Implementation Status and Deviations from Principles

Assessment Item

Implementation Status

Non-implementation and its reason(s)

1. If the Company established and disclosed
Corporate Governance Principles in accordance with Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies?

The Company formulated the “Corporate Governance
Principles” in accordance with Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies and disclosed on the Market Observation Post System and the company’s website.

No deviation

2. Shareholder Structure & Shareholder’ Rights

(1) Has the Company established internal
procedures to handle shareholder suggestions, proposals, complaints and litigation and execute accordingly?

(2) Has the Company maintained a list of major shareholders and a list of ultimate owners of these major shareholders?

(3) Do risk management mechanism and
“firewall” between the Company and its affiliates put in place?

(4) Has the Company established internal policies that forbid insiders from trading based on non-disclosed information?

(1) The Company assigned spokesperson, investor
relations contact, dedicated personnel for registrar and legal-related matters to address issues in relation to shareholders’ suggestions and disputes.

No deviation

(2) The company keeps in touch with major shareholders, and keeps abreast of the actual shareholding status of directors, managers and major shareholders holding more than 10% of the shares.

(3) The Company formulated “Administrative
Measures on the Operation of a Subsidiary”, “Administration Measures on the Related Party Transactions ”, “Procedures for the Acquisition and Disposal of Assets” and other internal management measures to regulate the financial transactions between the company and related companies, so as to establish a good risk control mechanism and firewall.

(4) The Company formulated control measures of “Insider Trading Prevention management operations” to regulate the company's directors, managers and employees, and regularly conduct publicity and education and training on relevant laws and regulations to establish codes of conduct and risk control.

3. Structure of Board of Directors and its responsibility

(1)Has the Board developed diversified policies, concrete management goals, and executed accordingly?

(1)According to the third chapter of the company's "Corporate Governance Code of Practice", strengthening the functions of the board of directors is to formulate a policy of diversification. The company attaches great importance to the professional knowledge and skills of the members of the board of directors and the diversity of composition, and pays attention to gender equality. The professional knowledge and skills of directors, including financial accounting, legal expertise, operational judgment ability, management ability, crisis handling ability, industry knowledge, international market outlook, leadership decision- making ability, etc., help to improve the decision- making of the board of directors and strengthen the internal supervision mechanism .

(2)The diversity policy of the board of directors is disclosed on the company
website and the public information observation station.

(3)The company's directors with employee status account for 22%; the
term of two independent directors does not exceed six years, and the
term of one independent director does not exceed three years.

(4)The company's directors have implemented a diversified policy regarding their academic experience, professional knowledge and related fields. In the future, we will promote gender equality in accordance with the development trend of international gender equality. It is expected to increase the number of female directors to achieve the goal and provide the company with more diverse perspectives..

Name	Gender	Diversification
Name	Gender	Business Management	Finance	Law	Operational udgment	Risk Managment	Industrial Knowlege	Global Market View	Leadership& Decision -making
Tseng, Ming-Jen	Male		-	-
Chan, Wen-Hsiung	Male		-	-
Hu, Shiang-Chi	Male		-	-
Tong, Chun-Jen	Male		-	-
Tong, Chun-Yi	Male		-	-
Chang, Hsiao-Chi	Male		-	-
Chen, Chien-Hung	Male		-
Huang, Chih-Chen	Male			-
Huang, Kuo-Lun	Male		-	-

No deviation

(2)Has the Company established any other functional committee in addition to the Compensation Committee, Audit Committee as required by law?

(2)The company has set up a Compensation Committee and an audit committee in accordance with the law.

(3)Has the company formulated board performance evaluation Rules and evaluation methods, conduct annual and regular performance evaluations, and report the results of performance evaluations to the board of directors, and use them as a reference for the remuneration of individual directors and the nomination for renewal?

(3)The company’s board of directors approved the "Board Performance Evaluation Regulations" on May 6, 2020.
The Chairman's Office is the execution unit for performance evaluation, which is conducted in the form of a questionnaire. The scope of the evaluation includes the entire board of directors, individual director members, the remuneration committee and the audit committee; the evaluation methods are internal self-evaluation of the board of directors, self-evaluation of director members, self-evaluation of the remuneration committee and the audit committee. Self- evaluation, the above performance evaluation results will be used as a reference when selecting or nominating directors; the performance evaluation results of individual directors will be used as a reference for setting their individual salaries and remuneration.

Evaluation Scale	Evaluation Content
Board of Directors (as a whole),	Participation in the operation of the Company Improvement of the quality of the board of directors’ decision making Composition and structure of the board of directors Election and continuing education of the directors Internal control
Board members,	Familiarity with the goals and missions of the Company Awareness of the duties of the director Participation in the operation of the Company. Management and communication of internal relationship The director’s profession and continuing educations Internal control
Functional committee (Compensation and committee committee)	Participation in the operation of the company Awareness of the duties of the committee Improvement of quality of decisions made by committee Composition of the committee and election of its members 5.Internal control

(4)Has the Company assessed the independence of CPA periodically?

(4) According to Article 29 of the Company’s “Corporate Governance Principles”, it is required to assess CPA’s independence and capacity regularly (at least once per year). In addition, with reference to Article 47 of the Accountants Law and the No. 10 Professional Ethics Bulletin, the independent assessment item table was formulated and the audit quality indicators (AQIs) were referred to. After evaluation, Lin Yahui and Wu Hanqi of Zicheng United Accounting Firm were in compliance with the requirements of the company. Evaluation criteria for independence and competence; the resolution was considered and passed by the audit committee and the Board of Directors of the company on March 8, 2024. (Ref. to Note 3)

Items Evaluated

1. Does the CPA have direct or material indirect financial interest in the Company?

2. Does the CPA have loans or guarantees with the Company or directors of the Company?

3. Does the CPA have a close business relationship or a potential employment relationship with the Company?

4.Have the CPA and a member of the audit team been a director, a manager of the Company or been employed by the Company within the last two years in a position to exert significant influence over the subject matter of the engagement?

5.Does the CPA provide any non-audit services which if performed for the Company would affect directly a material item of the audit engagement?

6. Does the CPA promote or broker shares for the Company or other securities issued by the company.

7. Does the CPA serve as an advocate or representative for the company with third parties in the event of conflict.

8.Does the CPA have family ties with anyone who is a director, manager, or officer of the company or any personnel who is in a position to exert significant influence over the subject matter of the engagement.

9. Is the CPA capable of performing its duties with its educational background and relevant experience.

4. Has the Company established a unit or assigned a personnel to handle corporate governance related issues (including but not limited to providing assistance to board members and handling all tasks ass

The chairman's office of the company coordinates and promotes matters related to corporate governance. Huang Meiling serves as the director of corporate governance, responsible for executing and assisting the board of directors in fulfilling its duties and strengthening the board of directors' operating mechanism.
The business execution situation in 2024 is as follows:
1.Handling matters relating to board meetings and shareholders meetings according to laws.
2.Formulating minutes of board meetings and shareholders meetings.
3.Assisting in onboarding and continuous development of directors
4.Furnishing information required for business execution by directors
5.Assisting directors with legal compliance
6.Other matters set out in the articles of incorporation or contracts

No deviation

5. Has the Company established communication channels with stakeholders (including but not limited to shareholders, employee, customers, suppliers, etc.) and disclosed key corporate social responsibility issues frequently enquired by stakeholders on the designated area of the corporate website?

The company's website has set up a special area for interested parties to provide good communication channels, and has investor relations, stock affairs and legal departments responsible for handling and communicating related issues, and continuously understands and responds to the needs of stakeholders.

No deviation

6. Has the Company engaged with professional transfer agents to host annual general shareholders’ meetings?

The Company engaged the registrar agency department of CTBC Bank Co., Ltd. to handle shareholder meeting affairs

No deviation

7 Information Disclosure

(1)If the Company set up a corporate website to disclose information regarding the Company’s finance, business and corporate governance?

(1)The Company promptly discloses relevant information on its corporate website (http://www.abilitycorp.com.tw).

No deviation

(2)If the Company adopted any other information disclosure channels (e.g., maintaining an English-language website, appointing designated personnel to handle information collection and disclosure, appointing spokespersons, webcasting investors conference, etc)?

(2)The company sets up Chinese and English websites, and specialized units collect and disclose relevant information in accordance with regulations. There is a spokesperson system in which the spokesperson or acting spokesperson is responsible for speaking to the outside world.
The official website provides live broadcast and replay of the corporate briefing.

(3)Does the company announce and report annual financial reports within two months after the end of the fiscal year, and announce and report the financial reports for the first, second and third quarters and the operating conditions of each month before the prescribed deadline?

(3)The company announces and declares its annual financial report within three months after the end of the fiscal year in accordance with laws and regulations, and completes the announcement and declares the first, second, and third quarter financial reports and operating conditions of each month before the prescribed deadline.

8. If the Company had other important information to facilitate better understanding of the Company’s corporate governance practices (including but not limited to employee rights,employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?

The company has established an employee welfare committee to provide various employee benefits and group insurance, hold regular labor- management meetings, and provide a labor- management negotiation mechanism. The company adopts the Employee Assistance Program (EAP) to provide free professional consulting channels based on employee needs, encourage employees to support and participate in social care activities, and give back to the society with practical actions.
The company regularly evaluates customer satisfaction and properly handles matters related to customer complaints to improve customer service.The company regularly evaluates customer satisfaction and properly handles customer complaints to improve customer service.
The company has established a Chinese and English website to provide investors with open and transparent information.
The company conducts risk assessment and audit for new suppliers, and regular evaluation and audit for existing suppliers. Formulate supplier relationship measures and codes of conduct for foreign-related personnel to maintain fair transactions with suppliers.
The company regularly conducts internal control assessments for each department to detect preventive controls. The audit unit assists the audit committee in supervising the company's business and the implementation of the internal control system. If possible drawbacks are found, appropriate measures can be initiated immediately to reduce operational risks.
The company has taken out liability insurance for directors, independent directors and important staff.

No deviation

Governance

Implementation Status and Deviations from Principles

Implementation Status and Deviations from Principles

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