promote continual improvement on environmental management cases through P-D-C-A management model. This approach will reduce the production of pollutants and wastes, which will take consideration of production costs and environmental protection.
3. Optimize and implement all ESG indicators in corporate social responsibilities to meet the corporate vision for sustainable management.
4. Develop and upgrade product performance to provide customers with more advanced, energy-saving and green products.
5. Hold industry-research cooperation projects with school professors over the long run to promote knowledge economics and social development.

(2) Community Involvement:
1. Sponsor parties and community activities in Lanxing Village, Zhongzheng Village, and Dexing Village of Taipei City.
2. Long-term adoption and care of the plants in Dexing Park. It took NT$266,000 for flower trimming and cleaning and maintenance in 2025.
3. Regularly holding local cultural and art activities, supporting local culture education and cultivation in-depth.
4. The maintenance cost (including robot body and floor cleaning) for the transformer robot plaza at Shilin No. 3 Plaza (next to Tianmu SOGO) in 2025 is approximately NT$60,000.

(3) Employees’ Rights and Interests and Care for Employees:
1. The company is committed in providing a work environment with fun and reasonable pay. To build such environment, employees in Taiwan and overseas are offered with competitive salary and benefits. The company also continues to launch diversity of work and life balance solutions to take care of the physical and mental health of the employees. In work, complete educational training system and employee development plan can help employees with upgrading professional competency and self-growth.
2. The company shall take consideration of the work competence of employees during recruitment and shall treat persons with different sex, religion, race, nationality, or political party equality with fair treatment.
3. The company values two-way communication and are committed to the strengthening of open and transparent communication channel between supervisor and employees, and between employees, thereby promoting labor-management harmony. We regularly hold senior supervisor communication meeting, cross-department meeting and holding employee satisfaction survey to listen to the opinion of employees as processing the problems reflected by employees to implement the relevant investigation and seminar conclusion.
4. Provide diversity of training courses to enhance the workplace competence of employees at all levels (management, professionalism, and language). In addition to arranging external training courses, the company also designs a series of training courses by hierarchy inside by holding language classes (English and Japanese) for employees to have self-study and growth, thereby continuing to upgrade personnel quality.
5. To maintain the competitiveness of the overall corporate Sustainability, measure the market salary level and macroeconomic indicators each year through salary investigation in Taiwan or overseas, making proper adjustment to the base salary of all employees.
6. Conducting regular personnel assessment and assisting with career planning, providing management and professional career dual-track system for employees to have unobstructed promotion channel with placement of right personnel on the right position.
7. Complete grievance channel can help employees solve work related personal rights and interests or unfair treatment by advocating for labor-management harmony and maintaining the rights and interests of labor | | | | |

65 -

Shihlin Electric

| Item | Implementation Status | | | Deviations from
“Corporate
Governance
Best-Practice
Principle for
TWSE/GTSM
Listed
Companies” and
Reasons |
| --- | --- | --- | --- | --- |
| | Yes | No | Summary | |
| 8. Provide employees with healthy, safe and comfortable work environment in addition to maintaining optimization and improvement. The foundation of productivity of the consolidated company values employee work and life balance, and the physical and mental health of employees. The company also continues to build healthy workplace environment through diverse health care solutions, holding health promotion related activities, and the optimization of employee fitness center.

(4) Safety and Health:
The company establishes dedicated safety and health department in collective processing of occupational safety and environmental safety related matters. The departments regularly hold labor safety training to enhance employees’ execution of labor safety awareness and implementation. The various health and life promotional campaigns are designed to assist employees with the implementation of healthy life. The health promotion activities provided by the company include fitness center sports courses, fitness test, stress-relief massage, flue vaccination services and seminar for physical and mental health.

(5) Supplier Relations:
The company has always treated the supplier as partners with commitment in guiding long-term cooperation with the supplier, in order to establish a sustainable supply chain with stable development.

(6) Rights and interests of Consumers:
The company offers the address, phone number and toll-free numbers of the service offices in Taiwan to consumers on the company website so the consumers can communicate with the company immediately. | | | | |

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Corporate Governance Report

H. Climate-Related Information of TWSE/TPEx Listed Company

Implementation of Climate-Related Information

Item	Implementation Status
1. Describe the board of directors' and management's oversight and governance of climate-related risks and opportunities.	1. Sustainability Committee: The Company's Sustainability Committee is composed of all independent directors. The Sustainability Department under the Sustainability Committee has also established a Chief Sustainability Officer, with six working groups divided into three major aspects: preparation of ESG Reports, sustainability risk assessment, and greenhouse gas inventory. The Sustainability Department conducts meetings every quarter to formulate, promote and strengthen action plans for the company's important sustainable development policies, review, track and revise the implementation and effectiveness of sustainable development, and submit reports to the board of directors. The company conducts a TCFD risk opportunity identification meeting every year. Senior Vice President Shih, Chin-Yi, Chief Sustainability Officer, leads the functional teams of the office to discuss and evaluate the risks and formulate relevant countermeasures based on the identification results. The company also submits the implementation status of risk management to the Audit Committee and the Board of Directors at least once a year to supervise and track the implementation of risk management. The Sustainability Committee held one meeting in 2025 and submitted a total of 7 sustainability proposals to the Board of Directors for that year. The communication topics included the establishment of sustainable development management policies, the status, frequency and goals of communication with stakeholders, and the progress of greenhouse gas inventory implementation. On August 6, 2025, the supervision and management response strategy for climate-related issues was submitted to the Board of Directors.
	2. Audit Committee: Hold meetings every quarter and regularly review the internal audit department's reports on the design and effectiveness of the internal control system for risk issues, as well as audit findings.
	3. Compensation Committee: Hold quarterly meetings to discuss, evaluate, and review managers' compensation in relation to ESG and climate performance, integrating the attainment of ESG and climate-related objectives into the performance evaluation and remuneration framework for senior executives, thereby promoting sustainable operational outcomes by management and the organization.
2. Describe how the identified climate risks and opportunities affect the business, strategy, and finances of the business (short, medium, and long term).	The Company continues to invest in the research, development, and application of energy-saving and carbon reduction technologies. We have also installed solar power generation systems at our own facilities to reduce the use of grid electricity and lower carbon emissions. This initiative aims to mitigate the financial impacts brought about by climate change. The Company defines short-term as within three years, mid-term as three to five years, and long-term as over five years. The Company assess the potential operational and financial impacts of relevant climate risks and opportunities to plan various response measures.
	Category		Short-term	Mid-term
	Risk	Transition Risks	Compulsory reporting obligations	Requirements for energy-intensive users
Taiwan carbon fee
Carbon border adjustment tax
		Physical Risks	Rising fuel prices
Flooding/water shortages
Rising temperatures
Unstable energy supply (blackouts/restrictions)
Opportunities		Opportunities for low-carbon products and services
Entry into new markets
Use of low-carbon energy
More efficient production
Increased recycling and reuse rates	Financial institution incentives - sustainability-linked loans
Construction of green factories	Government incentives
Water use efficiency
Company's sustainable competitiveness
More efficient transportation

Shihlin Electric

Implementation Status
The Company has evaluated the above risks and opportunities and proposed the climate-related risks and opportunities that may have significant financial impacts, as well as the response strategies as follows:
Type	Issue	Business Revenue	Cost/Expenses	Net Profit	Capital Expenditure	Cash Flow
Risk	2050 net-zero emissions requirements	-	Increase	Decrease	Increase	Decrease
	Compulsory reporting obligations	-	Increase	Decrease	Increase	Decrease
	Rising fuel prices	-	Increase	Decrease	-	Decrease
	Taiwan carbon fee	-	Increase	Decrease	-	Decrease
	Changes in customer requirements	-	Increase	Decrease	-	Decrease
	Low-carbon technology transition	Increase	Increase	Increase	Increase	Decrease
Response Measures
Conduct greenhouse gas and carbon footprint inventories and assurance. Implement internal carbon pricing. Develop an energy management system to collect and control reduction of factory emissions such as wastewater and electricity usage. Set up a dedicated unit to assess climate risks and allocate future expenditures for energy-saving and carbon reduction initiatives. Plan carbon reduction targets and regularly report progress to the Board of directors. Plan to install solar panels at each factory to achieve self-sufficiency. Establish a supply chain alliance to promote carbon inventory among suppliers to reduce operational impacts.
Type	Issue	Business Revenue	Cost/Expense	Net Profit	Capital Expenditure	Cash Flow
Opportunity	Construction of green factories	Increase	Increase	Increase	Increase	Decrease
	Opportunities for low-carbon products and services	Increase	Increase	Increase	Increase	Decrease
	Entry into new markets	Increase	Increase	Increase	Increase	Decrease
	Company's sustainable competitiveness	Increase	Increase	Increase	Increase	Decrease
	Using low-carbon energy	-	Decrease	Increase	Increase	Decrease
	Using more efficient production	-	Decrease	Increase	Increase	Decrease
Response Measures
Establish a new green energy brand to provide comprehensive solutions for customers. Improve and optimize factory equipment, such as updating lighting systems to automatic sensor switches and replacing high-energy-consuming equipment (air conditioning systems, air compressors, and heating furnaces). Optimize production processes by using variable frequency drives or amorphous transformers to reduce power loss, consolidating production, and batch processing to enhance production efficiency. Additionally, exchanging scrap materials with suppliers can reduce procurement costs and waste disposal volumes.
3. Describe the financial impact of extreme weather events and transformative actions.	Financial Impact of Extreme Climate Events: Extreme climate changes can result in rising temperatures, sea levels, flooding, water shortages, or unstable energy supplies (blackouts, power restrictions), which can lead to increased operational and transportation costs. After internal discussions and evaluations based on the likelihood and impact of these risks, it has been determined that the company faces minimal direct impact from extreme climate events, and they are not considered significant. Financial Impact of Transition Actions: Transition actions may face risks related to policy, regulations, technology, and market changes. Considering the company's recent proactive approach in the green energy industry, transitioning to a green electricity supplier with ventures into agrivoltaics, ground-mounted solar power plants, government public works, and Taiwan Power Company projects, we are actively developing green energy industries and expanding participation in public works to enhance our core strengths. The establishment of the cross-business group brand "Shihlin Electric Green Power" aims to quickly build a comprehensive new energy business portfolio. This project has financial implications, including increased capital investment and operational costs. For detailed information on the financial impacts of risks and opportunities related to climate change, please refer to the 2025 ESG Report.
4. Describe how climate risk identification, assessment, and management processes	The Company's Sustainability Committee is the highest-level risk management and governance unit, under which a Sustainability Risk Assessment Team is established. For different risk issues, the corresponding functional groups within the relevant departments implement effective monitoring mechanisms to ensure the effectiveness and timely adjustment of risk management measures. Through cross-departmental coordination, progress

Corporate Governance Report

Item	Implementation Status
are integrated into the overall risk management system.	tracking, and performance review mechanisms, the Company strengthens its oversight and management of climate risks. For more information on the monitoring and management processes for climate-related risks, please refer to the 2025 ESG Report.
Given the high level of concern among stakeholders regarding corporate environmental sustainability, the Company has adopted an environmentally friendly and energy-saving business approach, working with the value chain to participate in sustainable development initiatives. It is anticipated that future climate-related risks and opportunities will have a more profound impact on the Company's business model and value chain.
The detailed information regarding "Current and Expected Impacts of Climate-Related Risks and Opportunities on Business Model and Value" and "Climate Resilience: Climate-Related Situation Analysis and Assessment" will be disclosed in accordance with the statutory schedule of the IFRS Sustainable Information Disclosure Guidelines of the Taiwan Stock Exchange.
5. If scenario analysis is used to assess resilience to climate change risks, the scenarios, parameters, assumptions, analysis factors and major financial impacts used should be described.	N/A
6. If there is a transition plan for managing climate-related risks, describe the content of the plan, and the indicators and targets used to identify and manage physical risks and transition risks.	1. Transformation plan for managing climate-related risks: According to statistics, electricity consumption is the company's main source of carbon emissions. In response to ESG (carbon reduction production) and the government's green energy policy, the company launched a solar power generation system construction plan in 2022, with the goal of increasing the proportion of green electricity use to 15%. The relevant plans include:
(1) Establishing a Sustainability Development Department to formulate carbon reduction plans and track their effectiveness, reporting to the board of directors.
(2) Setting up an energy management system to draft plans and schedules for energy-saving and carbon reduction in the plants.
(3) Planning for each plant to install solar panels independently, ensuring self-sufficiency.
(4) Updating the lighting system to automatic sensor switches.
(5) Replacing high-energy-consuming equipment (such as air conditioning units, air compressors, and heating furnaces).
(6) Using variable frequency motors or amorphous transformers to reduce power loss.
(7) Using scrap materials to exchange for materials with suppliers, which can lower procurement costs and waste disposal volumes.
For detailed information on these initiatives, please refer to the Company's ESG Report.
	2. Indicators and targets for identifying and managing entity risks and transition risks:
	Plan	Indicator	2025 Goal	Action Item
	Energy Saving	Electricity consumption	Decreased by 960MWh compared with the previous year	• Introduced energy management platform for digital real-time monitoring and management
• Independent energy-saving measures in the factory
	Green Energy	Rooftop solar installation capacity	The installed capacity reached 1.8MWh	• The first phase of the rooftop solar installation project was completed, reaching 1.94MWh
	Carbon Reduction	Greenhouse gas emission intensity	Reduced by 11% compared with the base year	• Completed greenhouse gas inventory and assurance for the parent company and its subsidiaries in the consolidated financial statements.
Product carbon footprint quantification process		Effectively controls carbon emission sources	• Two products have obtained Environmental Labeling certified by the Ministry of the Environment.

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Shihlin Electric

Item	Implementation Status
	Plan	Indicator	2025 Goal	Action Item
	Water Recycling	The amount of tap water taken	Reduced by 660 tons compared to the previous year	• Improvement plan for waste liquid reduction
	Waste Reduction	Total waste reuse	175 tons less than the previous year	• Reduce and recycle waste in the manufacturing process
	Climate Change Adaptation	-	Continuous rolling adjustment	• Deploy relevant plans based on the climate change adaptation plan
7. If internal carbon pricing is used as a planning tool, the basis for setting the price should be stated.	In year 2023, the Company implemented an internal carbon fee mechanism for the first time. This mechanism takes into account factors such as international carbon tax systems, carbon pricing models of benchmark companies, prices in carbon emission trading markets, and penalties stipulated in relevant regulations. Additionally, considering the domestic and international sales revenue of each business unit, the company set the internal carbon price at NT$800 per ton. This price will be incorporated into the business statements for monthly tracking to supervise its implementation.The structure of the Company's internal carbon pricing mechanism involves each business unit conducting monthly emission inventories and including the internal price of NT$800 per ton in the financial management statements as an external expense. This further links emissions with the business performance of each unit. This design encourages each business group to continuously develop energy-saving products and promote green energy projects. Simultaneously, the Company is committed to the use of green energy in each plant, the introduction of energy-saving measures, and the reduction of greenhouse gas emissions. These efforts aim to achieve the Company's carbon reduction goals and enhance its corporate image.
8. If climate-related targets have been set, the activities covered, the scope of greenhouse gas emissions, the planning horizon, and the progress achieved each year should be specified. If carbon credits or renewable energy certificates (RECs) are used to achieve relevant targets, the source and quantity of carbon credits or RECs to be offset should be specified.	In accordance with the Financial Supervisory Commission's regulatory schedule, the Company has promoted internal greenhouse gas inventories and external assurance for its parent company and consolidated subsidiaries ahead of schedule. To strengthen greenhouse gas management, the Company has been conducting voluntary greenhouse gas inventories at its individual boundaries in accordance with the GHG Protocol standard since 2022, and has arranged for external organizations to conduct greenhouse gas emission assurance work for individual companies since 2023.Shihlin Electric has been promoting voluntary carbon reduction activities and the construction of solar power generation facilities in its various plants. The first phase of rooftop solar panel installation has been completed, with an installed capacity of 1.9 MWh. The cumulative solar power generation to date is 1,669,336 kWh. It is estimated that the installed capacity will reach 6.4 MWh by 2020, accounting for 15% of the company's electricity consumption.The Company has successfully applied for 1338 green energy Renewable Energy Certificates (RECs).For details on the greenhouse gas reduction base year and data, reduction targets, strategies and specific action plans, and achievement of reduction targets, please refer to the following 2. Greenhouse Gas Inventory and Assurance for the Past Two Years and 3. Explanation of Greenhouse Gas Reduction Targets, Strategies, and Specific Action Plans and the Company's ESG Report.
9. Greenhouse gas inventory and assurance status and reduction targets, strategy, and concrete action plan	Please refer to the information as follow,2. Greenhouse Gas Inventory and Assurance for the Past Two Years3. Explanation of Greenhouse Gas Reduction Targets, Strategies, and Specific Action Plans

Corporate Governance Report

2. Greenhouse Gas Inventory and Assurance for the Past Two Years

(1) Greenhouse Gas Inventory Information

State the greenhouse gas emissions for the last two years (tons CO₂e), intensity (tons CO₂e per million dollars), and the scope of the data coverage.
Basic information of the Company
☐ Companies with capital of more than 10 billion, copper industry, cement industry
■ Companies with capital of more than 5 billion but less than 10 billion
☐ Companies with a capital of less than 5 billion	According to the provisions of the sustainable development road map of listed companies, must at least disclose:
■ Individual inspection of the parent company: year 2024 and 2025
■ Consolidated Financial Reporting Subsidiary Inventory: year 2025
☐ The parent company’s individual confidence: year 2026
☐ Consolidated financial reporting of subsidiaries assurance: year 2027
Note: The Company completed the verification and assurance of the parent company and consolidated financial reporting subsidiaries ahead of schedule in 2025, and accordingly reset 2024 as the base year for greenhouse gas emissions of the entire Group. The base year for the parent company as an individual remained in 2022 to ensure the consistency and comparability of the data.
Year
---	---
Inspection Situation
The Company	Scope 1
	Scope 2
	Sub-total
Consolidated Financial Statements Subsidiaries	Scope 1
	Scope 2
	Sub-total
Total
Organizational Boundary
Note 1: Direct emissions (Scope 1, emissions directly from sources owned or controlled by the company) and energy indirect emissions (Scope 2, indirect greenhouse gas emissions resulting from imported electricity, heat, or steam).
Note 2: The data coverage for direct emissions and energy indirect emissions should be handled according to the schedule prescribed in Article 10, Paragraph 2 of this guideline. Information on other indirect emissions can be voluntarily disclosed.
Note 3: Greenhouse gas inventory standards: Greenhouse Gas Protocol (GHG Protocol) or ISO 14064-1 issued by the International Organization for Standardization (ISO).
Note 4: The intensity of greenhouse gas emissions can be calculated per unit of product/service or revenue, with revenue data calculated in NT$ million.
Note 5: Greenhouse gas inventory standards: Inventory conducted according to GHG Protocol, covering gases including carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF₆), and nitrogen trifluoride (NF₃).
Note 6: The 2025 data are expected to undergo third-party external verification by June 2026, and the verified data will be updated in the company's ESG Report.

Shihlin Electric

Note 7: The Global Warming Potential (GWP) references the IPCC 2021 Sixth Assessment Report.
Note 8: Source of conversion coefficient for 2024: Ministry of Environment, Executive Yuan, "Announcement of Greenhouse Gas Emission Coefficient on February 5, 2024".
Note 9: Emission factors for purchased electricity are based on the emission factors published by the Energy Bureau of the Ministry of Economic Affairs, with the 2024 emission factor for electricity being $0.474\mathrm{kgCO_2e / kWh}$
Note 10: The Company's project sites are categorized into system engineering sites and solar-charging-storage sites. As the solar-charging-storage sites involve multiple subcontractors and the associated expenses are intermingled and cannot be separated, and given that their share of total emissions is relatively small, they are therefore excluded from the inventory.
Note 11: For complete information of 2025, please refer to the 2025 ESG Report.

(2) Greenhouse Gas Assurance Information

A statement detailing the assurance situation for the most recent two years as of the annual report publication date, including the scope of assurance, the assurance provider, the assurance standards, and the assurance opinion.
Scope of Assurance		2024 (Metric Tons of CO2e)	2025 (Metric Tons of CO2e)
The Company	Scope 1: Direct Greenhouse Gas Emissions	5,718.82	Expected to complete third-party external verification by June 2026. For detailed assurance information, please refer to the Company's ESG Report.
	Scope 2: Indirect Greenhouse Gas Emissions	35,768.31
	Total	41.487.13
	Percentage of disclosed inventory information data covered	100%
Assurance Provider		Deloitte & Touche (Taiwan)
Description of Assurance Situation		Greenhouse Gas Assurance Standards: ISAE 3410 for limited assurance by the accountants.
Assurance Opinion/ Conclusion		Limited Assurance
Note 1: In accordance with the schedule prescribed in Article 10, Paragraph 2 of this guideline, if the Company does not obtain a complete greenhouse gas assurance opinion by the annual report publication date, it should state, "Complete assurance information will be disclosed in the ESG Report". If the company does not prepare a ESG Report, it should state, "Complete assurance information will be disclosed on the Market Observation Post System", and include the complete assurance information in the following year's annual report. Note 2: The assurance provider must comply with the relevant regulations for ESG Report assurance providers as set by the Taiwan Stock Exchange Corporation and the Taipei Exchange. Note 3: The Company is required to disclose assurance information starting from 2026. Note 4: The complete information for 2025, please refer to the 2025 ESG Report.

3. Greenhouse Gas Reduction Targets, Strategies, and Specific Action Plans

Item	Description
Specify the baseline year and data for greenhouse gas reduction, reduction targets, strategies and specific action plans, and the achievement status of the reduction targets.	1. Greenhouse Gas Reduction Base Year, Reduction Targets, and Achievement Status: To strengthen greenhouse gas management, the company has been conducting voluntary greenhouse gas inventories at individual plant boundaries in accordance standard since 2022, and has arranged for external organizations to conduct individual emission assurance operations since 2023. The Company currently has an individual company carbon reduction plan, with targets covering the parent company and set 2022 as base year.
	2025 Targets	2025 Targets Achievement Status	Short-term Targets (within 3 years)	Mid-to-long-term Targets (more than 3 years)
	Reduce Greenhouse Gas Emission Intensity by 11 %	Achieved	Reduce Greenhouse Gas Emission Intensity by 50%	Reduce Greenhouse Gas Emission Intensity by 54%, total emissions by 20%
	Note: The results of the greenhouse gas inventory are expected to be completed in June 2026. This is an estimated result. Please refer to the company's 2025 ESG Report for the actual achievement.

Corporate Governance Report

Item

Description

In 2024, the Company expanded its greenhouse gas inventory and assurance scope to include the parent company and its consolidated subsidiaries, and accordingly reset the base year for greenhouse gas emissions across the entire group. The base year for the parent company remains 2022 to ensure data consistency and comparability. Going forward, Shihlin Electric will further develop group-level carbon reduction targets to ensure that the scope of the targets covers the company's overall operations, and strengthen the promotion and implementation of carbon reduction strategies.

Greenhouse gas reduction strategy, specific action plan and implementation status:
Plant energy-saving measures and performance: Energy-saving improvements at all plants are estimated to reduce 272.5 metric tons of CO₂e /year in 2025, totaling 574,806 kWh (2.069.3 GJ). For details on the energy-saving measures of the plants, please refer to the ESG Report.

Solar power generation for self-use plan:
The company launched a solar power generation system construction plan in 2022, and it is estimated that the installed capacity will reach 6.4MWh in 2030. The goal is to increase the proportion of green electricity use to 15% in 2030. As of the end of December 2024, the first phase of the solar panel installation capacity has completed the construction plan, with an installed capacity of 1.94MWh, a completion rate of 102%, and the second phase of the construction plan has been started. The current cumulative solar power generation is 1,669,336kWh (6,009.6GJ). For details of our solar power generation self-use plan, please refer to the ESG Report. |
| Note 1: The procedure should be carried out according to the schedule prescribed in Article 10, Paragraph 2 of this guideline.
Note 2: The baseline year should be the year in which the inventory was completed within the boundary of the consolidated financial report. For example, according to the order prescribed in Article 10, Paragraph 2 of this guideline, companies with capital of over 10 billion NTD should complete the inventory for the 2024 consolidated financial report by 2025, making 2024 the baseline year. If a company has completed the inventory for the consolidated financial report earlier, that earlier year may be used as the baseline year. The data for the baseline year may be calculated as a single year or as an average over several years. | |

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Shihlin Electric

I Implementation of Honest Practices, Comparison Against the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies and Reasons:

Evaluation Items	Implementation Status
	Yes	No	Summary and Description
1. Establish ethical management policies and plans
(1) Has the Company adhered to the business conduct policy explicitly set out in its regulations and external documents, supported by the active commitment of the Board of Directors and Management to its implementation?
(2) Does the Company establish the evaluation mechanism on higher risk of unethical behavior, regularly analyze and evaluate the business activities with higher risk of unethical behavior, as well as adopt the preventative measures at least covering the Paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies?
(3) Are the operational procedures, guidelines, disciplinary and appeal system of impairment included in the Company’s prevention programs of unethical behavior thorough implementation? And any regular review of the foregoing programs for better implementation?	V		(1) The company complies with company act, Listed and OTC company related regulations as well as other commercial conduct law as the basic premise for implementing ethical management. The company adopted the ethical management principles at the Board of Directors meeting in November 2015 to establish the corporate culture and sound development of ethical management and the commitment to implement management policy with enthusiasm.
(2) The consolidated corporations have established the accounting system and internal control system with validity. The internal audit staff will regularly analyze and evaluate the business activities with higher risk of unethical behavior. The preventative measures of unethical behavior have been specified in Ethical Corporate Management Best Practice Principles against the following:
(a) Offering and acceptance of bribes.
(b) Illegal political donations.
(c) Improper charitable donations or sponsorships.
(d) Offering or acceptance of unreasonable presents or hospitality, or other improper benefits.
(e) Misappropriation of trade secrets and infringement of trademark rights, patent rights, copyrights and other intellectual property rights.
(f) Engaging in unfair competitive practices.
(g) Damage directly or indirectly caused to the rights or interests, health, or safety of consumers or other stakeholders in the course of research and development, procurement, manufacture, provision, or sale of products and services.
(3) The consolidated corporations have included the operational procedures, guidelines and reporting systems in the preventative measures of unethical behavior to guide directors, managers, employees, and substantial controllers on how to conduct business. The Company also at all times monitors the development of relevant local and international regulations concerning ethical	None

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Corporate Governance Report

Evaluation Items	Implementation Status
	Yes	No	Summary and Description
			corporate management and encourage their directors, managers, and employees to make suggestions, based on which the adopted ethical corporate management policies and measures taken will be reviewed and improved with a view to achieving better implementation of ethical management.
2. Implementation of the Codes of Business Conduct
(1) Does the Company access the ethical conduct records of its counterparts and specify “ethical clauses” in business contracts?
(2) Does the Company establish a dedicated unit under the Board of Directors to promote corporate ethical management and regularly (at least once a year) report to the Board on its integrity management policies, plans to prevent dishonest behaviors, and the supervision and implementation status?
(3) Does the Company promulgate policies to prevent conflicts of interests and offer channels for reporting such conflicts?
(4) Has the Company established an effective operation of the accounting and internal control system, and periodically conducted internal audits by internal auditors, or audited by CPA?
(5) Does the Company periodically conduct the internal and external training on ethical management?	V
V
V
V		(1) The Company upholds to fair and transparent practice in conducting commercial activities while taking consideration of agents, suppliers, customers, or other transacting parties of commerce for legitimacy and any unethical conducts to avoid transactions with such parties.
(2) To fulfill its supervisory responsibilities in promoting ethical business practices, the Company has designated the Sustainability Department as the unit responsible for implementing integrity management. Regular reports on implementation status are submitted to the Board of Directors. This effort is supported by the Internal Audit Office, which assists in enforcing internal controls. In addition, an internal control team composed of board members conducts regular audits on corporate governance practices and submits reports to both the Board of Directors and the Audit Committee. Subsidiaries have also established corresponding units responsible for related audit matters. The Company's implementation status of integrity management for the year 2025 was submitted to the Audit Committee and the Board of Directors on May 8, 2026.
(3) The directors and managers of the Company shall avoid all affairs with interests of conflict in addition to indicating the situations of conflict of interest operations in the Company’s Annual Report.
(4) The Company sets up internal control system to assure the continuous effect of system design and execution. The auditors conduct annually scheduled inspection and revision process to establish sound corporate governance and risk management mechanism.
(5) The Company includes an integrity advocacy course as part of its onboarding training for all new employees and regularly promotes ethical business conduct through internal training sessions for existing staff. Additionally, on April 24, 2025, the Company collaborated with the Taiwan Academy of	None
None
None
None

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Shihlin Electric

Evaluation Items	Implementation Status			Deviations from "Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies" and Reasons
	Yes	No	Summary and Description
			Banking and Finance to hold an internal seminar titled “Integrity Management and Insider Trading Prevention Training.”
3. Establishment of Reporting Channels for Violations of the Codes of Business Conduct (1) Has the Company established a specific reporting and reward system through convenient channels for lodging complaints? And does the Company assign the dedicated personnel to attend to the matter? (2) Has the Company established the standard operation procedure for investigating and proceeding of the report in a confidential manner? (3) Does the Company adopt measures to protect whistle blowers from reprisals for having filed the complaint report?	V	V	(1) The Company has designated the Sustainability Department as the unit responsible for overseeing the implementation of integrity management. Relevant grievance procedures are carried out in accordance with the processes specified in the Company’s internal regulations. (2) The Company has established the "Ethical Corporate Management Best Practice Principles," the "Code of Ethical Conduct," and the "Sexual Harassment Prevention Measures, Employee Grievance, and Disciplinary Regulations," which clearly define reporting mechanisms and procedures for general grievances and sexual harassment complaints. All reports are handled through standard procedures, with strict adherence to personal data protection and confidentiality regulations. Any form of retaliation against involved parties is strictly prohibited. (3) The aforementioned internal regulations clearly define the reporting mechanisms and procedures for general grievances and sexual harassment complaints. All information related to such cases must be kept strictly confidential by both the complainant and the personnel handling the case, and no details may be disclosed externally. Protective measures are in place to ensure that whistleblowers are not subjected to improper treatment as a result of their reports. For more detailed information on the Company’s integrity management practices, please refer to the Company’s official website or ESG Report.	None None None
4. Enforcement of Information Disclosure Has the Company disclosed its “Best Practice Principles” and the implementation through its official website or the market observation post system?	V		The company sets up a company website to disclose the execution of corporate ethical management with dedicated personnel routinely updating the information and website of corporate governance.	None
5. If the Company has established its ethical business best practice principles in accordance with the “Ethical Business Best-Practice Principles for TWSE/GTSM Listed Companies”, clearly describe the function of such principles and any discrepancies in ethical business best-practice principles: In November 2015, the Board of Directors approved the adoption of the Company’s “Ethical Corporate Management Best Practice Principles.” A second revision was conducted and approved by the Board in May 2025 to further strengthen the implementation of the Company’s integrity management policy. The Company regularly reviews implementation status in accordance with the Principles and makes improvements as needed. To date, there have been no deviations in its implementation.

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Corporate Governance Report

Evaluation Items	Implementation Status			Deviations from "Corporate Governance Best-Practice Principle for TWSE/GTSM Listed Companies" and Reasons
	Yes	No	Summary and Description
6. Other important information regarding the Company’s operation in ethical business best-practice, such as the reviewing and amending of the Company’s business best-practice principles and so on: The Company complies with regulations for all internal operations and upholds to legitimate ethical principles. Meanwhile internal auditors regularly prepare the audit report for submission to the Audit Committee while employees take regular educational training in promotion of ethical operation principles to effectively enhance the ethical management of the Company.

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Shihlin Electric

J. Other information enabling a better understanding of Company Corporate Governance:

Organization System

(1) Organization Structure Chart

Corporate Governance Report

(2) Department Operations

Department		Primary Responsibilities
1	Chairman's Office	Assist the Chairman to supervise/control the operation and management of the entire company.
2	President's Office	1. Coordinate the strategic planning and operation management as well as other matters of the entire company.
2. Coordinate the investment matters of the enter company.
3	General Management Office	Manage human resources, general affairs, finance and information functions, coordinate system planning and cross-organizational coordination, strengthen corporate governance and support operational management.
4	Human Resources Division	Coordinate the HR resource planning of the Company, HR management, HR development, educational training, employee welfare, labor affairs system, and assisting overseas HR.
5	General Affairs Division	Coordinate the general affairs of the entire company, factory affairs, general affairs, safety and health, environmental protection, and the operation and management of Yangder Building.
6	Finance Division	Coordinate for overseeing the company's cost management, fund allocation, accounting, tax processing, shareholder affairs, and assisting with overseas financial management.
7	Information Technology Division	Coordinate for overseeing the company's information development, information security, and the formulation and execution of strategies for information usage and order. Additionally, it assists in the establishment of the company's information systems.
8	Heavy Electric Business Group	1. Coordinate the R&D, production and manufacturing of power transformation, power distribution device, and capacitor products.
2. Coordinate the sales of power transformation, power distribution device, and capacitor products.
3. Coordinate power transportation turnkey, system product operations.
9	System Engineering Division	Comprehensively organize information resources and business opportunities in electromechanical public engineering cases, and cooperate with domestic engineering consulting companies in business cooperation and business supervision matters.
10	Automobile Equipment Business Group	Coordinate the R&D, production and sales of overseas and domestic auto-electric and special motor product.
11	Breaker & Switchgear Business Group	1. Coordinate the R&D, production and manufacturing of no fuse circuit breaker and electromagnetic switch.
2. Coordinate the sales of no fuse circuit breaker and electromagnetic switch products.
3. Coordinate digital and safety industry product sales.
12	Automation Business Group	Coordinate programmable controller (PLC), touch panel, variable-frequency drive, server motor, sensor product and other product R&D, production and sales.
13	System Engineering Integration Division	Coordinate CIM connection integration project, production machinery and power control system project, monitoring system project, and other device and product as well as project installation and construction.

79 -

Shihlin Electric

Advancement Courses and Trainings Related to Managers' Participation in Corporate Governance in 2025

Title	Name	Training Course	Training Hours
Chairman	Hsu, Yu-Jui	Looking to the Future Through Financial Reports: Management Strategies for Directors and Supervisors – From Financial Data to Business Decisions	3
President	Kuo, Yueh-She	Looking to the Future Through Financial Reports: Management Strategies for Directors and Supervisors – From Financial Data to Business Decisions	3
President	Cheng, Hsiang-Chih	Analyzing key domestic and international case studies to understand the strategies and mindset that companies should have for protecting business intelligence.	3
General Manager of Business Groups	Lee, Shui-Yuan	Global tariff war: supply chain restructuring trends and corporate responses	3
Senior Vice President	Bryant Hsu	The Impact of New Changes in International Politics and Economics on Taiwanese Businesses	3
Senior Vice President Chief Accounting Officer Chief Financial Officer Chief Sustainability Officer	Shih, Chin-Yi	Analysis of Practical Cases of Shareholder Meeting Disputes	3
		How Taiwanese businesses can cope with the global tariff war	3
		2025 Insider Equity Transaction Legal Compliance Briefing	3
		2025 Cathay Sustainable Finance and Climate Change Summit Forum	6
		Nvidia's Trillion-Dollar Miracle: New Thinking in the Semiconductor Industry Revolution Behind Artificial Intelligence	3
		Trump 2.0: Corporate Response Strategies for Global Tax Reform and Supply Chain Restructuring	3
		Taiwan Capital Market Summit	3

K. Status of Internal Control System

(1) Internal Control Declaration: Please visit the new version of the public information site for inquiries.

Query Index Path: Single Company--->Corporate Governance--->Company Regulations/Internal Control--->Internal Control Statement Announcement

URL: https://mops.twse.com.tw/mops/#/web/t06sg20

(2) The Internal Control Audit Report Issued By the CPA Commissioned to Conduct an Internal Control Audit, If Any: N/A.

L. Resolutions Reached at A Meeting of Shareholders or by the Board of Directors During the Recent Year and Up to the Date of Publication of This Annual Report:

Meetings	Dates	Resolutions
Shareholders' Meeting	June 13, 2025	1. Proposal of 2024 business report and financial statement, please recognize.
©Status: Recognized by the 2025 Shareholders' Meeting.
2. Proposal of distribution of 2024 surplus, please recognize.
©Status: Recognized by the 2025 Shareholders' Meeting and the distribution had been completed by August 20, 2025. (Shareholders' dividend NT$ 4.5 /share in cash)
3. Proposal of amendments to the Articles of Association.
©Status: Recognized by the 2025 Shareholders' Meeting.
4.The case of lifting the non-competition restrictions of directors and their representatives is proposed for discussion.
©Status: List of situations in which directors and their representatives have been announced to be dismissed from other profit-making enterprises.

Corporate Governance Report

Meetings	Dates	Resolutions
Board Meeting	Mar. 06, 2025	1. Proposal for distribution of employee and director compensation for the year 2024.
2. Proposal of 2024 business report and financial statement.
3. Proposal of distribution of year 2024 surplus.
4. Proposal of amendments to the Articles of Association
5. Proposal for Shareholders' Meeting approval to lift the non-compete restriction on directors and their representatives.
6. Proposal of convene date, location, and agenda of 2025 Shareholders’ Meeting, location for reception and acceptance of shareholders’ proposals, periods of reception and acceptance and e-voting.
7. Proposal of capital increase for Cheng Lin Investments Co., Ltd.
8. Proposal of management changes.
9. Proposal of approval to lift the non-compete restriction on the management.
10. Issuance of the 2024 Internal Control System Statement based on self-inspection results.
Board Meeting	May 08, 2025	1. Proposal of consolidated financial statements for January to March 2025.
2. Proposed provision of financing guarantee to ChangZhou Shihlin Auto Parts Co., Ltd.
3. 2024 Annual ESG Report.
4. 2025 Annual CPA remuneration proposal.
5. Revision of the " Ethical Corporate Management Best Practice Principles ".
6. Revision of the "Implementation Rules for Internal Control - Payroll Cycle" and the "Implementation Rules for Internal Audit - Payroll Cycle".
Board Meeting	Aug. 06,2025	1. Proposal of consolidated financial statements for January to June 2025.
2. Australia Photovoltaic and Energy Storage Investment Project
3. Proposed provision of financing guarantees to ChangZhou Shihlin Auto Parts Co., Ltd. and Shihlin Electrical Engineering Ltd. of Vietnam
4. Assessment of the independence of the Company's certified public accountants.
5. Proposal of management changes.
6. Proposal of audit supervisor changes.
Board Meeting	Sep. 10, 2025	1. Proposal of the President change.
2. Proposal of managers changes.
Board Meeting	Nov. 07, 2025	1. Proposal of consolidated financial statements for January to September 2025.
2. 2026 business plan and profit and loss budget.
3. Proposal of 2026 audit plan.
4. 2026 financing credit line proposal.
5. Proposal of financing guarantee to Wuxi Shihlin Electric & Engineering Co., Ltd.
6. Proposal of capital increase to "Shang Lin Investment Co., Ltd."
7. Proposal of donation to "Memorial Foundation of Mr. Ching-Teh Hsu".
8. Change of Certified Public Accountants to accommodate internal restructuring at Deloitte Touche Tohmatsu.
9. Proposal of managers changes.
10. Proposal of directors and managers remuneration.
Board Meeting	Mar. 12, 2026	1. Proposal for distribution of employee and director compensation for the year 2025.
2. Proposal of 2025 business report and financial statement.
3. Proposal of distribution of year 2025 surplus.
4. Proposal of election of 15 directors (including 3 independent directors) for the 22nd Board of Directors.
5. Proposal of the acceptance of shareholder nominations for director (including independent director) candidates at the 2026 Shareholders’ Meeting.
6. Proposal of the list of director (including independent director) candidates nominated by the Board of Directors for approval.
7. Request the Shareholders' Meeting to approve the lifting of non-compete restrictions on newly appointed directors and their representatives.
8. Proposal of convene date, location, and agenda of 2026 Shareholders’ Meeting, location for reception and acceptance of shareholders’ proposals, periods of reception and acceptance and e-voting.
9. Amendment of the Company's internal procedures.
10. Proposal of managers changes.
11. Agree to lift the non-competition restrictions imposed by the company's managers.
12. Based on the results of the self-inspection, issue the 2025 "Internal Control System Statement".

81 -

Shihlin Electric

M. Recorded or Written Statements of Dissent Made by Any Director or Supervisor to Important Resolutions Passed by the Board of Directors During the Recent Year And Up to the Date of Publication of This Annual Report: N/A

Information on CPA Professional Fees

Unit: NT$ thousand

Firm Name	CPA Name	Duration of Audit	Audit Fee	Non-Audit Fee	Total	Remark
Deloitte & Touche (Taiwan)	Huang, Yao-Lin	Jan.~ Dec.,2025	5,340	2,550	7,890	Internal adjustment of Accounting Firm
	Chuang, Yeh-Wei	Jul.~ Dec.,2025
	Lee, Tung-Feng	Jan.~ Jun.,2025

Specifically describe the content of non-audit public expense services: Non-audit expense refers to tax services and legal compliance services.
Public audit fees refer to the public fees paid by the company to certified accountants for the review, review, review and review of financial reports and financial forecasts.

The Company has one of the following circumstances, and should disclose the following matters:

(1) In the case of a change of CPA firm and the audit fees for the year of the change are less than those of the previous year, please specify the audit fees, and the reasons for the change: N/A
(2) In the case of the audit fees being 10% less than that of the previous year, please specify the audit fees before and after the change, and the reasons for the change: N/A
(3) Name of CPA and his/her audit opinion in the last three years

Year	Name of the Certified Public Accountant	Audit Opinion
2025	Deloitte & Touche (Taiwan)
Huang, Yao-Lin / Chuang, Yeh-Wei	Unqualified opinion plus other matters paragraph
2024	Deloitte & Touche (Taiwan)
Huang, Yao-Lin / Lee, Tung-Feng	Unqualified opinion plus other matters paragraph
2023	Deloitte & Touche (Taiwan)
Chen, Chih-Yuan / Lee, Tung-Feng	Unqualified opinion plus other matters paragraph

Corporate Governance Report

4. CPA Replacement Information in The Recent Two Years

(1) Former CPA:

Replacement Date	November 07, 2025
Reasons and explanations for change	Internal adjustment of the accounting firm, accountant Huang, Yao-Lin and Lee, Tung-Feng were replaced by accountants Huang, Yao-Lin and Chuang, Yeh-Wei
Explain that the appointer or accountant has terminated or refused to accept the appointment.	Party Situation		Accountant	Appointing Person
	Voluntary termination of appointment		Not applicable
	No longer accept (continue) appointment
Opinions and reasons for audit reports other than unqualified opinions issued within the latest two years	Among the subsidiaries included in the Company's consolidated financial statements for 2025 and 2024, the financial statements of certain subsidiaries were audited by other accountants. Therefore, in expressing our opinion on the aforementioned consolidated financial statements, the amounts related to these subsidiaries were based on the audit reports of other accountants. Additionally, the financial statements of certain associated companies included in the aforementioned consolidated financial statements were also audited by other accountants. Thus, in expressing our opinion on the aforementioned consolidated financial statements, the amounts related to the equity method investments in these associated companies, the share of profit or loss recognized under the equity method, and the share of comprehensive income or loss recognized under the equity method were based on the audit reports of other accountants. As a result, we have issued an unqualified opinion with an additional paragraph on the Company's financial statements for 2025 and 2024.
Any Disagreement with The Issuer	Yes		Accounting Principles or Practices
			Financial Report Disclosure
			Audit Scope or Steps
			Others
	No	V
	Description
Other disclosures (Items 1-4 to 1-7 of Paragraph 6 of Article 10 of this Code should be disclosed)	Not applicable

(2) Regarding the CPA:

Firm Name	Deloitte & Touche (Taiwan)
CPAs Name	Huang, Yao-Lin and Chuang, Yeh-Wei
Date of Appointment	November 7, 2025
Consultation Matters and Results Regarding Accounting Treatment Methods or Accounting Principles for Specific Transactions And Possible Issuance of Opinions on Financial Reports Before Appointment	Not applicable
The Successor Accountant’S Written Opinion On Matters With Which The Predecessor Accountant Disagrees	Not applicable

(3) The response from the former auditor regarding items 1 and 2(3) of Article 10, Paragraph 5 of these guidelines.: N/A

Shihlin Electric

Information Regarding the Chairman, President/General Manager, and Financial or Accounting Manager of The Company Who Has Worked with the CPA Firm Which Conducts the Audit of The Company or An Affiliate of Said Firm in the Recent Year: N/A
Shareholding Information for the Most Recent Year and Up to the Date of the Annual Report Publication

(1) Changes in Shareholding of Directors, Managerial Officers, and Major Shareholders.

Job title (Note 1)	Name	2025		The current year ended April 30
		Shares increase (decrease)	Pledge shares increase (decrease)	Shares increase (decrease)	Pledge shares increase (decrease)
Director	Yeang Der Investment Co., Ltd.	-	-	-	-
Legal Director Representative	Hsu, Yu-Jui	-	-	-	-
Legal Director Representative	Hsieh, Han-Chang	866,000	-	-108,000	-
Legal Director Representative	Bryant Hsu	-	-	-	-
Legal Director Representative	Kuo, Yueh-She	124,000	-	-21,000	-
Legal Director Representative	Cheng, Hsiang-Chih	174,000	-	-31,000	-
Legal Director Representative	Lee, Shui-Yuan	104,000	-	-22,000	-
Director	Mitsubishi Electric Corporation (Japan)	-	-	-	-
Legal Director Representative	Kawai Toshio (Note 3)	-	-	-	-
Legal Director Representative	Komura Hideaki	-	-	-	-
Legal Director Representative	Uchiyama Akira (Note 3)	-	-	-	-
Legal Director Representative	Kunieda Masayuki (Note 3)	-	-	-	-
Legal Director Representative	Okochi Kazuhiko (Note 4)	-	-	-	-
Legal Director Representative	Masuda Katsumi (Note 5)	-	-	-	-
Legal Director Representative	Kitamura Yasunori (Note 4)	-	-	-	-
Legal Director Representative	Masahiro Nakano (Note 6)	-	-	-	-
Director	Chanching Co., Ltd.	-	-	-	-
Legal Director Representative	Kan, Ming-Hong	-	-	-	-
Director	Shin-Po Investment Co., Ltd.	-	-	-	-
Legal Director Representative	Lin, Po-Fong	-	-	-	-
Independent Director	Lin, Hsin-I	-	-	-	-
Independent Director	Yan, Cherng-Jau	-	-	-	-
Independent Director	Hu, Chao-Fong	-	-	-	-
C.E.O.	Hsu, Yu-Jui	-	-	-	-
Senior Managing Director	Hsieh, Han-Chang	866,000	-	-108,000	-
President	Kuo, Yueh-She	124,000	-	-21,000	-
President	Cheng, Hsiang-Chih	174,000	-	-31,000	-
General Manager of Business Groups	Chang, Chin-Wen (Note 7)	-350,000	-	-	-
General Manager of Business Groups	Wu, Tsung-Ming	-	-	-18,000	-
General Manager of Business Groups	Lin, Teng-Fu	-	-	-	-
General Manager of Business Groups	Lee, Shui-Yuan	104,000	-	-22,000	-
General Manager of Business Groups	Yang, Tsung-Hsien	-	-	-	-
Senior Vice President	Bryant Hsu	-	-	-	-
Senior Vice President	Chu, Wen-Ping	-	-	-	-
Vice General Manager	Lin, Yu-Liang	92,000	-	-	-
Vice General Manager	Fang, Yu-Jung	-	-	-	-
Vice General Manager	Chen, Wen-Hsiang	-36,000	-	-7,000	-

Corporate Governance Report

| Job title
(Note 1) | Name | 2025 | | The current year ended April 30 | |
| --- | --- | --- | --- | --- | --- |
| | | Shares increase (decrease) | Pledge shares increase (decrease) | Shares increase (decrease) | Pledge shares increase (decrease) |
| Vice General Manager | Liu, Ta-Wei | - | - | -16,000 | - |
| Senior Vice President | Lee, Ying-Chu | -44,000 | - | - | - |
| Senior Assistant General Manager | Tien, Chia-Wen | 75,000 | - | -7,000 | - |
| Senior Assistant General Manager | Liao, Feng-Liang | -72,000 | - | -2,000 | - |
| Senior Assistant General Manager | Hou, Kuan-Liang | -20,000 | - | - | - |
| Senior Assistant General Manager | Chang, Kuei-Feng | - | - | - | - |
| Assistant General Manager | Hsu, Yao-Chou | - | - | - | - |
| Assistant General Manager | Yang, Tien-Shu | - | - | - | - |
| Assistant General Manager | Tzeng,Chi-Chong (Note 8) | - | - | - | - |
| Assistant General Manager | Chen,Ming-Chih (Note 8) | - | - | - | - |
| Assistant General Manager | Chang, Chih-Hong (Note 8) | - | - | - | - |
| Assistant General Manager | Chang Yu-Ping (Note 8) | - | - | - | - |
| Assistant General Manager | Huang, Jen-Ts (Note 9) | - | - | - | - |
| Assistant General Manager | Yeh, Sung-Yuan (Note 10) | 92,000 | - | - | - |
| Assistant General Manager | Tzeng, Guo-Wei (Note11) | - | - | - | - |
| Assistant General Manager | Wu,Chih-Hao (Note12) | - | - | - | - |
| Senior Vice President \ Chief Financial Officer \Chief Accountant Officer | Shih, Chin-Yi | - | - | - | - |
| Major Shareholder | Mitsubishi Electric Corporation (Japan) | - | - | - | - |
| Major Shareholder | Ambassador Hotel Co., Ltd. | - | - | - | - |

Note 1 : Shareholders holding greater than a 10% stake in the Company should be remark as major shareholders.
Note 2 : If the transferees of shareholding transfer or shareholding pledge are related party, it should fill in the following table.
Note 3 : April 01, 2025 Resigned.
Note 4 : April 01, 2025 New Appointed.
Note 5 : April 01, 2025 New Appointed. April 01, 2026 Resigned.
Note 6 : April 01, 2026 New Appointed.
Note 7 : January 05, 2026 Resigned.
Note 8 : August 06, 2025 New Appointed.
Note 9 : November 07, 2025 New Appointed.
Note 10 : June 30, 2025 Resigned.
Note 11 : October 15, 2025 Resigned.
Note 12 : December 31, 2025 Resigned.

(2) Shareholding transferred: N/A

Query Path: MOPS (Market Observation Post System) New Version ---> Individual Company --->
Shareholding Changes / Securities Issuance ---> Share Transfer Information Inquiry --->
Post-reporting of Insider Shareholding Changes

URL: https://mops.twse.com.tw/mops/#/web/query6_1

(3) Information of Shareholding pledged: N/A

Query Path: MOPS (Market Observation Post System) New Version ---> Individual Company --->
Shareholding Changes / Securities Issuance ---> Insider Pledge / Release of Pledge --->
Insider Pledge / Release of Pledge Announcements

URL: https://mopsov.twse.com.tw/mops/web/STAMAK03_1

Shihlin Electric

7. Information on the Top Ten Shareholders by Shareholding Ratio, Indicating Whether They are Related Parties or Have Spousal or Second-Degree Kinship Relationships

As of April 19, 2026; unit: share, %

Name (Note 1)	Current shareholding		Spouse and minor children's shareholding		Shareholding in name of others		Name, relationship of top 10 shareholders being the related party as spouse or kin within the second tier under the Civil Code(Note 3)		Remark
		Quantity of shares	Share holding	Quantity of shares	Share holding	Quantity of shares	Share holding	Name		Relationship
1	Mitsubishi Electric Corporation (Japan)	110,242,966	21.16	0	0	0	0	N/A	N/A	-
	Representative: Kei Uruma	0	0	0	0	0	0	N/A	N/A
2	The Ambassador Hotel Co., Ltd.	59,785,175	11.48	0	0	0	0	Yeang Der Investment Co., Ltd./ De Hong Investment Corp.	Director / Subsidiary/ Subsidiary company invested evaluated by equity method	-
	Representative: Hsu, Yu-Jui	732,735	0.14	0	0	0	0	Yeang Der Investment Co., Ltd.	Spouse of Chairman
3	Yeang Der Investment Co., Ltd.	27,556,494	5.29	0	0	0	0	The Ambassador Hotel Co., Ltd.	Director	-
	Representative: Kuo, Tun-Yu	0	0	0	0	0	0	The Ambassador Hotel Co., Ltd.	Spouse of Chairman
4	Trust Property Account for Shihlin Electric & Engineering Corp. under the custody of Taipei Fubon Commercial Bank	13,964,958	2.68	0	0	0	0	N/A	N/A	-
5	De Hong Investment Corp.	13,497,000	2.59	0	0	0	0	The Ambassador Hotel Co., Ltd.	The parent company of the investment company that evaluated by equity method/Investment company that evaluated by equity method	-
	Representative: Lee, Ying-Chu	0	0	0	0	0	0	N/A	N/A
6	Employee' Stock Ownership Association Trust Property Account for Shihlin Electric & Engineering Corp. under the custody of CTBC Bank Co., Ltd.	12,887,656	2.47	0	0	0	0	N/A	N/A	-
7	Citibank (Taiwan) is entrusted with the safekeeping of Firstrade Securities (Hong Kong) Co., Ltd. contracted customer Firstrade Securities (Hong Kong) Nominees Co., Ltd. Investment Account	11,654,000	2.24	0	0	0	0	N/A	N/A	-
8	Benz Investment Corp Ltd.	10,083,000	1.94	0	0	0	0	The Ambassador Hotel Co., Ltd.	The parent company of the investment company that evaluated by equity method/Investment company that evaluated by equity method	-
	Representative: Chao, Jien-Yun	0	0	0	0	0	0	N/A	N/A
9	Kan, Chin-Yu	8,281,169	1.59	0	0	0	0	N/A	N/A	-
10	Yu Hong Investment Corp.	7,988,000	1.53	0	0	0	0	The Ambassador Hotel Co., Ltd.	The parent company of the investment company that evaluated by equity method/Investment company that evaluated by equity method	-
	Representative: Lee, Ying-Chu	0	0	0	0	0	0	N/A	N/A

Note 1: Name of the top-10 shareholders must be listed respectively. For institutional shareholders, the title of such institutional shareholder and the name of the representative(s) shall be listed respectively.
Note 2: The percentage of shareholding shall be calculated by taking into account the shares held by the shareholder, his/her spouse, children of minor age, and other persons holding shares in his/her name.
Note 3: For the shareholders referred to above including legal person and natural person, shall have the relationship disclosed in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Firms.

Corporate Governance Report

The Number of Shares Held by the Company, its Directors, Managers, and the Enterprises Directly or Indirectly Controlled by the Company in the Same Reinvested Business Shall be Calculated Together to Determine the Combined Shareholding Ratio

As of December 31, 2025; unit: share, %

Investee Company (Note 1)	Invested by the Company		Invested by Directors, Supervisor, Management, and Enterprises Controlled by the Company Directly or Indirectly		Combined Investment
	Shares	%	Shares	%	Shares	%
SEEC International Holdings Ltd.	48,828,287	100.0	0	0.0	48,828,287	100.0
Ji Lin Investment Co., Ltd.	37,990,000	99.9	0	0.0	37,990,000	99.9
Shihlin Electric USA Company Limited	2,500,000	100.0	0	0.0	2,500,000	100.0
Hwo Lin Investment Co., Ltd.	49,990,000	94.8	2,700,000	5.1	52,690,000	99.9
Yuh Lin Investment Co., Ltd.	42,990,000	94.3	2,600,000	5.7	45,590,000	100.0
Jeng Lin Investment Co., Ltd.	22,990,000	89.4	2,700,000	10.5	25,690,000	99.9
Cheng Lin Investment Co., Ltd.	61,807,000	99.7	0	0.0	61,807,000	99.7
Shihlin Electrical Engineering Ltd. of Vietnam	Note 2	100.0	0	0.0	Note 2	100.0
Shang Lin Investment Co., Ltd.	59,807,000	99.6	0	0.0	59,807,000	99.6
Ruei Lin Electric & Engineering Corp.	10,274,053	90.0	464,457	4.1	10,738,510	94.1
Jeen-Lin Industrial Co., Ltd.	5,346,364	78.4	13,653	0.2	5,360,017	78.6
Chan Der Investment Corp.	2,438,783	8.1	7,758,514	25.9	10,197,297	34.0
Cheng Der Investment Corp.	1,149,177	3.6	7,733,342	24.8	8,882,519	28.4
Tingling Enterprise Co., Ltd.	12,188,000	96.7	0	0.0	12,188,000	96.7
Chuan Lin Scien-Technical Corp.	410,000	31.5	600,000	46.2	1,010,000	77.7
Hsin Lin Electric Machinery Co., Ltd.	2,880,000	60.0	108,000	2.3	2,988,000	62.3
Yu Der Investment Corp.	2,618,000	4.8	10,602,000	19.6	13,220,000	24.4
The Ambassador Hotel Co., Ltd.	66,918,617	18.2	11,399,000	3.1	78,317,617	21.3
ChangZhou Shihlin Mitsuba Electric & Engineering Co., Ltd.	0	0.0	Note 2	55.0	Note 2	55.0
ChangZhou Shihlin Auto Parts Co., Ltd.	0	0.0	Note 2	100.0	Note 2	100.0
Xiamen Shilin Electric & Engineering Co., Ltd.	0	0.0	Note 2	100.0	Note 2	100.0
Suzhou Shihlin Electric & Engineering Co., Ltd.	0	0.0	Note 2	100.0	Note 2	100.0
Wuxi Shihlin Electric & Engineering Co., Ltd.	0	0.0	Note 2	100.0	Note 2	100.0
Shihlin Electric (Suzhou) Power Equipment Co., Ltd.	0	0.0	Note 2	70.5	Note 2	70.5
Mitsubishi Electric Shinlin Automotive Changzhou Co., Ltd.	0	0.0	Note 2	49.0	Note 2	49.0
Mitsuba Shihlin Electric (Wuhan) Co., Ltd.	0	0.0	Note 2	45.0	Note 2	45.0
Shihlin Electric Engineering Equipment Vietnam Company Limited	0	0.0	Note 2	100.0	Note 2	100.0
Chang Hong Investment Corp.	0	0.0	24,002,000	29.7	24,002,000	29.7
Yu Hong Investment Corp.	0	0.0	62,002,000	31.0	62,002,000	31.0
Xin He Investment Corp.	0	0.0	44,998,000	39.1	44,998,000	39.1
Yeang Der Entertainment Co., Ltd.	0	0.0	4,000,000	100.0	4,000,000	100.0
De Hong Investment Corp.	0	0.0	57,002,000	34.1	57,002,000	34.1

87 -

Shihlin Electric

Investee Company (Note 1)	Invested by the Company		Invested by Directors, Supervisor, Management, and Enterprises Controlled by the Company Directly or Indirectly		Combined Investment
	Shares	%	Shares	%	Shares	%
Hsin Lin International Investment Corp of Samoa.	0	0.0	1,130,000	100.0	1,130,000	100.0
Shihlin Technology (Shenzhen) Co., Ltd.	0	0.0	Note 2	100.0	Note 2	100.0
Xiamen Chen-Ieu Transportation Implements Co., Ltd.	0	0.0	Note 2	100.0	Note 2	100.0
Mitsubishi Electric Low Voltage Equipment (Xiamen) Co., Ltd.	0	0.0	Note 2	30.0	Note 2	30.0
Wuling Electric Co., Ltd.	0	0.0	3,000,000	60.0	3,000,000	60.0
Shihlin Electric Green Power Corp.	30,000,000	100.0	0	0.0	30,000,000	100.0
Shilin Star Power Corporation	4,080,000	51.0	0	0.0	4,080,000	51.0
Rui Young Optronics Corp.	0	0.0	8,400,000	30.0	8,400,000	30.0

Note 1 : It is investments accounted for using equity method of the Company.
Note 2 : It is limited company, no shares.

88 -

Capital Overview

III. Capital Overview

1. Capital and Shares

A. Company's Capital and Any Issuance of Shares (as of the publication date of the annual report)

(1) Source of Capital

Year/Month	Issuing Price (NT$)	Authorized Capital		Paid-in Capital		Remarks
		Shares (thousand)	Amount (thousand)	Shares (thousand)	Amount (thousand)	Source of Capital	Capital increased by assets other than cash	Others
1955/08	100	40	4,000	40	4,000		-
1957/04	100	60	6,000	60	6,000	capital increase 2,000,000	-
1961/02	100	120	12,000	120	12,000	capital increase 6,000,000	-
1962/06	100	30	3,000	30	3,000	capital Decrease 9,000,000	-
1962/07	100	120	12,000	120	12,000	capital increase 9,000,000	-
1964/10	10	3,000	30,000	3,000	30,000	capital increase and change par value 18,000,000	-
1969/01	10	4,000	40,000	4,000	40,000	capital increase 10,000,000	-
1970/10	10	4,600	46,000	4,600	46,000	capital increase 6,000,000	-
1971/06	10	7,000	70,000	7,000	70,000	capital increase 24,000,000	-
1973/07	10	7,700	77,000	7,700	77,000	capital increase 7,000,000	-
1974/04	10	15,000	150,000	15,000	150,000	capital increase 73,000,000	-
1974/08	10	16,000	160,000	16,000	160,000	capital increase 10,000,000	-
1975/07	10	18,000	180,000	18,000	180,000	capital reserve and surplus capitalization 20,000,000	-
1976/07	10	20,000	200,000	20,000	200,000	capital increase 20,000,000	-
1977/07	10	22,000	220,000	22,000	220,000	surplus capitalization 20,000,000	-
1978/07	10	23,760	237,600	23,760	237,600	capital reserve and surplus capitalization 17,600,000	-
1979/08	10	39,000	390,000	39,000	390,000	cash increase and surplus capitalization 152,400,000	-
1980/06	10	80,000	800,000	56,950	569,500	capital reserve and surplus capitalization 179,500,000	-
1981/05	10	80,000	800,000	63,155	631,558	capital reserve and surplus capitalization 62,058,000	-
1982/07	10	80,000	800,000	68,524	685,242	capital reserve and surplus capitalization 53,684,000	-
1984/09	10	80,000	800,000	72,635	726,356	capital reserve and surplus capitalization 41,114,520	-
1986/08	10	80,000	800,000	76,267	762,674	surplus capitalization 36,317,820	-
1987/08	10	120,000	1,200,000	95,334	953,342	cash increase and surplus capitalization 190,668,590	-
1988/06	10	120,000	1,200,000	103,596	1,035,965	surplus capitalization 82,623,040	-
1988/09	10	120,000	1,200,000	120,000	1,200,000	cash increase 164,034,030	-
1989/05	10	160,000	1,600,000	135,539	1,355,395	surplus capitalization 155,395,000	-
1990/05	10	160,000	1,600,000	160,000	1,600,000	surplus capitalization 244,605,000	-	Note 1
1991/10	10	250,000	2,500,000	184,000	1,840,000	surplus capitalization 240,000,000	-
1992/10	10	250,000	2,500,000	202,400	2,024,000	surplus capitalization 184,000,000	-	Note 2
1993/10	10	250,000	2,500,000	218,592	2,185,920	surplus capitalization 161,920,000	-	Note 3
1994/09	10	250,000	2,500,000	218,592	2,404,512	surplus capitalization 218,592,000	-	Note 4
1995/09	10	350,000	3,500,000	282,530	2,825,302	surplus capitalization 420,789,600	-	Note 5
1996/08	10	350,000	3,500,000	347,633	3,476,330	surplus capitalization 226,028,400 cash increase in cash 425,000,000	-	Note 6

89 -

Shihlin Electric

Year/Month	IssuingPrice (NT$)	Authorized Capital		Paid-in Capital		Remarks
		Shares (thousand)	Amount (thousand)	Shares (thousand)	Amount (thousand)	Source of Capital	Capital increased by assets other than cash	Others
1997/08	10	410,000	4,100,000	365,014	3,650,147	surplus capitalization 173,816,500	-	Note 7
1998/09	10	410,000	4,100,000	408,817	4,088,170	surplus capitalization 438,023,500	-	Note 8
1999/06	10	580,000	5,800,000	472,274	4,722,747	conversion of Corporate Bonds 307,523,510 surplus capitalization 327,053,600	-	Note 9
2000/06	10	580,000	5,800,000	500,652	5,006,522	capital reserve capitalization 283,364,830 conversion of Corporate Bonds 410,520	-	Note 10
2001/03	10	580,000	5,800,000	500,853	5,008,531	conversion of Corporate Bonds 2,008,410	-	Note 11
2001/06	10	580,000	5,800,000	520,972	5,209,722	conversion of Corporate Bonds 842,230 capital reserve capitalization 200,349,130	-	Note 12

Note 1: (79) Tai-Tsai-Cheng (1) No. 01677 dated July 23, 1990
Note 2: (81) Tai-Tsai-Cheng (1) No.01640 dated July 17, 1992
Note 3: (82) Tai-Tsai-Cheng (1) No.30051 dated July 23, 1993
Note 4: (83) Tai-Tsai-Cheng (1) No.31356 dated July 13, 1994
Note 5: (84) Tai-Tsai-Cheng (1) No.36309 dated June 23, 1995
Note 6: (85) Tai-Tsai-Cheng (1) No.27246 dated May 15, 1996
Note 7: (86) Tai-Tsai-Cheng (1) No.40867 dated May 21, 1997
Note 8: (87) Tai-Tsai-Cheng (1) No.59758 dated July 16, 1998
Note 9: (88) Tai-Tsai-Cheng (1) No.44587 dated May 30, 1999
Note 10: (89) Tai-Tsai-Cheng (1) No.38404 dated May 09, 2000
Note 11: (90) Shan-Tzi No.9001092330 dated March 23, 2001
Note 12: (90) Tai-Tsai-Cheng (1) No.134819 dated June 04, 2001

(2) Type of share
Unit: share / April 19, 2026

Type of share	Authorized Capital Stock			Remark
	Outstanding Shares (listed)	Unissued Shares	Total
Common stock	520,972,223	59,027,777	580,000,000	—

Note: Please indicate whether the stock is a listed or OTC company stock (if it is restricted from listing or OTC trading, it should be noted).

(3) Self - Registration System: N/A

Capital Overview

图

B. Major Shareholders (Top 10 shareholders or with Shareholdings greater than 5%)

On the Book closure date: April 19, 2026

Major Shareholders	Total shares owned (Shares)	Shareholding ratio (%)
Mitsubishi Electric Corporation (Japan)	110,242,966	21.16
The Ambassador Hotel Co., Ltd.	59,785,175	11.48
Yeang Der Investment Co., Ltd.	27,556,494	5.29
Trust Property Account for Shihlin Electric & Engineering Corp. under the custody of Taipei Fubon Commercial Bank	13,964,958	2.68
De Hong Investment Corp.	13,497,000	2.59
Employee’ Stock Ownership Association Trust Property Account for Shihlin Electric & Engineering Corp. under the custody of CTBC Bank Co., Ltd.	12,887,656	2.47
Citibank (Taiwan) is entrusted with the safekeeping of Firstrade Securities (Hong Kong) Co., Ltd. contracted customer Firstrade Securities (Hong Kong) Nominees Co., Ltd. Investment Account	11,654,000	2.24
Benz Investment Corp. Ltd.	10,083,000	1.94
Kan, Chin-Yu	8,281,169	1.59
Yu Hong Investment Corp.	7,988,000	1.53

C. Company Dividend Policy and Status of Execution

1. Dividend Policy

The articles of incorporation of Shihlin Electric are outlined below:

The company should appropriate for taxation and make up for cumulative loss in there is any surplus to the final audit, followed by appropriating 10% as legal reserve. Any remaining surplus of the current year shall be appropriated as appropriated retained earnings in accordance with the regulations of competent authority. The appropriation of appropriated retained earnings and distribution of dividend and bonus shall be drafted by the Board of Directors for proposal to the Shareholders’ Meeting for resolution.

The afore mentioned relevant information in announced on the Market Observation Post System (MOPS) by law.

The company shall distribute dividends according to the profits, financing needs for future operation plans, changes in industry environment and other factors. The distribution will be based on the balance from the cumulative undistributed surplus from previous fiscal year with appropriation no less than 5% in general. In particular, the cash dividend and bonus in general cannot fall below 20% of the total amount of dividend and bonus. The actual distribution ratio or method of dividend distribution may be adjusted depending on the corporate operation, as the Board of Directors shall propose distribution proposition to Shareholders’ Meeting for resolution.

According to the company’s dividend distribution in the past five years, it is shown that the distribution ratio of the distribution of cash dividends to the basic earnings per share is higher than 50%, and 100% of the cash dividends are mainly distributed. The future dividend policy will be based on the company's profitability and operating plan, and distribute dividends in accordance with this principle.

2. Distribution of dividend proposed by current shareholders’ meeting

The 2026 Annual Shareholders’ Meeting proposed the distribution of a cash dividend of NT$5.0 per share.

D. Effect on Business Performance and EPS Resulting from Stock Dividend Distribution Proposed by the 2025 Shareholders’ Meeting: N/A

Shihlin Electric

E. Compensation of Employees and Directors

The compensation of employees and directors set out in the Articles of Incorporation of the Company is as follows:

The following distribution should be appropriated for any profit from the current fiscal year:

(1) Up to 4% in director Sustainability.
(2) Employee Sustainability between 1%~8%.

Nonetheless the amount of cumulative loss of the company shall be retained in advance, if any.

The so-called profit refers to the profit of net income before deducting director Sustainability and employee Sustainability.

The accounting treatment of the discrepancy between accrual and actual payment for the employees and directors compensation :

If the amount varies after the announcement date of the adoption of annual individual financial statements, the amount shall be processed by accounting estimation and shall be adjusted into account in the following fiscal year.

Board of Directors adoption of Sustainability distribution

(1) Amount of Employee's Sustainability and Directors' Sustainability distributed in cash or stocks:

Unit: NTD Thousand

Item	Amount
Employee Sustainability in Cash	200,000
Employee Sustainability in Stocks	None
Directors Sustainability	100,000

The employee remuneration and director compensation for the year 2025, as resolved by the Board of Directors on March 12, 2026, are consistent with the amounts accrued in the Company's individual financial statements for the same year, with no discrepancies.

(2) The ratio between the amount of employee Sustainability distributed in stocks and the sum of net income of entity or individual financial report and employee Sustainability of current fiscal year: N/A.

The actual distribution of employee, director, and supervisor compensation for the previous fiscal year:

The Board of Directors of the Company resolved on March 06, 2025 to distribute 2024 employee compensation and director/supervisor compensation in the amount of NT$168,000 thousand and NT$84,000 thousand. The foregoing Board of Director resolution on the distribution of employee compensation and director/supervisor compensation does not show discretion from the employee compensation and director/supervisor compensation realized in the 2024 individual financial statements.

F. Conditions that the Company buys back its shares: N/A.

Issuance of Corporate Bonds: None.
Issuance of Preferred Stock : None.
Issuance of Global Depositary Receipts : None.
Issuance of Employee Stock Option Certificates and New Shares With Restricted Employee Rights : None.
Issuance of New Shares in Connection with Mergers or Acquisitions or with Acquisitions of Shares of Other Companies : None.
Implementation Status of the Capital Utilization Plan: None.

Operation Overview

IV. Operation Overview

1. Business Activities

A. Business Scopes

Description of Operation

The Company’s primary products: Automobile electric products, heavy electric, low-voltage switch, industrial control products, industrial equipment, and digital home electronic appliances (agency).

The ratio of 2025 products of the company is described below:

Product Category	Ratio (%)
Electricity Distribution Products	72.19
Automobile Components	14.64
Automation Equipment and Components	10.43
Others	2.74
Total	100.00

New product development plan

Product Category	Development Items
Electricity Distribution Products	Heavy Electric Products
1. Large-Capacity Transformers for Green Energy
2. Aluminum-Aluminum Molded Transformers
3. Low Partial Discharge Billing Type Voltage Regulators for High-Voltage MOF Panels
4. Large-Capacity Energy-Saving Smart Capacitors
5. 11.4 kV Polymer Fuse Chains
6. Siemens 24kV Loop Switchgear (RMU)
7. Energy Storage System EMS Development (2nd Step)
8. Smart Monitoring and Predictive Maintenance Platform
9. Miniaturized Transformer Monitoring Terminal Host
10. Solid-State Transformer (SST) Development
	Switch Products
1. Development of BHAS-B4 Intelligent Miniature Circuit Breaker
2. Development of BHLS-B4 Intelligent Miniature Circuit Breaker
3. Development of BHA-125 DC1000V 125AF Miniature Circuit Breaker
4. Development of BHL-B AC 63AF Residual Current Circuit Breaker
5. Development of BHA-B UL Specification Miniature Circuit Breaker
6. Development of NVB-50AF Residual Current Circuit Breaker
7. Development of AFDD 1P/2P Circuit Breaker
8. Research on DC1000V Surge Protector
9. Development of ACB 3200-AF UL Specification Circuit Breaker
10. NV100s-CN/SN Oil Pipe Type Miniaturized AC Residual Current Circuit Breaker
11. Introduction of NF400-UE~NF800-SE/RE Electronic Circuit Breaker (Communication, Display)
12. NF30~NF250AF Second-generation manual operation development (& long pole type self-made)
13. NV30-SN~50-HN Cadmium-free contact and fuse-free circuit breaker
14. NF30~100-SN Cadmium-free contact and fuse-free circuit breaker

93 -

Shihlin Electric

Product Category	Development Items
Automobile Components	15. NF32-CF Aluminum rail type (oil pipe type, small current) development 2.5kA@440V
16. NV32-CF Aluminum rail type (oil pipe type, small current) development 2.5kA@440V
17. NF250-RT 85kA@380V (H=68mm) fuse-free circuit breaker
18. NF630-HTE Electronic circuit breaker (communication, display) introduction
19. NF400/630-AF DC1500V fuse-free circuit breaker
20. NV800-RN 3P/4P 30mA residual current circuit breaker
21. NV630-HT 3P/4P 30mA Residual Current Circuit Breaker
22. Integrated Star-Sealed Contactor 9~70A 3A3B+2a2b Dedicated Electromagnetic Contactor
23. S-P125T~150T Heavy-Duty Performance Enhanced Electromagnetic Contactor
24. SD-P06/09 AC/DC Control New Mini Electromagnetic Contactor
25. SRD-P06/09 AC/DC Control New Mini Electromagnetic Relay
26. S-P125~220N AC/DC Control Electromagnetic Contactor
27. SD-P40NQ4~65NQ4 4P Silent Electromagnetic Contactor
28. S-P300F, 500F High-Capacity Electromagnetic Contactor
29. SMC RCS AC110/220V (Pulse Coil) Household Relay
30. ATS-N125 3P AC220~480V Multifunctional Automatic Transfer Switch
31. Development of ER38L Electronic Overcurrent Relay
32. Collaborative Development of PM40C Carbon Meter
33. Development of Compact Electronic Starter
34. Preliminary Research on Solid State Circuit Breaker (SSCB)
	1. Long-life waterproof starter motor
2. Development of modular fuel pumps and starter stations for heavy motorcycles
3. 180cc starter generator (ISG) for two-wheeled vehicles
4. Development of modular fuel pumps for off-road vehicles
5. ISG controllers and 135cc starter generators (ISG) for two-wheeled vehicles
6. High-efficiency off-road generators
7. Development of fuel pumps for harsh fuels
8. Miniaturized 8kW air-cooled powertrain system for two-wheeled electric vehicles (white-plate)
9. 20kW water-cooled powertrain system for racing off-road electric vehicles
10. 130kW water-cooled powertrain system for four-wheeled electric vehicles
11. 4kW air-cooled powertrain system for four-wheeled small off-road vehicles
12. 8kW air-cooled powertrain system for four-wheeled small off-road vehicles
13. 200cc starter generator (ISG) for two-wheeled vehicles
14. Starter generator (ISG) for heavy vehicles
15. 48V ISG for two-wheeled vehicles Controller
16. 12V ISG for two-wheeled vehicles Controller
17. Lightweight Generator for Heavy Vehicles
18. Miniaturized Generator for Heavy Vehicles
19. Small High-Efficiency Starter Motor for Heavy Vehicles

94 -

Operation Overview

Product Category	Development Items
Automation Equipment and Components	20. Starter Motor for Outboard Motors (0.6kW & 1.1kW)
21. Ignition Coil for Energy-Saving Vehicles (Dual Ignition)
22. Magnetic Reluctance Stator for Exercise Bikes
23. 3.5KW Generator for Range Extender Engines
24. AC Slow Charging Stations for Cars (7, 11, 17kW)
25. DC Fast Charging Stations for Cars (30, 120, 150, 180, 360kW)
26. Range Extender Starter Generator
27. High-Power Generator for Heavy Motors
28. External Rotation Brushless Motor with Reduction Gear
29. DC Motor for Wheelchairs and Mobility Scooters
30. Brushless Motor for Wheelchairs and Mobility Scooters
31. Pen-Shaped Ignition Coil
32. Starter Generator (ISG) for Drones
33. 3KW High-Power Generator for Heavy Motors
	Automation Equipment Products:
1. Single-board custom frequency converter development
2. SL300 series frequency converter development
3. SE5 series frequency converter development
4. SF5 series frequency converter development
5. Low-voltage DC servo drive development
6. Custom hollow shaft motor development
7. Shihlin AX5S miniature PLC
8. Mitsubishi LM-AU coreless linear motor
9. Mitsubishi FR-D800 series compact frequency converter
10. Mitsubishi MX-F/MX-R PLC
11. Nidec gearboxes
12. IDEC safety controllers/safety bars
13. PV inverters (solar converters)
14. PCS power conversion systems
	Automation Equipment Products:
1. FOPLP large size LOAD PORT development (Sorter/EFEM)
2. Integrated AGV+WMS System

B. Industry Overview

Current Status and Development of Industries

(1) Power Distribution Industry

(A) The Heavy Electric Products division focuses on the research and development and manufacturing of key power transmission and distribution equipment. Its main products include various types of power and distribution transformers, reactors, switchboards, transformers, capacitors, gas-insulated switchgear (GIS), bus bars, high-voltage switches, surge arresters, meters, and monitoring systems. In line with the global energy transition, the new business group is actively expanding into green energy EPC turnkey projects such as solar energy and energy storage systems, and is also deeply involved in rail transit power construction (rail and aviation). The global political and economic landscape in 2025 is projected to exhibit resilience amidst volatility. Geopolitically, the stalemate in the Russia-Ukraine conflict and escalating trade barriers between the US and China, coupled with China's structural adjustments due to overcapacity and weak domestic demand, continue to drive global supply chain restructuring. However, with inflation under control, major central banks in Europe and the US have officially initiated a cycle

Shihlin Electric

of interest rate cuts this year. The loose monetary environment has effectively reduced financing costs and boosted end-consumer spending. Stimulated by these policies, the economies of Japan, Southeast Asia, and emerging markets have performed steadily, supporting the global economy in escaping the shadow of high inflation and entering a moderate recovery growth trajectory. Domestically, the economy remains robust, driven by government policies to expand public infrastructure and energy transition. In terms of industry, the deepening application of artificial intelligence (AI) and high-performance computing is driving the vigorous development of the electronics and ICT supply chain. The heavy power industry is particularly strong, with the Taiwan Power Company "Strengthening Grid Resilience Construction Project" entering its peak implementation phase, coupled with the expansion of data centers by international technology giants and Taiwanese businesses, creating massive demand for power infrastructure. With the combined support of policy budget execution and private sector digital transformation, the heavy electrical equipment market has expanded significantly, demonstrating strong growth momentum. Our operations benefit from the global energy transition, grid upgrade trends, and data center expansion plans, making transmission and distribution transformers a key resource and driving strong order momentum. In addition to maintaining a strong foothold in the domestic utilities, rail transportation, and green energy storage markets, export orders from North America, Japan, and Southeast Asia have also grown significantly. In particular, the demand in the US market is expected to continue its rapid growth over the next 5 to 10 years, driven by US tech giants' investments in AI training and data center planning. Leveraging our industry-leading full range of product certifications, our company possesses the core advantage of meeting Taipower's high-standard audits, effectively consolidating our domestic market share. Looking ahead, we will accelerate the acquisition of international certifications for high-voltage and high-capacity equipment in Europe and the US, striving to transform into an international supplier, optimizing our global market layout, and injecting steady growth momentum into the company's long-term revenue and profits.

(B) Regarding the current market situation of the low-voltage switch industry, due to the government's continued strengthening of policies to curb the housing market, regulation of financial lending, and continued rise in labor and material costs, the housing construction market has slowed down significantly. The number of building permits, construction starts, and occupancy permits across Taiwan continues to decline, showing the pressure on builders and continuing to affect construction investment.

Domestic semiconductor manufacturers have a leading advantage in high-end production capacity, but corporate investment is affected by global inflationary pressures, dramatic changes in US tariffs, and geopolitical tensions, leading to delays in domestic factory construction or relocation of factory sites. In addition, the growth momentum of machinery and equipment exports is still awaiting signs of recovery in 2025, affecting overall factory construction and equipment switching demand opportunities.

In recent years, the government has been promoting the development of the new energy industry to increase the proportion of green electricity. Solar power generation, due to policy shifts in 2025, the energy storage market is booming, and the demand for related electromechanical products continues to rise. In line with project needs, products are used in corresponding solar power projects and then connected to energy storage equipment switching applications.

Due to the US tariff policy on China, Taiwanese businesses continue to move south, especially to Vietnam as their main production base. The number of factory construction and expansion projects has increased, and sales have grown. The Middle East market has been cultivated for a long time and can continue to generate revenue for exports.

96 -

Operation Overview

(2) Automotive Parts Industry

Global auto sales are projected to see a slight increase in 2025 compared to 2024. Among major regional markets, Europe is expected to sell approximately 13 million vehicles, a 1.8% increase, with Chinese brands exceeding 800,000 units sold, reaching a market share of 6%. The US market is projected to sell approximately 16 million vehicles, a 2% increase, primarily driven by increased demand for hybrid vehicles. China is projected to sell approximately 34 million vehicles (including exports), a 9% increase, with new energy vehicles accounting for over 50% of sales. The domestic Chinese market is projected to sell approximately 410,000 vehicles, a 9% decline, mainly due to consumer uncertainty regarding tariff policies. Regarding new energy vehicles, global sales are projected to reach 21 million units in 2025, a significant 20% increase, with the Chinese market expected to be the main driver of growth in 2026, continuing to expand its market share.

Global motorcycle sales are projected to grow by approximately 2% in 2025, with Asia remaining the primary market. India, benefiting from increased consumer demand, is expected to sell over 20 million units. The Chinese market, constrained by weak domestic demand, is projected to sell approximately 12.5 million units, roughly flat compared to 2024. Southeast Asian sales are expected to reach approximately 15 million units, representing a 5% increase. Indonesia remains the largest market in Southeast Asia, with sales reaching 6.55 million units, while Vietnam and Thailand showed strong growth, selling 3.4 million and 1.73 million units respectively. Domestically, the market is also affected by tariffs, with sales of approximately 710,000 units, a 6% decline. Electric motorcycles, due to market uncertainty, are projected to sell approximately 50,000 units, a 38% decline. Meanwhile, the European and American heavy motorcycle markets are expected to stabilize in the second half of 2025, with demand for recreational vehicles (water sports, snowmobiles, etc.) projected to remain roughly flat compared to 2024.

(3) Automation Equipment and Parts Industry

In 2025, continued growth in demand from industries such as AI, semiconductors, electric vehicles, new energy, and aerospace will drive a gradual recovery in some sectors. At the same time, governments worldwide are continuously promoting low-carbon transformation and industrial upgrading, accelerating digitalization and automation, making smart manufacturing a key competitive advantage for businesses.

Looking ahead to 2026, with the clarification of tariff policies in various countries and the continued expansion of AI demand, the global manufacturing industry is entering a new investment cycle. Governments are increasing investment in their semiconductor and new energy industries, leading to increased demand for equipment upgrades. Smart manufacturing, AI automation, and digital transformation have become core industry trends. Furthermore, new energy technologies and ESG trends are further driving demand for automation equipment, creating new market opportunities. The Automation Business Group will continue to stay abreast of AI industry trends, smart manufacturing, and green energy product technologies, flexibly adjusting its operational strategies to ensure continued growth momentum in a globally competitive environment.

(4) Others

The digital audio-visual product market is showing a polarized consumer trend, with consumers increasingly opting for high-end digital cameras and lower-priced cameras for non-smartphone use. Furthermore, sales of handheld digital cameras have surged in recent years due to the rise of vlogging. Music-related peripherals such as Bluetooth speakers and headphones continue to grow in demand alongside smartphone sales, with wireless noise-canceling headphones experiencing the most significant growth.

Shihlin Electric

2. Association of Electric and Machinery Industries

Electric and Machinery Industry Association Diagram

Source: Sorted by ITRI-ITIS Project and Shihlin Electric

3. Product Development Trends and Competitive Situation

(1) Power Distribution

The consolidated companies have been deeply rooted in the heavy electric industry for nearly 71 years, accumulating extensive manufacturing and operational experience. They have a proven track record of producing and operating the nation's largest-capacity power system equipment—a 345 kV, 1260 MVA nuclear-grade ultra-high voltage transformer—demonstrating a technical level that leads the industry. In addition to continuing to provide high-quality heavy electric products and a comprehensive after-sales service system, the companies have introduced a new generation of energy-saving products and solutions, including oil-immersed transformers, amorphous transformers, high and low voltage bus ducts, Active Harmonic Filters (AHF), Static Var Generators (SVG), and Supervisory Control and Data Acquisition (SCADA) power monitoring systems, thereby enhancing their competitive advantage.

Actively participating in the Taiwan power substation construction turnkey projects, and leveraging the integration of engineering systems, construction technology, and experience, the Company has successively won turnkey projects for various power plants and switchyard renovations by Taipower. Following the "Wanda Power Plant Expansion and Songlin Branch Hydropower Project" Phase II

Operation Overview

Power Generation Equipment and Miscellaneous Electromechanical Equipment Engineering, which won the 12th Public Construction Gold Award (Special Excellence), the "Mingtan Power Plant Jugong Branch 161kV Switchyard Renovation Project" won the Ministry of Economic Affairs Public Construction Quality Award and the Public Construction Commission Gold Award, and the "Southern Taiwan Science Park E/S 161kV Static Synchronous Compensator (STATCOM) New Construction Project" also won the Ministry of Economic Affairs 2025 Public Construction Quality Award for Facilities Engineering and the Public Construction Commission Honorable Mention Award.

In addition, the company has also achieved numerous honors in transportation rail turnkey projects, including the "Taiwan Railways Administration Taitung-Chaozhou Section Electrification Project System Electromechanical Turnkey Engineering" which received the Facility Design and Construction Special Excellence Award at the 21st Public Construction Golden Quality Award by the Executive Yuan's Public Construction Commission in 2021 and ranked third in the Outstanding Engineering Category at the 23rd Golden Track Award by the Ministry of Transportation's Taiwan Railways Administration in 2022. The "Taiwan Railways Electrification Smart Enhancement Project (Taipei Power Section Tunnel Track Electrification Turnkey Engineering)" was recognized as a Design and Construction Excellent Work in the Facility Category at the 22nd Public Construction Golden Quality Award by the Executive Yuan's Public Construction Commission in 2022.

In 2017, the company obtained the system electromechanical turnkey project for the "Taiwan Railways Administration Taitung-Chaozhou Section Electrification Project." In 2018, they secured the "Taiwan Railways Push-Pull Electric Multiple Unit (EMU) and EMU500 Electric Train System Upgrade Project." In 2019, they acquired the "Taiwan Railways Electrification Smart Enhancement Project (Taipei Power Section Tunnel Track Electrification Turnkey Engineering)," as well as projects such as "the power cable replacement at Taichung Power Plant", "installation of conductive rails in Taipei Power Section tunnels", "procurement and installation of Taiwan Railways high-voltage cluster devices". In 2020, they obtained multiple ground-mounted solar energy projects and offshore wind power-related TR products. In 2021, they secured the electromechanical engineering project for the main terminal building in the third terminal area of Taiwan Taoyuan International Airport, and In 2023, the Company won the "Taiwan Taoyuan International Airport Third Terminal Area Information and Communication System Project", "Taiwan Railway Push-Pull Bus Motor System Update Project", "Southern Taiwan Science Park E/S 161kV Static Synchronous Compensator (STATCOM) New Construction Project". In 2024, the Company obtained the "Expansion Project of 4 Diesel Generator Sets at the Zhushan Branch of the Concord Power Plant" and continued to obtain multiple solar energy projects (including ground-based, fish-electricity co-generation, and water-based), energy storage projects, and large-scale solar-storage integrated turnkey projects. In 2025, the Company secured contracts for the "Kaohsiung Machinery Plant Chaozhou Base Phase II Construction Project - CL132 Maintenance Equipment Engineering" and the "Taiwan Taoyuan International Airport Third Runway Aviation Ground Lighting (AGL) System Turnkey Project", which will significantly contribute to the company's performance in the next few years.

Based on Taiwan's non-nuclear homeland concept and in response to the government's energy-saving and carbon reduction policies, harmonic-resistant and energy-efficient transformers have become mainstream in the market. Both high-efficiency and amorphous transformers have obtained the "Energy-saving and Low Pollution" certification, aligning with environmental standards. Additionally, the company actively participates in the ground-mounted solar and offshore wind power generation, pre-meter and post-meter energy storage, and geothermal power generation markets to seize the huge green business opportunities in Taiwan. They have also continued to

Shihlin Electric

secure orders for wind power transformers in the Americas. In addition to providing energy-saving products, the company combines technologies and expertise in power monitoring, power diagnosis, and power improvement to offer diversified services. These services assist customers in energy conservation and power quality improvement, resulting in fruitful achievements.

The development trend of switch products, in response to the rise of the green energy industry, is to develop DC high-voltage and AC high-voltage switches for the switching equipment required for solar power generation systems and energy storage systems. They have high voltage and high on-off capabilities to protect the safety of the system. In addition, the Type A and Type B leakage circuit breakers required for the charging system can detect various DC leakage currents to protect the personal safety of those using charging piles.

The direction of product development is to promote the construction of solar power generation systems, energy storage systems, charging systems, smart grids and other policies in response to policies. Upgrading the specifications of related equipment to meet the needs of the system is the key direction of development.

In terms of electrical safety, we develop arc fault interrupters to improve electrical safety in homes and factories and avoid wire fires caused by arcs.

In terms of the machinery market, The Company has developed aluminum rail circuit breakers paired with European standard series switches, contactors, relays and motor protection circuit breakers to complete the industrial control product series to meet customers' one-stop consumption and service of machinery and equipment.

In response to the large-scale export of Chinese brands, overseas markets are facing increasingly fierce price competition. In addition to launching competitive MCCB and MCB products to consolidate its market share, Shihlin Electric is also actively exploring business opportunities from the southward relocation of Taiwanese/Chinese manufacturers and targeting the project-base market.

(2) Automobile Components

In response to the trend of energy conservation and electrification in vehicle manufacturing, the Company continues to promote the expansion from the motorcycle market to the heavy motorcycle, off-road vehicle and electric logistics vehicle markets, and strengthen the breadth and depth of energy-saving and green energy products.

Regarding energy conservation, in response to the future regulatory direction adjustment of the domestic government, integrated starter generators (ISGs) are expected to become the mainstream in the market. The Automobile Equipment Business Group has been deeply involved in ISG systems and has cooperated with customers in mass production for many years. In recent years, it has continued to optimize its product line and promote the development of miniaturization and light rare earth elements.

In the green energy market, electric motorcycle power systems below 10kW have been in mass production for many years, and the company will continue to support customers' expansion into the heavy motorcycle and off-road vehicle markets. In recent years, the company has also invested in the development of medium and high-power power systems, and in conjunction with domestic vehicle manufacturers and logistics operators, trial operations were conducted in the fourth quarter of 2025, with mass production scheduled for 2026. The increasing sales of electric vehicles year by year have also driven up the demand for vehicle charging stations, and AC and DC charging stations have already been launched to meet the needs of various charging environments.

In terms of competition, the main challenge comes from low-price competition from Chinese and Indian manufacturers. In addition to continuously promoting product customization and differentiation, we are also optimizing costs to enhance our competitive advantage.

100 -

Operation Overview

(3) Automation Equipment and Components

The Automation Business Group closely monitors market trends, integrates R&D and manufacturing resources on both sides of the Taiwan Strait, and continues to promote industrial controllers, inverters, servo motors, IoT-related products and agency products required for smart manufacturing to meet the industry's needs for high performance, miniaturization, energy conservation and carbon reduction, and abnormal detection and prevention. In addition, we also focus on application areas such as AI, semiconductors, electric vehicles, new energy and aerospace to ensure our leading position in the market.

In addition to selling automation products, we also use the technology and experience of automation equipment integration, combined with self-developed key products, to provide customers with automation engineering system integration services, create vertical field solutions, and provide customers with one-stop services to enhance competitive advantages. We look forward to providing the most complete product line and integration services for industrial upgrading and becoming the best partner for smart automation in the industry.

(4) Others

In the digital imaging products market, affected by smartphones, the market size is gradually shrinking. With the development of smart phones becoming more and more mature, high-quality music accessories products (wireless Bluetooth headsets, Bluetooth speakers) are growing rapidly, and related products are actively introduced to increase revenue and strengthen channel relationships. The online shopping market has grown rapidly. In addition to existing SONY products, it actively promotes Mitsubishi home appliances to increase sales to meet the needs of online shoppers, maximize economic benefits, and create maximum benefits. In recent years, it has also actively established enterprise and project markets, combined with the advantages of the related companies within the group, introduced the agency's digital home appliance products in this closed market, established differentiation, and obtained original factory support to expand sales.

C. Research and Development (R&D)

The amount of R&D expenses invested with respect to the most recent fiscal year and current fiscal year up to the date of publication of the annual report.

Unit: NT$ Thousands

Year	As of May 08, 2026	2025
Amount	165,915	629,267

R&D Results During the Most Recent Annual Period and as of the Printing Date of this Annual Report:

Year	R&D Results
2025	Power Distribution Products:
Heavy electrical products
1. Large-capacity transformers for green energy applications
2. Low partial discharge metering type voltage converters for high-voltage MOF panels
3. Large-capacity energy-saving intelligent capacitors
Switch products
1. Development of BHA-BD5 DC1000V 63AF Miniature Circuit Breaker
2. Development of BHL-B3S 1P+N Miniature Residual Current Circuit Breaker (18mm)
3. Development of BHA-B3S 1P+N Miniature Circuit Breaker (18mm)
4. Development of BHR-B Class A +6mA Miniature Residual Current

Shihlin Electric

Year	R&D Results
2025	Circuit Breaker
5. Development of NVB-50HM-ARC Arc Fault Initiator
6. Development of BHA-B5 AC 63AF 15kA@400V Miniature Circuit Breaker
7. Development of ACB 2P 4000A DC Disconnect Switch
8. Development of NFA400-UTD AC800~1140V Fuseless Circuit Breaker
9. Development of NFA250-UT/RT/HT AC220~600V Fuseless Circuit Breaker
10. Development of NF125-CT/ST Fuseless Circuit Breaker
11. Development of NV125-CT/ST Residual Current Circuit Breaker
12. NF400-CN Fuseless Circuit Breaker (Capacity Enhancement)
13. NFA630-UTD AC800~1140V Fuseless Circuit Breaker
14. NFA400-UT/RT/HT AC220~600V Fuseless Circuit Breaker
15. SNDC DC1500V 150~600A (Non-polarity) DC Relay
16. TH-P18N Thermal Overcurrent Relay
17. TH-P800N Thermal Overcurrent Relay
18. S-P40N~65N4 AC/DC 4P Electromagnetic Contactor
19. SNDC1500V 800A DC Relay
20. SNDC1500V 1000A DC Relay
21. PM40C Carbon Meter
22. NV800-RN 3P/4P 30mA Residual Current Circuit Breaker

Automobile Components
1. High-output, high-efficiency 9G generator
2. 24V generator for unmanned aerial vehicles
3. Waterproof starter motor for ATVs
4. Development of modular fuel pumps for heavy-duty locomotives
5. Development of fuel pumps and module assemblies for locomotives with injection systems
6. Dustproof/waterproof power motor systems
7. Low-speed, high-output ACG
8. 4kW side-mounted air-cooled powertrain system for two-wheeled electric vehicles
9. 8kW air-cooled powertrain system for two-wheeled electric vehicles
10. 9kW air-cooled powertrain system for two-wheeled electric vehicles
11. 130kW water-cooled powertrain system for four-wheeled electric vehicles
12. 150cc starter generator (ISG) for two-wheeled vehicles
13. 100A generator for large outboard motors

Automation Equipment and Components
1. SDC-A Servo Drive Capacity Expansion (up to 3KW)
2. SDC-F CC-Link IE FB Bus Servo Drive
3. DX300 Series Multi-Axis Integrated Frequency Converter
4. Customized Hollow Shaft Motor Development |
| January to April 2026 | Electricity Dispatch Products
Heavy electrical products
1. Wind power generation transformer (230 kV, 325 MVA)
2. Large-capacity oil-fired transformer for green energy (69 kV, 5 MVA)
3. B-series air-core reactors (60 kVAR & 80 kVAR)
4. Low partial discharge metering current converter for high-voltage MOF panels
5. High-voltage oil-fired capacitors (13.8 kV, 400 kVAR, European standard bushing)
6. Polymer fuse chain switch (11.4 kV)
7. TPC AC 240 V low-voltage street light switch (MSL) |

102 -

Operation Overview

Year	R&D Results
January to April 2026	8. Siemens 24 kV loop switchgear (RMU)
9. Transformer health prediction and maintenance product series development
10. Energy Management System (EMS) development
11. Artificial Intelligence Technology Development and Application Research
12. Solid State Transformer (SST) Development

Switch products
1. NV-BF RCCB Residual Current Circuit Breaker
2. New MS-E 9~100A Series (Enhanced Competitiveness) Electromagnetic Contactor
3. MMS & MRS Accessories UL Certified
4. New Relay (Economy Type) Relay
5. S-P400F High-Capacity Electromagnetic Contactor
6. SD-P9NQ4~38NQ4 4P Silent Electromagnetic Contactor
7. NV-CS T1/T2 6mA Residual Current Socket
8. NV630-HT 3P/4P 30mA Residual Current Circuit Breaker

Automobile Components
1. 130kW Water-Cooled Powertrain System for Four-Wheeled Electric Vehicles
2. 4kW Air-Cooled Powertrain System for Four-Wheeled Small Off-Road Vehicles
3. 8kW Air-Cooled Powertrain System for Four-Wheeled Small Off-Road Vehicles
4. Long-Life Waterproof Starter Motor
5. Modular Fuel Pump for Heavy-Duty Motorcycles
6. Unbalanced Generator for Heavy-Duty Motorcycles
7. Off-Road Ultra-Miniature Starter Motor
8. High-Power Starter Motor for Snow Use
9. Magnetic Reluctance Stator for Exercise Bikes
10. Range Extender Starter Generator
11. High-Power Generator for Heavy-Duty Motorcycles
12. External Gear Brushless Motor
13. 12V ISG Controller for Two-Wheeled Vehicles

Automation Equipment and Components
1. Single-board custom frequency converter development
2. 400V medium-capacity motor development
3. SL300 series frequency converter development
4. SE5 series frequency converter development
5. Low-voltage DC servo drive development
6. Custom hollow shaft motor development |

103 -

Shihlin Electric

D. Long And Short-Term Business Development Plans

Corporate Vision:
(1) Develop international market with enthusiasm to become the world’s top-notch enterprise.
(2) Provide quality products to create safety and happiness.
Short-Term Plan:
(1) Continue to develop domestic market and expand market share in order to retain the advantage.
(2) Speed up overseas market expansion, extend operation tentacles and accumulate international experience.
(3) Expand the operating scale in Taiwan and overseas to create an economic scale with upgrade in cost competitiveness.
(4) Strengthen the risk response capabilities domestic and abroad to ensure the safety of business operations.
(5) Upgrade R&D capacity of the company through cooperation and exchange with major international corporation.
(6) Introduce and develop products related to power distribution system, electrical equipment and automation systems to expand the breadth of product lines.
(7) Respond to business development plan to undergo organization and staff adjustment in order to deploy the best combating team.
Long-Term Plan:
(1) Develop into cross-nation international electric factory based on Taiwan, China and ASEAN.
(2) Establish multi-nation R&D center to integrate international talents and local resources which will bring synergy into full effect.
(3) Complete electronation corporate value chains and supply chains which will double the boosting speed and response.
(4) Establish a continuously improving learning-type organization to cope with the changes in operating environment.
(5) Develop business management talents with international horizon and style to provide incessant human resource of globalization.
(6) Cooperate with government policies by investing trajectory projects construction and green energy products.
(7) Expand overseas revenue by growing 10% up per year.
(8) To perform overseas operation and multiple supply chains, control the multiple business opportunities, reduce costs and diversify risks.

2. Sales and Marketing Overview

A. Market Analysis

Sales Region for Major Products

The main sales areas for the merged company's heavy electrical products are: America, ASEAN, domestic private enterprises and green energy markets, and Taiwan Power Company; the sales areas for switch products are mainly Southeast Asia, China, the Middle East, and domestic sales in Taiwan; the sales areas for automation products (including parts and automation engineering integration equipment) are mainly domestic sales in Taiwan, and exports to China, the Middle East, and Southeast Asia; the sales areas for electrical equipment products are mainly domestic sales in Taiwan, China, Southeast Asia, and exports to Europe and the United States.

Operation Overview

2. Market Share

The market share of the company's heavy electrical products depends on the number of orders for power equipment received at home and abroad. The market share of switch products depends on the prosperity of the construction market and the sales volume of dealers. The market share of electrical equipment products depends on changes in the business environment and the actual number of domestically produced automobiles and motorcycles. The market share of automated engineering integration equipment depends on the orders from PCB/SEMI industry manufacturers under the AI trend. The market share of automation parts depends on the prosperity of the machinery and equipment industry and orders from machine tool manufacturers. As the merged company sells more diverse products and regions, its market share often varies among different markets and regions.

3. Market Supply and Demand Outlook and Growth

In the domestic electricity market, the government continues to implement a nuclear-free home and promote green energy policies. If the government continues to assist investors and resolve issues such as land and environmental protection, it can promote continued investment from the private sector. Taipower's plans to strengthen grid resilience and comprehensively promote the replacement of obsolete power equipment, coupled with the continued energy-saving upgrade of transformers by domestic private enterprises, will drive new business opportunities for heavy electrical equipment in the next 10 years. Internationally, the establishment of AI Data Centers and the self-sufficiency of semiconductor production in the United States have led to a surge in demand for power equipment. Government initiatives such as the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), along with the active designation of "electricity transmission corridors" to accelerate grid modernization, are all beneficial for expanding into the North American market and represent one of the engines of future growth. Orders from the North American market have increased year by year and now account for 15% to 20% of the total revenue of heavy electrical products. Looking ahead to the next 3 to 5 years, orders will grow significantly. As ASEAN continues to attract investment and open its economic policies, Taiwanese businessmen have also turned to investing and setting up factories, leading to strong demand for overseas power distribution products. In addition to continuing to deepen its presence in the North American and ASEAN markets, the company also plans to actively expand into the Japanese market and further expand its sales territory. Future overseas business opportunities and growth space are worth looking forward to.

In the switch market, the government has proposed twelve key strategies in response to the trend of net-zero emissions by 2050. Among them, policies on wind power/photovoltaic power, power systems and energy storage, and vehicle electrification and carbon-free will accelerate the development of green energy industries such as solar photovoltaic power, energy storage and charging station construction. The electromechanical equipment and devices required will bring huge business opportunities and are an important growth direction for the Company in the future. In recent years, the "China Plus One" effect has led to increased investment and factory establishment by Taiwanese companies in other countries, boosting demand in Southeast Asia. However, price competition among Chinese products has also intensified. With competitive products as a countermeasure, export growth is still expected. In addition to expanding existing markets, the Company will continue to develop new market customers and OEM cooperation projects to expand its sales territories.

In the automotive and motorcycle electrical equipment market, due to domestic government environmental regulations and tax rebate policies, domestic motorcycle market demand is expected to increase in 2026, and demand for ISG powertrain systems will also grow. Domestic electric motorcycles are susceptible to overall economic and policy influences, and market sales remain to be seen. Although the electric vehicle market experienced a sales decline this year due to tariffs, sales are projected to recover in 2026, driving demand for charging piles. Regarding exports, in response to supply chain decentralization, expansion into overseas markets is expected to grow. In addition to existing customers and market demand, efforts will continue to develop new customers and business opportunities to expand sales.

In the automotive and motorcycle electrical equipment market, governments around the world continue

Shihlin Electric

to promote the development of new energy vehicles, and it is estimated that the Chinese market will still be the main growth driver. In addition to continuing to cooperate with domestic and foreign customers in the research and development of green energy products and related products, we are also actively investing in improving product competitiveness. Heavy machinery exported to Europe and the United States continues to strengthen sales to mid- to high-end customers, explore business opportunities in the Southeast Asian market, and strengthen layout. The charging pile business is expected to grow with the rising demand for new energy vehicles. Overall sales are still expected to be stable and occupy a certain market size.

In the automation product market, continued growth in demand from industries such as AI, semiconductors, electric vehicles, new energy, and aerospace in 2025 led to a gradual recovery in some sectors. Looking ahead to 2026, with the clarification of tariff policies in various countries and the continued expansion of AI demand, the demand for smart manufacturing and AI automation equipment will be driven, bringing new business opportunities to the automation equipment market.

Advantages/Disadvantages and Response Strategies in Competitiveness and Future Development

The company pursues upgrade in products quality and 100% customer satisfaction as the core value of the company; it is also the mission to be accomplished. After more than 70 years of diligent efforts, the company has won excellent reputation in the industry while the excellent brand image also becomes the competition niche for the Company. The factors affecting the future development visions include the follows:

(1) Advantages:

(A) Peace in Cross-Strait relation offers stable development in the market development of China and other Asian countries.
(B) Long-Lasting competitive advantage for product development and production capacity.
(C) The complete product series cover from high to low voltage, providing one-stop shopping service to customers.
(D) The marketing network is intense, while tentacles can reach every corner of the market, making it difficult for competitors to break through.
(E) The overseas and domestic production and transfer system is based on rigorous structure and smooth operation.
(F) Employee cohesion and value are tightly related to the corporate vision, producing the focused massive power of vectors.
(G) Independent R&D, special and exceptional core manufacturing capacity, and control customized product trends.

(2) Disadvantages

(A) Conflicts of international boarder politics often lead to potential investment risks.
(B) The industry competition due to market saturation in Taiwan will affect the market ecology and evade the interests.
(C) The distribution system will be affected with the scale under the intense market competition.
(D) For NON-ASEAN countries, the tariff obstruction will lead to declined price competitiveness.
(E) The market offers non-Taiwan made low-price products with poor quality, which has tremendous damage on the market price.

(3) Response Strategies:

(A) Global procurement and policy pre-order with unfolding VA at the design end.
(B) Flexible price strategy quickly takes over market share and defeats the rivals.
(C) Strengthen the distribution system management by gradual increase of weight for direct sales.
(D) Entering ASEAN market through production/sales alliance in Vietnam.
(E) Establish and promotion excellent brand image, forming user awareness for the brand and creating business opportunities.
(F) Develop high-value and low-cost products to generate customer needs.

106 -

Operation Overview

B. Main applications and production process of major products

Applications of major products

Product Category	Application
Electric Distribution Products	(1) The power supply voltage of the power generator is upgraded or downgraded to the voltage needed, which is applicable in high-voltage site such as substation, factory and skyscraper buildings.
(2) Assur the facility safety and reliance of the entire power supply system. The operating control function is commonly seen in factories, hospitals and MRT system.
(3) Can remotely monitor and calculate the loading power consumption with the control of all equipment. It is used in the control and monitoring of incinerators, power generators, factory, public facilities, and others.
(4) The high-voltage power switch and high-voltage wire protection device are commonly seen in high-voltage circuit and power distribution board.
(5) Used for improving function factors and improve power use quality; commonly seen on high-voltage circuit and machines.
(6) For loading with high power consumption, the transmission cable can transmit the power needed for the load through BUS.
(7) Low-voltage power distribution device
1. The power switch is also the overload and protective device, commonly seen in the power distribution box in residential buildings and factories.
2. The automatic control device on the machine, motor or pump come with starter and protection overload function.
Automobile Components	(1) Components used in automobiles such as AC generators, starter motors and windshield wiper motors.
(2) Components used in fuel-powered motorcycles such as AC generators, starter motors, insulator starter generator (ISG), and fuel pumps.
(3) Components used in electric cars and motorcycles such as drive motors and controllers.
(4) Components used in electric scooters and wheelchair vehicles such as drive axle motors and gear motors.
(5) AC/DC charging stations for electric cars and motorcycles.
Automation Equipment and Components	(1) The automation equipment can save direct labor costs, circulate production information, improve yield rate, and boost competitiveness.
(2) The programmable controller is one indispensable controller for automation and also the conductor system for automation machine, which applies to the single unit control to the entire plant automation.
(3) The variable frequency device is one sensing motor drive without changes in speed and is suitable for use in the drive section of industry machine and parental working machine.
(4) The server system comes with position control, speed control, rotating control and other functions suitable for the use in driving department of industry mechanic and parental working machine.
(5) Sensor is one sensing device incorporate with automation mechanical motion for notification and determining.
(6) The linear motor directly converts the input power into linear kinetic energy, which is different from the traditional torque and rotational kinetic energy. It is like spreading the traditional motor and winding the coil into a straight strip.

107 -

Shihlin Electric

2. Product Manufacturing Process

(1) Transformation manufacturing process

(2) No fuse circuit breaker manufacturing process

(3) Automobile Starter Motor Manufacturing Process

(4) Programmable Controller Manufacturing Process

Operation Overview

C. Supply Condition of Major Raw Materials

1. Aluminum Ingots:

Aluminum ingots are the raw material for the brackets of various automotive and motorcycle components within the Electrical Products Business Group, including starter motors and alternators. In 2025, due to robust demand from electric vehicles, green energy transformation, and AI, coupled with structural supply bottlenecks, aluminum prices are expected to fluctuate upwards. To avoid high-priced inventory and maintain stable prices and supply, strategic alliances and long-term contract procurement will be maintained to mitigate short-term fluctuations and ensure cost competitiveness.

2. Copper Wire:

Copper wire is a material required for the production of automotive and motorcycle components. In 2025, in addition to demand from electric vehicles, demand from green energy transformation and the construction of artificial intelligence (AI) data centers is expected to experience explosive growth, becoming a new driving force for copper prices. Global copper demand is projected to grow by 2.4%, with international copper prices rising month by month. To reduce purchasing costs, we continuously monitor international price trends, adopt flexible procurement strategies, and stockpile copper as needed to maintain cost competitiveness.

3. Transformer Oil:

Transformer oil is an essential raw material for manufacturing oil-fired transformers. Its price fluctuates due to international oil prices, and a trend of "oversupply and lower prices" is expected in 2025. Although geopolitical risks in the Middle East occasionally push up oil prices, the slowdown in global economic growth and the energy transition have weakened the growth momentum of crude oil demand. Transformer oil prices are expected to remain stable. Furthermore, the company is monitoring the overall supply adequacy. Due to the continued expansion of the transformer market, the company is pre-purchasing transformer oil when prices are low to control costs and ensure timely delivery.

4. Silicon Steel Sheet:

Silicon steel sheets are a special raw material required for transformer manufacturing, making a stable supply more important than for other raw materials. With the transformer market booming in 2025, demand for silicon steel sheets is expected to strengthen. The Company, through long-term strategic partnerships with major global suppliers, ensures priority supply and price competitiveness, leading the industry in cost optimization and uninterrupted production.

5. Silver:

Silver is the main material for "silver contacts," "conductors," and "silver plating" in various circuit breakers and electromagnetic contactors. Its purchase cost is affected by factors such as the monetary policies of major countries, exchange rate fluctuations, and geopolitics. In addition to industrial demand, it is now regarded as a strategic material and controlled by many countries. The private market also regards physical silver as an asset. Market silver inventory is lower than in previous years. In order to ensure overall interests and prevent the risk of supply chain disruption, we actively collect and analyze various market information on silver prices, submit it to the company's strategic procurement team, and recommend strategic procurement to build up appropriate inventory when the market conditions are right.

6. Plastic Materials:

Bakelite powder and plastics are the main raw materials for manufacturing the housings and internal components of circuit breakers and electromagnetic contactors. In recent years, the costs of plastic raw materials such as flame retardants, fibers, and nylon have fluctuated due to the impact of international

Shihlin Electric

oil prices, unforeseen shutdowns (natural disasters, power outages), shipping costs, and the booming development of related industries. Oil prices are a source of raw material costs for manufacturing plastics. The procurement strategy is to prepare materials in advance before the price increases when production demand is high, and to reduce costs by sourcing from multiple sources in the R&D field. In accordance with EU regulations, we implement RoHS 2.0 requirements and use commitment letters provided by manufacturers as evidence to quickly respond to customer regulatory requirements. We also assess and evaluate green energy materials in response to ESG, and try to increase their usage as much as possible to support the production of green energy products.

110 -

D. The major suppliers and customers over the last two years

List of major suppliers in the most recent two fiscal years

Unit: NT$ Thousand

Year	2024				2025				2026Q1 (Note 2)
Item	Name	Amount	Percentage of total net purchase [%]	Affiliation with the issuer	Name	Amount	Percentage of total net purchase [%]	Affiliation with the issuer	Name	Amount	Percentage of total net purchase up to Q1 of the current year [%]	Affiliation with the issuer
1
2
3
	Others	24,265,573	100	-	Others	27,031,097	100	-	Others	7,606,198	100	-
	Net purchase	24,265,573	100	-	Net purchase	27,031,097	100	-	Net purchase	7,606,198	100	-

Note 1 : List the name of the suppliers with more than 10% of the total purchase amount, purchase amount, and purchase ratio in the last two years; however, it can also be identified with I.D. Number if the limitation of disclosure is stated in the signed contract or the counterparty of the transaction is an unrelated individual.
Note 2 : The listed companies or OTC companies shall disclose the financial information that audited or reviewed by a CPA as of the date of publication of the Annual Report.

List of Major Clients in the Last 2 Fiscal Years

Unit: NT$ Thousand

Year	2024				2025				2026Q1 (Note 2)
Item	Name	Amount	Percentage of total net sales [%]	Affiliation with the Issuer	Name	Amount	Percentage of total net sales [%]	Affiliation with the issuer	Name	Amount	Percentage of total net sales up to Q1 of the current year [%]	Affiliation with the issuer
1					Taiwan Power Company	4,144,222	13.0		Taiwan Power Company	1,123,904	11.5	-
2
3
	Others	31,548,431	100	-	Others	27,747,560	87.0	-	Others	8,609,306	88.5	-
	Net sales	31,548,431	100	-	Net sales	31,891,782	100	-	Net sales	9,733,210	100	-

Note 1 : List the name of the clients with more than 10% of the total sales amount, sales amount, and sales ratio in the last two years; however, it can also be identified with I.D. Number if the limitation of disclosure is stated in the signed contract or the counterparty of the transaction is an unrelated individual.
Note 2 : The listed companies or OTC companies shall disclose the financial information that audited or reviewed by a CPA as of the date of publication of the Annual Report.

Employee Information for the Most Recent Two Years and Up to the Date of the Annual Report Publication

year		2024	2025	As of May 08, 2026
No. of Employee	Direct labor	1,835	1,829	1,847
	Indirect labor	2,193	2,251	2,292
	Total	4,028	4,080	4,139
Average age		37.6	38.1	38.2
Average years of service		9.4	9.5	9.2
Academy Ratio (%)	Doctor	0.12	0.10	0.07
	Master	8.86	8.90	8.50
	College	45.85	46.86	46.36
	Senior High School	45.16	44.14	45.06

Environmental Protection Expenditure

A. The total amount of loss incurred due to environment contamination in most recent fiscal year or during the current fiscal year up to the date of publication of the Annual Report:

None

B. Response Strategies

Strengthen the environmental awareness of factory and external engineering management personnel, and ensure that related operations comply with laws and regulations.
Continuously improve air pollution and wastewater, waste and noise control equipment to ensure equipment treatment efficiency to meet the standards of environmental protection regulations.

(1) Improvement Plans:

Strengthen the operation, maintenance, supervision and management of environmental pollution prevention and control facilities, and implement regular maintenance of environmental protection equipment

(2) Estimated Environmental Expenditure and Countermeasures for Next Three Annual Periods

	2026	2027	2028
Pollution prevention and control equipment to be purchased or content of expenditure	1. Regular inspection and declaration of air pollution fixed pollution source prevention and control equipment.
2. Metal picking, cold forging, sandblasting, spraying, powder coating, etc., maintenance and repair of air pollution prevention and control equipment in the process and replacement of filter materials
3. Fees for air pollution in the painting process (paint, toluene, xylene)
4. Maintenance and repair of chemicals and facilities related to wastewater treatment	1. Regular inspection and declaration of air pollution fixed pollution source prevention and control equipment.
2. Metal picking, cold forging, sandblasting, spraying, powder coating, etc., maintenance and repair of air pollution prevention and control equipment in the process and replacement of filter materials
3. Fees for air pollution in the painting process (paint, toluene, xylene)
4. Maintenance and repair of chemicals and facilities related to wastewater treatment	1. Regular inspection and declaration of air pollution fixed pollution source prevention and control equipment.
2. Metal picking, cold forging, sandblasting, spraying, powder coating, etc., maintenance and repair of air pollution prevention and control equipment in the process and replacement of filter materials
3. Fees for air pollution in the painting process (paint, toluene, xylene)
4. Maintenance and repair of chemicals and facilities related to wastewater treatment

Operation Overview

	2026	2027	2028
	5. Wastewater regular inspection, declaration, sewage treatment fee.
6. Periodic maintenance and repair of sewerage well facilities
7. Industrial waste (general waste, waste liquid, sludge, waste oil-water mixture, waste solvent, waste wood, waste sandblasting powder, etc. cleaning and processing fee.
8. Operation and verification of environmental management system (ISO 14001)	5. Wastewater regular inspection, declaration, sewage treatment fee.
6. Periodic maintenance and repair of sewerage well facilities
7. Industrial waste (general waste, waste liquid, sludge, waste oil-water mixture, waste solvent, waste wood, waste sandblasting powder, etc. cleaning and processing fee.
8. Operation and verification of environmental management system (ISO 14001)	5. Wastewater regular inspection, declaration, sewage treatment fee.
6. Periodic maintenance and repair of sewerage well facilities
7. Industrial waste (general waste, waste liquid, sludge, waste oil-water mixture, waste solvent, waste wood, waste sandblasting powder, etc. cleaning and processing fee.
8. Operation and verification of environmental management system (ISO 14001)
Improvement to be Achieved	Ensure that air pollution, wastewater, waste, and noise control equipment meet environmental standards.	Ensure that air pollution, wastewater, waste, and noise control equipment meet environmental standards.	Ensure that air pollution, wastewater, waste, and noise control equipment meet environmental standards.
Amount (in NT$ thousand)	30,000	31,500	32,500

(3) Post-improvement impact

Impact on net profit: The expense disbursement and human resource related to improving environment-polluting equipment is minor compared with the overall disbursement ration in merger company and does not have direct impact on the company profit/loss.
Impact of competition position: Improve corporate green image and increase industry competitiveness.
Response actions failed to be adopted: None.

Shihlin Electric

5. Labor Relations

A. Labor Management Coordination and Implementation Status

1. Employee Welfare Measures

(1) The establishment of occupational and labor welfare committee can advocate employee benefits and boost the work morals in employees.

(2) The establishment of employee stock ownership trust allows employees to acquire and manage the company stocks over the long run in order to accumulate wealth and improve the stability of employees’ life in future retirement or resignation.

(3) The male and female employee dormitories offer excellent living environment for employees. There is also brand-new employee fitness center in the dormitories, including indoor tennis field, fitness room, aerobics classroom, karaoke, movie theaters and other services for employees to use.

(4) The cafeteria offers nutritious and hygiene food for employees.

(5) The reading room offers different books, magazines and reference which enrich the spiritual life and knowledge of employees.

(6) The facilities of large parking lot offer convenient parking spaces for employees.

(7) Employees and their children are funded with scholarship, where the language training courses encourage employees to take advancement course.

(8) The employee travel program adopts a dual-track approach, organized both by individual departments and coordinated company-wide by the welfare committee, balancing team cohesion and cross-departmental communication. It encourages employees to relax and unwind after hard work, accompany their families outdoors, and enhance their sense of belonging.

(9) The welfare committee and factories constantly hold activities to provide leisure activities for employees after work and develop loyalty from employees.

2. Retirement Policy

The “Labor Pension Act” was implemented since July 1, 2005; where employees employed before July 1, 2005, may choose to continue the adoption of pension fund regulations related to the “Labor Standard Act” or the pension fund system applicable to the Labor Pension Act with retention of the work seniority before the Labor Pension Act. Employees employed after July 1, 2005 may only be applied with the pension fund system of the Labor Pension Act.

The pension fund system of “Labor Pension Act” applicable to the company belongs to the appropriation pension plan. The company appropriates the pension fund in 6% of the employee salary under such plan to the personal account under the Labor Insurance Bureau. And employees may voluntarily contribute to the retirement fund within the range of 0–6% of their monthly salary. As of the end of 2025, the number of voluntary retirement fund participants was 266, accounting for 13.37% of the company's total number of employees under the new system.

The pension fund system of the “Labor Standard Act” applicable to the company belongs to the welfare pension plan, where the disbursement of pension fund is calculated by the average salary of the last 6 months before the date approving requirement and the service of seniority. The company shall appropriate the employee pension fund according to the statutory ratio applicable to the total employee salary amount by month and submit to the Labor Pension Reserve Supervising Committee for administration, saving the amount into the special account under the name of the committee into Bank of Taiwan.

The relevant pension systems of other subsidiaries shall comply with local law and regulations.

3. Employee Advanced Study and Training

Employee training is conducted in accordance with the "Training and Development Regulations" to

Operation Overview

cultivate and develop employees' competencies and potential. Through the organizational functions of the "Training and Development Committee," the Company effectively promotes and reviews the implementation and effectiveness of employee training. Training courses cover a wide range of topics, including business management, human resources, safety and environmental protection, information technology, financial management, marketing, product development and technology, and specialized subjects for each business group.

4. Employee Conduct or Ethical Practice

The employee conduct and compliance of ethical conduct are stipulated in Article 4~16, chapter 2 of "work conducts" – service principles. It is stipulated that employees shall conform to the company regulation and articles of information with compliance of workplace ethics and without jeopardizing the overall corporate interest and other regulations. Chapter 6 describes performance and reward/penalty, and hence proper reward or penalty should be given to employees violating work conducts.

5. Protection Measures for Work Environment and Employees' Physical Safety

The protection measures for the work environment and employees' physical safety are processed in compliance with "Safety and Health Management Rules" to protect the work safety and health of employees and to prevent the incidence of occupational disaster.

The safety and health management organization system is divided into review institution, management department and execution department to execute the safety inspection and maintenance. The improvement of outdoor operating environment and employee safety and health education training are closely cooperated with the company institutions and departments to assure the work safety of employees.

It is stipulated in Chapter 3 of the safety and health management rules that the specification of various operation safety such as firefighting and water prevention, electric (device) equipment use and safety requirement, processing safety management, dangerous machine and equipment, environmental management, human body protection devices, safety and health inspection, and health management.

6. Measures to Foster a Family-Friendly Parenting Environment

(1) Pregnancy: On-site physician services are available to care for the physical and mental well-being of pregnant employees before and after childbirth, providing professional consultation and support.

(2) Childbirth: The Company fully covers group insurance premiums for employees, reducing financial pressure during the maternity period and ensuring comprehensive workplace protection.

(3) Breastfeeding: The Company promotes breastfeeding and has established lactation rooms at both headquarters and plant sites, equipped with access control and managed by designated personnel. The lactation room at the headquarters has been certified as an "Outstanding Lactation Room" by the Taipei City Department of Health, underscoring the Company's commitment to high-quality breastfeeding facilities.

(4) Parenting: The Company promotes a sound system to support the return to work of caregivers, and by 2025, the return-to-work rate for caregivers on leave is 89%, and the retention rate for caregivers on leave is 74%. Additionally, employee child scholarship programs are offered, with 1,794 awards issued in 2025, totaling over NT$3 million, providing tangible support for parenting expenses.

7. Status of Collective Agreement Signing

The Company entered into a collective agreement with the labor union in 1996, covering key employment conditions and the protection of employee rights at the time. Although no collective bargaining meetings have been held in recent years, the Company continues to safeguard employee rights in accordance with labor laws and internal management policies. It also maintains open communication through regular labor-management meetings and employee feedback mechanisms. Going forward, the Company will continue to monitor changes in labor legislation and industry trends,

Shihlin Electric

and will engage in further dialogue with the union as necessary to ensure the timeliness and fairness of the agreement content.

8. Other Important Agreement

The company complies with the provision prescribed in Article 83 of the Labor Standard Act to hold regular labor relations for all factories each month, where the labor and management shall select five representatives to participate according to the Regulations Governing Labor Relations Meeting Implementation. The labor and management will propose discussions on issues related to the labor work environment, welfare, and system with mutual coordination and communication. The meeting will also study feasible solutions for thorough execution in order to promote the full cooperation between the labor and management in addition to advocating labor-management harmony.

B. Employee Rights Protection Measures

The Company regularly holds executive communication meetings, cross-level forums, and employee satisfaction surveys to listen to employee feedback, promptly address concerns, and implement improvements based on the conclusions of these communications.
To support the development of employees' career competencies, the Company's training team designs tailored training plans for each functional department, enabling systematic and structured development of professional capabilities.
The Company conducts regular employee evaluations and assists with career planning, offering a dual-track career development system that supports both managerial and professional advancement, ensuring employees are placed in roles suited to their talents.
A comprehensive grievance mechanism is in place to help employees resolve workplace issues related to personal rights or unfair treatment, thereby fostering harmonious labor relations and safeguarding employee rights.
The Human Resources Department regularly organizes employee forums and occupational safety training sessions to better understand employee needs and enhance awareness and execution of workplace safety practices.
Employee compensation is determined based on their educational and professional background, technical expertise, years of experience, and individual performance. The Company's performance evaluation system and related reward and disciplinary measures follow internal HR policies and are established in compliance with applicable laws and in consideration of corporate social responsibility principles.

C. The total amount of loss and disposition incurred due to labor-management disputes (including labor inspection results that violate the Labor Standards Law, the sanction date, sanction size, violation of laws and regulations, violations of laws and regulations, and sanctions should be listed) in most recent fiscal year or during the current fiscal year up to the date of publication of the annual report:

Subject: Shihlin Electric, the company subject to disciplinary action, was found to have violated Article 22, Paragraph 2 of the Labor Standards Act after investigation by this government. Therefore, in accordance with Article 79, Paragraph 1, Subparagraph 1 of the Labor Standards Act and Point 4 of the Common Principles for Penalties for Violations of the Labor Standards Act, a fine of NT$50,000 is imposed. In accordance with Article 80-1, Paragraph 1, the name of the person subject to disciplinary action, the name of the person in charge, the date of disciplinary action, the article violated, and the amount of the fine are hereby announced, and the company is required to make improvements within 30 days of receiving this notice.

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Operation Overview

Summary of the violation: An employee's late arrival at work without providing services is grounds for deduction of the day's wages proportionally based on the amount of lateness. However, the penalized party failed to pay the employee proportionally based on the actual services provided, thus violating the Labor Standards Act.
Date of Penalty: May 22, 2025
Penalty Number: 2025 Government Labor and Enterprise Management Document No. 1143933002
Violated Article: Article 22, Paragraph 2 of the Labor Standards Act
Violation of Law: Wages should be paid in full directly to the employee.
Penalty: A fine of NT$50,000.
Improvement Measures:
(1) The Company cooperates with routine or special labor inspections conducted by the labor authorities in accordance with the law. Regarding the suggestions or deficiencies raised during the inspections, we paid the employee proportionally based on the actual services provided on June 5, 2025, and strengthened internal management and training mechanisms to prevent similar incidents from recurring.
(2) The Company has always attached great importance to harmonious labor relations and the protection of workers' rights. We have established a sound labor-management communication channel and complaint handling mechanism in accordance with relevant laws and regulations, and regularly review our human resources management system and operating procedures to ensure compliance with legal requirements. The Company will continue to strengthen its compliance with labor laws and regulations and internal control system, implement corporate social responsibility, safeguard employee rights and interests, and promote sustainable operation.
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Shihlin Electric

6. Information Security Management

(1) Describe the information security risk management framework, the information security policy, the specific management plan, and the resources invested in the information security management, etc.

$\diamond$ Information security declaration

The Company conducts information security risk assessment in accordance with relevant laws and operational objectives, and takes appropriate information security measures to ensure the sustainable operation of the enterprise.

1. Information security risk management framework

In order to enhance the company's information security management and strengthen the protection of personal information and customer privacy, the company follows the ISO 27001 Information Security Management Framework to establish an information security architecture and formulate management guidelines to control various information security risks and reduce the likelihood and impact of security incidents. In response to the revision of the Financial Supervisory Commission's "Guidelines for Publicly Issued Companies to Establish Internal Control Systems," the Company has designated a dedicated information security supervisor and personnel to promote the company's information security construction and compliance, and coordinate the promotion of the company's information security. The company's information security policy is to "implement information security to enhance service quality, strengthen information security training to ensure continuous operation, and establish effective emergency response to enhance organizational resilience." All employees have the obligation to actively participate in promoting information security policies to ensure the secure operation of the company's data, information and communication systems, equipment, and networks. It is expected that all employees will understand, implement, and maintain these policies to achieve the goal of uninterrupted business operations. The company has obtained ISO 27001 certification, and the certificate is currently valid from February 13, 2025 to February 12, 2028.

Operation Overview

2. Information security management policies

This information security policy is hereby promulgated in order to enable the Company's various information security management systems to be implemented, effectively operated, supervised, managed, and continuously enhanced, and to maintain the confidentiality, integrity and availability of important information systems. The purpose of this policy is to allow colleagues to have a clear guiding principle in their daily work. All colleagues are obliged to actively participate in the promotion of information security policies to ensure the safe maintenance and operation of all colleagues' data, information and communication systems, equipment and networks. It is expected that all colleagues can understand, implement and maintain to achieve the goal of business continuity, as follows:

(1) "Implement information security and strengthen service quality."

All colleagues should implement ISMS (Information Security Management System), all related measures of information and communication operation, should ensure the confidentiality, integrity and availability of business information, avoid risks of leakage, destruction or loss due to external threats or improper management by internal personnel, choose appropriate protection measures to reduce the risk to an acceptable level, and continue to monitor, review and audit the information security system, strengthen service quality and improve service standards.

(2) "Strengthen information security training to ensure sustainable operation."

Supervise all colleagues to implement information security management, continue to conduct appropriate information security education and training every year, establish the concept of "information security, everyone is responsible", urge colleagues to understand the importance of information security, and urge them to comply with information security. In order to improve the security intelligence and emergency response capability of information security, reduce the information security risk, and achieve the goal of sustainable operation.

(3) "Well formulate contingency plan and improve organizational resilience."

Formulate contingency plan for important information assets and key business operations, and regularly perform drills on various emergency response procedures to ensure rapid recovery when the information communication system fails or major disaster events occur, and to ensure the sustainable operation of critical business as well as to improve organizational resilience.

3. Information security control measures and specific management plans

Item	Specific Management Measures
Network Security Management	• Occasionally evaluate or test network system security
• System patches for patching security risks and vulnerabilities in the network operating environment should be distributed regularly or in a timely manner
• Internal critical websites and application systems should be isolated from the external Internet by firewalls
• Using the encrypted transmission for network data transfer
• Establish Internet access policies and use filtering devices to prevent people from accessing dangerous websites

Shihlin Electric

Item	Specific Management Measures
Information System Access Control	• Database and file access should be set up with permission control
• The account number and password must comply with the password principle, the password length should be more than 8 characters, meet the password complexity requirement, and the password should be updated regularly
• For resigned employees, the Information Department should immediately delete the user ID or set an expiration date according to the resignation date of the resignation form
Information system Security Management	• Each server and PC should install anti-virus software on the client side with automatic virus pattern update mechanism
• The mail system should install information security modules, such as spam filters, malware detection, attachment control and other management modules to improve email information security
• When the equipment shutdowns or encounters information security incidents or due to business needs and it is necessary to perform the recovery operation, please follow the recovery operation procedures of each information system to quickly restore the normal operation of the system and shorten the time of system interruption. The system recovery operation procedure is proposed by the person in charge of each system and implemented after being reviewed and approved by the supervisor
• Each information system conducts disaster recovery drills from time to time
Data Backup	• Perform data backup on daily basis
• The backup data should be marked with the backup date, system name, and data content, and should be stored in different places
System Availability	• Establish a high availability mechanism for critical information systems
• Perform full backup of application system on daily basis

Allocation of Resources for Information Security Management:

(1) Budget: The annual investment in information security accounts for 22% of the total IT budget in 2025.

(2) Education and Training: Implement four sessions of one-hour hierarchical "Information Security Awareness Education" training courses.

(3) Security Drills: Conduct one company-wide "Phishing Exercises", with a total of 1,543 participants and an overall pass rate of 88%. Conduct quarterly emergency response drills for core information systems.

(4) Security Announcements: Issue at least two information security announcements to promote important security protection guidelines and knowledge.

(5) Information security certification: Passed ISO/IEC 27001:2022 certification (valid until 2028/02/12)

(6) Customer Satisfaction: No major security incidents and no customer complaints regarding data protection violations.

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Operation Overview

(2) Description of information security risk assessment, analysis and countermeasures:

Due to the development of information technology and network applications, information security risk has become an important issue for enterprises. In order to ensure the smooth operation of information systems and services, the Company implements the following information security policies and management procedures:

Computer system security management
Each server and PC should install anti-virus software on the client side with automatic virus pattern update mechanism.
The mail system should install information security modules, such as spam filters, malware detection, attachment control and other management modules to improve email information security.
Each application system and database shall be backed up every day. The backup data shall be marked with the backup date, system name, and data content, and shall be stored in different places.
When the equipment shutdowns or encounters information security incidents or due to business needs and it is necessary to perform the recovery operation, please follow the recovery operation procedures of each information system to quickly restore the normal operation of the system and shorten the time of system interruption. The system recovery operation procedure is proposed by the person in charge of each system and implemented after being reviewed and approved by the supervisor.
Each information system conducts disaster recovery drills from time to time.
Computer system security management
Database and file access should be set up with permission control.
The account number and password must comply with the password principle, the password length should be more than 8 characters, meet the password complexity requirement, and the password should be updated regularly (60 days).
For resigned employees, the Information Department should immediately delete the user ID or set an expiration date according to the resignation date of the resignation form.
Computer system security management
Occasionally evaluate or test network system security.
System patches for patching security risks and vulnerabilities in the network operating environment should be distributed regularly or timely.
Internal critical websites and application systems should be isolated from the external Internet by firewalls.
Using the encrypted transmission for network data transfer.
Regularly conduct employee information security seminars and announce and publish information security-related information at any time.
Conduct information security drills from time to time to enhance employees' awareness of information security.

Shihlin Electric

(3) Major IT cases (with losses and possible impact due to material IT safety incidents in the most recent year till the date as of the publication of this report): None

Important Contracts

May 08, 2026

Contract Nature	Parties	Contract Start / End Date	Main Content	Restriction Clause
Long-Term Technology	Mitsubishi Electric Corporation (Japan) (Note3)	1998~2026	Auto-electric products for engines	Note1
	Diamond Electric Co., Ltd. (Japan) (Note3)	2008~2026	Auto-electric products for car unit	Note1
	Mitsuba Electric Manufacturing Co., Ltd. (Japan)(Note3)	1998~2026	Auto-electric products for car unit	Note2
	NIDEC MOBILITY Corporation (Japan)(Note3)	1996~2026	Auto-electric products for car unit	Note2
	NIDEC MOBILITY Corporation (Japan)(Note3)	1999~2026	Auto-electric products for car unit	Note2
	Mitsubishi Electric Corporation (Japan) (Note3)	2001~2026	Auto-electric products for car unit	Note2
	Mitsubishi Electric Corporation (Japan) (Note3)	1999~2026	Vehicle electric control system	Note2
	Mitsubishi Electric Corporation (Japan) (Note3)	2001~2026	System electricity technology	Note2
	Mitsubishi Electric Corporation (Japan) (Note3)	1997~2026	Transformer	Note2
	Mitsubishi Electric Corporation (Japan) (Note3)	2006~2026	Transformer	Note2
	Mitsubishi Electric Corporation (Japan) (Note3)	2008~2026	Transformer	Note1
	Mitsubishi Electric Corporation (Japan) (Note3)	2011~2026	Transformer	Note2
	Mitsubishi Electric Corporation (Japan) (Note3)	2010~2026	Variable Frequency Device	Note1
	Mitsubishi Electric Corporation (Japan)	1998~2026	Programmable Controller	Note1
Lease	Pacific SOGO Department Stores Co., Ltd.	2009~2030	Shihlin Factory Land Development Project Commercial Site Lease Contract	-

Restriction Clauses: Note 1: Confidentiality of right to implement and right to re-implement, patent implementation right, commercial trade right, and intellectual property.
Note 2: Right to implement and right to re-implement, the patent application and right to implement related to invention, commercial trade right, and confidentiality of intellectual property.
Note 3: The contract formulated before the parties breach the contract of agreement contract remains valid.

Financial Status and Performance and Risk Management

V. Review and Analysis of Financial Status and Performance and Risk Management

1. Analysis of Financial Status

Comparison and Analysis of consolidated financial Status

Unit: NT$ thousand

| Year
Item | Year
2025 | 2024 | Discretion | |
| --- | --- | --- | --- | --- |
| | | | Amount | % |
| Current Asset | 29,162,806 | 24,573,996 | 4,588,810 | 18.7 |
| Property, Plant and Equipment | 7,711,917 | 7,522,906 | 189,011 | 2.5 |
| Other Assets | 23,662,689 | 26,297,557 | -2,634,868 | (10.0) |
| Total Asset | 60,537,412 | 58,394,459 | 2,142,953 | 3.7 |
| Current Liabilities | 20,937,747 | 17,372,090 | 3,565,657 | 20.5 |
| Non-Current Liabilities | 2,480,883 | 2,647,286 | -166,403 | (6.3) |
| Total Liabilities | 23,418,630 | 20,019,376 | 3,399,254 | 17.0 |
| Interest Attributable to Parent Company | 36,292,589 | 37,537,924 | -1,245,335 | (3.3) |
| Capital Stock | 5,209,722 | 5,209,722 | 0 | 0.0 |
| Capital Surplus | 2,797,585 | 2,695,304 | 102,281 | 3.8 |
| Retained Earnings | 22,874,944 | 22,049,331 | 825,613 | 3.7 |
| Other Equities | 5,410,338 | 7,583,567 | -2,173,229 | (28.7) |
| Treasure Stock | - | - | - | - |
| Non-Controlling Interest | 826,193 | 837,159 | -10,966 | (1.3) |
| Total Equities | 37,118,782 | 38,375,083 | -1,256,301 | (3.3) |
| 1. Increase in current liabilities: Primarily due to an increase in contract liabilities.
2. Increase in current assets: Primarily due to an increase in cash and inventory.
3. Decrease in other assets: Primarily due to a decrease in other comprehensive profits and losses of related companies invested in using the equity method.
4. Decrease in other equity: Primarily due to a decrease in unrealized profits and losses of financial assets of related companies recognized using the equity method. | | | | |

Shihlin Electric

2. Financial Performance

(1) Comparison and Analysis of Operating Results in the last two years

Unit: NT$ thousand

| Year
Item | 2025 | 2024 | Amount
Increase
(decrease) | Ratio (%) | Discretion |
| --- | --- | --- | --- | --- | --- |
| Operating Revenue | 37,177,945 | 35,071,161 | 2,106,784 | 6.0 | 1 |
| Gross Profit | 7,767,878 | 6,813,326 | 954,552 | 14.0 | 1 |
| Operating Profit (Loss) | 4,299,186 | 3,355,058 | 944,128 | 28.1 | 1 |
| Non-Operating Income and Expenses | -29,453 | 648,332 | -677,785 | (104.5) | 2 |
| Income Before Tax | 4,269,733 | 4,003,390 | 266,343 | 6.7 | |
| Income from Continuing Operation
before Income Tax | 3,377,627 | 3,143,738 | 233,889 | 7.4 | |
| Loss from Discontinuing Operation | 0 | 0 | 0 | 0.0 | |
| Net Profit (Loss) | 3,377,627 | 3,143,738 | 233,889 | 7.4 | |
| Other Consolidated Profit/Loss (Net
Profit After Tax) | -2,205,125 | 3,718,478 | -5,923,603 | (159.3) | 3 |
| Total Comprehensive Income | 1,172,502 | 6,862,216 | -5,689,714 | (82.9) | 3 |
| Analysis of changes in proportion:
1. The increase in gross profit and operating profit and loss for the current period: Mainly due to increased sales revenue of heavy electrical products and favorable scale and structure.
2. The decrease in non-operating income and expenses for the current period: Mainly due to
(1) A decrease in the share of related party interests recognized using the equity method.
(2) A decrease in financial assets that are required to be measured at fair value through profit or loss.
3. The decrease in other comprehensive profits and losses in the current period: Mainly due to
(1) A decrease in other comprehensive income and loss of related enterprises using the equity method.
(2) A decrease in unrealized valuation gains from equity instrument investments measured at fair value through other comprehensive income and loss.
(3) A decrease in the gains (losses) on remeasurements of defined benefit plans. | | | | | |

(2) For the possible impact and response plans of expected sales volume and reference on the future financial operations of the Company, please refer to Page 4.

Financial Status and Performance and Risk Management

133

3. Cash Flow

Cash Flow Analysis

Unit: NT$ thousand

Balance of cash-beginning	Net Cash Inflows from Operating Activities all year round	Cash outflow over the year	Cash Surplus (Deficit)	Remedy for Deficit in Cash
				Investment Plan	Financing Plan
3,370,646	4,096,082	(2,372,470)	5,094,258	—	—
1. The analysis of cash flow variations this year: (1) Net cash inflow from operating activities: Mainly due to net profit generated from operating activities. (2) Net cash outflow from investing activities: Mainly due to the dividends received from affiliated companies. (3) Net cash outflow from financing activities: Mainly due to the increase in short-term borrowings. 2. Improvement plan for insufficient liquidity: N/A 3. Cash flow analysis in the next coming year: (1) Operating activities: Estimated profit growth in 2026, operating activities will generate net cash inflow. (2) Investing activities: Mainly due to the procurement of property, plant and equipment. (3) Financing activities: Mainly due to the distribution of cash dividend.

4. The Effect upon Financial Operations of Any Major Capital Expenditures in the Most Recent Years

(1) Major Capital Expenditure Items and Source of Capital :

Unit: NT$ thousand

Project Items	Actual or Planned Source of Capital	Actual or Planned Date of Completion	Total Amount of Funds Needed	Actual or Expected Capital Expenditure
				2024	2025	2026	2027	2028
Procurement of equipment developing new type of transformers	Surplus	Dec. 2028	3,688,341	923,824	681,000	983,517	850,000	250,000
Procurement of equipment developing new type of transformers and various switches	Surplus	Dec. 2028	395,594	86,500	85,057	69,312	77,863	76,862
Procurement of equipment developing the enhancement of self-manufacturing rate in various electronic products	Surplus	Dec. 2028	59,009	23,050	8,729	5,735	12,505	8,990
Procurement of equipment boosting auto-electric product capacity	Surplus	Dec. 2028	254,400	89,400	47,000	38,000	40,000	40,000

Shihlin Electric

(2) Expected Benefits

I. Estimated increase in production, sales, and gross profits:

Unit : NT$ thousand

Year	Item	Quantity of Production	Quantity of Sales	Sales Revenue	Gross Profit
2026	Procurement of equipment developing new type of transformer	4,909	4,909	582,738	151,512
	Procurement of equipment developing new type of circuit breaker and various switches	132,500	132,500	106,000	21,200
	Procurement of equipment boosting the self-manufacturing rate of various electronic products	61,431	61,431	39,006	5,578
	Procurement of equipment boosting auto-electric product capacity	89,000	89,000	83,600	13,700

II. Other benefits

(1) Upgrade product quality and reach economic scale.
(2) Develop new products.

5. Reinvestment Policy in the Most Recent Years, the Main Reasons for the Profits/Losses Generated Thereby, the Plan for Improving Reinvestment Profitability, and Investment Plans for the Coming Year :

(1) Reinvestment policy

a. The long-term investment strategy of the company takes consideration of industry related vertical integration, horizontal strategic alliance, and future development trends, in addition to increasing corporate competition and profits through reinvestment.
b. The profits from reinvestment mainly come from the investment in overseas subsidiaries' proceeds.

(2) Future one-year investment plan

Take consideration of investment in industry related and future development of the company.

Financial Status and Performance and Risk Management

182

6. Risk Management and Assessment

(1) The impact of interest rate, exchange rate, and inflation rate changes on the Company's revenue, as well as corresponding actions :

Interest rates: Global interest rate policies have entered a relatively stable phase, with developed economies tending to slightly cut interest rates or maintain the status quo.

Response action: It is expected that interest rates will be gradually lowered as inflation slows down in the future, with limited impact on profits and losses; the mainland China subsidiaries also adopt a combination of local financing and foreign debt to reduce capital costs.

Exchange rate: The trend of foreign currency exchange rates will depend on changes in the global economic landscape and adjustments to national policies. The US dollar has always been one of the world's most important currencies, and its exchange rate has a key influence on other currencies.

Response action: The company's foreign exchange transactions mainly focus on US dollars, RMB, and Japanese yen. You should pay close attention to relevant information, adopt appropriate investment strategies based on the income and expenditure status and the rise and fall of exchange rates, and conduct exchange transactions, foreign exchange settlement and sales, spot transactions, etc. for each currency so that the company's foreign currency can be maintained at a safe level so as to cope with possible risks and fluctuations.

Inflation: Domestic electricity prices are rising, and fluctuations in the cost of precious metals and bulk raw materials are affected by the global economy, regional political and economic situations, extreme weather, etc. It is necessary to pay close attention to the development of market conditions.

Response actions: The consolidated company will use technology research and development and process optimization to reduce manufacturing costs; and reduce the impact of inflation by flexibly adjusting purchases and inventories. At the same keep close look at fluctuations in related operating costs.

(2) Policies on high risk, highly leveraged investments, loans to other parties, endorsements, and derivative trading policies, main reasons for profits or losses, and future response measures

The merged Company does not engage in high-risk or high-leverage investments. Short-term idle funds are primarily used in high-interest demand deposits or short-term fixed deposits. The merged company has established "Endorsement and Guarantee Procedures" to regulate external endorsement and guarantee operations. Guarantees are provided to subsidiaries and investee companies where each shareholder provides guarantees in proportion to their shareholding due to joint investment relationships. Except for hedging needs, the merged company generally does not engage in derivative transactions. If business needs necessitate such transactions, the company's "Procedures for Handling Derivative Financial Instrument Transactions" must be followed. The company's latest information on lending, endorsements and guarantees, and derivative transactions is disclosed monthly on the public information observation platform as required by regulations. Query index path: Single Company -> Operational Overview -> Endorsements/Lending -> Lending and Endorsement Details (https://mops.twse.com.tw/mops/#/web/t65sb04) and Single Company -> Operational Overview -> Derivatives Trading Information (https://mops.twse.com.tw/mops/#/web/t15sf).

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Shihlin Electric

(3) Future Research & Development (R&D) Plans and Expected R&D expenses :

Unit: NT$ thousand

Future R&D Plan	Current Progress of Future R&D Plan	R&D Expenses to be reinvested	Estimated schedule for completing mass production	Main factors affecting R&D success in the future
Please refer to the new product development plan from Page 93.	30%	391,667	2026.12	N/A

(4) Changes in important policies and the legal environment at home and abroad, and the effect on Company financial status and operation, and countermeasures:

The company will pay close attention and control the important financial operation policies and laws that could affect the company in addition to cooperating with the internal corporate regulation and rules. Assessment shows no major impact on the company.

(5) The technological and industrial changes, and their effect on the financial status and operation of the Company, and countermeasures:

With the rapid development of technology, information security risks are mostly generated through the network environment and employee behavior, including hacker attacks, network traffic attacks, software (ransomware) viruses, phishing, spam, software updates, permission control, etc. The possible impact on the Company includes internal information being stolen or tampered with, financial loss, impact on daily operations and damage to the Company's image, etc. The Company has formulated internal information security management procedures, regular inspections to ensure implementation, regular implementation of system information security testing, inspection of user behavior through information security equipment such as firewalls, enhancement of anti-virus and encryption mechanisms, and protection measures for personal data, and regularly through third-party units conduct audits and conduct regular employee education and training to improve information security awareness.

(6) The Impact of changes in corporate identity on Company crisis management, and countermeasures : N/A
(7) The expected benefits and possible risks of merger or acquisition, and countermeasures: N/A
(8) Expected benefits and possible risks associated with any plant expansion, and mitigation measures being or to be taken : N/A
(9) The risks from centralized purchasing or selling, and countermeasures : N/A
(10) Effect upon and risk to the Company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the Company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken : N/A
(11) Effect upon and risk to company associated with any change in governance personnel or top management, and mitigation measures being or to be taken : N/A
(12) Litigation and non-litigation matter which might materially affect shareholder equity or the price of securities : N/A
(13) Other Substantial Risks and Countermeasures: N/A

Other Important Matters : None.

Special Disclosure

VI. Special Disclosure

1. Affiliated Companies

A. 2025 Consolidated Business Report of Affiliates Enterprise :

Query Path: MOPS (Market Observation Post System) New Version → Individual Company → Electronic Document Downloads → Related Party Transactions – “Three Statements” Section

URL: https://mopsov.twse.com.tw/mops/web/t57sb01_q10

B. 2025 Consolidated financial statement of affiliates enterprises and its declaration:

Please visit the new Market Observation Post System (MOPS) to access the Company’s consolidated financial statements for Q4 of 2025.

Query Path: MOPS (Market Observation Post System) New Version → Individual Company → Electronic Document Downloads → Financial Reports

URL: https://mops.twse.com.tw/mops/#/web/t57sb01_q1

C. 2025 Affiliate Report: Not Applicable

Status of Private Placement of Securities for the Most Recent Year and Up to the Date of the Annual Report Publication : N/A
Any Matters of Material Significance That Could Have Affected Shareholder Equity or Securities Price Last Year and Up to the Date of Publication of the Annual Report, Pursuant to the Regulation of Article 36-3-2 of Securities Laws : N/A
Evaluation Basis and Foundation for the Allowance Practice of Balance Sheet Valuation Account

(1) Allowance for Bad Debts

The amalgamating Company uses the simplification of IFRS 9 to recognize an allowance loss for accounts receivable based on lifetime expected credit losses. The expected credit loss during the duration is based on the customer's past default record and current financial situation, industrial economic situation, and outlook.

(2) Allowance for Reduction of Inventory to Market

Inventories include raw materials, work in progress and finished goods. Inventories are measured at the lower of cost and net realizable value. When comparing cost and net realizable value, it is based on individual items except for inventories of the same category.

(3) Warranty Preparation

The warranty liability provision is based on the sales contract agreement, historical warranty experience and consideration of other factors that affect product quality, and estimates the present value of the best estimate of the outflow of future economic benefits caused by the warranty obligation.

Shihlin Electric

5. Key Performance Indicators of Industry Differentiation

Product Category	2025 Market Share (Domestic)
Heavy Electrical Products	54%
Breaker Switchgear Products	46%
Automation Products	36%
Automobile Equipment Products	52%

6. Other Matters That Require Additional Description

(1) The acquisition of relevant certification instructed by competent authority for personnel related to financial information transparency

Unit: No. of People

Personnel\Certification	Senior Securities Specialist	Securities Specialist	Stock Affairs Specialist	Others (Note 1)
Financial Specialist	3	1	2	5
Accountant	2	4	2	10
Stock Administration Specialist	0	1	2	0
Total	5	6	6	15

Note 1: others refer Securities Investment Trust and Consulting Professionals, futures specialist, banking trust specialist, financial plan specialist, internal banking control specialist, investment policy, personal insurance specialist, property insurance specialist, manufacturing manager, and accountant.

(2) Internal operating procedures for handling major information have been formulated and published internally and on the official website to inform all employees, managers and directors to avoid violations and insider trading.

130 -

SHIHLIN ELECTRIC & ENGINEERING CORP.

Chairman Hsu, Yu-Jui

Notice to readers

This English version annual report is a summary translation of the Chinese version and is not an official document of the shareholders' meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.

Changes For The Better, Create The Future

Shihlin Electric & Engineering Corp.
16F., No.88, Sec.6, Zhongshan N. Rd.,
Taipei City, Taiwan (R.O.C) Tel / (02) 2834-2662

AI assistant

SEEC — Annual Report 2025

51835_rns_2026-05-29_3692f01e-628e-48d2-8b79-96a74f0a6478.pdf

Spokesperson

Acting Spokesperson

Share Transfer Agent and Registrar

Auditors

Corporate Website

Overseas Securities Exchange Corporation Listing: N/A

Headquarter

Xin Feng Factory

Heavy Electric Factory

Automobile Equipment Factory

Taiwan Branch Office

Taipei Branch Office

Hsinchu Branch Office

Taichung Branch Office

Tainan Branch Office

Kaohsiung Branch Office

Contents

I. Letter to Shareholders

II. Corporate Governance Report

III. Capital Overview

IV. Operation Overview

V. Review and Analysis of Financial Status and Performance and Risk Management

VI. Special Disclosure

I. Letter to Shareholders

Ladies and Gentlemen, Dear Shareholders:

1. Business Report

(1) Implementation Results of Previous Year's Business Plan:

A. Power Distribution Department

B. Automobile Parts Department:

C. Automation Equipment and Components Departments and Others

(2) Budget Implementation:

(3) Analysis to Consolidated Financial Balance and Profitability

(4) Consolidated Progress of R&D of the Company:

2. Summary of Business Operation Plans for Current Fiscal Year

(1) Guidelines for Business Operation

(2) Expected Sales Volume and Basis

(3) Major Production and Marketing Policies:

II. Corporate Governance Report

B. Independence of the Board

B. Information on President/General Manager, Senior Vice President /Vice General Manager, Assistant General Manager, and Heads of All the Company Divisions

C. Remuneration Paid to Directors (Independent Director included), President/General Manager, Senior Vice President /Vice General Manager in the Most Recent Year

3. Employee bonus amount paid to managerial officers

2. Operation of Corporate Governance

A. Operation of Board of Directors

C. Annual Work Priorities and Operations of the Audit Committee

Audit Committee Review Report

E. Establishment, Functions, and Operations of the Remuneration Committee:

2. Operations of the Remuneration Committee

F. Establishment, Functions, and Operations of the Sustainability Committee:

2. Operations of the Sustainability Committee

3. The proposals and resolutions of the Sustainability Committee meetings in 2025.

H. Climate-Related Information of TWSE/TPEx Listed Company

2. Greenhouse Gas Inventory and Assurance for the Past Two Years

(1) Greenhouse Gas Inventory Information

(2) Greenhouse Gas Assurance Information

3. Greenhouse Gas Reduction Targets, Strategies, and Specific Action Plans

K. Status of Internal Control System

L. Resolutions Reached at A Meeting of Shareholders or by the Board of Directors During the Recent Year and Up to the Date of Publication of This Annual Report:

4. CPA Replacement Information in The Recent Two Years

(1) Former CPA:

(2) Regarding the CPA:

(3) The response from the former auditor regarding items 1 and 2(3) of Article 10, Paragraph 5 of these guidelines.: N/A

7. Information on the Top Ten Shareholders by Shareholding Ratio, Indicating Whether They are Related Parties or Have Spousal or Second-Degree Kinship Relationships

III. Capital Overview

1. Capital and Shares

B. Major Shareholders (Top 10 shareholders or with Shareholdings greater than 5%)

C. Company Dividend Policy and Status of Execution

1. Dividend Policy

2. Distribution of dividend proposed by current shareholders’ meeting

D. Effect on Business Performance and EPS Resulting from Stock Dividend Distribution Proposed by the 2025 Shareholders’ Meeting: N/A

E. Compensation of Employees and Directors

IV. Operation Overview

1. Business Activities

A. Business Scopes

B. Industry Overview

(2) Automotive Parts Industry

(3) Automation Equipment and Parts Industry

SEEC Annual Report 2025