2. Shareholding structure & shareholders’ rights

(1) Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure?

(2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares?

(3) Does the company establish and execute the risk management and firewall system within its conglomerate structure?

(4) Does the company establish internal rules against insiders trading with undisclosed information?

(1) In addition to the existing hotline and email channels, the Company has established an internal operating procedure, and has designated appropriate departments, such as Investor Relations, Public Relations, Legal Department, to handle shareholders’ suggestions, doubts, disputes and litigation.

(2) The Finance & Shared Services Division is responsible for collecting the updated information of major shareholders and the list of ultimate owners of those shares.

(3) Rules are made to strictly regulate the activities of trading, endorsement and loans between the Company and its affiliates. In addition, the “Criteria of Internal Control Mechanism for a Public Company”, outlined by the Financial Supervisory Commission when drafting the guidelines for the “Supervision and Governance of Subsidiaries”, was followed in order to implement total risk control with respect to subsidiaries.

(4) To protect shareholders’ rights and fairly treat shareholders, the Company has established the internal rules to forbid insiders trading on undisclosed information. The Company has also strongly advocated these rules in order to prevent any violations.

3. Composition and Responsibilities of the Board of Directors

(1) Does the Board develop and implement a diversified policy for the composition of its members?

(2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?

(3) Does the company establish a standard to measure the performance of the Board and implement it annually, and are performance evaluation results submitted to the Board of Directors and referenced when determining the remuneration of individual directors and nominations for reelection?

(4) Does the company regularly evaluate the independence of CPAs?

(1) Member diversification is considered by the Board members. Factors taken into account include, but are not limited to gender, age, cultures, educational background, race, professional experience, skills, knowledge and terms of service. The Board objectively chooses candidates to meet the goal of member diversification.

(2) The Company has set up the Remuneration Committee and the Audit Committee according to the law; the establishment of other committees is under evaluation.

(3) The company has formulated rules and procedures for evaluating the Board’s performance and conducts it annually. The Company uses two methods to evaluate the performance of the Board.

1. Self-assessment of Board members
Board members fill in the” Self-Assessment Questionnaire for Board Members” at the end of each year. To evaluate the performance of each member’s effectively, the questionnaire contains the following factors:

A. Their grasp of the Company's goals and missions;

B. Their recognition of director's duties;

C. Their degree of participation in the Company's operations;

D. Their management of internal relationships and communications;

E. Their professionalism and continuing professional education;

F. Internal controls.

2. Assessment of the Board:
The Secretary Office of the Board conducts the assessment of the Board’s performance. The following aspects are taken into consideration:

A. The degree of participation in the Company's operations;

B. Improvement in the quality of decision making by the Board of Directors;

C. The composition and structure of the Board of Directors;

D. The election of the directors and their continuing professional education.

E. Internal controls.
The Company conducts director self-assessments and peer assessments in the first quarter each year. Assessment results were reported to the Board of Directors in 25 Dec 2023, and are referenced when determining the remuneration of individual directors and nominations for reelection.

F. The external board performance evaluation is conducted at least once every three years by an external professional independent organization or a team of external expert scholars, and an annual performance evaluation is conducted at the end of each year. At the end of 112th year, our company commissioned the external organization " Taipei Foundation of Finance " to conduct a board performance evaluation for the period from January 2022 year to December 2023 year. The association issued the evaluation report on March 18th, 2024 year. For the overall evaluation and recommended actions, please refer to the Corporate Governance section on our company's website.

(4) The Company evaluates the independence of CPAs annually, ensuring that that they are not stakeholders such as a Board member, supervisor, shareholder or person paid by the Company.

7. Information Disclosure

(1) Does the company have a corporate website to disclose both financial standings and the status of corporate governance?

(2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)?

(3) Does the company announce and report annual financial statements within two months after the end of each fiscal year, and announce and report Q1, Q2, and Q3 financial statements, as well as monthly operation results, before the prescribed time limit?

(1) The Company has set up a Chinese/English website (www.scottselmanoff.com) to disclose information regarding the Company’s financials, business and corporate governance status.

(2) The Company has established a spokesman system. Investor conference information is disclosed on the corporate website.

(3) The Company has reported annual financial statements within two months after the end of each fiscal year and announced them on the company website.
The Company announced and reported its financial statements for Q1, Q2, and Q3 and filed monthly operating status before the deadline.