ACES — AGM Information 2016

Jul 26, 2016

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ACES ELECTRONICS CO., LTD.

Handbook for the 2016 Annual Meeting of Shareholders

Date: June 28, 2016

Place: 3F, No.398, Minquan Rd, Zhongli District, Taoyuan City (Hotel Kuva Chateau)

Table of Contents

	Item	Page
I.	Meeting procedure�����������������������������������������������������������	1
II.	Meeting Agenda��������������������������������������������������������������	2
	1. Discussion���������������������������������������������������������������	3
	2. Company Reports�������������������������������������������������������	4
	3. Proposals, Discussion and Elections��������������������������������	5
	4. Questions and Motions������������������������������������������������	7

ACES ELECTRONICS CO., LTD.

Procedure for the 2016 Annual Meeting of Shareholders

1. Call the Meeting to Order

2. Chairman Remarks

3. Discussion

4. Company Reports

5. Proposals, Discussion and Elections

6. Questions and Motions

7. Adjournment

1

ACES ELECTRONICS CO., LTD.

Agenda of 2016 Annual Meeting of Shareholders

Time：9:00 a.m. on Tuesday, June 28, 2016

Place：3F, No.398, Minquan Rd, Zhongli District, Taoyuan City (Hotel Kuva Chateau)

Meeting Agenda：

1. Report on attending shares of shareholders

2. Call the Meeting to Order

3. Chairman Remarks

4. Discussion

(1)Amendment to the Articles of Incorporation

1. Company Reports

2. (1)2015 Business Report

(2)Supervisor’s Review Report on the 2015 Financial Statements

(3)Report on 2015 employees’, Directors’ and Supervisors’ Remuneration

(4)Report on implementation of Treasury stock

1. Proposals, Discussion and Elections

(1)Adoption of the 2015 Financial Statements and Business Report

(2)Adoption of the proposal for Distribution of 2015 profits

(3)Amendment to the Operational Procedures for Loaning of Company Funds

(4)Amendment to the Operational Procedures for Endorsements and Guarantees (5)To Elect Directors and Supervisors

• (6)Proposal of Release the Prohibition on Directors from Participation in Competitive Business

• Questions and Motions

• Adjournment

2

Discussion

1.Amendment to the Articles of Incorporation. (Proposed by the Board)

Explanation：

(1)In order to conform to amednments to related Compnay Act and the needs of commercial practice, the company hereby proposes to amend the Articles of Incorporation.

(2)Please refer to Page 7-8 for details.

(3)The proposal is submitted for discussion.

Resolution：

3

Company Reports

1. 2015 Business Report.

The 2015 Business Report is attached as page 9-11.

1. Supervisor’s Review Report on the 2015 Financial Statements.

The 2015 Supervisor’s Review Report is attached as page 12-14.

1. Report on 2015 Employees’, Directors’ and Supervisor’s Remuneration.

The Board of Directors meeting on March 25, 2016 proposed the employees’ remuneration totaling NT$9,028,157, and the Directors’ and Supervisors’ remuneration totaling NT$4,514,078, both are paided in cash.

4. Report on implementation of Treasury stock.

In accordance with the Company Act Article 187, 317 and Article 12 of the Business Mergers and Acquisitions Act, buyback 960,000 shares from the shareholders who were disagree on Aces and MEC IMEX merger matter. The number of shares bought back as a percentage of total issued shares is 0.77%. It hasn’t gone through the shares cancellation or shares transferred.

4

Proposals, Discussion and Elections

1. Adoption of the 2015 Financial Statements and Business Report. (Proposed by the Board)

Explanation：

• (1)The Company’s 2015 Financial Statement, including the balance sheet, income statement, statement of changes in shaeholders’ equity, and statement of cash flows, were audited by Shu-Chih Yang and Pei-Chi Chen, accountants at CPA firm of KPMG.

• (2)The 2015 Business report, independent auditors’ audit report, and the above-mentioned Financial Statements are attached in the Meeting Agenda, page 9-11 and page 15-24.

• (3)The proposal is submitted for discussion.

• Resolution：

• Adoption of the proposal for Distribution of 2015 profits (Proposed by the Board) Explanation：

• (1)2015 net profit after tax is NT $149,030,214. Add beginning retained earnings of NT $1,510,074,434, and after setting aside the legal reserve of NT $14,903,021, the unappropriated retained earnings are NT$ 1,644,201,627.

• (2)The proposal for distribution of 2015 profits is to set aside NT$49,169,554 for cash dividends. Each shareholder will be entitled to receive a cash dividend of NT$0.4 per share.

(3)2015 Earnings Distribution Table, please refer to the page 25.

• (4)In the event of that the outstanding shares is affected by capital increase, conversion of convertible bonds, buyback of treasury stock or transfer of treasury stock, conduct of Employee stock options or any other factors, it is proposed that the Board of Directors be authorized to adjust the cash and to be distributed to eah shsre based on the mumber of actual shares outstanding on the record date for distribution.

• (5)Upon the approval of the Annual Meeting of Shareholders, it is porposed that the Chairman be authorized to resolve the ex-dividend date and other relevant issues.

(6)The proposal is submitted for discussion. Resolution：

5

1. Amendment to the Operational Procedures for Loaning of Company Funds (Proposed by the Board)

Explanation：

• (1)In order to conform to the amednments to related commercial laws and the needs of commercial practice, the company hereby proposes to amend the Operational Procedures for Loaning of Company Funds.

• (2)Please refer to Page 26-29 for details.

(3)The proposal is submitted for discussion.

Resolution：

1. Amendment to the Operational Procedures for Endorsements and Guarantees (Proposed by the Board) Explanation：

2. (1)In order to conform to the amednments to related commercial laws and the needs of commercial practice, the company hereby proposes to amend the Operational Procedures for Endorsements and Guarantees.

3. (2)Please refer to Page 30-31 for details.

(3)The proposal is submitted for discussion.

Resolution：

1. To Elect Directors and Supervisors (Proposed by the Board) Explanation：

2. (1)The term of the Compnay Directors and Supervisors is expired on June 19, 2016. According to the company Act 195 and 217, shall be extended the term until the new directors and supervisors have been elected.

3. (2)According to the Aarticles of Incorporation, 5 directors (include 2 independent directors) and 3 supervisors shall be elected in the shareholders’ meeting. Their three-year term will start from June 28, 2016 and conclude on June 27, 2019.

4. (3)The two independent directors shall be elected from the nomination list prepared by the company. Personal information of the 2 nominees, please refer to the page 32.

Election Result：

6

1. Proposal of Release the Prohibition on Directors from Participation in Competitive Business (Proposed by the Board) Explanation：

2. (1)According to Article 209 of Company Act, adopt a proposal for release the prohibition on new directors from participation in competitive business.

3. (2)The details of releasing of Non-competition restrictions for the new directors, as the supplementary explanation in the shareholders’ meeting.

4. (3)The proposal is submitted for discussion.

Resolution：

Questions and Motions

Adjournment

7