TRI — Annual Report 2021

Jul 8, 2021

Stock code: 3030

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Handbook for 2021 Shareholders Meeting of Test Research, Inc.

(Translation)

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Table of Contents

Meeting Agenda ------------------------------------------------------------------------------- 1 Reporting Items -------------------------------------------------------------------------------- 2 Approval Items -------------------------------------------------------------------------------- 2 Incidental Motions ---------------------------------------------------------------------------- 3 Appendices I. Annual Business Report --------------------------------------------------------------------------- 4 II. Audit Committee’s Review Report -------------------------------------------------------------- 5 III. CPA Audit Report and Financial Statements --------------------------------------------------- 6 IV. Earnings Distribution Statement --------------------------------------------------------------- 26 V. The Company’s Articles of Association ------------------------------------------------------ 27 VI. The Company’s Rules Governing the Shareholders Meeting----------------------------- 31 VII. Current Shareholdings of All Directors ----------------------------------------------------- 32 VIII. Any Other Matters Need to be Specified --------------------------------------------------- 32

2021 Shareholders Meeting Agenda

of Test Research, Inc.

• I. Time: 9:00 a.m. on May 26 (Wednesday), 2021

• II. Venue : 3F(Training Room of the Company), No. 36-1,Huangxi Street, Shilin District, Taipei City

III. Meeting Agenda

1. Call meeting to order

2. Chairman gives the opening address

3. Reporting items:

4. (1) 2020 Annual Business Report.

5. (2) Audit Committee’s Review Report on 2020 Financial Statements.

6. (3) 2020Employees' and Directors’ Remuneration Proposal.

7. Approval items:

8. (1) Adoption of 2020Financial Statements.

9. (2) Adoption of 2020 Earning Distribution Plan.

10. Incidental motions

11. Adjournment

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Reporting Items

Proposal 1: 2020 Annual Business Report.

Explanatory Notes: Please refer to Appendix 1 of this Handbook.

Proposal 2: Audit Committee’s Review Report on 2020 Financial Statements. Explanatory Notes: Please refer to Appendix 2 of this Handbook.

Proposal 3: 2020 Employees' and Directors’ Remuneration Proposal. Explanatory Notes:

• (1) 2020 employees’ remuneration and directors’ remuneration resolved is NT$ 21,602,182 and NT$11,128,394 respectively, and the above amount will be paid in cash.

• (2) The resolution amount doesn’t have any difference from the amount of expense recognized for 2020.

Approval Items

Proposal 1: Adoption of 2020 Financial Statements (Proposed by the Board of Directors) Explanatory Notes:

• (1) 2020 Business Report and Financial Statements (including the consolidated financial statements) are passed upon the resolution of the Board. The Financial Statements (including the consolidated financial statements) are audited by the CPA. The above reports are reviewed by the Audit Committee.

• (2) Please refer to the Appendix 1 and Appendix 3 of the Handbook.

Resolution:

Proposal 2: Adoption of 2020 Earning Distribution Plan (Proposed by the Board of Directors) Explanatory Notes:

• (1) This earning distribution plan firstly considers the earning of 2020, and then distributes the undistributed profits after 1998. The common shares are distributed with cash dividend of NT$3.3 per share.

• (2) For 2020 Earning Distribution Table, please refer to Appendix 4 of the Handbook.

• (3) As for the cash dividend distribution, the Board is authorized to settle the related affairs after it is passed in the Shareholders Meeting.

• (4) The Chairman is authorized to contact specific person to adjust the sum of fractional amount of the cash dividend less than NT$1.

• (5) In the event that, the transfer, exchange and cancellation of shares or buyback of shares of the Company affects the amount of outstanding shares and the payout ratio for shareholders, it is proposed that the Board of Directors be authorized to change the related affairs.

Resolution:

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Incidental Motions

A rnment djou

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Appendix 1

Business Report to Shareholders

Dear Shareholders:

The consolidated revenue of the Company in 2020 was NT$4.951 billion with after-tax profits totaled NT$1.093 billion. The revenue was increased by 13% compared with NT$4.387 billion in 2019, and the after-tax net profit was increased by 16% compared with NT$939 million in 2019.

As shown in the consolidated financial statements, the net operating profit margin of the Company last year was 29%, the after-tax profit margin was 22%, the return on equity was 20%, return on assets was 16%, and debt ratio was 19%. The overall financial condition of the Company was robust and good.

Main reasons for the Company’s revenue and profit growth in 2020 were: (1) demand for automatic inspection equipment from customers in Taiwan and mainland China increased (2) competitiveness of products raised (3) new products commercialized (4) demands on automatic X- ray inspection equipment increased (5) Being close to customers and working closely with major international manufacturers. All the above factors resulted in the increasing revenue and profits for the Company throughout the year.

• The business policy, production and sales policy, development strategy and expected sales volume in the future:

The Company's already build up the competitiveness and a solid foundation of three technologies of automatic inspection equipment: image optics (AOI, SPI), X-RAY, and board tester (ICT, FCT). To cope with the continuous increased demand for automatic inspection equipment, the Company will: (1) Continuously improve and enhance the product functions to achieve the leading market position on technology (2) Continuously improve the product quality, enhance the stability and reliability of the machinery. (3) Develop new demands for automatic inspection equipment in the automotive electronics, semiconductors, telecommunications, and server industries. (4) Close to customers. Work closely with major international manufacturers to provide customers with a total solution for automatic inspection. (5) Exploit the global market. Increase the market share of the Company's products globally to achieve the Company’s objective to be a leading brand in the industry. Due to the recovery of the global economy and the improvement of the Company's product competitiveness, it is expected that the sales volume will grow continuously this year.

• ●Influence of external competitive environment, regulatory environment and overall operation environment on the Company:

During the COVID-19 pandemic, the Company has been endeavored to increase the overall competitiveness through active product development, quality improvement, market development, and production of customer-ordered machines continuously. As facing the global competition, the Company will continue to improve in "leading technology", "quality reliability and stability", and "global market expansion", and will adjust the company's essence continuously. I believe that the company will continue to grow in the future.

Thanks for the support from all shareholders who bring opportunities for continuous growth of the Company.

Sincerely

Chairman: Chieh-Yuan,Chen

Accounting Chief: Kaun-Yuan, Chen

Manager: Chieh-Yuan,Chen

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Appendix 2

Audit Committee’s Review Report

The Board of Directors prepares the 2020 Business Report, Financial Statements

(including consolidated financial statements) and Earning Distribution Plan. PwC Taiwan audits the Financial Statements and presents the report. The above Business Report, Financial Statements and Earning Distribution Plan are reviewed by the Audit Committee, and no incompliance is found. The above report is presented as required by Article 14-4 of Securities and Exchange Act, Article 219 of the Company Act, for further inspection.

Convener of TRI Audit Committee: Mei-Jing, Chen

Feb. 25, 2021

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Appendix 3

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 20003750

To the Board of Directors and Shareholders of Test Research, Inc.

Opinion

We have audited the accompanying parent company only balance sheets of Test Research, Inc. (the “Company”) as at December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

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

Basis for opinion

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

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company’s 2020 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 2020 parent company only financial statements are stated as follows:

Valuation of inventories

Description

Refer to Note 4(9) for accounting policies adopted for the valuation of inventories, Note 5 for critical accounting estimates and assumptions related to the valuation of inventories, and Note 6(3) for details of inventories. As of December 31, 2020, inventory and allowance for valuation losses are NT$884,280 thousand and NT$112,350 thousand, respectively.

The Company is primarily engaged in the design, manufacture, sales, repairs and maintenance of automated inspection and testing equipment, and inventories are stated at the lower of cost and net realisable value. Management considers the rapidly changing technology and the short life cycle of electronic products in evaluating inventories. For inventories that are over a certain aging and individually identified obsolete or slowmoving items, the net realisable value is determined based on inventory aging and the market demand of such items in the future for a specific period, which are based on sales, obsolescence and the inventory quality. As the amount of inventory is significant, involves numerous items, and the valuation of inventory requires critical judgement and a high degree of uncertainty in estimation, we consider the valuation of inventory a key audit matter.

How our audit addressed the matter

Our audit procedures performed in respect of the above included the following:

1. Understanding the industry and operations of the Company, and assessing the reasonableness of accounting policies applied in determining the adequacy of inventory provision.

2. Understanding the inventory management processes, examining the annual physical count plan, and performing physical inventory observation to assess the effectiveness of judgement and control over obsolete or slow-moving inventory.

3. Obtaining inventory aging report and testing movements to confirm whether they are assigned to the correct aging category and are in accordance with the Company’s accounting policy. We also recalculated to check the adequacy of the allowance for valuation losses.

4. Analysing and comparing the difference of inventory valuation losses between the latest two years and examining supporting evidences in relation to allowance for slow-moving inventory valuation losses, which were individually identified by the management based on the inventory clearance condition, to assess the propriety of inventory valuation losses.

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Cutoff of export revenue recognition

Description

For accounting policies adopted for revenue recognition, refer to Note 4(22).

The Company recognises export revenue in accordance with the terms of the transaction with the customer. Export revenue constitutes more than 70% of parent company only operating revenue and the period of revenue recognition is based on transaction terms of different customers. As the timing of revenue recognition might be based on management judgement depending on past experience, revenue may not be recorded in the proper period. Thus, we consider the cutoff of export revenue recognition a key audit matter.

How our audit addressed the matter

Our audit procedures performed in respect of the above included the following:

1. Understanding and assessing the effectiveness of export revenue recognition control processes.

2. Obtaining detailed listing of export sales within a certain period before and after period end, selecting samples and assessing the completeness by agreeing the sale to supporting documentation (such as export bill of lading and proof of delivery) to ascertain whether the sale was recorded in the proper period.

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.

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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 generally accepted auditing standards in 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 generally accepted auditing standards in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

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

5. 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.

6. 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.

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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 report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Pan, Hui-Lin

Liao, A-Shen

For and on behalf of PricewaterhouseCoopers, Taiwan February 24, 2021

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

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

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TEST RESEARCH, INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(2) 7 7 6(3) 6(4) 6(5) and 8 6(16)	December 31, 2020 AMOUNT % $ 1,330,637 19 3,932 - 1,336,094 20 207,170 3 6,436 - 111,533 2 884,280 13 20,698 - 3,900,780 57 888,325 13 1,957,334 29 24,331 - 78,125 1 542 - 2,948,657 43 $ 6,849,437 100	December 31, 2019	December 31, 2019
		AMOUNT $ 1,330,637 3,932 1,336,094 207,170 6,436 111,533 884,280 20,698 3,900,780 888,325 1,957,334 24,331 78,125 542 2,948,657 $ 6,849,437	AMOUNT $ 1,077,000 8,827 1,222,037 223,932 17,029 274,320 708,685 11,252 3,543,082 815,753 1,993,580 19,834 66,195 2,942 2,898,304 $ 6,441,386	%
Current assets 1100 Cash and cash equivalents 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable due from related parties, net 1200 Other receivables 1210 Other receivables due from related parties 130X Inventories 1470 Other current assets 11XX Total current assets Non-current assets 1550 Investments accounted for using equity method 1600 Property, plant and equipment 1780 Intangible assets 1840 Deferred income tax assets 1920 Guarantee deposits paid 15XX Total non-current assets 1XXX Total assets				17 - 19 4 - 4 11 -
				55
				13 31 - 1 -
				45
				100

(Continued)

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TEST RESEARCH, INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

LiabilitiesandEquity

December 31, 2020 December 31, 2019 Notes AMOUNT % AMOUNT % 6(11) $ 7,962 - $ 38,296 1 16,782 - 26,398 - 463,946 7 448,115 7 6(6) 248,565 4 225,081 3 7 27,596 - 20,244 - 135,488 2 107,961 2 5,730 - 7,356 - 906,069 13 873,451 13 41,343 1 35,299 1 6(16) 136,920 2 88,846 1 6(7) 62,911 1 61,358 1 241,174 4 185,503 3 1,147,243 17 1,058,954 16 6(8) 2,362,160 34 2,362,160 37 6(9) 53,290 1 53,290 1 6(10) 1,306,390 19 1,213,046 19 67,270 1 41,795 1 1,970,293 29 1,779,411 27 ( 57,209) ( 1) ( 67,270) ( 1) 5,702,194 83 5,382,432 84 11 $ 6,849,437 100 $ 6,441,386 100

Current liabilities 2130 Current liabilities - current 2150 Notes payable 2170 Accounts payable 2200 Other payables 2220 Other payables to related parties 2230 Current income tax liabilities 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2550 Provisions for liabilities - non-current 2570 Deferred income tax liabilities 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 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.

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TEST RESEARCH, INC.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Items

Year ended December 31 2020 2019 Notes AMOUNT % AMOUNT % 6(11) and 7 $ 4,728,188 100 $ 4,007,099 100 6(14)(15) ( 2,259,678)( 48)( 1,861,925)( 46) 2,468,510 52 2,145,174 54 6(4) ( 99,181) ( 2) ( 78,642) ( 2) 6(4) 78,642 1 88,752 2 2,447,971 51 2,155,284 54 6(14)(15) and 7 ( 630,730) ( 13) ( 530,541) ( 13) ( 121,696) ( 3) ( 111,826) ( 3) ( 390,750) ( 8) ( 422,541) ( 11) 12(2) ( 1,529) -( 191) - ( 1,144,705)( 24)( 1,065,099)( 27) 1,303,266 27 1,090,185 27 3,241 - 3,697 - 6(12) 4,852 - 4,682 - 6(13) ( 96,859) ( 2) ( 56,663) ( 1) 6(4) 124,674 3 104,500 3 35,908 1 56,216 2 1,339,174 28 1,146,401 29 6(16) ( 246,518)( 5)( 207,703)( 5) $ 1,092,656 23 $ 938,698 24 6(7) ($ 3,442) -($ 5,261) - 12,576 - ( 31,844) ( 1) 6(16) ( 2,515) - 6,369 - 10,061 -( 25,475)( 1) $ 1,099,275 23 $ 907,962 23 6(17) $ 4.63 $ 3.97 $ 4.62 $ 3.96

4000 Operating revenue 5000 Operating costs 5900 Gross profit from operations 5910 Unrealised loss from sales 5920 Realised profit from sales 5950 Gross margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment loss 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7070 Share of profit of associates and joint ventures accounted for using 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 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Actuarial losses on defined benefit plan Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8399 Income tax relating to the components of other comprehensive (loss) income that will be reclassified to profit or loss 8360 Other comprehensive income that will be reclassified to profit or loss 8500 Total comprehensive income for the year 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.

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TEST RESEARCH, INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

2019 Balance at January 1, 2019 Profit for the year Other comprehensive loss for the year Total comprehensive income Appropriations of 2018 earnings Legal reserve Special reserve Cash dividends Balance at December 31, 2019 2020 Balance at January 1, 2020 Profit (loss) for the year Other comprehensive income (loss) for the year Total comprehensive income Appropriations of 2019 earnings Legal reserve Special reserve Cash dividends Balance at December 31, 2020	Notes		Share capital – commonstock		Capital Reserves	Capital Reserves	Capital Reserves		RetainedEarnings	RetainedEarnings	RetainedEarnings	RetainedEarnings	Financial statements translation differences of foreign operations		Totalequity
					Capital surplus, additional paid- incapital		Capital surplus, changes in equity of associates and joint ventures accounted for using equity method		Legal reserve		Special reserve	Unappropriated retained earnings
	6(10) 6(10)		$2,362,160 - - - - - - $2,362,160 $2,362,160 - - - - - - $2,362,160		$ 51,874 - - - - - - $ 51,874 $ 51,874 - - - - - - $ 51,874		$ 1,416 - - - - - - $ 1,416 $ 1,416 - - - - - - $ 1,416		$1,106,607 - - - 106,439 - - $1,213,046 $1,213,046 - - - 93,344 - - $1,306,390		$ 30,123 - - - - 11,672 - $ 41,795 $ 41,795 - - - - 25,475 - $ 67,270	$1,838,084 938,698 ( 5,261) 933,437 ( 106,439) ( 11,672) ( 873,999) $1,779,411 $1,779,411 1,092,656 ( 3,442) 1,089,214 ( 93,344) ( 25,475) ( 779,513) $1,970,293	($ 41,795) - ( 25,475) ( 25,475) - - - ($ 67,270) ($ 67,270) - 10,061 10,061 - - - ($ 57,209)	$5,348,469 938,698 ( 30,736) 907,962 - - ( 873,999) $5,382,432 $5,382,432 1,092,656 6,619 1,099,275 - - ( 779,513) $5,702,194

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

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TEST RESEARCH, INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortisation Expected credit impairment loss Interest income Share of profit or loss of subsidiaries accounted for using the equity method Unrealised loss (profit) from sales, net Loss on disposal of property, plant and equipment Changes in operating assets and liabilities Changes in operating assets Notes receivable Accounts receivable Accounts receivable due from related parties Other receivables Other receivables due from related parties Inventory Other current assets Changes in operating liabilities Current liabilities - current Notes payable Accounts payable Other payables Other payables to related parties Other current liabilities Provisions for liabilities - non-current Other non-current liabilities Cash inflow generated from operations Interest received Income taxes paid Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of investments accounted for using the equity method Disposal of investments accounted for using the equity method Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in refundable deposits Decrease (increase) in other non-current assets Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Payment of cash dividends Net cash flows used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2020 2019 $ 1,339,174 $ 1,146,401 6(14) 67,626 65,828 6(14) 12,042 10,143 12(2) 1,529 191 ( 3,241 ) ( 3,697 ) 6(4) ( 124,674 ) ( 104,500 ) 6(4) 20,539 ( 10,110 ) 6(13) 139 1,009 4,895 ( 5,165 ) ( 115,586 ) ( 625,084 ) 16,762 434,037 10,593 7,454 162,787 409,873 ( 201,308 ) 132,307 ( 9,446 ) 7,033 ( 30,334 ) 21,032 ( 9,616 ) ( 500 ) 15,831 79,447 23,484 ( 21,533 ) 7,352 ( 14,969 ) ( 1,626 ) 452 6,044 8,327 ( 1,889 ) ( 1,755 ) 1,191,077 1,536,221 3,241 3,697 ( 185,362 ) ( 255,960 ) 1,008,956 1,283,958 6(4) ( 10,591 ) - 6(4) 54,730 - 6(5) ( 11,682 ) ( 19,363 ) 5,876 - ( 16,539 ) ( 13,815 ) 2,400 ( 1,908 ) 24,194 ( 35,086 ) 6(10) ( 779,513 ) ( 873,999 ) ( 779,513 ) ( 873,999 ) 253,637 374,873 1,077,000 702,127 $ 1,330,637 $ 1,077,000

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

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 20003621

To the Board of Directors and Shareholders of Test Research, Inc.

Opinion

We have audited the accompanying consolidated balance sheets of Test Research, Inc. and its subsidiaries (the “Group”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, 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 as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the ‘ Auditors’ responsibilities for the audit of the consolidated financial statements’ section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public 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 judgment, were of most significance in our audit of the Group’s 2020 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 2020 consolidated financial statements are stated as follows:

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Valuation of inventories

Description

Refer to Note 4(12) for accounting policies adopted for the valuation of inventories, Note 5 for critical accounting estimates and assumptions related to the valuation of inventories, and Note 6(4) for details of inventories. As of December 31, 2020, inventory and allowance for valuation losses are NT$1,055,435 thousand and NT$120,706 thousand, respectively.

The Group is primarily engaged in the design, manufacture, sales, repairs and maintenance of automated inspection and testing equipment, and inventories are stated at the lower of cost and net realisable value. Management considers the rapidly changing technology and the short life cycle of electronic products in evaluating inventories. For inventories that are over a certain aging and individually identified obsolete or slow-moving items, the net realisable value is determined based on inventory aging and the market demand of such items in the future for a specific period, which are based on sales, obsolescence and the inventory quality. As the amount of inventory is significant, involves numerous items, and the valuation of inventory requires critical judgement and a high degree of uncertainty in estimation, we consider the valuation of inventory a key audit matter.

How our audit addressed the matter

Our audit procedures performed in respect of the above included the following:

1. Understanding the industry and operations of the Group, and assessing the reasonableness of accounting policies applied in determining the adequacy of inventory provision.

2. Understanding the inventory management processes, examining the annual physical count plan, and performing physical inventory observation to assess the effectiveness of judgement and control over obsolete or slow-moving inventory.

3. Obtaining inventory aging report and testing movements to confirm whether they are assigned to the correct aging category and are in accordance with the Group’s accounting policy. We also recalculated to check the adequacy of the allowance for valuation losses.

4. Analysing and comparing the difference of inventory valuation losses between the latest two years and examining supporting evidences in relation to allowance for slow-moving inventory valuation losses, which were individually identified by the management based on the inventory clearance condition, to assess the propriety of inventory valuation losses.

Cutoff of export revenue recognition

Description

For accounting policies adopted for revenue recognition, refer to Note 4(24).

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The Group recognises export revenue in accordance with the terms of the transaction with the customer. Export revenue constitutes more than 80% of consolidated operating revenue and the period of revenue recognition is based on transaction terms of different customers. As the timing of revenue recognition might be based on management judgement depending on past experience, revenue may not be recorded in the proper period. Thus, we consider the cutoff of export revenue recognition a key audit matter.

How our audit addressed the matter

Our audit procedures performed in respect of the above included the following:

1. Understanding and assessing the effectiveness of export revenue recognition control processes.

2. Obtaining a detailed listing of export sales within a certain period before and after period end, selecting samples and assessing the completeness by agreeing the sale to supporting documentation (such as export bill of lading and proof of delivery) to ascertain whether the sale was recorded in the proper period.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Test Research, Inc. as at and for the years ended December 31, 2020 and 2019.

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 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.

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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 generally accepted auditing standards in 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 generally accepted auditing standards in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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.

5. 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.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or

~19~

business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

Pan, Hui-Lin Liao, A-Shen

For and on behalf of PricewaterhouseCoopers, Taiwan February 24, 2021

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

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

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets	December 31, 2020 Notes AMOUNT % $ 1,560,909 22 6(2) 231,422 3 6(3) 72,840 1 6(3) 1,846,509 27 20,850 - 6(4) 934,729 13 8 28,258 1 4,695,517 67 6(5) and 8 2,131,960 31 6(6) 44,109 1 24,807 - 6(17) 90,620 1 10,290 - 2,301,786 33 $ 6,997,303 100 (Continued)	December 31, 2019	December 31, 2019
		AMOUNT $ 1,300,530 204,777 25,343 1,934,508 21,016 738,433 39,434 4,264,041 2,135,082 61,824 20,237 76,260 11,591 2,304,994 $ 6,569,035	%
Current assets 1100 Cash and cash equivalents 1136 Current financial assets at amortised cost 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 130X Inventories 1470 Other current assets 11XX Total current assets Non-current assets 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			20 3 - 30 - 11 1
			65
			33 1 - 1 -
			35
			100

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

LiabilitiesandEquity

December 31, 2020 December 31, 2019 Notes AMOUNT % AMOUNT % 6(12) $ 24,302 1 $ 48,694 1 16,782 - 26,398 - 494,597 7 455,746 7 6(7) 300,303 5 276,615 4 143,357 2 109,836 2 17,293 - 20,582 - 7,859 - 8,943 - 1,004,493 15 946,814 14 41,343 1 35,298 - 6(17) 160,147 2 102,193 2 26,215 - 40,940 1 6(8) 62,911 1 61,358 1 290,616 4 239,789 4 1,295,109 19 1,186,603 18 6(9) 2,362,160 34 2,362,160 36 6(10) 53,290 1 53,290 1 6(11) 1,306,390 18 1,213,046 18 67,270 1 41,795 1 1,970,293 28 1,779,411 27 ( 57,209) ( 1) ( 67,270) ( 1) 5,702,194 81 5,382,432 82 5,702,194 81 5,382,432 82 11 $ 6,997,303 100 $ 6,569,035 100

Current liabilities 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2280 Current lease liabilities 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2550 Provisions for liabilities - non-current 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of the 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 31XX Equity attributable to owners of the parent 3XXX Total equity Significant events after the balance sheet date 3X2X Total liabilities and equity

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

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

Items

Year ended December 31 2020 2019 Notes AMOUNT % AMOUNT % 6(12) $ 4,950,695 100 $ 4,386,806 100 6(4)(15)(16) ( 2,235,439)( 45)( 1,897,217)( 43) 2,715,256 55 2,489,589 57 6(15)(16) ( 728,124) ( 15) ( 740,949) ( 17) ( 155,817) ( 3) ( 150,021) ( 3) ( 390,750) ( 8) ( 422,541) ( 10) 12(2) ( 3,240) - 20,436 1 ( 1,277,931)( 26)( 1,293,075)( 29) 1,437,325 29 1,196,514 28 7,719 - 7,803 - 6(13) 18,857 1 7,156 - 6(14) ( 89,288) ( 2) ( 49,106) ( 1) 6(6) ( 1,368) -( 1,408) - ( 64,080)( 1)( 35,555)( 1) 1,373,245 28 1,160,959 27 6(17) ( 280,589)( 6)( 222,261)( 5) $ 1,092,656 22 $ 938,698 22 6(8) ($ 3,442) -($ 5,261) - 12,576 - ( 31,844) ( 1) 6(17) ( 2,515) - 6,369 - $ 6,619 -($ 30,736)( 1) $ 1,099,275 22 $ 907,962 21 $ 1,092,656 22 $ 938,698 22 $ 1,099,275 22 $ 907,962 21 6(18) $ 4.63 $ 3.97 $ 4.62 $ 3.96

4000 Operating revenue 5000 Operating costs 5950 Gross margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment loss (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 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Components of other comprehensive income that will be reclassified to profit or loss 8311 Other comprehensive income, before tax, actuarial losses on defined benefit plans Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8399 Income tax relating to the components of other comprehensive (loss) income that will be reclassified to profit or loss 8300 Total other comprehensive income (loss) for the year 8500 Total comprehensive income for the year Profit attributable to: 8610 Owners of the parent Comprehensive income attributable to: 8710 Owners of the 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.

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

2019 Balance at January 1, 2019 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) Appropriations of 2018 earnings Legal reserve Special reserve Cash dividends Balance at December 31, 2019 2020 Balance at January 1, 2020 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income Appropriations of 2019 earnings Legal reserve Special reserve Cash dividends Balance at December 31, 2020	Notes			Equityattributableto owners of the parent	Equityattributableto owners of the parent	Equityattributableto owners of the parent	Equityattributableto owners of the parent	Equityattributableto owners of the parent	Equityattributableto owners of the parent	Equityattributableto owners of the parent	Equityattributableto owners of the parent	Equityattributableto owners of the parent			Totalequity
			Share capital - commonstock	Capital Reserves					RetainedEarnings				Financial statements translation differences of foreign operations
				Capital surplus, additional paid- incapital			Donated assets received		Legal reserve		Special reserve	Unappropriated retained earnings
	6(11) 6(11)		$2,362,160 - - - - - - $2,362,160 $2,362,160 - - - - - - $2,362,160		$ 51,874 - - - - - - $ 51,874 $ 51,874 - - - - - - $ 51,874		$ 1,416 - - - - - - $ 1,416 $ 1,416 - - - - - - $ 1,416		$1,106,607 - - - 106,439 - - $1,213,046 $1,213,046 - - - 93,344 - - $1,306,390		$ 30,123 - - - - 11,672 - $ 41,795 $ 41,795 - - - - 25,475 - $ 67,270	$1,838,084 938,698 ( 5,261) 933,437 ( 106,439) ( 11,672) ( 873,999) $1,779,411 $1,779,411 1,092,656 ( 3,442) 1,089,214 ( 93,344) ( 25,475) ( 779,513) $1,970,293	($ 41,795) - ( 25,475) ( 25,475) - - - ($ 67,270) ($ 67,270) - 10,061 10,061 - - - ($ 57,209)	$5,348,469 938,698 ( 30,736) 907,962 - - ( 873,999) $5,382,432 $5,382,432 1,092,656 6,619 1,099,275 - - ( 779,513) $5,702,194

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

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortisation Expected credit impairment loss (gain) Interest income Interest expense Gain on disposal of property, plant and equipment Intangible assets transferred to expenses Changes in operating assets and liabilities Changes in operating assets Notes receivable Accounts receivable Other receivables Inventory Other current assets Changes in operating liabilities Contract liabilities - current Notes payable Accounts payable Other payables Other current liabilities Provisions for liabilities - non-current Other non-current liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Financial assets at amortised cost Other current financial assets Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease (increase) in refundable deposits Decrease in other non-current assets Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Lease principal repayment Payment of cash dividends Net cash flows used in financing activities Effect due to changes in exchange rate Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

YearendedDecember 31 Notes 2020 2019 $ 1,373,245 $ 1,160,959 6(15) 116,556 116,077 6(15) 12,174 10,271 12(2) 3,240 ( 20,436 ) ( 7,719 ) ( 7,803 ) 6(6) 1,368 1,408 6(14) ( 7,378 ) ( 4,538 ) 79 - ( 47,497 ) 33,726 84,759 153,416 597 8,189 ( 259,942 ) 127,953 14,174 6,660 ( 24,392 ) 9,060 ( 9,616 ) ( 500 ) 38,851 74,614 23,687 ( 31,723 ) ( 1,084 ) 750 6,045 8,326 ( 1,889 ) ( 1,755 ) 1,315,258 1,644,654 7,288 5,778 ( 1,368 ) ( 1,408 ) ( 200,959 ) ( 290,818 ) 1,120,219 1,358,206 ( 26,645 ) ( 204,777 ) ( 2,998 ) ( 74 ) 6(5) ( 35,795 ) ( 39,964 ) 24,408 15,492 ( 16,819 ) ( 13,784 ) 1,301 ( 2,797 ) - 29 ( 56,548 ) ( 245,875 ) ( 26,653 ) ( 24,360 ) 6(11) ( 779,513 ) ( 873,999 ) ( 806,166 ) ( 898,359 ) 2,874 ( 10,875 ) 260,379 203,097 1,300,530 1,097,433 $ 1,560,909 $ 1,300,530

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

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Appendix 4

TRI 2020 Earnings Distribution Table

Unit: NT$ Undistributed earnings in the beginning of 2020 881,078,492 Add: Net after-tax profit for the year 1,092,656,108 Add: Reversal of Special Reserve 10,060,965 Less: 10% legal reserve (108,921,433) Less: 2020 retained earnings adjustment (3,441,780) Earnings available for distribution by the end of the fiscal year 1,871,432,352 Distributable item: Dividend to shareholders(NT$3.3 per share) (779,512,800) Undistributed earnings at the end of 2020 1,091,919,552

Chairman: Chieh-Yuan,Chen Manager: Chieh-Yuan,Chen Accounting Chief: Kaun-Yuan, Chen

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

~26~

Appendix 5

TRI Articles of Association

Chapter 1 General Principles

Article 1: The Company is organized under the provisions of Company Act, with the name of Test Research, Inc.

Article 2: The businesses of the Company include:

• 一 、 CB01010 machinery and equipment manufacturing.

• 二 、 CE01010 precision instruments manufacturing.

• 、

• 三 CE01030 photographic and optical equipment manufacturing.

• 、

• 四 E604010 machinery installation construction.

• 、

• 五 EZ05010 apparatus installation construction.

• 、

• 六 F113030 wholesale of precision instruments.

• 七 、 F119010 wholesale of electronic materials.

• 八、 F213030 retail sale of computing and business machinery equipment. 九、 F213040 retail sale of precision instruments. 十、 F219010 retail sale of electronic materials. 十一、 F401010 international trade.

• 十二、 I301010 information software service.

• 十三、 I501010 product design.

• 十四、 ZZ99999 all business items that are not prohibited or restricted by laws, except those that are subject to special approval.

• Article 3: The Company may act as guarantor externally based on business demands.

• Article 4: The re-investment amount of the Company is free from the restriction of no more than 40% in the paid-in capital.

• Article 5: The Company is headquartered in Taipei County, and may set up and cancel branch or office home and abroad upon the resolution of the Board of Directors.

• Article 6: Removed.

Chapter 2 Shares

• Article 7: The capital amount of the Company is NT$2.5 billion composed of 250,000,000 shares with NTD10 per share. Wherein, the Board of Directors is authorized to issue the unissued shares by installments.

• NT$50,000,000 in the above capital amount equivalent to 5,000,000 shares of NT$10 per share are retained for staff subscription right, which shall be issued by installments based on the resolution of the Board of Directors.

• Article 8: The shares of the Company are registered, which are issued with the signature or seal of more than 3 directors based on the legal certification. The Company may issue the shares in scriptless form after issuing the shares publically. Moreover, it shall consult the Central Securities Depository for register.

• Article 9: Regarding the change of shareholders list, it shall be stopped 60 days before the general Shareholders meeting, 30 days before the interim Shareholders meeting or 5 days before the baseline date when company decides to distribute dividend, bonuses or other profits.

• Article 10: The shareholder affairs of the Company shall be subject to the regulations prescribed by the related laws and the competent authority.

Chapter 3 Shareholders Meeting

Article 11: It is divided into the general and interim meetings. The general meeting is held annually by the

~27~

Board of Directors of Directors within 6 months after each fiscal year in accordance with laws, while the interim meeting is convened in accordance with laws if necessary.

• Article 12: The Chairman shall preside over the meetings convened by the Board of Directors. In case the Chairman is absent, s/he shall designate a person to act in lieu of him. If no one is designated, the directors shall elect one from themselves to act in lieu of the Chairman. As for the meetings convened by any other person having the convening right rather other the Board of Directors, the convener shall act as the Chairman. If there are two or more persons having the convening right, the Chairman of the meeting shall be elected among themselves.

• Article 13: If any shareholder can’t attend the shareholder meeting for some reason, the Letter of Attorney printed by the Company shall be printed that specifies the authorization scope of the proxy to attend the meeting. The proxy appointment shall be subject to Article 177 of the Company Act and “Regulations Governing the Use of Proxies for Attendance at Shareholders Meetings of Public Listed Companies”.

• Article 14: The shareholders of the Company shall have one vote for each share unless the voting right is restricted or prohibited by the Company Act.

• Article 15: Unless otherwise provided by the Company Act, the resolution of the shareholders meeting requires the presence of shareholders representing more than half of the issued shared, and the approval of more than half of votes of the shareholders attending the meeting. The resolutions of the shareholders meeting shall be recorded in the meeting minutes.

• The resolutions passed in the shareholders meeting shall be recorded in memo, which shall be signed or sealed by the Chairman, and distributed to the shareholders within 20 days after the meeting. After the Company issues the shares publically, the memo shall be distributed by making announcements. The memo can be generated and distributed in an electronic way.

Chapter 4 Directors and Audit Committee

• Article 16: The Company sets up 5~9 directors. The Board Meeting is authorized to determine the number of directors, which shall include at least 3 independent directors. The election of directors adopts the nomination system as required by the Company Act. The independent directors and non-independent directors shall be elected in the same election, but the respective votes shall be separately calculated to determine the elected persons. The directors shall be elected and appointed based on the cumulative counts as stipulated in Article 198 of the Company Act, with a three-year term, who may be re-elected and re-appointed for one additional term. The representative of entity shareholder may be elected as director. Where there are several representatives of any entity shareholder, they may be elected as directors or supervisors, and the entity shareholder shall appoint a replacement representative based on the position until the expiration of the original term.

• As for the professional qualifications, shareholdings, restrictions on concurrent positions held, nomination and other compliances with respect to independent directors, it is subject to the related regulations under the competent authority of the securities.

• The Company sets up Audit Committee as required by Securities and Exchange Act, which is composed of all independent directors.

• Article 16-1: One of the following relationships may not exist among more than half of the directors.

• A spousal relationship.

• A familial relationship within the second degree of kinship.

• Article 17: The Board of Director shall exercise the legal duties in the Board. An Chairman shall be elected from themselves with the presence of more than 2/3 directors, and the approval of more than half of the directors attending the meeting. The Chairman represents the company externally, and

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may appoint several consultants upon the resolution of the board meeting if necessary.

• Article 18: The first board meeting of each new term after an election shall be convened by the director who receives the ballot representing the highest number of votes within 15 days. The other board meetings shall be convened by the Chairman, which shall specify the reason and inform the directors within written notice 7 days in advance. However, in case of emergency, the Company’s board meeting can be convened via E-mail or fax instead of written notice.

• Article 19: Unless otherwise provided by the Company Act and the Articles of Association, the resolutions shall be attended by more than 2/3 directors and approved by more than half number of the attending directors.

• Article 20: When the Chairman is on leave or can’t exercise the duties for some reason, the proxy shall be subject to Article 208 of the Company Act.

• Article 21: The director may authorize another director in written form to attend the board meeting in lieu of him. However, each director can only serve as the proxy of only one director.

• Article 22: The board organizes the board meeting, with the rights as listed below:

• 一、 Make and revising business plan.

• 二、Make earning distribution or loss recovery plan.

• 三、Make capital increase/decrease plan.

• 四、Amend the Articles of Association.

• 五、Review the important contracts.

• 六、Appoint managers.

• 七、Set up and cancel the branches and offices.

• 八、Budgeting and final accounts.

• 九、Decide the transaction of real properties and investment into other businesses.

• 十、Other rights granted based on the Company Act or the resolution of shareholders meeting.

• Article 23: Removed.

• Article 24: The duties and related affairs of the Audit Committee and its members are subject to the related regulations under the competent authority of the securities.

• Article 25: The directors shall be distributed with remuneration as stipulated by Article 29, who shall also receive some reward of a fixed amount every month. The board is authorized to determine the reward based on the competitors and the level of listed companies.

Chapter 5 Managers

Article 26: The Company shall set up General Manager, whose appointment, dismiss and remuneration shall be subject to Article 29 of the Company Act.

• Article 27: The General Manager shall deal with all businesses of the Company as instructed by the Board.

Chapter 6 Accounting

• Article 28: The fiscal year of the Company is from Jan. 1 to Dec. 31. At the end of each fiscal year, it shall close the final accounts. After the final accounts every year, the Board will prepare various reports as required by laws, which shall be submitted to the shareholders meeting for approval.

• Article 29: After the final accounts of the Company, if there are earnings, the Company shall first pay the tax, make up the losses for the preceding years and then set aside a legal reserve of 10% of the net profit. However, it is an exception when the legal reserve of profit reaches the capital sum. After an additional special reserve shall be set aside or reversed in compliance with laws, it shall be the distributable profit of the year. Together with the undistributed profit at the end of the period, it will be the cumulative distributable profit of the shareholders. The Board shall work out the earning distribution plan, and submit it to the shareholders meeting for resolution on distribution. The Company is engaged in the industries related to high-tech automatic inspection devices. It is in the growth period of the corporate life cycle. To cope with the overall environment and

~29~

characteristics of industrial growth, achieve business sustainability, and pursue the long-term profit of the company and stabilize operating performance goals, the dividend policy of the Company shall be based on the capital expenditure budget and the capital demands in the future. The dividend for shareholder shall be appropriated from the cumulative distributable profit, which shall be no less than 60% of the distributable profit of the current year. The cash dividend shall be no less than 50% of the amount distributed in the current year.

• Article 29-1: If the Company gains some profits in the year, it shall make up the loss based on the pre-tax profit before deducting the remuneration of the employees. If there are still some profits remaining, it shall appropriate no less than 1% as the remuneration of the employees, and no more than 2% as the remuneration of the directors.

The subjects distributed with the above remuneration shall include the employees of the subsidiaries.

Chapter 7 Supplementary Provisions

Article 30: The affairs not mentioned herein this document shall be subject to the Company Act and other laws.

Article 31: The document was drafted on March 31, 1989

• The 1[st] amendment was on June 1, 1989

• The 2[nd] amendment was on April 6, 1990 The 3[rd] amendment was on February 25, 1995

• The 4[th] amendment was on November 20, 1995 The 5[th] amendment was on July 18, 1996 The 6[th] amendment was on May 27, 1997 The 7[th] amendment was on June 8, 1997 The 8[th] amendment was on June 18, 1998 The 9[th] amendment was on March 27, 1999 The 10[th] amendment was on June 3, 2000 The 11[th] amendment was on April 28, 2001 The 12[th] amendment was on May 4, 2002 The 13[th] amendment was on June 23, 2003 The 14[th] amendment was on June 15, 2004 The 15[th] amendment was on June 14, 2005 The 16[th] amendment was on June 9, 2006 The 17[th] amendment was on June 15, 2007 The 18[th] amendment was on June 13, 2008 The 19[th] amendment was on June 19, 2009 The 20[th] amendment was on June 18, 2010 The 21[st] amendment was on June 6, 2011 The 22[nd] amendment was on June 3, 2016 The 23[rd] amendment was on May 26, 2018 The 24[rd] amendment was on May 29, 2019

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Appendix 6

TRI Rules Governing the Shareholders Meeting

1. The general shareholders meeting of the Company is subject to the Rules.

2. The shareholders attending the meeting (or the proxies) shall present the attendance card and submit the sign-in card for checking in, based on which the attending votes shall be calculated.

3. Unless otherwise provided by the Company Act, the Chairman shall call the general meeting to order at the time schedules and when the attending shareholders hold more than half of the issued shares. If the scheduled time is due and the number of shares represented by the attending shareholders is less than the quorum, the Chairman may announce to postpone the time for the meeting. If the number of shares represented by the attending shareholders is less than the quorum after two postponements, but more than 1/3 of the issued shares, it shall be subject to “the tentative resolution passed by more than half of the votes represented by the attending shareholders” pursuant to Article 175 of the Company Act.

If the number of shares represented by the attending shareholders reaches the above quorum before the tentative resolution is passed, the Chairman shall call the meeting to order and submit the said tentative resolution for ratification in the meeting.

1. The meeting agenda is determined by the Board, based on which the general meeting shall be held.

2. When making a speech, the attending shareholder shall fill out a speech note with the number of attendance card and name. The sequence of speeches shall be determined by the Chairman.

3. When the attending shareholder makes a speech, each speech time shall not exceed five minutes, which can be extended for three minutes upon the approval of the Chairman.

4. Any shareholder may not speak more than twice concerning the same proposal item.

5. During the discussion of proposals, the Chairman may announce the conclusion of discussion at the appropriate time, and also announce the termination of discussion when necessary.

6. The shareholders of the Company shall have one vote for each share unless the voting right is restricted or prohibited by the Company Act.

7. As for voting for proposals, unless otherwise provided by the Company Act, it shall be passed upon the consent of more than half of the voting rights represented by the attending shareholders. When voting, the Chainman may consult the number of objecting shareholders. If the voting rights of the objecting shareholders are less than a half, or no objection is consulted by the Chairman, the proposal shall be deemed as being passed, which has the same effect as voting.

8. During the general meeting, the Chairman may, at his or her discretion, set for intermission.

9. The affairs not mentioned herein this document shall be subject to the Company Act and the Articles of Association of the Company.

The Rules shall be implemented upon the approval of the Board, and it is the same for the amendments.

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Appendix 7 Current Shareholdings of All Directors:

1. The paid-in capital of the Company is NT$2,362,160,000, with a total of 236,216,000 shares issued.

2. According to Article 26 of Securities and Exchange Act, the minimum number of shares held by all directors is 12,000,000.

Until the book closure date of this general meeting, the shareholding of all directors recorded under the shareholder book is as listed below:

e shareholder book is as listed below:	e shareholder book is as listed below:	e shareholder book is as listed below:	e shareholder book is as listed below:
March 28,2021
Title	Account Name	Number of shares held	Shareholding percent
Chairman	Chieh-Yuan,Chen	37,889,235	16.04%
Director	Kuang-Chao,Fan	151,211	0.06%
Director	Chin-Lung,Chen	415,857	0.18%
Director	Chiang-Huai,Lin	2,357,864	1.00%
Director	Ming-Chuan,Tsai	1,005,650	0.43%
Director	Representative of Der-Hong Investment Co., Ltd.: Chiou-Shann,Fuh	2,738,939	1.16%
Independent Director	Mei-Jing,Chen	0	0.00%
Independent Director	Yow-Shiuan,Fu	0	0.00%
Independent Director	Liang-Jia,Chen	0	0.00%
Total shareholdings of all directors		44,558,756	18.87%

Appendix 8 Any other matters that need to be specified:

The notes for proposals handled in this shareholders meeting:

Notes: 1. According to Article 172-1 of the Company Act, the shareholder representing more than 1%

• of the issued shares shall submit proposal in written forms for the shareholders meeting, which is limited to one proposal within 300 words.

• The period for receiving the shareholder’s proposal for this shareholders meeting is March 19, 2021~March 29, 2021, which is already disclosed on MOPS.

• No proposal from shareholders is received by the Company.

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