Sunonwealth Electric Machine Industry : 2023 AGM HANDBOOK

Stock Code：2421

Sunonwealth Electric Machine Industry Co., Ltd.

2023 Annual General Shareholders' Meeting Meeting Handbook

Printed on June 9, 2023

Sunonwealth Electric Machine Industry Co., Ltd.

Agenda for the 2023 General Shareholders Meeting

Shareholders' meeting will be held by means of physical shareholders' meeting

1. Time: 9:00 a.m. June 9, 2023 (Friday)

1. Location: 9F, No. 266, Chenggong 1st Rd., Qianjin Dist., Kaohsiung City (Room D, 9F, Grand Hi-Lai Hotel)

1. Chairman's Speech:
   IV. Matters to be Reported:

1. The Company's 2022 Business Report.

1. 2022 Audit Committee's Report.

1. Report on the distribution of remuneration for employees and Directors in 2022.

(IV) Report on the status of endorsements and guarantees.

1. Proposed Resolutions:
2. 1. 2022 Business Report and Financial Statements.

1. Ratification of 2022 earnings distribution proposal.
   VI. Discussions and Votes:

1. Amendment to the "Articles of Incorporation".

1. Amendment to the Regulations for Election of Directors.
   VII. Extraordinary Motions VIII.Adjournment

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[Report items]

1. The Company's 2022 Business Report. Please refer to page 45 to 51 of the Handbook.

1. The 2022 Audit Committee's Report. Please refer to page 52 of the Handbook.

1. Report on the distribution of remuneration for employees and Directors in 2022.

The Company's earnings in 2022 (net profit before tax with remuneration for employees and Directors) totaled NT$1,394,250,265. The Company plans to distribute NT$8,000,000 as remuneration for Directors and NT$32,000,000 as remuneration for employees in accordance with Article 29 of the Articles of Incorporation. All remuneration shall be distributed in cash.

(IV) Report on the status of endorsements and guarantees

As of December 31, 2022, the Company's total endorsement and guarantees for external parties total NT$750,424,000.

[Proposed Resolutions]

Agenda item #1 (Proposed by the Board of Directors)

Agenda: The 2022 Business Report and Financial Statements are filed for resolution. Description:

1. The Company's Financial Statements for 2022 have been audited by the CPAs Ching-Lin Li and Kuo-Ming Li of Crowe Horwath (TW). Please refer to page 9 to 33 of the Handbook.

1. The aforementioned statements of final accounts and the Business Report have been reviewed by the Audit Committee.

1. The amendment is hereby filed for resolution. Resolution:

Agenda item #2 (Proposed by the Board of Directors)

Agenda: The earnings distribution proposal for 2022 is filed for resolution.

Description:

1. The Company's net profit after tax in 2022 was NT$1,089,094,499 and total distributable earnings was NT$1,330,555,336. The Company plans to appropriate NT$652,417,303 as

dividends for shareholders with NT$2.6 per share. All dividends shall be distributed in cash (calculated to the NTD and the remaining amounts below NT$1 will be rounded down). The sum of fractional amounts of less than NT$1 shall be tallied and transferred to the Employee Welfare Committee.

1. After the dividends are approved by the shareholders' meeting, the Chairman of the Board is authorized to establish the ex-dividend date, distribution date, and other related matters.

1. If the number of shares outstanding is affected by changes in the Company's share capital before the ex-dividend date for the distribution of earnings and causes changes in the shareholders' dividend rate, the Chairman of the Board is authorized process the adjustments at his full discretion.

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IV. Please refer to the table below for the earnings distribution statement
Undistributed earnings at the beginning of the period	303,670,012
Plus: After-tax net profit of 2022	1,089,094,499
Minus: Appropriation for statutory reserve	(109,920,660)
Plus: Reversal of appropriation for special earnings reserve	37,599,382
Minus: Other consolidated income (loss) (remeasurement in	10,112,103
defined benefit plans in 2022)
Distributable earnings in current period	1,330,555,336
Minus: Distributed shareholder dividends - cash dividends of	(652,417,303)
NT$2.6 per share (Note)
Undistributed retained earnings from previous years		678,138,033

Note: Stock dividends for shareholders: 250,929,732 shares *NT$2.6 =NT$652,417,303

Chairman of the Board: Ching-Shen Hong

President: Ching-Shen Hong

Head of Accounting: William Li

1. The amendment is hereby filed for resolution. Resolution:

[Discussions and Votes]

Agenda item #1 (Proposed by the Board of Directors)

Agenda: The amendment of the Articles of Incorporation is filed for discussion.

Description: I. Proposal for the amendment of the Articles of Incorporation in compliance with Article 172-2 of the Company Act which allows shareholders' meetings to be convened by means of visual communication network. The comparison table of the Articles of Incorporation before and after the amendment is provided as follows:

Content	After amendment	Before amendment	Reason for
amendment
Article 11	Shareholders' meetings include	Shareholders' meetings include	Amended in
	regular meetings and	regular meetings and	accordance
	extraordinary meetings. Regular	extraordinary meetings. Regular	with Article
	meetings are convened once a	meetings are convened once a	172-2 of the
	year, and usually within six	year, and usually within six	Company
	months of the end of each fiscal	months of the end of each fiscal	Act.
	year. The regular meeting	year. The regular meeting is
	requires a 30-day advance notice	convenedwith a 30-day
	from the Board of Directors.	advance notice from the Board
	Where necessary, extraordinary	of Directors. Where necessary,

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	meetings may be convened with a	extraordinary meetings may be
	notice to shareholders 15 days in	convened with a writtennotice
	advance according to the law.	to shareholders 15 days in
	The shareholders' meeting of the	advance according to the law.
	Company may be held by means
	of visual communication network
	or other methods announced by
	the central competent authority.
Article 33	The Articles of Incorporation	The Articles of Incorporation	Added the
	were established on August 12,	were established on August 12,	amendment
	1980.	1980.	date.
	Omitted	Omitted
	The 30th amendment was on July	The 30th amendment was on
	1, 2021.	July 1, 2021.
	The 31st amendment was on June
	9, 2023.

1. The amendment is hereby filed for resolution.
   Resolution:
   Agenda item #2 (Proposed by the Board of Directors)
   Agenda: The amendment of the Regulations for Election of Directors is filed for discussion.
   Description: I. Proposal for the amendment of the Regulations for Election of Directors in compliance with the amendment of the "Sample Template for XXX Co., Ltd. Procedures for Election of Directors" announced in Tai-Zheng-Zhi-Li No. 1090009468 dated June 3, 2020. The comparison table of the Regulations for Election of Directors before and after the amendment is provided as follows:

Content	After amendment	Before amendment	Reason for
amendment
Article 4	Each share shall be empowered	Each share shall be empowered	This article is
	with voting rights equal to the	with voting rights equal to the	amended for
	number of elected Directors in	number of elected Directors in	the adoption of
	elections of Directors of the	elections of Directors of the	the candidate
	Company. The Board of Directors	Company. The Board of Directors	nomination
	shall prepare the ballots equal to the	shall prepare the ballots equal to	system for the
	number of Directors to be elected	the number of Directors to be	election of
	and distribute them to the	elected and distribute them to the	Directors.
	shareholders. The aforementioned	shareholders. The aforementioned
	ballots may be concentrated on one	ballots may be concentrated on
	candidate or separated across	one candidate or separated across

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