Weikeng Industrial : 2021 Annual General Meeting Minutes

威健實業股份有限公司(Weikeng Industrial Co., Ltd.)

110 年股東常會議事錄(2021 Annual General Meeting Minutes)

Notice to readers

This English-version meeting minutes is a summary translation of the Chinese version and is not an official document of the shareholders' meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

• Date and Time of the Meeting：July 20, 2021 at 9:00 a.m. (Tuesday)
• Location of the Meeting：Chin-Chin Garden Restaurant (No.32, Ln. 266, Sec. 2, Zhishan Rd., Shilin Dist., Taipei City 111, Taiwan )
• Report of the Number of Shares Represented by Shareholders Present at the Meeting)： At 9:00 a.m., the total number of ordinary shares in attendance by shareholders (including in person and by proxy) are 238,260,329 shares (including the number of shares attended through electronic means which are 28,809,496 shares), accounted for 64.78% of the total 367,751,242 ordinary shares issued by the Company, and met the statutory meeting quorum in accordance with article 174 of the Company Act.
• Chairman：Hu, Chiu-Chiang
• Recorder: Chou, Kan-Lin
• Directors Present：
• 1. Independent Director： Tsai, Yu-Ping, Lin, Hung, and Yu, Hsueh-Ping
  2. Director：Hu, Chiu-Chiang, Chi, Ting-Fang, Chen, Kuan-Hu, and Chen, Cheng-Fong
• Other Attendees
• 1. Attorney at Law：Wang, Chien-Chih
  2. CPA： KPMG: Lo, Jui-Lan

1. The statutory meeting quorum is met. Chairman Hu, Chiu-Chiang announces the commencement of the meeting.

1. Chairman's Remarks：（Omitted）
   III.Reporting Matters
2. 1. 2020 Business Report & Report to Shareholders
      Explanation: Please refer to the Attachment I for the Company's 2020 Business Report (Report to Shareholders).

1. 2020 Financial Results as reviewed by Audit Committee Explanation:
2. 1. Please refer to the Attachment II for the Review Report of the Audit Committee on the Business Report, the Financial Statements audited and attested by independent auditors, Lo, Jui-Lan and Au, Yiu-Kwan of KPMG Taiwan, and Earnings Distribution Plan for 2020.
   2. Report on the communication between members of the Audit Committee and the head of internal audit: After checking the 2020 internal audit report, there were no major internal control deficiencies and abnormal matters.

1. Report on the Company's endorsements and guarantees amount Explanation:
2. 1. As of the end of the year 2020, the Company's endorsements and guarantees amount for its subsidiary, Weikeng International Co., Ltd., was US$210.6 million and NT$613 million, both of which were subject to the Procedures for Endorsements and Guarantees.
   2. As of the end of the year 2020, the Company's endorsements and guarantees amount for its subsidiary, Weikeng Technology Pte. Ltd., was US$24 million, which was subject to the Procedures for Endorsements and Guarantees.

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1. As of the end of the year 2020, the Company's endorsements and guarantees amount for its subsidiary, Weikeng International (Shanghai) Co., Ltd., were US$23 million and RMB 30 million, both of which were subject to the Procedures for Endorsements and Guarantees.
2. The operational strategy of Weikeng Group is to continuously expand, integrate, and strengthen the combined sales capabilities of its subsidiaries' product lines. As the sales performance of each subsidiary grows, the demand for working capital is not only considered to raise funds from the capital market, but also requires injection from bank loans. Therefore, the total amount of endorsements and guarantees for each subsidiary company are necessary and reasonable.

(IV) Report on the Company's the implementation of the 5th domestic unsecured convertible corporate bonds

Explanation:

1. The Company issued the 5th domestic unsecured convertible corporate bonds of 10,000 units, each with a denomination of NT$100,000, issued by denomination with a total amount of NT$1 billion and a coupon rate of 0%, which was issued on November 3, 2020 and traded on Taipei Exchange (stock code: 30335), the tenor is 5 years with maturity on November 3, 2025.
2. All funds raised from the convertible corporate bonds were used to repay loans from financial institutions and which expected benefits of the fund-raising project will be
3. 1. saving cash outflow of interest expenses, reducing financial burden, and (ii) strengthening financial structure and improving debt solvency.
4. As of the shares book closure date for the 2021 Annual General Meeting, the bondholders of the convertible corporate bonds have not yet executed the conversion, so the number of outstanding convertible corporate bonds are still 10,000 units.

Supplementary Explanation: Subject to the actual date of this shareholders meeting, as of June 30, 2021, the bondholders of the converted corporate bonds have performed the conversion of 588 bonds, so the number of outstanding bonds at that time was 9,412.

1. Report on the remuneration distribution of employees and directors for 2020 Explanation: In accordance with Article 22 of the Articles of Association of the Company, the
   Company appropriated the remuneration of employees and directors for 2020, of which for employees and directors is NT$78,442,400 and NT$19,610,600, respectively. The above remuneration had been resolved by the Board of Directors on March 26, 2021 with no less than two-thirds of directors present, and approved by more than half of directors attending the meeting. Both of which will be paid in cash after this 2021 Annual General Meeting and there will be no difference from the expense appropriated in the financial statements of 2020.
   Supplementary explanation: Subject to the actual date of this shareholders meeting, the above remuneration has been paid after the resolution of board of directors agreed on June 29, 2021.

(VI) Report on the Cash Dividends of the 2020 Earnings Distribution Plan Explanation:

1. The Company's 2020 earnings distribution plan (please refer to the Attachment IV), will be fully distributed by cash dividends totaling by NT$494,508,010, has been resolved by the Audit Committee and Board of Directors with no less than two-thirds of directors present, and approved by more than half of directors attending the meeting on March 26, 2021. Board of Directors authorized the Chairman to set the ex-dividend date, the date of distribution, and other related matters, which information will be announced to shareholders thereafter.
2. As of the shares book closure date for the 2021 Annual General Meeting, the total issued and outstanding ordinary shares are 367,751,242 shares and the proposed declared cash dividend is NT$1.3446807 per share. The cash dividends on the issued and outstanding ordinary shares are distributed pro rata and are rounded down to the nearest whole number. The fractional balance of dividends less than NT$ 1 will be summed up and recognized as other income of the Company's employee welfare committee.

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1. Where the total number of issued and outstanding shares of the Company subsequently changes and the aforesaid cash dividends distributed to each ordinary share needs to be adjusted pursuant to actual number of the issued and outstanding ordinary shares on the ex-dividend date, the Chairman of the Board of Directors of the Company is authorized to handle it in full authority according to the actual situation, and which information will be announced to

shareholders thereafter.

Supplementary explanation: Subject to the actual date of this shareholders meeting, the above-mentioned cash dividends were approved by the board of directors on June 29, 2021 to set the ex-dividend date. The relevant matters have been announced on July 9, 2021 with material information and set August 20, 2021 as the cash dividend payment date.

(VII) Report on the Some Amendments to the Company's "Rules and Procedures of Board of Directors' Meeting" and "Codes of Ethical Conduct"

Explanation: According to the amendments of relevant laws and regulations promulgated by the competent authority, the Company has revised some articles of the Company's "Rules and Procedures of Board of Directors' Meeting" and " Codes of Ethical Conduct", which have been approved by the resolution of Board of Directors on July 31, 2020 and March 26, 2021, respectively, and both of amendments are being reported to the 2021 Annual General Meeting. Please refer to the Attachment V~VI.

(VIII) Report on the results of individual performance assessments of directors and executive officers, as well as the correlation and rationality between the contents and amounts of their individual remuneration and performance assessment results.

Explanation: The correlations between the Company's emoluments (salary and remuneration) policy of directors and executive officers and the operating performance are as follows:

1. Remuneration to directors including directors' remuneration and business execution fees.
   The Company pays the remuneration of directors, including the remuneration appropriated by the Company's articles of association and business execution fees (only the attendance fee for attending the meeting). The total appropriated amount of directors' remuneration shall be set at a maximum of 2.5% of the net profit before tax stated in the articles of association of the Company. However, if the Company still has accumulated losses, it shall first be offset against any deficit.
   The total remuneration of directors for 2020 is NT$19,610,600. After the 2021 shareholders' meeting is reported, the Company will pay directors' remuneration in accordance with the "Rules for Remuneration Management of Directors and Executive Managers" and "Rules for Board of Directors Performance Assessment".
2. • For the performance assessments of the board of directors and board members, please refer to the Company's 2020 Annual Report.
3. Emoluments paid to executive officers are divided into fixed salary and variable remuneration.
   Fixed salary includes base pay, duty allowance and meal allowance, which are determined by the following factors such as education, experience, skills, degree of decision-making responsibility & risk, contribution to the Company, and the typical pay levels adopted by peer companies. The annual salary adjustment is carried out in accordance with the Company's operating conditions, the domestic economic growth rate, price index, the salary adjustment status of the industry, the personal performance appraisal and the Company's annual budget target.
    Variable remuneration includes year-end bonus and employee remuneration. a. The year-end bonus is the amount of accumulated reserves appropriates

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in the accounting entry in advance on a monthly basis based on the achievement rate of the budget profit target; prior to the distribution of the bonus to executive officers, the top management must first complete a comprehensive assessments, including personal performance appraisal, education, experience, skills, degree of decision-making responsibility & risk, contribution to the Company, the typical pay levels adopted by peer companies, etc., after which the Company distributes year-end bonuses to executive officers based on the approved allocation plan. However, the distribution plan of year-end bonus belongs to executive officers must be approved by the resolution of the Remuneration Committee and the Board of Directors.

b. Employees and executive officers' remuneration is the total appropriated amount in accordance with the Company's Articles of Association, which amount is first approved by the resolution of the Remuneration Committee and the Board of Directors and reported to the shareholders' meeting; the procedures for the distribution of remuneration to executive officers are the same as described in the preceding subparagraph a.

Appropriation of employees and executive officers remuneration

a. In accordance with the Articles of Association of the Company, the earning in the Company's annual final accounts if any shall first be offset against any deficit, then, 6% to 10% of net profit before tax (before deducting remuneration to employees , executive officers, and directors) will be distributed as employees and executive officers' remuneration. Employees and executive officers who are entitled to receive the above mentioned remuneration, in share or cash, include the employees of the subsidiaries of the Company who meet certain specific requirements.

b. The total employees and executive officers' remuneration for 2020 is NT$78,442,400, which is being reported to 2021Annual General Meeting of shareholders, and then the executive officers' distribution amount will be paid in cash in accordance with the approved procedures.

1. Please refer to the Company's 2020 Annual Report for the relevant information in the "Remuneration paid to Directors, President, and Vice President in the Most Recent Year".

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IV. Recognition Matters

Agenda 1. Recognition on the 2020 Business Report and the Financial Statements, including individual financial statements and consolidated financial statements. (Proposed by the Board of Directors)

Explanation:

1. The independent auditors, Lo, Jui-Lan and Au, Yiu-Kwan of KPMG Taiwan, have completed the auditing and attesting procedures of the Company's 2020 financial reports, including individual and consolidated statements, and submitted an audit report.
2. The Board of Directors of the Company had resolved to approve the 2020 financial reports and business report on March 26, 2021 and submitted those reports to the Audit Committee for verification and a written review report was prepared.
3. Please refer to Attachment III for the Independent Auditors' Report、Balance Sheets, Statements of Comprehensive Income, Statements of changes in Equity, and Statements of Cash Flows.
4. Recognition is respectfully requested.

RESOLVED：Approved after voting, voting results are as follows:

Number of			Disapproval		Abstention
votes	Approval Votes	Invalid Votes	Votes/No
Votes
represented by				Votes
attending	Number	Percentage	Number	Number	number
shareholders
	221,810,735		277,110		16,172,484
238,260,329	(including E-	93.09%	(Including E-	0	(Including E-
Voting :	Voting :	Voting :
	12,359,902)		277,110)		16,172,484)

Agenda 2. Recognition on the 2020 Earnings Distribution Plan. (Proposed by the Board of Directors)

Explanation:

1. The Company proposed the Earnings Distribution Plan (please refer to the Attachment IV) pursuant to Articles of Association of the Company, that plan has been approved by the resolution of Audit Committee and Board of Directors of the Company through discussion on March 26, 2021.
2. Recognition is respectfully requested.

RESOLVED：Approved after voting, voting results are as follows:

Number of			Disapproval		Abstention
votes	Approval Votes	Invalid Votes	Votes/No
Votes
represented by				Votes
attending	Number	Percentage	Number	Number	number
shareholders
	222,177,247		280,363		15,802,719
238,260,329	(including E-	93.24%	(Including E-	0	(Including E-
Voting :	Voting :	Voting :
	12,726,414)		280,363)		15,802,719)

1. Discussion Matters

Agenda 1. Discussion on the Some Amendments to the Company's Articles of Association. (Proposed by the Board of Directors)

Explanation:

1. In order to comply with the amendments to the laws and the actual operational needs, some of the articles of the Company's Articles of Association will be amended.
2. The amended articles had been approved by the resolution of Audit Committee and Board of Directors on March 26, 2021, which amended articles will be implemented after the resolution of the 2021 Annual General Meeting. Please refer to the Attachment VII for

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