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Transcend AGM Information 2024

Jul 9, 2024

52092_rns_2024-07-09_cd9798de-53cf-448d-91da-91bc8b079991.pdf

AGM Information

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創見資訊股份有限公司 Transcend Information, Inc.

Handbook for the 2024 Annual Regular Shareholders’ Meeting

This English version is a translation based on the original Chinese version. Where any discrepancy arises between the two versions, the Chinese version shall prevail.

Transcend Information, Inc.

Handbook for the 2024 Annual Regular Shareholders’ Meeting

TABLE OF CONTENTS

MEETING PROCEDURE .................................................................................................................... 1 MEETING AGENDA ............................................................................................................................ 2 REPORT ITEMS ................................................................................................................................. 3 PROPOSED ITEMS ............................................................................................................................ 5 DISCUSSION AND ELECTION ITEMS .......................................................................................... 7 OTHER BUSINESS AND SPECIAL MOTION ............................................................................... 8 ATTACHMENT I ： BUSINESS REPORT ...................................................................................................................... 9 II ： AUDIT COMMITTEE’S REVIEW REPORT ......................................................................... 11 III ： 2023 PARENT COMPANY ONLY FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT ....................................................................................................... 12 IV ： 2023 CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT .............................................................................................................................. 21 V ： COMPARISON TABLE FOR THE “RULES AND PROCEDURES OF SHAREHOLDERS’ MEETING” ......................................................................................................................... 31 VI ： THE NOMINATION LIST OF DIRECTORS ........................................................................ 33 VII ： THE CONCURRENT POSITIONS OF DIRECTORS ........................................................ 37 APPENDIX I ： RULES AND PROCEDURES OF SHAREHOLDERS’ MEETING (BEFORE AMENDMENT) ... 39 II ： ARTICLES OF INCORPORATION ......................................................................................... 46 III ： PROCEDURES FOR ELECTION OF DIRECTOR ............................................................. 52 IV ： SHAREHOLDINGS OF ALL DIRECTORS .......................................................................... 54

Transcend Information, Inc.

2024 ANNUAL REGULAR SHAREHOLDERS’ MEETING PROCEDURE

  1. Call the Meeting to Order

  2. Chairman's Remarks

  3. Report Items

  4. Proposed Items

  5. Discussion and Election Items

  6. Other Business and Special Motion

  7. Meeting Adjourned

–1–

Transcend Information, Inc.

2024 ANNUAL REGULAR SHAREHOLDERS’ MEETING AGENDA

(Translation)

Meeting Type: Physical shareholders meeting

Time: 9:00 a.m., Friday, June 21, 2024

Place: 1F, No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan (Transcend Information, Inc.)

Chairman's Remarks

I. Report Items

  • (1) To report the business of 2023.

  • (2) Audit Committee’s Review Report.

  • (3) To report 2023 employees’ profit sharing bonus and directors’ compensation.

  • (4) The status of endorsements and guarantees provided by the Company.

  • (5) Cash distribution from 2023 retained earnings.

  • (6) Cash distribution from capital surplus.

II. Proposed Items

  • (1) Adoption of 2023 Business Report and Financial Statements.

  • (2) Adoption of the proposal for distribution of 2023 earnings.

III. Discussion and Election Items

  • (1) To approve the amendments to “Rules and Procedures of Shareholders’ Meeting”.

  • (2) Election of directors.

  • (3) To release the prohibition on directors from participation in competing business.

  • IV. Other Business and Special Motion

V. Meeting Adjourned

–2–

I. Report Items

  • (1) To report the business of 2023.

Explanatory Notes:

Please refer to page 9 to 10 for Attachment I.

  • (2) Audit Committee’s Review Report.

Explanatory Notes:

Please refer to page 11 for Attachment II.

  • (3) To report 2023 employees’ profit sharing bonus and directors’ compensation. Explanatory Notes:

  • A. The remuneration of 2023 profit to employees would be NT$ 24,962,283 (distributed in cash); and that to directors would be NT$ 2,300,000.

  • B. The estimated remuneration to employees is NT$ 25,696,351 and the different amount should be NT$ 734,068; the estimated remuneration to directors is NT$ 0 and the different amount should be NT$ 2,300,000.

  • C. The difference will be taken as a change in accounting estimate and adjusted in profit or loss for 2024.

  • (4) The status of endorsements and guarantees provided by the Company.

Explanatory Notes:

The Company provided a guarantee for Transcend Japan Inc. amounting to JPY 2,000,000 thousands, and the actual amount of guarantee draw down is JPY 0 by the end of 2023. Pursuant to the Company’s “Procedures for Endorsements and Guarantees”, the limit of guarantee was NT$ 7,468,568 thousands (approximate JPY 35,700,000 thousands).

  • (5) Cash distribution from 2023 retained earnings.

Explanatory Notes:

  • A. To comply with Section 5 of Article 240 of the Company Act and Article 22-1 of the Company’s Articles of Incorporation, the board of directors is authorized to distribute dividends and bonuses in whole or in part that may be paid in cash after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors.

  • B. For appropriations of 2023 earnings, the Company will distribute cash dividend of NT$ 1,930,777,538 (NT$4.50 per share).

  • C. Please refer to page 6 for the chart of 2023 earnings distribution.

  • D. Cash dividend will be distributed proportionately according to shareholders’ shares ownership registered in the Common Stockholders’ Roster as of the date of record. The cash distribution

–3–

will be rounded down to NT$1 (any amount under NT$1 will be discarded), and the remaining fraction will be incorporated into other revenues of the Company.

  • E. To avoid the change in the total amount of common shares outstanding resulting from buyback of company shares, or transfer or cancellation of treasury stock, it is proposed that the Chairman of the Board be authorized to adjust the cash to be distributed to each common share.

(6) Cash distribution from capital surplus.

Explanatory Notes:

  • A. To comply with Article 241 of the Company Act and Article 22-1 of the Company’s Articles of Incorporation, the board of directors is authorized to distribute capital surplus in whole or in part that may be paid in cash after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors.

  • B. The capital surplus derived from the issuance of new shares at a premium totaling NT$ 214,530,838 will be distributed in cash of NT$0.50 per share.

  • C. Cash distribution from capital surplus will be distributed proportionately according to shareholders’ shares ownership registered in the Common Stockholders’ Roster as of the date of record. The cash distribution will be rounded down to NT$1 (any amount under NT$1 will be discarded), and the remaining fraction will be incorporated into other revenues of the Company.

  • D. To avoid the change in the total amount of common shares outstanding resulting from buyback of company shares, or transfer or cancellation of treasury stock, it is proposed that the Chairman of the Board be authorized to adjust the cash to be distributed to each common share.

–4–

II. Proposed Items

  • (1) Adoption of 2023 Business Report and Financial Statements.

  • (Proposed by the Board of Directors)

Explanatory Notes:

  • A. The parent company only financial statement and consolidated financial statement of the Company for the year of 2023 have been audited by independent auditors, Mr. Chin-Chang Chen and Mr. Lin, Yi-Fan, of the Pricewaterhouse Coopers.

  • B. The Business Report, Independent Auditors’ Report and Financial Statements are hereby also attached. (Please refer to page 9 to 10 for Attachment I, and page 12 to 30 for Attachment III and IV)

  • C. It is submitted for ratification.

Resolution:

  • (2) Adoption of the proposal for distribution of 2023 earnings.

  • (Proposed by the Board of Directors)

Explanatory Notes:

  • A. To appropriate legal reserve and special reserve from 2023 earnings in accordance with the regulations.

  • B. Please refer to page 6 for the chart of 2023 earnings distribution.

  • C. It is submitted for ratification.

Resolution:

–5–

Transcend Information, Inc. The Chart of 2023 Earnings Distribution

For the year ended December 31, 2023

(Expressed in New Taiwan dollar)

Item Amount Remarks
Unappropriated retained earnings at beginning 4,508,949,374
Add:Adjustment on unappropriated earnings for 2023 8,544,002
Adjusted unappropriated retained earnings 4,517,493,376
Add:Net income for 2023 1,984,834,817
Less:Legal reserve(10%) (199,337,882)
Add:Reversal ofSpecial reserve 127,453,351
Retained earnings available for appropriation as of
December31,2023		 6,430,443,662
Less:Items of distribution -
Cash dividend to shareholders		 (1,930,777,538)
Cash dividend
(NT$4.50 per share)
Unappropriated retained earnings at end 4,499,666,124

[Chairman: Shu, Chung-Won ]

General Manager: Shu, Chung-Won

Accounting Supervisor: Chi, Wen Hui

–6–

III. Discussion and Election Items

  • (1) To approve the amendments to “Rules and Procedures of Shareholders’ Meeting”.

  • (Proposed by the Board of Directors)

Explanatory Notes:

  • A. To comply with the amendment of “Regulations Governing the Documents and Compliance Matters in Public Companies’ Shareholders’ Meeting Handbooks” made by Financial Supervisory Commission, the Company hereby proposes amendments to “Rules and Procedures of Shareholders’ Meeting”.

  • B. Please refer to page 31 to 32 for Attachment V: the comparison table for the “Rules and Procedures of Shareholders’ Meeting”.

  • C. It is submitted for approval.

Resolution:

  • (2) Election of directors.

(Proposed by the Board of Directors)

Explanatory Notes:

  • A. Three-year term of the current directors started from August 26, 2021 and concluded on August 25, 2024. To comply with Article 199-1 of the Company Act, and the term of office for all current directors will end upon the election of new directors.

  • B. The shareholders’ meeting shall elect 9 directors (including 4 independent directors). Three-year term of the new directors will start from June 21, 2024 and conclude on June 20, 2027.

  • C. According to the regulations and Articles of Incorporate, a candidate nomination system shall be adopted. Please refer to page 33 to 36 for Attachment VI: the Nomination List of Directors.

  • D. It is submitted for election.

Voting by Poll:

  • (3) To release the prohibition on directors from participation in competing business.

  • (Proposed by the Board of Directors)

Explanatory Notes:

  • A. Pursuant to Article 209 of Company Act, it is proposed to release non-competition restrictions on the newly-elected directors, who may participate in investment or operation of another company that engages in the same or similar business scope, under the premise that no harm to the Company's interest.

–7–

  • B. Please refer to page 37 to 38 for Attachment VII: the Concurrent Positions of Directors.

  • C. It is submitted for approval.

Resolution:

IV. Other Business and Special Motion

  • V. Meeting Adjourned

–8–

Attachment I

TRANSCEND INFORMATION, INC. BUSINESS REPORT

Looking back on 2023 from a global perspective, the memory market continued the downward trend in economic conditions from 2022, with the overall situation remaining severe and market performance remaining weak. Major memory manufacturers were still under inventory pressure, and production capacity showed a contracting situation. During this economic downturn, Transcend continued to flexibly adjust its inventory management policies and procurement strategies, coupled with a highly efficient production model, to meet customer order demands, thereby maintaining a high gross profit margin performance. Starting from the fourth quarter of 2023, the effects of inventory depletion and production cuts gradually became apparent, and DRAM and NAND FLASH prices showed an upward trend. In this rapidly changing memory market, Transcend adhered to its consistent prudent operating strategy, continuing to deepen its roots in existing sales channels, timely launching new products, enriching product diversity to enhance customer satisfaction, and strengthening brand value. The Company also continuously sought breakthroughs in industrial application fields, satisfying customer needs through comprehensive R&D capabilities, and establishing long-term mutually beneficial cooperative models through its professional sales team. Transcend will continue to grow and thrive. We would like to express our gratitude to our shareholders, customers, suppliers and employees for your long-term support and encouragement of Transcend.

For the year of 2023, the consolidated revenue of Transcend reached NT$10.5 billion, the consolidated gross profit was NT$3.04 billion, and the gross margin rate was 29%; the consolidated operating income was NT$1.89 billion, the net income before tax was NT$2.47 billion and the net income after tax was NT$1.98 billion. Based on the calculation of the share capital of the weighted average number of shares outstanding of NT$4.3 billion, the EPS was NT$4.63.

Facing diverse market demands, as a leading brand in a Taiwanese industry, Transcend continues to pursue product innovation and R&D technology improvements, providing customers with high-quality products and services, which is the driving force behind the Company’s growth and progress. In 2023, we launched industrial-grade DDR5 5600 memory modules, creating low-power, high-performance, low-latency, and highly reliable embedded solutions. In the consumer market, we introduced the ESD310 dual-interface portable SSD and the ESD300 series of Type-C high-speed mini portable SSDs, offering consumers diverse choices to meet their different needs. Our strategic product was the DrivePro Body 70 wearable camera designed for professionals, featuring durability, convenience, and efficiency. Thanks to years of commitment to brand management, Transcend has received numerous honors and awards for our outstanding R&D design, product quality, and brand image. This year, Transcend was honored as one of the “Top 25 International Brands in Taiwan” for the 17th consecutive year. The ESD310C dual-interface portable SSD and DrivePro Body 70 wearable camera were also recognized by the “2024 Taiwan Excellence Award.”

–9–

In addition to focusing on the core business operations, Transcend also strives to contribute corporate resources by long-term sponsorship of youth sports events, including HBL and HVL, earning the “Sports Promoter Award” from the Sports Administration of the Ministry of Education for ten consecutive years, demonstrating Transcend’s achievements in fostering youth sports. Furthermore, to fully support the development of youth baseball in Taiwan, Transcend launched the “Rural Baseball Seeds Project” eight years ago, aiming to enable underprivileged young players in rural areas to pursue their baseball dreams. Transcend hopes that by combining business with sports, more people will pay attention to youth sports events and contribute to the physical and mental well-being of the next generation.

Looking forward to 2024, it is expected that the memory market will recover from the slump of 2023 and experience a year of robust development. The benefits of inventory adjustments will drive continued increases in DRAM and NAND FLASH prices, while reduced production capacity and a rebound in consumer demand will restore a healthy overall supply-demand balance. Facing dramatic cyclical changes in the industry, Transcend continues to flexibly adjust the business strategies of various departments within the organization. It also appropriately plans its assets in accordance with the overall economic environment, enabling it to maintain stable profitability. In the future, we will seize opportunities, continuously strengthen our professional capabilities, implement efficient management, and expand our customer base while introducing new areas of expertise. We believe this will bring a new wave of growth momentum. At the same time, sustainable development is also an issue that Transcend attaches great importance to. In addition to developing memory module products that reduce energy consumption, we have also adopted environmentally friendly packaging consumables to continue to contribute to sustainable development. We look forward to your continuing care and support for the Company and appreciate your valuable comments and feedback. We will continue to seek innovations and breakthroughs, delivering ever more remarkable performance in all areas.

Chairman ： Shu, Chung-Won

General Manager ： Shu, Chung-Won

Accounting Supervisor ： Chi, Wen Hui

–10–

Attachment II

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2023 Business Report, Financial Statements and Earnings Distribution Proposal. Transcend Corporation’s Financial Statements have been audited and certified by Mr. Chin-Chang Chen and Mr. Lin, Yi-Fan, the CPA of the Pricewaterhouse Coopers. The Business Report, Financial Statements and Earnings Distribution Proposal have been reviewed and considered to be complied with relevant rules by the undersigned, the audit committee of Transcend Corporation. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

The Audit Committee of Transcend Information, Inc.

Chairman of the Audit Committee: WANG, YI-HSIN

February 29, 2024

–11–

Attachment III

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 23000329

To the Board of Directors and Shareholders of Transcend Information, Inc.

Opinion

We have audited the accompanying parent company only balance sheets of Transcend Information, Inc. (the “Company”) as at December 31, 2023 and 2022, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of material accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Independent Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Company’s 2023 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Company’s 2023 parent company only financial statements are stated as follows:

Valuation of inventories

Description

Refer to Notes 4(13), 5(2) and 6(5) to the parent company only financial statements for the information

–12–

on the Company’s inventory accounting policy, estimates and assumptions and allowance for inventory valuation losses.

The percentage of the Company’s inventories to total assets is material and the Company applies judgements and estimates in determining the net realizable value of inventories at the balance sheet date. The Company mainly produces DRAM and flash memory. As these products have a short life cycle and belong to a highly competitive industry, the market prices change frequently. Since the Company’s inventories and the allowance for inventory valuation losses are material to the financial statements, the valuation of inventories has been identified as one of the key audit matters.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

  • A. Obtained an understanding of the Company’s operations and industry. Assessed the reasonableness of the policy and procedures to recognize allowance for inventory valuation losses.

  • B. Obtained an understanding of the Company’s inventory control procedures. Reviewed annual inventory count plan and observed the annual physical count of material inventory storage location in order to assess the effectiveness of internal controls over inventory.

  • C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information to assess the reasonableness of allowance for inventory valuation losses.

Estimation of allowance for sales discounts

Description

In consideration of business volume, the Company provides a variety of business incentives to specific customers or products, and based on that, the Company can estimate the allowance for sales discounts monthly. Refer to Notes 4(25) and 6(4) to the parent company only financial statements for the information on the estimation of allowance for sales discounts.

Since the contracts are numerous and the result could affect the net revenue in the parent company only financial statements, the estimation of allowance for sales discounts has been identified as one of the key audit matters.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

  • A. Obtained an understanding of the Company’s operations, industry and the procedures to recognize allowance for sales discounts.

  • B. Obtained an understanding of the Company’s sales procedures and interviewed management to assess the appropriateness of sales allowance contracts and internal control over estimation of allowance.

  • C. Obtained the evaluation list of allowance for sales discounts, and tested material sales allowance contracts and recalculated it to assess the reasonableness of allowance determined by the Company.

–13–

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

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

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

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

Independent auditors’ responsibilities for the audit of the parent company only financial statements

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

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

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

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

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

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

–14–

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

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

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

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

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

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

Chen, Chin-Chang Lin, Yi-Fan

For and on behalf of PricewaterhouseCoopers, Taiwan

February 29, 2024

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

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

–15–

TRANSCEND INFORMATION, INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Assets Notes
6(1)
6(3)
6(4)
6(4)
7
6(5)
6(2)
6(6)
6(3)
6(7)
6(8)
6(9) and 7
6(11)
6(23)
6(12)		 December31,2023
AMOUNT
%
$ 1,214,553
5
8,060,820
36
323
-
689,554
3
688,923
3
112,946
1
4,940,866
22
1,845
-
15,709,830
70
461,734
2
626,628
3
301,602
1
1,242,066
6
1,316,764
6
128,309
1
2,547,461
11
69,255
-
37,869
-
6,731,688
30
$ 22,441,518
100		 December31,2022 December31,2022
AMOUNT
$ 1,214,553
8,060,820
323
689,554
688,923
112,946
4,940,866
1,845
15,709,830
461,734
626,628
301,602
1,242,066
1,316,764
128,309
2,547,461
69,255
37,869
6,731,688
$ 22,441,518		 AMOUNT
$ 1,812,082
8,527,800
867
720,973
423,847
21,627
3,069,913
1,270
14,578,379
51,463
524,939
-
2,252,378
1,374,912
165,858
2,555,793
126,380
31,070
7,082,793
$ 21,661,172		 %
Current assets
1100
Cash and cash equivalents
1136
Financial assets at amortised cost -
current
1150
Notes receivable, net
1170
Accounts receivable, net
1180
Accounts receivable - related parties
1200
Other receivables
130X
Inventories
1479
Other current assets
11XX
Total current assets
Non-current assets
1510
Financial assets at fair value through
profit or loss - non-current
1517
Financial assets at fair value through
other comprehensive income -
non-current
1535
Financial assets at amortised cost -
non-current
1550
Investments accounted for using
equity method
1600
Property, plant and equipment
1755
Right-of-use assets
1760
Investment property, net
1840
Deferred income tax assets
1900
Other non-current assets
15XX
Total non-current assets
1XXX
Total assets		 9
39
-
3
2
-
14
-
67
-
3
-
10
6
1
12
1
-
33
100

(Continued)

–16–

TRANSCEND INFORMATION, INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Liabilities and equity December31,2023
December31,2022
Notes
AMOUNT
%
AMOUNT
%
$ 1,790,529
8
$ 471,713
3
7
298,728
2
443,591
2
266,495
1
209,400
1
7
16,683
-
17,692
-
491,425
2
422,774
2
7
37,187
-
36,662
-
3,751
-
3,086
-
2,904,798
13
1,604,918
8
6(23)
173,377
1
376,445
2
7
75,976
-
113,163
-
6(13)
18,657
-
16,110
-
268,010
1
505,718
2
3,172,808
14
2,110,636
10
6(14)
4,290,617
19
4,290,617
20
6(15)
3,044,619
13
3,387,781
16
6(16)
5,303,693
24
5,057,967
23
357,817
2
190,514
1
6,502,327
29
6,981,474
32
6(17)
(
230,363 ) (
1 ) (
357,817) (
2)
19,268,710
86
19,550,536
90
9
11
$ 22,441,518
100
$ 21,661,172
100
Current liabilities
2170
Accounts payable
2180
Accounts payable - related parties
2200
Other payables
2220
Other payables - related parties
2230
Current income tax liabilities
2280
Lease liabilities - current
2300
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2570
Deferred income tax liabilities
2580
Lease liabilities - non-current
2600
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
Share capital
3110
Common stock
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3XXX
Total equity
Significant contingent liabilities and
unrecognized contract commitments
Significant events after the balance
sheet date
3X2X
Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

–17–

TRANSCEND INFORMATION, INC. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Items Forthe years endedDecember31
2023
2022
Notes
AMOUNT
%
AMOUNT
%
6(18) and 7
$ 9,879,469
100
$ 11,386,995
100
6(5)(22) and 7
(
7,409,205 )(
75)(
9,278,593)(
81)
2,470,264
25
2,108,402
19
(
16,316 )
-
(
3,455)
-
3,455
-
10,106
-
2,457,403
25
2,115,053
19
6(22)
(
317,083 ) (
3) (
314,858) (
3)
(
181,690 ) (
2) (
207,177) (
2)
(
132,973 )(
2)(
137,105)(
1)
(
631,746 )(
7)(
659,140)(
6)
1,825,657
18
1,455,913
13
6(3)(19)
374,837
4
96,934
1
6(6)(10)(11)(20)
78,703
1
82,483
1
6(2)(21) and 7
145,851
2
217,979
2
6(9)
(
1,822 )
-
(
1,239)
-
6(7)
47,306
-
1,214,903
10
644,875
7
1,611,060
14
2,470,532
25
3,066,973
27
6(23)
(
485,697 )(
5)(
612,629)(
6)
$ 1,984,835
20
$ 2,454,344
21
6(13)
( $ 2,159 )
-
$ 5,185
-
6(6)(17)
173,465
2
(
170,069) (
1)
6(7)
1,524
-
(
219)
-
6(7)(17)
(
46,041 ) (
1)
892
-
6(17)(23)
9,208
-
(
178)
-
$ 135,997
1
($ 164,389)(
1)
$ 2,120,832
21
$ 2,289,955
20
6(24)
$ 4.63
$ 5.72
$ 4.62
$ 5.71
4000
Operating revenue
5000
Operating costs
5900
Gross profit
5910
Unrealized profit from sales
5920
Realized profit from sales
5950
Realized gross profit
Operating expenses
6100
Sales and marketing expenses
6200
Administrative expenses
6300
Research and development expenses
6000
Total operating expenses
6900
Operating profit
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7070
Share of profit of subsidiaries,
associates and joint ventures
accounted for using the equity
method
7000
Total non-operating income and
expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year
Other comprehensive income (loss)
Components of other
comprehensive income (loss) that
will not be reclassified to profit or
loss
8311
(Loss) gain on remeasurements of
defined benefit plan
8316
Unrealized gain (loss) on financial
assets at fair value through other
comprehensive income
8330
Share of other comprehensive
income (loss) of associates and joint
ventures accounted for using equity
method
Components of other
comprehensive income (loss) that
will be reclassified to profit or loss
8361
Financial statements translation
differences of foreign operations
8399
Income tax related to components of
other comprehensive income that
will be reclassified to profit or loss
8300
Other comprehensive income (loss)
for the year
8500
Total comprehensive income
Earnings per share (in dollars)
9750
Basic earnings per share
9850
Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

–18–

TRANSCEND INFORMATION, INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

For the year ended December 31, 2022
Balance at January 1, 2022
Net income for the year
Other comprehensive income (loss)
Total comprehensive income (loss)
Appropriations and distribution of 2021 earnings
Legal reserve
Cash dividends
Special reserve
Cash payment from capital surplus
Net loss on disposal of financial assets at fair value through
other comprehensive income
Expired unclaimed dividends recognized as capital surplus
Balance at December 31, 2022
For the year ended December 31, 2023
Balance at January 1, 2023
Net income for the year
Other comprehensive income (loss)
Total comprehensive income (loss)
Appropriations and distribution of 2022 earnings
Legal reserve
Cash dividends
Special reserve
Cash payment from capital surplus
Net gain on disposal of financial assets at fair value through
other comprehensive income
Expired unclaimed dividends recognized as capital surplus
Balance at December 31, 2023		 Notes Commonstock Capital Reserves Capital Reserves Capital Reserves RetainedEarnings Other EquityInterest Other EquityInterest Other EquityInterest Other EquityInterest Totalequity
Additional paid-in
capital		 Donated assets
received		 Net assets from
merger		 Legal reserve Special reserve Unappropriated
retained earnings		 Financial
statements
translation
differences of
foreignoperations
Unrealised gains
(losses) on
financial assets at
fair value through
other
comprehensive
income
6(6)(17)
6(16)
6(6)(17)
6(6)(17)
6(16)
6(6)(17)


$ 4,290,617
-
-
-
-
-
-
-
-
-
$ 4,290,617
$ 4,290,617
-
-
-
-
-
-
-
-
-
$ 4,290,617		 $ 3,691,432
-
-
-
-
-
-
(
343,249 )
-
-
$ 3,348,183
$ 3,348,183
-
-
-
-
-
-
(
343,249 )
-
-
$ 3,004,934		 $ 4,354
-
-
-
-
-
-
-
-
116
$ 4,470
$ 4,470
-
-
-
-
-
-
-
-
87
$ 4,557		 $ 35,128
-
-
-
-
-
-
-
-
-
$ 35,128
$ 35,128
-
-
-
-
-
-
-
-
-
$ 35,128		 $ 4,803,503
-
-
-
254,464
-
-
-
-
-
$ 5,057,967
$ 5,057,967
-
-
-
245,726
-
-
-
-
-
$ 5,303,693


$ 117,244
-
-
-
-
-
73,270
-
-
-
$ 190,514
$ 190,514
-
-
-
-
-
167,303
-
-
-
$ 357,817










$ 7,083,072
2,454,344
4,966
2,459,310
(
254,464 )
(
2,231,121 )
(
73,270 )
-
(
2,053 )
-
$ 6,981,474
$ 6,981,474
1,984,835
(
635 )
1,984,200
(
245,726 )
(
2,059,496 )
(
167,303 )
-
9,178
-
$ 6,502,327		 ($ 197,932 )
-
714
714
-
-
-
-
-
-
($ 197,218 )
($ 197,218 )
-
(
36,833 )
(
36,833 )
-
-
-
-
-
-
($ 234,051 )		 $ 7,417
-
(
170,069 )
(
170,069 )
-
-
-
-
2,053
-
($ 160,599 )
($ 160,599 )
-
173,465
173,465
-
-
-
-
(
9,178 )
-
$ 3,688		 $ 19,834,835
2,454,344
(
164,389 )
2,289,955
-
(
2,231,121 )
-
(
343,249 )
-
116
$ 19,550,536
$ 19,550,536
1,984,835
135,997
2,120,832
-
(
2,059,496 )
-
(
343,249 )
-
87
$ 19,268,710

The accompanying notes are an integral part of these parent company only financial statements.

–19–

TRANSCEND INFORMATION, INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Unrealized profit from sales
Realized profit from sales
Net (gain) loss on financial assets at fair value through profit or loss
Share of profit or loss of associates and joint ventures accounted for
using the equity method
Depreciation
Interest income
Interest expense
Dividend income
Changes in assets and liabilities relating to operating activities
Changes in assets relating to operating activities
Financial assets at fair value through profit or loss - current
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Other current assets
Changes in liabilities relating to operating activities
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities
Net defined benefit liability
Other non-current liabilities
Cash inflow generated from operations
Dividends received
Interest received
Income tax paid
Net cash flows provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of financial assets at fair value through profit or
loss - non-current
Acquisition of financial assets at fair value through profit or loss -
non-current
Proceeds from disposal of financial assets at amortised cost
Acquisition of financial assets at amortised cost
Proceeds from disposal of financial assets at fair value through other
comprehensive income
Acquisition of financial assets at fair value through other comprehensive
income
Capital reduction and return of shares of investment accounted for using
the equity method
Acquisition of property, plant and equipment
Increase in guarantee deposits paid
Acquisition of right-of-use assets
Acquisition of investment property
Increase in other non-current assets
Dividends received
Net cash flows from (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Incease in guarantee deposits received
Payment of lease liabilities
Cash dividends paid (including cash payment from capital surplus)
Expired unclaimed dividends recognized as capital surplus
Net cash flows used in financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 For theyears ended December 31
Notes
2023
2022
$ 2,470,532 $ 3,066,973
16,316
3,455
(
3,455 ) (
10,106 )
6(2)(21)
(
38,186 )
17,262
6(7)
(
47,306 ) (
1,214,903 )
6(22)
127,671
154,169
6(19)
(
374,837 ) (
96,934 )
6(9)
1,822
1,239
6(6)(20)
(
21,134 ) (
35,592 )
-
1,508,314
544
1,632
31,419
416,616
(
265,076 ) (
148,118 )
(
84,132 )
94,758
(
1,870,953 )
2,544,650
(
575 ) (
110 )
1,318,816 (
892,131 )
(
144,863 ) (
16,940 )
57,095 (
42,967 )
(
1,009 )
261
665 (
65,182 )
(
884 ) (
827 )
-
1,322
1,172,470
5,286,841
19,874
35,592
368,607
85,784
(
553,781 ) (
613,516 )
1,007,170
4,794,701
-
41,155
(
372,085 )
-
4,573,010
3,100,000
(
4,407,329 ) (
6,147,400 )
6(6)
71,776
6,179
- (
71,611 )
6(7)
-
985,589
6(25)
(
20,241 ) (
35,790 )
(
135 )
-
- (
692 )
6(11)
(
489 ) (
4,082 )
(
9,576 ) (
1,712 )
6(7)
1,000,240
98,635
835,171 (
2,029,729 )
1,272
-
(
38,484 ) (
38,484 )
6(16)
(
2,402,745 ) (
2,574,370 )
87
116
(
2,439,870 ) (
2,612,738 )
(
597,529 )
152,234
1,812,082
1,659,848
$ 1,214,553 $ 1,812,082

The accompanying notes are an integral part of these parent company only financial statements.

–20–

Attachment IV

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 23000331

To the Board of Directors and Shareholders of Transcend Information, Inc.

Opinion

We have audited the accompanying consolidated balance sheets of Transcend Information, Inc. and subsidiaries (the “Group”) as at December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Independent auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Group’s 2023 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2023 consolidated financial statements are stated as follows:

–21–

Valuation of inventories

Description

Refer to Notes 4(14), 5(2) and 6(5) to the consolidated financial statements for the information on the Group’s inventory accounting policy, estimates and assumptions and allowance for inventory valuation losses.

The percentage of the Group’s inventories to total assets is material and the Group applies judgements and estimates in determining the net realizable value of inventories at the balance sheet date. The Group mainly produces DRAM and flash memory. As these products have a short life cycle and belong to a highly competitive industry, the market prices change frequently. Since the Group’s inventories and the allowance for inventory valuation losses are material to the financial statements, the valuation of inventories has been identified as one of the key audit matters.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

  • A. Obtained an understanding of the Group’s operations and industry. Assessed the reasonableness of the policy and procedures to recognize allowance for inventory valuation losses.

  • B. Obtained an understanding of the Group’s inventory control procedures. Reviewed annual inventory count plan and observed the annual physical count of material inventory storage location in order to assess the effectiveness of internal controls over inventory.

  • C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information to assess the reasonableness of allowance for inventory valuation losses.

Estimation of allowance for sales discounts

Description

In consideration of business volume, the Group provides a variety of business incentives to specific customers or products, and based on that, the Group can estimate the allowance for sales discounts monthly. Refer to Notes 4(26) and 6(4) to the consolidated financial statements for the information on the estimation of allowance for sales discounts.

Since the contracts are numerous and the result could affect the net revenue in the consolidated financial statements, the estimation of allowance for sales discounts has been identified as one of the key audit matters.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

  • A. Obtained an understanding of the Group’s operations, industry and the procedures to recognize allowance for sales discounts.

  • B. Obtained an understanding of the Group’s sales procedures and interviewed management to assess

–22–

the appropriateness of sales allowance contracts and internal control over estimation of allowance.

  • C. Obtained the evaluation list of allowance for sales discounts, and tested material sales allowance contracts and recalculated it to assess the reasonableness of allowance determined by the Group.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Transcend Information, Inc. as at and for the years ended December 31, 2023 and 2022.

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

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

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

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

Independent auditors’ responsibilities for the audit of the consolidated financial statements

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

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

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

–23–

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

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

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

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

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

–24–

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

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

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

Chen, Ching Chang

Lin, Yi-Fan

For and on behalf of PricewaterhouseCoopers, Taiwan

February 29, 2024

----------------------------------------------------------------------------------------------------------------------------- -- The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China and their applications in practice. As the consolidated financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

–25–

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Assets Notes
6(1)
6(3)
6(4)
6(4)
6(5)
6(2)
6(6)
6(3)
6(7)
6(8) and 8
6(9) and 7
6(11)
6(23)
6(12)		 December31,2023
AMOUNT
%
$ 1,858,719
8
8,130,839
37
323
-
1,247,331
6
113,104
1
5,003,689
22
41,262
-
16,395,267
74
461,734
2
626,628
3
301,602
1
105,138
-
1,509,348
7
168,708
1
2,580,696
12
80,796
-
59,364
-
5,894,014
26
$ 22,289,281
100		 December31,2022 December31,2022
AMOUNT
$ 1,858,719
8,130,839
323
1,247,331
113,104
5,003,689
41,262
16,395,267
461,734
626,628
301,602
105,138
1,509,348
168,708
2,580,696
80,796
59,364
5,894,014
$ 22,289,281		 AMOUNT
$ 3,187,312
8,611,357
867
1,217,936
77,626
3,143,064
16,710
16,254,872
51,463
524,939
-
136,710
1,580,372
196,190
2,593,931
137,774
52,191
5,273,570
$ 21,528,442		 %
Current assets
1100
Cash and cash equivalents
1136
Financial assets at amortised cost -
current
1150
Notes receivable, net
1170
Accounts receivable, net
1200
Other receivables
130X
Inventories
1479
Other current assets
11XX
Total current assets
Non-current assets
1510
Financial assets at fair value through
profit or loss - non-current
1517
Financial assets at fair value through
other comprehensive income -
non-current
1535
Financial assets at amortised cost -
non-current
1550
Investments accounted for using
equity method
1600
Property, plant and equipment, net
1755
Right-of-use assets
1760
Investment property, net
1840
Deferred income tax assets
1900
Other non-current assets
15XX
Total non-current assets
1XXX
Total assets		 15
40
-
6
-
14
-
75
-
3
-
1
7
1
12
1
-
25
100

(Continued)

–26–

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Liabilities and equity December31,2023
December31,2022
Notes
AMOUNT
%
AMOUNT
%
$ 1,791,770
8
$ 472,677
2
7
39,913
-
27,442
-
301,355
2
271,948
2
494,669
2
581,546
3
7
52,944
-
47,806
-
22,189
-
25,348
-
2,702,840
12
1,426,767
7
6(23)
173,377
1
376,447
2
7
101,640
1
132,962
-
6(13)
42,714
-
41,730
-
317,731
2
551,139
2
3,020,571
14
1,977,906
9
6(14)
4,290,617
19
4,290,617
20
6(15)
3,044,619
13
3,387,781
16
6(16)
5,303,693
24
5,057,967
24
357,817
2
190,514
1
6,502,327
29
6,981,474
32
6(17)
(
230,363 ) (
1 ) (
357,817) (
2)
19,268,710
86
19,550,536
91
9
11
$ 22,289,281
100
$ 21,528,442
100
Current liabilities
2170
Accounts payable
2180
Accounts payable - related parties
2200
Other payables
2230
Current income tax liabilities
2280
Lease liabilities - current
2300
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2570
Deferred income tax liabilities
2580
Lease liabilities - non-current
2600
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity attributable to shareholders of
parent
Share capital
3110
Common stock
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3XXX
Total equity
Significant contingent liabilities and
unrecognized contract commitments
Significant events after the balance
sheet date
3X2X
Total liabilities and equity

The accompanying notes are an integral part of these consolidated financial statements.

–27–

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Items Forthe years endedDecember31
2023
2022
Notes
AMOUNT
%
AMOUNT
%
6(18) and 7
$ 10,496,172
100
$ 12,122,350
100
6(5)(22) and 7
(
7,451,567 )(
71)(
9,399,607)(
77)
3,044,605
29
2,722,743
23
6(22)
(
742,597 ) (
7) (
750,015) (
6)
(
279,454 ) (
3) (
329,213) (
3)
(
132,973 ) (
1) (
137,105) (
1)
6(4)
65
-
295
-
(
1,154,959 )(
11)(
1,216,038)(
10)
1,889,646
18
1,506,705
13
6(3)(19)
394,761
4
114,926
1
6(6)(10)(11)(20)
78,703
1
82,483
1
6(2)(21)
133,172
1
1,643,836
13
6(9)
(
3,320 )
-
(
1,973)
-
6(7)
(
22,128 )
-
10,300
-
581,188
6
1,849,572
15
2,470,834
24
3,356,277
28
6(23)
(
485,999 )(
5)(
901,933)(
8)
$ 1,984,835
19
$ 2,454,344
20
6(13)
( $ 2,159 )
-
$ 5,185
-
6(6)(17)
173,465
1
(
170,069) (
1)
6(7)
1,524
-
(
219)
-
6(17)
(
46,041 )
-
892
-
6(17)(23)
9,208
-
(
178)
-
$ 135,997
1
($ 164,389)(
1)
$ 2,120,832
20
$ 2,289,955
19
$ 1,984,835
19
$ 2,454,344
20
$ 2,120,832
20
$ 2,289,955
19
6(24)
$ 4.63
$ 5.72
$ 4.62
$ 5.71
4000
Operating revenue
5000
Operating costs
5900
Gross profit
Operating expenses
6100
Sales and marketing expenses
6200
Administrative expenses
6300
Research and development expenses
6450
Expected credit impairment gain
6000
Total operating expenses
6900
Operating profit
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7060
Share of (loss) profit of associates
and joint ventures accounted for
using the equity method
7000
Total non-operating income and
expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year
Other comprehensive income (loss)
Components of other
comprehensive income (loss) that
will not be reclassified to profit or
loss
8311
(Loss) gain on remeasurements of
defined benefit plans
8316
Unrealized gain (loss) on financial
assets at fair value through other
comprehensive income
8320
Share of other comprehensive
income (loss) of associates and
joint ventures accounted for using
the equity method
Components of other
comprehensive income (loss) that
will be reclassified to profit or loss
8361
Financial statements translation
differences of foreign operations
8399
Income tax related to components
of other comprehensive income
that will be reclassified to profit or
loss
8300
Other comprehensive income
(loss) for the year
8500
Total comprehensive income
Net profit attributable to:
8610
Shareholders of parent
Comprehensive income attributable to:
8710
Shareholders of parent
Earnings per share (in dollars)
9750
Basic earnings per share
9850
Diluted earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

–28–

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

For the year ended December 31, 2022
Balance at January 1, 2022
Net income for the year
Other comprehensive income (loss)
Total comprehensive income (loss)
Appropriations and distribution of 2021 earnings
Legal reserve
Cash dividends
Special reserve
Cash payment from capital surplus
Net loss on disposal of financial assets at fair value through
other comprehensive income
Expired unclaimed dividends recognized as capital surplus
Balance at December 31, 2022
For the year ended December 31, 2023
Balance at January 1, 2023
Net income for the year
Other comprehensive income (loss)
Total comprehensive income (loss)
Appropriations and distribution of 2022 earnings
Legal reserve
Cash dividends
Special reserve
Cash payment from capital surplus
Net gain on disposal of financial assets at fair value through
other comprehensive income
Expired unclaimed dividends recognized as capital surplus
Balance at December 31, 2023		 Notes Equity attribu ta ble to shareholder s o fthe parent Total equity
Common stock Capital Reserves RetainedEarnings Other EquityInterest
Additional paid-in
capital		 Donated assets
received		 Net assets from
merger		 Legal reserve Special reserve Unappropriated
retained earnings		 Financial
statements
translation
differences of
foreign operations		 Unrealised gains
(losses) from
financial assets
measured at fair
value through
other
comprehensive
income
6(6)(17)
6(16)
6(6)(17)
6(6)(17)
6(16)
6(6)(17)		 $ 4,290,617
-
-
-
-
-
-
-
-
-
$ 4,290,617
$ 4,290,617
-
-
-
-
-
-
-
-
-
$ 4,290,617		 $ 3,691,432
-
-
-
-
-
-
(
343,249 )
-
-
$ 3,348,183
$ 3,348,183
-
-
-
-
-
-
(
343,249 )
-
-
$ 3,004,934		 $ 4,354
-
-
-
-
-
-
-
-
116
$ 4,470
$ 4,470
-
-
-
-
-
-
-
-
87
$ 4,557		 $ 35,128
-
-
-
-
-
-
-
-
-
$ 35,128
$ 35,128
-
-
-
-
-
-
-
-
-
$ 35,128		 $ 4,803,503
-
-
-
254,464
-
-
-
-
-
$ 5,057,967
$ 5,057,967
-
-
-
245,726
-
-
-
-
-
$ 5,303,693


$ 117,244
-
-
-
-
-
73,270
-
-
-
$ 190,514
$ 190,514
-
-
-
-
-
167,303
-
-
-
$ 357,817		 $ 7,083,072
2,454,344
4,966
2,459,310
(
254,464 )
(
2,231,121 )
(
73,270 )
-
(
2,053 )
-
$ 6,981,474
$ 6,981,474
1,984,835
(
635 )
1,984,200
(
245,726 )
(
2,059,496 )
(
167,303 )
-
9,178
-
$ 6,502,327		 ($ 197,932 )
-
714
714
-
-
-
-
-
-
($ 197,218 )
($ 197,218 )
-
(
36,833 )
(
36,833 )
-
-
-
-
-
-
($ 234,051 )		 $ 7,417
-
(
170,069 )
(
170,069 )
-
-
-
-
2,053
-
($ 160,599 )
($ 160,599 )
-
173,465
173,465
-
-
-
-
(
9,178 )
-
$ 3,688		 $ 19,834,835
2,454,344
(
164,389 )
2,289,955
-
(
2,231,121 )
-
(
343,249 )
-
116
$ 19,550,536
$ 19,550,536
1,984,835
135,997
2,120,832
-
(
2,059,496 )
-
(
343,249 )
-
87
$ 19,268,710

The accompanying notes are an integral part of these consolidated financial statements.

–29–

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Net (gain) loss on financial assets at fair value through profit or loss
Share of profit or loss of associates and joint ventures accounted for
using the equity method

Expected credit impairment gain

Gain on disposal of non-current assets held for sale

Loss on disposal of property, plant and equipment

Depreciation

Interest income

Interest expense

Dividend income

Changes in assets and liabilities relating to operating activities
Changes in assets relating to operating activities
Financial assets at fair value through profit or loss - current
Notes receivable
Accounts receivable
Other receivables
Inventories
Other current assets
Changes in liabilities relating to operating activities
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Net defined benefit liability
Other non-current liabilities
Cash inflow generated from operations
Dividends received
Interest received
Income tax paid
Net cash flows provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of financial assets at fair value through profit or
loss - non-current
Acquisition of financial assets at fair value through profit or loss -
non-current
Proceeds from disposal of financial assets at amortised cost
Acquisition of financial assets at amortised cost
Proceeds from disposal of financial assets at fair value through other
comprehensive income

Acquisition of financial assets at fair value through other comprehensive
income
Proceeds from disposal of non-current assets held for sale
Proceeds from disposal of property, plant and equipment
Acquisition of property, plant and equipment

Decrease in guarantee deposits paid
Acquisition of right-of-use assets
Acquisition of investment property

Increase in other non-current assets
Dividends received

Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Decease in guarantee deposits received
Payment of lease liabilities
Cash dividends paid (including cash payment from capital surplus)

Expired unclaimed dividends recognized as capital surplus
Net cash flows used in financing activities
Effect of exchange rate changes
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 For theyears ended December 31
Notes
2023
2022
$ 2,470,834 $ 3,356,277
6(2)(21)
(
38,186 )
8,271
6(7)
22,128 (
10,300 )
6(4)
(
65 ) (
295 )
6(21)
- (
1,324,180 )
6(21)
2
448
6(22)
158,441
194,624
6(19)
(
394,761 ) (
114,926 )
6(9)
3,320
1,973
6(6)(20)
(
21,134 ) (
35,592 )
-
1,517,305
544
1,632
(
29,347 )
404,838
(
28,291 )
93,247
(
1,860,625 )
2,631,761
(
24,552 ) (
3,265 )
1,319,093 (
892,158 )
12,471 (
24,799 )
29,407 (
14,220 )
(
3,159 ) (
63,258 )
(
884 ) (
827 )
-
546
1,615,236
5,727,102
19,874
35,592
388,531
103,776
(
709,760 ) (
756,207 )
1,313,881
5,110,263
-
41,155
(
372,085 )
-
4,592,690
3,113,029
(
4,413,471 ) (
6,150,167 )
6(6)
71,776
6,179
- (
71,611 )
-
1,800,796
-
162
6(25)
(
24,173 ) (
38,325 )
1,893
-
- (
692 )
6(11)
(
489 ) (
4,082 )
(
11,978 ) (
5,262 )
6(7)
10,968
21,885
(
144,869 ) (
1,286,933 )
(
291 )
-
(
49,430 ) (
55,289 )
6(16)
(
2,402,745 ) (
2,574,370 )
87
116
(
2,452,379 ) (
2,629,543 )
(
45,226 ) (
24,581 )
(
1,328,593 )
1,169,206
3,187,312
2,018,106
$ 1,858,719 $ 3,187,312

The accompanying notes are an integral part of these consolidated financial statements.

–30–

Attachment V

TRANSCEND INFORMATION INC.

COMPARISON TABLE FOR THE “RULES AND PROCEDURES OF SHAREHOLDERS’ MEETING”

Proposed Amendment Currentlyin Effect Explanation
Article 3:
Paragraphs 1: Omitted
2. This Corporation shall prepare
electronic
versions
of
the
shareholders meeting notice and
proxy forms, and the origins of
and explanatory materials relating
to
all
proposals,
including
proposals for ratification, matters
for deliberation, or the election or
dismissal of directors, and upload
them to the Market Observation
Post System (MOPS) before 30
days before the date of a regular
shareholders meeting or before 15
days before the date of a special
shareholders
meeting.
This
Corporation
shall
prepare
electronic
versions
of
the
shareholders meeting agenda and
supplemental meeting materials
and upload them to the MOPS
before30 daysbefore the date of
the regular shareholders meeting
or before 15 days before the date
of
the
special
shareholders
meeting. In addition, before 15
days before the date of the
shareholders
meeting,
this
Corporation
shall
also
have
prepared the shareholders meeting
agenda and supplemental meeting
materials and made them available
for review byshareholders at any		 Article 3:
Paragraphs 1: Omitted
2. This Corporation shall prepare
electronic
versions
of
the
shareholders meeting notice and
proxy forms, and the origins of
and explanatory materials relating
to
all
proposals,
including
proposals for ratification, matters
for deliberation, or the election or
dismissal of directors, and upload
them to the Market Observation
Post System (MOPS) before 30
days before the date of a regular
shareholders meeting or before 15
days before the date of a special
shareholders
meeting.
This
Corporation
shall
prepare
electronic
versions
of
the
shareholders meeting agenda and
supplemental meeting materials
and upload them to the MOPS
before21 daysbefore the date of
the regular shareholders meeting
or before 15 days before the date
of
the
special
shareholders
meeting. In addition, before 15
days before the date of the
shareholders
meeting,
this
Corporation
shall
also
have
prepared the shareholders meeting
agenda and supplemental meeting
materials and made them available
for review byshareholders at any		 In line with the
amendment to Article 6
of the “Regulations
Governing the
Documents and
Compliance Matters in
Public Companies’
Shareholders’ Meeting
Handbooks,” public
companies with a capital
of NT$ 2 billion or more
shall disclose the agenda
handbook and other
relevant information 30
days prior to the regular
shareholders’ meeting.

–31–

ProposedAmendment Currentlyin Effect Explanation
time. The meeting agenda and
supplemental materials shall also
be displayed at this Corporation
and the professional shareholder
services agent designated thereby
as well as being distributed on-site
at the meeting place.		 time. The meeting agenda and
supplemental materials shall also
be displayed at this Corporation
and the professional shareholder
services agent designated thereby
as well as being distributed on-site
at the meeting place.
  • 32 -

Attachment VI

TRANSCEND INFORMATION, INC.

THE NOMINATION LIST OF DIRECTORS

(NON-INDEPENDENT DIRECTOR)

Name Shares Education Experience Presentposition
SHU,
CHUNG-
WON		 10,709,453
Department of
Electrical Engineering,
National Cheng Kung
University		 Project Manager of
Hewlett-Packard Development
Company, L.P.		 Chief Executive Officer:
- Transcend Information, Inc.
Chairman of the board of directors:
- Taiwan IC Packaging Corporation
Director:
- C-TECH Corporation
- Transcend Information Trading GmbH
General Manager
- Transcend Information Inc.
- Transcend Information Trading GmbH
Independent Director:
- Sports Gear Co., Ltd.
SHU,
CHUNG-
CHENG		 5,034,098 Department of Civil
Engineering, National
Taipei Institute of
Technology		 General Manager of Transcend
Information, Inc.		 Chairman of the board of directors:
- C-TECH Corporation
- Cheng Chuan Technology Development
Inc.
- Shu Min Investment Inc.
Executive director:
- Transtech Trading (Shanghai) Co., Ltd.
Director:
- Wan An Technology Inc.
- Won Chin Investment Inc.
- Wan Min Investment Inc.
- Wan Chuan Investment Inc.
- Saffire Investment Ltd.
- Memhiro Pte. Ltd.
Consultant:
- Transcend Information, Inc.
  • 33 -
Name Shares Education Experience Presentposition
SHU,
DAO-AN		 153,000 National Taiwan
University
MBA, Global Business
University of
California, Los Angeles
B.S.,Electrical and
Electronics Engineering		 Marketing Director of Transcend
Information, Inc.
Industrial Control Business
Manager of Transcend Information,
Inc.
Product Manager of Transcend
Information, Inc.
Procurement Director of Transcend
Information, Inc.
CHENG,
YAN-WEI		 950,000 National Taipei Institute
of Technology
Chairman of the board of director
of Hitron Technologies, Inc.
Chairman of the board of director
of Interactive Digital
Technologies Inc.		 Chairman of the board of directors:
- Artmo Inc.
Director:
- Sports Gear Co., Ltd.
Independent Director:
- TPK HoldingCo.,Ltd.
JIAYUN
INVESTM
ENT INC.		 10,000 - - -
  • 34 -

(INDEPENDENT DIRECTOR)

Name Shares Education Experience Presentposition
KUO,
TSUNG-MING		 0 Institute of National
Taiwan University
EMBA Accounting
Department of
Accounting, Taipei
University		 Deputy Director of PwC Taiwan and
Certified Public Accountant serving
as the primary consultant for
high-net-worth family business
succession planning and
consultation services.
COO, Tax and Legal Services, PwC
Taiwan
Director, Cultural and Creative
Industries Promotion Program, PwC
Taiwan
Adjunct Professor at the Executive
Master of Business Administration
Program, College of Management,
Tunghai University
Adjunct Associate Professor,
In-service Master
Program of Accounting, National
Taipei University
Vice President, National Taipei
University Alumni Association
Managing Supervisor, NTU
Children’s Health Foundation
Director, International Leadership
Association
Director, Tai-Fu Startup Association
Director, Creativities, Innovation
and Entrepreneurship Association
Director, Taiwan CPA Association
Chairman, Accounting Department
Association, National Taipei
University
Managing Supervisor, Chung-Hua
Institute International Taxation
Association
Lecturer of Accounting Research
and Development Foundation

Independent Director:
- BRIM Biotechnology, Inc.
- China Bills Finance
- XAVI Technologies Corp.
Supervisor:
- CommonWealth Magazine Co., Ltd.
- Common Life Publishing Co., Ltd.
- Screenworks Asia LTD.
- Tung Hua Books Co., Ltd
- New Moon Education Co., Ltd
- Kai Ming Bookstore Co., Ltd.
  • 35 -
Name Shares Education Experience Presentposition
Certified Financial Planner (CFP)
Lecturer, Taipei Foundation of
Finance
Visiting lecturer of National Taiwan
University and Soochow University
Director of the Family Office
Association Hong Kong and
Chairman of the Taxation
Professional Committee
CHEN,
SHI-HONG		 38,463 Department of
Electrical Engineering,
College of Engineering,
Datong University		 Director and General Manager of
Hitachi Asia Pacific Co., Ltd.
Taiwan
Hitachi, Ltd. Taiwan Representative		 -
LIN,
JIA-XING		 0 Department of
Electrical Engineering,
College of Engineering,
Datong University		 Chairman of the board of director of
Elpida Memory (Taiwan) Co., Ltd.
Director of Walton Advanced
Engineering, Inc.
Micron Technology Director of
Worldwide Sale, SSG、Director of
Sale, Asia、Director of Corporate
Development, Asia、Director of
Sale, Great China
Micron Technology Asia Pacific
Taiwan Branch Legal Representaive		 Independent Director:
- Zimmite Taiwan Ltd.
- Grandsys Inc.
- Kingmax Digital Inc
LIN,
SHU-SHAN		 27,599 Institute of Science and
Technology
Management, Jiaotong
University		 Vice President, China Development
Industrial Bank
Product Manager, Philips Taiwan
Institutional Director Representative
of Wendell Industrial Co., Ltd.
Institutional Director Representative
of ANPEC Electronics Corporation
Institutional Supervisor
Representative of ASPEED
Technology Inc.		 General Manager:
-China Development Advantage
Venture Capital Limited Partnership
-Innolux Development Venture
Capital Limited Partnership
Legal person director representative:
-TCLAD Technology Corp.
Senior Deputy General Manager:
-CDIB Capital Management Corp.
  • 36 -

Attachment VII

TRANSCEND INFORMATION, INC. THE CONCURRENT POSITIONS OF DIRECTORS

Category Name Concurrent Position
Director SHU,
CHUNG-WON		 ■Chairman of Taiwan IC Packaging Corporation
■Director of C-TECH Corporation
■Independent Director of Sports Gear Co., Ltd
Director SHU,
CHUNG-CHENG
■Chairman of
- C-TECH Corporation
- Cheng Chuan Technology Development Inc.
- Shu Min Investment Inc.
■Director of
- Wan An Technology Inc.
- Won Chin Investment Inc.
- Wan Min Investment Inc.
- Wan Chuan Investment Inc.
Director CHENG,
YAN-WEI		 ■Chairman of the board of directors of Artmo Inc.
■Director of Sports Gear Co., Ltd.
■Independent Director of TPK Holding Co., Ltd.
Independent Director KUO,
TSUNG-MING		 ■Independent Director of
- BRIM Biotechnology, Inc.
- China Bills Finance
- XAVI Technologies Corp.
■Supervisor of
- CommonWealth Magazine Co., Ltd.
- Common Life Publishing Co., Ltd.
- Screenworks Asia LTD.
- Tung Hua Books Co., Ltd
- New Moon Education Co., Ltd
- Kai Ming Bookstore Co., Ltd.
  • 37 -
Category Name Concurrent Position
Independent Director LIN,
JIA-XING		 ■Independent Director of
- Zimmite Taiwan Ltd.
- Grandsys Inc.
- Kingmax Digital Inc
Independent Director LIN,
SHU-SHAN		 ■General Manager of China Development Advantage Venture Capital
Limited Partnership and Innolux Development Venture Capital Limited
Partner
■Legal person director representative of TCLAD Technology Corp.
■Senior Deputy General Manager of CDIB Capital Management Corp.
  • 38 -

APPENDIX I

TRANSCEND INFORMATION, INC.

RULES AND PROCEDURES OF SHAREHOLDERS’ MEETING (Before amendment)

  • Article 1: To establish a strong governance system and sound supervisory capabilities for this Corporation's shareholders meetings, and to strengthen management capabilities, these Rules are adopted pursuant to Article 5 of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.

  • Article 2: The rules of procedures for this Corporation's shareholders meetings, except as otherwise provided by law, regulation, or the articles of incorporation, shall be as provided in these Rules.

  • Article 3: Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be convened by the board of directors.

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

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

Election or dismissal of directors, amendments to the articles of incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1 of the Company Act, Articles 26-1 and 43-6 of the Securities and Exchange Act and Articles 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out and the essential contents explained in the notice of the reasons for convening the shareholders meeting. None of the above matters may be raised by an extraordinary motion. Where re-election of all directors as well as their inauguration date is stated in the notice of the reasons for convening the shareholders meeting, after the completion of the re-election in said meeting such inauguration date may not be altered by any extraordinary motion or otherwise in the same meeting.

A shareholder holding one percent or more of the total number of issued shares may submit to this Corporation a proposal for discussion at a regular shareholders meeting. The number of items so proposed is limited to one only, and

  • 39 -

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

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

Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. The shareholder making the proposal shall be present in person or by proxy at the regular shareholders meeting and take part in discussion of the proposal.

Prior to the date for issuance of notice of a shareholders meeting, this Corporation shall inform the shareholders who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. At the shareholders meeting the board of directors shall explain the reasons for exclusion of any shareholder proposals not included in the agenda.

  • Article 4: For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by this Corporation and stating the scope of the proxy's authorization.

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

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

  • Article 5: The venue for a shareholders meeting shall be the premises of this Corporation, or a place easily accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting.

  • Article 6: Shareholders and their proxies (collectively, "shareholders") shall attend shareholders meetings based on attendance cards, sign-in cards, or other certificates of attendance. This Corporation may not arbitrarily add requirements for other documents beyond those showing eligibility to attend presented by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for verification.

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

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

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

  • Article 7: If a shareholders meeting is convened by the board of directors, the meeting shall be chaired by the chairperson of the board. When the chairperson of the board is on leave or for any reason unable to exercise the powers of the chairperson, the vice chairperson shall act in place of the chairperson; if there is no vice chairperson or the vice chairperson also is on leave or for any reason unable to exercise the powers of the vice chairperson, the chairperson shall appoint one of the managing directors to act as chair, or, if there are no managing directors, one of the directors shall be appointed to act as chair. Where the chairperson does not make such a designation, the managing directors or the directors shall select from among themselves one person to serve as chair.

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

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

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

  • Article 8: This Corporation, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures.

  • The recorded materials of the preceding paragraph shall be retained for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

  • Article 9: Attendance at shareholders meetings shall be calculated based on numbers of shares. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in plus the number of shares whose voting rights are exercised electronically.

The chair shall call the meeting to order at the appointed meeting time and disclose information concerning the number of nonvoting shares and number of shares represented by shareholders attending the meeting.

However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair

may announce a postponement, provided that no more than two such postponements, for a combined total of no more

  • 41 -

than one hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned.

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

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

  • Article 10: If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. Votes shall be cast on each separate proposal in the agenda (including extraordinary motions and amendments to the original proposals set out in the agenda). The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting.

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

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

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

  • Article 11: Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair.

A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.

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

When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chair shall stop any violation. When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one of the representatives so appointed may speak on the same proposal.

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

Article 12: Voting at a shareholders meeting shall be calculated based on the number of shares.

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

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

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

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

Article 13: A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Article 179, paragraph 2 of the Company Act.

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

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

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

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

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

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

Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

  • Article 14: The election of directors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by this Corporation, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected, and the names of directors not elected and number of votes they received.

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

  • Article 15: Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form. This Corporation may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS.

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

  • Article 16: On the day of a shareholders meeting, this Corporation shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at the place of the shareholders meeting.

If matters put to a resolution at a shareholders meeting constitute material information under applicable laws or regulations or under Taiwan Stock Exchange Corporation regulations, this Corporation shall upload the content of such resolution to the MOPS within the prescribed time period.

  • Article 17: Staff handling administrative affairs of a shareholders meeting shall wear identification cards or arm bands. The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."

At the place of a shareholders meeting, if a shareholder attempts to speak through any device other than the public

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address equipment set up by this Corporation, the chair may prevent the shareholder from so doing.

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

  • Article 18: When a meeting is in progress, the chair may announce a break based on time considerations. If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

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

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

  • Article 19: These Rules shall take effect after having been submitted to and approved by a shareholders meeting. Subsequent amendments thereto shall be effected in the same manner.

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APPENDIX II

TRANSCEND INFORMATION, INC. ARTICLES OF INCORPORATION

Section I - General Provisions

Article 1 ： The Corporation shall be incorporated, as a company limited by shares, under the Company Law of the Republic of China, and its name shall be 創見資訊股份有限公司 in the Chinese language, and Transcend Information, Inc. in the English language.

Article 2 ： The scope of business of the Corporation shall be as follows:

  1. CC01110 Computers and Computing Peripheral Equipments Manufacturing

  2. CC01120 Data Storage Media Manufacturing and Duplicating

  3. F113050 Wholesale of Computing and Business Machinery Equipment

  4. F118010 Wholesale of Computer Software

  5. F119010 Wholesale of Electronic Materials

  6. F401010 International Trade

  7. I301010 Software Design Services

  8. CC01080 Electronic Parts and Components Manufacturing

  9. F401021 Restrained Telecom Radio Frequency Equipments and Materials Import

  10. CC01101 Restrained Telecom Radio Frequency Equipments and Materials Manufacturing

  11. ZZ99999 In addition to licensing business, business law may prohibit or restrict non-business.

  12. Article 3 ： The Corporation shall have its head office in Taipei City, Taiwan, Republic of China, and shall be free, upon the resolutions of Board of Directors to set up branch offices in Republic of China and abroad wherever and whenever the Corporation deems it necessary or advisable to carry out any or all of its activities.

  13. Article 4 ： The total amount of the Corporation’s reinvestment shall not be subject to the restriction of not more than forty percent of the Corporation’s paid-up capital as provided in the Company Law but shall not be more than the Corporation’s paid-up capital. The Corporation may provide endorsement and guarantee and act as a guarantor. Any matters regarding the reinvestment shall be resolved in accordance with the resolutions of the Board of Directors.

Article 5 ： Public announcements of the Corporation shall be made in accordance with the Article 28 of the Company Act.

Section II - Capital Stock

  • Article 6 ： The total capital stock of the Corporation shall be in the amount of 5,000,000,000 New Taiwan Dollars, divided into 500,000,000 shares, at ten New Taiwan Dollars each. The Board of directors is authorized to issue the shares in separate

  • 46 -

installments as required. A total of 25,000,000 shares among the above total capital stock should be reserved for issuing employee stock options. The Board of directors is authorized to issue employee stock options from time to time.

  • Article 6-1 ： If the Corporation issue employee stock options on the exercise price under the market price, it shall be issued after the resolution of the Shareholders’ meetings in accordance with relevant rules and regulations of the Republic of China. Employees, including the employees of parents or subsidiaries of the company meeting certain specific requirements, are entitled to receive employee stock options. Such specific requirements shall be prescribed by the board of directors.

  • Article 6-2 ： The Corporation may issue shares without printing share certificate(s), but shares issued shall be registered with a securities depository enterprise.

  • Article 7 ： All stock transaction conducted by shareholders of the Corporation shall follow the “Guidelines for Stock Operations for Public Companies”.

  • Article 8 ： Registration for transfer of shares shall be suspended 60 days immediately before the date of regular meeting of shareholders, and 30 days immediately before the date of any special meeting of shareholders, or within 5 days before the day on which dividend, bonus, or any other benefit is scheduled to be paid by the Corporation.

  • Article 8-1 ： When the Company issue new shares, employees who are entitled to subscribe for new shares include employees of parent or subsidiaries of the Company meeting certain specific requirements.

  • When the Company issue restricted stocks, employees who are entitled to receive restricted stock include employees of parent or subsidiaries of the Company meeting certain specific requirements.

  • When the Company buy back stocks to transfer to employees, employees who are entitled to receive buyback stocks include employees of parent or subsidiaries of the Company meeting certain specific requirements.

Section III - Shareholders’ meetings

  • Article 9 ： Shareholders’ meetings of the Corporation are of two types, namely: (1) regular meetings and (2) special meetings. Regular meetings shall be convened at least once a year, and within 6 months after the close of each fiscal year.

  • Special meetings shall be convened in accordance with applicable laws and regulations whenever necessary. Written notices shall be sent to all shareholders, at least 30 days in advance; and at least 15 days in advance, in case of special meetings.

  • Article 10 ： If a shareholder is unable to attend a meeting, he/she may appoint a proxy to attend it by using the proxy form issued by the Company and specifying the scope of proxy. Shareholder attendance by proxy shall be subject to the Company Law and also to the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies issued by the competent authority.

  • Article 11 ： Each share of stock shall be entitled to one vote.

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  • Article 12 ： Except as provided in the Company Law of the Republic of China, shareholders’meetings may be held if attended by shareholders more than one half of the total issued and outstanding capital stock of the Corporation, and resolutions shall be adopted at the meeting with the concurrence of a majority of the votes held by shareholders present at the meeting. Pursuant to Article 177-1 of the Company Act, the shareholders may vote via written form or an electronic voting system, and the manner or voting shall be clearly stated in each meeting notice.

Section IV - Directors

  • Article 13 ： The Corporation shall have seven to eleven Directors. The Board of Directors is authorized to determine the number of Directors, to be elected by the shareholders meeting from among candidates with legal capacity. The term of office for Directors shall be 3 years, and all Directors shall be eligible for re-election. Once the term of office is expired and it can’t elect directors immediately, directors can extend and continue the performance of their duties until the election of directors to take office. The aggregate shareholding percentages of the entire bodies of directors shall comply with the regulations prescribed by the securities supervisory authorities. The board of directors is authorized to resolve the rates of directors’ remuneration based on the extent of their participation in the Company’s business operations or value of their contribution, at a level consistent with general practices in the industry.

  • The company shall acquire liability insurance for all directors within their term of office, and report to Board at the next board meeting.

  • Article 13-1 ： To harmonize with Article 14-2 of the Securities and Exchange Act, there shall be at least three independent directors among the Company's directors. A candidate nomination system shall be adopted, and the shareholders meeting shall elect all directors (including independent directors) from among those listed on the slate of director candidates. The relevant regulations of the competent securities authority shall be followed regarding the professional qualifications, shareholding, moonlighting restrictions, nomination and election, and other compliance requirements regarding independent directors.

  • Article 13-2 ： In compliance with Articles 14-4 of the ROC Securities and Exchange Law, the Corporation shall establish an Audit Committee, which shall consist of all independent directors. The Audit Committee shall exercise their functions in accordance with the ROC Company Law, Securities and Exchange Law, other relevant regulations and the procedure of corporation.

  • Article 14 ： The board of directors shall consist of the directors of the company, and the chairman of the board of directors shall be elected from among the directors by a majority of directors in attendance at a meeting attended by at least two-thirds of the directors. The chairman of the board of directors shall represent the Company in external matters. The board of director may set up any functional committee.

  • Article 15 ： Board of Directors Meetings shall be convened by the Chairman of the Board of Directors. Except as otherwise provided in the Company Act, resolutions of the Board of Directors shall be adopted by a majority of the directors at a meeting attended by a majority of the directors.

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  • Article 15-1 ： Each director shall be given at least 7 days advance notice of the convening of a board of directors meeting of the Corporation. In emergency circumstances, however, a meeting may be convinced on shorter notice. The meeting notice referred to in the preceding paragraph shall specify the reasons for convening the meeting, and shall be made in writing, by e-mail, or by facsimile.

  • Article 16 ： The Chairman of the Board of Directors shall preside over all meetings of the Board of Directors. If the Chairman of the Board of Directors is on leave or cannot exercise powers or perform duties for any reason, an acting chairman shall be designated in accordance with Article 208 of the Company Act. Directors shall attend meetings of the board of directors in person. If a director is unavailable to attend a meeting in person, the director may appoint a proxy for the given meeting specifying the scope of the authorized powers to authorize another director to attend the meeting on the director's behalf, provided that a director may represent only one other director at a meeting.

Article 17 ： Duties of the Board of the Directors are as follows:

  1. To propose concerning appropriation of net profits or covering of losses.

  2. To propose increasing or decreasing capital

  3. To establish or dissolve branches

  4. To approve budget and final reports

  5. Other duties in accordance with Company Act or given by the resolution of shareholders’meeting

Section V - Managerial Officers

  • Article 20 ： The Company may have managerial officers, whose appointment, dismissal, and remuneration shall be handled in accordance with Article 29 of the Company Act.

Section VI - Accounting

  • Article 21 ： After the close of each fiscal year, the Board of Directors shall prepare 1.Business Report 2. Financial Statements and 3.Proposal Concerning Appropriation of Net Profits or Covering of Losses, and submitted to the regular shareholders’ meeting for acceptance:

  • Article 22 ： If the Company has earnings after the annual final accounting, it shall pay remuneration to employees at the minimum of

  • 1% of the profit, and pay remuneration to directors at the maximum of 0.2% of the profit. However, the Company's accumulated losses shall have been covered.

Employees’ remuneration could be paid by cash or stock. Employees shall mean the employees of parent or subsidiaries

  • of the company meeting certain specific requirements. Such specific requirements shall be prescribed by the board of directors.

  • Article 22-1 ： If the Company has earnings after the annual final accounting, it shall be allocated in the following order:

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  • To pay taxes.

  • To cover accumulated losses, if any.

  • To appropriate 10% legal reserve unless the total legal reserve accumulated has already reached the amount of the Company’s authorized capital.

  • To appropriate or reverse special reserve in accordance with the regulations

  • To reserve certain amount, on the premise that there is no effect on the Company’s normal operations and no violation of regulations, for maintaining stability of dividends.

  • For any remainder, adding on accumulated unappropriated retained earnings, the board of directors shall propose the earnings distribution proposal and shall handle in accordance with the following provision: the board of directors is authorized to distribute dividends and bonuses or legal reserve and capital reserve in whole or in part which be paid in cash after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting in accordance with Section 5 of Article 240 and Article 241 of the Company Act. In case of the dividends and bonuses or legal reserve and capital reserve in whole or in part be distributed in the form of new shares to be issued by the company, shall be proposed to the shareholders' meeting for review and approval by a resolution in accordance with Article 240 of the Company Act.

Regarding the special reserve under subparagraphs 4, the Company shall set aside special reserve, equal to the debit balance which happens at the current year on other equity items (including unrealized loss on financial instrument, cumulative translation adjustment, and unrecognized pension cost, which can be combined if there are unrealized gain.), from the current earnings after tax and unappropriated retained earnings prior year. If the debit balance is cumulative before, the Company shall set aside special reserve not to distribute it from the unappropriated retained earnings prior year. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

  • Article 22-2 ： The Company distributes dividends taking into consideration the Company's economic environment and growth phases, future demands of funds, long-term financial planning, and the cash flows that the stockholders desire. Cash dividends shall account for at least 5% of the total dividend distributed.

Section VII - Supplementary Provisions

Article 23 ： In regard to all matters not provided for in these Articles of Incorporation, the Company Act of the Republic of China shall govern.

  • Article 24 ： These Articles of Incorporation were adopted on August 23, 1989.

The first amendment was made on January 28, 1991.

The second amendment was made on May 25, 1992. The third amendment was made on September 1, 1992.

The fourth amendment was made on July 30, 1994.

The fifth amendment was made on June 8, 1995.

The sixth amendment was made on July 8, 1997.

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The seventh amendment was made on August 15, 1997. The eighth amendment was made on September 12, 1997. The ninth amendment was made on June 20, 1998. The 10th amendment was made on September 15, 1998. The 11th amendment was made on June 12, 1999. The 12th amendment was made on April 15, 2000. The 13th amendment was made on April 9, 2001. The 14th amendment was made on June 10, 2002. The 15th amendment was made on June 3, 2003. The 16th amendment was made on June 11, 2004. The 17th amendment was made on June 13, 2005. The 18th amendment was made on June 14, 2006. The 19th amendment was made on June 11, 2007. The 20th amendment was made on June 13, 2008. The 21st amendment was made on June 16, 2009. The 22nd amendment was made on June 17, 2010. The 23rd amendment was made on June 10, 2011. The 24th amendment was made on January 5, 2012. The 25th amendment was made on June 13, 2013. The 26th amendment was made on June 12, 2014. The 27th amendment was made on June 14, 2016. The 28th amendment was made on June 12, 2019. The 29th amendment was made on June 19, 2020.

Transcend Information, Inc. Chairman: Shu, Chung-Won

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APPENDIX III

TRANSCEND INFORMATION, INC. PROCEDURES FOR ELECTION OF DIRECTOR

  • Article 1: Elections of directors shall be conducted in accordance with these Procedures. Elections of directors at this Corporation shall be conducted in accordance with the candidate nomination system, carefully review the qualifications of a nominated candidate and the existence of any other matters set forth in Article 30 of the Company Act, and act in accordance with Article 192-1 of the Company Act. The professional qualifications, restrictions on both shareholding and concurrent positions held, determination of independence, method of nomination and other requirements with regard to the independent directors shall be set forth in accordance with the Securities and Exchange Act, the Regulations Governing Appointment of Independent Directors and Compliance Matter for Public Companies, and the rules and regulations of the Taiwan Stock Exchange.

  • Article 2: In the election of directors of this Company, each share shall have voting rights equivalent to the number of seats to be elected and such voting rights can be combined to vote for one person or divided to vote for several persons. The election of independent directors and non-independent directors shall be held together; provided, however, that the number of independent directors and non-independent directors elected shall be calculated separately.

  • Article 3: The Board of Directors shall prepare ballots equivalent to the number of seats to be elected and note the number of voting rights to distribute to the attended shareholders.

  • Article 4: Before the election, the Chairman shall appoint several persons each to check and record the ballots to carry out related duties.

  • Article 5: In the election of directors of this Company, the ballot box used for voting shall be prepared by Board of Directors and checked in public by the person to check the ballots before voting.

  • Article 6: Ballots shall be deemed void under the following conditions:

  • Ballots not prepared in accordance with the rules;

  • Blank ballots placed in the ballot box;

  • Illegible writing or altered ballots;

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

  • Ballots with other written the number of votes cast for the candidate;

  • Two or more candidates filled in one ballot.

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  • Article 7: In the election of directors equal to the number stated in the Article of Incorporation of this Company, candidates who acquire more votes sequentially should win the seats of directors. If two or more persons acquire the same number of votes and the number of such persons exceeds the specified seats available, such persons acquiring the same votes shall draw lots to decide who should win the seats available, and the Chairman shall draw lots on behalf of the candidate who is not present. If the director elected was checked that his/ her personal information is un-conformed or he/ she is not applied for related regulations, the position left vacant by such decision shall be filled by the candidate with the next highest number of votes in the original election.

  • Article 8: The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, shall be announced by the chair on the site. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

  • Article 9: This Company shall issue notifications to the directors elected.

  • Article 10: Matters on which these Bylaws are silent shall be handled in accordance with the Articles of Incorporation of the Corporation, the Company Act, and applicable laws and regulations.

  • Article 11: These Rules shall be effective from the date it is approved by the Shareholders' Meeting. The same applies in case of revision.

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APPENDIX IV

TRANSCEND INFORMATION, INC. SHAREHOLDINGS OF ALL DIRECTORS

1. Minimum Required Shareholding and Shareholding of all Directors:

Title Minimum Required
Shareholding by all Directors		 Current Shareholding (Shares)
Directors 16,000,000 16,120,795

Note 1: The period of Book closure is from April 23, 2024 to June 21, 2024.

Note 2: The Company has three independent directors, and the minimum required shareholding by all Directors except for independent directors is downsized to 80% of the minimum required based on Article 2, paragraph 2 of “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies”.

2. Company’s current Directors’ shareholding are as follows on April 23, 2024:

Title Name Current Shareholding
(Shares)		 Note
Chairman SHU,CHUNG-WON 10,709,453 Note 1
Director SHU,CHUNG-CHENG 5,034,098
Director CHUI,LI-CHU 0
Director HSU,CHIA-HSIAN 377,244
Director CHEN,PO-SHOU 0
Director WU,KUAN-DE 0
Independent Director CHEN,YI-LIANG 0
Independent Director CHEN,LO-MIN 0
Independent Director WANG,YI-HSIN 0
Total 16,120,795

Note 1: As of April 23, 2024, the personal shareholding of Director Shu, Chung-Won was 5,409,453 shares, and he retained the right to decide the exercise of the 5,300,000 shares. The total amount was 10,709,453 shares.

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