Advantech - AGM Information 2019 | FinancialReports.eu

Advantech Co.,Ltd. 2019 Annual Shareholders’ Meeting Meeting Minutes (Translation)

Time : 09:00 AM,May 28,2019

Place : (Neihu Headquarters) B1, No. 1, Line 20, Lane 26, Rueiguang Road,

Neihu District, Taipei City

Total outstanding ACL shares : 699,075,510 shares

Total shares represented by shareholders present in person or by proxy : 648,914,798 shares Percentage of outstanding share held by shareholders present in person or by proxy : 92.82%

Chairman: K.C Liu, the Chairman of the Board of Directors

Attendees: Benson Liu(Independent Director), Joseph Yu (Independent Director), Jeff Chen (Independent Director) ,Donald Chang (Director),Chaney Ho (Director ), Eric Chen (President), Miller Chang (President), Linda Tsai (President ), Meng Chieh Chiu, CPA, Deloitte, Villis Yang (Director)

The aggregate shareholding of the shareholders present in person or by proxy constituted a quorum. The Chairman called the meeting to order.

Chairman’s Address (omitted)

I. Management Presentations
1.The 2018 Business Report (see appendix I)
The Audit Committee’s Review Report on the 2018 Financial Statements (see appendix II)
Report of Employees’ compensation and Directors’ compensation of 2018.
The Status of Endorsement and Guarantee in 2018 (see meeting agenda)
II. Proposals
Adoption of the 2018 Business Report and Financial Statements
- (Proposed by the board of directors )
- Explanation:
- (1) The 2018 business report and standalone financial statements (including consolidated financial statements) were composed by the Board of Directors. The Company’s financial statements were audited by independent auditors, M.J. Chiou and Jr-Shian Ke , of Deloitte & Touche and were reviewed by the supervisor along with the business report with a written audit report issued.
- (2) The Business Report, independent auditor’s report, and Financial Statements are enclosed as Attachment I and Attachment III.
- (3)Please acknowledge.
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Voting Results:

648,914,798 shares were represented at the time of voting; 607,939,922 votes

were in favor of the proposal (including votes casted electronically: 356,705,450);

8,029 votes were cast against the proposal (including votes castedelectronically: 8,029);

0 votes wereinvalid; 40,966,847 votes were either invalidly cast or abstained

(including votes casted electronically:40,942,467).

Approved , that the above proposal be and hereby were accepted as submitted.

Adoption of the Proposal for Distribution of 2018 Earnings. (Proposed by the board of directors ) Explanation:
(1) Please refer to the 2018 prorofit distribution table in Attachment IV.
(2) The net income of the company amounted to NT$6,294,657,374 for 2018. Added the beginning unappropriated earnings of NT$3,797,379,616 and deducted effect of retrospective application and retrospective restatement NT$34,001,578,adjustment of retained earnings due to investments accounted for using the equity method NT$14,715,950, remeasurements of the defined benefit recognized in retained earnings NT$15,687,150, cumulative profit or loss of disposals of investments in equity instruments designated as at fair value through other comprehensive income directly transferred to retained earnings NT$11,736,286, the legal reserve of NT$629,465,737 and special reserve of NT$429,108,736, the distributable earnings for 2018 amounted to NT$8,957,321,553 resulted to be distributed as follows:
(3) The amounts of NT$4,751,129,468 out of the 2018 earnings are appropriated for distribution as cash dividends, respectively.
- There were 698,695,510 shares of common stock outstanding on December 31, 2018 that are entitled to the distribution of shareholder’s dividend at NT$6.6 per share.
(4) The distribution of cash dividend is calculated to the dollar (round up to the dollar). The total amount of the odd shares with a distribution of less than NT$1 will be booked as the other income or other expense of the company.
(5) The current distribution of earnings is scheduled before the dividend benchmark date. If there is any change in the yield rate as a result of any change in the Company’s outstanding shares, a request is to be made in the shareholders’ meeting having the Chairman authorized to handle matters related to the changes.
(6) Upon the approval of the Annual General Shareholder’s Meeting, it is proposed that the Chairman is authorized to resolve the ex-dividend date and other relevant issues.

Voting Results:

648,914,798 shares were represented at the time of voting; 607,939,922 votes

were in favor of the proposal (including votes casted electronically: 356,705,450);

8,029 votes were cast against the proposal (including votes castedelectronically: 8,029);

0 votes wereinvalid; 40,966,847 votes were either invalidly cast or abstained

(including votes casted electronically: 40,942,467).

Approved , that the above proposal be and hereby were accepted as submitted.

III. Discussion

Amendment to the “ Articles of Incorporation ”

(Proposed by the board of directors)

Explanation:

(1) In order to comply with the law and relevant regulations and to conform to the needs of Commercial practice, the Company hereby proposes to amend the Articles of Incorporation. Please refer to Attachment V.
(2) Please proceed to discuss .

Voting Results:

648,914,798 shares were represented at the time of voting; 601,055,420 votes were in favor of the proposal (including votes casted electronically: 349,820,948);

1,655,053 votes were cast against the proposal (including votes castedelectronically: 1,655,053);

0 votes wereinvalid; 46,204,325 votes were either invalidly cast or abstained

(including votes casted electronically: 46,179,945).

Approved , that the above proposal be and hereby were accepted as submitted.

Amendment to the“Procedures for Lending Funds to Other Parties”.

(Proposed by the board of directors)

Explanation:

(1) In order to comply with the law and relevant regulations and to conform to the needs of commercial practice, the Company hereby proposes to amend the Procedures for Lending Funds to Other Parties . Please refer to Attachment VI.
(2) Please proceed to discuss.

Voting Results:

648,914,798 shares were represented at the time of voting; 602,611,201 votes

were in favor of the proposal (including votes casted electronically: 351,376,729);

99,272 votes were cast against the proposal (including votes castedelectronically: 99,272); 0 votes wereinvalid; 46,204,325 votes were either invalidly cast or abstained

(including votes casted electronically: 46,179,945).

Approved, that the above proposal be and hereby were accepted as submitted.

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Amendment to the “Procedures For Acquisition or Disposal of Assets”.
(Proposed by the board of directors) Explanation:
(1) The proposal is handled according to Financial Supervisory Commission Order Gin-Guan-Zheng-Fa-Zi No. 1070338553 dated November 26, 2018.
(2) In order to comply with the law and relevant regulations and to conform to the needs of commercial practice, the Company hereby proposes to amend the Procedures For Acquisition or Disposal of Assets . Please refer to Attachment VII.

Voting Results:

648,914,798 shares were represented at the time of voting; 602,701,201 votes

were in favor of the proposal (including votes casted electronically: 351,466,729); 9,272 votes were cast against the proposal (including votes castedelectronically: 9,272); 0 votes wereinvalid; 46,204,325 votes were either invalidly cast or abstained(including votes casted electronically: 46,179,945).

Approved , that the above proposal be and hereby were accepted as submitted.

Amendment to the “ Procedures for Financial Derivatives Transactions”. (Proposed by the board of directors)
(1) The proposal is handled according to Financial Supervisory Commission Order Gin-Guan-Zheng-Fa-Zi No. 1070338553 dated November 26, 2018.
(2) In order to comply with the law and relevant regulations and to conform to the needs of commercial practice, the Company hereby proposes to amend the Procedures For Acquisition or Derivatives Transactions. Please refer to Attachment VIII.

Voting Results:

648,914,798 shares were represented at the time of voting; 602,611,156 votes

were in favor of the proposal (including votes casted electronically: 351,376,684); 99,317 votes were cast against the proposal (including votes castedelectronically: 99,317); 0 votes

wereinvalid; 46,204,325 votes were either invalidly cast or abstained(including votes casted electronically: 46,179,945).

Approved , that the above proposal be and hereby were accepted as submitted.

V. Extemporary Motion: None.
VI. Meeting Adjourned: There was no other business and extemporary motion,
the Chairman announced the meeting adjourned.
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Business Report

Dear shareholders:

2018 Summary of Results

In 2018, Advantech reported consolidated revenues of NT$ 48.8 billion, an increase of ten percent over the NT$44.4 billion of 2017. Net income was NT$6.31 billion and diluted earnings per share were NT$9.02. Gross profit margin was 38.2 percent, compared with 39.2 percent in 2017, and operating profit margin was 15.3 percent at the same level as a year earlier. Net profit margin was 12.9 percent, from the previous year’s 13.9 percent.

By segment, the three major business groups- Embedded IoT, Industrial IoT and Service IoT- all delivered double digit revenue growth in 2018. In US dollar term, Advantech achieved US$1.6 billon revenues in 2018, up 11.2% from US$1.45 billion in 2017. The decrease of gross margin was mainly due to component price increase. Thanks to operating efficiency improvement, Advantech sustained operating margin at 15.3% in 2018.

We maintain our positive view for the future of industrial IoT. After several years’ development, the overall industrial IoT benefit has become meaningful to customers, especially for manufacturers. In fiscal 2019, we will continue to build our strengths in industrial IoT computing platforms to achieve our target in both revenues and profit growth.

Our Development for IoT

Looking forward, we believe the overall industrial IoT growth pattern will enter into a new era and the hardware and software integration service providers will benefit the most. The WISE-PaaS software platform is designed for industrial IoT users. Our mission is to collaborate with third party partners to introduce SRPs (Solution Ready Package), the software and hardware combination solutions, to facilitate our platform customers in different vertical markets. When the overall industrial IoT application is getting mature, the final winners will be cloud service providers. Advantech intends to support and enable our partners in this area. Also Advantech might participate in the growth through investments.

Given this belief, Advantech host our first IoT Co-Creation Summit in Suzhou in November 2018. Totally we had over 5000 guests together with Advantech to explore the future outlook of the wave

II and wave III growth profile of Industrial IoT application. At same time, Advantech also introduced the latest embedded computing platforms and 34 SRPs at the summit. During 2019 and 2020, Advantech will expand WISE-PaaS global footprints and expect to achieve the target of 1,000 WISE-PaaS VIP memberships by 2021.

Strengthening Corporate Governance and Business Leadership

Advantech markets “Advantech” as an industrial brand since the firm start-up and now Advantech has operations in 23 countries around the world. In 2018, Advantech was awarded as the top 5 Taiwan International Brand, the only B2B company at the top 10 Taiwan International Brands. The “Advantech” brand valued US$500mn in 2018. To enhance corporate governance and comply with international trend, Advantech transformed our Board Organization from Supervisory Systems to Independent Directors Systems starting since 2017. Our goal is the pursuit of excellence and sustainable operation and Advantech has established its altruistic spirit at the core of its business culture, along with the pursuit of the best and balanced interests of society, shareholders, customers, and employees.

Advantech Co., Ltd. Chairman K.C. Liu President Eric Chen Miller Chang Linda Tsai

Chief Financial officer Rorie Kang

< Attachment II>

Audit Committee’s Review Report

The Company’s 2018 Financial Statements have been agreed by Audit Committee members of the Company and approved by the by the Board of Directors. The CPA firm of Deloitte & Touche was retained to audit the Company’s Financial Statements and has issued an audit report relating to the Financial Statements.

The Board of Directors has prepared the Company’s 2018 Business Report and proposal for allocation of profits. The 2018 Business Report and profit allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of the Company.

According with Article 14-4 of the securities and Exchange Act and Article 219 of the Company Law, we hereby submit this report.

Sincerely yours,

The 2019 General Shareholders’ Meeting of Advantech Co., Ltd.

Chairman of the Audit Committee ： Benson Liu

March 08, 2019

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Advantech Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Advantech Co., Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters on the consolidated financial statements for the year ended December 31, 2018 were as follows:

Assessment of Provisions for Inventory Write-downs

Inventories as of December 31, 2018 amounted to NT$7,557,820 thousand and accounted for 17% of the total assets in the Group’s consolidated financial statements, which represented a material percentage of the total assets.

The inventories of the Group are measured at the lower of cost or net realizable value and according to the ratios of possible impairment for aged inventories. Due to the rapid changes in the technological environment and the significant size and variety of inventories, after analyzing the structure of provisions for inventory valuation, we noticed that the provisions were generated from obsolescent inventories which were aged longer. We considered the evaluation of inventory write-downs of aged inventories as having a significant impact on the Group’s consolidated financial statements. Therefore, the assessment of provisions for inventory write-downs was deemed to be one of the key audit matters.

Our audit procedures performed in respect of the above area included the following:

We assessed and analyzed the Group’s policies for the inventory write-downs provisions and compared them with other competitors’ policies to affirm the reasonableness and consistency of application.
We understand the internal control, evaluated and tested the design and operating effectiveness of the internal controls over the provisions for inventory write-downs.
We reviewed the historical inventory aging reports to trace the process for the usage and scrap of aged inventories in order to assess the reasonableness of percentages for recognizing aged inventories.
We verified the appropriateness of source data, parameters and logic used in the Group’s inventory aging analysis reports.

Sales Revenue

Since the Group operates in the highly competitive industry, we determined that revenue recognition of the Group carries risk due to the demand for the growth of sales and the need to remain competitive in the industry. Hence, the Group’s sales revenue from several product lines and customers whose sales increased materially in numbers and percentages was considered as a key audit matter.

Our audit procedures performed in respect of sales revenue included the following:

We analyzed the trend of the industry, categories of revenue, product lines and customer categories for two consecutive years to confirm whether there were any abnormal situations or centralized trading which might put revenue recognition at risk.
We interviewed personnel who operates the control activities and reviewed related internal vouchers to understand the processes of internal controls related to revenue-recognition and evaluate the design, implementation, and operating effectiveness of internal controls over revenue recognition. Tested such internal controls to obtain sufficient and appropriate audit evidence of the effectiveness of key controls.
We obtained details of accounts, analyzed balances and confirmed or reconciled them with general ledgers; tested the reconciliation between detailed and general ledgers and traced the reconciliation to acquire sufficient and appropriate evidence.
We determined the appropriate methods of sampling and sample sizes and audited sales orders, packing lists and export declarations in order to evaluate whether the amount of revenue is recognized accurately and in accordance with the regulations for the preparation of financial reports.
We audited the records and vouchers of collections to evaluate whether the amounts of collections are accurate and the payers of such collections and the recipients of the related orders are consistent in order to attest the reality of sales.
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Other Matter

We have also audited the parent company only financial statements of the Company as of and for the years ended December 31, 2018 and 2017 on which we have issued an unmodified opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
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Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Jr-Shian Ke and Meng-Chieh Chiu.

Deloitte & Touche Taipei, Taiwan Republic of China

March 8, 2019

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

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ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4, 7 and 33) Available-for-sale financial assets - current (Notes 4, 10 and 33) Financial assets at amortized cost - current (Notes 4, 9 and 33) Debt investments with no active market - current (Notes 4, 12 and 35) Notes receivable (Notes 4 and 13) Trade receivables (Notes 4 and 13) Trade receivables from related parties (Note 34) Other receivables Inventories (Notes 4, 5 and 14) Other current assets (Note 20) Total current assets NON-CURRENT ASSETS Available-for-sale financial assets - non-current (Notes 4, 10 and 33) Financial assets at fair value through other comprehensive income - non-current (Notes 4, 8 and 33) Financial assets measured at cost - non-current (Notes 4 and 11) Investments accounted for using the equity method (Notes 4 and 16) Property, plant and equipment (Notes 4, 17 and 35) Goodwill (Notes 4, 5 and 18) Other intangible assets (Notes 4, 5 and 19) Deferred tax assets (Notes 4 and 26) Prepayments for business facilities Long-term prepayments for leases (Note 20) Other non-current assets (Note 31) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 21) Financial liabilities at fair value through profit or loss - current (Notes 4, 7 and 33) Notes payable and trade payables (Notes 4 and 34) Other payables (Note 22) Current tax liabilities (Notes 4 and 26) Short-term warranty provisions Current portion of long-term borrowings (Note 21) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 21) Deferred tax liabilities (Notes 4 and 26) Net defined benefit liabilities (Notes 4 and 23) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital Ordinary shares Advance receipts for share capital Total share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translation of foreign financial statements Unrealized gain on available-for-sale financial assets Unrealized gain on financial assets at fair value through other comprehensive income Other equity - unearned stock-based employee comprehensive Total other equity Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL		2018		2017
		Amount % $ 6,633,161 15 2,098,552 5 - - 157,426 1 - - 1,461,404 3 6,870,878 16 18,969 - 45,956 - 7,557,820 17 522,407 1 25,366,573 58 - - 1,300,267 3 - - 2,431,522 6 9,782,781 22 2,840,001 6 1,095,899 2 501,260 1 273,386 1 297,665 1 47,718 - 18,570,499 42 $ 43,937,072 100 $ 87,581 - 6,139 - 5,810,904 13 3,662,199 8 1,611,886 4 196,782 1 9,626 - 761,473 2 12,146,590 28 45,784 - 1,798,914 4 255,545 1 149,653 - 2,249,896 5 14,396,486 33 6,982,275 16 4,680 - 6,986,955 16 7,073,348 16 5,655,613 13 369,655 1 10,015,895 23 16,041,163 37 (475,245) (1) - - (324,254) (1) 736 - (798,763) (2) 29,302,703 67 237,883 - 29,540,586 67 $ 43,937,072 100		Amount % $ 5,204,219 13 3,098,846 8 229,381 1 - - 38,908 - 1,255,781 3 6,596,030 16 14,067 - 75,298 - 6,242,251 15 445,791 1 23,200,572 57 1,430,854 4 - - 78,518 - 1,349,735 3 9,967,332 24 2,727,549 7 1,124,407 3 398,441 1 68,440 - 312,708 1 45,213 - 17,503,197 43 $ 40,703,769 100 $ 8,400 - 6,226 - 5,280,728 13 3,624,710 9 1,269,165 3 180,975 - - - 676,457 2 11,046,661 27 113,717 - 1,399,013 4 237,225 1 146,713 - 1,896,668 5 12,943,329 32 6,970,325 17 2,500 - 6,972,825 17 6,554,842 16 5,039,962 13 85,204 - 9,297,896 23 14,423,062 36 (463,479) (1) 93,824 - - - - - (369,655) (1) 27,581,074 68 179,366 - 27,760,440 68 $ 40,703,769 100

The accompanying notes are an integral part of the consolidated financial statements.

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ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4 and 34) Sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 14, 23, 25 and 34) GROSS PROFIT OPERATING EXPENSES (Notes 23, 25 and 34) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses OPERATING PROFIT NON-OPERATING INCOME Share of the profit of associates accounted for using the equity method (Note 16) Interest income Gains on disposal of property, plant and equipment Gains on disposal of investments Foreign exchange gains (losses), net (Notes 25 and 36) Gains on financial instruments at fair value through profit or loss (Note 7) Dividend income Other income (Note 34) Finance costs (Note 25) Losses on financial instruments at fair value through profit or loss (Note 7) Impairment loss Other losses Total non-operating income PROFIT BEFORE INCOME TAX INCOME TAX EXPENSES (Note 26) NET PROFIT FOR THE YEAR		2018 Amount % $ 47,495,030 97 1,231,488 3 48,726,518 100 30,063,070 62 18,663,448 38 4,774,069 10 2,424,667 5 3,997,313 8 11,196,049 23 7,467,399 15 95,635 - 38,789 - 80,439 - 8,012 - 16,956 - 59,322 - 106,315 - 173,002 1 (4,685) - (39,710) - - - (6,985) - 527,090 1 7,994,489 16 1,677,741 3 6,316,748 13		2017
				Amount % $ 43,367,051 98 1,007,700 2 44,374,751 100 26,993,793 61 17,380,958 39 4,400,803 10 2,389,863 5 3,811,815 9 10,602,481 24 6,778,477 15 218,651 1 16,461 - 96,885 - 292,441 1 (76,098) - 207,795 - 122,220 - 95,772 - (12,117) - (84,658) - (112,120) - (10,166) - 755,066 2 7,533,543 17 1,384,254 3 6,149,289 14 (Continued)

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ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss (Notes 16, 23, 24 and 26): Remeasurement of defined benefit plans Share of the other comprehensive income (loss) of associates accounted for using the equity method Unrealized loss on investments in equity instruments as at fair value through other comprehensive income Income tax related to items that will not be reclassified Items that may be reclassified subsequently to profit or loss (Notes 16, 23, 24 and 26): Exchange differences on translation of foreign financial statements Unrealized gains (losses) on available-for-sale financial assets Share of the other comprehensive losses of associates Income tax related to items that may be reclassified subsequently to profit or loss Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT (LOSS) ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Company Non-controlling interests		2018 Amount % $ (20,858) - (14,942) - (445,333) (1) 6,316 - (30,455) - - - (11,074) - 23,883 - (492,463) (1) $ 5,824,285 12 $ 6,294,657 13 22,091 - $ 6,316,748 13 $ 5,807,959 12 16,326 - $ 5,824,285 12		2017
				Amount % $ (23,905) - (1,306) - - - 4,064 - (315,229) (1) (18,605) - (6,919) - 54,450 - (307,450) (1) $ 5,841,839 13 $ 6,156,516 14 (7,227) - $ 6,149,289 14 $ 5,850,991 13 (9,152) - $ 5,841,839 13 (Continued)

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ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

EARNINGS PER SHARE (NEW TAIWAN DOLLARS; Note 27) Basic Diluted	2018 Amount % $ 9.02 $ 8.93	2017
		Amount % $ 8.84 $ 8.77

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

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							Total Equity	$ 25,386,897		-	-	(3,988,367 )	-	77,420	424,637		2,054		15,203	757	6,149,289		(307,450 )		5,841,839	27,760,440	(4,572 )	27,755,868		-	-	(4,600,414 )	118,376	341,624		3,396	(14,716 )		112,101	66	6,316,748		(492,463 )		5,824,285			-	$ 29,540,586
					Non-controlling	Interests (Notes 24,	29 and 30)	$ 173,315		-	-	-	-	-	-		-		15,203	-	(7,227 )		(1,925 )		(9,152 )	179,366	-	179,366		-	-	-	-	-		-	-		41,385	806	22,091		(5,765 )		16,326			-	$ 237,883
							Total	$ 25,213,582		-	-	(3,988,367 )	-	77,420	424,637		2,054		-	757	6,156,516		(305,525 )		5,850,991	27,581,074	(4,572 )	27,576,502		-	-	(4,600,414 )	118,376	341,624		3,396	(14,716 )		70,716	(740 )	6,294,657		(486,698 )		5,807,959			-	$29,302,703
				Unearned	Stock-based	Employee	Compensation	$ -		-	-	-	-	-	-		-		-	-	-		-		-	-	-	-		-	-	-	-	-		736	-		-	-	-		-		-			-	$ 736
	Other Equity (Note 24)				Unrealized Gain on	Available-for-sale	Financial Assets	$ 112,429		-	-	-	-	-	-		-		-	-	-		(18,605 )		(18,605 )	93,824	(93,824 )	-		-	-	-	-	-		-	-		-	-	-		-		-			-	$ -
		Unrealized Gain	on Financial Assets	at Fair Value	Through Other	Comprehensive	Income	$ -		-	-	-	-	-	-		-		-	-	-		-		-	-	123,254	123,254		-	-	-	-	-		-	-		-	-	-		(459,245 )		(459,245 )			11,737	$ (324,254 )
			Exchange	Differences on	Translation of	Foreign Financial	Statements	$ (197,633 )		-	-	-	-	-	-		-		-	-	-		(265,846 )		(265,846 )	(463,479 )	-	(463,479 )		-	-	-	-	-		-	-		-	-	-		(11,766 )		(11,766 )			-	$ (475,245 )
Equity Attributable to Owners of the Company					Retained Earnings (Notes 4, 23 and 24)	Unappropriated	Special Reserve Earnings Total	$ - $ 8,435,785 $ 12,909,061		- (566,686 ) -	85,204 (85,204 ) -	- (3,988,367 ) (3,988,367 )	- (633,074 ) (633,074 )	- - -	- - -		- - -		- - -	- - -	- 6,156,516 6,156,516		- (21,074 ) (21,074 )		- 6,135,442 6,135,442	85,204 9,297,896 14,423,062	- (34,002 ) (34,002 )	85,204 9,263,894 14,389,060		- (615,651 ) -	284,451 (284,451 ) -	- (4,600,414 ) (4,600,414 )	- - -	- - -		- - -	- (14,716 ) (14,716 )		- - -	- - -	- 6,294,657 6,294,657		- (15,687 ) (15,687 )		- 6,278,970 6,278,970			- (11,737 ) (11,737 )	$ 369,655 $10,015,895 $16,041,163
							Legal Reserve	$ 4,473,276		566,686	-	-	-	-	-		-		-	-	-		-		-	5,039,962	-	5,039,962		615,651	-	-	-	-		-	-		-	-	-		-		-			-	$ 5,655,613
						Capital Surplus	(Notes 4, 24 and 28)	$ 6,058,884		-	-	-	-	68,510	424,637		2,054		-	757	-		-		-	6,554,842	-	6,554,842		-	-	-	104,246	341,624		2,660	-		70,716	(740 )	-		-		-			-	$ 7,073,348
							Total	6,330,841		-	-	-	633,074	8,910	-		-		-	-	-		-		-	6,972,825	-	6,972,825		-	-	-	14,130	-		-	-		-	-	-		-		-			-	6,986,955
					Issued Capital (Notes 24 and 28)	Advance Receipts	for Ordinary Shares	$ 100 $		-	-	-	-	2,400	-		-		-	-	-		-		-	2,500	-	2,500		-	-	-	2,180	-		-	-		-	-	-		-		-			-	$ 4,680 $
							Share Capital	$ 6,330,741		-	-	-	633,074	6,510	-		-		-	-	-		-		-	6,970,325	-	6,970,325		-	-	-	11,950	-		-	-		-	-	-		-		-			-	$ 6,982,275
								BALANCE AT JANUARY 1, 2017	Appropriation of the 2016 earnings	Legal reserve	Special reserve	Cash dividends on ordinary shares	Share dividends on ordinary shares	Recognition of employee share options by the Company	Compensation costs recognized for employee share options	Changes in capital surplus from investments in associates	accounted for using the equity method	Difference between consideration paid and carrying amount of	subsidiaries acquired or disposed of	Changes in percentage of ownership interests in subsidiaries	Net profit for the year ended December 31, 2017	Other comprehensive loss for the year ended December 31,	2017, net of income tax	Total comprehensive income (loss) for the year ended	December 31, 2017	BALANCE AT DECEMBER 31, 2017	Effect of retrospective application and retrospective restatement	BALANCE AT JANUARY 1, 2018	Appropriation of the 2017 earnings	Legal reserve	Special reserve	Cash dividends on ordinary shares	Recognition of employee share options by the Company	Compensation costs recognized for employee share options	Changes in capital surplus from investments in associates	accounted for using the equity method	Associates using equity methods	Difference between consideration paid and carrying amount of	subsidiaries acquired or disposed of	Recognized for employee by subsidiaries	Net profit for the year ended December 31, 2018	Other comprehensive income (loss) for year ended	December 31, 2018, net of income tax	Total comprehensive income for the year ended December 31,	2018	Associates disposal of investments in equity instruments	designated as at fair value through other comprehensive	income	BALANCE AT DECEMBER 31, 2018

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ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments to reconcile profit (loss): Depreciation expenses Amortization expenses Amortization expenses for prepayments of lease obligations Impairment loss recognized (reversed) for trade receivables Expected loss on credit impairment Net gain on financial assets or liabilities at fair value through profit or loss Compensation costs of employee share options Finance costs Interest income Dividend income Share of profit of associates accounted for using the equity method Gain on disposal of property, plant and equipment Gain on disposal of investments Impairment loss Changes in operating assets and liabilities Financial assets held for trading Notes receivable Trade receivables Trade receivables from related parties Other receivables Inventories Other current assets Notes payable and trade payables Net defined benefit liabilities Other payables Short-term warranty provisions Other current liabilities Other non-current liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities	2018 $ 7,994,489 567,706 165,406 8,844 - 19,432 (19,612) 341,624 4,685 (38,789) (106,315) (95,635) (80,439) (8,012) - 967,642 (205,623) (278,370) (4,902) 29,342 (1,310,932) (76,001) 510,358 (2,538) (3,165) 15,807 84,143 2,940 8,482,085 38,789 106,315 (3,093) (1,198,350) 7,425,746	2017 $ 7,533,543 587,293 228,062 8,741 3,030 - (123,137) 424,637 12,117 (16,461) (122,220) (218,651) (96,885) (292,441) 112,120 (2,866,686) (290,700) (193,567) (110) (61,523) (614,558) 40,203 270,599 960 (280,286) 13,853 15,583 5,115 4,078,631 16,461 122,220 (9,620) (1,196,403) 3,011,289 (Continued)

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ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Purchase of available-for-sale financial assets Proceeds from sale of available-for-sale financial assets Proceeds from sale of debt investments with no active market Purchase of financial assets measured at cost Purchase of investments accounted for using the equity method Net cash flow on the acquisition of subsidiaries Dividends received from associates Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Payments for intangible assets Decrease (increase) in prepayments for equipment Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease (increase) in short-term loans Repayments of long-term borrowings Increase in guarantee deposits received Payments of cash dividends Exercise of employee share options Increase in non-controlling interests Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2018 $ (41,168) (116,998) - - - - (1,081,527) (60,322) 146,250 (574,229) 189,061 (2,151) (111,209) (116,865) (1,769,158) 79,481 (54,245) - (4,600,414) 118,376 104,910 (4,351,892) 124,246 1,428,942 5,204,219 $ 6,633,161	2017 $ - - (6,589,478) 9,872,540 26,485 (77,333) (615,000) (118,847) 75,026 (533,741) 146,582 6,858 (76,167) 12,820 2,129,745 (456,480) (22,733) 200 (3,988,367) 77,420 757 (4,389,203) (185,189) 566,642 4,637,577 $ 5,204,219

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and the Shareholders Advantech Co., Ltd.

Opinion

We have audited the accompanying financial statements of Advantech Co., Ltd. (the “Company”), which comprise the balance sheets as of December 31, 2018 and 2017, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters on the financial statements for the year ended December 31, 2018 were as follows:

Assessment of Provision for Inventory Write-downs

Inventories as of December 31, 2018 amounted to NT$3,630,979 thousand and accounted for 9% of the total assets in the Company’s financial statements, which represented a material percentage of the total asset.

19 -

The inventories of the Company are measured at the lower of cost or net realizable value and according to the ratios of possible impairment for aged inventories. Due to the rapid changes in the technological environment and the significant size and variety of inventories, after analyzing the structure of provisions for inventory valuation, we noticed that the provisions were generated from obsolescent inventories which were aged longer. We considered the evaluation of inventory write-downs of aged inventories as having a significant impact on the Company’s financial statements. Therefore, the assessment of provisions for inventory write-downs was deemed to be one of the key audit matters.

Our audit procedures performed in respect of the above area included the following:

We assessed and analyzed the Company’s policies for the inventory write-downs provisions and compared them with other competitors’ policies to affirm the reasonableness and consistency of application.
We understood the internal control, evaluated and tested the design and operating effectiveness of the internal controls over the provisions for inventory write-downs.
We reviewed the historical inventory aging reports to trace the process for the usage and scrap of aged inventories in order to assess the reasonableness of percentages for recognizing aged inventories.
We verified the appropriateness of source data, parameters and logic used in the Company’s inventory aging analysis reports.

Sales Revenue

Since the Company operates in the highly competitive industry, we determined that revenue recognition of the Company carries risk due to the demand for the growth of sales and the need to remain competitive in the industry. Hence, the Company’s sales revenue from several product lines whose sales increased materially in numbers and percentages was considered as a key audit matter.

Our audit procedures performed in respect of sales revenue included the following:

We analyzed the trend of the industry, categories of revenue, product lines and customer categories for two consecutive years to confirm whether there were any abnormal situations or centralized trading which might put revenue recognition at risk.
We interviewed personnel who operates the control activities and reviewed related internal vouchers to understand the processes of internal controls related to revenue-recognition and evaluate the design, implementation, and operating effectiveness of internal controls over revenue recognition. We tested such internal controls to obtain sufficient and appropriate audit evidence of the effectiveness of key controls.
We obtained details of accounts, analyzed balances and confirmed or reconciled them with general ledgers; we tested the reconciliation between detailed and general ledgers and traced the reconciliation to acquire sufficient and appropriate evidence.
We determined the appropriate methods of sampling and sample sizes and audited sales orders, packing lists and export declarations in order to evaluate whether the amount of revenue is recognized accurately and in accordance with the regulations for the preparation of financial reports.
We audited the records and vouchers of collections to evaluate whether the amounts of collections are accurate and the payers of such collections and the recipients of the related orders are consistent in order to attest the reality of sales.
20 -

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
21 -
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Jr-Shian Ke and Meng-Chieh Chiu.

Deloitte & Touche Taipei, Taiwan Republic of China

March 8, 2019

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

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ADVANTECH CO., LTD.

BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4, 7 and 27) Notes receivable (Notes 4 and 10) Trade receivables (Notes 4 and 10) Trade receivables from related parties (Notes 4 and 28) Other receivables Other receivables from related parties (Note 28) Inventories (Notes 4, 5 and 11) Other current assets Total current assets NON-CURRENT ASSETS Available-for-sale financial assets - non-current (Notes 4, 9 and 27) Financial assets at fair value through other comprehensive income - non-current (Notes 4, 8 and 27) Investments accounted for using the equity method (Notes 4, 5 and 12) Property, plant and equipment (Notes 4 and 13) Goodwill (Notes 4 and 14) Other intangible assets (Note 4) Deferred tax assets (Notes 4 and 19) Prepayments for equipment Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Financial liabilities at fair value through profit or loss - current (Notes 4, 7 and 27) Notes payable and trade payables Trade payables to related parties (Note 28) Other payables (Note 15) Other payables to related parties (Note 28) Current tax liabilities (Notes 4 and 19) Short-term warranty provisions (Note 4) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 19) Net defined benefit liabilities (Notes 4 and 16) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY Share capital Ordinary shares Advance receipts for share capital Total share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translation of foreign financial statements Unrealized gain on available-for-sale financial assets Unrealized gain on financial assets at fair value through other comprehensive income Other equity - unearned employee compensation Total other equity Total equity TOTAL		2018		2017
		Amount % $ 2,509,958 6 1,360,381 3 75,203 - 1,487,837 4 5,655,196 14 143,225 - 41,111 - 3,630,979 9 42,717 - 14,946,607 36 - - 1,028,441 3 17,723,652 43 6,752,642 17 111,599 - 105,532 - 343,646 1 26,344 - 3,963 - 26,095,819 64 $ 41,042,426 100 $ 6,128 - 3,963,470 10 1,695,599 4 2,530,927 6 54,583 - 1,413,134 4 57,675 - 139,075 - 9,860,591 24 1,568,910 4 255,273 1 54,949 - 1,879,132 5 11,739,723 29 6,982,275 17 4,680 - 6,986,955 17 7,073,348 17 5,655,613 14 369,655 1 10,015,895 24 16,041,163 39 (475,245) (1) - - (324,254) (1) 736 - (798,763) (2) 29,302,703 71 $ 41,042,426 100		Amount % $ 2,436,648 7 645,100 2 62,468 - 1,546,135 4 4,603,076 12 143,493 - 15,569 - 2,654,681 7 46,533 - 12,153,703 32 1,419,479 4 - - 16,591,055 44 6,865,025 19 111,599 - 75,584 - 236,699 1 20,126 - 6,755 - 25,326,322 68 $ 37,480,025 100 $ 6,226 - 3,459,433 9 1,123,366 3 2,470,498 7 77,549 - 1,108,579 3 53,304 - 151,823 - 8,450,778 22 1,162,514 3 236,251 1 49,408 - 1,448,173 4 9,898,951 26 6,970,325 19 2,500 - 6,972,825 19 6,554,842 18 5,039,962 13 85,204 - 9,297,896 25 14,423,062 38 (463,479) (1) 93,824 - - - - - (369,655) (1) 27,581,074 74 $ 37,480,025 100

The accompanying notes are an integral part of the financial statements.

23 -

ADVANTECH CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4 and 28) Sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 11, 18 and 28) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES (Note 4) REALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES (Note 4) REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 18 and 28) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses OPERATING PROFIT NON-OPERATING INCOME Share of the profit of subsidiaries and associates accounted for using the equity method (Notes 4 and 12) Interest income (Note 4) Gains on disposal of property, plant and equipment (Note 4) Gains on disposal of investments (Notes 4 and 16) Foreign exchange losses, net (Notes 4, 18 and 29) Gains on financial instruments at fair value through profit or loss (Note 4) Dividend income (Note 4) Other income (Notes 8, 22 and 28) Finance costs (Note 18) Losses on financial instruments at fair value through profit or loss (Note 4)		2018 Amount % $ 34,928,854 99 453,922 1 35,382,776 100 24,735,871 70 10,646,905 30 (665,475) (2) 446,326 2 10,427,756 30 661,227 2 867,975 3 2,965,117 8 4,494,319 13 5,933,437 17 1,326,913 4 234 - 87,990 - - - 38,413 - 39,052 - 77,692 - 168,230 1 (33) - (37,756) -		2017
				Amount % $ 30,518,459 99 382,118 1 30,900,577 100 21,520,472 70 9,380,105 30 (446,326) (1) 264,679 1 9,198,458 30 683,065 2 832,526 3 2,837,185 9 4,352,776 14 4,845,682 16 1,965,070 6 923 - 99,749 - 165,076 1 (45,802) - 65,594 - 89,215 - 109,510 - - - (84,455) - (Continued)

24 -

ADVANTECH CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Impairment loss recognized on investments accounted for using the equity method (Note 12) Other losses Total non-operating income PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 19) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 16) Share of the other comprehensive income (loss) of subsidiaries and associates accounted for using the equity method (Notes 12 and 17) Unrealized loss on investment in equity instruments as at fair value through other comprehensive income (Note 17) Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 19) Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign financial statements (Notes 4 and 17) Unrealized losses on available-for-sale financial assets (Notes 4 and 17) Share of other comprehensive loss of subsidiaries and associates accounted for using the equity method (Notes 4, 12 and 17) Income tax relating to item that may be reclassified subsequently to profit (Notes 4, 17 and 19) Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR		2018 Amount % $ - - (32) - 1,700,703 5 7,634,140 22 1,339,483 4 6,294,657 18 (21,155) - (14,802) - (445,333) (2) 6,358 - (24,575) - - - (11,074) - 23,883 - (486,698) (2) $ 5,807,959 16		2017
				Amount % $ (66,443) - (130) - 2,298,307 7 7,143,989 23 987,473 3 6,156,516 20 (23,710) - (1,395) - - - 4,031 - (313,377) (1) (1,678) - (23,846) - 54,450 - (305,525) (1) $ 5,850,991 19 (Continued)

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ADVANTECH CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

EARNINGS PER SHARE (Note 20) Basic Diluted	2018 Amount % $ 9.02 $ 8.93	2017
		Amount % $ 8.84 $ 8.77

The accompanying notes are an integral part of the financial statements.

(Concluded)

26 -

							Total Equity	$ 25,213,582		-	-	(3,988,367 )	-	77,420	424,637		2,054	757	6,156,516		(305,525 )		5,850,991	27,581,074	(4,572 )	27,576,502		-	-	(4,600,414 )	118,376	341,624		3,396	(14,716 )		70,716	(740 )	6,294,657		(486,698 )		5,807,959		-	$ 29,302,703
				Unearned	Share-Based	Employee	Compensation	$ -		-	-	-	-	-	-		-	-	-		-		-	-	-	-		-	-	-	-	-		736	-		-	-	-		-		-		-	$ 736
Other Equity (Notes 4 and 17)	Unrealized	Gain or Loss on	Financial Assets at	Fair Value Unrealized	Through Other Gain (Loss) on	Comprehensive Available-for-sale	Income Financial Assets	$ - $ 112,429		- -	- -	- -	- -	- -	- -		- -	- -	- -		- (18,605 )		- (18,605 )	- 93,824	123,254 (93,824 )	123,254 -		- -	- -	- -	- -	- -		- -	- -		- -	- -	- -		(459,245 ) -		(459,245 ) -		11,737 -	$ (324,254 ) $ -
				Exchange	Differences on	Translating	Foreign Operations	$ (197,633 )		-	-	-	-	-	-		-	-	-		(265,846 )		(265,846 )	(463,479 )	-	(463,479 )		-	-	-	-	-		-	-		-	-	-		(11,766 )		(11,766 )		-	$ (475,245 )
							Total	$ 12,909,061		-	-	(3,988,367 )	(633,074 )	-	-		-	-	6,156,516		(21,074 )		6,135,442	14,423,062	(34,002 )	14,389,060		-	-	(4,600,414 )	-	-		-	(14,716 )		-	-	6,294,657		(15,687 )		6,278,970		(11,737 )	$16,041,163
					Retained Earnings (Notes 4 and 17)	Unappropriated	Special Reserve Earnings	$ - $ 8,435,785		- (566,686 )	85,204 (85,204 )	- (3,988,367 )	- (633,074 )	- -	- -		- -	- -	- 6,156,516		- (21,074 )		- 6,135,442	85,204 9,297,896	- (34,002 )	85,204 9,263,894		- (615,651 )	284,451 (284,451 )	- (4,600,414 )	- -	- -		- -	- (14,716 )		- -	- -	- 6,294,657		- (15,687 )		- 6,278,970		- (11,737 )	$ 369,655 $10,015,895
							Legal Reserve	$ 4,473,276		566,686	-	-	-	-	-		-	-	-		-		-	5,039,962	-	5,039,962		615,651	-	-	-	-		-	-		-	-	-		-		-		-	$ 5,655,613
						Capital Surplus	(Notes 4, 17 and 21)	$ 6,058,884		-	-	-	-	68,510	424,637		2,054	757	-		-		-	6,554,842	-	6,554,842		-	-	-	104,246	341,624		2,660	-		70,716	(740 )	-		-		-		-	$ 7,073,348
							Total	6,330,841		-	-	-	633,074	8,910	-		-	-	-		-		-	6,972,825	-	6,972,825		-	-	-	14,130	-		-	-		-	-	-		-		-		-	6,986,955
					Issued Capital (Notes 17 and 21)	Advance Receipts	Share Capital for Ordinary Share	$ 6,330,741 $ 100 $		- -	- -	- -	633,074 -	6,510 2,400	- -		- -	- -	- -		- -		- -	6,970,325 2,500	- -	6,970,325 2,500		- -	- -	- -	11,950 2,180	- -		- -	- -		- -	- -	- -		- -		- -		- -	$ 6,982,275 $ 4,680 $
								BALANCE AT JANUARY 1, 2017	Appropriation of the 2016 earnings	Legal reserve	Special reserve	Cash dividends on ordinary shares	Share dividends on ordinary shares	Recognition of employee share options by the Company	Compensation costs recognized for employee share options	Changes in capital surplus from investments in associates accounted for	using equity method	Changes in percentage of ownership interests in subsidiaries	Net profit for the year ended December 31, 2017	Other comprehensive loss for the year ended December 31, 2017, net of	income tax	Total comprehensive income (loss) for the year ended December 31,	2017	BALANCE AT DECEMBER 31, 2017	Effect of retrospective application and retrospective restatement	BALANCE AT JANUARY 1, 2018	Appropriation of the 2017 earnings	Legal reserve	Special reserve	Cash dividends distributed on ordinary shares	Recognition of employee share options by the Company	Compensation costs recognized for employee share options	Changes in capital surplus from investments in associates accounted for	using equity method	Associates using equity methods	Difference between considerations and carrying amounts of subsidiaries	acquired or disposed of	Recognized for employee by subsidiaries	Net profit for the year ended December 31, 2018	Other comprehensive loss for the year ended December 31, 2018, net of	income tax	Total comprehensive income (loss) for the year ended December 31,	2018	Associates disposal of investments in equity instruments designated as at	fair value through other comprehensive income	BALANCE AT DECEMBER 31, 2018

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ADVANTECH CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments to reconcile profit (loss): Depreciation expenses Amortization expenses Impairment loss recognized for trade receivables Expected loss on credit impairment Net loss (gain) on financial assets or liabilities at fair value through profit or loss Financial costs Interest income Dividend income Compensation costs of employee share options Share of profit of subsidiaries and associates accounted for using the equity method Gain on disposal of property, plant and equipment Gain on disposal of investments Impairment loss recognized on investments accounted for using the equity method Realized loss on the transactions with subsidiaries and associates Changes in operating assets and liabilities Financial assets held for trading Notes receivable Trade receivables Trade receivables from related parties Other receivables Other receivables from related parties Inventories Other current assets Notes payable and trade payables Trade payables to related parties Other payables Other payables to related parties Short-term warranty provisions Net defined benefit liabilities Other current liabilities Other non-current liabilities Cash generated from operations Interest received Dividends received Interests paid Income tax paid Net cash generated from operating activities	2018 $ 7,634,140 255,248 85,574 - 6,815 (1,296) 33 (234) (77,692) 341,624 (1,326,913) (87,990) - - 219,149 (714,083) (12,735) 51,483 (1,052,120) 268 (25,542) (976,298) 3,816 504,037 572,233 60,429 (22,966) 4,371 (2,133) (12,748) 5,385 5,431,855 234 77,692 (33) (705,238) 4,804,510	2017 $ 7,143,989 272,639 81,067 185 - 18,861 - (923) (89,215) 424,637 (1,965,070) (99,749) (165,076) 66,443 181,647 (632,232) 4,755 (2,716) (694,628) (37,564) 3,433 (718,808) (8,172) 1,908,464 (1,487,276) (73,796) (77,531) 4,149 1,371 (2,169) 13,655 4,070,370 923 89,215 - (783,217) 3,377,291 (Continued)

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ADVANTECH CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of available-for-sale financial assets Proceeds from sale of available-for-sale financial assets Acquisition of investments accounted for using equity method Proceeds from disposal of subsidiaries Proceeds from capital reduction of investees accounted for using equity method Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase(decrease) in refundable deposits Payments for intangible assets Decrease in prepayments for equipment Dividends received from subsidiaries and associates Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in guarantee deposits received Cash dividends paid Exercise of employee share options Net cash used in financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2018 $ - - (1,731,720) 126,769 530,458 (204,404) 113,260 2,792 (111,209) 25,738 998,998 (249,318) 156 (4,600,414) 118,376 (4,481,882) 73,310 2,436,648 $ 2,509,958	2017 $ (5,082,000) 6,220,989 (637,500) - - (252,269) 135,528 (1,094) (76,794) 17,924 636,457 961,241 816 (3,988,367) 77,420 (3,910,131) 428,401 2,008,247 $ 2,436,648

The accompanying notes are an integral part of the financial statements.

(Concluded)

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Advantech Co., Ltd.

2018 Profit Distribution Table

2018 Profit Distribution Table
Item	Total
Unappropriated retained earnings - beginning	3,797,379,616
Less: Retrospective application and retrospective restatement	(34,001,578)
Adjusted Unappropriated Retained Earnings – Beginning	3,763,378,038
Less:Adjustment of retained earnings due to investments accounted for usingthe equitymethod	(14,715,950)
Less:Remeasurements of the defined benefit recognized in retained	(15,687,150)
Less: cumulative profit or loss of disposals of investments in equity instruments designated as at fair value through other comprehensive income directly transferred to retained earnings	(11,736,286)
Adjusted Unappropriated Retained Earnings	3,721,238,652
Add: Net income	6,294,657,374
Less: 10% legal reserve appropriated	(629,465,737)
Less: Special reserve appropriated	(429,108,736)
Current earnings available for distribution	8,957,321,553
Distributions:
Common stock cash dividend ( Dividends Per Share $6.6)	(4,751,129,468)
Unappropriated retained earnings - ending	4,206,192,085

Chairman: K.C. Liu President: Eric Chen Chief Financial officer: Rorie Kang Miller Chang

Linda Tsai

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< Attachment V>

Advantech Co., Ltd.

Corporate Charter (Articles of Incorporation) Article Amendments Table

After amendment	Before amendment	Before amendment	Remark
Article 1.1 When conducting its business, every company shall comply with the laws and regulations as well as business ethics and may take actions which will promote public interests in order to fulfill its social responsibilities.	Article 1.1		This article added
Article 5.2 The entitled transferees who receive the shares bought by the Company based on Article 167-1 of Company Act include the employees of parents or subsidiaries of the company meeting certain specific requirements. The entitled transferees who receive share subscription warrants based on Article 167-2 of Company Act include the employees of parents or subsidiaries of the company meeting certain specific requirements. The employees who are entitled to subscribe new shares or restricted stock issued by the Company based on Article 267 of Company Act include the employees of parents or subsidiaries of the company meeting certain specific requirements.	Article 5.2		1.This article added 2.Accordi ng to the governin g law and regulatio ns
Article 6.1 Deleted		Article 6.1 The Company may be requested by Taiwan Depository and Clearing Corp. to issue large denomination stocks.	1.This article added 2.Accordi ng to the governin g law and regulatio ns
Article 7 The Company is exempted from having the stock shares printed out after issuance; however, the Company should contact the securities depository and clearing institution for registration.		Article 7 The Company’s stock shares are ordered with the signature or seal of three or more directors affixed and numbered; also,are issued after proper certification. The Company is exempted from having the stock shares printed out after issuance; however, the Company should contact the securities depository and clearing institution for registration.	Accordin g to the governin g law and regulatio ns
Article 13 The company has seven ~ nine directors.Nominated for a term of three years and they are elected from the capable candidates in the shareholders’meeting; also,		Article 13 The company has seven ~ nine directors.Nominated for a term of three years and they are elected from the capable candidates in the shareholders’meeting; also,	wording revise

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they can be re-elected. There must be at least two independent directors (not less than one fifth of the total number of directors) out of the number of directors referred to above. The independent directors are to be elected from the candidates in the shareholders’ meeting. The professional qualifications of the independent directors, shareholdings, limitation of part-time job, the nomination and appointment method, and other matters to be complied with must be processed according to the relevant provisions of the competent authorities.	they can be re-elected. There must be at least two independent directors (not less than one fifth of the total number of directors) out of the number of directors referred to above. The independent directors are to be elected from the candidates in the shareholders’ meeting. The professional qualifications of the independent directors, shareholdings, limitation of part-time job, the nomination and appointment method, and other matters to be complied with must be processed according to the relevant provisions of the competent authorities.
Article 13.4 The company may obtain directors liability insurance with respect to liabilities resulting from exercising their duties during their terms of directorship.	Article 13.4 The Company may purchase liability insurance for directors throughout the tenure based on their scope of responsibility.	wording revise
Article 14.1 Meetings of the board of directors shall be convened by the chairman of the board of directors. The majority or more of the directors may, by filing a written proposal setting forth therein the subjects for discussions and the reasons, request the chairman of the board of directors to convene a meeting of the board of directors. If the chairman of the board of directors fails to convene a meeting of board of directors within 15 days after the filing of the request under the preceding paragraph, the proposing directors may convene a meeting of board of directors on their own.	Article 14.1 The Company may at any time in case of emergency convene a board meeting and with the directors informed in writing or by E-mail or fax.	1.This article added 2.Accordi ng to the governin g law and regulatio ns
Article 14.2 The Company may at any time in case of emergency convene a board meeting and with the directors informed in writing or by E-mail or fax.	Article 14.2	The original article of § 14-1 moves to §14-2
Article 15.1 The resolutions of the board of directors, unless otherwise provided by the Company Law and the Corporate Charter, shall be exercised with the consent of a majority of the attending directors at the board meeting that is attended by a majority of the directors. Directors should attend board meetings in person. The director who is unable to attend board meetings in person may authorize another director in writing to attend the board meetings; however, the above mentionedproxy should be issued each time with the scope of authorization detailed to have one and only deputy delegated.	Article 15.1 The resolutions of the board of directors, unless otherwise provided bythe Company Law and the Corporate Charter, shall be exercised with the consent of a majority of the attending directors at the board meeting that is attended by a majority of the directors. Directors should attend board meetings in person. The director who is unable to attend board meetings in person may authorize another director in writing to attend the board meetings; however,aproxy should be issued each time with the scope of authorization detailed to have one and only deputy delegated.	wording revise

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Article 20

The Company may, by a resolution adopted by a majority vote at the meeting of the Board of Directors attended by two-thirds of total members, have the profit value not less than 5% of the total Company’s surplus (if any) distributable as employees’ compensation distributed in the form of shares or in cash. The entitled transferees who receive the compensation include the employees of parents or subsidiaries of the company meeting certain specific requirements. The remuneration for Directors with the maximum value as 1% of the above-mentioned Company’s surplus may be distributable by a resolution adopted by the Board of Directors.The proposed bonus to employees and remuneration to directors should be presented in the shareholders’ meeting for a resolution. If the company is with accumulated losses, an amount for making up the losses should be reserved in advance before appropriating bonus to employees and remuneration to directors according to the ratio referred to above.

Article 20.1

The Company’s reinvestment may exceed 40% of the paid-in capital and with the board of directors authorized to execute it.

Article 20.2

The Company shall, after its losses have been covered and all taxes and dues have been paid and at the time of allocating surplus profits, first set aside 10% of such profits as a legal reserve. However when the legal reserve amount has reached the one of the paid-in capital of the Company, this shall not apply. The balance shall be accounted or reversed to special reserve based on legal regulations, and accumulated to undistributed earnings (if any further balance exists after the accounting or reversal). The Board of Directors shall draft the proposal for surplus distribution. Such surplus is distributable by a resolution adopted by the shareholders’ meeting if adopt distribution approach in the form of shares, and a resolution adopted by the Board of Director if adopting the approach in cash.

The company’s dividend policy is formed under the consideration of its future funding demands and long-term financial planning as well as the interests of shareholders to distribute at least 30% of available profits for revenue allocation as dividends to shareholders annually; and among them, the distribution of cash dividends shall not be less than 20% of the total dividend

Article 20

wording The company’s annual profits, if any, should not be less than 5% appropriated as bonus to revise employees; also, it is to be resolved in the board meeting with stock dividend or cash distributed to employees, including employees of the subsidiaries that meet certain conditions. The Company’s Board of Directors may determine to appropriate an amount less than 1% of the profits referred to above as remuneration to directors. The proposed bonus to employees and remuneration to directors should be presented in the shareholders’ meeting for a resolution. If the company is with accumulated losses, an amount for making up the losses should be reserved in advance before appropriating bonus to employees and remuneration to directors according to the ratio referred to above.

Article 20.1

Accordin The Company’s reinvestment may exceed 40% of the paid-in capital and with the board g to the of directors authorized to execute it. actual practice Article 20.2 Accordin The company’s annual earnings, if any, are subject to paying taxes, making up losses, g to the appropriating 10% legal reserve thereafter or governin it can be exempted if the legal reserve amount is equivalent to the company’s g law and paid-in capital amount. The remaining regulatio balance thereafter should be applied to have the special reserve appropriated or reversed ns lawfully. The board of directors should present a proposal for the distribution of the remaining amount, if any, plus the accumulated unappropriated earnings as shareholders’ dividend and bonus in the shareholders’ meeting.

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distribution amount of that particular year. Article 22 The Corporate Charter (Article of Incorporation) was established on September 25, 1981 (the first time ~ Twentieth are omitted). The 21st amendment of the Corporate Charter (Article of Incorporation) was made on May 2, 2003. The 22nd amendment of the Corporate Charter (Article of Incorporation) was made on May 27, 2003. The 23rd amendment of the Corporate Charter (Article of Incorporation) was made on May 24, 2005. The 24th amendment of the Corporate Charter (Article of Incorporation) was made on November 18, 2005. The 25th amendment of the Corporate Charter (Article of Incorporation) was made on June 16, 2006. The 26th amendment of the Corporate Charter (Article of Incorporation) was made on June 15, 2007. The 27th amendment of the Corporate Charter (Article of Incorporation) was made on June 12, 2008. The 28th amendment of the Corporate Charter (Article of Incorporation) was made on May 15, 2009. The 29th amendment of the Corporate Charter (Article of Incorporation) was made on May 18, 2010. The 30th amendment of the Corporate Charter (Article of Incorporation) was made on May 25, 2011. The 31st amendment of the Corporate Charter (Article of Incorporation) was made on June 13, 2012. The 32nd amendment of the Corporate Charter (Article of Incorporation) was made on June 18, 2014. The 33rd amendment of the Corporate Charter (Article of Incorporation) was made on May 28, 2015. The 34th amendment of the Corporate Charter (Article of Incorporation) was made on May 25, 2016. The 35th amendment of the Corporate Charter (Article of Incorporation) was made on May 26, 2017. The 36th amendment of the Corporate Charter (Article of Incorporation) was made on May 24, 2018. The 37th amendment of the Corporate Charter (Article of Incorporation) was made on May 28, 2019.

Article 22 Update the The Corporate Charter (Article of date of the Incorporation) was established on amendmen September 25, 1981 (the first time ~ t Twentieth are omitted). The 21st amendment of the Corporate Charter (Article of Incorporation) was made on May 2, 2003. The 22nd amendment of the Corporate Charter (Article of Incorporation) was made on May 27, 2003. The 23rd amendment of the Corporate Charter (Article of Incorporation) was made on May 24, 2005. The 24th amendment of the Corporate Charter (Article of Incorporation) was made on November 18, 2005. The 25th amendment of the Corporate Charter (Article of Incorporation) was made on June 16, 2006. The 26th amendment of the Corporate Charter (Article of Incorporation) was made on June 15, 2007. The 27th amendment of the Corporate Charter (Article of Incorporation) was made on June 12, 2008. The 28th amendment of the Corporate Charter (Article of Incorporation) was made on May 15, 2009. The 29th amendment of the Corporate Charter (Article of Incorporation) was made on May 18, 2010. The 30th amendment of the Corporate Charter (Article of Incorporation) was made on May 25, 2011. The 31st amendment of the Corporate Charter (Article of Incorporation) was made on June 13, 2012. The 32nd amendment of the Corporate Charter (Article of Incorporation) was made on June 18, 2014. The 33rd amendment of the Corporate Charter (Article of Incorporation) was made on May 28, 2015.

The 34rd amendment of the Corporate Charter (Article of Incorporation) was made on May 25, 2016. The 35rd amendment of the Corporate Charter (Article of Incorporation) was made on May 26, 2017.

The 36th amendment of the Corporate Charter (Article of Incorporation) was made on May 24, 2018.

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Advantech Co., Ltd.

Procedures for Lending Funds to Other Parties

After amendment	Before amendment	Remar k
Article 3 Lending Counterparts Lending counterparts in need of short-term financing shall be limited to a subsidiary in which the Company holds 50% of the voting shares or companies with the de facto control having the need of short-term financing due to business needs. The phrase “short-term” mentioned above shall mean within one year or a business cycle (whichever is longer). The company capital of foreign companies whose 100% of voting shares are directly or indirectly held by the Company may be loaned to all third parties and each individual company with the total values not exceed 40% of the net worth of the borrower companies, and in a loan applicable duration not longer than 5 years.	Article 3 Lending Counterparts Lending counterparts in need of short-term financing shall be limited to a subsidiary in which the Company holds 50% of the voting shares or companies with the de facto control having the need of short-term financing due to business needs. The phrase “short-term” mentioned above shall mean within one year or a business cycle (whichever is longer). Foreign companies, of which the Company directly or indirectly holds 100% of the voting shares,if engaged in the lending business, will be exempt from the restrictions referred to in the first paragraph of Article 4.	Accordi ng to the actual practice
Article 4 Lending Amount and Financing Limit The total values of Company capital loaned to all third parties shall not exceed 20% of the Company’s net value of the current period,while such value shall not exceed 10% to any individual party receiving the loaned Company capital.	Article 4 Lending Amount and Financing Limit The total amount lent to others (loanable funds) shall not exceed 20% of the net value of the Company.The total lending amount of an individual borrower shall not exceed 50% of the total amount of loanable funds.	Accordi ng to the actual practice
Article 6 Term of Loan The term of the loan shall be limited to one year.Loans between the Company and its parent company shall be approved by the Board of Directors and authorization may also be given to the Chairman of the Board, within a certain capital limit for a specific borrowing counterparty and within a period not to exceed one year, to give loans in installments or to make a revolving credit line available for the counterparty to draw down. If the Company has established independent directors, it shall consider the dissenting opinions from all independent directors fully and list the consenting and objecting opinions and their reasons in the meeting minutes of the Board of Directors.	Article 6 Term of Loan The term of the loan shall be limited to one year; however, due to the actual needs, the term of the loan may be extended once prior to expiration with the approval of the Board of Directors. Loans between the Company and its parent company shall be approved by the Board of Directors and authorization may also be given to the Chairman of the Board, within a certain capital limit for a specific borrowing counterparty and within a period not to exceed one year, to give loans in installments or to make a revolving credit line available for the counterparty to draw down. If the Company has established independent directors, it shall consider the dissenting opinions from all independent directors fully and list the consenting and objecting opinions and their reasons in the meeting minutes of the Board of Directors.	Accordi ng to the actual practice

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Article 14

Procedures for Managing Funds Lent to Subsidiaries:

For a subsidiary in which the Company directly or indirectly holds more than 50% of the voting shares and which is not a public company of the Republic of China, these Operational Procedures shall be followed. The net value shall be calculated based on the Company’s net value. The Company shall submit the previous month's balance of its loaned funds to Finance Department by the 5th day of each month.
Internal auditors of the Company shall perform the audit on the lending of funds of the subsidiaries based on the annual audit plan. In the case that a material violation is found, internal auditors shall continuously follow up the improvements and submit the follow-up report to the Board of Directors and the Audit Committee.

Article 15

These Procedures were established on May 3, 1997.

The 1st amendment was made on May 30, 2002. The 2nd amendment was made on May 2, 2003. The 3rd amendment was made on May 15, 2009. The 4th amendment was made on May 18, 2010. The 5th amendment was made on June 13, 2013. The 6th amendment was made on May 26, 2017. The 7th amendment was made on May 28, 2019.

Article 14

Accordi

Procedures for Managing Funds Lent to ng to Subsidiaries:

the

For a subsidiary in which the Company the directly or indirectly holds more than 50% of actual the voting shares and which is not a public practice company of the Republic of China, these Operational Procedures shall be followed. The net value shall be calculated based on the Company’s net value. The Company shall submit the previous month's balance of its loaned funds to Finance Department by the 5th day of each month.
Internal auditors of the Company shall perform the audit on the lending of funds of the subsidiaries based on the annual audit plan. In the case that a material violation is found, internal auditors shall continuously follow up the improvements and submit the follow-up report to the Board of Directors and the Audit Committee.

Article 15 Update These Procedures were established on May 3, the date 1997. of the The 1st amendment was made on May 30, 2002. amendme The 2nd amendment was made on May 2, 2003. nt The 3rd amendment was made on May 15, 2009. The 4th amendment was made on May 18, 2010. The 5th amendment was made on June 13, 2013. The 6th amendment was made on May 26, 2017.

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Advantech Co., Ltd.

Procedures for the Acquisition or Disposal of Assets

After amendment	After amendment	Before amendment	Remark
Article 2 The companies shall handle the acquisition or disposal of assets in compliance with these Regulations; provided, where financial laws or regulations provide otherwise, such provisions shall govern.		Article 2 The Company shall handle the acquisition or disposal of assets in compliance with these Procedures; provided, where another law or regulation provides otherwise, such provisions shall govern.	According to the governing law and regulations
Article 3 The term "assets" as used in these Regulations includes the following: 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. 2. Real property (including land, houses and buildings, investment property, and construction enterprise inventory) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5.Right-of-use assets. 6. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). 7.Derivatives. 8.Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law. 9. Other major assets.		Article 3 The term “assets” as used in these Procedures includes the following: 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. 2. Real property (including land, houses and buildings, investment property, rights touse land,and construction enterprise inventory) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). 6. Derivatives. 7. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law 8. Other major assets.	According to the governing law and regulations
	Article 4 Terms used in these Regulations are defined as follows: 1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, indexof prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or	Article 4 Terms used in these Procedures are defined as follows: 1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts,and swap contracts, and compound contracts combining the above products, whose value is derived from assets, interest rates, foreign exchange rates, indexes or other interests. The term “forward contracts” does not include insurance contracts, performance contracts, after-sales	According to the governing law and regulations
		exchange rates, indexes interests. The term “forward does not include insurance performance contracts,

37 -

hybrid contracts or structured products service contracts, long-term leasing containing embedded derivatives. The contracts, or long-term purchase (sales) term "forward contracts" does not agreements. include insurance contracts, 2. Assets acquired or disposed through performance contracts, after-sales mergers, demergers, acquisitions, or service contracts, long-term leasing transfer of shares in accordance with contracts, or long-term purchase (sales) law: Refers to assets acquired or contracts. disposed through mergers, demergers, 2. Assets acquired or disposed through or acquisitions conducted under the mergers, demergers, acquisitions, or Business Mergers and Acquisitions Act, transfer of shares in accordance with Financial Holding Company Act, law: Refers to assets acquired or Financial Institution Merger Act and disposed through mergers, demergers, other acts, or to transfer of shares from or acquisitions conducted under the another company through issuance of Business Mergers and Acquisitions new shares of its own as the Act, Financial Holding Company Act, consideration therefor (hereinafter Financial Institution Merger Act and “transfer of shares”) under Article 156, other acts, or to transfer of shares from paragraph 8 of the Company Act. another company through issuance of 3. Related party or subsidiary: As new shares of its own as the defined in the Regulations Governing consideration therefor (hereinafter the Preparation of Financial Reports by Securities Issuers.

Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of shares") under Article 156-3 of the Company Act.
Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or other fixed assets.
Related party or subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.
Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 6. Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.
Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 6. Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area. 7.Investment professional: Refers to financial holding companies, banks, insurance companies, bill finance companies, trust enterprises, securities
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firms operating proprietary trading or underwriting business, futures commission merchants operating proprietary trading business, securities investment trust enterprises, securities investment consulting enterprises, and fund management companies, that are lawfully incorporated and are regulated by the competent financial authorities of the jurisdiction where they are located. 8.Securities exchange: "Domestic securities exchange" refers to the Taiwan Stock Exchange Corporation; "foreign securities exchange" refers to any organized securities exchange market that is regulated by the competent securities authorities of the jurisdiction where it is located. 9.Over-the-counter venue ("OTC venue", "OTC"): "Domestic OTC venue" refers to a venue for OTC trading provided by a securities firm in accordance with the Regulations Governing Securities Trading on the Taipei Exchange; "foreign OTC venue" refers to a venue at a financial institution that is regulated by the foreign competent authority and that is permitted to conduct securities business. Article 5 Article 5 According to Professional appraisers and their Professional appraisers and their officers, certified public accounts, officers, certified public accounts, the attorneys, and securities underwriters attorneys, and securities underwriters governing that provide public companies with that provide the Company with appraisal reports, certified public appraisal reports, certified public law and accountant's opinions, attorney's accountant's opinions, attorney's opinions, or underwriter's opinions opinions, or underwriter's opinions shall regulations shall meet the following requirements: not be a related party of any party to the 1.May not have previously received a transaction. final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed since completion of service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received. 2.May not be a related party or de facto related party of any party to the

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transaction.

3.If the company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other.

When issuing an appraisal report or opinion, the personnel referred to in the preceding paragraph shall comply with the following:

Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience, and independence.

2.When examining a case, they shall appropriately plan and execute adequate working procedures, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The related working procedures, data collected, and conclusion shall be fully and accurately specified in the case working papers.

3.They shall undertake an item-by-item evaluation of the comprehensiveness, accuracy, and reasonableness of the sources of data used, the parameters, and the information, as the basis for issuance of the appraisal report or the opinion.

4.They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that they have evaluated and found that the information used is reasonable and accurate, and that they have complied with applicable laws and regulations

Article 7

The Limit of Investment in Non-business Real Property and Securities The limit of the above assets acquired by the Company and its subsidiaries is set up respectively as follows:

The total amount of non-business real property and short-term securities purchased by the Company shall be no more than 30% of the Company’s shareholders’ equity and the investment of short-term securities shall be no more than 10% of the Company’s shareholders’ equity. 2. The total amount of non-business real property and short-term securities purchased by each subsidiary of the

Article 7

The Limit of Investment in Non-business Real Property and Securities The limit of the above assets acquired by the Company and its subsidiaries is set up respectively as follows: 1. The total amount of non-business real property and short-term securities purchased by the Company shall be no more than 30% of the Company’s shareholders’ equity and the investment of short-term securities shall be no more than 10% of the Company’s shareholders’ equity. 2. The total amount of non-business real property and short-term securities purchased by each subsidiary of the

According to the governing law and regulations

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Company and the respective Company and the respective investment investment of right-of-use assets or of short-term securities shall be no more securities shall be no more than each than each subsidiary’s shareholders’ subsidiary’s shareholders’ equity. equity. 3. The total amount of long-term 3. The total amount of long-term securities invested by the Company securities invested by the Company shall be no more than its capital and shall be no more than its capital and the the investment in a single company investment in a single company (actual (actual invested funds) shall be no invested funds) shall be no more than more than 40% of the Company’s 40% of the Company’s capital. capital. 4. The total amount of long-term 4. The total amount of long-term securities invested by each subsidiary of securities invested by each subsidiary the Company and the respective of the Company and the respective investment in a single company (actual investment in a single company (actual invested funds) shall be no more than its invested funds) shall be no more than capital. its capital. Article 8 Article 8 According to The Company’s acquisition or disposal The Company’s acquisition or disposal of assets shall be approved by the of assets shall be approved by the Board the Board of Directors under the of Directors under the Company’s governing Company’s procedures or other laws or procedures or other laws or regulations. regulations. If a director expresses If a director expresses dissent and it is law and dissent and it is contained in the contained in the minutes or a written regulations minutes or a written statement, the statement, the Company shall submit Company shall submit the director's the director's dissenting opinion to the dissenting opinion to the Audit Audit Committee. Committee. When a transaction involving the When a transaction involving the acquisition or disposal of assets is acquisition or disposal of assets is submitted to the Board of Directors for submitted to the Board of Directors for discussion pursuant to the preceding discussion pursuant to the preceding paragraph, the Board of Directors shall paragraph, the Board of Directors shall take into full consideration each take into full consideration each independent director's opinions. If an independent director's opinions. If an independent director objects to or independent director objects to or expresses reservations about any matter, expresses reservations about any it shall be recorded in the minutes of the matter, it shall be recorded in the board of directors meeting. minutes of the board of directors Major assets or derivatives transactions meeting. shall be approved by more than half of Major assets or derivatives transactions all Audit Committee members and shall be approved by more than half of reported to the Board of Directors for all Audit Committee members and resolution. reported to the Board of Directors for If approval of more than half of all resolution. Audit Committee members is not If approval of more than half of all obtained, these procedures may be Audit Committee members is not implemented if approved by more than obtained, these procedures may be two-thirds of all directors, and the implemented if approved by more than resolution of the Audit Committee shall two-thirds of all directors, and the be recorded in the minutes of the board resolution of the Audit Committee meeting. The terms “all Audit shall be recorded in the minutes of the Committee members” and “all board meeting. The terms “all Audit directors” shall be counted as the actual Committee members” and “all number of persons currently holding directors” shall be counted as the those positions. actual number of persons currently holding those positions.

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Article 9

In acquiring or disposing of real property, equipment, or right-of-use assets thereof where the transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, the company, unless transacting with a domestic government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment or right-of-use assets thereof held for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions:

Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors; the same procedure shall also be followed whenever there is any subsequent change to the terms and conditions of the transaction.
Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.
Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:

(1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.

(2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months may elapse

Article 9

In acquiring or disposing of real property or equipment where the transaction amount reaches 20% of the Company’s paid-in capital or NT$300 million or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions:

Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction. 2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.
Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:

(1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.

(2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount.

No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current

According to the governing law and regulations

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between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.	value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.
Article 11 Where the company acquires or disposes of intangible assets or right-of-use assets thereof or memberships and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a domestic government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.	Article 11 Where the Company acquires or disposes ofmembershipsor intangible assets and the transaction amount reaches 20% of the Company’s paid-in capital or NT$300 million or more, except in transactions with a government agency, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20.	According to the governing law and regulations
Article 12 The calculation of the transaction amounts referred to in the preceding three articles shall be done in accordance with Paragraph 2 of Article 30, herein, and “within the preceding year” as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.	Article 11.1 The calculation of the transaction amounts referred to in the preceding three articles shall be done in accordance with Paragraph 2 of Article 30, herein, and “within the preceding year” as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.	According to the governing law and regulations
Article 13 Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.	Article 12 Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.	According to the governing law and regulations
Article 14 When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised, if the transaction amount reaches 10 percent or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in	Article 13 When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised, if the transaction amount reaches 10 percent or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in	According to the governing law and regulations

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compliance with the provisions of compliance with the provisions of Article 12. Article 11.1. The calculation of the transaction The calculation of the transaction amount referred to in the preceding amount referred to in the preceding paragraph shall be made in accordance paragraph shall be made in accordance with Article 11.1 herein. with Article 11.1 herein. When judging whether a trading When judging whether a trading counterparty is a related party, in counterparty is a related party, in addition to legal formalities, the addition to legal formalities, the substance of the relationship shall also substance of the relationship shall also be considered. be considered. Article 15 Article 14 According to When the Company intends to acquire When the Company intends to acquire or dispose of real property or or dispose of real property from or to a the right-of-use assets thereof from or to a related party, regardless of the amount, governing related party, regardless of the amount, or when it intends to acquire or dispose or when it intends to acquire or dispose of assets other than real property from law and of assets other than real property or or to a related party at the amount regulations right-of-use assets thereof from or to a reaching 20% of the Company’s paid-in related party at the amount reaching capital, 10% of its total assets or 20% of the Company’s paid-in capital, NT$300 million, except in trading of 10% of its total assets or NT$300 government bonds or bonds under million, except in trading of repurchase and resale agreements, or government bonds or bonds under subscription or repurchase of domestic repurchase and resale agreements, or money market funds issued by subscription or repurchase of domestic securities investment trust enterprises, money market funds issued by the Company may not proceed to enter securities investment trust enterprises, into a transaction contract or make a the Company may not proceed to enter payment until the following matters into a transaction contract or make a have been approved by more than half payment until the following matters of all Audit Committee members and have been approved by more than half the Board of Directors: of all Audit Committee members and 1. The purpose, necessity and the Board of Directors: anticipated benefit of the acquisition or 1. The purpose, necessity and disposal of assets. anticipated benefit of the acquisition or 2. The reason for choosing the related disposal of assets. party as a trading counterparty. 2. The reason for choosing the related 3. With respect to the acquisition of real party as a trading counterparty. property from a related party, 3. With respect to the acquisition of information regarding appraisal of the real property or right-of-use assets reasonableness of the preliminary thereof transaction terms in accordance with from a related party, information Article 15 and Article 16. regarding appraisal of the 4. The date and price at which the reasonableness of the preliminary related party originally acquired the real transaction terms in accordance with property, the original trading Article 16 and Article 17. counterparty, and that trading 4. The date and price at which the counterparty's relationship to the related party originally acquired the company and the related party. real property, the original trading 5. Monthly cash flow forecasts for the counterparty, and that trading year commencing from the anticipated counterparty's relationship to the month of signing of the contract, and company and the related party. evaluation of the necessity of the 5. Monthly cash flow forecasts for the transaction, and reasonableness of the year commencing from the anticipated funds utilization. month of signing of the contract, and 6. An appraisal report from a evaluation of the necessity of the professional appraiser or a CPA's transaction, and reasonableness of the opinion obtained in compliance with the

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funds utilization. preceding article. 6. An appraisal report from a 7. Restrictive covenants and other professional appraiser or a CPA's important stipulations associated with opinion obtained in compliance with the transaction. the preceding article. The calculation of the transaction 7. Restrictive covenants and other amounts referred to in the preceding important stipulations associated with paragraph shall be made in accordance the transaction. with Article 30 herein, and “within the The calculation of the transaction preceding year” as used herein refers to amounts referred to in the preceding the year preceding the date of paragraph shall be made in accordance occurrence of the current transaction. with Article 31 and "within the Items that have been announced in preceding year" as used herein refers to accordance with these Procedures need the year preceding the date of not be counted toward the transaction occurrence of the current transaction. amount. Items that have been approved by the With respect to the acquisition or board of directors and recognized by disposal of business-use equipment the audit committee need not be between the Company and its parent counted toward the transaction amount. company or subsidiaries, the With respect to the types of Company’s Board of Directors may transactions listed below, when to be pursuant to Article 9 delegate the conducted between a public company Chairman of the Board to decide such and its parent or subsidiaries, or matters when the transaction is within a between its subsidiaries in which it certain amount and have the decisions directly or indirectly holds 100 percent subsequently submitted to and ratified of the issued shares or authorized by the next board of directors meeting. capital, the company's board of When a matter is submitted to the Board directors may pursuant to Article 9 of Directors for discussion pursuant to delegate the board chairman to decide the preceding paragraph, the Board of such matters when the transaction is Directors shall take into full within a certain amount and have the consideration each independent decisions subsequently submitted to director's opinions. If an independent and ratified by the next board of director objects to or expresses directors meeting: reservations about any matter, it shall be 1.Acquisition or disposal of equipment recorded in the minutes of the board of or right-of-use assets thereof held for directors meeting. business use. If approval of more than half of all 2.Acquisition or disposal of real Audit Committee members as required property right-of-use assets held for in the preceding paragraph is not business use. obtained, these procedures may be When a matter is submitted to the implemented if approved by more than Board of Directors for discussion two-thirds of all directors, and the pursuant to the preceding paragraph, resolution of the Audit Committee shall the Board of Directors shall take into be recorded in the minutes of the board full consideration each independent meeting. The terms “all Audit director's opinions. If an independent Committee members” and “all director objects to or expresses directors” shall be counted as the actual reservations about any matter, it shall number of persons currently holding be recorded in the minutes of the board those positions. of directors meeting. If approval of more than half of all Audit Committee members as required in the preceding paragraph is not obtained, these procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the Audit Committee shall be recorded in the minutes of the

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board meeting. The terms “all Audit Committee members” and “all directors” shall be counted as the actual number of persons currently holding those positions.

Article 16

Article 15

The Company that acquires real property or right-of-use assets thereof from a related party shall evaluate the reasonableness of the transaction costs by the following means:

The Company that acquires real property from a related party shall evaluate the reasonableness of the transaction costs by the following means:

Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance.
Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. “Necessary interest on funding” is imputed as the weighted average interest rate on borrowing in the year the Company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance.
Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the transaction counterparties.
Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. Where land and structures thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. The Company that acquires real property from a related party and appraises the cost of the real property in accordance with Paragraph 1 and Paragraph 2 shall also engage a CPA to check the appraisal and render a specific opinion.

Where land and structures thereupon are combined as a single property purchased or leased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph.

A public company that acquires accordance with Paragraph 1 and real property or right-of-use assets Paragraph 2 shall also engage a CPA to thereof from a related party and check the appraisal and render a specific appraises the cost of the real property opinion. or right-of-use assets thereof in Where the Company acquires real accordance with the preceding two property from a related party and one of paragraphs shall also engage a CPA to the following circumstances exists, the check the appraisal and render a acquisition shall be conducted in specific opinion. accordance with Article 14 and the Where a public company preceding three paragraphs do not acquires real property or right-of-use apply: assets thereof from a related party and 1. The related party acquired the real one of the following circumstances property through inheritance or as a gift.

According to the governing law and regulations

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exists, the acquisition shall be conducted in accordance with the preceding article, and the preceding three paragraphs do not apply:

The related party acquired the real property or right-of-use assets thereof through inheritance or as a gift.
More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property or right-of-use assets thereof to the signing date for the current transaction.
More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property to the signing date for the current transaction.
The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land.
The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land. 4.The real property right-of-use assets for business use are acquired by the public company with its parent or subsidiaries, or by its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital.

Article 17 Article 16 When the results of a public company's When the results of the Company's appraisal conducted in accordance with appraisal conducted in accordance with paragraph 1 and paragraph 2 of the Paragraph 1 and Paragraph 2 of the preceding Article are uniformly lower preceding article are uniformly lower than the transaction price, the matter than the transaction price, the matter shall be handled in compliance with shall be handled in compliance with Article 18. However, where the Article 17. However, where the following circumstances exist, following circumstances exist, objective objective evidence has been submitted evidence has been submitted and and specific opinions on specific opinions on reasonableness reasonableness have been obtained have been obtained from a professional from a professional real property real property appraiser and a CPA have appraiser and a CPA have been been obtained, this restriction shall not obtained, this restriction shall not apply: apply: 1. Where the related party acquired 1. Where the related party acquired undeveloped land or leased land for undeveloped land or leased land for development, it may submit proof of development, it may submit proof of compliance with one of the following compliance with one of the following conditions: conditions: (1) Where undeveloped land is (1)Where undeveloped land is appraised in accordance with the means appraised in accordance with the in the preceding Article, and structures means in the preceding Article, and according to the related party's structures according to the related construction cost plus reasonable party's construction cost plus construction profit are valued in excess reasonable construction profit are of the actual transaction price. The valued in excess of the actual "Reasonable construction profit" shall transaction price. The "Reasonable be deemed the average gross operating construction profit" shall be deemed profit margin of the related party's the average gross operating profit construction division over the most margin of the related party's recent 3 years or the gross profit margin construction division over the most for the construction industry for the

According to the governing law and regulations

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recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.

most recent period as announced by the Ministry of Finance, whichever is lower.

(2) Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices.

(2)Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale or leasing practices.

prices in accordance with standard (3) Completed leasing transactions by property market sale or leasing unrelated parties for other floors of the practices. same property from within the 2. Where a public company acquiring preceding year, where the transaction real property, or obtaining real terms are similar after calculation of property right-of-use assets through reasonable price discrepancies among leasing, from a related party provides floors in accordance with standard evidence that the terms of the property leasing market practices. transaction are similar to the terms of 2. Where the Company acquiring real completed transactions involving property from a related party provides neighboring or closely valued parcels evidence that the terms of the of land of a similar size by unrelated transaction are similar to the terms of parties within the preceding year. transactions completed for the Completed transactions involving acquisition of neighboring or closely neighboring or closely valued parcels valued parcels of land of a similar size of land in the preceding paragraph in by unrelated parties within the principle refers to parcels on the same preceding year. or an adjacent block and within a Completed transactions for neighboring distance of no more than 500 meters or or closely valued parcels of land in the parcels close in publicly announced preceding paragraph in principle refers current value; transactions involving to parcels on the same or an adjacent similarly sized parcels in principle block and within a distance of no more refers to transactions completed by than 500 meters or parcels close in unrelated parties for parcels with a publicly announced current value; land area of no less than 50 percent of transaction for similarly sized parcels in the property in the planned transaction; principle refers to transactions within the preceding year refers to the completed by unrelated parties for year preceding the date of occurrence parcels with a land area of no less than of the acquisition of the real property 50 percent of the property in the or obtainment of the right-of-use assets planned transaction; within the thereof. preceding year refers to the year preceding the date of occurrence of the acquisition of the real property. Article 18 Article 17 According to Where a public company acquires real Where the Company acquires real property or right-of-use assets thereof property from a related party and the the from a related party and the results of results of appraisals conducted in governing appraisals conducted in accordance accordance with Article 15 and Article with the preceding two articles are 16 are uniformly lower than the law and uniformly lower than the transaction transaction price, the following steps regulations price, the following steps shall be shall be taken: taken: 1. A special reserve shall be set aside in 1.A special reserve shall be set aside in accordance with Paragraph 1, Article 41 accordance with Article 41, paragraph of the Securities and Exchange Act 1 of the Act against the difference against the difference between the real

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between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, paragraph of the Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company.

The Audit Committee shall comply with Article 218 of the Company Act. Where an audit committee has been established in accordance with the provisions of the Act, the preceding part of this subparagraph shall apply mutatis mutandis to the independent director members of the audit committee.
Actions taken pursuant to the preceding two subparagraphs shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

The Company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased or leased at a premium, or they have been disposed of, or the leasing contract has been terminated, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent.

property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in another company, then the special reserve called for under Paragraph 1, Article 41 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company.

The Audit Committee shall comply with Article 218 of the Company Act. 3. Actions taken pursuant to subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

The Company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent.

When the Company obtains real property from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm’s length transaction. Engaging in Derivatives Trading

When a public company obtains real property or right-of-use assets thereof from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arms length transaction.

Article 19

The Companies engaging in derivatives trading shall pay strict attention to control of the following important risk management and auditing matters, and incorporate them into their Procedures:

Trading principles and strategies: Shall include the types of derivatives

Article 18

According to The Company engaging in derivatives trading shall pay strict attention to the control of the following important risk governing management and auditing matters, and incorporate them into their Procedures: law and 1. Trading Principles and Policies: Shall regulations include the types of derivatives that may be traded, operating or hedging

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that may be traded, operating or strategies, segregation of duties, hedging strategies, segregation of essentials of performance evaluation, duties, essentials of performance total amount of derivatives contracts evaluation, total amount of derivatives that may be traded, and the maximum contracts that my be traded, and the loss limit on total trading and for maximum loss limit on total trading individual contracts. and for individual contracts. 2. Risk management measures. 2. Risk management measures. 3. Internal audit system. 3. Internal audit system. 4. Regular evaluation methods and the 4. Regular evaluation methods and the handling of irregular circumstances. handling of irregular circumstances. Article 20 Article 19 According to The Company engaging in derivatives The company engaging in derivatives trading shall adopt the following risk trading shall adopt the following risk the management measures: management measures: governing 1. Risk management shall address 1. Risk management shall address credit, market, liquidity, cash flow, credit, market, liquidity, cash flow, law and operational, and legal risks. operational, and legal risks. regulations 2. Personnel engaged in derivatives 2. The personnel that deal with the trading may not serve concurrently in transaction of derivatives, make other operations such as confirmation confirmation of these transactions and and settlement. make settlements of these transactions 3. Risk measurement, monitoring, and shall not be the same. control personnel shall be assigned to a 3. The evaluation, supervision and different department that the personnel control of risk-related matters also shall in the preceding subparagraph and be reported by persons from a different shall report to the board of directors or department to the Board of Directors or senior management personnel with no to the high-level managers who are not responsibility for trading or position responsible for setting policies for decision-making. transactions or position 4. Derivatives trading positions held 4. The position held in the trading of shall be evaluated at least once per derivatives shall be evaluated at least week; however, positions for hedge once a week, but the hedging trades required by business shall be transaction made for business purposes evaluated at least twice per month. shall be evaluated at least twice a Evaluation reports shall be submitted month, and the evaluation reports shall to senior management personnel be given to high-level managers authorized by the board of directors. authorized by the Board of Directors. 5. Other important risk management 5. Other important risk management measures. measures. Article 21 Article 20 According to Where a public company engaging in Where the Company engaging in derivatives trading, its board of derivatives trading, its Board of the directors shall faithfully supervise and Directors shall faithfully supervise and governing manage such trading in accordance manage such trading in accordance with with the following principles: the following principles: law and 1. Designate senior management 1. Designate senior management regulations personnel to pay continuous attention personnel to pay continuous attention to to monitoring and controlling monitoring and controlling derivatives derivatives trading risk. trading risk. 2. Periodically evaluate whether 2. Periodically evaluate whether derivatives trading performance is derivatives trading performance is consistent with established operational consistent with established operational strategy and whether the risk strategy and whether the risk undertaken is within the company's undertaken is within the Company's permitted scope of tolerance. permitted scope of tolerance. Senior management personnel Senior management personnel

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authorized by the board of directors authorized by the Board of Directors shall manage derivatives trading in shall manage derivatives trading in accordance with the following accordance with the following principles: principles: 1. Periodically evaluate the risk 1. Periodically evaluate the risk management measures currently management measures currently employed are appropriate and are employed are appropriate and are faithfully conducted in accordance faithfully conducted in accordance with with these Regulations and the these Procedures and the Procedures for procedures for engaging in derivatives Engaging in Derivatives Transactions trading formulated by the company. formulated by the Company. 2. When irregular circumstances are 2. When irregular circumstances are found in the course of supervising found in the course of supervising trading and profit-loss circumstances, trading and profit-loss circumstances, appropriate measures shall be adopted appropriate measures shall be adopted and a report immediately made to the and a report immediately made to the board of directors; where a company Board of Directors; where the company has independent directors, an has independent directors, an independent director shall be present at independent director shall be present at the meeting and express an opinion. the meeting and express an opinion. The Company shall report to the The Company shall report to the soonest soonest meeting of the board of board meeting after it authorizes the directors after it authorizes the relevant relevant personnel to handle derivatives personnel to handle derivates trading in trading in accordance with its accordance with its Procedures for Procedures for Engaging in Derivatives Engaging in Derivatives Trading. Transactions. Article 22 Article 21 According to The Company engaging in derivatives The Company engaging in derivatives trading shall establish a log book in trading shall establish a log book in the which details of the types and amounts which details of the types and amounts governing of derivatives trading engaged in, of derivatives trading engaged in, Board board of directors approval dates, and of Directors’ approval dates, and the law and the matters required to be carefully matters required to be carefully regulations evaluated under subparagraph 4 of evaluated under Subparagraph 4 of Article 20 and subparagraph 2 of Article 19 and Subparagraph 2 of paragraph 1, and subparagraph 1 of Paragraph 1 and Subparagraph 1 of paragraph 2, of the preceding article Paragraph 2 of Article 20 shall be shall be recorded in detail in the log recorded in detail in the log book. book. A public company's internal audit A public company's internal audit personnel shall periodically make a personnel shall periodically make a determination of the suitability of determination of the suitability of internal controls on derivatives and internal controls on derivatives and conduct a monthly audit of how conduct a monthly audit of how faithfully derivatives trading by the faithfully derivatives trading by the trading department adheres to the trading department adheres to the procedures for engaging in derivatives procedures for engaging in derivatives trading, and prepare an audit report. If trading, and prepare an audit report. If any material violation is discovered, the any material violation is discovered, Audit Committee shall be notified in the Audit Committee shall be notified writing. in writing. Article 23 Article 22 According to The Company that conducts a merger, The Company that conducts a merger, demerger, acquisition, or transfer of demerger, acquisition, or transfer of the shares, prior to convening the board of shares, prior to convening the board of governing directors to resolve on the matter, shall directors to resolve on the matter, shall engage a CPA, attorney, or securities engage a CPA, attorney, or securities law and

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underwriter to give an opinion on the underwriter to give an opinion on the regulations reasonableness of the share exchange reasonableness of the share exchange ratio, acquisition price, or distribution ratio, acquisition price, or distribution of cash or other property to of cash or other property to shareholders, and submit it to the board shareholders, and submit it to the Board of directors for deliberation and of Directors for deliberation and passage. However, the requirement of passage. However, an opinion rendered obtaining an aforesaid opinion on by an expert on the reasonableness of a reasonableness issued by an expert merger with subsidiaries whose 100% may be exempted in the case of a of shares issued or total capital are merger by a public company of a directly or indirectly held by the subsidiary in which it directly or Company or a merger between indirectly holds 100 percent of the subsidiaries whose 100% of shares issued shares or authorized capital, and issued or total capital are directly or in the case of a merger between indirectly held by the Company may be subsidiaries in which the public exempted. company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital. Article 24 Article 23

Article 24 Article 23 According to The Company participating in a The Company participating in a merger, merger, demerger, acquisition, or demerger, acquisition, or transfer of the transfer of shares shall prepare a public shares shall prepare a public report to governing report to shareholders detailing shareholders detailing important important contractual content and contractual content and matters relevant law and matters relevant to the merger, to the merger, demerger, or acquisition regulations demerger, or acquisition prior to the prior to the shareholders meeting and shareholders meeting and include it include it along with the expert opinion along with the expert opinion referred referred to in the first paragraph of the to in paragraph 1 of the preceding preceding article when sending Article when sending shareholders shareholders notification of the notification of the shareholders shareholders’ meeting for reference in meeting for reference in deciding deciding whether to approve the merger, whether to approve the merger, demerger, or acquisition. Provided, demerger, or acquisition. Provided, where a provision of another act where a provision of another act exempts the Company from convening exempts a company from convening a a shareholders meeting to approve the shareholders meeting to approve the merger, demerger, or acquisition, this merger, demerger, or acquisition, this restriction shall not apply. restriction shall not apply. Where the shareholders meeting of any Where the shareholders meeting of any one of the companies participating in a one of the companies participating in a merger, demerger, or acquisition fails to merger, demerger, or acquisition fails convene or pass a resolution due to lack to convene or pass a resolution due to of a quorum, insufficient votes, or other lack of a quorum, insufficient votes, or legal restriction, or the proposal is other legal restriction, or the proposal rejected by the shareholders meeting, is rejected by the shareholders the companies participating in the meeting, the companies participating in merger, demerger or acquisition shall the merger, demerger or acquisition immediately publicly explain the shall immediately publicly explain the reason, the follow-up measures, and the reason, the follow-up measures, and preliminary date of the next the preliminary date of the next shareholders meeting. shareholders meeting. Article 25 Article 24 According to A company participating in a merger, A company participating in a merger, demerger, or acquisition shall convene demerger, or acquisition shall convene a the

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a board of directors meeting and board meeting and shareholders’ shareholders meeting on the day of the meeting on the day of the transaction to transaction to resolve matters relevant resolve matters relevant to the merger, to the merger, demerger, or demerger, or acquisition, unless another acquisition, unless another act provides act provides otherwise or the FSC is otherwise or the FSC is notified in notified in advance of extraordinary advance of extraordinary circumstances and grants consent. circumstances and grants consent. A company participating in a transfer of A company participating in a transfer shares shall call a board meeting on the of shares shall call a board of directors day of the transaction, unless another meeting on the day of the transaction, act provides otherwise or the FSC is unless another act provides otherwise notified in advance of extraordinary or the FSC is notified in advance of circumstances and grants consent. extraordinary circumstances and grants When participating in a merger, consent. demerger, acquisition, or transfer of When participating in a merger, another company's shares, a company demerger, acquisition, or transfer of that is listed on an exchange or has its another company's shares, a company shares traded on an OTC market shall that is listed on an exchange or has its prepare a full written record of the shares traded on an OTC market shall following information and retain it for 5 prepare a full written record of the years for reference: following information and retain it for 1. Basic identification data for 5 years for reference: personnel: Including the occupational 1.Basic identification data for titles, names, and national ID numbers personnel: Including the occupational (or passport numbers in the case of titles, names, and national ID numbers foreign nationals) of all persons (or passport numbers in the case of involved in the planning or foreign nationals) of all persons implementation of any merger, involved in the planning or demerger, acquisition, or transfer of implementation of any merger, another company's shares prior to demerger, acquisition, or transfer of disclosure of the information. another company's shares prior to 2. Dates of material events: Including disclosure of the information. the signing of any letter of intent or 2.Dates of material events: Including memorandum of understanding, the the signing of any letter of intent or hiring of a financial or legal advisor, the memorandum of understanding, the execution of a contract, and the hiring of a financial or legal advisor, convening of a board of directors the execution of a contract, and the meeting. convening of a board of directors 3. Important documents and minutes: meeting. Including merger, demerger, acquisition, 3.Important documents and minutes: and share transfer plans, any letter of Including merger, demerger, intent or memorandum of acquisition, and share transfer plans, understanding, material contracts, and any letter of intent or memorandum of minutes of board of directors meetings. understanding, material contracts, and When participating in a merger, minutes of board of directors meetings. demerger, acquisition, or transfer of When participating in a merger, another company's shares, a company demerger, acquisition, or transfer of that is listed on an exchange or has its another company's shares, a company shares traded on an OTC market shall, that is listed on an exchange or has its within 2 days commencing immediately shares traded on an OTC market shall, from the date of passage of a resolution within 2 days counting inclusively by the board of directors, report (in the from the date of passage of a resolution prescribed format and via the by the board of directors, report (in the Internet-based information system) the prescribed format and via the information set out in subparagraphs 1 Internet-based information system) the and 2 of the preceding paragraph to the information set out in subparagraphs 1 FSC for recordation. and 2 of the preceding paragraph to the Where any of the companies

governing law and regulations

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FSC for recordation. participating in a merger, demerger, Where any of the companies acquisition, or transfer of another participating in a merger, demerger, company's shares is neither listed on an acquisition, or transfer of another exchange nor has its shares traded on an company's shares is neither listed on an OTC market, the company(s) so listed exchange nor has its shares traded on or traded shall sign an agreement with an OTC market, the company(s) so such company whereby the latter is listed or traded shall sign an agreement required to abide by the provisions of with such company whereby the latter paragraphs 3 and 4. is required to abide by the provisions of the preceding two paragraphs. Article 26 Article 25 Every person participating in or privy Every person participating in or privy to to the plan for merger, demerger, the plan for merger, demerger, acquisition, or transfer of shares shall acquisition, or transfer of shares shall issue a written undertaking of issue a written undertaking of confidentiality and may not disclose confidentiality and may not disclose the the content of the plan prior to public content of the plan prior to public disclosure of the information and may disclosure of the information and may not trade, in their own name or under not trade, in their own name or under the name of another person, in any the name of another person, in any stock stock or other equity security of any or other equity security of any company company related to the plan for related to the plan for merger, demerger, merger, demerger, acquisition, or acquisition, or transfer of shares. transfer of shares. Article 27 Article 26

According to Every person participating in or privy Every person participating in or privy to to the plan for merger, demerger, the plan for merger, demerger, the acquisition, or transfer of shares shall acquisition, or transfer of shares shall governing issue a written undertaking of issue a written undertaking of confidentiality and may not disclose confidentiality and may not disclose the law and the content of the plan prior to public content of the plan prior to public regulations disclosure of the information and may disclosure of the information and may not trade, in their own name or under not trade, in their own name or under the name of another person, in any the name of another person, in any stock stock or other equity security of any or other equity security of any company company related to the plan for related to the plan for merger, demerger, merger, demerger, acquisition, or acquisition, or transfer of shares. transfer of shares. Article 27 Article 26 According to The Companies participating in a The Company participating in a merger, merger, demerger, acquisition, or demerger, acquisition, or transfer of the transfer of shares may not arbitrarily shares may not arbitrarily alter the share governing alter the share exchange ratio or exchange ratio or acquisition price acquisition price unless under the unless under the below-listed law and below-listed circumstances, and shall circumstances, and shall stipulate the regulations stipulate the circumstances permitting circumstances permitting alteration in alteration in the contract for the the contract for the merger, demerger, merger, demerger, acquisition, or acquisition, or transfer of shares: transfer of shares: 1. Cash capital increase, issuance of 1. Cash capital increase, issuance of convertible corporate bonds, or the convertible corporate bonds, or the issuance of bonus shares, issuance of issuance of bonus shares, issuance of corporate bonds with warrants, corporate bonds with warrants, preferred shares with warrants, stock preferred shares with warrants, stock warrants, or other equity based warrants, or other equity based securities. securities. 2. An action, such as a disposal of major 2. An action, such as a disposal of assets, which affects the company's major assets, that affects the company's financial operations. financial operations. 3. An event, such as a major disaster or 3. An event, such as a major disaster or major change in technology, which major change in technology, that affects shareholder equity or share affects shareholder equity or share price. price. 4. An adjustment where any of the 4. An adjustment where any of the companies participating in the merger, companies participating in the merger, demerger, acquisition, or transfer of demerger, acquisition, or transfer of shares from another company, buys shares from another company, buys back treasury stock. back treasury stock. 5. An increase or decrease in the 5. An increase or decrease in the number of entities or companies number of entities or companies participating in the merger, demerger,

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participating in the merger, demerger, acquisition, or transfer of shares. acquisition, or transfer of shares. 6. Other terms/conditions that the 6. Other terms/conditions that the contract stipulates may be altered and contract stipulates may be altered and that have been publicly disclosed. that have been publicly disclosed. Article 28 Article 27 According to The contract for participation by a The contract for participation by the public company in a merger, demerger, Company in a merger, demerger, the acquisition, or of shares shall record acquisition, or of shares shall record the governing the rights and obligations of the rights and obligations of the companies companies participating in the merger, participating in the merger, demerger, law and demerger, acquisition, or transfer of acquisition, or transfer of shares, and regulations shares, and shall also record the shall also record the following: following: 1. Handling of breach of contract. 1. Handling of breach of contract. 2. Principles for the handling of 2. Principles for the handling of equity-type securities previously issued equity-type securities previously issued or treasury stock previously bought or treasury stock previously bought back by any company that is back by any company that is extinguished in a merger or that is extinguished in a merger or that is demerged. demerged. 3. The amount of treasury stock 3. The amount of treasury stock participating companies are permitted participating companies are permitted under law to buy back after the record under law to buy back after the record date of calculation of the share date of calculation of the share exchange ratio, and the principles for exchange ratio, and the principles for handling thereof. handling thereof. 4. The manner of handling changes in 4. The manner of handling changes in the number of participating entities or the number of participating entities or companies. companies. 5. Preliminary progress schedule for 5. Preliminary progress schedule for plan execution, and anticipated plan execution, and anticipated completion date. completion date. 6. Scheduled date for convening the 6. Scheduled date for convening the legally mandated shareholders meeting legally mandated shareholders meeting if the plan exceeds the deadline without if the plan exceeds the deadline completion, and relevant procedures. without completion, and relevant procedures. Article 29 Article 28 According to After public disclosure of the After public disclosure of the information, if any company information, if any company the participating in the merger, demerger, participating in the merger, demerger, governing acquisition, or share transfer intends acquisition, or share transfer intends further to carry out a merger, further to carry out a merger, demerger, law and demerger, acquisition, or share transfer acquisition, or share transfer with regulations with another company, all of the another company, all of the participating participating companies shall carry out companies shall carry out anew the anew the procedures or legal actions procedures or legal actions that had that had originally been completed originally been completed toward the toward the merger, demerger, merger, demerger, acquisition, or share acquisition, or share transfer; except transfer; except that where the number that where the number of participating of participating companies is decreased companies is decreased and a and a participating company's participating company's shareholders shareholders meeting has adopted a meeting has adopted a resolution resolution authorizing the board of authorizing the board of directors to directors to alter the limits of authority, alter the limits of authority, such such participating company may be

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participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.

exempted from calling another shareholders meeting to resolve on the matter anew.

Article 30

Article 29

Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the public company(s) shall sign an agreement with the non-public company whereby the latter is required to abide by the provisions of Article 25, Article 26, and the preceding article.

Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company whereby the latter is required to abide by the provisions of Article 24, Article 25, and Article 28.

Article 31

Article 30

Under any of the following Under any of the following circumstances, a public company circumstances, the Company acquiring acquiring or disposing of assets shall or disposing of assets shall publicly publicly announce and report the announce and report the relevant relevant information on the FSC's information on the FSC's designated designated website in the appropriate website in the appropriate format as format as prescribed by regulations prescribed by regulations within 2 days within 2 days counting inclusively commencing immediately from the date from the date of occurrence of the of occurrence of the event: event: 1. Acquisition or disposal of real 1. Acquisition or disposal of real property from or to a related party, property or right-of-use assets thereof regardless of the amount, or acquisition from or to a related party, or or disposal of assets other than real acquisition or disposal of assets other property from or to a related party than real property or right-of-use assets where the transaction amount reaches thereof from or to a related party where 20 percent or more of paid-in capital, 10 the transaction amount reaches 20 percent or more of the company's total percent or more of paid-in capital, 10 assets, or NT$300 million or more; percent or more of the company's total provided, this shall not apply to trading assets, or NT$300 million or more; of government bonds or bonds under provided, this shall not apply to trading repurchase and resale agreements, or of domestic government bonds or subscription or repurchase of domestic bonds under repurchase and resale money market funds issued by agreements, or subscription or securities investment trust enterprises. redemption of money market funds 2. Merger, demerger, acquisition, or issued by domestic securities transfer of shares. investment trust enterprises. 3. Losses from derivatives trading 2. Merger, demerger, acquisition, or reaching the limits on aggregate losses transfer of shares. or losses on individual contracts set out 3. Losses from derivatives trading in the procedures adopted by the reaching the limits on aggregate losses Company. or losses on individual contracts set out 4. Where the type of asset acquired or in the procedures adopted by the disposed is equipment for business use, company. the trading counterparty is not a related 4. Where equipment or right-of-use party, and the transaction amount meets assets thereof for business use are one of the following requirements: acquired or disposed of, and (1) The paid-in capital is less than furthermore the transaction NT$10 billion and the transaction counterparty is not a related party, and amount is more than NT$500 million. the transaction amount meets any of (2) The paid-in capital is more than the following criteria: NT$10 billion and the transaction (1).For a public company whose amount is more than NT$1 billion.

According to the governing law and regulations According to the governing law and regulations

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paid-in capital is less than NT$10 billion, the transaction amount reaches NT$500 million or more.

Where land is acquired under an arrangement on engaging others to build on the Company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction is less than NT$500 million. 6. Where an asset transaction other than any of those referred to in the preceding five subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances:

(2).For a public company whose paid-in capital is NT$10 billion or more, the transaction amount reaches NT$1 billion or more.

5.Where land is acquired under an construction and separate sale, and the arrangement on engaging others to amount the Company expects to invest build on the company's own land, in the transaction is less than NT$500 engaging others to build on rented million. land, joint construction and allocation 6. Where an asset transaction other than of housing units, joint construction and any of those referred to in the preceding allocation of ownership percentages, or five subparagraphs, a disposal of joint construction and separate sale, receivables by a financial institution, or and furthermore the transaction an investment in the mainland China counterparty is not a related party, and area reaches 20 percent or more of the amount the company expects to paid-in capital or NT$300 million; invest in the transaction reaches provided, this shall not apply to the NT$500 million. following circumstances: 6.Where an asset transaction other than (1) Trading of government bonds. any of those referred to in the (2) Securities trading by investment preceding six subparagraphs, a professionals on foreign or domestic disposal of receivables by a financial securities exchanges or over-the-counter institution, or an investment in the markets, or subscription of corporate mainland China area reaches 20 bonds and general financial bonds not percent or more of paid-in capital or involving no equity in the domestic NT$300 million; provided, this shall primary market or securities by a not apply to the following securities firm due to business needs or circumstances: a securities firm recommended for listed (1).Trading of domestic government companies at the emerging stock market bonds. in accordance with the regulations of (2).Where done by professional Taipei Exchange. investors—securities trading on (3) Trading of bonds under securities exchanges or OTC markets, repurchase/resale agreements, or or subscription of ordinary corporate subscription or repurchase of domestic bonds or general bank debentures money market funds issued by without equity characteristics securities investment trust enterprises. (excluding subordinated debt) that are The amount of transactions above shall offered and issued in the primary be calculated as follows and “Within the market, or subscription or redemption preceding year” as used in the preceding of securities investment trust funds or paragraph refers to the year preceding futures trust funds, or subscription by a the date of occurrence of the current securities firm of securities as transaction. Items duly announced in necessitated by its undertaking accordance with the regulations need business or as an advisory not be counted toward the transaction recommending securities firm for an amount. emerging stock company, in 1. The amount of any individual accordance with the rules of the Taipei transaction. Exchange. 2. The cumulative transaction amount of (3). Trading of bonds under repurchase acquisitions and disposals of the same and resale agreements, or subscription type of underlying asset with the same or redemption of money market funds trading counterparty within the issued by domestic securities preceding year. investment trust enterprises. 3. The cumulative transaction amount of The amount of transactions above shall real property acquisitions and disposals be calculated as follows: (cumulative acquisitions and disposals, 1. The amount of any individual respectively) within the same

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transaction. development project within the 2. The cumulative transaction amount preceding year. of acquisitions and disposals of the 4. The cumulative transaction amount of same type of underlying asset with the acquisitions and disposals (cumulative same transaction counterparty within acquisitions and disposals, respectively) the preceding year. of the same security within the 3. The cumulative transaction amount preceding year. of acquisitions and disposals “ Within the preceding year” as used in (cumulative acquisitions and disposals, the preceding paragraph refers to the respectively) of real property or year preceding the date of occurrence of right-of-use assets thereof within the the current transaction. Items duly same development project within the announced in accordance with these preceding year. Procedures need not be counted toward 4. The cumulative transaction amount the transaction amount. of acquisitions and disposals The Company shall compile monthly (cumulative acquisitions and disposals, reports on the status of derivatives respectively) of the same security trading engaged in up to the end of the within the preceding year. preceding month by itself and any "Within the preceding year" as used in subsidiaries that are not domestic public the preceding paragraph refers to the companies and enter the information in year preceding the date of occurrence the prescribed format into the of the current transaction. Items duly information reporting website announced in accordance with these designated by the FSC by the 10th day Regulations need not be counted of each month. toward the transaction amount. When the Company at the time of A public company shall compile public announcement makes an error or monthly reports on the status of omission in an item required by derivatives trading engaged in up to regulations to be publicly announced the end of the preceding month by the and so is required to correct it, all the company and any subsidiaries that are items shall be again publicly announced not domestic public companies and and reported in their entirety within 2 enter the information in the prescribed days commencing immediately from the format into the information reporting date of knowing of the error or website designated by the FSC by the omission. 10th day of each month. The Company acquiring or disposing of When a public company at the time of assets shall keep all relevant contracts, public announcement makes an error meeting minutes, log books, appraisal or omission in an item required by reports and CPA, attorney, and regulations to be publicly announced securities underwriter opinions at the and so is required to correct it, all the company headquarters, where they shall items shall be again publicly be retained for 5 years except where announced and reported in their another act provides otherwise. entirety within two days counting inclusively from the date of knowing of such error or omission. A public company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company, where they shall be retained for 5 years except where another act provides otherwise. Article 32 Article 31 Where any of the following Where any of the following circumstances occurs with respect to a circumstances occurs with respect to a transaction that a public company has transaction that the Company has already publicly announced and already publicly announced and

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reported in accordance with the reported in accordance with the preceding article, a public report of preceding article, a public report of relevant information shall be made on relevant information shall be made on the information reporting website the information reporting website designated by the FSC within 2 days designated by the FSC within 2 days counting inclusively from the date of commencing immediately from the date occurrence of the event: of occurrence of the event: 1. Change, termination, or rescission of 1. Change, termination, or rescission of a contract signed in regard to the a contract signed in regard to the original transaction. original transaction. 2. The merger, demerger, acquisition, 2. The merger, demerger, acquisition, or or transfer of shares is not completed transfer of shares is not completed by by the scheduled date set forth in the the scheduled date set forth in the contract. contract. 3. Change to the originally publicly 3. Change to the originally publicly announced and reported information. announced and reported information. Article 33 Article 32 Subsidiaries of the Company shall Subsidiaries of the Company shall comply with the following regulations: comply with the following regulations: 1. A subsidiary of the Company 1.A subsidiary of the Company shall shall acquire or dispose of assets in acquire or dispose of assets in accordance with these Procedures. accordance with these Procedures. 2. Information required to be 2.Information required to be publicly publicly announced and reported in announced and reported in accordance accordance with the provisions of these with the provisions of these Procedures Procedures on acquisitions and on acquisitions and disposals of assets disposals of assets by a subsidiary of by a subsidiary of the Company that is the Company that is not itself a public not itself a public company in Taiwan company in Taiwan shall be reported shall be reported by the Company. by the Company. 3. The paid-in capital or total assets of 3. The paid-in capital or total assets the Company shall be the standard for of the public company shall be the determining whether or not a subsidiary standard applicable to a subsidiary referred to in the preceding paragraph referred to in the preceding paragraph requiring a public announcement and in determining whether, relative to regulatory filing in the event the type of - paid in capital or total assets, it reaches transaction specified therein reaches 20 a threshold requiring public percent of paid-in capital or 10 percent announcement and regulatory filing of the total assets. under Article 31, paragraph 1. These Procedures were established on These Procedures were established on May Update the date May 3, 1997. 3, 1997. of the The 1st amendment was made on The 1st amendment was made on November amendment November 29, 1999. 29, 1999. The 2nd amendment was made on May The 2nd amendment was made on May 30, 30, 2002. 2002. The 3rd amendment was made on May The 3rd amendment was made on May 2, 2, 2003. 2003. The 4th amendment was made on May The 4th amendment was made on May 27, 27, 2004. 2004. The 5th amendment was made on June The 5th amendment was made on June 16, 16, 2006. 2006. The 6th amendment was made on June The 6th amendment was made on June 15, 15, 2007. 2007. The 7th amendment was made on June The 7th amendment was made on June 13, 13, 2012. 2012. The 8th amendment was made on June The 8th amendment was made on June 18,

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18, 2014. The 9th amendment was made on May 26, 2017. The 10th amendment was made on May 28, 2019.	2014. The 9th amendment was made on May 26, 2017.

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Advantech Co., Ltd.

Procedures For Financial Derivatives Transactions

After amendment	Before amendment	Remar k
Article 4 Risk Management Measures 1. Credit risk management: Trading partners shall be limited to banks having business dealings with the Company. 2. Market risk management: Markets shall be limited to publicly traded foreign exchange markets and exclude futures markets. 3. Liquidity risk management: Products with high liquidity (that can square the position in the market at any time) shall be selected to ensure the trading liquidity. Trading financial institutions must have the sufficient information to trade in any market at any time. 4. Cash flow risk management: The source of funds used in derivatives transactions shall be limited to the Company’s own funds to ensure the stability of working capital. 5. Operational risk management: A. The Company shall comply with its authorized amount and operating procedures, and have them reviewed in the internal audit to avoid operational risks. B. The personnel that deal with the transaction of derivatives, make confirmation of these transactions and make settlements of these transactions shall not be the same. C. The evaluation, supervision and control of risk-related matters also shall be reported by persons from a different department to the Board of Directors or to the high-level managers who are not responsible for setting policies for transactions or position. D. The position held in the trading of derivatives shall be evaluated at least once a week, but the hedging transaction made for business purposes shall be evaluated at least twice a month, and the evaluation reports shall be given to high-level managers authorized by the Board of Directors. 6. Legal risk management: The Company shall have the documents to be signed with financial institutions reviewed by the dedicated person in charge of foreign exchange and legal affairs or legal consultation prior to the official signing in order to avoid legal risks.	Article 4 Risk Management Measures 1. Credit risk management: Trading partners shall be limited to banks having business dealings with the Company. 2. Market risk management: Markets shall be limited to publicly traded foreign exchange markets and exclude futures markets. 3. Liquidity risk management: Products with high liquidity (that can square the position in the market at any time) shall be selected to ensure the trading liquidity. Trading financial institutions must have the sufficient information to trade in any market at any time. 4. Cash flow risk management: The source of funds used in derivatives transactions shall be limited to the Company’s own funds to ensure the stability of working capital. 5. Operational risk management: A. The Company shall comply with its authorized amount and operating procedures, and have them reviewed in the internal audit to avoid operational risks. B. The personnel that deal with the transaction of derivatives, make confirmation of these transactions and make settlements of these transactions shall not be the same. C. The evaluation, supervision and control of risk-related matters also shall be reported by persons from a different department to the Board of Directors or to the high-level managers who are not responsible for setting policies for transactions or position. D. The position held in the trading of derivatives shall be evaluated at least once a week, but the hedging transaction made for business purposes shall be evaluated at least twice a month, and the evaluation reports shall be given to high-level managers authorized by the Board of Directors. 6. Legal risk management: The Company shall have the documents to be signed with financial institutions reviewed by the dedicated person in charge of foreign exchange and legal affairs or legal consultation prior to the official signing in order to avoid legal risks.
Article 6 Method of Periodic Evaluation and Abnormality	Article 6 Method of Periodic Evaluation and Abnormality

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Handling

The position held in the trading of derivatives shall be evaluated at least twice a month, and the evaluation reports shall be given to high-level managers authorized by the Board of Directors.
The Board of Directors shall designate senior management personnel to periodically supervise and evaluate whether the trading performance is consistent with established trading procedures and whether the risk undertaken is within the Company’s permitted scope of tolerance. When irregular circumstances are found in the course of supervision and evaluation, appropriate measures shall be taken immediately and a report shall be made to the Board of Directors.

Article 7 Internal Audit System

The Company's internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If any material violation is discovered, the Audit Committee shall be notified in writing.

Article 9

These Procedures were established on May 3, 1997.

The 1st amendment was made on April 18, 1998. The 2nd amendment was made on May 2, 2003. The 3rd amendment was made on May 24, 2005. The 4th amendment was made on May 18, 2010 The 5th amendment was made on June 18, 2014. The 6th amendment was made on May 26, 2017. The 7th amendment was made on May 28, 2019.

Handling

The position held in the trading of derivatives shall be evaluated at least twice a month, and the evaluation reports shall be given to high-level managers authorized by the Board of Directors.
The Board of Directors shall designate senior management personnel to periodically supervise and evaluate whether the trading performance is consistent with established trading procedures and whether the risk undertaken is within the Company’s permitted scope of tolerance. When irregular circumstances are found in the course of supervision and evaluation, appropriate measures shall be taken immediately and a report shall be made to the Board of Directors. Article 7

Internal Audit System

Internal auditors shall check the suitability of internal control of derivatives transactions periodically and inspect monthly the compliance of the trading departments with these Procedures and analyze the trading cycle in order to make the auditing report. The Company shall file the auditing report and the implementing status of annual auditing plans of internal audits to the Exchange Commission of the Ministry of Finance (SEC) before the end of February of next year and also shall report the improvement situation for any abnormal affairs to the SEC before the end of May of next year.

Article 9 Update These Procedures were established on May 3, the date 1997. of the The 1st amendment was made on April 18, 1998. amendme The 2nd amendment was made on May 2, 2003. nt The 3rd amendment was made on May 24, 2005. The 4th amendment was made on May 18, 2010 The 5th amendment was made on June 18, 2014. The 6th amendment was made on May 26, 2017.

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AI assistant

Advantech — AGM Information 2019

52053_rns_2019-06-06_b54bada5-52d4-4eab-b480-4fd535e6429c.pdf

Advantech Co.,Ltd. 2019 Annual Shareholders’ Meeting Meeting Minutes (Translation)

III. Discussion

Voting Results:

Voting Results:

Voting Results:

Voting Results:

Business Report

Dear shareholders:

2018 Summary of Results

Our Development for IoT

Strengthening Corporate Governance and Business Leadership

Audit Committee’s Review Report

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Assessment of Provisions for Inventory Write-downs

Sales Revenue

Other Matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ADVANTECH CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Assessment of Provision for Inventory Write-downs

Sales Revenue

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

ADVANTECH CO., LTD.

BALANCE SHEETS DECEMBER 31, 2018 AND 2017

ADVANTECH CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ADVANTECH CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ADVANTECH CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ADVANTECH CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ADVANTECH CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Advantech Co., Ltd.

2018 Profit Distribution Table

Corporate Charter (Articles of Incorporation) Article Amendments Table

Article 20

Article 20.1

Article 20.2

Article 20

Article 20.1

Advantech Co., Ltd.

Procedures for Lending Funds to Other Parties

Article 14

Article 15

Article 14

Advantech Co., Ltd.

Article 9

Article 15

Article 18

Article 29

Article 30

Advantech Co., Ltd.

Procedures For Financial Derivatives Transactions

Handling

Advantech AGM Information 2019