TYC Brother Industrial : 2024 Handbook for the Annual Meeting of Shareholders

Stock Code: 1522

TYC Brother Industrial Co., Ltd

2 0 2 4 A n n u a l S h a r e h o l d e r s ' M e e t i n g

Meeting Agenda

Method: Physical Shareholders' Meeting

Meeting Date：June 18, 2024

Place： Hotel Château Anping

(2rd Floor, No. 47, Xinjian Rd, South District, Tainan City, Taiwan)

TYC Brother Industrial Co., Ltd
2024 Annual Shareholders' Meeting
Meeting Agenda
Table of Contents
1. Meeting Procedures	1
2. Meeting Agenda	2
(1) CALL TO ORDER	2
(2) CHAIRMAN'S ADDRESS	2
(3) REPORT ITEMS:	2
(4) MATTERS FOR RATIFICATION:	2
(5) MATTERS FOR ELECTION	3
(6) EXTRAORDINARY MOTIONS	6
(7) EXTEMPORARY MOTIONS	6
(8) ADJOURNMENT	6
3. Appendices	7
A. BUSINESS REPORT	7
B. AUDIT COMMITTEE'S AUDIT REPORT	10
C. INDEPENDENT AUDITORS' REPORT AND FINANCIAL STATEMENTS	11
D. STATEMENT OF SURPLUS ALLOCATION	30
F. REFERENCE OF DIRECTOR CANDIDATES' CONCURRENT POSITION IN ANOTHER COMPANY34
G. SHAREHOLDERS' MEETING RULES AND PROCEDURES	35
H. ARTICLES OF INCORPORATION	38
I. STATUS OF SHARES HELD BY DIRECTORS	48

1. Meeting Procedures

1. Call to Order
2. Chairman's Address
3. Report Items
4. Matters for Ratification
5. Matter for Election
6. Extraordinary Motions
7. Extemporary Motions
8. Adjournment

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2. Meeting Agenda

Time： 9:00 a.m., Tuesday, June 18, 2024

Place： Hotel Château Anping

(2rd Floor, No. 47, Xinjian Rd, South District, Tainan City, 702)

1. Call to Order
2. Chairman's Address
3. Report Items:

Proposal 1: 2023 Business report

Explanatory Notes: For the 2023 Business report, please refer to the Attachment. (p. 7-9 of this manual)

Proposal 2: Auditing of the 2023 Annual Accounting Final Reports and Statements of the Company

Explanatory Notes: For the 2023 Annual Accounting Final Reports and Statements of the Company, please refer to the Attachment. (p. 10 of this manual)

Proposal 3: 2023 Profit Sharing Bonus for Employees and Directors' Compensation Distribution Report

Explanatory Notes:

a. The company's 2023 profit was NT$1,147,134,334, which covers the benefits

(i.e. all in NT$) before tax excluding the profit sharing bonus for employees and directors' compensation distributed in accordance with the company's Articles of Incorporation.

b. Approved by the 5th meeting of the Fifth Salary and Compensation Committee, i.e., the distribution of NT$36,000,000 (not less than 1%) employee remuneration and NT$18,000,000 (not more than 3%) directors' remuneration in cash, with the same amount of expenses recorded in 2023.

(4) Matters for Ratification:

Proposal 1: Acknowledgment of 2023 Financial Statements (Proposed by the Board of Directors)

Explanatory Notes:

The 2023 individual financial report and consolidated financial report of the Company have been certified by HU, TZU-REN and HUNG, KUO-SEN, CPAs of ERNST & YOUNG, TAIWAN. The reports have also been reviewed by the Audit Committee and are certified true and correct. Please refer to the

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Attachments (page 7-9 and 11-29) for ratification of the 2023 Financial Statements.

Resolution:

Proposal 2: Adoption of the Proposal for Distribution of 2023 Earnings (Proposed by the Board of Directors)

Explanatory Notes:

a.The company's 2023 net income after tax was NT$1,093,134,334, and the proposal for distribution of the 2023 earnings shall be prepared in accordance with the Articles of Incorporation. Please refer to the Attachment (page 30) for details.

b.From the accumulated earnings in 2023 for distribution, NT$60,000,000 shall be set aside from type A preferred stock dividend and NT$625,795,762 from common stock of shareholders' dividends. (a cash dividend of NT$2 per share) The total amount of dividends distributed to each individual shareholder of preferred stock dividend and common stock cash dividend is distributed up to NT$1. (allocated up to NT$1, rounded down to less than NT$1), and the total abnormal cost is included in the company's other income. Upon approval at the Annual Shareholders' Meeting presided over by the Chairman, the resolution regarding the ex-rights date, distribution date, and other relevant issues shall be adopted.

c.If there is a change in the company's share capital afterwards, which in turn affects the dividend ratio, the Board of Directors shall be authorized to adjust the dividend ratio according to each distributed share.

Resolution:

(5) Matters for Election

Proposal 1: Election of the Proposal for Re-election of Board of Directors of the Company (Proposed by the Board of Directors)

Explanatory Notes:

a.The term of the Board of Directors shall expire on August 2nd, 2024, and by Company Act and this Company's Articles of Incorporation, the re-election shall take place.

b.In accordance with Article 21 of the Articles of Incorporation, 9 directors shall be elected, including 3 independent directors adopted by the candidates nomination system, and newly elected directors shall take term after the

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completion of the shareholders' meeting. The terms of the directors shall be three-year terms, from June 18, 2024, to June 17, 2027.

c.The roster of director candidates, where the nominees listed in the roster of directors' and independent directors' candidates approved by the resolution of the Board of Directors meeting on March 14, 2024, are as follows:

TYC Brother Industrial Co., Ltd

The Roster of Director and Independent Director Candidates (Nominated by Board of

Directors)

						Reason of
						continuous
Job Title	Name	Academic	Experience	Current Position	Holding	nomination for
Category	Qualifications	Shares	independent
						directors with 3
						consecutive terms
	Representative of				Common
	MA, University of	Supervisor,		Stock
	KUO-CHI-MIN
	Southern	VARROC TYC	Chairman of	7,200,893
Director	INVESTMENT CO.,	Not applicable
California	AUTO LAMPS	the Company	Preferred
	LTD.
	Business School	CO., LTD.		Stock
	WU, KUO-CHEN
				3,999,500
					Common
		National Beimen	President,	Vice Chairman	Stock
		YUAN-HONG	5,401,383
Director	WU, CHUN-LANG	Senior High	of the	Not applicable
INVESTMENT	Preferred
		School	Company
		CO., LTD.	Stock
					0
					Common
		National Beimen	President,		Stock
		JUOKU	Founder of the	824,081
Director	WU, CHUN-CHI	Senior High	Not applicable
TECHNOLOG	Company	Preferred
		School
		Y CO., LTD.		Stock
					0
					Common
		National Beimen	President, TA	President, TA	Stock
		YIH	YIH	4,593,613
Director	WU, CHUN-I	Senior High	Not applicable
INDUSTRIAL	INDUSTRIAL	Preferred
		School
		CO., LTD.	CO., LTD.	Stock
					0
	Representative,	Chien Hsin			Common
	University of	Director, DBM		Stock
	YUAN-HONG	Science and	Vice General	5,354,451
	REFLEX OF
Director	INVESTMENT CO.,	Technology	Manager of the		Not applicable
TAIWAN CO.,	Preferred
	LTD.	Department of	Company
	TING, CHENG-TAI	Electronic	LTD.		Stock
		Engineering			0

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						Reason of
						continuous
Job Title	Name	Academic	Experience	Current Position	Holding	nomination for
Category	Qualifications	Shares	independent
						directors with 3
						consecutive terms
			Executive		Common
			Director of
				Stock
			Changan Ford	President,
			0
		EMBA, Yuan Ze	Automobile	VARROC
Director	CHUANG, TAI-SHIE	Co., Ltd. and	TYC AUTO		Not applicable
University
		Director of	LAMPS CO.,	Preferred
			Greater China,	LTD.	Stock
			Ford Pan-Asian
				400,000
			Manufacturing.
			Independent
			Director of		Common
			MOSPEC		Stock
		EMBA, National	SEMICONDU		0
Independent		CTOR CORP.
HOU, RONG- HSIEN	Cheng Kung	Independent	CPA		No
Director
	University	Director of
			Preferred
			UNITED
			FIBER OPTIC		Stock
			COMMUNICA		0
			TION INC.
			Chair Professor		Common
			Emeritus,
				Stock
			Chang Jung	Chair Professor,
			4,000
		PhD. of THE	Christian
		Chang Jung
Independent		UNIVERSITY	University
HSU, CHIANG	Christian		No
Director	OF WYOMING,	Independent
	University
		USA	Director of K N	Preferred
			H		Stock
			ENTERPRISE
				0
			CO., LTD.
		PhD, Programs in		Associate	Common
		Management,	Chair,	Stock
		professor,
		National	Department of	0
Independent		Department of
HUANG, HUI-LING	Kaohsiung	Business		No
Director	Business	Preferred
	University of	Administration,
		Science and	CJCU	Administration,	Stock
		CJCU
		Technology		0

Result of the Election:

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(6) Extraordinary Motions

Proposal 1: Discussion of waiver to the director's limitation of non-competition. (Proposed by the Board of Directors)

Explanatory Notes:

a.In accordance with Article 209 of the Company Act, "A director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval."

b.A director is a member or a representative of the board and invests or participates in company operations, who were to conduct activities that are within the scope of or similar to company business and serve as a director or a managerial officer, if a director explains to a meeting of shareholders the essentials of activities within the scope of company business that he/she plans to engage in outside the company and no harm to the benefit of the Company, then it shall be proposed to the shareholders' meeting to grant a waiver to the director's and his/her representatives' limitation of non-competition by a resolution.

c.Please refer to the Attachment (page 34) for the reference table of director candidates who concurrently serves in business scope of other company.

Resolution:

1. Extemporary Motions
2. Adjournment

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3. Appendices

A. Business Report

TYC Brother Industrial Co., Ltd

Business Report

Dear Shareholders,

I would like to report the 2023 business performance and 2024 business plan of the Company.

Business results in 2023:

1. Business plan implementation results:

As a result of the efforts of all our colleagues in the past year, TYC Brother's operating revenue reached NT$19,277,545 thousand, an increase of 0.37 percent from NT$19,207,226 thousand in 2022. The Company's gross profit was NT$5,168,485 thousand and net profit before tax was NT$1,504,225 thousand.

Unit: In thousand dollars

Item	2022 Achievements	2023 Achievements	Growth rate%
Operating Revenue	19,207,226	19,277,545	0.37%
Cost of goods sold	15,023,313	14,109,060	-6.09%
Gross Profit (from goods sold)	4,183,913	5,168,485	23.53%
Operating Expenses	3,297,077	3,421,541	3.77%
Operating Profit	886,836	1,746,944	96.99%
Non-Operating Income and Expenses	380,748	-242,719	-163.75%
Net Income before tax	1,267,584	1,504,225	18.67%
Income tax	265,723	347,856	30.91%
Net Income after tax	1,001,861	1,156,369	15.42%

1. Budget execution status: The company did not disclose 2023 financial forecast
2. Analysis of 2023 financial income and expenditure, and profitability:
   Annual net profit after tax was NT$1,156,369 thousand and diluted earnings per share were NT$3.31. The percentages of net operating profit and net profit before tax versus paid-in capital were 55.83% and 48.07%, respectively, with a profit ratio of 6.00%.

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4. Status of research and development:

1. Research and development expenses in the last 2 years:
2. 1. Research and development expense in 2022 was NT$375,587 thousand, accounting for 1.96% of the 2022 operating revenue.
   2. Research and development expense in 2023 was NT$396,267 thousand, accounting for 2.06% of the 2023 operating revenue.
3. R&D accomplishments:
4. 1. LED Asymmetry bending lens design light
   2. 24 PIXEL ADB headlight design
   3. LED multi-dimensional viewing angle Language Screen optical design

Summary of 2024 Operation Plans:

1. Operating Strategy
2. 1. Continue to obtain product certification and boost sales performance of related product groups to increase company revenue and profit
   2. Proactively invest in the development of smart lighting and electronic control technology, improve car light related optical and mechanism patents as well as styling innovation to maintain the Company's top position in product technology
   3. Maximize the use of internal and external resources to make product cost and quality more competitive
   4. Speed up the development of new products, effectively reduce lead time to market, and expand market opportunities
3. Sales Volume Estimation

The Company expects sales growth of AM and OEM in 2024 to be better than in 2023.

3. Significant Production and Marketing Policies

1. Continue to improve cost and strengthen management structure as well as market price competitiveness.
2. Establish a labor-saving and automated production system, increase output and improve production efficiency.
3. Effectively manage fixed asset expenditures, reduce fixed cost allocation, and improve the flexibility of funds

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