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YC AGM Information 2023

Jun 19, 2023

51960_rns_2023-06-19_c3137f87-d579-44cc-b3be-23e86fbbfde9.pdf

AGM Information

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Stock Code: 2034

YC INOX CO., LTD.

2023 Annual General Shareholders’ Meeting

Agenda

D a t e : J u n e 1 6 , 2 0 2 3

( P h y s i c a l S h a r e h o l d e r s M e e t i n g )

(This document is prepared in accordance with the Chinese version and for reference only. In the event of any inconsistency between the English version and the Chinese version, the Chinese version shall prevail.)

YC INOX Co., Ltd.

Table of Contents

YC INOX Co., Ltd.
Table of Contents
Agenda……………………………………………………………………………………………………………….……… 1
Report Items……………………………………………………………………………………………………….……… 2
Proposed Resolutions for Ratification………………………………………………………………………… 3
Proposed Resolutions for Discussion…………………………………………..……………………………… 3
Extraordinary Motions…………………………………………………………………..…………………………… 3
Appendixes
2022 Business Report………………………………………………………………………………………….……… 4
Audit Committee’s Review Report……………………………………………………………………………… 7
Independent Auditors’ Report…………………………………..…..………………………………………….. 8
2022 Financial Statements………………………………….……………………………………………………… 12
Comparison Table for the Rules of Procedure for Board of Directors Meeting Before
and After Amendment……………………………………………………………………………………………….. 28
Execution status of issuance of the 3rdDomestic Unsecured Convertible Corporate
Bonds.………………………………………………………………………………………………………………………… 31
Execution status of Endorsement, Guarantee and lending Funds to Other
Parties………………………………………………………………………………………………………………………… 32
2022 Earnings Distribution Table……………………………………….……….………………………………. 33
Comparison Table for the Rules of Procedure of Shareholders’ Meeting Before and
After Amendment………………………………………………………………………………………………………. 34
Shareholdings Status of Directors…………………………………………………………………………..…… 49
Articles of Incorporation…………………………………………………………………………………..………… 50
Rules of Procedure of Shareholders’ Meeting……………………………………………………….….. 57
Other Instructions………………………………………………………………………………………………………. 64

YC INOX Co., Ltd.

2023 Annual General Shareholders’ Meeting Agenda

(Translation)

The meeting will be held by means of: Physical shareholders meeting

Time: 9:00 a.m. on Friday, June 16, 2023

Place: 5[th ] Floor of Administration Building, YC INOX’s Headquarters, No.270, Sec. 4, Jungshan Rd., Shijou Township, Chang-Hwa, Taiwan.

  • I. Call Meeting to Order

  • II. Chairman Takes Chair

III. Chairman’s Opening Address

  • IV. Report Items:

  • 2022 Business report

  • 2022 Audit Committee’s review report

  • 2022 employees’ profit sharing and directors’ compensation

  • Amendment of Rules of Procedure for Board of Directors Meeting

  • Execution status of the 3[rd] domestic unsecured convertible corporate bonds

  • Execution status of endorsement, guarantee and lending funds to other parties

  • V. Proposed Resolutions for Ratification

  • 2022 Financial Statements

  • 2022 Earnings Distribution

  • VI. Proposed Resolutions for Discussion

  • Amendment of Rules of Procedure for Shareholders’ Meeting

  • VII. Extraordinary Motions

VIII. Meeting Adjourned

  • 1 -

Report Items

Item 1: (proposed by the Board of Directors)

Description: The Company’s 2022 Business Report.

Explanation: Regarding the Company’s 2022 Business Report, please refer to page 4.

Item 2: (proposed by the Board of Directors)

Description: The 2022 Audit Committee’s review report.

Explanation: The 2022 financial statements have been audited by the Independent Auditors and reviewed by the Audit Committee. The Audit Committee’s review report and the Independent Auditors’ Audit Report have been issued respectively, please refer to page 7, page 8 to page 27.

Item 3: (proposed by the Board of Directors)

Description: The 2022 employees’ profit sharing and directors’ compensation.

Explanation: 1. The 2022 employees’ profit sharing and directors’ compensation is determined in accordance with Article 235-1 of the Company Act and the Articles of Incorporation.

  1. The directors' compensation and employees’ profit are planned to be paid in cash this year.

  2. The 2022 income before income tax prior to deducting employees’ profit sharing and directors’ compensation is NT$698,583,128. 2% to 6% of the profit amount of NT$30,000,000 is allocated for employees’ profit sharing, and no higher than 2% of the profit amount of NT$13,000,000 is allocated for directors’ compensation.

Item 4: (proposed by the Board of Directors)

Description: Amendment of Rules of Procedure for Board of Directors Meeting.

  • Explanation: The amendment was made in accordance with the Financial Supervisory Commission's letter of Jin-Guan-Zheng-Fa-Zi No.11103832635 on August 5, 2022, the Financial Supervisory Commission's letter of Jin-Guan-Zheng-Fa-Zi No. 1110361758 on December 12, 2022, and the Financial Supervisory Commission's letter of Jin-Guan-Zheng-Fa-Zi No.1110152489 on December 21, 2022, please refer to page 28.

Item 5: (proposed by the Board of Directors)

Description: Execution status of the 3[rd] Domestic Unsecured Convertible Corporate Bonds.

  • Explanation: Regarding the execution status of the 3[rd] Domestic Unsecured Convertible Corporate Bonds, please refer to page 31.

  • 2 -

Item 6: (proposed by the Board of Directors)

Description: Execution status of endorsement, guarantee and lending funds to other parties. Explanation: Regarding the execution status of endorsement, guarantee and lending funds to other parties, please refer to page 32.

Proposed Resolutions for Ratification

Item 1: (proposed by the Board of Directors)

Description: To accept 2022 business report and financial statements.

Explanation: The 2022 business report and financial statements (incl. consolidated financial statement and standalone financial statement) are all prepared, and have been audited by independent auditors of Deloitte & Touche. Please refer to page 8 to page 27.

Resolution:

Item 2: (proposed by the Board of Directors)

Description: To adopt the proposal of 2022 earnings distribution.

Explanation: 1. Please refer the page 33 for the 2022 Earnings Distribution Table.

  1. If the Company subsequently repurchases its outstanding common shares, or transfers or write-off its treasury shares, or the unsecured convertible corporate bonds being converted into common shares, or issues cash capital increase, etc., which leads the change of the total amount of outstanding common shares, and results in changes in cash dividend rates, such power with respect to adjust relevant matters is authorized to the Board of Directors.

  2. Cash dividends with a value less than NT$1.00 will be remitted to the account of the Employee Welfare Committee of the Company.

Resolution:

Proposed Resolutions for Discussion

Item 1: (proposed by the Board of Directors)

Description: To amend the Rules of Procedure for Shareholders’ Meeting.

Explanation: The draft amendment is stipulated in accordance with the Financial Supervisory Commission's letter of Jin-Guan-Zheng-Fa-Zi No1110133385 on March 7, 2022, please refer to page 34.

Resolution:

Extraordinary Motions

Meeting Adjourned

  • 3 -

2022 Business Report

Since the beginning of 2022, central banks in various countries have continuously raised interest rates to cope with severe inflation. In addition, market expectations that the interest rate cycle has not yet peaked have also contributed to the overall contraction in the industry and terminal market, resulting in a downward revision in the Company's order situation. To cope with these conditions, the Company has not only continued to reduce inventory level but also made timely adjustments to the source of raw materials procurement and the sales portfolio of product items. In 2022, the total volume sold was decreased by approximately 27.4% (compared to 2021), and sales were therefore decreased by approximately 8.5%, while income before income tax was increased by approximately 6.6%, and net income was decreased by approximately 58.9%. The decrease in net income is mainly due to the accumulated inflation rate of over 100% in the Turkish economic environment over the past three years. The subsidiary located in Turkey has recognized a loss of TRY 570,860 thousand on hyperinflation in accordance with the accounting treatment of International Accounting Standard 29 (IAS 29), "Financial Reporting in Hyperinflationary Economies."

Moreover, our Turkey mill has gradually started mass production in the second quarter of 2022. By then, we will not only be able to supply local customers to avoid tariff barriers, but to make best global sales arrangements according to global stainless steel production and supply/demand condition.

1. 2022 Business Report

1.1 Operation Result:

Unit: NT$ thousands

Items 2022 2021 Variance Growth Rate(%)
Stainless Steel Tube and Pipe 9,444,167 9,478,885 -34,718 -0.4%
Stainless Steel Sheet and Coil 6,524,594 8,047,890 -1,523,296 -18.9%
Other Stainless Steel Products 289,176 251,144 38,032 15.1%
Electricity sales revenue 4,610 - 4,610 New Item
Total 16,262,547 17,777,919 -1,515,372 -8.5%

1.2 Budget Execution:

Unit: Metric Ton

1.2 Budget Execution:
 Unit: Metric Ton
Items 2022 Actual 2022 Budgeted (Note) Achievement rate (%)
Stainless Steel Tube and Pipe 71,817 72,798 98.7%
Stainless Steel Sheet and Coil 60,382 60,454 99.9%
Other Stainless Steel Products 2,233 2,226 100.3%
Total 134,432 135,478 99.2%

Note: The updated 2022 annual budget of YC INOX have been adopted by the Board of Directors on December 23, 2022.

  • 4 -

1.3 Condensed Financial Status and Profitability:

Unit: NT$ thousands

Items / Year 2022 2021
Financial Result Operating Revenue 16,262,547 17,777,919
Gross Profit 2,636,861 2,893,140
Operating Income 1,500,588 1,407,183
Net Income 518,282 1,260,047
Profitability Return on total Assets (%) 3.1% 8.1%
Return on shareholders’ equity (%) 5.2% 13.6%
Ratio of pre-tax income to paid-in capital (%) 14.8% 35.8%
Profit margin (%) 3.2% 7.1%
Earnings per share (dollar) 1.16 2.86

1.4 Progress in Research and Development:

YC INOX engages in stainless steel processing industry, its research and development focus on the improvement of processing techniques, machinery and equipment, and the efficiency of production processes. The Production Department is responsible for the research and development of processing techniques. Years been through, our process techniques are now very proficient. We continue to improve, achieving the goal of automatic production, such as the implementation of laser welding technology, automated pickling process with zero discharge, and automated warehouse systems, etc. Those are YC INOX's innovative technologies that outshine the industry, our product quality and our environmental protection plan are especially affirmed by our customers. In order to make our products more popular in the market, and create high value-added products, we have made magnificent breakthroughs and achievements in stainless steel pipes manufacturing rate and stainless steel plate processing techniques. We believe that these achievements will be of great help and benefit to market development and cost reduction.

2. Summary of 2023 Business Plan

2.1 Operating Strategy

  • A. Development of high value-added products and improvement of processing techniques, to increase the competitiveness of our products.

  • B. Aggressively expand overseas emerging markets to diversify sales risks.

  • C. Improve production efficiency and quality, reduce manufacturing costs.

  • D. Strengthen the implementation of the internal control system to improve the management system.

  • E. Strengthen employee education and training to improve quality of employees and enhance the quality of work and performance.

  • F. Continue to promote sustainable development strategies and action plans, fulfill corporate social responsibilities, and achieve the goal of sustainable development.

  • 5 -

2.2 2023 Budget

Unit: Metric Ton

Unit:Metric Ton
Items 2023 Budget 2022 Actual Growth Rate (%)
Stainless Steel Tube and Pipe 92,610 71,817 29.0%
Stainless Steel Sheet and Coil 83,470 60,382 38.2%
Other Stainless Steel Products 3,120 2,233 39.7%
Total 179,200 134,432 33.3%

Explanation:

Against the backdrop of gradually easing global inflation, slower pace of interest rate hikes, and active economic stimulus measures implemented by various countries, the overall industry is poised to benefit from the recovery of end-demand and propel the steel market towards another period of prosperity. In the future, besides supplying products locally through overseas subsidiary, we will also continue to increase product added value to cope with the market changes. As for short-term annual sales targets, we will only make moderate adjustments to the product portfolio to maximize profits.

  • 2.3 Important Policies of Production and Marketing

  • A. Continue to implement automatic equipment, to improve production techniques and efficiency so the manufacturing costs could be reduced.

  • B. Strengthen and integrate domestic and exporting sales channels and develop high value-added products to enhance market competitiveness.

  • C. Continuous evaluation of overseas production bases in response to the trend of regional economics of the world.

  • D. Use financial instruments efficiently and strengthen customer credit inquiries to avoid bad debts and protect the Company’s interests.

Chairman: Chang, Chin-Yu

CEO: Chang, Chin-Yu

Chief Accounting Officer: Chang, Jung-Wei

  • 6 -

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2022 Business Report, Financial Statements, and proposal for the profit distribution. The CPA firm of Deloitte & Touche was retained to audit YC INOX’ Financial Statements and has issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and proposal for the profit distribution have been reviewed and determined to be correct and accurate by the Audit Committee members of YC INOX Co., Ltd. According to relevant requirements of Securities and Exchange Act. and the Company Act, we hereby submit this report.

To:

2023 General Shareholders’ Meeting of YC INOX Co., Ltd.

YC INOX Co., Ltd.

Chairman of the Audit Committee: Chen, Tai-Shan

March 10, 2023

  • 7 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders YC Inox Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of YC Inox Co., Ltd. and its subsidiaries (the “Group”), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public 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 consolidated financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

  • 8 -

The key audit matter of the Group’s consolidated statements for the year ended December 31, 2022 is described as follows:

Inventory Valuation

The amount of inventory held by the Group is considered material to the consolidated financial statements; and out of this amount, inventory is made based on the lower of cost and net realizable value of inventory. As the inputs and assumptions used in the determination of the net realizable value involve management’s judgment, inventory assessment has been deemed as a key audit matter. For the accounting policies, significant accounting judgments, estimates and uncertainty of assumptions related to inventory assessment as well as other related disclosures, refer to Notes 4, 5, and 10.

The main audit procedures performed with respect to the aforementioned key audit matter are as follows:

  1. We obtained an understanding of and assessed the appropriateness of the Group’s policies on the provision for inventory valuation loss and the related internal control procedures.

  2. We obtained the inventory valuation report, selected samples and sampled and reviewed the correctness and reasonableness of the net realizable value.

Other Matter

We have also audited the parent company only financial statements of YC Inox Co., Ltd. as of and for the years ended December 31, 2022 and 2021 on which we have issued an unmodified opinion.

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 IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, 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 members of the audit committee) are responsible for overseeing the Group’s financial reporting process.

  • 9 -

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and 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 and appropriate audit evidence regarding the financial information of 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.

  7. 10 -

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 for the year ended December 31, 2022 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.

The engagement partners on the audits resulting in this independent auditors’ report are Done-Yuin Tseng and Shu-Chin Chiang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 10, 2023

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

  • 11 -

YC INOX CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

ASSETS
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)
Financial assets at fair value through profit or loss - current (Notes 4 and 7)
Notes receivable (Notes 4 and 27)
Trade receivables (Notes 4, 9 and 27)
Other receivables (Note 4)
Inventories (Notes 4, 5 and 10)
Prepayments
Other current assets (Notes 4 and 28)
Total current assets
NON-CURRENT ASSETS
Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8)
Property, plant and equipment (Notes 4 and 12)
Right-of-use assets (Notes 4 and 13)
Computer software (Notes 4 and 14)
Deferred tax assets (Notes 4 and 22)
Prepayments for equipment
Other non-current assets
Total non-current assets
TOTAL
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 15)
Contract liabilities - current (Note 20)
Notes payable
Trade payables
Other payables (Notes 17 and 18)
Current tax liabilities (Notes 4 and 22)
Lease liabilities - current (Notes 4 and 13)
Current portion of long-term borrowings (Note 15)
Other current liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Financial liabilities at fair value through profit or loss - non-current (Notes 4 and 16)
Bonds payable (Notes 4 and 16)
Long-term borrowings (Note 15)
Deferred tax liabilities (Notes 4 and 22)
Lease liabilities - non-current (Notes 4 and 13)
Net defined benefit liabilities - non-current (Notes 4 and 18)
Guarantee deposits received
Total non-current liabilities
Total liabilities
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY
Share capital
Ordinary shares
Registered capital (pending change)
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Other equity
Total equity
TOTAL		 2022
Amount
%
$ 951,207
5
248,011
1
88,122
1
841,425
4
279,419
1
5,172,264
26
1,546,255
8
5,637
-
9,132,340
46
3,006,601
15
6,043,505
31
14,781
-
8,597
-
301,099
2
869,611
4
287,248
2
10,531,442
54
$ 19,663,782
100
$ 4,824,074
24
407,896
2
556
-
192,793
1
539,823
3
327,177
2
6,303
-
160,714
1
48,347
-
6,507,683
33
236
-
765,149
4
1,882,143
10
2,614
-
8,161
-
51,148
-
30,385
-
2,739,836
14
9,247,519
47
4,453,799
23
-
-
2,005,108
10
1,292,961
7
-
-
1,022,254
5
1,642,141
8
10,416,263
53
$ 19,663,782
100		 2021
Amount
%
$ 1,396,077
7
267,852
1
166,220
1
1,241,870
7
296,636
2
6,514,836
34
574,375
3
3,011
-
10,460,877
55
2,666,411
14
4,789,937
25
3,631
-
6,360
-
384,474
2
536,002
3
231,052
1
8,617,867
45
$ 19,078,744
100
$ 5,559,180
29
518,204
3
14,557
-
771,356
4
565,116
3
372,226
2
2,466
-
119,643
1
32,079
-
7,954,827
42
966
-
775,775
4
780,357
4
62,053
-
814
-
71,257
1
30,630
-
1,721,852
9
9,676,679
51
4,445,345
23
1,080
-
1,994,700
10
1,166,385
6
-
-
1,276,096
7
518,459
3
9,402,065
49
$ 19,078,744
100

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

  • 12 -

YC INOX CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET REVENUE (Notes 4, 20 and 27)
OPERATING COSTS (Notes 5, 10 and 21)
GROSS PROFIT
OPERATING EXPENSES (Note 21)
Selling and marketing expenses
General and administrative expenses
Expected credit loss (Notes 4 and 9)
Total operating expenses
INCOME FROM OPERATIONS
NON-OPERATING INCOME AND EXPENSES (Note 4)
Finance costs (Notes 4 and 21)
Interest income
Other gains and losses, net (Notes 4, 21 and 27)
Foreign exchange gain, net
Gain (loss) on disposal of property, plant and equipment
Loss on fair value changes of financial instruments at fair
value through profit or loss
Total non-operating income and expenses
INCOME BEFORE INCOME TAX
INCOME TAX EXPENSE (Notes 4 and 22)
NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS) (Note 4)
Items that will not be reclassified subsequently to profit or
loss:
Remeasurement of defined benefit plans (Note 18)
Unrealized gain on investments in equity instruments at
fair value through other comprehensive income
Income tax related to items that will not be reclassified
subsequently to profit or loss (Note 22)
Items that may be reclassified subsequently to profit or
loss:
Exchange differences on translation of the financial
statements of foreign operations
Income tax related to items that may be reclassified
subsequently to profit or loss (Note 22)		 2022
Amount
%
$ 16,840,315
100
14,663,502
87
2,176,813
13
906,087
5
322,819
2
-
-
1,228,906
7
947,907
6
(81,477)
(1)
6,098
-
(534,228)
(3)
366,070
2
401
-
(19,111)
-
(262,247)
(2)
685,660
4
167,378
1
518,282
3
16,011
-
312,952
2
(8,669)
-
320,294
2
1,031,005
6
(206,201)
(1)
824,804
5		 2021
Amount
%
$ 17,777,919
100
14,884,779
84
2,893,140
16
1,221,866
7
281,233
1
820
-
1,503,919
8
1,389,221
8
(38,308)
-
644
-
12,453
-
395,470
2
(22,788)
-
(9,181)
-
338,290
2
1,727,511
10
467,464
3
1,260,047
7
3,069
-
217,718
1
76,895
1
297,682
2
(971,011)
(6)
194,202
1
(776,809)
(5)
(Continued)
  • 13 -

YC INOX CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Other comprehensive income (loss) for the year, net
of income tax
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
EARNINGS PER SHARE (Note 23)
Basic
Diluted		 2022
Amount
%
$ 1,145,098
7
$ 1,663,380
10
$ 1.16
$ 1.09		 2021
Amount
%
$ (479,127)
(3)
$ 780,920
4
$ 2.86
$ 2.66

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

(Concluded)

  • 14 -

YC INOX CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2021
Appropriation of 2020 earnings
Legal reserve
Cash dividends distributed by the Company
Reversal of special reserve
Net profit for the year ended December 31, 2021
Other comprehensive income (loss) for the year ended December 31, 2021, net
of income tax
Total comprehensive income (loss) for the year ended December 31, 2021
Convertible bonds converted to ordinary shares
Disposal of investments in equity instruments at fair value through other
comprehensive income by subsidiaries
BALANCE AT DECEMBER 31, 2021
Appropriation of 2021 earnings
Legal reserve
Cash dividends distributed by the Company
Net profit for the year ended December 31, 2022
Other comprehensive income (loss) for the year ended December 31, 2022, net
of income tax
Total comprehensive income for the year ended December 31, 2022
Convertible bonds converted to ordinary shares
Disposal of investments in equity instruments at fair value through other
comprehensive income by subsidiaries
BALANCE AT DECEMBER 31, 2022		 Ordinary Shares (Note 19)
Registered
Capital Stock
Ordinary Shares
Capital (Pending
Change)
Capital Surplus
(Note 19)
$ 4,371,307
$ -
$ 1,882,352
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
74,038
1,080
112,348
-
-
-
4,445,345
1,080
1,994,700
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,454
(1,080)
10,408
-
-
-
$ 4,453,799
$ -
$ 2,005,108		 Retained Earnings (Note 19)
Legal Reserve
Special Reserve
Unappropriated
Earnings
$ 1,124,194
$ 185,661
$ 522,557
42,191
-
(42,191)
-
-
(655,696)
-
(185,661)
185,661
-
-
1,260,047
-
-
2,455
-
-
1,262,502
-
-
-
-
-
3,263
1,166,385
-
1,276,096
126,576
-
(126,576)
-
-
(666,964)
-
-
518,282
-
-
12,809
-
-
531,091
-
-
-
-
-
8,607
$ 1,292,961
$ -
$ 1,022,254		 Other Equity (Note 4)
Unrealized Gain
(Loss) on
Exchange
Differences on
Financial Assets
at Fair Value
Translating
through Other
Foreign
Operations
Comprehensive
Income
$ (235,655)
$ 1,238,959
-
-
-
-
-
-
-
-
(776,809)
295,227
(776,809)
295,227
-
-
-
(3,263)
(1,012,464)
1,530,923
-
-
-
-
-
-
824,804
307,485
824,804
307,485
-
-
-
(8,607)
$ (187,660)
$ 1,829,801		 Total Equity
$ 9,089,375
-
(655,696)
-
1,260,047
(479,127)
780,920
187,466
-
9,402,065
-
(666,964)
518,282
1,145,098
1,663,380
17,782
-
$ 10,416,263

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

  • 15 -

YC INOX CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Depreciation expense
Amortization expense
Expected credit loss
Loss on financial instruments at fair value through profit or loss, net
Interest expense
Interest income
Dividend income
Gain on lease modification
(Gain) loss on disposal of property, plant and equipment
Write-down of inventories
(Gain) loss on foreign currency exchange, net
Effect of hyperinflation
Changes in operating assets and liabilities:
Notes receivable
Trade receivables
Other receivables
Inventories
Prepayments
Other current assets
Contract liabilities
Notes payable
Trade payables
Other payables
Other current liabilities
Net defined benefit liabilities
Cash generated from (used in) operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash generated from (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other comprehensive
income
Disposal of financial assets at fair value through other comprehensive income
Acquisition of financial assets at fair value through profit or loss
Disposal of financial assets at fair value through profit or loss
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Acquisition of computer software
Increase in other non-current assets
Increase in prepayments for equipment
Net cash used in investing activities		 2022
$ 685,660
331,036
4,110
-
19,111
81,477
(6,098)
(10,425)
(29)
(401)
325,261
(28,063)
570,860
78,098
393,133
14,570
1,017,311
(698,397)
(2,629)
(110,308)
(14,001)
(577,619)
(83,602)
17,501
(4,098)
2,002,458
6,098
10,425
(72,299)
(388,130)
1,558,552
(39,771)
12,533
-
-
(1,034,925)
15,248
(2,676)
(6,281)
-
(327,987)
(1,383,859)		 2021
$ 1,727,511
275,196
2,547
820
9,181
38,308
(644)
(4,000)
-
22,788
52,900
1,194
-
(105,887)
(280,426)
(46,969)
(3,555,504)
(631,749)
(28)
227,840
14,376
650,272
134,008
(10,017)
(4,559)
(1,482,842)
644
4,000
(27,698)
(81,460)
(1,587,356)
(56,970)
5,632
(324,306)
46,739
(629,541)
77,386
(115)
(7,395)
(271,233)
(461,551)
(1,621,354)
(Continued)
  • 16 -

YC INOX CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Decrease in guarantee deposits received
Repayments of the principal portion of lease liabilities
Cash dividends paid to owners of the Company
Net cash (used in) generated from financing activities
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR		 2022
$ 20,216,918
(20,951,537)
1,400,000
(257,143)
(245)
(7,144)
(666,964)
(266,115)
(353,448)
(444,870)
1,396,077
$ 951,207		 2021
$ 22,450,759
(18,408,129)
600,000
(375,000)
(12,510)
(4,525)
(655,696)
3,594,899
(344,254)
41,935
1,354,142
$ 1,396,077

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

(Concluded)

  • 17 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders YC Inox Co., Ltd.

Opinion

We have audited the accompanying parent company only financial statements of YC Inox Co., Ltd. (the “Company”), which comprise the parent company only balance sheets as of December 31, 2022 and 2021, the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2022 and 2021, and its parent company only financial performance and its parent company only 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 the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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 parent company only financial statements for the year ended December 31, 2022. 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, and we do not provide a separate opinion on these matters.

  • 18 -

The key audit matter of the Company’s parent company only financial statements for the year ended December 31, 2022 is described as follows:

Inventory Valuation

The amount of inventory held by the Company is considered material to the parent company only financial statements; and out of this amount, inventory is made based on the lower of cost and net realizable value of inventory. As the inputs and assumptions used in the determination of the net realizable value involve management’s judgment, inventory assessment has been deemed as a key audit matter. For the accounting policies, significant accounting judgments, estimates and uncertainty of assumptions related to inventory assessment as well as other related disclosures, refer to Notes 4, 5, and 10.

The main audit procedures performed with respect to the aforementioned key audit matter are as follows:

  1. We obtained an understanding of and assessed the appropriateness of the Company’s policies on the provision for inventory valuation loss and the related internal control procedures.

  2. We obtained the inventory valuation report, selected samples and reviewed the correctness and reasonableness of the net realizable value.

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 members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

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

  • 19 -

As part of an audit in accordance with the Standards on Auditing of 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 and appropriate audit evidence regarding the financial information of 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 for the year ended December 31, 2022 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.

  • 20 -

The engagement partners on the audits resulting in this independent auditors’ report are Done-Yuin Tseng and Shu-Chin Chiang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 10, 2023

Notice to Readers

The accompanying parent company only financial statements are intended only to present the parent company only financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying parent company only financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

  • 21 -

YC INOX CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(In Thousands of New Taiwan Dollars)

ASSETS
CURRENT ASSETS
Cash (Notes 4 and 6)
Financial assets at fair value through profit or loss - current (Notes 4 and 7)
Notes receivable (Notes 4 and 27)
Trade receivables (Notes 4, 9 and 27)
Other receivables (Note 4)
Inventories (Notes 4, 5 and 10)
Prepayments
Other current assets (Notes 4 and 28)
Total current assets
NON-CURRENT ASSETS
Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8)
Investments accounted for using the equity method (Notes 4 and 11)
Property, plant and equipment (Notes 4 and 12)
Right-of-use assets (Notes 4 and 13)
Computer software (Notes 4 and 14)
Deferred tax assets (Notes 4 and 22)
Prepayments for equipment
Other non-current assets (Note 4)
Total non-current assets
TOTAL
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 15)
Contract liabilities - current (Note 20)
Notes payable
Trade payables
Other payables (Notes 17 and 18)
Current tax liabilities (Notes 4 and 22)
Lease liabilities - current (Notes 4 and 13)
Current portion of long-term borrowings (Note 15)
Other current liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Financial liabilities at fair value through profit or loss - non-current (Notes 4 and 16)
Bonds payable (Notes 4 and 16)
Long-term borrowings (Note 15)
Deferred tax liabilities (Notes 4 and 22)
Lease liabilities - non-current (Notes 4 and 13)
Net defined benefit liabilities - non-current (Notes 4 and 18)
Guarantee deposits received
Total non-current liabilities
Total liabilities
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY
Share capital
Ordinary shares
Registered capital (pending change)
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Other equity
Total equity
TOTAL		 2022
Amount
%
$ 486,484
3
248,011
1
88,122
-
760,684
4
241,027
1
4,186,741
22
205,467
1
5,224
-
6,221,760
32
2,640,544
14
5,350,518
28
4,370,107
23
8,301
-
7,697
-
299,228
1
305,483
2
52,404
-
13,034,282
68
$ 19,256,042
100
$ 4,754,074
25
378,950
2
556
-
174,828
1
276,569
1
327,177
2
3,624
-
160,714
1
26,880
-
6,103,372
32
236
-
765,149
4
1,882,143
10
2,614
-
4,732
-
51,148
-
30,385
-
2,736,407
14
8,839,779
46
4,453,799
23
-
-
2,005,108
10
1,292,961
7
-
-
1,022,254
5
1,642,141
9
10,416,263
54
$ 19,256,042
100		 2021
Amount
%
$ 728,661
4
267,852
1
166,220
1
1,241,870
7
296,636
1
6,514,836
35
378,218
2
3,001
-
9,597,294
51
2,328,150
12
1,951,085
10
4,238,219
23
3,079
-
6,078
-
380,725
2
271,762
2
52,404
-
9,231,502
49
$ 18,828,796
100
$ 5,489,180
29
518,204
3
14,557
-
771,356
4
464,281
2
299,201
2
2,292
-
119,643
1
26,165
-
7,704,879
41
966
-
775,775
4
780,357
4
62,053
-
814
-
71,257
1
30,630
-
1,721,852
9
9,426,731
50
4,445,345
24
1,080
-
1,994,700
10
1,166,385
6
-
-
1,276,096
7
518,459
3
9,402,065
50
$ 18,828,796
100

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

  • 22 -

YC INOX CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET REVENUE (Notes 4, 20 and 27)
OPERATING COSTS (Notes 5, 10 and 21)
GROSS PROFIT
UNREALIZED GAIN ON TRANSACTIONS WITH
SUBSIDIARIES (Note 4)
REALIZED GROSS PROFIT
OPERATING EXPENSES (Note 21)
Selling and marketing expenses
General and administrative expenses
Expected credit loss (Notes 4 and 9)
Total operating expenses
INCOME FROM OPERATIONS
NON-OPERATING INCOME AND EXPENSES (Note 4)
Finance costs
Share of profits or loss of subsidiaries (Notes 4 and 11)
Interest income
Gain (loss) on disposal of property, plant and equipment
Other gains and losses, net (Notes 21 and 27)
Foreign exchange gain (loss), net
Loss on fair value changes of financial instruments at fair
value through profit or loss
Total non-operating income and expenses
INCOME BEFORE INCOME TAX
INCOME TAX EXPENSE (Notes 4 and 22)
NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS) (Note 4)
Items that will not be reclassified subsequently to profit or
loss:
Remeasurement of defined benefit plans (Note 18)
Unrealized gain on investments in equity instruments at
fair value through other comprehensive income		 2022
Amount
%
$ 16,262,547
100
13,625,686
84
2,636,861
16
9,578
-
2,627,283
16
898,309
6
228,386
1
-
-
1,126,695
7
1,500,588
9
(78,634)
-
(943,373)
(6)
4,435
-
403
-
34,659
-
156,616
1
(19,111)
-
(845,005)
(5)
655,583
4
137,301
1
518,282
3
16,011
-
276,568
2		 2021
Amount
%
$ 17,777,919
100
14,884,779
84
2,893,140
16
-
-
2,893,140
16
1,221,866
7
263,271
1
820
-
1,485,957
8
1,407,183
8
(37,474)
-
237,844
1
256
-
(22,788)
-
12,519
-
(11,554)
-
(9,181)
-
169,622
1
1,576,805
9
316,758
2
1,260,047
7
3,069
-
203,791
1
(Continued)
  • 23 -

YC INOX CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Share of other comprehensive income of subsidiaries
accounted for using the equity method
Income tax related to items that will not be reclassified
subsequently to profit or loss (Note 22)
Items that may be reclassified subsequently to profit or
loss:
Exchange differences on translation of the financial
statements of foreign operations (Note 4)
Income tax related to items that may be reclassified
subsequently to profit or loss (Note 22)
Other comprehensive income (loss) for the year, net
of income tax
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
EARNINGS PER SHARE (Note 23)
Basic
Diluted		 2022
Amount
%
$ 34,506
-
(6,791)
-
320,294
2
1,031,005
6
(206,201)
(1)
824,804
5
1,145,098
7
$ 1,663,380
10
$ 1.16
$ 1.09		 2021
Amount
%
$ 17,676
-
73,146
1
297,682
2
(971,011)
(6)
194,202
1
(776,809)
(5)
(479,127)
(3)
$ 780,920
4
$ 2.86
$ 2.66

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

(Concluded)

  • 24 -

YC INOX CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2021
Appropriation of 2020 earnings
Legal reserve
Cash dividends distributed by the Company
Reversal of special reserve
Net profit for the year ended December 31, 2021
Other comprehensive income (loss) for the year ended December 31, 2021, net
of income tax
Total comprehensive income (loss) for the year ended December 31, 2021
Convertible bonds converted to ordinary shares
Disposal of investments in equity instruments at fair value through other
comprehensive income by subsidiaries
BALANCE AT DECEMBER 31, 2021
Appropriation of 2021 earnings
Legal reserve
Cash dividends distributed by the Company
Net profit for the year ended December 31, 2022
Other comprehensive income (loss) for the year ended December 31, 2022, net
of income tax
Total comprehensive income (loss) for the year ended December 31, 2022
Convertible bonds converted to ordinary shares
Disposal of investments in equity instruments at fair value through other
comprehensive income by subsidiaries
BALANCE AT DECEMBER 31, 2022		 Ordinary Shares (Note 19)
Registered
Capital
Capital Stock
Ordinary Shares
(Pending
Change)
Capital Surplus
(Note 19)
$ 4,371,307
$ -
$ 1,882,352
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
74,038
1,080
112,348
-
-
-
4,445,345
1,080
1,994,700
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,454
(1,080)
10,408
-
-
-
$ 4,453,799
$ -
$ 2,005,108		 Retained Earnings (Note 19)
Legal Reserve
Special Reserve
Unappropriated
Earnings
$ 1,124,194
$ 185,661
$ 522,557
42,191
-
(42,191)
-
-
(655,696)
-
(185,661)
185,661
-
-
1,260,047
-
-
2,455
-
-
1,262,502
-
-
-
-
-
3,263
1,166,385
-
1,276,096
126,576
-
(126,576)
-
-
(666,964)
-
-
518,282
-
-
12,809
-
-
531,091
-
-
-
-
-
8,607
$ 1,292,961
$ -
$ 1,022,254		 Other Equity (Note 4)
Unrealized
Gain (Loss) on
Exchange
Financial Assets
Differences on
at Fair Value
Translating
through Other
Foreign
Operations
Comprehensive
Income
$ (235,655)
$ 1,238,959
-
-
-
-
-
-
-
-
(776,809)
295,227
(776,809)
295,227
-
-
-
(3,263)
(1,012,464)
1,530,923
-
-
-
-
-
-
824,804
307,485
824,804
307,485
-
-
-
(8,607)
$ (187,660)
$ 1,829,801		 Total Equity
$ 9,089,375
-
(655,696)
-
1,260,047
(479,127)
780,920
187,466
-
9,402,065
-
(666,964)
518,282
1,145,098
1,663,380
17,782
-
$ 10,416,263
Capital Stock
Ordinary Shares
$ 4,371,307
-
-
-
-
-
-
74,038
-
4,445,345
-
-
-
-
-
8,454
-
$ 4,453,799

The accompanying notes are an integral part of the financial statements.

  • 25 -

YC INOX CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Depreciation expense
Amortization expense
Expected credit loss
Loss on financial instruments at fair value through profit or loss, net
Interest expense
Interest income
Dividend income
Share of loss (profit) of subsidiaries
(Gain) loss on disposal of property, plant and equipment
Write-down of inventories
Unrealized gain on transactions with subsidiaries
Loss on foreign currency exchange, net
Changes in operating assets and liabilities:
Notes receivable
Trade receivables
Other receivables
Inventories
Prepayments
Other current assets
Contract liabilities
Notes payable
Trade payables
Other payables
Other current liabilities
Net defined benefit liabilities
Cash generated from (used in) operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash generated from (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other comprehensive
income
Acquisition of financial assets at fair value through profit or loss
Disposal of financial assets at fair value through profit or loss
Acquisition of subsidiaries
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Decrease in refundable deposits
Acquisition of computer software
Decrease in other non-current assets
Increase in prepayments for equipment
Net cash used in investing activities		 2022
$ 655,583
280,746
3,479
-
19,111
78,634
(4,435)
(10,425)
943,373
(403)
112,000
9,578
10,131
78,098
473,500
52,816
2,216,095
172,751
(2,223)
(139,254)
(14,001)
(596,542)
(158,806)
692
(4,098)
4,176,400
4,435
10,425
(71,145)
(300,259)
3,819,856
(35,826)
-
-
(3,286,873)
(375,128)
15,249
-
(5,098)
-
(111,807)
(3,799,483)		 2021
$ 1,576,805
274,004
2,403
820
9,181
37,474
(256)
(4,000)
(237,844)
22,788
52,900
-
1,194
(105,887)
(280,426)
(46,969)
(3,555,504)
(360,055)
(16)
227,840
14,376
650,272
132,509
(18,819)
(4,559)
(1,611,769)
256
4,000
(26,949)
(41,889)
(1,676,351)
-
(324,306)
46,739
(979,951)
(207,557)
77,386
10
(6,821)
473
(226,787)
(1,620,814)
(Continued)
  • 26 -

YC INOX CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Decrease in guarantee deposits received
Repayments of the principal portion of lease liabilities
Cash dividends paid to owners of the Company
Net cash (used in) generated from financing activities
NET (DECREASE) INCREASE IN CASH
CASH AT THE BEGINNING OF THE YEAR
CASH AT THE END OF THE YEAR		 2022
$ 20,146,919
(20,881,538)
1,400,000
(257,143)
(245)
(3,579)
(666,964)
(262,550)
(242,177)
728,661
$ 486,484		 2021
$ 22,310,759
(18,318,129)
600,000
(375,000)
(12,510)
(3,532)
(655,696)
3,545,892
248,727
479,934
$ 728,661

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

(Concluded)

  • 27 -

YC INOX Co., Ltd.

Comparison Table for the Rules of Procedure for Board of Directors Meetings Before and After Amendment

Amended Articles Articles Before Amendment Description
Article 12：(Matters that shall be discussed by
the Board of Directors)
The following matter shall be discussed by the
Board of Directors of the Company:
1. Business plan of the Company.
2. Annual financial reports.
3. Adoption or amendment of an internal
control system pursuant to Article 14-1 of the
Securities and Exchange Act, and the
assessment of the effectiveness of the internal
control system.
4. Adoption or amendment, pursuant to Article
36-1 of the Securities and Exchange Act, of any
handling procedures for material financial or
business transactions, such as the acquisition
or disposal of assets, derivatives trading,
lending funds to other parties, and
endorsement or guarantee for others.
5. The offering, issuance, or private placement
of equity-type securities.
6. The appointment or discharge of the
Chairman
7. The appointment or discharge of a chief
financial officer, a chief accounting officer, a
chief internal auditor, or a chief corporate
governance officer.
8. A donation to a related party or a major
donation to a non-related party, provided that
a public-interest donation of disaster relief
made for a major natural disaster may be
submitted to the next board of directors
meeting for retroactive recognition.
9. Any matter that, under Article 14-3 of the
Securities and Exchange Act or any other law,
regulation, or bylaw, must be approved by
resolution at a shareholders meeting or board
meeting, or any material matter prescribed by
the competent authority.
The term "related party" in subparagraph 8 of
the preceding paragraph means a related party
as defined in the Regulations Governing the
Preparation of Financial Reports bySecurities		 Article 12：(Matters that shall be discussed by
the Board of Directors)
The following matter shall be discussed by the
Board of Directors of the Company:
1. Business plan of the Company.
2. Annual financial reports.
3. Adoption or amendment of an internal
control system pursuant to Article 14-1 of the
Securities and Exchange Act, and the
assessment of the effectiveness of the internal
control system.
4. Adoption or amendment, pursuant to Article
36-1 of the Securities and Exchange Act, of any
handling procedures for material financial or
business transactions, such as the acquisition
or disposal of assets, derivatives trading,
lending funds to other parties, and
endorsement or guarantee for others.
5. The offering, issuance, or private placement
of equity-type securities.
~~6.~~The appointment or discharge of a chief
financial officer, a chief accounting officer, a
chief internal auditor, or a chief corporate
governance officer.
~~7.~~A donation to a related party or a major
donation to a non-related party, provided that
a public-interest donation of disaster relief
made for a major natural disaster may be
submitted to the next board of directors
meeting for retroactive recognition.
~~8.~~Any matter that, under Article 14-3 of the
Securities and Exchange Act or any other law,
regulation, or bylaw, must be approved by
resolution at a shareholders meeting or board
meeting, or any material matter prescribed by
the competent authority.
The term "related party" in subparagraph~~7~~of
the preceding paragraph means a related party
as defined in the Regulations Governing the
Preparation of Financial Reports by Securities
Issuers. The term "major donation to a non-
relatedparty" means an individual donation,or		 Amendment
in
compliance
with
competent
rules and
laws.
  • 28 -
Amended Articles Articles Before Amendment Description
Issuers. The term "major donation to a non-
related party" means an individual donation, or
cumulative donations within a 1-year period to
a single recipient, at an amount of NTD100
million or more, or at an amount equal to or
greater than 1 percent of net operating
revenue or 5 percent of paid-in capital as
stated in the audited financial report for the
most recent year.
The term "within a 1-year period" in the
preceding paragraph means a period of 1 year
calculated retroactively from the date on which
the current board of directors meeting is
convened. Amounts already submitted to and
passed by a resolution of the board are
exempted from inclusion in the calculation.
At least one independent director of the
Company shall attend the meeting in person.
With respect to the matters which must be
approved by resolutions at a board meeting as
provided in the first paragraph, any and all
independent directors shall attend the
meeting. Where an independent director is
unable to attend the meeting, that
independent director shall appoint another
independent director to attend the meeting as
proxy. If an independent director objects to or
expresses reservations about such a matter, it
shall be recorded in the board meeting
minutes; if an independent director intends to
express an objection or reservation but is
unable to attend the meeting in person, then
unless there is a legitimate reason to do
otherwise, that director shall issue a written
opinion in advance, which shall be recorded in
the board meeting minutes.		 cumulative donations within a 1-year period to
a single recipient, at an amount of NTD100
million or more, or at an amount equal to or
greater than 1 percent of net operating
revenue or 5 percent of paid-in capital as
stated in the audited financial report for the
most recent year.
The term "within a 1-year period" in the
preceding paragraph means a period of 1 year
calculated retroactively from the date on which
the current board of directors meeting is
convened. Amounts already submitted to and
passed by a resolution of the board are
exempted from inclusion in the calculation.
At least one independent director of the
Company shall attend the meeting in person.
With respect to the matters which must be
approved by resolutions at a board meeting as
provided in the first paragraph, any and all
independent directors shall attend the
meeting. Where an independent director is
unable to attend the meeting, that
independent director shall appoint another
independent director to attend the meeting as
proxy. If an independent director objects to or
expresses reservations about such a matter, it
shall be recorded in the board meeting
minutes; if an independent director intends to
express an objection or reservation but is
unable to attend the meeting in person, then
unless there is a legitimate reason to do
otherwise, that director shall issue a written
opinion in advance, which shall be recorded in
the board meeting minutes.
Article 18: (Standard operating procedures for
handling directors’ requests)
The directors of the Company shall be provided
with appropriate and timely information, the
form and quality of which shall be sufficient to
enable the directors to make decisions while
having relevant information and to perform
their duties.
All the directors of the Companyshall be able		 Article 18: (Standard operating procedures for
handling directors’ requests)
The directors of the Company shall be provided
with appropriate and timely information, the
form and quality of which shall be sufficient to
enable the directors to make decisions while
having relevant information and to perform
their duties.
All the directors of the Companyshall be able		 Amendment
in
compliance
with
competent
rules and
laws.
  • 29 -
Amended Articles Articles Before Amendment Description
to obtain the assistance from the chief
corporate governance officer to ensure that
the procedures of the board meeting and all
applicable laws and regulations are complied
with, and to maintain well information
exchange among board members, directors
and managers.
The Company appoints a chief corporate
governance officer, who is responsible for
responding to the directors' requirements, on
principle of timely and effective, as soon as
possible within 3 working days to assist
directors to perform their duties.
When the director resigns or is reassigned in
accordance with Article 27, Paragraph 3 of the
Company Act, the resigning director and/or the
juridical shareholder shall immediately notify
the Company and the chief corporate
governance officer.
Upon receiving such notification in the
preceding paragraph, the Company or the chief
corporate governance officer shall handle the
matter in accordance with the relevant laws
and regulations.		 to obtain the assistance from the chief
corporate governance officer to ensure that
the procedures of the board meeting and all
applicable laws and regulations are complied
with, and to maintain well information
exchange among board members, directors
and managers.
The Company ~~shall ~~appoint a chief corporate
governance officer, who is responsible for
responding to the directors' requirements, on
principle of timely and effective, as soon as
possible within 3 working days to assist
directors to perform their duties.
Article 20：
These articles of the Rules of Procedure for
Board of Directors Meetings are stipulated on
December 29, 2006, (omitted), the seventh
amendment on March 15, 2019, the eighth
amendment on March 6, 2020, the ninth
amendment on December 25, 2020, the tenth
amendment on November 4, 2022 and the
eleventh amendment on March 10, 2023.		 Article 20：
These articles of the Rules of Procedure for
Board of Directors Meetings are stipulated on
December 29, 2006, (omitted), the seventh
amendment on March 15, 2019, the eighth
amendment on March 6, 2020, and the ninth
amendment on December 25, 2020.		 Update the
date of
amendment.
  • 30 -

YC INOX Co., Ltd.

Execution status of issuance of the 3[rd] Domestic Unsecured Convertible Corporate Bonds

ecution status of issuance of the 3rdDomestic Unsecured Convertible Corporate Bon
Type of Corporate Bond The 3rdDomestic Unsecured Convertible Corporate Bonds
Date and document No. of
the approval issued by
competent authority		 Letter of Jin-Guan-Zheng-Fa-Zi No.10903737121 of the Financial
Supervisory Commission on November 25, 2020
Date of Issuance December 15, 2020
Face Value per Bond NT$100,000
Issue Price At 100% of par value
Total Amount issued NT$1,000,000,000
Coupon Rate 0%
Issuance Period Five Years, the Maturity Date is December 15, 2025
Conversion price at
issuance		 NT$26.5
Latest conversion price NT$23.6
Methods of Redemption Except the holders of the convertible corporate bonds convert it
into the Company’s common shares in accordance with Article 10
of Rules and Conditions of Issuance and Conversion of the 3rd
Domestic Unsecured Convertible Bonds (“the Rule”), or the
Company redeems the bond prior to maturity or repurchases the
bond from the securities firm for write-off in accordance with
Article 18 of the Rule, redemption payment will be made by cash
at par value upon maturity.
Unpaid Balance NT$ 738,100,000 (As of Mar 31, 2023)

As of March 31, 2023, the 3[rd] Domestic Unsecured Convertible Corporate Bonds valued at NT$261,900,000 has been converted into 10,295,802 common shares.

  • 31 -

YC INOX Co., Ltd.

Execution status of Endorsement, Guarantee and lending Funds to Other Parties

  1. Endorsement and Guarantee:

  2. 1.1 According to the Procedures of Endorsement and Guarantee of the Company, the total amount of endorsement/guarantee shall not exceed 40% of total equity of the Company's most recent financial statements. The amount of endorsement/guarantee for a single enterprise shall not exceed 20% of the total equity of the most recent financial statement of the Company

  3. 1.2 As of March 31, 2023, the balance of endorsement/guarantee is NT$304,500 thousand, which does not exceed the limit specified by the Company. (On March 31, 2023, total equity of the Company’s most recent financial statements is NT$10,870,513 thousand * 40% = NT$4,348,205 thousand; NT$10,870,513 thousand * 20% = NT$2,174,102 thousand) Details are as follows:

Unit: NTD/USD thousands

are as follows: are as follows: Unit: NTD/USD thousands
Endorsed/Guaranteed Party YC INOX TR Çelik Sanayi ve Ticaret A.Ş.
Consolidated Shareholding ratio 100%
Balance Amount US$ 10,000 → NT$ 304,500
Date of adopted by the Board 2022.12.23 11thmeeting of the 17thsession
Actual Amount Used NT$942
Type Financing Guarantee

  1. Lending Funds to Other Parties:

  2. 2.1 According to the Procedures for Lending Funds to Other Parties of the Company, the total amount of lending funds shall not exceed 40% of total equity of the Company's most recent financial statements. The amount of lending funds to a single enterprise shall not exceed half of the total equity of the most recent financial statement of the Company.

  3. 2.2 As of March 31, 2023, the balance of lending funds is NT$1,522,500 thousand, which does not exceed the limit specified by the Company. (On March 31, 2023, total equity of the Company’s most recent financial statements is NT$10,870,513 thousand * 40% = NT$4,348,205 thousand; NT$10,870,513 thousand * 20% = NT$2,174,102 thousand) Details are as follows:

Unit: NTD/USD thousands

Unit: NTD/USD thousands
Endorsed/Guaranteed Party YC INOX TR Çelik Sanayi ve Ticaret A.Ş.
Consolidated Shareholding ratio 100%
Balance Amount USD$ 50,000 → NTD$ 1,522,500
Date of adopted by the Board 2022.5.6 6thmeeting of the 17thsession
Actual Amount Used 0
Type Operating capital
  • 32 -

YC INOX Co., Ltd.

2022 Earnings Distribution Table

Unit: NT$

Unit: NT$
Item
Beginning
Balance
of		 Unappropriated
Retained Earnings 482,556,290
2022 Net Income 518,282,189
Remeasurement of Defined Benefit Obligation
Recognized in Retained Earnings 12,808,609
Adjustment
amount		 of
disposal		 of
investments in equity instruments at fair value
through other comprehensive income -
subsidiaries 8,606,616
2022 Net Income Plus Other Items Designated
to be Included in Unappropriated Retained
Earnings 539,697,414
10% Legal Reserve (53,969,741)
Retained Earnings Available for Distribution 968,283,963
Distribution item:
Cash Dividends (669,309,321)
Ending Balance of Unappropriated Retained
Earnings 298,974,642
Chairman: Chang, Chin-Yu
CEO: Chang, Chin-Yu

Chief Accounting Officer: Chang, Jung-Wei

  • 33 -

YC INOX Co., Ltd.

Comparison Table for the Rules of Procedure of Shareholders’ Meeting Before and After Amendment

Amended Articles Articles Before Amendment Description
Article 3:
Except as otherwise stipulated in laws and
regulations, the Company’s Shareholders’
Meeting shall be convened by the Board of
Directors.
Changes in the method of convening the
Shareholders'Meeting of the Company
shall be resolved by the Board of Directors,
and shall be implemented no later than the
dispatch of the notice of the Shareholders'
Meeting.
The Company shall prepare electronic
versions of the shareholders meeting
notice and proxy forms, and the origins of
and explanatory materials relating to all
proposals, including proposed resolutions
for ratification, proposed resolutions for
discussion, or the election or dismissal of
directors, and upload them to the Market
Observation Post System (MOPS) prior to
30 days before the date of a general
shareholders’ meeting or prior to 15 days
before the date of an extraordinary
shareholders’ meeting. The Company shall
prepare electronic versions of the
shareholders meeting agenda and
supplemental meeting materials and
upload them to the MOPS prior to 21 days
before the date of the general
shareholders’ meeting or prior to 15 days
before the date of the extraordinary
shareholders’ meeting.However, where the
Company's paid-in capital is greater than
NT$10 billion or above at the end of the
most recent fiscal year, or the Company
holds a general shareholders’meeting in
the most recent fiscal year while the total
shareholding ratio of foreign capital and
Mainland Chinese capital listed in the
register of shareholders reaches 30% or
more, the transmission of the electronic
file in the preceding paragraph shall be
completed 30 days before the general		 Article 3:
Except as otherwise stipulated in laws and
regulations, the Company’s Shareholders’
Meeting shall be convened by the Board of
Directors.
The Company shall prepare electronic
versions of the shareholders meeting
notice and proxy forms, and the origins of
and explanatory materials relating to all
proposals, including proposed resolutions
for ratification, proposed resolutions for
discussion, or the election or dismissal of
directors, and upload them to the Market
Observation Post System (MOPS) prior to
30 days before the date of a general
shareholders’ meeting or prior to 15 days
before the date of an extraordinary
shareholders’ meeting. The Company shall
prepare electronic versions of the
shareholders meeting agenda and
supplemental meeting materials and
upload them to the MOPS prior to 21 days
before the date of the general
shareholders’ meeting or prior to 15 days
before the date of the extraordinary
shareholders’ meeting.		 Amendment
in
compliance
with
competent
rules and
laws.
  • 34 -

Amended Articles Articles Before Amendment Description shareholders’ meeting. Prior to 15 days before the date of the Prior to 15 days before the date of the shareholders meeting, The Company shall shareholders meeting, The Company shall also have prepared the shareholders also have prepared the shareholders meeting agenda and supplemental meeting meeting agenda and supplemental meeting materials and made them available for materials and made them available for review by shareholders at any time. The review by shareholders at any time. The meeting agenda and supplemental meeting agenda and supplemental materials shall also be displayed at the materials shall also be displayed at the Company and the professional stock affairs Company and the professional stock affairs services agent designated. services agent designated ~~thereby as well~~ On the day of the general shareholders’ ~~as being distributed on-site at the meeting~~ meeting, the Company shall provide ~~place~~ . shareholders with reference to the meeting agenda and supplementary materials mentioned in the preceding paragraph in the following manner: 1. When the physical shareholder meeting is held, it shall be issued at the site of shareholders’ meeting. 2. When convening a video-assisted shareholders' meeting, it shall be distributed at the site of the shareholders' meeting and uploaded to the video conference platform as an electronic file. 3. When convening a video conference, the electronic file shall be uploaded to the video conference platform. The reasons for convening a shareholders’ The reasons for convening a shareholders’ meeting shall be specified in the meeting meeting shall be specified in the meeting notice and public announcement; Said notice and public announcement; Said notice may be made by means of electronic notice may be made by means of electronic transmission with the prior consent of the transmission with the prior consent of the recipients. recipients. (Following contents which have not been (Following contents which have not been amended have omitted.) amended have omitted.) Article 4: Article 4: Amendment For each Shareholders’ Meeting, a For each Shareholders’ Meeting, a in compliance shareholder may appoint a proxy to attend shareholder may appoint a proxy to attend with the Meeting in his/her behalf by executing the Meeting in his/her behalf by executing competent rules and a proxy form issued by the Company, a proxy form issued by the Company, laws. stating the scope of power authorized to stating the scope of power authorized to the proxy. the proxy. A shareholder may only execute one proxy A shareholder may only execute one proxy form and appoint one proxy only, and shall form and appoint one proxy only, and shall deliver such written proxy form to the deliver such written proxy form to the

  • 35 -
Amended Articles Articles Before Amendment Description
Company no later than five days prior to
the date of the Meeting. When one single
shareholder executes two or more written
proxy forms, the first one received by the
Company shall prevail, unless an explicit
statement is made to rescind the previous
written proxy form.
After a proxy form has been delivered to
the Company, in case the shareholder
intends to attend the Meeting in person or
to exercise his/her voting rights in writing
or by electronic transmission, a written
notice of proxy cancellation shall be
submitted to the Company two days prior
to the date of the Meeting. Otherwise, the
voting rights exercised by the proxy at the
Meeting shall prevail.
After the proxy form is delivered to the
Company, shareholders wishing to attend
the Shareholders'Meeting by
videoconference shall notify the Company
in writing of the cancellation of the proxy
two days before the Shareholders'
Meeting; If the cancellation is overdue, the
voting rights exercised by the proxy shall
prevail.		 Company no later than five days prior to
the date of the Meeting. When one single
shareholder executes two or more written
proxy forms, the first one received by the
Company shall prevail, unless an explicit
statement is made to rescind the previous
written proxy form.
After a proxy form has been delivered to
the Company, in case the shareholder
intends to attend the Meeting in person or
to exercise his/her voting rights in writing
or by electronic transmission, a written
notice of proxy cancellation shall be
submitted to the Company two days prior
to the date of the Meeting. Otherwise, the
voting rights exercised by the proxy at the
Meeting shall prevail.
Article 5:
The Shareholders’ Meeting shall be
convened at the headquarters or at an
appropriate place that facilitates the
attendance of shareholders, and shall begin
no earlier than 9:00AM and no later than
3:00PM of the meeting date. The venue
and time of the meeting shall be fully
considered by the Independent Directors.
When the Company holds a virtual
Shareholders’Meeting, it is not subject to
the restriction on the venue of the
preceding paragraph.		 Article 5:
The Shareholders’ Meeting shall be
convened at the headquarters or at an
appropriate place that facilitates the
attendance of shareholders, and shall begin
no earlier than 9:00AM and no later than
3:00PM of the meeting date. The venue
and time of the meeting shall be fully
considered by the Independent Directors.		 Amendment
in
compliance
with
competent
rules and
laws.
Article 6:
The Company shall specify in the Meeting
notice the time during which shareholder,
solicitors and entrusted proxies (collectively
"shareholders") attendance registrations
will be accepted,and location for		 Article 6:
The Company shall specify in the Meeting
notice the time during which shareholder
attendance registrations will be accepted,
and location for shareholders’ attendance
registration,and other matters for		 Amendment
in
compliance
with
competent
rules and
  • 36 -
Amended Articles Articles Before Amendment Description
shareholders’ attendance registration, and
other matters for attention.
Said time for shareholders’ attendance
registration will be accepted shall be at
least thirty minutes prior to the time
scheduled to begin the Meeting. The
Company shall set clear sign and assign
sufficient numbers of qualified personnel to
handle attendance registrations at the
location.For virtual shareholders’
meetings, shareholders may register on the
virtual meeting platform thirty minutes
before the meeting starts. Shareholders
completing registration will be deemed as
attend the shareholders’meeting in
person.
Shareholders shall attend the Meeting
based on the attendance badge, the
attendance sign-in card, or other
certificates of attendance. No arbitrary
requirements shall be imposed on
shareholders to provide additional
certificates of attendance beyond those
showing eligibility to attend. Solicitors
soliciting proxy forms shall also carry
identification and for verification.
The Company shall set up an attendance
book for shareholders to sign in, or the
attending shareholders shall hand in the
sign-in card as a sign in replacement.
The Company shall provide the agenda, the
annual report, the attendance badge, the
comments slip, the blank voting slips and
other Meeting materials to shareholders
who attend the Meeting; In case there will
be a Directors election, the blank election
ballots should also be provided for voting.
Government or juristic shareholders may
appoint more than one representative to
attend the Shareholders’ Meeting.
However, a juristic person attending the
Shareholders’ Meeting as a proxy may only
appoint one representative to attend.
Where a shareholders’meeting is held via
video conference, shareholders intend to		 attention.
Said time for shareholders’ attendance
registration will be accepted shall be at
least thirty minutes prior to the time
scheduled to begin the Meeting. The
Company shall set clear sign and assign
sufficient numbers of qualified personnel to
handle attendance registrations at the
location.
The Company shall set up an attendance
book for shareholders~~themselves or the~~
~~proxies designated by the shareholders~~
~~(hereinafter, "shareholders")~~to sign in, or
the attending shareholders shall hand in
the sign-in card as a sign in replacement.
The Company shall provide the agenda, the
annual report, the attendance badge, the
comments slip, the blank voting slips and
other Meeting materials to shareholders
who attend the Meeting; In case there will
be a Directors election, the blank election
ballots should also be provided for voting.
Shareholders shall attend the Meeting
based on the attendance badge, the
attendance sign-in card, or other
certificates of attendance. No arbitrary
requirements shall be imposed on
shareholders to provide additional
certificates of attendance beyond those
showing eligibility to attend. Solicitors
soliciting proxy forms shall also carry
identification and for verification.
Government or juristic shareholders may
appoint more than one representative to
attend the Shareholders’ Meeting.
However, a juristic person attending the
Shareholders’ Meeting as a proxy may only
appoint one representative to attend.		 laws.
  • 37 -
Amended Articles Articles Before Amendment Description
attend the virtual meeting shall register
with the Company two days before the
meeting date.
Where a shareholders’meeting is held via
video conference, the Company shall
upload the meeting agenda, annual report
and other meeting materials to the virtual
meeting platform at least thirty minutes
before the meeting starts, and keep them
disclosed until the end of the meeting.
Article 6-1:
When the Company holds a Shareholders’
Meeting via video conference, the
following items shall be specified in the
Shareholders’Meeting notice.
1. Ways for shareholders to participate in
virtual meeting and exercise their rights.
2. The methods of dealing with obstacles
caused by natural disasters, accidents, or
other force majeure events that make the
video conferencing platform or
participation in the form of video, at least
include the following items.
(1) The time at which the meeting must be
postponed or continued, and the date
when the meeting must be postponed or
continued cannot be ruled out if the
obstacles in the preceding paragraph
continue to occur.
(2) Shareholders who have not registered
to participate in the original Shareholders'
Meeting via video conference shall not
participate in the postponed or continued
meeting.
(3) When convening a video-assisted
Shareholders’Meeting, if the video
conference cannot be continued, the total
number of shares attended reaches the
statutory quota for the Shareholders’
Meeting after deducting the number of
shares attending via video conference, the
Shareholders’Meeting shall continue,
those who participate via video conference,
whose number of shares attended shall be
included in the total number of
shareholders'shares present, and they		 Addition in
compliance
with
competent
rules and
laws.
  • 38 -
Amended Articles Articles Before Amendment Description
shall be deemed to have abstained from
voting on all proposals at the Shareholders'
Meeting.
(4) How to deal with the situation where all
the resolutions have been announced and
no extraordinary motions have raised.
3. When convening a video-conference
shareholders’meeting, it shall specify
appropriate alternative measures for
shareholders who have difficulty
participating in video-conferencing.
Article 8:
The Company, 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. However, in case a shareholder files a
lawsuit pursuant to Article 189 of the
Company Act, the recording shall be
retained until the conclusion of the
litigation.
Where a shareholders’meeting is held via
video conference, the Company shall
record and preserve information such as
shareholder registration, sign-in, check-in,
questions raised, votes cast and results of
votes counted by the Company, and record
the entire video conference without
interruption
The information and audiovisual recordings
in the preceding paragraph shall be
properly preserved by the Company during
its existence, and the audiovisual
recordings shall be provided to the
entrusted party responsible for handling
video conference affairs for keeping.
Where a shareholders’meeting is held via
video conference, it is advisable for the
Company to record the audiovisuals of the
backend operation interface of the video
conference platform.		 Article 8:
The Company, 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. However, in case a shareholder files a
lawsuit pursuant to Article 189 of the
Company Act, the recording shall be
retained until the conclusion of the
litigation.		 Amendment
in
compliance
with
competent
rules and
laws.
  • 39 -

Amended Articles

Article 9:

Attendance at Shareholders’ Meeting 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 or sign-in cards handed in, and the shares checked in on the virtual meeting platform, plus the number of shares whose voting rights are exercised by correspondence or electronically.

The chairman shall call the meeting to order at the scheduled meeting time, and shall simultaneously announce relevant information such as the number of nonvoting shares and the number of shares in attendance.

However, when the attending shareholders do not represent a majority of the total number of issued shares, the chairman may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. In case 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 chairman shall announce the meeting adjourned. Where a shareholders’ meeting is held via video conference, the Company shall also declare the meeting adjourned at the virtual meeting platform.

If the quorum is still 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. Where a shareholders’ meeting is held via video conference, shareholders intend to attend

Articles Before Amendment Description Article 9: Amendment Attendance at Shareholders’ Meeting shall in be calculated based on numbers of shares. compliance with The number of shares in attendance shall competent be calculated according to the shares rules and indicated by the attendance book or sign-in laws. cards handed in, plus the number of shares whose voting rights are exercised by correspondence or electronically. The chairman shall call the meeting to order at the scheduled meeting time, and shall simultaneously announce relevant information such as the number of nonvoting shares and the number of shares in attendance. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chairman may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. In case 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 chairman shall announce the meeting adjourned. If the quorum is still 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. Prior to the conclusion of the current Meeting, once the number of shares represented by the shareholder’s present reaches a majority of outstanding shares, the chairman of the Meeting may resubmit tentative resolutions already made for a vote by the shareholders in accordance

  • 40 -
Amended Articles Articles Before Amendment Description
the virtual meeting shall re-register to the
Company in accordance with Article 6.
Prior to the conclusion of the current
Meeting, once the number of shares
represented by the shareholder’s present
reaches a majority of outstanding shares,
the chairman of the Meeting may resubmit
tentative resolutions already made for a
vote by the shareholders in accordance
with the provisions of Article 174 of the
CompanyAct.		 with the provisions of Article 174 of the
Company Act.
Article 11:
Prior to speaking, attending shareholders
shall specify on a comment slip the subject
to be expressed, his/her shareholder
account number (or attendance badge
number) and his/her name. The sequence
of the shareholders’ speeches will be
arranged by the chairman.
(Following contents which have not been
amended have omitted.)
After an attending shareholder has spoken,
the chairman may respond in personal or
appoint relevant personnel to respond.
Where a shareholders’meeting is held via
video conference, shareholders attending
the virtual meeting may raise questions in
writing at the virtual meeting platform
from the chairman declaring the meeting
begins until the chairman declaring the
meeting adjourned. No more than two
questions for the same proposal may be
raised. Each question shall contain no more
than 200 words, where the regulations in
paragraphs 1 to 5 shall not apply.
As long as questions so raised in
accordance with the preceding paragraph
are not in violation of the regulations or
beyond the scope of a proposal, it is
advisable the questions be disclosed to the
public at the virtual meeting platform.		 Article 11:
Prior to speaking, attending shareholders
shall specify on a comment slip the subject
to be expressed, his/her shareholder
account number (or attendance badge
number) and his/her name. The sequence
of the shareholders’ speeches will be
arranged by the chairman.
(Following contents which have not been
amended have omitted.)
After an attending shareholder has spoken,
the chairman may respond in personal or
appoint relevant personnel to respond.		 Amendment
in
compliance
with
competent
rules and
laws.
Article 13:
A shareholder shall be entitled to one vote
for each share held, except when the
shares are restricted shares or are deemed		 Article 13:
A shareholder shall be entitled to one vote
for each share held, except when the
shares are restricted shares or are deemed		 Amendment
in
compliance
with
competent
  • 41 -

Amended Articles Articles Before Amendment Description non-voting shares under Article 179, non-voting shares under Article 179, rules and paragraph 2 of the Company Act. paragraph 2 of the Company Act. laws. (Following contents which have not been (Following contents which have not been amended have omitted.) amended have omitted.) A shareholder intends to exercise voting A shareholder intends to exercise voting rights by correspondence or electronic rights by correspondence or electronic means under the preceding paragraph , if means under the preceding paragraph, if they also intend to attend the they also intend to attend the shareholders' meeting in person or via shareholders' meeting in person, they shall videoconference, they shall deliver a deliver a written declaration of intent to written declaration of intent to the the Company before two days prior to the Company before two days prior to the date date of the Shareholders’ Meeting. When of the Shareholders’ Meeting. When duplicate declarations of intent are duplicate declarations of intent are delivered, the one received earliest shall delivered, the one received earliest shall prevail, except when a declaration is made prevail, except when a declaration is made to cancel the earlier declaration of intent. to cancel the earlier declaration of intent. (Following contents which have not been (Following contents which have not been amended have omitted.) amended have omitted.) Vote counting for Shareholders’ Meeting Vote counting for Shareholders’ Meeting proposals or elections shall be conducted proposals or elections shall be conducted in public at the place of the Shareholders’ in public at the place of the Shareholders’ Meeting. Once vote counting has been Meeting. Once vote counting has been completed, the results of the voting, completed, the results of the voting, including the statistical tallies of the including the statistical tallies of the numbers of votes, shall be announced onnumbers of votes, shall be announced onsite at the meeting, and the vote record site at the meeting, and the vote record shall be made for reference. shall be made for reference.

Where a shareholders’ meeting is held via video conference, after the chairman declares the beginning of the meeting, shareholders who attend the virtual meeting shall cast votes on proposals and elections on the virtual meeting platform before the chairman announces the voting session ends or will be deemed abstained from voting.

Where a shareholders’ meeting is held via video conference, votes shall be counted at once after the chairman announces the voting session ends, and results of votes and elections shall be announced immediately.

In case a video-assisted shareholders’ meeting is held, if shareholders who have registered to attend the virtual meeting in

  • 42 -
Amended Articles Articles Before Amendment Description
accordance with Article 6 decide to attend
the physical shareholders’meeting in
person, they shall revoke their registration
two days before the shareholders’meeting
in the same manner as they registered. If
their registration is not revoked within the
time limit, they may only attend the virtual
shareholders meeting.
When shareholders exercise voting rights
by correspondence or electronic means,
unless they have withdrawn the declaration
of intent and attended the virtual
shareholders’meeting, except for
extraordinary motions, they will not
exercise voting rights on the original
proposals or make any amendments to the
original proposals or exercise voting rights
on amendments to the original proposal.
Article 15:
Resolutions adopted at a Meeting shall be
recorded in the Meeting Minutes. The
Meeting Minutes shall be signed or sealed
by the chairman of the Meeting, and a copy
shall be distributed to each shareholder
within twenty days after the conclusion of
the Meeting. The Meeting Minutes may be
prepared and distributed by means of
electronic form.
The Meeting Minutes as required in the
preceding paragraph may be distributed by
means of a public announcement through
MOPS.
The Meeting Minutes shall accurately
record the date and place of the Meeting,
the name of the chairman, the method of
resolution adopting, and a summary of the
deliberations and the results of the voting
(including the total number of voting
rights). In the event of election of Directors,
the number of voting rights won by each
candidate shall be disclosed. The Meeting
Minutes shall be retained permanently
throughout the life of the Company.
Where a shareholders’meeting is held via
video conference, in addition to the
particulars to be included in the meeting		 Article 15:
Resolutions adopted at a Meeting shall be
recorded in the Meeting Minutes. The
Meeting Minutes shall be signed or sealed
by the chairman of the Meeting, and a copy
shall be distributed to each shareholder
within twenty days after the conclusion of
the Meeting. The Meeting Minutes may be
prepared and distributed by means of
electronic form.
The Meeting Minutes as required in the
preceding paragraph may be distributed by
means of a public announcement through
MOPS.
The Meeting Minutes shall accurately
record the date and place of the Meeting,
the name of the chairman, the method of
resolution adopting, and a summary of the
deliberations and the results of the voting
(including the total number of voting
rights). In the event of election of Directors,
the number of voting rights won by each
candidate shall be disclosed. The Meeting
Minutes shall be retained permanently
throughout the life of the Company.		 Amendment
in
compliance
with
competent
rules and
laws.
  • 43 -
Amended Articles Articles Before Amendment Description
minutes as described in the preceding
paragraph, the begin time and end time of
the shareholders meeting, way of meeting
convened, the chairman's and recorder’s
name, and actions to be taken in the event
of disruption to the virtual meeting
platform or participation in the virtual
meeting due to natural disasters, accidents
or other force majeure events, and how
issues will be dealt with, shall also be
included in the minutes.
When convening a virtual shareholder’
meeting, other than compliance with the
requirements in the preceding paragraph,
the Company shall specify in the meeting
minutes alternative measures available to
shareholders with difficulties in attending a
virtual shareholders’meeting.
Article 16:
On the date of the Meeting, the Company
shall draw up a statistics statement of the
number of shares obtained by solicitors
through solicitation, the number of shares
represented by proxiesand the number of
shares represented by shareholders
attending the meeting by correspondence
or electronic means,in compliance with
the required format, and shall make an
express disclosure of the same at the place
of the shareholders’ meeting.Where a
shareholders’meeting is held via video
conference, the Company shall upload the
above meeting materials to the virtual
meeting platform at least 30 minutes
before the meeting begins, and keep this
information disclosed until the end of the
meeting.
During the Company's virtual shareholders’
meeting, when the meeting is called to
order, the total number of shares
represented at the meeting shall be
disclosed on the virtual meeting platform.
The same shall apply whenever the total
number of shares represented at the
meeting and a new tally of votes is released
during the meeting.		 Article 16:
On the date of the Meeting, the Company
shall draw up a statistics statement of the
number of shares obtained by solicitors
through solicitation~~and ~~the number of
shares represented by proxies in
compliance with the required format, and
shall make an express disclosure of the
same at the place of the shareholders’
meeting. If matters resolved/adopted at
the Shareholders’ Meetings constitute
material under applicable laws or
regulations or under Taiwan Stock
Exchange Corporation (or Taipei Exchange)
regulations, the Company shall upload such
contents to the MOPS within the
prescribed time period.		 Amendment
in
compliance
with
competent
rules and
laws.
  • 44 -
Amended Articles Articles Before Amendment Description
If matters resolved/adopted at the
Shareholders’ Meetings constitute material
under applicable laws or regulations or
under Taiwan Stock Exchange Corporation
(or Taipei Exchange) regulations, the
Company shall upload such contents to the
MOPS within the prescribed time period.
Article 19:
Where a shareholders’meeting is held via
video conference, the Company shall
disclose real-time results of votes and
election immediately after the end of the
voting session on the virtual meeting
platform according to the regulations, and
this disclosure shall continue at least 15
minutes after the chairman has announced
the meeting adjourned.		 Addition in
compliance
with
competent
rules and
laws.
Article 20
Where a shareholders’meeting is held via
video conference, both the chairman and
recorder shall be in the same location, and
the chairman shall declare the address of
their location when the meeting is called to
order.		 Addition in
compliance
with
competent
rules and
laws.
Article 21:
Where a shareholders’meeting is held via
video conference, the Company may offer a
simple connection test to shareholders
prior to the meeting, and provide relevant
real-time services before and during the
meeting to help resolve communication
technical issues.
Where a shareholders’meeting is held via
video conference, when declaring the
meeting to begin, the chairman shall also
declare, unless under a circumstance
where a meeting is not required to be
postponed to or resumed at another time
under Article 44-20, paragraph 4 of the
Regulations Governing the Administration
of Shareholder Services of Public
Companies, if the virtual meeting platform
or participation in the virtual meeting is
obstructed due to natural disasters,
accidents or other force majeure events		 Addition in
compliance
with
competent
rules and
laws.
  • 45 -
Amended Articles Articles Before Amendment Description
before the chairman has announced the
meeting adjourned, and the obstruction
continues for more than thirty minutes, the
meeting shall be postponed to or resumed
on another date within five days, in which
case Article 182 of the Company Act shall
not apply.
For a meeting to be postponed or resumed
as described in the preceding paragraph,
shareholders who have not registered to
participate in the affected virtual
shareholders’meeting shall not attend the
postponed or resumed session.
For a meeting to be postponed or resumed
under the second paragraph, the number
of shares represented by, and voting rights
and election rights exercised by the
shareholders who have registered to
participate in the affected shareholders’
meeting and have successfully signed in the
meeting, but do not attend the postpone
or resumed session, at the affected
shareholders’meeting, shall be counted
towards the total number of shares,
number of voting rights and number of
election rights represented at the
postponed or resumed session.
During a postponed or resumed session of
a shareholders’meeting held under the
second paragraph, no further discussion or
resolution is required for proposals for
which votes have been cast and counted
and results have been announced, or list of
elected directors and supervisors.
Where a video-assisted shareholders’
meeting is held, and the virtual meeting
cannot continue as described in second
paragraph, if the total number of shares
represented at the meeting, after
deducting those represented by
shareholders attending the virtual
shareholders’meeting, still meets the
minimum legal requirement for a
shareholder’s meeting, then the
shareholders’meeting shall continue, and
no postponement or resumption thereof
  • 46 -
Amended Articles Articles Before Amendment Description
under the second paragraph is required.
Under the circumstances where a meeting
shall continue as in the preceding
paragraph, the shares represented by
shareholders attending the virtual meeting
shall be counted towards the total number
of shares represented by shareholders
present at the meeting, provided these
shareholders shall be deemed abstaining
from voting on all proposals on meeting
agenda of that shareholders’meeting.
When postponing or resuming a meeting
according to the second paragraph, the
Company shall handle the preparatory
work based on the date of the original
shareholders’meeting in accordance with
the requirements listed under Article 44-
20, paragraph 7 of the Regulations
Governing the Administration of
Shareholder Services of Public Companies.
For dates or period set forth under Article 12,
second half, and Article 13, paragraph 3 of
Regulations Governing the Use of Proxies for
Attendance at Shareholder Meetings of
Public Companies, and Article 44-5,
paragraph 2, Article 44-15, and Article 44-17,
paragraph 1 of the Regulations Governing the
Administration of Shareholder Services of
Public Companies, the Company shall handle
the matter based on the date of the
shareholders’meeting that is postponed or
resumed under the second paragraph.
Article 22:
Where a virtual shareholders’meeting is
held, the Company shall provide
appropriate alternative measures available
to shareholders with difficulties in
attending a virtual shareholders’meeting
online.		 Amendment
in
compliance
with
competent
rules and
laws.
Article23:
The adoption of these Rules, and any
amendments, shall be proposed to the
Board of Directors for adoption, and shall
be effective after proposed to the
Shareholders’ Meeting for approval.		 Article~~19:~~
The adoption of these Rules, and any
amendments, shall be proposed to the
Board of Directors for adoption, and shall
be effective after proposed to the
Shareholders’ Meeting for approval.		 Adjust the
article
number to
match the
newly added
article of the
rules and
laws.
  • 47 -
Amended Articles Articles Before Amendment Description
Article24:
These Rules are stipulated on June 18, 2013.
The first amendment was approved on June
17, 2015.
The second amendment on June 18, 2020.
The third amendment on August 23, 2021.
And the fourth amendment on XX XX,
2023.		 Article~~20:~~
These Rules are stipulated on June 18, 2013.
The first amendment was approved on June
17, 2015.
The second amendment on June 18, 2020.
And the third amendment on August 23,
2021.		 Update the
date of
amendment.
  • 48 -

YC INOX Co., Ltd.

Shareholdings Status of Directors

As of the book closure date on April 18[th] , 2023, the Company has issued 447,426,545 common shares, according to Article 26 of Securities and Exchange Act, all directors shall collectively hold at least 16,000,000 common shares

A/C NO. Name Current Shareholding
(Shares)
21 Chang, Chin-Yu 6,029,632
41 Tai Chyang Investment Co., LTD. 61,209,508
7811 Chin Ying Fa Mechanical Ind Co., Ltd. 6,898,000
28 Hsieh, Ming-Hong 2,452,072
10927 Chang, Po-Kai 2,370,264
39854 Pan, Cheng-Hsiung 271,458
22460 Chen, Tai-Shan 135,513
46140 Kuo, Chao-Sung 417,884
142055 Chang, Wei-Lun 0
Total 79,784,331

  • Note 1: Refers to the number of shares stated in shareholder register on April 18, 2023, the book closure date for the 2023 Shareholders’ Meeting.

  • Note 2: As the Company has established the audit committee that satisfies the requirements of the Securities and Exchange Act, the minimum shareholding requirement for supervisors does not apply.

  • Note 3: The total shares held by the directors of the Company has already met the statutory standard of Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.

  • 49 -

YC INOX Co., Ltd.

Articles of Incorporation

Chapter I: General Provisions

Article 1:

This Company is duly incorporated under the provisions governing company limited by shares as set forth in the Company Act, its full name is 允強實業股份有限公司 in Chinese, and YC INOX Co., Ltd. in English (hereinafter referred to as “the Company”).

Article 2:

The business scope of the Company are as follows:

  1. CA01050 Steel Secondary Processing;

  2. CA01990 Other Non-ferrous Metal Basic Industries;

  3. CA02990 Other Metal Products Manufacturing;

  4. CA03010 Heat Treatment;

  5. CA04010 Surface Treatment;

  6. E599010 Piping Engineering;

  7. F106010 Wholesale of Hardware;

  8. F401010 International Trade;

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

Article 2-1:

Once the Company becomes a limited liability shareholder of other company, the total amount of all of its investments is not subject to the upper limit of forty percent of the Company’s paidin capital as set forth in Article 13 of the Company Act, provided that such investment shall be approved by the Board of Directors.

Article 2-2:

The Company may endorse and guarantee other party in accordance with "Procedures of Endorsement and Guarantee" stipulated by the Company according to its business needs.

Article 3:

The Company is headquartered in Changhua County. If necessary, the Company may establish branches domestically and abroad upon the approval of the Board of Directors.

Article 4:

Public announcement of the Company shall be made in accordance with the provisions in Article 28 of Company Act.

Chapter II: Shares

Article 5:

The total capital of the Company is six billion six hundred million New Taiwan Dollars (NT$6,600,000,000), which can be divided into six hundred sixty million shares (660,000,000 shares), at a par value of ten New Taiwan Dollars (NT$10) per share. The Company shall issue shares in installments according to its actual needs upon the approval of the Board of Directors.

Article 5-1:

The Company may grant its employees (including employees of affiliations) who are qualified for certain conditions with the Company’s treasury stocks, employee stock option certificates, new shares subscriptions, and new restricted employee shares.

  • 50 -

Article 6:

The Company's shares shall be registered and serial numbered, and shall be signed or sealed by the directors who have the right to represent the Company, and its issuance shall be duly certified and authenticated by the bank authorized under applicable laws and regulations. The Company may issue shares without printing the share certificates, provided that the issued shares shall be registered to TDCC, and its process shall follow TDCC’s regulations.

Article 7:

Except as otherwise prescribed by other laws and regulations, the Company’s share affairs shall follow the provisions under the “Regulations Governing the Administration of Shareholder Services of Public Companies”.

Article 8:

Registered share certificates issued by the Company shall only be transferred by assignors to assignees only by way of endorsement; the name or title of the assignee shall be stated on the share certificates. The name or title and address of residence of the assignee shall be recorded in the shareholders’ roster, may the assignees claim their rights against the Company.

Article 9:

In case shareholders lose or damage their share certificates, shareholders shall apply to the Company for reissuance of share certificates in written form under stipulated procedures in accordance with laws and regulations.

Article 10:

(Deleted)

Article 11:

During the book closure period, share affairs of the Company shall follow the Company Act and other applicable laws and regulations.

Chapter III: Shareholders’ Meeting

Article 12:

There are two types of shareholders’ meeting: general shareholders’ meeting and extraordinary shareholders’ meeting. Unless otherwise provided by the Company Act, the meeting shall be convened by the Board of Directors.

The Board of Directors shall convene the general shareholders’ meeting once per annum within six months from the end of each fiscal year, by notifying all shareholders thirty days prior to the general shareholders’ meeting date. The extraordinary shareholders’ meeting may be convened whenever deemed necessary by notifying all shareholders fifteen days prior to the extraordinary shareholders’ meeting date.

Article 12-1:

The Company may convene shareholders’ meetings by means of visual communication network or other methods promulgated by the central competent authority.

Article 13:

In case a shareholder is unable to attend a shareholders’ meeting for any cause, the shareholder may appoint a proxy to attend the meeting on his/her behalf by executing a proxy form in accordance with the Article 177 of the Company Act. Except as otherwise prescribed in the Company Act, a shareholder may also appoint a proxy in accordance with the provisions set forth in the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies” published by the competent authority. With the exception of a trust enterprises or stock affairs agency institutions approved by the competent securities authority,

  • 51 -

in case 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. Once the percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.

Article 14:

In the time of convening the shareholders’ meeting, the meeting shall be chaired by the Chairman of the Board of Directors. In case the Chairman on leave or can not exercise his power and authority for any cause, he/she shall appoint a Director to act on his/her behalf. In the absence of such appointment, the Directors shall elect one person from among themselves to chair the meeting.

Article 15:

Except in case of not entitled to voting rights prescribed in the Article 179 of the Company Act, each share held by the shareholders of the Company shall be entitled to one vote.

Article 16:

Except otherwise provided in the Company Act, the adoption of a proposal shall be made by a majority of shareholders present at a meeting attended by a majority of all shareholders.

Article 17:

Resolutions adopted at a shareholders’ meeting shall be recorded in the Meeting Minutes. The Meeting Minutes shall be signed or sealed by the chairman of the Meeting, and a copy shall be distributed to each shareholder within twenty days after the conclusion of the Meeting. The Meeting Minutes may be prepared and distributed by means of electronic form or public announcement.

The items to be recorded in the minutes for shareholders' meeting, the preparation of attendance book bearing the signatures of attending shareholders, and retention period of the proxy forms, such matters shall follow the provisions of Article 183 of the Company Act.

Chapter IV: Board of Directors and Audit Committee

Article 18:

The Board of Directors of the Company consists of nine to eleven directors. The Board of Directors of the Company shall determine the number of directors to be elected within this range. The directors’ election shall be conducted by nomination mechanism; shareholders may elect the directors from the list of Director nominees.

The numbers of directors referred to in the preceding paragraph shall at least contain three independent directors. The independent directors and non-independent directors shall be elected at the same election, provided that the seats elected shall be calculated separately. The election of independent directors shall be conducted by nomination mechanism, shareholders may elect the independent directors from the list of independent Director nominees.

The candidates’ qualifications for running for the independent directors, restrictions on his/her shareholding and bywork conditions, method of nomination and election, and other related matters shall follow the Company Act, the Securities and Exchange Act, and any other applicable laws and regulations.

The total registered shares held by all directors shall meet the required percentage prescribed in the competent securities authority.

  • 52 -

Article 18-1:

The Company shall establish an Audit Committee, composed of the all independent directors, one of whom shall be the convener, and at least one of whom shall possess of accounting or financial expertise.

An adoption of resolution by the Audit Committee shall be approved by a majority of all members. From the date of establishment, the Audit Committee is responsible for implementing the supervisor’s duties prescribed in the Company Act, the Securities and Exchange Act and other applicable laws and regulations.

Article 19:

In case the number of directors falls short by one third of the total number of seats available, the Company shall convene an extraordinary shareholders’ meeting within 60 days from the date of occurrence to conduct a by-election to fill the vacancy(ies), and the tenure of the byelected director(s) shall be limited to the tenure of the original directors. However, in case a director elected is a juristic shareholder or its representative, such representative may be reappointed to satisfy the requirement the position in any time during the original tenure.

Article 20:

The tenure of a director shall be three years and may be eligible for re-election. In case the new directors’ election is not conducted when current tenure expires, such tenure shall be extended until the inauguration of new elected directors.

Article 21:

The directors form the Board of Directors. The directors shall elect a Chairman of the Board Directors from among themselves by a majority at a meeting attended by over two-thirds of the directors. The Chairman of the Board of Directors shall internally chair the Shareholders’ Meeting and the Board of Directors, and externally have the authority to represent the Company. The Chairman executes all affairs of the Company in accordance with the provisions of laws and regulations, the Articles of Incorporations of the Company, and the resolutions adopted by the Shareholders’ Meetings and the Board of Directors.

In case the Chairman on leave or can not exercise his power and authority for any cause, he/she shall appoint a Director to act on his/her behalf. In the absence of such appointment, the Directors shall elect one person from among themselves to chair the meeting.

Article 22:

The Company’s operating strategy and other important matters, except those that shall be adopted by the Shareholders’ Meeting in accordance with the laws, shall be adopted by the Board of Directors.

Except for the first meeting of each term of the Board of Directors shall be convened in compliance with the provisions of Article 203 of the Company Act, others board meetings shall be convened by the Chairman.

The convening of a Board Meeting shall be notified to all directors seven days in advance with convening reasons stated. In urgent circumstances, Board Meeting may be convened at any time.

Aforementioned notice may be made by means of electronic transmission with the prior consent of the recipients.

Article 23:

Except for otherwise specified in the Company Act, the resolution/adoption of a proposed resolution shall be made by a majority of those directors present at a meeting by a majority of all directors.

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In case a director has a personal interest conflict, he/she shall explain their own interests at the respective meeting. Once that may impair the interests of the Company, he/she shall not join the discussion and voting of such matter, nor exercise the right to vote on behalf of other directors.

Where the spouse of a Director, a blood relative having a second or closer degree of kinship of a Director, or any company which controls or is controlled by a Director who has interest in the matter under discussion at the meeting, such Director shall be deemed to have a personal interest in the matter.

Every time a director appoints another director to attend the Board Meeting on behalf of him/her shall issue a proxy, stating the scope of authorization with respect to the meeting convening reasons. The appointee referred to preceding paragraph shall not be appointed as proxy for more than one director.

Article 24:

The Company’s resolutions of every Board Meeting shall be recorded in the meeting minutes, which shall be signed or chopped by the chairman of the meeting, then distributed to each Director within 20 days after the meeting.

The matters to be recorded in the meeting minutes, the preservation of the attendance book for the attending Directors and the proxy forms, shall follow the provisions in the Article 183 of the Company Act.

Article 25: (Deleted)

Article 25-1:

The traveling expenditures, the salary and other allowances of Directors who executing businesses for the Company, shall be paid in accordance with the standard which is stipulated by the Board of Directors by referring to the arms’ length range of the same industry regardless of profit or loss.

Article 25-2:

The Company shall insure its Directors, and important employees who currently involved in the Company’s decision-making, against liability insurance, which shall cover legally-binding compensation liability of their business scopes.

The Company shall report important information of said insurance, such as insured amounts, coverage and rates, to the next Board Meeting after such insurances (or renewal) is completed.

Chapter V: Managerial Officers and Employees

Article 26:

The Company shall appoint one General Manager, whose appointment, dismissal and remuneration shall comply with the Company Act and the Procedures of Organization Management.

Article 27:

The Company may employ a consultant or appoint/dismiss important employees by a resolution of the Board of Directors in accordance with the provisions of Article 23 of Articles of Incorporation.

Article 28:

Other employees of the Company other than the those in preceding articles shall be appointed/dismissed by the General Manager in accordance with the relevant internal management measures of the Company.

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Chapter VI: Finalization of Accounts

Article 29:

After the end of each fiscal year, the Board of Directors of the Company shall prepare the following documents and submit them to the Audit Committee for audit 30 days before the General Shareholders’ Meeting. The Audit Committee shall issue an audit report and propose it to the General Shareholders’ Meeting for approval.

  1. Business Report,

  2. Financial statements, and

  3. Proposals of earnings distribution or deficits offset.

Article 30:

In case the Company results profits for the year, it shall reserve 2% to 6% of profits as employees’ profit sharing, and the Board of Directors shall determine said profits shall be distributed by way of share or cash, which can also be distributed to employees of affiliations who meet certain conditions; Board of Directors may also adopt a resolution to reserve up to 2% of said profits as Directors’ compensation. The resolution of distribution of employees’ profit sharing and directors’ compensation shall be reported to the Shareholders’ Meeting.

In case the Company still has accumulated losses, a certain amount of the earnings corresponding to accumulated losses shall be retained, then the employees’ profit sharing and directors’ compensation shall be reserved by the percentage specified in the preceding paragraph.

Article 30-1:

In case the Company results profits in annual accounts finalization, after tax is paid in accordance with laws and deficits is offset, the Company shall reserve 10% legal reserve of the remaining earnings. However, such reservation may no longer need to be made once the amount of accumulated legal reserve has reached the amount of paid-in capital of the Company. The remaining earnings shall be reserved as special reserves or the special reserves shall reverse as an add-on to remaining earnings in accordance with applicable laws. When reserving the special reserves, once the unappropriated earnings balance carried from the preceding period is insufficient, it shall reserve from the amount of current net income plus other items designated to be included in unappropriated retained earnings. In case there are still remaining amounts of earnings, the Board of Directors may draft a proposal of earnings distribution to distribute such earnings (together with the retained earnings available) as dividends, submit to the Shareholders’ Meeting for adoption.

The dividend policy of the Company shall be consistent with factors such as its current and future development plans, investment environment, capital needs, domestic and overseas competition and the interests of shareholders. The Company may annually distribute more than fifty percent of retained earnings available as dividends. In case dividend per share is less than NT$0.5, it may be retained for not distributing in the current year. The Company is in a traditional industry and its operation has reached maturity and stability, therefore its dividends shall be preferentially distributed by way of cash dividend, however, it may also be distributed by way of share dividend, provided that the part of cash dividend shall not be less than 20%. When distributing dividend, the Company may consider its financial situation, business and operational factors to determine the distribution of part or all of the surplus in accordance with applicable laws or regulations of competent authority.

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Chapter VII: Supplementary Provisions

Article 31:

The organizational rules and the enforcement rules of the Company shall be otherwise stipulated by the Board of Directors.

Article 32:

Any matters not provided for in these Articles of Incorporation, the Company Act and other applicable laws shall govern.

Article 33 ：

These Articles of Incorporation are stipulated on January 9, 1973, the first amendment was approved on January 22, 1973, the second amendment on March 20, 1974, the third amendment on September 27, 1975, the fourth amendment on October 30, 1978, the fifth amendment on February 18, 1982, the sixth amendment on October 25, 1983, the seventh amendment on June 24, 1987, the eighth amendment on May 3, 1988, the ninth amendment on September 26, 1994, the tenth amendment on March 7, 1995, the eleventh amendment on June 23, 1995, the twelfth amendment on July 29, 1995, the thirteenth amendment on October 21, 1995, the fourteenth amendment on February 1, 1996, the fifteenth amendment on September 20, 1997, the sixteenth amendment on May 28, 1998, the seventeenth amendment on April 12, 2000, the eighteenth amendment on June 7, 2002, the nineteenth amendment on June 14, 2006, the twentieth amendment on June 15, 2007, the twenty-first amendment on June 19, 2009, the twenty-second amendment on June 17, 2010, the twenty-third amendment on June 22, 2011, the twenty-fourth amendment on June 18, 2012, the twenty-fifth amendment on June 18, 2013, the twenty-sixth amendment on June 18, 2014, the twentyseventh amendment on June 17, 2015, the twenty-eighth amendment on June 15, 2016, the twenty-ninth amendment on June 14, 2019, the thirtieth amendment on June 18, 2020, and the thirty-first amendment on June 16, 2022.

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YC INOX Co., Ltd. Rules of Procedure of Shareholders’ Meeting

Article 1:

To establish a strong governance system and sound supervisory capabilities for the Company's Shareholders’ Meetings, and to strengthen management capabilities, these Rules are adopted pursuant to the Article 5 of the Corporate Governance Best Practice Principles for Taiwan Stock Exchange Corp (“TWSE”)/ Taipei Exchange (“TPEx”) Listed Companies.

Article2:

Except as otherwise specified by laws, regulations or Articles of Incorporation of YC INOX Co., Ltd. (herein referred to as "the Company"), the rules of procedure at Shareholders’ Meeting shall be as prescribed in these Rules.

Article 3:

Except as otherwise stipulated in laws and regulations, the Company’s Shareholders’ Meeting shall be convened by the Board of Directors.

The Company shall prepare electronic versions of the shareholders meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposed resolutions for ratification, proposed resolutions for discussion, or the election or dismissal of directors, and upload them to the Market Observation Post System (MOPS) prior to 30 days before the date of a general shareholders’ meeting or prior to 15 days before the date of an extraordinary shareholders’ meeting. The Company shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS prior to 21 days before the date of the general shareholders’ meeting or prior to 15 days before the date of the extraordinary shareholders’ meeting. Prior to 15 days before the date of the shareholders meeting, The Company 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 The Company and the professional stock affairs 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; Said notice may be made by means of electronic transmission with the prior consent of the recipients.

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, earnings distributed in the form of new shares, reserve distributed in the form of new shares, the dissolution, merger, or demerger of the Company, any matter under Article 185, paragraph 1 of the Company Act, Article 26-1 and Article 43-6 of the Securities and Exchange Act, or Article 56-1 and Article 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. Once the resolution of re-election of all Directors as well as their inauguration date is stated in the notice of the convening reasons of 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.

Shareholders holding one percent or more of the total number of issued shares may submit a proposal to the Company for discussion at a General Shareholders’ Meeting, provided only one

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item shall be allowed in each single proposal, and in case a proposal contains more than one item, such proposal shall not be included in the agenda. Proposals that are under the circumstances as specified in Article 172-1, paragraph 4 of the Company Act, the Board of Directors may not include such proposals in the agenda. Shareholders may submit a proposal which is to urge the Company to promote public interests or fulfill its social responsibilities. Such proposal shall be procedurally done in compliance with Article 172-1 of the Company Act that, only one item shall be allowed in each single proposal, and in case a proposal contains more than one item, such proposal shall not be included in the agenda.

Prior to the book closure date before the General Shareholders’ Meeting is held, the Company shall publicly announce the location and the time period for shareholders to submit proposals in writing or electronic transmission. The period for submission of shareholder proposals may not be less than ten days.

Proposals submitted by shareholders are limited to no more than three hundred words, and no proposal containing more than three hundred words will be included in the agenda. The shareholder who submitting a proposal shall attend the Shareholders’ Meeting in person or by proxy, and shall take part in the discussion of such proposal.

Prior to the date of Meeting notice issuance date, the Company shall inform the proposal submitting shareholders of the proposal screening results, and shall list in the Meeting notice that conform to the requirements set out in this Article. At the Shareholders’ Meeting, the Board of Directors shall state 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 in his/her behalf by executing a proxy form issued by the Company, stating the scope of power authorized to the proxy.

A shareholder may only execute one proxy form and appoint one proxy only, and shall deliver such written proxy form to the Company no later than five days prior to the date of the Meeting. When one single shareholder executes two or more written proxy forms, the first one received by the Company shall prevail, unless an explicit statement is made to rescind the previous written proxy form.

After a proxy form has been delivered to the Company, in case the shareholder intends to attend the Meeting in person or to exercise his/her voting rights in writing or by electronic transmission, a written notice of proxy cancellation shall be submitted to the Company two days prior to the date of the Meeting. Otherwise, the voting rights exercised by the proxy at the Meeting shall prevail.

Article 5:

The Shareholders’ Meeting shall be convened at the headquarters or at an appropriate place that facilitates the attendance of shareholders, and shall begin no earlier than 9:00AM and no later than 3:00PM of the meeting date. The venue and time of the meeting shall be fully considered by the Independent Directors.

Article 6:

The Company shall specify in the Meeting notice the time during which shareholder attendance registrations will be accepted, and location for shareholders’ attendance registration, and other matters for attention.

Said time for shareholders’ attendance registration will be accepted shall be at least thirty minutes prior to the time scheduled to begin the Meeting. The Company shall set clear sign and

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assign sufficient numbers of qualified personnel to handle attendance registrations at the location.

The Company shall set up an attendance book for shareholders themselves or the proxies designated by the shareholders (hereinafter, "shareholders") to sign in, or the attending shareholders shall hand in the sign-in card as a sign in replacement.

The Company shall provide the agenda, the annual report, the attendance badge, the comments slip, the blank voting slips and other Meeting materials to shareholders who attend the Meeting; In case there will be a Directors election, the blank election ballots should also be provided for voting.

Shareholders shall attend the Meeting based on the attendance badge, the attendance sign-in card, or other certificates of attendance. No arbitrary requirements shall be imposed on shareholders to provide additional certificates of attendance beyond those showing eligibility to attend. Solicitors soliciting proxy forms shall also carry identification and for verification.

Government or juristic shareholders may appoint more than one representative to attend the Shareholders’ Meeting. However, a juristic person attending the Shareholders’ Meeting as a proxy may only appoint one representative to attend.

Article 7:

In case a Shareholders’ Meeting is convened by the Board of Directors, the Meeting shall be chaired by the Chairman of the Board of Directors. In case the Chairman is on leave or for any reason unable to exercise the power of the chairman, the Vice-Chairman shall act on the Chairman’s behalf. In case there is no Vice-Chairman or the Vice-Chairman is on leave or for any reason unable to exercise his/her power as well, the Chairman shall appoint a Managing Director to act on his/her behalf at the meeting. In case the Company doesn’t set Managing Director, the Director shall be appointed to act as agent. In the absence of such appointee appointed by the chairman, the Managing Directors or Director shall elect one person from among themselves to chair the meeting.

Said a Managing Director or a Director appointed to act as the aforementioned chairman of the Meeting, this person shall be one who has held that position for at least six months and understands the financial and business conditions of the Company. The same provision shall apply mutatis mutandis to the case that the chairman of the Meeting is acted by the representative of a Juristic Director.

It is recommended that Shareholders’ Meeting convened by the Board of Directors be chaired by the Chairman 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 other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall elect a chairman from among themselves.

The Company may appoint its attorneys, certified public accountants, or other relevant personnel to attend the Shareholders’ Meeting in a non-voting capacity

Article 8:

The Company, 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.

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The recorded materials of the preceding paragraph shall be retained for at least one year. However, in case 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’ Meeting 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 or sign-in cards handed in, plus the number of shares whose voting rights are exercised by correspondence or electronically.

The chairman shall call the meeting to order at the scheduled meeting time, and shall simultaneously announce relevant information such as the number of non-voting shares and the number of shares in attendance. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chairman may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. In case 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 chairman shall announce the meeting adjourned.

If the quorum is still 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.

Prior to the conclusion of the current Meeting, once the number of shares represented by the shareholder’s present reaches a majority of outstanding shares, the chairman of the Meeting may resubmit tentative resolutions already made for a vote by the shareholders in accordance with the provisions of Article 174 of the Company Act.

Article 10:

For Shareholders’ Meetings convened by the Board of Directors, the Meeting agenda shall be set by the Board of Directors. Votes shall be case on each proposal in the agenda (including extraordinary motions and amendments to the original proposal set out in the agenda). Meetings shall proceed in order set by the agenda, which must not be changed without a resolution of the Shareholders’ Meeting.

For Shareholders’ Meetings convened by a party with power to convene other than the Board of Directors, the provisions of the preceding paragraph shall apply mutatis mutandis.

Prior to the conclusion of proceedings for the arranged agendas in the preceding two paragraphs (including extraordinary motions), the chairman must not declare meeting adjourned without a resolution; in case the chairman declares meeting adjourned in violation of these Rules, other members of the Board of Directors shall promptly assist the attending shareholders in electing a new chairman in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

The chairman shall provide ample opportunities for adequate explanation and discussion of original proposals, amendments and extraordinary motions submitted by shareholders. The chairman may announce to finalize the discussion of any resolution and call for a vote once the chairman deems it appropriate, and arrange sufficient time for voting.

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Article 11:

Prior to speaking, attending shareholders shall specify on a comments slip the subject to be expressed, his/her shareholder account number (or attendance badge number) and his/her name. The sequence of the shareholders’ speeches will be arranged by the chairman.

Attending shareholders who submit comments slips without speaking shall be deemed to have not spoken. In case the content expressed does not correspond to the subject of the comments slip, the expressed content shall prevail.

Without the consent of the chairman, each shareholder may not speak more than twice on a same proposal, and a single speech may not exceed five minutes. In case the shareholders’ speech violates the Rules or exceeds the scope of the agenda, the chairman may terminate the speech.

When an attending shareholder is speaking, other shareholders shall not speak to/or interrupt unless they have solicited and obtained the consent of the chairman and the shareholder who is speaking; the chairman shall stop any violation.

In case a juristic shareholder appoints two or more representatives to attend the Meeting, only one of the representatives may speak on the same proposal.

After an attending shareholder has spoken, the chairman may respond in personal or appoint relevant personnel to respond.

Article 12:

Voting at Shareholders’ Meeting shall be calculated based on the number of shares.

With respect to resolutions of Shareholders’ Meeting, the number of shares held by shareholders with no voting rights shall be excluded from the calculation of the total number of issued shares.

When a shareholder is an interested party in relation to a proposal, and such relationship may damage the Company's interest, the shareholder may not vote on that proposal, and may not exercise voting rights on behalf of any other shareholders.

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

With the exception of a trust enterprise or stock affairs agency institutions approved by the competent securities authority, in case 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. Once the 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 the Company holds a shareholder meeting, it shall adopt exercise of voting rights by electronic means and may adopt exercise of voting rights by correspondence. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders’ meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting; it is therefore advisable that the Company avoid the submission of extraordinary motions and amendments to original proposals.

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A shareholder intends to exercise voting rights by correspondence or electronic means under the preceding paragraph, if they also intend to attend the shareholders' meeting in person, they shall deliver a written declaration of intent to the Company before two days prior to the date of the Shareholders’ Meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent.

After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders’ meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to the Company, by the same means by which the voting rights were exercised, before two business days prior to the date of the shareholders’ meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders’ meeting, the voting rights exercised by the proxy in the meeting shall prevail. Except as otherwise provided in the Company Act and, in the Company’s, Articles of Incorporation, the adoption of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the chairman or a person designated by the chairman shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day of Shareholders’ Meeting, 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.

When there is an amendment or an alternative to a proposal, the chairman 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 of which is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

Personnel who monitor and count the voting of a proposal shall be appointed by the chairman, provided that such personnel shall be shareholders of the Company.

Vote counting for Shareholders’ Meeting proposals or elections shall be conducted in public at the place of the Shareholders’ Meeting. Once 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 the vote record shall be made for reference.

Article 14:

The election of directors at a Shareholders’ Meeting shall be held in compliance with the applicable election and appointment rules adopted by the Company and the voting results shall be announced immediately, including the list of elected directors, the number of votes they were elected, the list of unsuccessful candidates and the number of votes they obtained.

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. However, in case 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:

Resolutions adopted at a Meeting shall be recorded in the Meeting Minutes. The Meeting Minutes shall be signed or sealed by the chairman of the Meeting, and a copy shall be distributed to each shareholder within twenty days after the conclusion of the Meeting. The

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Meeting Minutes may be prepared and distributed by means of electronic form.

The Meeting Minutes as required in the preceding paragraph may be distributed by means of a public announcement through MOPS.

The Meeting Minutes shall accurately record the date and place of the Meeting, the name of the chairman, the method of resolution adopting, and a summary of the deliberations and the results of the voting (including the total number of voting rights). In the event of election of Directors, the number of voting rights won by each candidate shall be disclosed. The Meeting Minutes shall be retained permanently throughout the life of the Company.

Article 16:

On the date of the Meeting, the Company shall draw up a statistics statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies in compliance with the required format, and shall make an express disclosure of the same at the place of the shareholders’ meeting. If matters resolved/adopted at the Shareholders’ Meetings constitute material under applicable laws or regulations or under Taiwan Stock Exchange Corporation (or Taipei Exchange) regulations, the Company shall upload such contents to the MOPS within the prescribed time period.

Article 17:

Meeting affairs personnel shall wear identification badges or armbands.

The chairman may direct the sergeants at arms or security guards to assist in maintaining order at the Meeting venue. When assist in maintaining order at the Meeting venue, the sergeants at arms or security guards shall wear identification badges or armbands bearing the word “Sergeant at Arms”.

At the place of a shareholders’ meeting, in case a shareholder attempts to speak through any device other than the public address equipment set up by the Company, the chairman may prevent the shareholder from doing so.

In case a shareholder violates these Rules and defies the chairman’s corrections, thereby obstructing the proceedings and refusing to heed calls to stop, the chairman may direct the sergeants at arms or security guards to escort such shareholder from the Meeting venue.

Article 18:

During the Meeting, the chairman may announce a break based on time considerations; In case a force majeure event occurs, the chairman may rule the meeting temporarily suspended and announce a resume time when, in view of the circumstances, the meeting will be resumed.

In case the Meeting venue is no longer available before the agenda (including extraordinary motions) have been addressed, the Shareholders’ Meeting may resolve to resume the Meeting at another venue.

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

Article 19:

The adoption of these Rules, and any amendments, shall be proposed to the Board of Directors for adoption, and shall be effective after proposed to the Shareholders’ Meeting for approval.

Article 20:

These Rules are stipulated on June 18, 2013.

The first amendment was approved on June 17, 2015.

The second amendment on June 18, 2020.

And the third amendment on August 23, 2021.

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Other Instructions

Reporting of the progress of processing shareholders’ proposals at this General Shareholders’ Meeting:

  1. Shareholder(s) holding one percent or more of the total number of issued shares of the Company may submit a proposal to the Company for discussion at a General Shareholders’ Meeting, provided that only one item shall be allowed in each single proposal in accordance with Article 172-1 of the Company Act. Total number of words in said proposal shall not exceed three hundred (including punctuation).

  2. The Company will receive shareholders’ proposal for the General Shareholders’ Meeting from April 11, 2023 to April 21, 2023, such information has been announced on MOPS.

  3. However, the Company has not yet received any shareholders’ proposal.

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