Zyxel Group - AGM Information 2021

Unizyx Holding Corporation 2021 Annual Shareholders’ Meeting Minutes (Translation)

Time: 9:00 am, July 01, 2021 (Thursday)

Venue: B1, Conference Hall, No. 6, Innovation Road II, Hsinchu Scienc Park, Hsin-Chu, Taiwan

Total outstanding shares: 439,040,093 shares (excluding the shares with no voting rights stipulated in Article 179 of the Company Act)

Total shares represented by shareholders present in person or by proxy: 258,219,507 shares

Percentage of shares held by shareholders present in person or by proxy: 58.81%

Directors present: Shun-I Chu, Chairman of the Board of Directors

Gordon Yang, Director Yuh-Long Chen, Director ZYXEL Foundation (Representative: Ping-Chin Li) Che-Ho Wei, Director Feng Chian, Independent Director Chin-Tang Liu, Independent Director

Attendees: An-Chih Cheng, CPA and Shing-Hai Wei, CPA, KPMG Taiwan

Chairman: Shun-I Chu Recorder: Woei Lo

I. Call the Meeting to Order

The aggregate of shareholding of the shareholders present in person or by proxy constituted a quorum. The Chairman called the meeting to order.

II. Chairman’s Address (omitted)

III.Reports

Overview of Operation (Due to space limitations, please refer to Meeting Agenda)
2020 Business Report (Please refer to Attachment 1)
Audit Committee’s Review Report regarding 2020 Financial Statements (Please refer to Attachment 2)

IV.Ratifications

To approval the 2020 Business Report and Financial Statements (Proposed by the Board of Directors) Explanation:
(1) Unizyx’s 2020 Financial Statements have been audited by An-Chih Cheng, CPA and Shing-Hai Wei, CPA from KPMG Taiwan.
(2) For 2020 Business Report, please refer to Attachment 1 (pages 7~9).
(3) For 2020 Independent Auditors’ Report and Financial Statements, please refer to Attachment 3 (pages 11~15) and Attachment 4 (pages 16~20).

RESOLVED, that the 2020 Business Report and Financial Statements be and hereby were accepted as submitted.

Voting Results:

Shares represented at the time of voting: 258,219,507

Voting Results*	% of the total represented sharepresent
Votes in favor: 245,926,390 votes (179,131,754 votes)	95.23%
Votes against: 65,901 votes (65,901 votes)	0.02%
Votes invalid: 0 votes	0.00%
Votes abstained: 12,227,216 votes (12,177,216 votes)	4.73%

*including votes casted electronically (numbers in brackets)

To approval the proposal for 2020 Deficit Compensated (Proposed by the Board of Directors)
Explanation:
(1) The net profit after tax for 2020 was NTD827,943,246 to cover accumulated deficit. After covering the deficit, the deficit yet to be compensated is NTD32,700,358, it is proposed to make up for deficit at a legal reserve of NTD32,700,358.
(2) Pursuant to Article 232 of the Company Act and the Articles of Incorporation, please refer the 2020 Deficit Compensation Statement at Attachment 5 (page 21) of this manual.

RESOLVED, that the proposal for 2020 Deficit Compensated be and hereby was accepted as submitted.

Voting Results:

Shares represented at the time of voting: 258,219,507

Voting Results*	% of the total represented sharepresent
Votes in favor: 246,101,318 votes (179,306,682 votes)	95.30%
Votes against: 65,973 votes (65,973 votes)	0.02%
Votes invalid: 0 votes	0.00%
Votes abstained: 12,052,216 votes (12,002,216 votes)	4.66%

*including votes casted electronically (numbers in brackets)

V. Discussion

To discuss the proposal for distributing cash from capital surplus (Proposed by the Board of Directors)
Explanation:
(1) Unizyx proposed a cash distribution of NTD223,821,928 from the capital surplus generated from premium in excess of the par value of the shares issued (the source is the new shares issued at premiums in excess of the par value in the past

by the subsidiary, Zyxel, before it had the share swap with Unizyx in 2010.) The distribution will be made at NTD0.5 per share in cash for the shares registered in the Shareholder Registry on the record date. The cash dividends are distributed up to NTD1.00, with amounts of less than NTD1.00 unconditionally rounded down. The total fractional shares distributed less than NTD1.00 will be distributed from large to small and from the earlier shareholder account number to the later, until the total amount of cash dividends from the capital surplus is met.

(2) Upon the approval in the annual shareholders’ meeting, it is proposed that the Board of Directors be authorized to determine the ex-dividend date and payment date for the cash distribution.
(3) In the event of the exercise of employees stock options, shares buyback, transfer of treasury stocks or other cases, leading to change in number of outstanding shares and a consequent change in payout ratio, it is proposed that the Board of Directors are fully authorized to handle matters.

RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Results:

Shares represented at the time of voting: 258,219,507

Voting Results*	% of the total represented sharepresent
Votes in favor: 246,099,554 votes (179,304,918 votes)	95.30%
Votes against: 82,906 votes (82,906 votes)	0.03%
Votes invalid: 0 votes	0.00%
Votes abstained: 12,037,047 votes (11,987,047 votes)	4.66%

*including votes casted electronically (numbers in brackets)

To discuss the proposal for amending the “Rules of Procedure for Shareholders’ Meetings” (Proposed by the Board of Directors) Explanation:
(1) To comply with regulations from the competent authorities, it is proposed to amend the “Rules of Procedure for Shareholders’ Meetings” pursuant to the “Sample Template for XXX Co., Ltd. Rules of Procedure for Shareholders’ Meetings.” This amendment aims to conform to the letter of explanation for the Company Act from MOEA, to amend that a shareholder proposal for urging the corporation to promote public interests or fulfill its social responsibilities shall comply with the requirement of Article 172-1, the Company Act, for one item only; no proposal containing more than one item will be included in the meeting agenda.
(2) The comparison table of this amendment is provided in Attachment 6 (pages 22~26).

RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Results:

Shares represented at the time of voting: 258,219,507

Voting Results*	% of the total represented sharepresent
Votes in favor: 246,105,874 votes (179,311,238 votes)	95.30%
Votes against: 63,083 votes (63,083 votes)	0.02%
Votes invalid: 0 votes	0.00%
Votes abstained: 12,050,550 votes (12,000,550 votes)	4.66%

*including votes casted electronically (numbers in brackets)

To discuss the proposal for amending the “Procedures for Loaning of Funds to Others” (Proposed by the Board of Directors) Explanation:
(1) In response to the Article 37 of the “Q&As of Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies,” it is proposed to amend the “Procedures for Loaning of Funds to Others.” Shall any material accounts receivable or money has arisen from a non-operating activities not be collected exceeding the normal credit duration for three months, such money shall be at least reported to the Board of Directors quarterly, to determine if its nature is loaning of funds. Therefore, this amendment intends to delete the requirement that for the accounts receivable due from related parties, when being overdue for a certain period, such accounts receivable shall be reclassified as other receivables, and disclosed in the information of loaning of funds, while being public announced and submitted to the Board of Directors for ratification.
(2) The comparison table of this amendment is provided in Attachment 7 (pages 27~29).

RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Results:

Shares represented at the time of voting: 258,219,507

Voting Results*	% of the total represented sharepresent
Votes in favor: 246,104,267 votes (179,309,631 votes)	95.30%
Votes against: 69,193 votes (69,193 votes)	0.02%
Votes invalid: 0 votes	0.00%
Votes abstained: 12,046,047 votes (11,996,047 votes)	4.66%

*including votes casted electronically (numbers in brackets)

To discuss the proposal for amending the “Procedures for Election of Directors” (Proposed by the Board of Directors) Explanation:
(1) To comply with regulations from the competent authorities, it is proposed to amend the “Procedures for Election of Directors” pursuant to the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors.” The major amendments are:
- a. Simplify the operating procedures for nominate directors, and the by-election requirements when independent directors are insufficient or discharged.
- b. Shareholders’ may, pursuant to Article 173 of the Company Act, convene meetings by obtaining approvals from the competent authorities. Therefore the requirement that the ballots shall be prepared by persons with the right to convene, is amended.
- c. To enable shareholders’ conveniently exercise their voting rights, and implement the shareholder activism, the FSC regulates that the election of directors and supervisors of public listing companies shall apply the candidate nomination system. Shareholders’ shall elect directors from the candidate list. Before the convention of a meeting, the candidate list would provide the names and education/industrial backgrounds so that shareholders’ do not need to identify candidates with shareholder account numbers or ID numbers. The amendment is made accordingly.
(2) The comparison table of this amendment is provided in Attachment 8 (pages 30~32).

RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Results:

Shares represented at the time of voting: 258,219,507

Voting Results*	% of the total represented sharepresent
Votes in favor: 246,103,385 votes (179,308,749 votes)	95.30%
Votes against: 71,075 votes (71,075 votes)	0.02%
Votes invalid: 0 votes	0.00%
Votes abstained: 12,045,047 votes (11,995,047 votes)	4.66%

*including votes casted electronically (numbers in brackets)

To discuss the proposal for lifting the non-competition restriction on Unizyx’s directors of the 4th Term
(Proposed by the Board of Directors) Explanation:
(1) Proceeded pursuant to Article 209-1 of the Company Act.
(2) Whereas the Company’s directors may concurrently take positions with identical or similar businesses as the Company, to the extent where the Company’s interests are not harmed, it is proposed to have the meeting of shareholder approve to lift the non-competition restriction on these directors. The

newly-added positions of the directors at other companies are described as the following: (as of February 5, 2021).

	Current positions taken at other companies concurrently
Name		Remarks

Shun-I Chu	Director, ZQAM Communications Corporation
Gordon Yang	Director,Zyell Solutions Corporation
Ping-Chin Li	Director/Chairman, ZyFX Technologies Inc.	Representative, ZYXEL Foundation
	Director/Chairman, ZQAM Communications Corporation
	Director, Zyell Solutions Corporation	Representative, ZyFX Technologies Inc.
Chin-Tang Liu	Independent Director, Sino-American Silicon Products Inc.

RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Results:

Shares represented at the time of voting: 258,219,507

Voting Results*	% of the total represented sharepresent
Votes in favor: 246,057,132 votes (179,262,496 votes)	95.28%
Votes against: 137,396 votes (137,396 votes)	0.05%
Votes invalid: 0 votes	0.00%
Votes abstained: 12,024,979 votes (11,974,979 votes)	4.65%

*including votes casted electronically (numbers in brackets)

VI.Extemporary Motions: None.

VII.Meeting Adjourned: July 01, 2021 at 9:19 am

Attachment 1

Unizyx Holding Corporation 2020 Business Report

Unizyx Holding Corporation (hereinafter referred to as “Unizyx”) was established through a share swap with Zyxel Communications Corporation (hereinafter referred to as “Zyxel”) on August 16, 2010. Since then, the Group has carried out the reorganization subject to the Group Member’ industrial characteristics in order to upgrade the performance and competitiveness in the industry, as well as its industrial focus and profitability.

I. Business Results 2020:

The operating revenue in Unizyx’s 2020 consolidated statement of comprehensive income is NTD22.25 billion, the gross profit NTD5.78 billion, the gross margin 26.0%, operating expenses are NTD4.49 billion, net income is NTD831 million, and EPS NTD1.91.

(1) Outcome of performance:

Outcome of performance:
	Unit: NTD thousand
Item	2020	2019
Operating revenue	22,250,630	24,026,346
Gross profit	5,780,099	5,090,526
Operating income	1,292,694	175,810
Income (loss) before income taxes	1,175,888	(38,014)
Net income	831,001	101,978

(2) Analysis on profitability:

Analysis onprofitability:	Analysis onprofitability:
Item		2020	2019
Return on total assets %		4.84	0.81
Return on attributable to shareholders of theparent %		10.69	1.40
As a percentage of paid-in capital %	Operating Income	28.88	3.99
	Income (Loss) before income taxes	26.27	(0.86)
Net income %		3.73	0.42
Basic earningsper share/NTD		1.91	0.25

II. Business Outlook

Unizyx is dedicated to the networking industry to have deeply set its roots in various areas about the network technology and market. Unizyx plans the Group’s business strategies and goals, uses the best effort to plan and utilize its resources effectively and provides the affiliated companies with a better development platform to upgrade its competitiveness and shareholders’ equity. The three subsidiaries, namely

Zyxel, MitraStar Technology Corporation (hereinafter referred to as “MitraStar”), and Zyxel Networks Corporation (hereinafter referred to as “ZNet”), are in charge of telecommunication, OEM, and channel business, respectively, and strive in the technologies and markets in the network industry.

Zyxel’ brand promise is “Empowering worldwide service providers to unlock the broadband potential.” It dedicates to developing comprehensive, reliable solutions that accelerate and satisfy the advent of next-generation fixed and mobile broadband technology to help operators in 150 markets around the world to open up more opportunities with truly converged services. MitraStar specializes in R&D and OEM of network communication technologies and products; by working with the brand clients around the world, it provides value from the customers’ point of view and improves the performance of mass production by virtue of innovative design and control over costs, and satisfy customers’ needs with excellent production management, logistic management, technical support and customer services. To respond to the effects of the COVID-19 pandemic and the uncertainty resulted from US-Sino trade war, the Company has the deployment for optimal capacity to enhance the partnership with our clients and supply chain.

Zyxel provides solutions instead of products to meet the needs of service providers, while MitraStar seeks more clients for one technology to expand quantity and scale. Zyxel and MitraStar expand their business respectively while supporting each other; collectively, they continue to contribute to the R&D of broadband access equipment, pursue the operational optimization and technological interoperability, increase the return of investment of technologies, and enhance the operating efficiency. In terms of product R&D, Zyxel uses the best effort to position in the areas of new generation high-performance fixed and mobile broadband technology and digital home multimedia, and provide service providers with products and solutions with high capacity and low-latency internet connectivity to subscribers.

For products and technologies, Zyxel develops 10G active fiber and passive fiber broadband access solutions aggressively in recent years while continuing to provide solutions for operators upgrading their existing copper infrastructure, such as VDSL 2 Vectoring, Bonding, and G.fast, to help operators overcome the “last-mile” challenge in terms of difficulties for fiber optic deployment, to provide fiber-like services to the residential users. As the fifth generation mobile communication technology (5G) is formally operated commercially, Zyxel has launched the complete 5G NR Fixed Wireless Access (FWA) product portfolio, including outdoor, indoor, portable products, which has been chosen by many Nordic service providers. Meanwhile, Zyxel utilizes its outstanding software R&D capability to launch the MPro Mesh® Solution. This solution supports WiFi 6 and EasyMesh standards. The latest WiFi 6 product portfolio is chosen by many leading operators in Europe and the U.S.

ZNet focuses on the development of networking solutions for business applications. To combine the popularity of cloud services, it provides the products and services that satisfy the networking needs of SMBs and home users. With Nebula, the first smart cloud management networking solution developed successfully in Taiwan, and Nebula

SD-WAN solutions, it aims to promote Taiwan’s networking technology into the world. In addition, as the cybersecurity threats are getting complicated and got more attention from companies, ZNet has introduced the ATP firewalls to help SMBs protect unknown cybersecurity threats. ZNet also provides painless transition subscription services so SMBs can customize the solutions based on their needs. Not only is efficiency enhanced, but the overall IT costs are also greatly reduced, and various demands from different industries are met. In the future, we will base on the three key focuses, including cloud, AI, and cybersecurity protection to help improve the operational efficiency of SMBs and accelerate their digital transformation to ensure that ZNet can continue its growth in the highly competitive global market and maintain its leading position.

As a networking company, Unizyx’s expertise in networking technologies is also applied to the areas of national defense communications and information security. Unizyx is one of the few Taiwan-based suppliers capable of researching and developing the information security hardware products, such as radar, military wireless communications and firewalls.

By virtue of professional management and market deployment, Unizyx will increase rewards to employees to encourage employees and increase the incentives to solicit talents. Externally, it will improve the profitability and long-term competitiveness of Unizyx Holding Corporation. The entire management team will use its best effort to combine the sound technical energy, create more infinite possibilities for network communications, and upgrade the shareholders’’ equity and create a win-win-win situation for Unizyx Holding Corporation and its employees and shareholders.”

At last, we wish all of you good health and everything goes well!

Chairman of Board: Shun-I Chu

Chief Executive Officer: Gordon Yang

Chief Financial Officer: Woei Lo

Attachment 2

Unizyx Holding Corporation Audit Committee’s Review Report

Unizyx’s 2020 Business Report, Financial Statements and proposal for deficit compensated were prepared and submitted by the Board of Directors. The Financial Statements were audited by KPMG and issued an Independent Audit Report. The Business Report, Financial Statements and proposal for deficit compensated, have been reviewed and determined to be correct and accurate by the Audit Committee of Unizyx Holding Corporation. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

Please review and approve.

Unizyx Holding Corporation 2021 Annual Shareholders’ Meeting

Feng Chian, Convener of the Audit Committee

March 15, 2021

Attachment 3

Independent Auditors’ Report

To the Board of Directors of Unizyx Holding Corporation:

Opinion

We have audited the consolidated financial statements of Unizyx Holding Corporation and its subsidiaries (“the Company”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) and the former Standing Interpretations Committee (“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 auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of 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 of the current period. 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. Based on our judgment, the key audit matters that should be disclosed in this report are as follows:

Valuation of Accounts Receivable

－ Please refer to Note 4(7) “Summary of significant accounting policies Financial instruments” Note 5(1) “Major sources of accounting judgments, estimations and assumptions of uncertainty”, and Note 6(5) － “Explanation of significant accounts Notes and accounts receivable, net”to the consolidated financial statements.

Description of key audit matters:

The Company has its customers spread throughout the globe, wherein they are vulnerable to various changes, such as market trend, geopolitical economy as well as regulatory matters. Therefore, the customer credit control is considered to be more complex. When assessing the recoverability of its receivables, it is necessary to consider any changes in the credit quality of the receivables from the original grant date of credit

limit to the reporting date. For those receivables that have not been collected within the credit term, the balance of the estimated valuation allowance for bad debts is calculated by reference from the transaction in the past and customers’ current financial status. The management’s judgment on the balance of allowance for impairment loss of receivables involved uncertainty and it might lead to significant adjustments in estimate, as such, it was one of the key audit matters for our audit.

How the matter was addressed in our audit:

Our principal audit procedures included: testing the completeness and accuracy of the aging analysis; testing the key control of the management for the credit limits and supervision process to assess the appropriateness of approval when sales exceeds the credit limits; understanding and evaluating the management’s consideration and the rate of lifetime expected credit losses relating to receivables that are overdue, vouching the receipt of cash after the year end and understanding the possibility of remaining receivables collection suggested by historical trends; testing the adequacy of the Company’ s provisions against the receivables by assessing the relevant assumptions, examining and reviewing related documents, discussing with the management the probability of collecting the remaining receivables, as well as recalculating and evaluating the adequacy of the Company’s disclosures.

2. Valuation of Inventories

－ Please refer to Note 4(8) “Summary of significant accounting policies Inventories”, Note 5(2) “Significant accounting judgments, assumptions, and major sources of estimation uncertainty”, and Note 6(6) － “Explanation of Significant Accounts Inventories” to the consolidated financial statements.

Description of key audit matters:

The Company mainly engages in the research and development, as well as the production of networks communication products. Inventories are stated at the lower of cost or net realizable value. The Company used judgment and estimate to determine the net realizable value of inventory at the end of each reporting period. However, the rapid evolution of technology and the fluctuation of market may lead to obsolete inventories and unmarketable items. The net realizable value of the inventory is mainly determined based on assumptions of future demand within a specific time frame, which could result in significant adjustments. As a result, the valuation of inventories is one of the key audit matters of our audit.

How the matter was addressed in our audit:

Our principal audit procedures included: obtaining the inventory aging report and testing the completeness and the accuracy of the aging of inventory based on acceptable documents from the last valid transaction; understanding and evaluating the management’s judgment on the calculation of net realizable value, testing the relevant documents to assess the adequacy and reasonableness for identification of slow moving inventories and discussing with the management about the reasonableness for slow moving inventories; as well as understanding the management's assumption on the completeness of inventory provisions and evaluating the adequacy of provision to write down slow moving or obsolete inventories; and evaluating the adequacy of the Company's disclosures.

Other Matter

Unizyx Holding Corporation has additionally prepared its parent-company-only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unqualified 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 with

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the IFRSs, IASs, 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 Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

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 auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

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.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 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 Company to cease to continue as a going concern.
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.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company 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.

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are An-Chih Cheng and Shing-Hai Wei.

KPMG

Taipei, Taiwan (Republic of China) March 15, 2021

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the 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 accepted and applied in the Republic of China.

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Unizyx Holding Corporation and subsidiaries

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

December 31, 2020 Amount % $ 4,078,159 21 - - 569,159 3 5,841,093 30 4,794 - 5,959 - 4,900,890 25 89,467 - 918,884 5	December 31, 2020 Amount % $ 4,078,159 21 - - 569,159 3 5,841,093 30 4,794 - 5,959 - 4,900,890 25 89,467 - 918,884 5	December 31, 2019 Amount % 3,219,348 21 2,051 - 221 - 4,715,847 30 19,991 - 1,732 - 3,485,268 23 69,573 - 791,593 5 12,305,624 79 8,669 - 19,224 - 32,373 - 1,639,267 11 475,036 3 124,792 1 609,085 4 155,955 1 85,000 1 30,799 - 3,180,200 21 15,485,824 100 Liabilities and Equity Current liabilities: Short-term borrowings (notes 6(13) and 8) Short-term notes and bills payable (note 6(14)) Financial liabilities at fair value through profit or loss－current (note 6(2)) Contract liabilities－current (note 6(22)) Notes and accounts payable Accounts payable－related parties (note 7) Payroll and bonus payable Royalty payable Other payables－related parties (note 7) Income tax payable Provision for warranty obligations－current (note 6(15)) Lease liabilities－current (note 6(16)) Other current liabilities, others (note 6(8)) Non-current liabilities: Deferred income tax liabilities (note 6(18)) Lease liabilities－non-current (note 6(16)) Net defined benefit liabilities (note 6(17)) Guarantee deposits received Total liabilities Equity(note 6(19)): Equity attributable to the shareholders of the parent company: Capital stock Capital surplus Retained earnings Other equity Treasury stock Non-controlling interests Total equity Total liabilities and equity	December 31, 2020	December 31, 2020	December 31, 2019 Amount % 1,626,803 11 - - 2,469 - 89,595 - 3,349,407 22 79,840 - 680,582 4 280,526 2 - - 7,502 - 575,449 4 44,021 - 901,820 6	December 31, 2019 Amount % 1,626,803 11 - - 2,469 - 89,595 - 3,349,407 22 79,840 - 680,582 4 280,526 2 - - 7,502 - 575,449 4 44,021 - 901,820 6
Amount $ 4,078,159 - 569,159 5,841,093 4,794 5,959 4,900,890 89,467 918,884			Amount	%	Amount
			$ 1,614,247 300,000 46,359 74,760 5,232,851 546,513 788,435 169,340 46,489 91,938 546,982 46,575 1,077,049	8 2 - - 27 3 4 1 - - 3 - 6	1,626,803 - 2,469 89,595 3,349,407 79,840 680,582 280,526 - 7,502 575,449 44,021 901,820
16,408,405	84	12,305,624
26,999 70,669 24,059 1,592,121 471,029 259,758 513,652 131,690 69,783 21,000	- - - 8 3 1 3 1 - -	8,669 19,224 32,373 1,639,267 475,036 124,792 609,085 155,955 85,000 30,799
			10,581,538	54	7,638,014	49
			251,828 443,497 5,496 575	2 2 - -	153,279 448,832 3,192 539	1 3 - -
			701,396	4	605,842	4
			11,282,934	58	8,243,856	53
			4,476,438 3,827,886 447,480 (351,910) (120,861)	23 20 2 (2) (1)	4,411,773 3,755,876 (362,370) (463,227) (120,861)	29 24 (2) (3) (1)
3,180,760	16	3,180,200
$ 19,589,165	100	15,485,824
			8,279,033	42	7,221,191	47
			27,198	-	20,777	-
			8,306,231	42	7,241,968	47
			$ 19,589,165	100	15,485,824	100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Unizyx Holding Corporation and subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

2020	% 100 74	2019 Amount 24,026,346 18,935,820	% 100 79
Amount $ 22,250,630 16,470,531
5,780,099	26	5,090,526	21
2,044,671 845,039 1,599,814 (2,119)	9 4 7 -	2,203,757 870,134 1,839,885 940	9 3 8 -
4,487,405	20	4,914,716	20
1,292,694	6	175,810	1
185,179 (71,072) (12,450) 14,471 (23,311) (209,623)	1 - - - - (1)	47,863 (45,816) (18,283) 13,478 (38,443) (172,623)	- - - - - (1)
(116,806)	-	(213,824)	(1)
1,175,888 344,887	6 2	(38,014) (139,992)	- -
831,001	4	101,978	-
(18,094) 9,068	- -	(3,122) (26,813)	- -
(9,026)	-	(29,935)	-
127,975 (25,562)	- -	(116,868) 13,166	- -
102,413	-	(103,702)	-
93,387	-	(133,637)	-
$ 924,388	4	(31,659)	-
$ 827,944 3,057	4 -	106,753 (4,775)	- -
$ 831,001	4	101,978	-
$ 921,167 3,221	4 -	(24,310) (7,349)	- -
$ 924,388	4	(31,659)	-
$	1.91		0.25
$	1.90		0.24

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Unizyx Holding Corporation and subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

					Equity attributable	Equity attributable	to the sharehold	ers of theparent					Subtotal of equity attributable to the shareholders of theparent 7,241,236 (23,664)	Non-controllin g interests 65,098 -	Total equity 7,306,334 (23,664)
		Capital Stock	Total share capital 4,411,773 -	Capital surplus 3,725,204 -		Retained	earnings	Total (439,594) (23,664)	Total	other equity inte	rest Total (335,286) -	Treasury stock (120,861) -
									Exchange differences on translation of foreign financial statements (294,693) -	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
Common stock		Advance receipts for share capital			Legal reserve 279,833 -	Special reserve 200,347 -	Accumulated deficits (919,774) (23,664)
$ 4,411,773 -		- -								(40,593) -
	4,411,773	-	4,411,773	3,725,204	279,833	200,347	(943,438)	(463,258)	(294,693)	(40,593)	(335,286)	(120,861)	7,217,572	65,098	7,282,670
	- -	- -	- -	- -	- -	- -	106,753 (3,122)	106,753 (3,122)	- (101,128)	- (26,813)	- (127,941)	- -	106,753 (131,063)	(4,775) (2,574)	101,978 (133,637)
	-	-	-	-	-	-	103,631	103,631	(101,128)	(26,813)	(127,941)	-	(24,310)	(7,349)	(31,659)
	- - - -	- - - -	- - - -	19,641 4,486 6,545 -	- - - -	- - - -	- (2,459) (284) -	- (2,459) (284) -	- - - -	- - - -	- - - -	- - - -	19,641 2,027 6,261 -	- (2,027) - (34,945)	19,641 - 6,261 (34,945)
	4,411,773 - -	- - -	4,411,773 - -	3,755,876 - -	279,833 - -	200,347 - -	(842,550) 827,944 (18,094)	(362,370) 827,944 (18,094)	(395,821) - 102,249	(67,406) - 9,068	(463,227) - 111,317	(120,861) - -	7,221,191 827,944 93,223	20,777 3,057 164	7,241,968 831,001 93,387
	-	-	-	-	-	-	809,850	809,850	102,249	9,068	111,317	-	921,167	3,221	924,388
	- - - - -	- 64,665 - - -	- 64,665 - - -	37,563 14,226 20,221 - -	- - - - -	- - - - -	- - - - -	- - - - -	- - - - -	- - - - -	- - - - -	- - - - -	37,563 78,891 20,221 - -	- - (20,221) 40,000 (16,579)	37,563 78,891 - 40,000 (16,579)
$ 4,411,773		64,665	4,476,438	3,827,886	279,833	200,347	(32,700)	447,480	(293,572)	(58,338)	(351,910)	(120,861)	8,279,033	27,198	8,306,231

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Unizyx Holding Corporation and subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

2020 Cash flows from operating activities: Income (loss) before income tax $ 1,175,888 Adjustments: Adjustments to reconcile profit (loss): Depreciation expense 268,051 Amortization expense 95,806 Expected credit loss (gain) (2,119) Provision for warranties and after service cost 54,620 Provision of allowance for sales discounts 119,161 Net loss (profit) on financial assets or liabilities at fair value through profit or loss 57,091 Interest expense 23,311 Interest income (14,471) Share-based compensation expense 37,563 Share of loss of associates accounted for using the equity method 12,450 Loss (gain) on disposal of property, plant and equipment (109) Loss on disposal of intangible assets 164 Loss on liquidation of subsidiaries 71 Provision for (reversal of) inventory obsolescence (113,239) Others 859 Total adjustments to reconcile profit (loss) 539,209 Changes in operating assets and liabilities: Changes in operating assets: Financial assets or liabilities at fair value through profit or loss (11,150) Notes and accounts receivable (including related parties) (1,096,506) Other receivables－related parties (4,227) Inventories (1,244,079) Other financial assets and other current assets (176,900) Total changes in operating assets (2,532,862) Changes in operating liabilities: Notes and accounts payable (including related parties) 2,350,568 Other payables－related parties 46,489 Contract liabilities and other current liabilities 44,111 Net defined benefit assets and liabilities (573) Total changes in operating liabilities 2,440,595 Total changes in operating assets and liabilities (92,267) Total adjustments 446,942 Cash inflow generated from operations 1,622,830 Interest received 13,826 Dividends received 2,158 Interest paid (23,188) Income taxes paid (68,873) Net cash flows from operating activities 1,546,753	2019 (38,014) 290,340 77,858 940 116,648 42,712 (197) 38,443 (13,478) 19,641 18,283 600 353 36,942 275,936 (86)
	904,935
	2,469 2,353,745 - 1,065,929 (33,370)
	3,388,773
	(1,741,949) (5,072) 14,841 (700)
	(1,732,880)
	1,655,893
	2,560,828
	2,522,814 14,865 1,193 (38,853) (127,246)
	2,372,773

(Continued)

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Unizyx Holding Corporation and subsidiaries

Consolidated Statements of Cash Flows (continue)

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of financial assets at amortized cost Proceeds from repayments of financial assets at amortized cost Net cash outflow from loss of control of subsidiaries Net cash outflow from acquisition of subsidiaries Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Acquisition of intangible assets Proceeds from disposal of intangible assets Increase in other non-current assets Net cash flows from (used in) investing activities Cash flows from financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term notes and bills payable Decrease in short-term notes and bills payable Increase (decrease) in guarantee deposits received Payment of lease liabilities Exercise of employee stock options Change in non-controlling interests Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period	2020 (1,039,062) 419,062 (33,584) (85,273) (175,819) 962 24,265 (187,833) - (27,181) (1,104,463) 6,595,762 (6,611,976) 806,000 (506,000) 33 (49,439) 78,891 40,000 353,271 63,250 858,811 3,219,348 $ 4,078,159	2019 (4,679) 375,092 - (26,010) (140,338) 1,138 (78,248) (11,692) 4,385 (45,844)
		73,804
		10,912,636 (11,226,740) 930,000 (1,130,000) (352) (50,466) - (34,945)
		(599,867)
		(127,894)
		1,718,816 1,500,532
		3,219,348

15-1

Attachment 4

Independent Auditors’ Report

To the Board of Directors of Unizyx Holding Corporation:

Opinion

We have audited the financial statements of Unizyx Holding Corporation (“the Company”), which comprise the balance sheets as of December 31, 2020 and 2019, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent-company-only financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent-Company-Only Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of 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 of the current period. 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. Based on our judgment, the key audit matters that should be disclosed in this report are as follows:

Evaluation of investments accounted for using the equity method

“ － Please refer to Note 4(7) Summary of significant accounting policies Investment in ” “ － ” associates , Note 4(8) Summary of significant accounting policies Investment in subsidiaries , and “ － Note 6(3) Explanation of significant accounts Investments accounted for using the equity method” to the parent company only financial statements.

Description of key audit matters:

The investments in subsidiaries accounted for using the equity method constituted 97% of total assets of the Company, wherein the amount is material. As a result, the evaluation of investments accounted for using the equity method is our key audit matter.

How the matter was addressed in our audit:

Our principal audit procedures included: recalculating the shares of profit or loss of associates and subsidiaries in accordance with ownership percentage of shares; physically counting the securities and certificates of long term equity investment; discussing with the management about the evaluation of subsidiary related significant matters, as well as understanding the reasonableness of the subsidiary’s valuation of impairment for accounts receivable and inventories; considering the adequacy of the Company’s disclosures on its accounts

Responsibilities of Management and Those Charged with Governance for the Parent-Company-Only Financial Statements

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

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

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

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 auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent-company-only financial statements.

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

16-1

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.

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.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. Furthermore, we remain solely responsible for our audit opinion.

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

The engagement partners on the audit resulting in this independent auditors’ report are An-Chih Cheng and Shing-Hai Wei.

KPMG

Taipei, Taiwan (Republic of China) March 15, 2021

Notes to Readers

The accompanying parent-company-only financial statements are intended only to present the financial position, financial performance and cash flows in accordance with the 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 parent-company-only financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ report and the accompanying parent-company-only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent-company-only financial statements, the Chinese version shall prevail.

16-2

(English Translation of Parent-Company-Only Financial Statements Originally Issued in Chinese)

Unizyx Holding Corporation

Balance Sheets

December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

December 31, 2020 Amount % $ 191,849 3 38,584 - 21,271 - 31 - 1,002 -	December 31, 2020 Amount % $ 191,849 3 38,584 - 21,271 - 31 - 1,002 -	December 31, 2019 Amount % 122,561 2 38,126 - - - 3 - 3,152 - 163,842 2 - - 7,094,042 98 1,162 - 327 - - - 7,095,531 98 7,259,373 100 Liabilities and Equity Current liabilities: Other payables－related parties (note 7) Income tax payable (note 6(7)) Other current liabilities, others Non-current liabilities: Net defined benefit liabilities (note 6(6)) Total liabilities Equity(note 6(8)): Capital stock Capital surplus Retained earnings Other equity Treasury stock Total equity Total liabilities and equity	December 31, 2020 Amount % 498 - 6,206 - 26,785 -	December 31, 2020 Amount % 498 - 6,206 - 26,785 -	December 31, 2019 Amount % 6,709 - - - 28,281 -	December 31, 2019 Amount % 6,709 - - - 28,281 -
Amount $ 191,849 38,584 21,271 31 1,002			Amount 498 6,206 26,785
			33,489	-	34,990	-
			5,496	-	3,192	-
252,737	3	163,842
9,262 8,050,929 4,121 215 754	- 97 - - -	- 7,094,042 1,162 327 -	38,985	-	38,182	-
			4,476,438 3,827,886 447,480 (351,910) (120,861)	54 46 5 (4) (1)	4,411,773 3,755,876 (362,370) (463,227) (120,861)	61 52 (5) (6) (2)
8,065,281	97	7,095,531
$ 8,318,018	100	7,259,373	8,279,033	100	7,221,191	100
			$ 8,318,018	100	7,259,373	100

See accompanying notes to the parent-company-only financial statements.

(English Translation of Parent-Company-Only Financial Statements Originally Issued in Chinese)

Unizyx Holding Corporation

Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

2020	2019	% 65 35 - -
Amount $ 130,347 816,677 254 42 947,320 133,339 - - 133,339 813,981 (13,963) 827,944 (2,473) (15,621) 9,068 (9,026) 127,811 (25,562) 102,249 93,223 $ 921,167 $	Amount 153,814 83,743 208 32 237,797 124,000 216 2 124,218 113,579 6,826 106,753 452 (3,574) (26,813) (29,935) (114,294) 13,166 (101,128) (131,063) (24,310)
		100
		52 - -
		52
		48 3
		45
		- (1) (11)
		(12)
		(48) 6
		(42)
		(54)
		(9)
		0.25
$		0.24

See accompanying notes to the parent-company-only financial statements.

(English Translation of Parent-Company-Only Financial Statements Originally Issued in Chinese) Unizyx Holding Corporation

Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

	Capital stock	Total share capital	Capital surplus 3,725,204 -		Retained	earnings	Total (439,594) (23,664)	Tota	other equity inte	rest Total (335,286) -	Treasury stock (120,861) -	Total equity 7,241,236 (23,664)
								Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
Common stock	Advance receipts for share capital			Legal reserve 279,833 -	Special reserve	Accumulated deficits
$ 4,411,773 -	- -	4,411,773 -			200,347 -	(919,774) (23,664)		(294,693) -	(40,593) -
4,411,773	-	4,411,773	3,725,204	279,833	200,347	(943,438)	(463,258)	(294,693)	(40,593)	(335,286)	(120,861)	7,217,572
- -	- -	- -	- -	- -	- -	106,753 (3,122)	106,753 (3,122)	- (101,128)	- (26,813)	- (127,941)	- -	106,753 (131,063)
-	-	-	-	-	-	103,631	103,631	(101,128)	(26,813)	(127,941)	-	(24,310)
- - -	- - -	- - -	19,641 4,486 6,545	- - -	- - -	- (2,459) (284)	- (2,459) (284)	- - -	- - -	- - -	- - -	19,641 2,027 6,261
4,411,773 - -	- - -	4,411,773 - -	3,755,876 - -	279,833 - -	200,347 - -	(842,550) 827,944 (18,094)	(362,370) 827,944 (18,094)	(395,821) - 102,249	(67,406) - 9,068	(463,227) - 111,317	(120,861) - -	7,221,191 827,944 93,223
-	-	-	-	-	-	809,850	809,850	102,249	9,068	111,317	-	921,167
- - -	- 64,665 -	- 64,665 -	37,563 14,226 20,221	- - -	- - -	- - -	- - -	- - -	- - -	- - -	- - -	37,563 78,891 20,221
$ 4,411,773	64,665	4,476,438	3,827,886	279,833	200,347	(32,700)	447,480	(293,572)	(58,338)	(351,910)	(120,861)	8,279,033

See accompanying notes to the parent-company-only financial statements.

(English Translation of Parent-Company-Only Financial Statements Originally Issued in Chinese)

Unizyx Holding Corporation

Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

Cash flows from operating activities: Income (loss) before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Interest income Share-based compensation expense Share of loss (profit) of subsidiaries and associates accounted for using the equity method Loss on disposal of property, plant and equipment Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Accounts receivable Other receivables－related parties Other financial assets and other current assets Total changes in operating assets Changes in operating liabilities: Other payables－related parties Accrued expenses and other current liabilities Net defined benefit liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow (outflow) generated from operations Interest received Income taxes refunded Net cash flows from (used in) operating activities Cash flows from investing activities: Acquisition of investments accounted for using the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Net cash flows used in investing activities Cash flows from financing activities: Exercise of employee stock options Net cash flows from financing activities Net increase cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period	2020 $ 813,981 489 112 (254) 4,008 (816,677) -	2019 113,579 316 112 (208) 1,169 (83,743) 216 (82,138) 2,473 - (358) 2,115 (11,865) 11,030 (5) (840) 1,275 (80,863) 32,716 214 366 33,296 (100) (1,239) 790 (549) - - 32,747 89,814 122,561
	(812,322)
	(458) (1,782) 324
	(1,916)
	(6,285) (1,496) (169)
	(7,950)
	(9,866)
	(822,188)
	(8,207) 226 1,826
	(6,155)
	- (3,448) -
	(3,448)
	78,891
	78,891
	69,288 122,561
	$ 191,849

Attachment 5

Unizyx Holding Corporation

2020 Deficit Compensation Statement

	Unit: NTD	Unit: NTD
Item	Amount
	Subtotal	Total
Opening undistributed earnings Plus (Less) Remeasurement of the definite benefit plans Net income of 2020 Deficit yet to be compensated Plus (Less) Legal reserves Unappropriated retained earnings	(18,093,932) 827,943,246 32,700,358	(842,549,672) 809,849,314
		( 32,700,358) 32,700,358
		0

Chairman of Board: Shun-I Chu

Chief Executive Officer: Gordon Yang

Chief Financial Officer: Woei Lo

Attachment 6

Unizyx Holding Corporation Comparison Table for Amendments to the Rules of Procedure for Shareholders’ Meetings

		Basis of
After Amendment	Before Amendment
		Amendment

Article 3: Unless otherwise provided by law or regulation, this Company's shareholders meetings 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 proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the Market Observation Post System (MOPS) before 30 days before the date of a regular shareholders’ meeting or before 15 days before the date of a special shareholders’ meeting. The Company shall prepare electronic versions of the shareholders’’ meeting agenda and supplemental meeting materials and upload them to the MOPS 21 days before the date of the regular shareholders’ meeting or before 15 days before the date of the special shareholders’ meeting. In addition, 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	Article 3: Unless otherwise provided by law or regulation, this Company's shareholders meetings 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 proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the Market Observation Post System (MOPS) before 30 days before the date of a regular shareholders’ meeting or before 15 days before the date of a special shareholders’ meeting. The Company shall prepare electronic versions of the shareholders’’ meeting agenda and supplemental meeting materials and upload them to the MOPS 21 days before the date of the regular shareholders’ meeting or before 15 days before the date of the special shareholders’ meeting. In addition, 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	Amended pursuant to the competent authorities’ “Sample Template for XXX Co., Ltd. Rules of Procedure for Shareholders’ Meetings”

		Basis of
After Amendment	Before Amendment
		Amendment

available for review by shareholders’ at any time. The meeting agenda and supplemental materials shall also be displayed at the Company and the professional shareholder services agent designated thereby, as well as being distributed on‐site at the meeting place. The reasons for convening a shareholders’ meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form. Election or dismissal of directors, amendments to the articles of incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1 of the Company Act, Article 26‐1 and Article 43‐6 of the Securities and Exchange Act, and 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 conveningthe	available for review by shareholders’ at any time. The meeting agenda and supplemental materials shall also be displayed at the Company and the professional shareholder services agent designated thereby, as well as being distributed on‐site at the meeting place. The reasons for convening a shareholders’ meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form. Election or dismissal of directors, amendments to the articles of incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1 of the Company Act, Article 26‐1 and Article 43‐6 of the Securities and Exchange Act, and 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 conveningthe

		Basis of
After Amendment	Before Amendment
		Amendment

shareholders’ meeting. None of the above matters may be raised by an extraordinary motion; the essential contents may be posted on the website designated by the competent authority in charge of securities affairs or the corporation, and such website shall be indicated in the above notice. Where re‐election of all directors and supervisors as well as their inauguration date is stated in the notice of the reasons for convening the shareholders’ meeting, after the completion of the re‐election in said meeting such inauguration date may not be altered by any extraordinary motion or otherwise in the same meeting. A shareholder holding one percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion at a regular shareholders’ meeting. The number of items so proposed, however, is limited to one only, and no proposal containing more than one item will be included in the meeting agenda. A shareholder proposal for urging the corporation to promote public interests or fulfill its social responsibilities may still be included in the agenda by the board of directors by complying with the requirement of Article 172‐1, the Company Act, for	shareholders’ meeting. None of the above matters may be raised by an extraordinary motion; the essential contents may be posted on the website designated by the competent authority in charge of securities affairs or the corporation, and such website shall be indicated in the above notice. Where re‐election of all directors and supervisors as well as their inauguration date is stated in the notice of the reasons for convening the shareholders’ meeting, after the completion of the re‐election in said meeting such inauguration date may not be altered by any extraordinary motion or otherwise in the same meeting. A shareholder holding one percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion at a regular shareholders’ meeting. The number of items so proposed, however, is limited to one only, and no proposal containing more than one item will be included in the meeting agenda. Provideda shareholderproposal proposed for urging the Company to promote public interests or fulfill its social responsibilities may still be included in the list of proposals to be discussed at a regular meeting of shareholders’ bythe board of

		Basis of
After Amendment	Before Amendment
		Amendment

one item only; no proposal containing more than one item will beincluded in the meeting agenda. In addition, when the circumstances of any subparagraph of Article 172‐1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda. Prior to the book closure date before a regular shareholders’ meeting is held, this Corporation shall publicly announce its acceptance of shareholder proposals in writing or electronically, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days. Shareholder‐submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. Prior to the date for issuance of notice of a shareholders’ meeting, the Company shall inform the shareholders’ who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. With regard to the proposals submitted by shareholders but not included in the agenda of the meeting, the cause of exclusion of suchproposals	directors.In addition, when the circumstances of any subparagraph of Article 172‐1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda. Prior to the book closure date before a regular shareholders’ meeting is held, this Corporation shall publicly announce its acceptance of shareholder proposals in writing or electronically, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days. Shareholder‐submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. Prior to the date for issuance of notice of a shareholders’ meeting, the Company shall inform the shareholders’ who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. With regard to the proposals submitted by shareholders but not included in the agenda of the meeting, the cause of exclusion of such proposals and explanation shall be made by the board of directors at the shareholders’ meeting to be convened.

			Basis of
After Amendment		Before Amendment
			Amendment

and explanation shall be made by the board of directors at the shareholders’ meeting to be convened.
Article 20:	Omitted The seventh amendment to the Rules was approved on June 12, 2020 The eighth amendment to the Rules was approved on July 01, 2021	Article 20: Omitted The seventh amendment to the Rules was approved on June 12, 2020	Amendment date is added

Attachment 7

Unizyx Holding Corporation Comparison Table for Amendments to the Procedures for Loaning of Funds to Others

		Basis of
After Amendment	Before Amendment
		Amendment

Article 7: Procedures for handling loaning of funds. 1. The loaning is only conducted with the Board of Directors’ resolution, and no other party may be authorized to determine. Any material loaning of funds requires the approval of one‐half or more of all audit committee members, and furthermore shall be submitted for a resolution by the Board of Directors Provided, for inter‐company loans between the Company and subsidiaries in which the Company holds, directly or indirectly, 100% of the voting shares, and loans among subsidiaries, the Chairman may be authorized within a certain monetary limit resolved by the board of directors, and within a period not to exceed one year, to give loans in installments or to make a revolving credit line available for the counterparty to drawdown. The “certain monetary limit” mentioned in the preceding paragraph on	Article 7: Procedures for handling loaning of funds. 1. The loaning is only conducted with the Board of Directors’ resolution, and no other party may be authorized to determine. Any material loaning of funds requires the approval of one‐half or more of all audit committee members, and furthermore shall be submitted for a resolution by the Board of Directors Provided, for inter‐company loans between the Company and subsidiaries in which the Company holds, directly or indirectly, 100% of the voting shares, and loans among subsidiaries, the Chairman may be authorized within a certain monetary limit resolved by the board of directors, and within a period not to exceed one year, to give loans in installments or to make a revolving credit line available for the counterparty to drawdown. The “certain monetary limit” mentioned in the preceding paragraph on	Amended pursuant to the “Q&As of Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies”

			Basis of
After Amendment	Before Amendment
			Amendment

authorization for loans extended by the Company or any of its subsidiaries to any single entity shall not exceed 10% of the net worth on the most current financial statements of the lending company, except for the loans between the Company and subsidiaries in which the Company holds, directly or indirectly, 100% of the voting shares. 2. The accountable department shall prepare a memorandum book for its fund‐loaning activities and truthfully record the following information: borrower, amount, date of approval by the board of directors, lending/borrowing date, and matters to be carefully evaluated. The subsidiaries are not subject to the restrictions set forth in Articles 8, 9 and 10 of the Procedures. Omitted hereafter.	2.	authorization for loans extended by the Company or any of its subsidiaries to any single entity shall not exceed 10% of the net worth on the most current financial statements of the lending company, except for the loans between the Company and subsidiaries in which the Company holds, directly or indirectly, 100% of the voting shares. The accountable department shall prepare a memorandum book for its fund‐loaning activities and truthfully record the following information: borrower, amount, date of approval by the board of directors, lending/borrowing date, and matters to be carefully evaluated. For the receivables due from related parties, such receivables shall be re‐recognized as other receivables and disclosed in the information of loaning of
		funds when being overdue for certain period. The receivables re‐recognized as loaning of funds shall be publicly
		announced regularly and
		submitted to the next meeting Board of Directors for ratification. The subsidiaries are not subject to the

			Basis of
After Amendment		Before Amendment
			Amendment

		restrictions set forth in Articles 8, 9 and 10 of the Procedures. Omitted hereafter.
Article 15:	Omitted The third amendment to the Rules was approved on June 12, 2020 The fourth amendment to the Rules was approved on July 01, 2021	Article 15: Omitted The third amendment to the Rules was approved on June 12, 2020	Amendment date is added

Attachment 8

Unizyx Holding Corporation Comparison Table for Amendments to Procedures for Election of Directors

				Basis of
	After Amendment		Before Amendment
				Amendment

Article 3:	Elections of directors at the Company shall be conducted in accordance with the candidate nomination system and procedures set out in Article 192‐1 of the Company Act. Shareholders’ shall elect from the candidate list of the directors and independent directors. The Company’s directors and independent directors shall be elected at the same time pursuant to the Procedures; the votes are separately calculated for independent and non‐independent director positions. Those receiving more ballots will be elected. When the number of independent directors falls below that required under the proviso of Article 14‐2, paragraph 1 of the Securities and Exchange Act, a	Article 3:	Elections of directors and independent directors at the	Amended pursuant to the competent authorities’ “Sample Template for XXX Co., Ltd. Procedures for Election of Directors.”
			Company shall be conducted
			in accordance with the candidate nomination system
			and procedures set out in the
			Company Act.
			be assessed for their qualifications and whether or
			not to be subjected to the matters set forth in Article 30
			of the Company Act prudentially,and the election
			prudentially
			shall be proceeded pursuant to Article 192‐1 of the Company Act. Shareholders’ shall elect from the candidate list of the directors and independent directors. The Company’s directors and independent directors shall be elected at the same time pursuant to the Procedures; the votes are separately calculated for independent and non‐independent director positions. Those receiving more ballots will be elected.
	by‐election shall be held at the next shareholders’ meeting to fill the vacancy. When the independent directors are dismissed en masse, a special shareholders’
	meeting shall be called within
	60 days from the date of occurrence to hold a by‐election to fill the vacancies.
		Article 7:	Shall a candidate be a shareholder, voters shall indicate the candidate’s account name and number in	Deleted pursuant to the competent

			Basis of
After Amendment		Before Amendment
			Amendment

		the“Candidate”column on the ballot; if a candidate is not a shareholder, his/her name and identity document	authorities’ “Sample Template for XXX Co., Ltd. Procedures for Election of Directors.”
		number shall be specified. However, if a candidate is a governmental or institutional
		shareholder, the candidate’s account name on the ballot shall be the name of such governmental or institutional
		shareholder, or with their representatives. Shall there be several representatives, their names shall be specified individually.
Article7:A ballot is invalid under any of the following circumstances, and the voting rights on the questioned ballot will not be counted under the questioned candidate: 1. The ballot was not prepared by a person with the right to convene. 2. Electing more candidates than required. 3. A ballot not placed in the ballot box, or a blank ballot is placed in the ballot box. 4. Other words or marks are entered in addition to the number of voting rights allotted. 5. The writing is unclear and indecipherable or has been altered. 6. The candidate whose name is entered in the ballot does not conform to the director	Article 8:	A ballot is invalid under any of the following circumstances, and the voting rights on the questioned ballot will not be counted under the questioned candidate: 1. The ballot was not the ballot specified in Article 6. 2. Electing more candidates than required. 3. A ballot not placed in the ballot box, or a blank ballot is placed in the ballot box. 4. Other words or marks are entered in addition to the name or account number (or identity document number)of the candidate, and number of voting rights allotted, or any alteration of such. 5. The writing is unclear and indecipherable. 6. The entered name of	Provisions and serial numbers are amended pursuant to the competent authorities’ “Sample Template for XXX Co., Ltd. Procedures for Election of Directors.”

						Basis of
After Amendment				Before Amendment
						Amendment

		candidate list.		7.	the candidate is identical to the shareholder(s) or disputable, but no other
					identification, such as account number or identity document number is provided to identify. Shall the candidate whose name is entered in the ballot be a shareholder, but his/her

					account name and number differ from the shareholder registry; or if the candidate whose name is entered in the ballot is not a shareholder, his/her name and identity document number are inconsistent after verification.
Article 8:Omitted			Article 9:	Omitted		Provisions amended.
Article 9:Omitted			Article 10: Omitted			Provisions amended.
Article 10:	Omitted		Article 11: Omitted			Provisions amended.
Article 11:	Omitted The third amendment to the Rules was approved on June 12, 2019 The fourth amendment to the Rules was approved on July 01, 2021		Article 12: Omitted The third amendment to the Rules was approved on June 12, 2019			Amendment date is added

AI assistant

Zyxel Group — AGM Information 2021

52370_rns_2021-07-05_99829f05-f030-4ac2-86be-ee96fc3a7ba2.pdf

Unizyx Holding Corporation 2021 Annual Shareholders’ Meeting Minutes (Translation)

I. Call the Meeting to Order

II. Chairman’s Address (omitted)

III.Reports

IV.Ratifications

Voting Results:

V. Discussion

Voting Results:

Shares represented at the time of voting: 258,219,507

Voting Results:

Shares represented at the time of voting: 258,219,507

Shares represented at the time of voting: 258,219,507

VI.Extemporary Motions: None.

Unizyx Holding Corporation 2020 Business Report

I. Business Results 2020:

(1) Outcome of performance:

(2) Analysis on profitability:

II. Business Outlook

Unizyx Holding Corporation Audit Committee’s Review Report

Attachment 3

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

How the matter was addressed in our audit:

2. Valuation of Inventories

Description of key audit matters:

Other Matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Unizyx Holding Corporation and subsidiaries

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Unizyx Holding Corporation and subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Unizyx Holding Corporation and subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Unizyx Holding Corporation and subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Unizyx Holding Corporation and subsidiaries

Consolidated Statements of Cash Flows (continue)

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Responsibilities of Management and Those Charged with Governance for the Parent-Company-Only Financial Statements

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

Notes to Readers

(English Translation of Parent-Company-Only Financial Statements Originally Issued in Chinese)

Unizyx Holding Corporation

Balance Sheets

December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

Unizyx Holding Corporation

Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

(English Translation of Parent-Company-Only Financial Statements Originally Issued in Chinese) Unizyx Holding Corporation

Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

Unizyx Holding Corporation

Statements of Cash Flows

For the years ended December 31, 2020 and 2019

Zyxel Group AGM Information 2021