Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sign up Log in

ASCENT AGM Information 2019

Jul 2, 2019

51802_rns_2019-07-02_ee0d7609-dc1f-4cb2-9fb4-2c390704495d.pdf

AGM Information

Open in viewer

Opens in your device viewer

==> picture [26 x 27] intentionally omitted <==

Stock Code ： 1439

Chuwa Wool Industry Co., (Taiwan) Ltd.

2019 Annual Shareholders’ Meeting

Meeting Agenda

(Translation)

June 24, 2019

Primasia Conference & Business Center

(15F, No.99, Fu-Xing North Road, Taipei 105, Taiwan)

==> picture [23 x 23] intentionally omitted <==

Table of Contents


Meeting procedure..........................................................
Meeting agenda............................................................
1. Reporting Items
......................................................
2. Recognized Items.....................................................
3. Discussion Items......................................................
4. Election Items........................................................
5. Other Items...........................................................
6. Temporary Motion.....................................................
7. Adjournment..........................................................
Attachments
1. 2018 annual business report.............................................
2. Supervisor's Review Report.............................................
3. “Code of Conduct for Integrity” revised before and after the provisions of the
table and description....................................................
4. “Director's Code of Conduct” revised before and after the provisions of the table
and description.........................................................
5. The 2018 annual business report and financial statement.....................
6. Statement of Deficit Compensation
...............................
7. “Company articles of association” revised before and after the provisions of the
the table and description................................................
8. “Acquisition or Disposition of Asset Processing Procedures” revised before and
after the provisions of the table and description ............................
9. “Loaning Other Party's Operating Procedures” and “Endorsement Guaranteed
Operating Procedures” revised before and after the provisions of the table and
description............................................................
10. “Rules of Procedures for Shareholders' Meeting” and “Elections for Directors”
Annex
1. “Company articles of association”........................................
2. “Acquisition or Disposition of Asset Processing
..................
3. “Loaning Other Party's Operating Procedures” and “Endorsement Guaranteed
Operating Procedures” .................................................
4. “Rules of Procedures for Shareholders’ Meeting” and “Elections for Directors”
5. Shareholdings of all directors and supervisors of the company..................		 Page
.
1
.2
.3
.4
.5
.7
.
8
.8
.
8
.
9
. 11
12
15
. 16
36
.37

.42
.57

64
. 77
82
.104
115
120

==> picture [23 x 23] intentionally omitted <==

Chuwa Wool Industry Co., (Taiwan) Ltd.

Meeting Procedure of the 2019 Shareholders' Meeting

1. Call Meeting to Order

2. Chairman's Remarks

3. Reporting Items

4. Recognized Items

5. Discussion Items

6. Election Items

7. Other Items

8. Temporary Motion

9. Adjournment

==> picture [24 x 23] intentionally omitted <==

- 1 -

Chuwa Wool Industry Co., (Taiwan) Ltd.

Meeting Agenda of the 2019 Shareholders' Meeting

Time: 9:00 am on Monday, June 24, 2019 Place: Primasia Conference & Business Center

(15F, No.99, Fu-Xing North Road, Taipei 105, Taiwan)

1. Call Meeting to Order (and report the number of shares present)

2. Chairman's Remarks

3. Reporting Items

  • (1) The 2018 Annual Business Report.

  • (2) The Supervisor Reviews 2018 Annual Final Accounts.

  • (3) Revise the “Code of Conduct for Integrity” case of the Company.

  • (4) Revise the “Director's Code of Conduct” case of the Company.

  • (5) Other Reporting Matters.

4. Recognized Items

  • (1) The 2018 Annual Business Report and Financial Statement Case.

  • (2) 2018 Deficit Compensation Proposal.

5. Discussion Items

  • (1) Revise the Articles of Association of the Company.

  • (2) Revise the “Acquisition or Disposition of Asset Processing Procedures” case of the Company.

  • (3) Amend the “Loaning Other Party's Operating Procedures” and “Endorsement Guaranteed Operating Procedures” cases of the Company.

  • (4) Re-enact the “Rules of Procedures for Shareholders' Meeting” and “Director's Election Rules” cases of the Company.

6. Election Items

  • (1) The Election of Directors.

7. Other Items

  • (1) Dissolving the Non-compete Clause of the new Director and his Representative.

8. Temporary Motion

9. Adjournment

==> picture [24 x 23] intentionally omitted <==

- 2 -

Reporting Items

1. The 2018 Annual Business Report.

Explanatory Notes︰Please refer to [Attachment 1] (pages 9-10).

2. The Supervisor Reviews 2018 Annual Final Accounts.

Explanatory Notes︰Please refer to [Attachment 2] (pages 11).

3. Revise the “Code of Conduct for Integrity” case of the Company.

  • Explanatory Notes︰

  • (1) In order to set up the audit committee of the Company, it is proposed to amend the Code of Conduct for Integrity.

  • (2) For the comparison table and description of the “Code of Conduct for Integrity” before and after the amendment, please refer to [Attachment 3] (pages 12-14).

4. Revise the “Director's Code of Conduct” case of the Company.

Explanatory Notes︰

  • (1) In order to set up the audit committee of the Company, it is proposed to amend the Director's Code of Conduct.

  • (2) For the comparison table and description of the “Director's Code of Conduct” before and after the amendment, please refer to [Attachment 4] (pages 15).

5. Other Reporting Matters.

Explanatory Notes︰

  • (1) Report on the correlation and rationality of the post-tax profit and loss of 2018 and the changes in directors' and supervisor's remuneration:

  • According to Article 15 of the articles of association, all directors and supervisors are required to receive transportation allowances, the amount of which is determined by the board of directors. The remuneration of all directors and supervisors authorizes the board of directors to determine the value of the degree of participation and contribution of the company's operations and to determine the level of the industry's general standards.

  • Consideration of the appointment of directors with professional competence (including independent directors) and supervisors to provide valuable advice on corporate governance and future operational strategies. Therefore, according to the market level, the directors and supervisors are paid a fixed amount of compensation. The board of directors passed the resolution on August 6, 2018. Since the directors' remuneration in 2018 is only a fixed amount of remuneration and there is no remuneration of the directors and supervisors, there is no correlation with the company's profit and loss.

  • (2) Report on the shareholders' proposal of the shareholders' meeting in 2019:

  • The company handled the provisions of Article 172-1 of the Company Act and did not receive any shareholders' proposals from April 15, 2019 to April 25, 2019.

==> picture [24 x 23] intentionally omitted <==

- 3 -

Recognized Items

1. The 2018 Annual Business Report and Financial Statement Case.

(Proposed by the Board of Directors)

Explanatory Notes︰

  • (1) The company's 2018 consolidated financial statements and individual financial statements have been verified by Ernst & Young, Taiwan accountant Hsu, Jung-Huang and accountant Huang, Chien-Che, and the inspection report has been submitted to the supervisor for review and a report on the examination is issued.

  • (2) For the 2018 annual business report, accountant's audit report and financial statements, please refer to [Attachment 1] (pages 9-10) and [Attachment 5] (pages 16-33).

  • (3) Submitted for recognition.

Resolution︰

2. 2018 Deficit Compensation Proposal.

(Proposed by the Board of Directors)

Explanatory Notes︰

  • (1) The Company's 2018 annual after-tax loss was NT$68,814,888, and the adjusted undistributed surplus of NT$544,889,745 was added at the beginning of the adjustment period. After deducting the special reserve of NT$46,864 from the deduction of equity, the current distribution of surplus for the period is NT$476,027,993. The undistributed surplus in the next period is NT$476,027,993. Due to the consideration of future operating conditions and capital requirements, it is proposed to retain and not distribute shareholder dividends, employee bonuses and remuneration of directors and supervisors.

  • (2) For the Statement of Deficit Compensation, please refer to [Attachment 6] (pages 34).

  • (3) Submitted for recognition.

Resolution︰

==> picture [24 x 23] intentionally omitted <==

- 4 -

Discussion Items

1. Revise the Articles of Association of the Company.

(Proposed by the Board of Directors)

Explanatory Notes︰

  • (1) In accordance with the amendments to the Company Law, the actual operational needs of the Company and the setting up of the Audit Committee, it is proposed to amend certain provisions of the Articles of Association.

  • (2) “Company articles of association” revised before and after the provisions of the table and description, please refer to [Attachment 7] (pages 35-39).

  • (3) Please proceed to discuss.

Resolution︰

2. Revise the “Acquisition or Disposition of Asset Processing Procedures” case of the Company.

  • (Proposed by the Board of Directors)

Explanatory Notes︰

  • (1) According to Rule no. 1070341072 issued by the Financial Supervisory Commission (FSC) on November 26, 2018 and at the same time set up an audit committee.

  • (2) “Acquisition or Disposition of Asset Processing Procedures” revised before and after the provisions of the table and description, please refer to [Attachment 8] (pages 40-54).

  • (3) Please proceed to discuss.

Resolution︰

3. Amend the “Loaning Other Party's Operating Procedures” and “Endorsement Guaranteed Operating Procedures” cases of the Company.

(Proposed by the Board of Directors)

Explanatory Notes︰

  • (1) According to Rule no. 1080304826 issued by the Financial Supervisory Commission (FSC) on March 27, 2019 and at the same time set up an audit committee to handle.

  • (2) “Loaning Other Party's Operating Procedures” and “Endorsement Guaranteed Operating Procedures” revised before and after the provisions of the table and description, please refer to [Attachment 9] (pages 55-61).

  • (3) Please proceed to discuss.

Resolution︰

==> picture [24 x 23] intentionally omitted <==

- 5 -

4. Re-enact the “Rules of Procedures for Shareholders' Meeting” and “Director's Election Rules” cases of the Company.

(Proposed by the Board of Directors)

Explanatory Notes︰

  • (1) To comply with the “Code of Practice for Corporate Governance on the Listed Companies” and in accordance with the Rule no. 1030051379 issued by the Financial Supervisory Commission (FSC) on January 27, 2004 and Rule no. 1040001716 issued by the Taiwan Stock Exchange on January 2, 2015 is handled. In order to take into account the fact that the Company's original “Rules of the Shareholders' Meeting” and “Elections for Directors and Supervisors” differed greatly from the reference examples, the content of the texts should be substantially revised. In addition, in order to re-establish the “Rules of Procedures for Shareholders' Meeting” and “Elections for Directors” in response to the setting up of the Audit Committee, please refer to [Attachment 10] (pages 62-74).

  • (2) The “Rules of the Shareholders' Meeting” and the “Director's Election Rules” were released to be re-formulated this time are proposed to be discussed at the shareholders' meeting after the resolution of the board of directors is passed. And the original “Rules of Procedures for Shareholders' Meeting” and “Elections for Directors and Supervisors” were abolished from the date of the implementation of the agreement.

  • (3) Please proceed to discuss.

Resolution︰

==> picture [24 x 23] intentionally omitted <==

- 6 -

Election Items

1. The Election of Directors.

(Proposed by the Board of Directors)

Explanatory Notes︰

  • (1) In accordance with Article 11 of the Company's operations and article of association, it is proposed to elect one director and one independent director. (Independent directors adopt nomination system for candidates).

  • (2) The term of office of the elected directors and independent directors is the same as that of the original directors, from the election date on June 24, 2019 to June 7, 2021.

  • (3) The list of candidates for this independent director has been reviewed and approved by the board

  • of directors of the company on May 8, 2019, and the relevant information is as follows:

Independent director candidate Jeff C. Young
Education background National ChengChi University (LL.B.)
Georgetown University of Law, U.S.A. (LL.M.)
Working experience LANHAM, KAMMER & PERRETTA LLC. MANAGER
PARTNER
YunRong Lubricant (Shanghai)
International Limited
(Affiliated Enterprises of Amalie Oil Co.(U.S.A.))
Legal Adviser / Director of Board
ABIT Computer Corporation
/Shineon Laser Co., Ltd.
Chief Law Officer / Executive Director (PRC-China
Region)
The total shareholding of the
company		 0

Election result ：

==> picture [24 x 23] intentionally omitted <==

- 7 -

Other Items

1. Dissolving the Non-compete Clause of the new Director and his Representative.

  • (Proposed by the Board of Directors)

Explanatory Notes︰

  • (1) According to Article 209 of the Company Act："A director who acts as his or her own business within the scope of the company's business shall, in response to the shareholders' meeting, explain the important content of its actions and obtain its permission."

  • (2) In order to take advantage of the expertise and relevant experience of the directors before the loss and the interests of the company, the shareholders' meeting will be required to lift the restrictions on their non-compete clause from the date of the appointment of the new directors and their representatives.

  • (3) Please proceed to discuss.

Resolution︰

Temporary Motion

Adjournment

==> picture [24 x 23] intentionally omitted <==

- 8 -

【 Attachment 1 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

2018 annual business report

Dear all shareholders:

First of all, thank you for your valuable time for reading the 2018 business report of Chuwa Wool Industry Co., (Taiwan) Ltd.

Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries' 2018 consolidated operating income was NT$ 264.022 million and increase of 0.3% from 2017 NT$ 263.220 million.

With our vision to 2019, the company will continue to focus on the development of existing wool sales customers and be committed to the development of new customers and the expansion of real estate leasing business.

The company's 2018 annual business results and 2019 annual outlook report are as follows:

  1. 2018 annual business results

  2. (1) Business plan implementation results

The Company's 2018 consolidated operating income was NT$264.022 million, and the consolidated net loss for the period was NT$68.815 million (attributable to the parent company owner). The total consolidated loss for the current period is NT$68.862 million (vesting in the owner of the parent company). After-tax earnings per share was NT$0.75.

  • (2) Budget execution situation

The company did not disclose financial forecasts for the year 2018, so no budget was reached.

  • (3) Financial revenue and expenditure and profitability
Items 2018
Financial
structure (%)		 Debts ratio 7.76
Long term funds to fixed assets 67,951.55
Solvency (%) Current ratio 1,294.23
Working capital Ratio 1,188.41
Multiple of interest coverage (809.61)
Profitability Return on asset (%) (3.38)
Return on equity (%) (3.67)
Profit before tax to capital stock (%) (7.75)
Net profit rate (%) (27.69)
Earnings per share ($NT) (0.75)

==> picture [24 x 23] intentionally omitted <==

- 9 -

  • (4) Status of research and development

The company has no research and development activities and related expenses in 2018.

2. Business plan and summary for 2019

  • (1) Policy of management

  • a. Strengthen the maintenance and operation between existing suppliers and customers.

  • b. Continue to expand potential markets and customers.

  • c. Realize the governance of the company.

  • (2) Important production, sales and policy

Australian wool prices are still at relatively high prices, so that sales of wool-related products will remain conservative.

3. The company's development and strategy

In the future, the company will continue to focus on the maintenance of existing wool sales customers and the development of new customers, while focusing on the expansion of real estate leasing business. In addition, the company will also actively develop businesses other than wool products and seek for the development direction of the company.

  1. Impact of external competitive environment, regulatory environment and overall business environment

In recent years, due to the continuous development of man-made chemical fibers, natural fibers such as wool have been gradually compressed and marketed. Meanwhile, the cost of wool is easily affected by factors such as overall wages, environmental factors and weather factors, which is not conducive to the long-term development of the wool industry. However, in the face of fierce competition in the external environment, the company will continue to maintain its triangle trading business model and control sales and orders.

Sincerely,

Health and Happiness for all shareholders

Chuwa Wool Industry Co., (Taiwan) Ltd.

Director CHEN, SHIH-HSIU Manager SUN, YANG

Accounting Supervisor CHIANG, CHUNG-WEI

==> picture [24 x 23] intentionally omitted <==

- 10 -

【 Attachment 2 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

Supervisor's Review Report

Hereby

The board of directors attaches the 2018 consolidated financial statements of the company and its subsidiaries, as well as the individual financial statements of the company for 2018. This information has been verified by Ernst & Young accountant Hsu, Jung-Huang and accountant Huang, Chien-Che, and a verification report has been issued. And, together with the business report and Statements of deficit compensated, after reviewing by the supervisor, etc., it is considered that there is no discrepancy. Therefore, this report has been prepared in accordance with Section 219 of the Company Act. Please read the review.

Sincerely for

The company 2019 general shareholders' meeting

Chuwa Wool Industry Co., (Taiwan) Ltd. Supervisor HSU, CHUNG-JUNG Supervisor LIN, HSIU-YUAN

March 5, 2019

==> picture [24 x 23] intentionally omitted <==

- 11 -

【 Attachment 3 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

“Code of Conduct for Integrity” revised before and after the provisions

of the table and description

of the table and description
Revisedprovision Currentprovision Description
Article 2
When engaging in commercial activities,
directors, managers, employees, and
mandataries of TWSE/GTSM listed
companies or persons having substantial
control over such companies ("substantial
controllers") shall not directly or indirectly
offer, promise to offer, request or accept any
improper benefits, nor commit unethical
acts including breach of ethics, illegal acts,
or breach of fiduciary duty ("unethical
conduct") for purposes of acquiring or
maintaining benefits.
(omit)		 Article 2
When engaging in commercial activities,
directors,supervisors,managers,
employees, and mandataries of
TWSE/GTSM listed companies or persons
having substantial control over such
companies ("substantial controllers") shall
not directly or indirectly offer, promise to
offer, request or accept any improper
benefits, nor commit unethical acts
including breach of ethics, illegal acts, or
breach of fiduciary duty ("unethical
conduct") for purposes of acquiring or
maintaining benefits.
(omit)		 Cooperate with the establishment
of an audit committee to replace
the supervisor system and remove
the relevant regulations of the
supervisor.
Article 17
The directors, managers, employees,
mandataries, and substantial controllers of a
TWSE/GTSM listed company shall exercise
the due care of good administrators to urge
the company to prevent unethical conduct,
always review the results of the preventive
measures and continually make adjustments
so as to ensure thorough implementation of
its ethical corporate management policies.
The company is responsible for the
management of sound and honest
management. TheManagementDepartment
is responsible for the formulation and
supervision of the integrity management
policies and prevention programs. It mainly
deals with the following matters and reports
to the board of directors on a regular basis:
(omit)		 Article 17
The directors,supervisors,managers,
employees, mandataries, and substantial
controllers of a TWSE/GTSM listed
company shall exercise the due care of good
administrators to urge the company to
prevent unethical conduct, always review
the results of the preventive measures and
continually make adjustments so as to
ensure thorough implementation of its
ethical corporate management policies.
The
company is responsible for the management
of sound and honest management. The
General AffairsDepartment is responsible
for the formulation and supervision of the
integrity management policies and
prevention programs. It mainly deals with
the following matters and reports to the
board of directors on a regular basis:
(omit)		 1. Cooperate with the
establishment of an audit
committee to replace the
supervisor system and remove
the relevant regulations of the
supervisor.
2. Amendment General Affairs
Department for Management
Department.

Article 18
TWSE/GTSM listed companies and their
directors, managers, employees,
mandataries, and substantial controllers
shall comply with laws and regulations and
the prevention programs when conducting
business.		 Article 18
TWSE/GTSM listed companies and their
directors,supervisors,managers,
employees, mandataries, and substantial
controllers shall comply with laws and
regulations and the prevention programs
when conductingbusiness.		 Cooperate with the establishment
of an audit committee to replace
the supervisor system and remove
the relevant regulations of the
supervisor.
Article 19
The company shall adopt policies for
preventing conflicts of interest to identify,
monitor, and manage risks possibly resulting
from unethical conduct, and shall also offer
appropriate means for directors, managers,
and other stakeholders attending or present
at board meetings to voluntarily explain		 Article 19
The company shall adopt policies for
preventing conflicts of interest to identify,
monitor, and manage risks possibly resulting
from unethical conduct, and shall also offer
appropriate means for directors,supervisors,
managers, and other stakeholders attending
or present at board meetings to voluntarily
explain whether their interests would		 Cooperate with the establishment
of an audit committee to replace
the supervisor system and remove
the relevant regulations of the
supervisor.

==> picture [23 x 23] intentionally omitted <==

- 12 -

Revisedprovision Currentprovision Description
whether their interests would potentially
conflict with those of the company.
When a proposal at a given board of
directors meeting concerns the personal
interest of, or the interest of the juristic
person represented by, any of the directors,
managers, and other stakeholders attending
or present at board meetings of a
TWSE/GTSM listed company, the
concerned person shall state the important
aspects of the relationship of interest at the
given board meeting. If his or her
participation is likely to prejudice the
interest of the company, the concerned
person may not participate in the discussion
of or voting on the proposal and shall recuse
himself or herself from the discussion or the
voting, and may not exercise voting rights
as a proxy for another director. The directors
shall practice self-discipline and must not
support one another in improper dealings.
(omit)		 potentially conflict with those of the
company.
When a proposal at a given board of
directors meeting concerns the personal
interest of, or the interest of the juristic
person represented by, any of the directors,
supervisors,managers, and other
stakeholders attending or present at board
meetings of a TWSE/GTSM listed
company, the concerned person shall state
the important aspects of the relationship of
interest at the given board meeting. If his or
her participation is likely to prejudice the
interest of the company, the concerned
person may not participate in the discussion
of or voting on the proposal and shall recuse
himself or herself from the discussion or the
voting, and may not exercise voting rights
as a proxy for another director. The directors
shall practice self-discipline and must not
support one another in improper dealings.
(omit)
Article 22
(omit)
The company shall periodically organize
training and awareness programs for
directors, managers, employees,
mandataries, and substantial controllers and
invite the companies' commercial
transaction counterparties so they
understand the companies' resolve to
implement ethical corporate management,
the related policies, prevention programs
and the consequences of committing
unethical conduct.
(omit)		 Article 22
(omit)
The company shall periodically organize
training and awareness programs for
directors,supervisors,managers,
employees, mandataries, and substantial
controllers and invite the companies'
commercial transaction counterparties so
they understand the companies' resolve to
implement ethical corporate management,
the related policies, prevention programs
and the consequences of committing
unethical conduct.
(omit)		 Cooperate with the establishment
of an audit committee to replace
the supervisor system and remove
the relevant regulations of the
supervisor.
Article 23
1. (omit)
2. The company's complaints about
illegal (including corruption) and
unethical behavior can be reported
through the company's internal
mailing box or to theManagement
Department. The method can be
submitted in any form, such as written
information or by phone. The
company will promptly handle the
reported case and Measures to protect
the prosecutor from improper handling
due to the circumstances of the report
and the company will give appropriate
rewards to the prosecutor.
3. Upon investigation by the
management department of a major
violation or the company has suffered
significant damages, the company
shall immediately make a report and
notify the independent directors or
supervisors in writing. Those who
violate the rules of good faith
management will bepunished		 Article 23
1. (omit)
2. The company's complaints about
illegal (including corruption) and
unethical behavior can be reported
through the company's internal
mailing box or to theGeneral Affairs
Department. The method can be
submitted in any form, such as written
information or by phone. The
company will promptly handle the
reported case and Measures to protect
the prosecutor from improper handling
due to the circumstances of the report
and the company will give appropriate
rewards to the prosecutor.
3. Upon investigation by the
management department of a major
violation or the company has suffered
significant damages, the company
shall immediately make a report and
notify the independent directorsor
supervisorsin writing. Those who
violate the rules of good faith
management will bepunished		 1. Amendment General Affairs
Department for Management
Department.
2. Cooperate with the
establishment of an audit
committee to replace the
supervisor system and remove
the relevant regulations of the
supervisor.

==> picture [23 x 23] intentionally omitted <==

- 13 -

Revisedprovision Currentprovision Description
according to the seriousness of the
circumstances.		 according to the seriousness of the
circumstances.
Article 27
The ethical corporate management best
practice principles of the company shall be
implemented after the board of directors
grants the approval, and shall be sent to the
audit committeeand reported at a
shareholders' meeting. The same procedure
shall be followed when the principles have
been amended.
The company has appointed any
independent director, when the ethical
corporate management best practice
principles are submitted for discussion by
the board of directors pursuant to the
preceding paragraph, the board of directors
shall take into full consideration each
independent director's opinions. If an
independent director objects to or expresses
reservations about any matter, it shall be
recorded in the minutes of the board of
directors meeting. An independent director
that cannot attend the board meeting in
person to express objection or reservations
shall provide a written opinion before the
board meeting, unless there is some
legitimate reason to do otherwise, and the
opinion shall be specified in the minutes of
the board of directors meeting.		 Article 27
The ethical corporate management best
practice principles of the company shall be
implemented after the board of directors
grants the approval, and shall be sent to the
supervisorsand reported at a shareholders'
meeting. The same procedure shall be
followed when the principles have been
amended.
Ifthe company has appointed any
independent director, when the ethical
corporate management best practice
principles are submitted for discussion by
the board of directors pursuant to the
preceding paragraph, the board of directors
shall take into full consideration each
independent director's opinions. If an
independent director objects to or expresses
reservations about any matter, it shall be
recorded in the minutes of the board of
directors meeting. An independent director
that cannot attend the board meeting in
person to express objection or reservations
shall provide a written opinion before the
board meeting, unless there is some
legitimate reason to do otherwise, and the
opinion shall be specified in the minutes of
the board of directors meeting.If the
company establishes an audit committee, the
provisions regarding supervisors in these
Principles shall apply mutatis mutandis to
the audit committee.		 Cooperate with the establishment
of an audit committee to replace
the supervisor system and remove
the relevant regulations of the
supervisor.
Article 28
This Code was enacted on March 25,
2015. The first amendment was made on
November 4, 2016, and the second
amendment was made on August 6, 2018.
The third amendment was made on April 18,
2019.		 Article 28
This Code was enacted on March 25,
2015. The first amendment was made on
November 4, 2016, and the second
amendment was made on August 6, 2018.		 1. Text correction.
2. Add revision date.

==> picture [23 x 23] intentionally omitted <==

- 14 -

【 Attachment 4 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

“Director's Code of Conduct” revised before and after the provisions

of the table and description

of the table and description
Revisedprovision Currentprovision Description
Article 11
(omit)
The aforementioned personnel actions
and transactions with related companies
shall be handled in accordance with the
Company's “Loaning Other Party's
Operating Procedures”, “Endorsement
Guaranteed Operating Procedures”,
“Acquisition or Disposition of Asset
Processing Procedures” or other competent
authority regulations; In the case of the
above procedures and fear of conflict with
the interests of the company, the board of
directors or theaudit committeeshould be
proactively identified in advance whether
there is a conflict of interest.		 Article 11
(omit)
The aforementioned personnel actions
and transactions with related companies
shall be handled in accordance with the
Company's “Loaning Other Party's
Operating Procedures”, “Endorsement
Guaranteed Operating Procedures”,
“Acquisition or Disposition of Asset
Processing Procedures” or other competent
authority regulations; In the case of the
above procedures and fear of conflict with
the interests of the company, the board of
directors or thesupervisorsshould be
proactively identified in advance whether
there is a conflict of interest.		 Cooperate with the establishment
of an audit committee to replace
the supervisor system and remove
the relevant regulations of the
supervisor.
Article 12
When employees of the company
discover that directors violate the laws and
regulations or the Code, they should inspect
sufficient information, and the report should
be reported by theAudit Committee, the
direct manager, the general manager, the
internal audit supervisor or other
appropriate personnel. After the employee's
report is confirmed and confirmed, it will be
awarded according to personnel
management regulations.
(omit)		 Article 12
When employees of the company
discover that directors violate the laws and
regulations or the Code, they should inspect
sufficient information, and the report should
be reported by thesupervisors,the direct
manager, the general manager, the internal
audit supervisor or other appropriate
personnel. After the employee's report is
confirmed and confirmed, it will be awarded
according to personnel management
regulations.
(omit)		 Cooperate with the establishment
of an audit committee to replace
the supervisor system and remove
the relevant regulations of the
supervisor.
Article 17
This Codeof Conductis implemented
after the approval of the Board of Directors
and is reported to the shareholders' meeting
report. The same applies to the amendment.		 Article 17
This Code is implemented after the
approval of the Board of Directors andhas
been sent to the supervisors andis reported
to the shareholders' meeting. The same
applies to the amendment.		 Cooperate with the establishment
of an audit committee to replace
the supervisor system and remove
the relevant regulations of the
supervisor.
Article 18
This Codeof Conductwas enacted on
January 1, 2015.The first amendment was
made on April 18, 2019.		 Article 18
This Codewas approved on December 7,
2014 and was enacted on January 1, 2015.		 1. Text correction.
2. Add revision date.

==> picture [23 x 23] intentionally omitted <==

- 15 -

【 Attachment 5 】

==> picture [499 x 679] intentionally omitted <==

==> picture [23 x 23] intentionally omitted <==

- 16 -

  • 17 -

  • 18 -

  • 19 -

  • 20 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS December 31, 2018 and 2017 (Note)

(Expressed in Thousands of New Taiwan Dollars)

Assets Notes As of December 31, As of December 31,
2018 2017(Note)
Current assets
Cash and cash equivalents
Financial assets at fair value through profit or loss-current
Financial assets at amortized cost-current
Accounts receivable, net
Other receivables
Current tax assets
Inventories
Prepayments
Non-current assets classified as held for sale, net
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Investment property, net
Intangible asssets
Deferred tax assets
Refundable deposits
Total non-current assets		 4, 6(1), 12
4, 12
4, 6(2), 12
4, 6(3), 12
4, 12
4, 6(17)
4, 6(4)
6(5)
4, 6(6)
4, 6(7)
4, 6(8)
4
4, 6(17)		 $28,479
10,355
1,098,080
11,171
411
684
-
160,268
650,537
100		 $1,304,769
11,172
-
2,960
519
528
15,933
758
-
100
1,960,085 1,336,739
2,716
28,769
35
4,286
1,121		 78,033
658,317
49
506
77
36,927 736,982

Total assets

$1,997,012 $2,073,721

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

NOTE: It's the parant company only financial statement. Refer to the accompanying Note 4(3).

  • 21 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2018 and 2017 (Note)

(Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity Notes As of December 31, As of December 31,
2018 2017(Note)
Current liabilities
Notes payable
Other payables
Current tax liabilities
Liabilities related to non-current assets classified as held for sale
Other current liabilities
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Guarantee deposits
Total non-current liabilities
Total liabilities
Equity attributable to the parent company
Capital
Common stock
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Total retained earnings
Other equity
Total equity
Total liabilities and equity		 4, 12
4, 12
4, 6(17)
4, 6(6)
4, 6(17)
6(10)
6(10)
6(10)		 $-
5,381
42
145,900
125		 $535
11,394
-
-
706
151,448 12,635
898
2,543		 146,431
3,670
3,441 150,101
154,889 162,736
920,000
8,686
225,134
212,275
476,075		 920,000
8,686
225,134
212,275
544,890
913,484 982,299
(47) -
1,842,123 1,910,985
$1,997,012 $2,073,721

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

NOTE: It's the parant company only financial statement. Refer to the accompanying Note 4(3).

  • 22 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2018 and 2017 (Note)

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

Operating revenues
Operating costs
Gross profit
Operating expenses
Selling expenses
Administrative expenses
Expected credit losses
Total operating expenses
Operating loss
Non-operating income and expenses
Other income
Other gains and losses
Finance costs
Total non-operating income and expenses
Loss before income tax
Income tax benefit (expense)
Net loss
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign financial statements
Income tax related to items may be reclassified subsequently
Total other comprehensive income, net of tax
Total comprehensive income
Net loss attributable to:
Owners of parent
Comprehensive income attributable to:
Owners of parent
Earning per share (NTD)
Basic earnings per share
Loss from continuing operations		 Notes For the Years Ended December 31 For the Years Ended December 31
2018 2017(Note)
$264,022
255,558		 $263,220
249,358
8,464 13,862
1,856
27,170
-
77,916 29,026
(69,452) (15,164)
5,279
(7,073)
(88)		 11,728
(3,288)
(136)
(1,882) 8,304
(71,334)
2,519		 (6,860)
(12)
(68,815) (6,872)
(59)
12		 -
-
(47) -
$(68,862) $(6,872)
$(68,815) $(6,872)
$(68,862) $(6,872)
$(0.75) $(0.07)

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

NOTE: It's the parant company only financial statement. Refer to the accompanying Note 4(3).

  • 23 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2018 and 2017 (Note)

(Expressed in Thousands of New Taiwan Dollars)

Items EquityA ttributable to Owners of Parant Total
Equity
Capital Capital Suplus Retained Earnings Other Equity
Common Stock Legal Reserve Special Reserve Unappropriated
Earnings		 Total Exchange
Difference on
Translation of
Foreign Financial
Statements
Balance as of January 1, 2017
Appropriations of 2016 earnings:
Legal reserve
Cash dividends
Net loss for the year ended December 31, 2017
Other comprehensive income for the year ended December 31, 2017
Total comprehensive income (loss)
Balance as of December 31, 2017
Balance as of January 1, 2018
Net loss for the year ended December 31, 2018
Other comprehensive income (loss) for the year ended December 31, 2018
Total comprehensive income (loss)
Balance as of December 31, 2018		 $920,000
-
-
-
-		 $8,686
-
-
-
-		 $222,587
2,547
-
-
-		 $212,275
-
-
-
-		 $600,309
(2,547)
(46,000)
(6,872)
-		 $1,035,171
-
(46,000)
(6,872)
-		 $-
-
-
-
-		 $1,963,857
-
(46,000)
(6,872)
-
- - - - (6,872) (6,872) - (6,872)
$920,000 $8,686 $225,134 $212,275 $544,890 $982,299 $- $1,910,985
$920,000
-
-		 $8,686
-
-		 $225,134
-
-		 $212,275
-
-		 $544,890
(68,815)
-		 $982,299
(68,815)
-		 $-
-
(47)		 $1,910,985
(68,815)
(47)
- - - - (68,815) (68,815) (47) (68,862)
$920,000 $8,686 $225,134 $212,275 $476,075 $913,484 $(47) $1,842,123

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

NOTE: It's the parant company only financial statement. Refer to the accompanying Note 4(3).

  • 24 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2018 and 2017 (Note)

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities:
Net loss before income tax:
Adjustments:
Adjustment items of income and expenses:
Depreciation expense
Amortization expense
Bad debt reversal
Expected credit loss
Net loss (gain) of financial assets and liabilities at fair value through profit or loss
Interest expense
Interest income
Dividend income
Loss on disposal of property, plant and equipment
Loss on disposal of investment property
Impairment loss of investment property
Changes in operating assets and liabilities:
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Notes payable
Other payables
Other current liabilities
Cash outflow from operating activities
Interest paid
Income tax (paid) refund
Net cash used in operating activities
Cash flows from investing activities:
Acquisition of financial assets at amortized cost
Acquisition of financial assets at fair value through profit or loss
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of investment property
Decrease (increase) in refundable deposits
Interest received
Dividend received
Net cash (used in) provided by investing activities
Cash flows from financing activities:
Increase (decrease) in guarantee deposits
Cash dividends paid
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 2018 2017(Note)
$(71,334)
5,551
14
-
83
1,341
88
(4,696)
(522)
86
5,070
-
(8,294)
118
15,933
(159,510)
-
(535)
(6,013)
(581)		 $(6,860)
5,968
33
(98)
-
(1,106)
136
(8,258)
(417)
-
-
3,100
9,774
(122)
(2,322)
2,077
21
259
(8,093)
249
(223,201) (5,659)
(88)
(996)		 (136)
863
(224,285) (4,932)
(1,098,080)
(524)
(2,153)
1,019
44,755
(1,044)
4,686
522		 -
-
-
-
-
17
8,172
417
(1,050,819) 8,606
(1,127)
-		 56
(46,000)
(1,127) (45,944)
(59) -
(1,276,290)
1,304,769		 (42,270)
1,347,039
$28,479 $1,304,769

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

NOTE: It's the parant company only financial statement. Refer to the accompanying Note 4(3).

  • 25 -

  • 26 -

  • 27 -

  • 28 -

  • 29 -

  • 30 -

English Translation of Financial Statements Originally Issued in Chinese

CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.

PARENT COMPANY ONLY STATEMENTS OF BALANCE SHEETS

December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

Assets Notes As of December 31, As of December 31,
2018 2017
Current assets
Cash and cash equivalents
Financial assets at fair value through profit or loss-current
Financial assets at amortized cost-current
Accounts receivable, net
Other receivables
Current tax assets
Inventories
Prepayments
Non-current assets classified as held for sale, net
Other current assets
Total current assets
Non-current assets
Investments accounted for using the equity method
Property, plant and equipment
Investment property, net
Intangible assets
Deferred tax assets
Refundable deposits
Total non-current assets
Total assets		 4, 6(1), 12
4, 12
4, 6(2), 12
4, 6(3), 12
4, 12
4, 6(18)
4, 6(4)
6(5)
4, 6(6)
4, 6(7)
4, 6(8)
4, 6(9)
4
4, 6(18)		 $14,791
10,355
1,000,000
11,171
370
684
-
160,268
650,537
100		 $1,304,769
11,172
-
2,960
519
528
15,933
758
-
100
1,848,276 1,336,739
111,805
2,716
28,769
35
4,140
1,121		 -
78,033
658,317
49
506
77
148,586 736,982
$1,996,862 $2,073,721

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

  • 31 -

English Translation of Financial Statements Originally Issued in Chinese CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.

PARENT COMPANY ONLY STATEMENTS OF BALANCE SHEETS

December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity Notes As of December 31, As of December 31,
2018 2017
Current liabilities
Notes payable
Other payables
Liabilities related to non-current assets classified as held for sale
Other current liabilities
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Guarantee deposits
Total non-current liabilities
Total liabilities
Equity
Capital
Common stock
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Total retained earnings
Other equity
Total equity
Total liabilities and equity		 4, 12
4, 12
4, 6(6)
4, 6(18)
6(11)
6(11)
6(11)		 $-
5,261
145,900
125		 $535
11,394
-
706
151,286 12,635
898
2,555		 146,431
3,670
3,453 150,101
154,739 162,736
920,000
8,686
225,134
212,275
476,075		 920,000
8,686
225,134
212,275
544,890
913,484 982,299
(47) -
1,842,123 1,910,985
$1,996,862 $2,073,721

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

  • 32 -

English Translation of Financial Statements Originally Issued in Chinese

CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

Operating revenues
Operating costs
Gross profit
Operating expenses
Selling expenses
Administrative expenses
Expected credit losses
Total operating expenses
Operating loss
Non-operating income and expenses
Other income
Other gains and losses
Finance costs
Share of profit or loss of subsidiaries, associates and joint ventures
accounted for using equity method
Total non-operating income and expenses
Loss before income tax
Income tax benefit (expense)
Net loss
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign financial statements
Income tax related to items may be reclassified subsequently
Total other comprehensive income, net of tax
Total comprehensive income
Earnings per share (NTD)
Basic earnings per share
Loss from continuing operations		 Notes For the Years Ended December 31 For the Years Ended December 31
4, 6(12)
6(15), 7
4, 6(10,14,15), 7
6(13)
6(16)
6(16)
6(16)
6(16)
6(18)
4, 6(17,18)
6(19)		 2018 2017
$264,049
255,558		 $263,220
249,358
8,491 13,862
2,456
56,648
83		 1,856
27,170
-
59,187 29,026
(50,696) (15,164)
5,125
(6,620)
(88)
(18,951)		 11,728
(3,288)
(136)
-
(20,534) 8,304
(71,230)
2,415		 (6,860)
(12)
(68,815) (6,872)
(59)
12		 -
-
(47) -
$(68,862) $(6,872)
$(0.75) $(0.07)

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

  • 33 -

English Translation of Financial Statements Originally Issued in Chinese

CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2018 and 2017

(Expressed in New Taiwan Thousand Dollars)

Items Capital Capital Surplus Retained Earnings Other Equity Total
Equity
Common Stock Legal Reserve Special Reserve Unappropriated
Earnings		 Total Exchange
Differences on
Translation of
Foreign Financial
Statements
Balance as of January 1, 2017
Appropriations of 2016 earnings:
Legal reserve
Cash dividends
Net loss for the year ended December 31, 2017
Other comprehensive income for the year ended December 31, 2017
Total comprehensive income (loss)
Balance as of December 31, 2017
Balance as of January 1, 2018
Net loss for the year ended December 31, 2018
Other comprehensive income (loss) for the year ended December 31, 2018
Total comprehensive income (loss)
Balance as of December 31, 2018		 $920,000
-
-
-
-		 $8,686
-
-
-
-		 $222,587
2,547
-
-
-		 $212,275
-
-
-
-		 $600,309
(2,547)
(46,000)
(6,872)
-		 $1,035,171
-
(46,000)
(6,872)
-		 $-
-
-
-
-		 $1,963,857
-
-
(46,000)
(6,872)
-
- - - - (6,872) (6,872) - (6,872)
$920,000 $8,686 $225,134 $212,275 $544,890 $982,299 $- $1,910,985
$920,000
-

-		 $8,686
-
-		 $225,134
-
-		 $212,275
-
-		 $544,890
(68,815)
-		 $982,299
(68,815)
-		 $-
-
(47)		 $1,910,985
(68,815)
(47)
- - - - (68,815) (68,815) (47) (68,862)
$920,000 $8,686 $225,134 $212,275 $476,075 $913,484 $(47) $1,842,123

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

  • 34 -

English Translation of Financial Statements Originally Issued in Chinese

CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2018 and 2017

(Expressed in New Taiwan Thousand Dollars)

Cash flows from operating activities:
Net loss before income tax:
Adjustments:
Adjustment items of income and expenses:
Depreciation expense
Amortization expense
Bad debt reversal
Expected credit loss
Net loss (gain) of financial assets and liabilities at fair value through profit or loss
Interest expense
Interest income
Dividend income
Loss on disposal of property, plant and equipment
Loss on disposal of investment property
Impairment loss of investment property
Share of loss of subsidiaries, associates and joint ventures accounted for using equity method
Changes in operating assets and liabilities:
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Notes payable
Other payables
Other current liabilities
Cash outflow from operating activities
Interest paid
Income tax (paid) refund
Net cash used in operating activities
Cash flows from investing activities:
Acquisition of financial assets at amortized cost
Acquisition of financial assets at fair value through profit or loss
Acquisition of investments accounted for using the equity method
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of investment property
Decrease (increase) in refundable deposits
Interest received
Dividend received
Net cash (used in) provided by investing activities
Cash flows from financing activities:
Increase (decrease) in guarantee deposits
Cash dividends paid
Net cash (used in) financing activities
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 2018 2017
$(71,230)
5,551
14
-
83
1,341
88
(4,542)
(522)
86
5,070
-
18,951
(8,294)
118
15,933
(159,510)
-
(535)
(6,133)
(581)		 $(6,860)
5,968
33
(98)
-
(1,106)
136
(8,258)
(417)
-
-
3,100
-
9,774
(122)
(2,322)
2,077
21
259
(8,093)
249
(204,112) (5,659)
(88)
(996)		 (136)
863
(205,196) (4,932)
(1,000,000)
(524)
(130,815)
(2,153)
1,019
44,755
(1,044)
4,573
522		 -
-
-
-
-
-
17
8,172
417
(1,083,667) 8,606
(1,115)
-		 56
(46,000)
(1,115) (45,944)
(1,289,978)
1,304,769		 (42,270)
1,347,039
$14,791 $1,304,769

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

  • 35 -

【 Attachment 6 】

Chuwa Wool Industry Co., (Taiwan) Ltd. 2018 Statement of Deficit Compensation

Unit: NTD
Item Amount
Unappropriated Retained Earnings of Previous Year 544,889,745
Add: Net Loss of 2018 (68,814,888)
Less: 10% Legal Reverse 0
Special Reserve (Note 1) (46,864)
Earnings in 2018 Available for Distribution 476,027,993
Distribution Item (Note 2) 0
Unappropriated Retained Earnings 476,027,993
Note 1: According to Rule no. 1010012865 issued by the Financial
Supervisory Commission (FSC) on April 6, 2012, the public issued
company is required to record special reserve after the initial
adoption of International Financial Reporting Standards (IFRSs).
Note 2: The Company proposed not to distribute dividends.

Director CHEN, SHIH-HSIU

Manager SUN, YANG

Accounting Supervisor CHIANG, CHUNG-WEI

==> picture [23 x 23] intentionally omitted <==

- 36 -

【 Attachment 7 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

“Company articles of association” revised before and after the provisions

of the table and description

Revisedprovision Currentprovision Description
Article 3
The head office ofthe company is
established in Taipei City.If necessary, the
branch office can be established at home
and abroad after the resolution of the board
of directors.		 Article 3
The company is established in Taipei
City.		 In order to meet the needs of the
company's operations and
business planning, the relevant
provisions were amended.
Article 4
(omit)
The company's stocks are all registered,
signed or sealed by the directors
representing the company and issued after
being approved according to law.
(omit)		 Article 4
(omit)
The company's stocks are all registered,
signed or sealed by more than three
directorsand issued after being signed
according to law.
(omit)		 Amended to tie in with the law.
Article 6-1
When the company issues new shares,
the employees of the acquired shares may
include control or subordinate company
employees who meet the conditions set by
the board of directors or its authorized
personnel.
The company's treasury stock purchased
under the Company Act may be subject to
control or subordinate company employees
who meet the conditions set by the board of
directors or its authorized personnel.
The company's employee stock option
certificate is issued to the target and may
include the control or subordinate company
personnel that meet the conditions set by
the board of directors or its authorized
personnel.
The Company's issue of restrictions on
employee rights of new shares may include
control or subordinate company employees
who meet the conditions set by the board of
directors or its authorized personnel.		 According to Rule no.
1070121068 issued by the
Financial Supervisory
Commission (FSC) on December
27, 2018, and in line with the
company's operational and
business planning needs, the
provision was updated.
Article 8
Notice shall be given to the shareholders
by mail or electronic transmissionat least
thirty days prior to an annual meeting, and
at least fifteen days prior to a special
meeting, stating the date, place, and
purpose of the meeting. Notice to
shareholders holding less than a thousand
(1,000) shares may be given by public
announcement.		 Article 8
Notice shall be given to the shareholders
at least thirty days prior to an annual
meeting, and at least fifteen days prior to a
special meeting.		 Cooperate with the law and
slightly modify the text.

==> picture [23 x 23] intentionally omitted <==

- 37 -

Revisedprovision Currentprovision Currentprovision Description
Chapter 4 Directors Chapter 4 Directors and Supervisors In order to tie in with the
establishment of an audit
committee to replace the
supervisory system, the relevant
provisions of the supervisor are
deleted.
Article 11
The company is set up with five to seven
directors(including independent directors).
The election of directors is based on the
candidate nomination system of Section
192-1 of the Company Act, which is elected
by the shareholders' meetingon the list of
candidates for a termof three years.
However, the directors who have been re-
elected can take on the post.When the term
of office expires and it is too late to re-
elect, it may be extended until the time of
re-election. When the director's vacancy is
one-third or the independent directors are
dismissed, the board of directors shall
convene the shareholders'temporary
meeting by-election within 60 days, and
shall be limited to the original term. Among
the above-mentioned directors, at least two
independent directors and not less than one-
fifth of the seats.The professional
qualifications, shareholdings, part-time
restrictions, nomination and selection
methods of other independent directors and
other matters to be complied with shall be
handled in accordance with the relevant
provisions of the competent authority.
The resolution of the board of directors,
with the exception of the Company Act,
shall be attended by more than half of the
directors and approved by a majority of the
directors present. The proceedings shall be
signed or sealed by the chairman. If the
director is unable to attend in person for
any reason, he may entrust other directors
to attend. However, independent directors
may only entrust other independent
directors to attend. However, each person is
limited to being entrusted by one person.		 Article 11
The company is set up with five to seven
directors, organizes the board of directors,
and is selected by the shareholderswho
have the capacity to act.The term of office
is three years, but they can be re-elected.
Among the directors in the preceding
paragraph, there are at least two
independent directors and no less than five-
fifths of the seats.
The election of independent directors of
the Company adopts the candidate
nomination system of Section 192-1 of the
Company Act. The implementation of the
relevant matters shall be handled in
accordance with the relevant acts and
regulations such as the Company Act and
the Securities Exchange Act.
The resolution of the board of directors
shall be attended by more than half of the
directors and shall be approved by a
majority of the directors present. The
minutes of the board shall be signed or
sealed by the chairman. If a director is
unable to attend in person for any reason,
he may entrust other directors to attend.
However, independent directors may only
entrust other independent directors to
attend. However, each person is limited to
one person.Directors residing abroad can
be entrusted to other shareholders in the
country in writing and often represent the
board of directors. However, the application		 1. Candidate nomination system
for the election of directors.
2. In order to cooperate with the
law and slightly modify the
text.

==> picture [23 x 23] intentionally omitted <==

- 38 -

Revisedprovision Currentprovision Description
should be registered with the competent
official office, and the same applies to the
change.
Article 11-1
The convening of the board of directors
of the company shall be notified to the
directors seven days before the meeting.
However, when there is an emergency, the
directors may be called at any time.
(omit)		 Article 11-1
The convening of the board of directors
of the company shall be notified to the
directors andsupervisorsseven days before
the meeting. However, when there is an
emergency, the directors may be called at
any time.
(omit)		 In order to tie in with the
establishment of an audit
committee to replace the
supervisor, the relevant
regulations of the supervisor are
deleted.
Article 14
The board of directors of the company
may set up various functional committees.
The membership, powers and related
matters shall be handled in accordance with
the relevant acts and regulations, and shall
be determined by the board of directors.
The audit committee consists of all
independent directors and replaces the
supervisor's authority on the date of
establishment. The number of audit
committees, term of office, authority, rules
of procedure, etc., shall be determined in
accordance with the relevant regulations of
the“Regulations Governing the Exercise of
Powers by Audit Committees of Public
Companies”.		 Article 14
The companyhas two supervisors, who
are selected by the shareholders'meeting
and have a capacity of three years, but the
consecutive elections can be taken
continuously.		 In order to tie in with the
establishment of an audit
committee to replace the
supervisor, the relevant
regulations of the supervisor are
deleted. And corrected according
to actual needs.
Article 15
All directors shall receive transportation
allowance, the amount of which shall be
determined by the board of directors.
The remuneration of all directors
authorizes the board of directors to
determine the value of the degree of
participation and contribution of the
company's operations and to determine the
level of the industry's usual standards of the
industry.		 Article 15
All directorsand supervisors may receive
a transportation subsidy, the amount of
which is determined by the board of
directors.
The remuneration of all directorsand
supervisorsis delegated to the board of
directors in accordance with the value of
their participation in and contribution to the
operation of the company, and is subject to
the usual standards of the industry.		 In order to tie in with the
establishment of an audit
committee to replace the
supervisor, the relevant
regulations of the supervisor are
deleted.
Article 15-1
The Company may, through the
resolution of the Board of Directors,
purchase liability insurance for the liability
for damages within the scope of its business
operations during the term of the directors.
In this way, the risk of significant damage to
the company and shareholders caused by
mistakes or negligenceof the directors is
reduced and diversified.The amount of
insurance and the insured matters are
authorized by the board of directors.		 Article 15-1
The Company may, through the
resolution of the Board of Directors,
purchase liability insurance for the liability
for damages within the scope of its business
operations during the term of the directors.
In this way, the risk of significant damage to
the company and shareholders caused by
violations of the lawof the directors is
reduced and diversified.The company's
supervisor can handle it.		 In order to tie in with the
establishment of an audit
committee to replace the
supervisor, the relevant
regulations of the supervisor are
deleted. And corrected according
to actual needs.

==> picture [23 x 23] intentionally omitted <==

- 39 -

Revisedprovision Revisedprovision Currentprovision Description
Article 17
The company's fiscal year begins from
January 1 to December 31. At the end of the
fiscal year, the board of directors shall
produce the following list, and submit it to
the audit committeefor review 30 days
before the general meeting of the
shareholders, and then submit it to the
shareholders' general meeting for approval.
(omit)		 Article 17
The company's fiscal year begins from
January 1 to December 31. At the end of the
fiscal year, the board of directors shall
produce the following list, and shall submit
it tothe supervisorfor review 30 days
before the general meeting of the
shareholders,and the supervisor shall issue
a reportto the general meeting of the
shareholders for approval.
(omit)		 In order to tie in with the
establishment of an audit
committee to replace the
supervisor, the relevant
regulations of the supervisor are
deleted. And corrected according
to actual needs.
Article 18
(omit)
Employee compensation may be paid by
stock or cash, includingcontrolled or
subordinate companyemployeeswho meet the
conditions set by the board or its authorized
personnel.		 Article 18
(omit)
Employee compensation may be paid by
stocks or cash, including employeesof
subordinate companies that meet certain
conditions.		 In conjunction with the
amendments to the Company Act,
the employee compensation is
extended to employees of the
control company who meet the
conditions set by the board of
directors or its authorized
personnel.
authorized

==> picture [23 x 23] intentionally omitted <==

- 40 -

Revised provision

Article 15

This articles of association was concluded on August 19, 1964. The 1st amendment was made on March 2, 1967. The 2nd amendment was made on May 16, 1967. The 3rd amendment was made on March 15, 1968. The 4th amendment was made on March 24, 1970. The 5th amendment was made on May 31, 1971. The 6th amendment was made on April 29, 1972. The 7th amendment was made on April 26, 1973. The 8th amendment was made on December 21, 1974. The 9th amendment was made on March 30, 1977. The 10th amendment was made on July 15, 1978. The 11th amendment was made on August 10, 1980. The 12th amendment was made on April 11, 1981. The 13th amendment was made on March 27, 1982. The 14th amendment was made on April 2, 1983. The 15th amendment was made on September 5, 1983. The 16th amendment was made on April 27, 1985. The 17th amendment was made on July 17, 1985. The 18th amendment was made on April 26, 1986. The 19th amendment was made on June 28, 1986. The 20th amendment was made on April 25, 1987. The 21st amendment was made on April 2, 1988. The 22nd amendment was made on May 16, 1988. The 23rd amendment was made on April 4, 1989. The 24th amendment was made on April 23, 1990. The 25th amendment was made on April 11, 1991. The 26th amendment was made on April 15, 1993. The 27th amendment was made on May 2, 1996. The 28th amendment was made on May 4, 1999. The 29th amendment was made on May 23, 2000. The 30th amendment was made on May 8, 2000. The 31st amendment was made on May 22, 2002. The 32nd amendment was made on May 27, 2004. The 33rd amendment was made on June 14, 2005. The 34th amendment was made on June 9, 2006. The 35th amendment was made on June 25, 2010. The 36th amendment was made on June 15, 2012. The 37th amendment was made on June 29, 2016. The 38th amendment was made on June 6, 2017. The 39th amendment was made on June 8, 2018. The 40th amendment was made on June 24, 2019.

Current provision

Article 15

This articles of association was concluded on August 19, 1964. The 1st amendment was made on March 2, 1967. The 2nd amendment was made on May 16, 1967. The 3rd amendment was made on March 15, 1968. The 4th amendment was made on March 24, 1970. The 5th amendment was made on May 31, 1971. The 6th amendment was made on April 29, 1972. The 7th amendment was made on April 26, 1973. The 8th amendment was made on December 21, 1974. The 9th amendment was made on March 30, 1977. The 10th amendment was made on July 15, 1978. The 11th amendment was made on August 10, 1980. The 12th amendment was made on April 11, 1981. The 13th amendment was made on March 27, 1982. The 14th amendment was made on April 2, 1983. The 15th amendment was made on September 5, 1983. The 16th amendment was made on April 27, 1985. The 17th amendment was made on July 17, 1985. The 18th amendment was made on April 26, 1986. The 19th amendment was made on June 28, 1986. The 20th amendment was made on April 25, 1987. The 21st amendment was made on April 2, 1988. The 22nd amendment was made on May 16, 1988. The 23rd amendment was made on April 4, 1989. The 24th amendment was made on April 23, 1990. The 25th amendment was made on April 11, 1991. The 26th amendment was made on April 15, 1993. The 27th amendment was made on May 2, 1996. The 28th amendment was made on May 4, 1999. The 29th amendment was made on May 23, 2000. The 30th amendment was made on May 8, 2000. The 31st amendment was made on May 22, 2002. The 32nd amendment was made on May 27, 2004. The 33rd amendment was made on June 14, 2005. The 34th amendment was made on June 9, 2006. The 35th amendment was made on June 25, 2010. The 36th amendment was made on June 15, 2012. The 37th amendment was made on June 29, 2016. The 38th amendment was made on June 6, 2017. The 39th amendment was made on June 8, 2018.

Description

  1. Correction of the text. 2. Add the date of revision.

==> picture [23 x 23] intentionally omitted <==

- 41 -

【 Attachment 8 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

“Acquisition or Disposition of Asset Processing Procedures” revised before and after the provisions of the table and description

Revisedprovision Currentprovision Description
Article 3 Scope of assets
(omit)
2. Real estate (including land, housing and
construction, investment real estate,
inventory of construction industry) and
equipment.
(omit)
5.Right-to-use assets.
6.Creditor's rights of financial institutions
(including receivables, discounted bills
and loans, collections).
7.Derivative goods.
8.Assets acquired or disposed of in
accordance with legal mergers, divisions,
acquisitions or transfer of shares.
9.Other important assets.		 Article 3 Scope of assets
(omit)
2. Real estate (including land, housing and
construction, investment real estate,land
use rights,inventory of construction
industry) and equipment.
(omit)
5.Creditor's rights of financial institutions
(including receivables, discounted bills
and loans, collections).
6.Derivative goods.
7.Assets acquired or disposed of in
accordance with legal mergers, divisions,
acquisitions or transfer of shares.
8.Other important assets.		 1. In accordance with the
provisions of the International
Least Bulletin No. 16 of the
International Financial
Reporting Standards, add the
fifth paragraph to expand the
scope of the right to use assets
and move the current land use
rights of the second paragraph
to the fifth paragraph.
2. The current paragraphs 5 to 8
are moved to paragraphs 6 to
9.
Article 4 Definition of nouns
1. Derivative goods: Refers to thevalue of
a specific interest rate, financial
instrument price, commodity price,
exchange rate,price or rateindex,credit
rating, or credit index.Or forward
contracts, option contracts, futures
contracts, leverage contracts, and swap
contracts derived fromother variables.A
combination of the above-mentioned
contracts, or a combined contract or
structured commodity in which a
derivative product is embedded. The so-
called forward contract does not include
insurance contracts, performance
contracts, after-sales service contracts,
long-term lease contracts, and long-term
purchase (sales)contracts.
2. Assets acquired or disposed of by law,
division, acquisition or share transfer:
Merger, division, acquisition in
accordance with the Enterprise Mergers
and Acquisitions Act, the Financial
Holding Company Act, and the Financial
Institutions Merger Act or other laws The
assets obtained or disposed of, or the
issuance of new shares in accordance
with the provisions of Article 156-3of
the Company Act, the transfer of shares
of the company (hereinafter referred to as
share transfer).		 Article 4 Definition of nouns
1. Derivative goods: Refers to theforward
contract,option contract, futures contract,
leverage contract, swap contract whose
value is derived fromcommodities,such
as assets, interest rates, exchange rates,
indices or other interests, and a
combination contract of the above
products. The so-called Forward Contract
does not include insurance contracts,
performance contracts, after-sales service
contracts, long-term lease contracts and
long-term purchase (invoicing) contracts.
2. Assets acquired or disposed of by law,
division, acquisition or share transfer:
Merger, division, acquisition in
accordance with the Enterprise Mergers
and Acquisitions Act, the Financial
Holding Company Act, and the Financial
Institutions Merger Act or other laws The
assets obtained or disposed of, or the
issuance of new shares in accordance
with the provisions of Article 156
Paragraph 8of the Company Act, the
transfer of shares of the company
(hereinafter referred to as share transfer).		 1. In accordance with the
definition of Financial
Instruments No. 9 of
International Financial
Reporting Standards, amend
the scope of the derivative
goods of this Code in the first
paragraph, and slightly modify
the text.
2. In accordance with the
amendments to the Company
Act, amend "Article 156, Item
8" in the second paragraph to
"Article 156-3".

==> picture [23 x 23] intentionally omitted <==

- 42 -

Revisedprovision Currentprovision Description
(omit)
7. Investment as a professional:
refers to financial control
companies, banks, insurance
companies, ticket finance
companies, and trust companies
established in accordance with the
law and managed by local
financial authorities. Or a
securities firm that operates a
self-operated or underwriting
business, a futures dealer that
operates a self-operated business,
a securities investment trust
business, a securities investment
advisory business, and a fund
management company.
8. Stock exchange: The domestic
stock exchange refers to the
Taiwan Stock Exchange; the
foreign stock exchange refers to
any securities trading market
organized and managed by the
securities authority of the country.
9. The business premises of
securities firms: the domestic
securities firm's business premises,
which refers to the place where the
securities dealers set up counters
to conduct transactions according
to the securities trading system. A
foreign securities firm's business
premises refers to the financial
institution's business premises
managed by a foreign securities
authority and operating securities
business.
10.The term "within one year" is based on
the factual date of the transaction in
which the assets were acquired or
disposed of. The retrospective
calculation is made for one year. It has
been announced that some of the
exemptions are included.
11.The term "recent financial statements"
refers to the financial statements that
the company has publicly audited and
approved by the accountants before
obtainingor disposingof assets.		 (omit)
7. The term "within one year" is based on
the factual date of the transaction in
which the assets were acquired or
disposed of. The retrospective
calculation is made for one year. It has
been announced that some of the
exemptions are included.
8. The term "recent financial statements"
refers to the financial statements that the
company has publicly audited and
approved by the accountants before
obtainingor disposingof assets.		 3. Add the seventh paragraph,
which clearly defines the
scope of the investment as a
professional.
4. Add paragraphs 8 and 9 to
specify the scope of the stock
exchanges and securities
firms' business premises at
home and abroad.
5. The current paragraphs 7 and
8 are subject to paragraphs 10
and 11.

==> picture [23 x 23] intentionally omitted <==

- 43 -

Revisedprovision Currentprovision Description
Article 5 The amount of investment for
non-business for real estateand its right-
to-use assetsand securities
The amount of the above assets obtained
by the Company and each subsidiary is
individually as follows:
1. The total amount of real estateand its
right-to-use assetsthat are not for
business use shall not exceed 50% of
the net value.
(omit)		 Article 5 Investment of non-business for
real estate and securities
The amount of the above assets obtained
by the Company and each subsidiary
individually is as follows:
1. The total amount of real estate that is
not for business use shall not exceed
50% of the net value.
(omit)		 In accordance with the
provisions of the 16th Lease
Bulletin applicable to
International Financial Reporting
Standards, the first paragraph of
the first paragraph is amended to
include the right to use assets of
non-operating real estate in the
calculation of the limit.
Article 6
When the valuation report or the opinion
of an accountant, lawyer or securities
underwriter obtained by the company, the
professional valuer and its appraisers,
accountants, lawyers or securities
underwritersshall meet the following
requirements:
1. No violation of this Act, Company Act,
Banking Act, The Insurance Company
Act, Financial Holding Company Act,
Business Account Act. There may be
fraudulent, breach of trust,
encroachment, falsification of documents
or business crimes, subject to the
declaration of more than one year of
imprisonment. However, if it has been
executed, the probation period has
expired or the pardon has been completed
for three years, this is not the case.
2. The situation in which the party to the
transaction may not be a related person
or a person with a substantive
relationship.
3. If the company should obtain the
valuation report of more than two
professional valuers, different
professional valuers or appraisers may
not be related to each other or have
substantive relationships.
When issuing the valuation report or
opinion, the personnel of the preceding
paragraph shall handle the following
matters:
1. Before undertaking a case, personnel
should carefully assess their professional
competence, practical experience and
independence.		 Article 6
When the valuation report or the opinion
of an accountant, lawyer or securities
underwriter obtained by the company, the
professional valuer and its appraisers,
accountants, lawyers or securities
underwritersand parties to the transaction
may not be interested parties.		 1. Add the first paragraph to the
third paragraph of the first
item to clarify the negative
qualifications of relevant
experts.
2. Identify the external expert
responsibility and add the
second item to the provisions
of Article 9 of the Regulations
Governing the Preparation of
Financial Reports by
Securities Issuers. The
relevant experts of this
standard shall issue the
evaluation, check and
declaration of the valuation
report or opinion.
1.

==> picture [23 x 23] intentionally omitted <==

- 44 -

Revisedprovision Currentprovision Description
2.
3.
4.		 When checking the case, the personnel
should properly plan and implement the
appropriate operational procedures to
form a conclusion and issue a report or
opinion. The detailed procedures,
collection of information and conclusions
will be published in the case work paper.
For the source of data, parameters and
information used, personnel should
evaluate their completeness, correctness
and rationality one by one, and use this
as the basis for issuing valuation reports
or opinions.
The declarations shall include the
professionalism and independence of the
relevant personnel, the information used
for evaluation is reasonable and correct,
and the relevant acts and regulations are
followed.
Article 7 Procedures for acquisition or
disposing of immovable property or
equipment
1. Assessment and operating procedures
The acquisition or disposition of real
estate, equipmentor its right-to-use
assetsare in accordance with the
company's internal control system for
real estate, plant and equipment recycling
procedures.
2. The procedure for determining the terms
of the transaction and the amount of the
authorization
(1) When acquiring or disposing real
propertyor its right-to-use assets,
reference shall be made to the present
value of the announcement, the
assessed value, and the actual
transaction price of the adjacent real
estate. The resolution of the trading
conditions and the transaction price,
and the analysis report will be
submitted to the chairman. If the
amount is 20% of the company's
paid-in capital or NT$300 million, it
should be submitted to the chairman
of the board for approval and should
be submitted to the board of directors
for the last time. If the amount
exceeds 20% of the company's paid-
up capital or NT$300 million, it must
be approved by the board of directors.		 Article 7 Procedures for acquisition or
disposing of immovable property or
equipment
1. Assessment and operating procedures
The acquisition or disposition of real
estate and equipment are in accordance
with the company's internal control
system for real estate, plant and
equipment recycling procedures.
2. The procedure for determining the terms
of the transaction and the amount of the
authorization
(1) When acquiring or disposing real
property, reference shall be made to
the present value of the
announcement, the assessed value,
and the actual transaction price of the
adjacent real estate. The resolution of
the trading conditions and the
transaction price, and the analysis
report will be submitted to the
chairman. If the amount is 20% of
the company's paid-in capital or
NT$300 million, it should be
submitted to the chairman of the
board for approval and should be
submitted to the board of directors
for the last time. If the amount
exceeds 20% of the company's paid-
up capital or NT$300 million, it must
be approved by the board of
directors.		 1. In accordance with the
provisions of the 16th Lease
Bulletin applicable to
International Financial
Reporting Standards, the
"right to use assets" shall be
included in the provisions of
this Article.

==> picture [23 x 23] intentionally omitted <==

- 45 -

Revisedprovision Currentprovision Description
3.
4.		 (omit)
Execution unit
When the company acquires or disposes
real estate,equipmentor its right-to-use
assets,it shall be executed by the use
department and the management
department after the verification of the
prior approval authority.
Real estate or equipment valuation report
When the company acquires or disposes
of real estate, equipmentor its right-to
use-assets,it not only deals with
domesticgovernment agencies,
establishes commissions from local
governments, leases land, or acquires or
disposes of equipment for business useor
its right-to-use assets,if the transaction
amount reaches 20% of the company's
paid-up capital or NT$300 million or
more, the valuation report issued by the
professional valuer shall be obtained
before the date of the fact, and the
following provisions shall be met:
(1) For special reasons, when a limited
price, a specific price or a special
price is used as the reference basis for
the transaction price, the transaction
shall be approved by the board of
directors first;and thereafter, the
trading conditions shall be changed.
(omit)		 (omit)
(3) The company's acquisition or
disposition of assets shall be
approved by the board of directors in
accordance with the procedures or
other legal requirements. If a director
expresses dissent and has a record or
written statement, the company shall
send the director's objection
information to the supervisors. In
addition, if the company has set up
independent directors and submits or
disposes of the asset transactions to
the board of directors for discussion,
it should fully consider the opinions
of the independent directors and
include their opinions and reasons for
their consent or objection in the
minutes of the meeting.
3. Execution unit
When the company acquires or disposes
real estateorequipment, it shall be
executed by the use department and the
management department after the
verification of the prior approval
authority.
4. Real estate or equipment valuation report
When the company acquires or disposes
of real estateorequipment, it not only
deals with government agencies,
establishes commissions from local
governments, leases land, or acquires or
disposes of equipment for business use, if
the transaction amount reaches 20% of
the company's paid-up capital or NT$300
million or more, the valuation report
issued by the professional valuer shall be
obtained before the date of the fact, and
the following provisions shall be met:
(1) For special reasons, when a limited
price, a specific price or a special
price is used as the reference basis for
the transaction price, the transaction
shall be approved by the board of
directors first;and the future trading
conditions shall be changed, and shall
be handled in accordance with the
above procedures.
(omit)		 2. The item 3 of the second
paragraph and the item 1 of
the fourth paragraph are
modified in the text part to
perform the operation.
3. The item 3 provisions of the
second paragraph are moved
to Article 17.
4. Due to transactions with
foreign government agencies,
the relevant regulations and
bargaining mechanisms are
less clear, and are not covered
by this article. The provisions
of the fourth paragraph that
are limited to domestic
government agencies are
amended.

==> picture [23 x 23] intentionally omitted <==

- 46 -

Revisedprovision Currentprovision Description
Article 8 Procedures for acquisition or
disposition of securities investment,
evaluation and operating procedures
(omit)
2. The procedure for determining the terms
of the transaction and the amount of the
authorization
(omit)		 Article 8 Procedures for acquisition or
dispostion of securities investment,
evaluation and operating procedures
(omit)
2. The procedure for determining the terms
of the transaction and the amount of the
authorization
(omit)
(3) If the company acquires or disposes
of the assets according to the
prescribed processing procedures or
other legal requirements, it shall be
approved by the board of directors. If
any directors express objection and
have a record or written statement, the
company shall send the directors'
objection information to the
supervisors. In addition, if the
company has set up independent
directors and submits or disposes of
the asset transactions to the board of
directors for discussion, it should
fully consider the opinions of the
independent directors and include
their opinions and reasons for their
consent or objection in the minutes of
the meeting.
(omit)		 The provisions of item 3 of the
second paragraph are moved to
Article 17.
Article 9 Procedures for the transaction of
related parties
1. The Company and its related parties
acquire or dispose of assets. Except for
matters relating to the relevant
resolutions and the reasonableness of the
trading conditions in accordance with the
procedures of Articles 7 to 10, the
transaction amount shall be more than
10% of the total assets of the company.
The valuation report or accountant's
opinion issued by the professional valuer
shall also be obtained in accordance with
the provisions of the preceding section.
The calculation of the transaction amount
of the preceding paragraph shall be
handled in accordance with one of the
provisions of Article 10. In addition,
when judging whether the transaction
object is a related party, in addition to
paying attention to its legal form, the
substantive relationship should be
considered.		 Article 9 Procedures for the transaction of
related parties
1. The Company and its related parties
acquire or dispose of assets. Except for
matters relating to the relevant
resolutions and the reasonableness of the
trading conditions in accordance with the
procedures of Articles 7 to 10, the
transaction amount shall be more than
10% of the total assets of the company.
The valuation report or accountant's
opinion issued by the professional valuer
shall also be obtained in accordance with
the provisions of the preceding section.
The calculation of the transaction amount
of the preceding paragraph shall be
handled in accordance with one of the
provisions of Article 10. In addition,
when judging whether the transaction
object is a related party, in addition to
paying attention to its legal form, the
substantive relationship should be
considered.		 1. Make changes to the text as
appropriate.

==> picture [23 x 23] intentionally omitted <==

- 47 -

  1. Assessment and operating procedures If the company acquires from the relationship or disposes real property or its right-to-use asset to the relationship, or, the company acquires or disposes the property except real estate or its right-touse asset e and the transaction amount reaches 20% of the company's paid-in capital, 10% of total assets or NT$300 million or more. . In addition to trading domestic bonds, bonds with Reverse Repo, Repurchase Agreement, purchase or purchase of money market funds issued by domestic securities investment trusts, the following information shall be submitted to assets audit committee and the board of directors for approval. After that, the parties must sign the transaction contract and pay the payment:

2. Assessment and operating procedures If the company acquires from the relationship or disposes real property to the relationship, or, the company acquires or disposes the property except real estate and the transaction amount reaches 20% of the company's paid-in capital, 10% of total assets or NT$300 million or more. . In addition to trading domestic bonds, bonds with Reverse Repo, Repurchase Agreement, purchase or purchase of money market funds issued by domestic securities investment trusts, the following information shall be submitted to supervisor and the board of directors for approval. After that, the parties must sign the transaction contract and pay the payment:

(omit)

  1. In accordance with the provisions of the Lease Bulletin No. 16 of the International Financial Reporting Standards, the "right to use assets" shall be included in the provisions of this Article.

  2. Due to the different credits of foreign governments, the scope of exemption in the second paragraph of this Article is not yet in place, and the provisions of the second item that are limited to domestic public debts are amended.

  3. Update the relevant provisions of the Audit Committee.

(omit)

  • (3) Obtaining the real estate from the (3) Obtaining the real estate from the related party or its right-to-use asset, related party, and evaluating the and evaluating the relevant relevant information of the information of the reasonable reasonable conditions of the conditions of the predetermined predetermined trading conditions trading conditions according to the according to the provisions of Item 1 provisions of Item 1 and Item 4 in and Item 4 in Paragraph 3 of the third Paragraph 3 of the third point. point.

  • (omit)

  • Evaluation of the reasonableness of transaction costs:

  • (omit)

  • Evaluation of the reasonableness of transaction costs:

  • (1) The Company obtains real estate or (1) The Company obtains real estate from its right to use assets from related related parties and should evaluate parties, the reasonableness of the reasonableness of transaction transaction costs should be assessed costs in the following ways: in the following ways:

  • (omit)

  • (2) If the land and houses of the same subject matter are purchased or leased together, the transaction costs shall be assessed on the land and houses in accordance with any of the methods listed in the preceding paragraph.

  • (3) When the Company obtains real estate or its right to use assets from the related parties, it shall assess the cost of the real property or its right-to-use assets in accordance with the provisions of Item 1 and Item 2 in Paragraph 3 of this Article, and shall contact the accountant for review and express specific opinions.

  • (omit)

  • (2) If the land and houses of the same subject matter are purchased together, the transaction costs shall be assessed on the land and houses in accordance with any of the methods listed in the preceding paragraph.

  • (3) When the Company obtains real estate from the related parties, it shall assess the cost of the real property in accordance with the provisions of Item 1 and Item 2 in Paragraph 3 of this Article, and shall contact the accountant for review and express specific opinions.

  • (4) When the company obtains the real (4) When the company obtains the real estate or its right-of-use assets from estate from the related parties, the the related parties, the evaluation evaluation results are lower than the

==> picture [23 x 23] intentionally omitted <==

- 48 -

Revisedprovision Currentprovision Description
results are lower than the transaction
price according to the provisions of
Item 1 and Item 2 in Paragraph 3, and
shall be handled in accordance with
Item 5 in Paragraph 3. However, if
the following circumstances, and the
objective evidence and the specific
reasonable opinions of the real estate
appraisers and accountants are taken,
this is not the case:
a. (omit)
(a)(omit)
(b)The transactions of other non-
relevant persons within one year
of other floors or adjacent areas
of the same target premises are
similar in area, and the trading
conditions are equivalent to the
reasonable floor or regional price
difference as determined by the
real estate tradingor leasing
practice.
b. The Company provides evidence of
the acquisition of real estateor
leases from related parties to obtain
real estate use right assets.The
trading conditions are similar to
those of other non-relevant
transactions in the adjacent area
within one year. The so-called
trading cases in the neighboring
areas are based on the same or
adjacent street profiles and the
distance from the object of the
transaction is less than 500 meters
or the present value of the
announcement is similar. The so-
called similar area is based on the
principle that the area of other non-
relevant person transactions is not
less than 50% of the area of the
transaction subject matter. In the
so-called one year mentioned
above, one year is calculated based
on the date on which the fact that
the real estateor its right-to-use		 transaction price according to the
provisions of Item 1 and Item 2 in
Paragraph 3, and shall be handled in
accordance with Item 5 in Paragraph
3. However, if the following
circumstances, and the objective
evidence and the specific reasonable
opinions of the real estate appraisers
and accountants are taken, this is not
the case:
a. (omit)
(a)(omit)
(b)The transactions of other non-
relevant persons within one year
of other floors or adjacent areas
of the same target premises are
similar in area, and the trading
conditions are equivalent to the
reasonable floor or regional
price difference as determined
by the real estate trading
practice.
(c)For other non-relevant lease
cases within one year of the
same floor of the same subject,
the transaction conditions are
estimated to be equivalent to the
reasonable floor spreads
required by the real estate
leasing practice.
b. The Company provides evidence of
the acquisition of real estate. The
trading conditions are similar to
those of other non-relevant
transactions in the adjacent area
within one year. The so-called
trading cases in the neighboring
areas are based on the same or
adjacent street profiles and the
distance from the object of the
transaction is less than 500 meters
or the present value of the
announcement is similar. The so-
called similar area is based on the
principle that the area of other non-
relevant person transactions is not
less than 50% of the area of the
transaction subject matter. In the
so-called one year mentioned
above, one year is calculated based
on the date on which the fact that
the real estate was acquired.		 5. (3) of the first sub-item of
Item 4 is merged to (2) of the
first sub-item of Item 4.

==> picture [23 x 23] intentionally omitted <==

- 49 -

Revisedprovision Currentprovision Description
(5)
(6)		 assetwas acquired.
If the company obtains the real
propertyor its right-to-use assetsfrom
the related parties, if the evaluation
results are lower than the transaction
price according to the provisions of
articles 1 and 2 of the third paragraph,
the following matters shall be
handled. In addition, the Company
and the publicly issued company that
evaluates the investment in the
Company by the equity method,
including the special surplus reserve,
shall be entitled to the depreciation
loss or the disposalor terminationof
the lease or the appropriate
compensation for the assets purchased
or leased at a high price.Or restore
the original state.Or, there is other
evidence to determine that there is no
unreasonable, and the special surplus
reserve is used after the FSC agrees.
a. The Company shall provide a
special reserve for the difference
between the transaction price of the
real property or its right-of-use
asset and the estimated cost, and
shall not assign or transfer the
capital allotment in accordance
with the provisions of Article 41,
Paragraph 1, of the Securities
Exchange Act. Investors who
evaluate the company's investment
using the equity method, if it is a
public offering company, should
also provide a special reserve for
the proposed amount in accordance
with the provisions of Article 41,
Paragraph 1, of the Securities
Exchange Act.
b. Theindependent directors who
have set up an audit committee
shall proceed in accordance with
the provisions of Article 218 of the
Company Act.
(omit)
If the company obtains real estateor
its right-to-use assetsfrom the related
parties, one of the following
circumstances shall be handled in
accordance with the provisions of the
first and second paragraphs of this
article regarding the assessment and
operationalprocedures. This		 (5) If the real estate obtained by the
company from the related party is
lower than the transaction price
according to the items 1 and 2 of the
third paragraph of this point, the
following matters shall be handled. In
addition, the Company and the
publicly issued company that
evaluates the investment in the
Company by the equity method,
including the special reserve, shall be
entitled to the depreciation loss or
disposition of the asset purchased at a
high price or to be properly
compensated or reinstated. Or wait
until there is other evidence and
determine that there is no
unreasonable, and the special reserve
is used after the approval of the FSC.
a. The Company shall provide a
special reserve for the difference
between the transaction price of the
real property and the estimated
cost, and shall not assign or transfer
the capital allotment in accordance
with the provisions of Article 41,
Paragraph 1, of the Securities
Exchange Act. Investors who
evaluate the company's investment
using the equity method, if it is a
public offering company, should
also provide a special reserve for
the proposed amount in accordance
with the provisions of Article 41,
Paragraph 1, of the Securities
Exchange Act.
b. Thesupervisorshall proceed in
accordance with the provisions of
Article 218 of the Company Act.
(omit)
(6) If the company obtains real estate
from the related parties, one of the
following circumstances shall be
handled in accordance with the
provisions of the first and second
paragraphs of this article regarding
the assessment and operational
procedures. This condition

==> picture [23 x 23] intentionally omitted <==

- 50 -

Revisedprovision Currentprovision Description
condition does not apply to the
assessment of the reasonableness of
transaction costs in Item 1, 2, 3 of the
third paragraph:
(omit)
d. The Company and its parent company,
its subsidiaries, or its subsidiaries that
directly or indirectly hold 100% of the
issued shares or total capital, acquire
the real estate use right assets for
business use.
(omit)		 does not apply to the assessment of the
reasonableness of transaction costs in
Item 1, 2, 3 of the third paragraph:
(omit)		 6. The Company and the parent
company, subsidiaries, or
subsidiaries directly or
indirectly held by 100% of
each other, due to the overall
planning of the business, have
the possibility of collective
leasing of real estate and sub-
lease. Moreover, the risk of
non-conventional transactions
in the above transactions is
relatively low, so the fourth
sub-item of item 6 is added,
and the requirement that the
transaction should be
evaluated for the
reasonableness of transaction
costs in accordance with this
article is excluded (The price
at which the related person
obtains the real estate
transaction price or the leased
real estatepayment).
Article 10 Procedures for obtaining or
disposing of intangible assetsor their
right to use assets or membership
certificates
1. Assessment and operating procedures
The Company obtains or disposes of
intangible assetsor their right-to-use
assetsor membership certificates, and is
handled in accordance with the internal
control system of the Company's internal
control system for real estate, plant and
equipment.
2. The procedure for determining the terms
of the transaction and the amount of the
authorization
(omit)
(2) Obtaining or disposing of intangible
assetsor its right-to-use assetsto use
shall refer to the expert evaluation
report or the market fair market price
resolution trading conditions and
transaction price, and make an
analysis report to report to the
chairman. If the amount is less than
NT$30 million (inclusive), it should
be submitted to the chairman for
approval. If the amount exceeds
NT$10,000, it must be approved by
the board of directors.		 Article 10 Procedures for obtaining or
disposing of membership certificates or
intangible assets
1. Assessment and operation procedures
The Company obtains or disposes of
membership certificates or intangible
assets, and is handled in accordance with
the internal control system of the
Company's internal control system for
real estate, plant and equipment.
2. The conditions for the transaction and the
decision procedure for the amount of
authorization
(omit)
(2) Obtaining or disposing of intangible
assets to use shall refer to the expert
evaluation report or the market fair
market price resolution trading
conditions and transaction price, and
make an analysis report to report to
the chairman. If the amount is less
than NT$30 million (inclusive), it
should be submitted to the chairman
for approval. If the amount exceeds
NT$10,000, it must be approved by
the board of directors.		 1. The reason for the amendment
is the same as the explanations
1 and 2 of Article 7.

==> picture [23 x 23] intentionally omitted <==

- 51 -

Revisedprovision Currentprovision Description
3.
4.		 Execution unit
If the company acquires or disposes
intangible assetsor their right to use
assets or membership certificates, it shall
be executed by the management
department and the financial accounting
department after the delegation of
authorization.
Expert assessment report on intangible
assets or their right to use assets
If the transaction amount of the
company's acquires or disposes intangible
assetsor its right-of-use assetsreaches
20% of the company's paid-in capital or
NT$300 million, in addition to
transactions withdomesticgovernment
agencies, it should be requested before the
factual date. The accountant expressed his
opinion on the reasonableness of the
transaction price. Accountants should also
follow the twentieth tenth of Statements
on Auditing Standards issued by the
Accounting Research and Development
Foundation.
(3) The handling procedures or other acts
and regulations in accordance with
the company in order to acquire or
dispose of the assets shall be
approved by the board of directors. If
a director expresses dissent and has a
record or written statement, the
company shall send the director's
objection information to the
supervisors. In addition, if the
company has set up independent
directors and submits transactions for
acquisition or disposing of assets to
the board of directors for discussion,
it should fully consider the opinions
of the independent directors and
include their opinions and reasons for
their consent or objection in the
minutes of the meeting.
3. Execution unit
If the company acquires or disposes
membership certificates or intangible
assets, it shall be executed by the
management department and the
financial accounting department after the
delegation of authorization.
4. Expert assessment report on membership
card or intangible assets
If the transaction amount of the
company's acquires or disposes
membership certificates or intangible
assets reaches 20% of the company's
paid-in capital or NT$300 million, in
addition to transactions with government
agencies, it should be requested before
the factual date. The accountant
expressed his opinion on the
reasonableness of the transaction price.
Accountants should also follow the
twentieth tenth of Statements on Auditing
Standards issued by the Accounting
Research and Development Foundation.		 (3) 2. The provisions of item 3 of the
second paragraph are moved
to Article 17.

==> picture [23 x 23] intentionally omitted <==

- 52 -

Revisedprovision Currentprovision Description
Article 12 Procedures for acquisition or
disposition of derivative goods
1. Principles and guidelines for trading
(1) Types of transactions
a.The derivative financial products
engaged by the company refer to
the specific interest rate, financial
instrument price, commodity price,
exchange rate, price or rate index,
credit rating, or credit index, or,
Forward Contract, Option contract,
Futures contract, Leverage
contract, and swap contract derived
from other variables and based on
the combination of the above-
mentioned contracts, or a
combination contract or structured
product in which derivative goods
are embedded. The so-called
forward contract does not include
insurance contracts, performance
contracts, after-sales service
contracts, long-term lease
contracts, and long-term (sales)
purchase contracts.
(omit)
(3) Division of powers and
responsibilities
(omit)
c. Authorization decision authority for
derivative goods
(omit)
(omit)		 Article 12 Procedures for acquisition or
disposition of derivative goods
1. Principles and guidelines for trading
(1) Types of transactions
a. The derivative financial products
engaged by the company refer to
assets, interest rates, exchange
rates, indices or other interests.
(Like Forward Contracts such as
Forward Contract, options, futures,
interest rates or exchange rates,
exchanges, and composite contracts
of the above commodities, etc.).
(omit)
(3) Division of powers and
responsibilities
(omit)
c. Authorization decision authority
for derivative goods
(omit)
(c) The handling procedures or other
acts and regulations in accordance
with the company in order to
acquire or dispose of the assets
shall be approved by the board of
directors. If a director expresses
dissent and has a record or written
statement, the company shall send
the director's objection information
to the supervisors. In addition, if
the company has set up
independent directors and submits
transactions for acquisition or
disposing of assets to the board of
directors for discussion, it should
fully consider the opinions of the
independent directors and include
their Opinion and reasons for their
consent or objection in the minutes
of the meeting.
(omit)		 1. In conjunction with Article 4,
amend the definition of the
derivative goods of item 1 of
the first paragraph.
2. The third sub-item of item 3 of
the third paragraph is moved
to Article 17.

==> picture [23 x 23] intentionally omitted <==

- 53 -

Revisedprovision Currentprovision Description
3. Internal audit system
(1) Internal auditors should regularly
understand the admissibility of internal
control of derivative commodity
transactions, and check the compliance
of the trading department on the
transaction procedures for derivative
commodity transactions and analyze
the trading cycle on a monthly basis to
make an audit report. If major
violations are found, notify theAudit
Committee in writing.
(omit)		 3. Internal audit system
(1) Internal auditors should regularly
understand the admissibility of internal
control of derivative commodity
transactions, and check the compliance
of the trading department on the
transaction procedures for derivative
commodity transactions and analyze the
trading cycle on a monthly basis to
make an audit report. If major
violations are found, notify the
supervisorin writing.
(omit)		 3. The item 3 of the third
paragraph is newly added. If
the independent directors have
been set up according to law,
the independent directors
should also be notified in
writing for the discovery of
major derivative goods
violations.
4. Add item 4 of the third
paragraph, the company that
has set up the audit committee,
and notify the audit committee
in writing if it finds a major
derivativeproduct violation.
Article 14 Information disclosure procedures
1. The project should be announced and the
reporting standard should be announced.
(1) When acquiring or disposing the real
propertyor its right-of-use assetsto the
person concerned, or with the
relationship person to obtain or
dispose of the real property or its
right-of-use assetsother than the
assets it uses, but the transaction
amount reaches 20% of the
company's paid-up capital, 10% of
the total assets or NT$300 million.
However, the trading ofdomestic
bonds, repurchase agreement, and
reverse repo bonds, purchase or
purchase of money market funds
issued by domestic securities
investment trusts are not limited.
(omit)
(3) The maximum amount of all or
individual contract losses stipulated in
the procedures for handling derivative
goods losses.
(4) Acquisition and disposition of
equipment for use in businessor its
right-to-use assets,and the transaction
object is not related to the transaction,
the transaction amount of NT$500
million or more.
(omit)
(6) Real estate is obtained by self-use land
construction, land lease construction,
joint housing construction, profit
sharing, and separate sales. And the
transaction object is non-relationship,
and the company expects the
transaction amount to reach NT$500
million.		 Article 14 Information disclosure procedures
1. The project should be announced and the
reporting standard should be announced.
(1) When acquiring or disposing the real
property to the person concerned, or
with the relationship person to obtain
or dispose of the real property other
than the assets it uses, but the
transaction amount reaches 20% of
the company's paid-up capital, 10%
of the total assets or NT$300 million.
However, the trading of bonds,
repurchase agreement, and reverse
repo bonds, purchase or purchase of
money market funds issued by
domestic securities investment trusts
are not limited.
(omit)
(3) The maximum amount of all or
individual contract losses stipulated in
the procedures for handling derivative
goods losses.
(4) Acquisition and disposition of
equipment for use in business, and the
transaction object is not related to the
transaction, the transaction amount of
NT$500 million or more.
(omit)
(6) Real estate is obtained by self-use land
construction, land lease construction,
joint housing construction, profit
sharing, and separate sales. The
company expects to invest NT$500
million or more.		 1. In accordance with the
provisions of the 16th Lease
Bulletin applicable to
International Financial
Reporting Standards, the right-
of-use assets are included in the
provisions of this Article.
2. Item 1 of the first paragraph and
the first sub-item of Item 7 of
the first paragraph are not
subject to exemption due to
foreign government debts. The
amendments are limited to
domestic bonds.
3. The item 3 of the first
paragraph is subject to text
correction.
4. The item 6 of the first
paragraph regulates non-
relevant transactions and is
subject to revision.

==> picture [23 x 23] intentionally omitted <==

- 54 -

Revisedprovision Currentprovision Description
(7) In addition to the asset trading of the
first six items, financial institutions
disposing of creditor's rights or
investing in mainland China, the
transaction amount shall reach 20% of
the company's paid-in capital or
NT$300 million. However, the
following situations are not limited to
this:
a. Buying and sellingdomesticbonds.
b. Take investment as a professional,
buy or sell securities of securities at
the stock exchanges of securities
companies or securities firms, or
subscribe for common corporate
bonds issued in the domestic
primary market and general
financial bonds not involving equity
(excluding secondary subordinated
debt) that do not involve equity. Or
take out or buy back a securities
investment trust or futures trust
fund. Or securities dealers who are
required by the underwriting
business to serve as a listed
company at the emerging stock
market, recommend securities firms
to subscribe for securities under the
Taipei Exchange.
(omit)
(8) (omit)
a. (omit)
b. (omit)
c. Accumulate the amount of
acquisition and disposition
(Acquisition and disposition
separately) in the same development
plan for real estateor its right-to-use
assetswithin one year.
(omit)		 (7) In addition to the asset trading of the
first six items, financial institutions
disposing of creditor's rights or
investing in mainland China, the
transaction amount shall reach 20% of
the company's paid-in capital or
NT$300 million. However, the
following situations are not limited to
this:
a. Buying and selling bonds.
b. Take investment as a professional,
buy or sell securities of securities at
the stock exchanges of securities
companies or securities firmsat
home or abroad,or subscribe for
common corporate bonds issued in
the domestic primary market and
general financial bonds not
involving equity. Or securities
dealers who are required by the
underwriting business to serve as a
listed company at the emerging
stock market, recommend securities
firms to subscribe for securities
under the Taipei Exchange.
(omit)
(8) (omit)
a. (omit)
b. (omit)
c. Accumulate the amount of
acquisition and disposition
(Acquisition and disposition
separately) in the same development
plan for real estate within one year.
(omit)		 5. The second sub-item of item 7
of the first paragraph has a
higher risk of considering the
secondary order bond, and the
general financial bond that does
not involve the equity of the
ordinary corporate bond is not
included in the subordinated
bond.

==> picture [23 x 23] intentionally omitted <==

- 55 -

Revisedprovision Currentprovision Description
Article 17 Implementation and revision
After the approval of the board of directors,
the company's "The procedures for
acquisition or disposal of assets" was
approved by theAudit Committeeand
reported to the shareholders' meeting.The
same applies to the amendment. If a director
expresses objection and has a record or
written statement, the company shall send the
director's objection information toAudit
Committee and reported to the shareholders'
meeting.The independent directors have been
set up to consider the opinions of the
independent directors when reporting the
"The procedures for acquisition or disposal of
assets" to the board of directors for
discussion. If an independent director has
objections or reservations, it should be stated
in theproceedings of the board of directors.		 Article 17 Implementation and revision
After the approval of the board of directors,
the company's "The procedures for
acquisition or disposal of assets" was sent to
thesupervisorsand submitted to the
shareholders' meeting for approval. The same
applies to the amendment. If a director
expresses dissent and has a record or written
statement, the company shall send the
director's objection information to the
supervisors.In addition, if the company has
set up an independent director, the "The
procedures for acquisition or disposal of
assets" should be fully considered in the
discussion of the board of directors, and the
opinions and reasons of their consent or
objection should be included in the minutes.		 Revised the relevant provisions of
the Audit Committee.

==> picture [23 x 23] intentionally omitted <==

- 56 -

【 Attachment 9 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

“Loaning Other Party's Operating Procedures” revised before and after the provisions of the table and description

Revisedprovision Revisedprovision Currentprovision Currentprovision Description
3.4 The date of occurrence of the facts
referred to in this operating procedure
refers to the date of the signing date, the
date of payment, the resolution date of the
board of directors or other date on which
the funds are fully determined and the
date and the amount of the money are
determined.		 3.4 The date of occurrence of the facts
referred to in this operating procedure
refers to the date of thetransaction
signing date, the date of payment, the
resolution date of the board of directors or
other date on whichthe transaction object
and transaction amount are determined.		 Considering the loan of funds, it
is not a transactional nature, so
the text is modified as
appropriate.
4.1 FinancialAccountingDepartment: The
proposal for the revision of this Procedure
and the supervisory execution unit.		 4.1 Finance Department: The proposal for the
revision of this Procedure and the
supervisory execution unit.		 Revise the management unit of
the Procedure.
5.1.1 (omit)
5.1.1.1(omit)
5.1.1.2(omit)		 5.1.1 (omit)
1> (omit)
2> (omit)		 Change the item number.
5.1.2 Illustrated (omit) 5.1.2 5.1.1Illustrated (omit) Delete the item number.
5.1.3 The company directly and indirectly
holds 100% of the voting shares of
foreign companies, engaged in capital
loans,or the company directly and
indirectly holds 100% of the voting
shares of the foreign companies
engaged in the company's funds, is not
subject to 5.1.1.2. However, it should
still set the limit and term of the loan for
funds in accordance with 5.3 and 5.4.		 5.1.3 The company directly and indirectly
holds 100% of the voting shares of
foreign companies, engaged in capital
loans, is not subject to 5.1.1 2>
However, it should still set the limit and
term of the loan for funds in accordance
with 5.3 and 5.4.		 In cooperation with FSC, the
foreign companies that directly
and indirectly hold 100% of the
voting shares of the public issuing
company are engaged in the loan
of the publicly issued company,
and are not subject to the net
value of 40% and one year limit.
5.1.4 If the person in charge of the company
violates the provisions of 5.1.1, it shall
be responsible for the return of the loan
with the borrower. If the company
suffers damage, it should also be liable
for damages.		 This provision is added in
accordance with the second
paragraph of Article 15 of the
Company Act.
5.2.2 (omit)
5.2.2.1(omit)
5.2.2.2(omit)		 5.2.2 (omit)
1> (omit)
2> (omit)		 Change the item number.
5.4.2 Interest-bearing method: The capital
loan and interest rate shall be subject to
the deposit and interest rate of the
company in the financial institution,and
shall be submitted to the board of
directors for approval after being
formulated by the Financial Accounting
Department.		 5.4.2 Interest-bearing method: The capital
loan and interest rate shall be subject to
the deposit and interest rate of the
company in the financial institution.In
case of special circumstances, it may be
adjusted according to the actual
situation after the supervisor has agreed
and sent to the board of directors for
approval.		 The fund loan and interest rate
revision shall be submitted to the
board of directors for approval
by the Finance and Accounting
Department according to the
company's deposit and loan
interest rate tax standards.

==> picture [23 x 23] intentionally omitted <==

- 57 -

Revisedprovision Currentprovision Description
5.5.1 Before the company lends the
company's funds to others, it should
carefully evaluate whether it meets the
requirements of Processing Guidelines
and the Procedure, and submits the
results of the evaluation of 5.6 to the
board of directors for resolution, and
may not authorize others to decide.		 5.5.1 Before the company lends the
company's funds to others, it should
carefully evaluate whether it meets the
requirements of Processing Guidelines
and the Procedure, and submits the
results of the evaluation of 5.6 to the
board of directors for resolution, and
may not authorize others to decide.
However, major capital loans and loans
shall be obtained after the relevant
regulations have been approved by the
supervisor and sent to the board of
directors for approval.		 The unit for the approval of the
fund loan and the approval
decision is the board of directors.
If it is necessary to delete the
requirement that the supervisor
must agree in advance.
5.5.3 If the borrower applies for a loan from
the company, an application form
should be issued. The application shall
be detailed in the amount of the loan,
the term, the purpose, the guarantee
provided, and other matters specified in
the company. The borrower should also
provide basic information and financial
information, and the contractor should
transfer the financialaccounting
department of the company to handle
the credit investigation.		 5.5.3 If the borrower applies for a loan from
the company, an application form
should be issued. The application shall
be detailed in the amount of the loan,
the term, the purpose, the guarantee
provided, and other matters specified in
the company. The borrower should also
provide basic information and financial
information, and the contractor should
transfer the financial department of the
company to handle the credit
investigation.		 Revise the management unit of
the Procedure.
5.5.4 After the credit investigation and
evaluation, if the borrower's credit
rating is not good, the loan will not be
released. The handling personnel should
report the loan and reply to the borrower
as soon as possible. For credit
information and those who agree to lend
after evaluation, the handling personnel
shall fill out the credit report and review
opinions, and submit them to the board
of directors for approval.
In the case of continuing borrowers, in
principle, the credit investigation should
be re-applied when making an
application for renewal.		 5.5.4 After the credit investigation and
evaluation, if the borrower's credit
rating is not good, the loan will not be
released. The handling personnel should
report the loan and reply to the borrower
as soon as possible. For credit
information and those who agree to lend
after evaluation, the handling personnel
shall fill out the credit report and review
opinions, and submit them to the board
of directors for approval.
The Company has set up independent
directors and should fully consider the
opinions of independent directors and
include the reasons for their consent or
objection and the reasons for objection
in the records of the board of directors.
In the case of continuing borrowers, in
principle, the credit investigation should
be re-applied when making an
application for renewal.		 The second item of this article
was moved to 5.5.7.
5.5.7 When the company handles the loan, it
should fully consider the opinions of
independent directors. If an independent
director has objections or reservations, it
should be stated in the minutes of the
board meeting.		 This clause is moved from the
second item of 5.5.4 to 5.5.7 and
is in accordance with Article 14-
3 of the Securities Exchange
Act.

==> picture [23 x 23] intentionally omitted <==

- 58 -

Revisedprovision Currentprovision Description
5.7.2 The borrower shall repay the principal
and interest upon expiration of the loan.
If there is still a need for the follow-up,
you may apply for renewal of the
extension once, and after the resolution
of the board of directors has passed, re-
applythe relevantprocedures.		 5.7.2 Before the borrower expires, if the
borrower still needs it, he may apply for
renewal of the extension once.After the
resolution of the board of directors was
passed, the relevant procedures were re-
applied.		 Amended in accordance with the
thirty-fourth question of the
"Question of Governing Loaning
of Funds and Making of
Endorsements/Guarantees by
Public Companies".
5.10 When the company handles capital
loans and matters, a checklist should be
established. The content should be
published for inspection in accordance
with the target of the fund loan, the
amount, the date of the board of
directors, the date of the fund loan and
the criteria that should be carefully
assessed in accordance with5.6.		 5.10 When the company handles capital
loans and matters, a checklist should be
established. The content should be
published for inspection in accordance
with the target of the fund loan, the
amount, the date of the board of
directors, the date of the fund loan and
the criteria that should be carefully
assessed in accordance withthe first
paragraph of the preceding article.		 Amend the article number.
5.11 The internal auditors of the company
shall, at least quarterly, audit the funds
and other people's operating procedures
and their implementation, and make a
written record. If a major violation is
discovered,the audit committeeshall
be notified in writing.		 5.11 The internal auditors of the Company
shall, at least quarterly, audit the funds
and other people's operating procedures
and their implementation, and make a
written record. If a major violation is
found,each supervisorshould be
notified in writing.		 In order to establishment of an
audit committee to amend the
Loaning Other Party's Operating
Procedures.
5.12 If the company changes its status and
the loan does not meet the requirements
of the operating procedures or the
balance exceeds the limit, an
improvement plan shall be made, and
the relevant improvement plan shall be
sent tothe audit committeeand
completed according to the planning
schedule.		 5.12 If the company changes its status and
the loan does not meet the requirements
of the operating procedures or the
balance exceeds the limit, an
improvement plan shall be made, and
the relevant improvement plan shall be
sent tothe supervisorand completed
according to the planning schedule.		 In order to establishment of an
audit committee to amend the
Loaning Other Party's Operating
Procedures.
5.13.2 (omit)
5.13.2.1(omit)
5.13.2.2(omit)
5.13.2.3(omit)		 5.13.2 (omit)
1> (omit)
2> (omit)
3> (omit)		 Change the item number.
6.1 The Loaning Other Party's Operating
Procedures set by the company shall be
approved by the Audit Committee and the
board of directors. Then reported to the
shareholders'meeting for approval.If the
directors express objection and have a
record or written statement, the company
shall send the objection to theAudit
Committee.And to report to the
shareholders meeting for discussion, the
same applies to the amendment.		 6.1 The Loaning Other Party's Operating
Procedures set by the company shall be
approved by the board of directors. Then
sent to supervisors and reported to the
shareholders'meeting for approval.If the
directors express objection and have a
record or written statement, the company
shall send the objection to thesupervisors.
And to report to the shareholders meeting
for discussion, the same applies to the
amendment.		 In order to establishment of an
audit committee to amend the
Loaning Other Party's Operating
Procedures.
6.2 The Company has set up independent
directors to fully report the opinions of
each independent director when
submitting the fund loan and other
people's operating procedures to the
board of directors in accordance with
6.1, the opinions of each independent
director should be fully considered.If an
independent director has objections or
reservations, it should be stated in the
minutes of the board meeting.		 6.2 The Company has set up independent
directors to fully report the opinions of
each independent director when
submitting the fund loan and other
people's operating procedures to the
board of directors in accordance with
6.1, the opinions of each independent
director should be fully consideredand
include the reasons for their consent or
objection and the reasons for objection
in the board record.		 Adjust the text of this section in
accordance with Article 14-3 of
the Securities Exchange Act.

==> picture [23 x 23] intentionally omitted <==

- 59 -

Chuwa Wool Industry Co., (Taiwan) Ltd.

"Endorsement Guaranteed Operating Procedures" revised before and after the provisions of the table and description

Revisedprovision Revisedprovision Currentprovision Description
3.4 The date of occurrence of the facts
referred to in this operating procedure
refers to the date of the signing date, the
date of payment, the resolution date of
the board of directors, or other date on
whichthe endorsement object and the
amount of theendorsementare
determined.		 3.4 The date of occurrence of the facts
referred to in this operating procedure
refers to the date of signing of the
transaction,the date of payment, the
resolution date of the board of directors,
or other date on which the transaction
object and thetransactionamount are
determined.		 Consideration of the endorsement
guarantee is not a transactional
nature, and the text is modified as
appropriate.
4.1 FinancialAccountingDepartment: The
proposal for the revision of this
operating procedure and the supervisory
execution unit.		 4.1 Finance Department: The proposal for
the revision of this operating procedure
and the supervisory execution unit.		 Revise the management unit of
this operating procedure.
5.1 (omit)
5.1.1(omit)
5.1.2(omit)
5.1.3(omit)
5.1.4(omit)
5.2 (omit)
5.2.1(omit)
5.2.2(omit)
5.2.3(omit)
5.2.4(omit)
5.3 (omit)
5.3.1 (omit)
5.3.1.1(omit)
5.3.1.2(omit)：
5.3.1.3(omit)：
5.3.1.4(omit)：
5.3.1.5(omit)：
5.3.1.6(omit)：
5.3.1.7 (omit)：		 5.1 (omit)
1> (omit)
2> (omit)
3> (omit)
4> (omit)
5.2 (omit)
1> (omit)
2> (omit)
3> (omit)
4> (omit)
5.3 (omit)
5.3.1 (omit)
1> (omit)
2> (omit)
3> (omit)
4> (omit)
5> (omit)
6> (omit)
7> (omit)		 Change the item number.
5.3.1.4Endorsement guarantee procedure
(1) (omit)
(2) (omit)
(3) (omit)
(4) (omit)
(5) The financialaccountingdepartment
shall, at any time, deactivate the
endorsement guarantee ticket into the
“endorsement guarantee checklist”,
thereby reducing the accumulated
endorsementguarantee amount.		 4>Endorsement guarantee procedure
(1) (omit)
(2) (omit)
(3) (omit)
(4) (omit)
(5) The financial department shall, at any
time, deactivate the endorsement
guarantee ticket into the
“endorsement guarantee checklist”,
thereby reducing the accumulated
endorsementguarantee amount.		 Revise the management unit of
this operating procedure.
5.3.1.5(omit)：
5.3.1.6(omit)：
5.3.1.7 (omit)：		 5> (omit)
6> (omit)
7> (omit)		 Change the item number.

==> picture [23 x 23] intentionally omitted <==

- 60 -

Revisedprovision Revisedprovision Revisedprovision Currentprovision Description
5.3.1.8 Decision and authorization level
(1) When the company handles the
endorsement guarantee, it shall be
approved by the board of directors.
However, in order to meet the needs of
timeliness, the board of directors may
authorize the chairman to conduct and
decide within a certain amount, and then
report to the board of directors for the
most recent period.
(2) For the subsidiaries that directly or
indirectly hold more than 90% of the
voting shares, according to the provisions
of 5.2.2,before the endorsement
guarantee, the company should report it
to the board of directors of the company.
However, the inter-company
endorsement guarantees of 100% of the
company's direct and indirect voting
shares, except for this.
(3) If the company guarantees endorsements
that exceed the endorsement guarantee
limit due to business needs, it shall be
approved by the board of directors and
by more than half of the directors named.
The procedure should be amended and
reported to the shareholders meeting for
ratification. When the shareholders
disagree, they should plan to eliminate
the overruns within a certain period of
time.In the discussion of the board of
directors of the preceding paragraph, the
opinions of the independent directors
should be fully considered and the
reasons for the express opinions and
objections of their consent or objection
should be included in the records of the
board of directors.		 8>Decision and authorization level
(1) When the company handles the
endorsement guarantee, it shall be
approved by the board of directors.
However, in order to meet the needs of
timeliness, the board of directors may
authorize the chairman to conduct and
decide within a certain amount, and then
report to the board of directors for the
most recent period.However, the more
important endorsement guarantees shall
be carried out only after the relevant
regulations have been approved by the
supervisor and sent to the board of
directors for approval.
(2) For the subsidiaries that directly or
indirectly hold more than 90% of the
voting shares, according to the provisions
of 5.2.1>,before the endorsement
guarantee, the company should report it
to the board of directors of the company.
(3) If the company has an endorsement
guarantee, if it exceeds the endorsement
guarantee limit due to business needs, it
shall be approved by thesupervisor and
sent tothe board of directors for approval
and by more than half of the directors to
give their names. And, the operating
procedures should be revised and
reported to the shareholders meeting for
ratification. When the shareholders
disagree, they should plan to eliminate
the overruns within a certain period of
time.		 1. The approved decision-making
unit of the endorsement of the
first paragraph of this Article
shall be the board of directors,
and the provisions for the prior
consent of the supervisor shall
be deleted.
2. Amended the applicable
paragraph number of the
second paragraph of the
article. In accordance with
Article 5, Paragraph 2 of the
Regulations Governing
Loaning of Funds and Making
of Endorsements/Guarantees
by Public Companies, the
provisions for endorsement
guarantees between 100% of
the company's direct and
indirect voting shares are
added.
3. The provisions for the prior
consent of the supervisor shall
be deleted. In accordance with
the provisions of Article 19,
Paragraph 2 of the Regulations
Governing Loaning of Funds
and Making of
Endorsements/Guarantees by
Public Companies, the
opinions of independent
directors shall be considered.
5.3.1.9 (omit) 9> (omit) Change the item number.
5.3.1.10 When the Company endorses the
guarantees of others, it shall fully
consider the opinions of the independent
directors and include the reasons for their
unanimous opinions and objections to the
Board of Directors.		 Adjust the text of this section in
accordance with Article 14-3 of
the Securities Exchange Act.
unanimous opinions and objections to the

Board of Directors.

==> picture [23 x 23] intentionally omitted <==

- 61 -

Revisedprovision Revisedprovision Revisedprovision Revisedprovision Currentprovision Currentprovision Description
5.3.2 The Company shall establish a
checklist for the endorsement of the
endorsement, according to the
endorsement object, the amount, the
date of the board of directors or the
chairman's decision, the endorsement
date and the items that should be
carefully evaluated in accordance with
5.3.1.5, and shall be published for
reference.		 5.3.2 The Company shall establish a
checklist for the endorsement of the
endorsement, according to the
endorsement object, the amount, the
date of the board of directors or the
chairman's decision, the endorsement
date and the items that should be
carefully evaluated in accordance with
5.3.1 5>,and shall be published for
reference.		 Change the item number.
5.3.3 The internal auditors of the company
shall at least quarterly audit the
endorsement to ensure the operating
procedures and their implementation,
and make a written record. If a major
violation is found, theaudit committee
shall be notified in writing.		 5.3.3 The internal auditors of the company
shall at least quarterly audit the
endorsement to ensure the operating
procedures and their implementation,
and make a written record. If a major
violation is found, thesupervisorshall
be notified in writing.		 In order to strengthen corporate
governance, independent directors
should be notified in writing of
the status and issues of major
violations in the endorsement.
5.3.4 If the company's endorsement
guarantee object does not meet the
requirements of this operating
procedure or the amount exceeds the
limit due to the change of status, the
improvement plan shall be formulated.
The relevant improvement plans were
sent to the audit committee,and the
improvement was completed according
to the schedule.		 5.3.4 If the company's endorsement
guarantee object does not meet the
requirements of this operating
procedure or the amount exceeds the
limit due to the change of status, the
improvement plan shall be formulated.
The relevant improvement plans were
sent to thesupervisor,and the
improvement was completed according
to the schedule.		 In order to strengthen corporate
governance, independent
directors should be notified in
writing of the status and issues
of major violations in the
endorsement.
5.4 (omit)
5.4.1 (omit)
5.4.2 (omit)
5.4.2.1 (omit)
5.4.2.2(omit)		 5.4 (omit)
5.4.1 (omit)
5.4.2 (omit)
1>(omit)
2> (omit)		 Change the item number.
5.4.2.3 The company and its subsidiaries
endorse the single company to ensure
that its balance reaches NT$10 million or
more. And the endorsement guarantee,
the investment book amount and the fund
loan balance ofEquity Methodare up to
30% of the company'slatest financial
statements.		 3> The company and its subsidiaries endorse
the single company to ensure that its
balance reaches NT$10 million or more.
And its endorsement guarantee,long-
terminvestment and fund loan and
balance totaled more than 30% of the
company'smost recent financial
statement.		 In order to clarify the definition of
long-term investment, the text of
this article shall be amended in
accordance with the provisions of
Article 9, paragraph 4, item 1 of
the Regulations Governing the
Preparation of Financial Reports
bySecurities Issuers.
5.4.2.4(omit) 4> (omit) Change the item number.
When the subsidiary of the company is
not a domestic public issuance company,
if the subsidiary has an issue to be
announced in the5.4.2.4of the
preceding paragraph, it shall be carried
out bythe company.		 When the subsidiary of the company is
not a domestic public issuance company,
if the subsidiary has an issue to be
announced in theitem 4of the preceding
paragraph, it shall be carried out by the
company.		 Change and Correct the item
number.

==> picture [23 x 23] intentionally omitted <==

- 62 -

Revisedprovision Currentprovision Description
6.1 The Endorsement Guaranteed Operating
Procedures set by the company shall be
approved by the Audit Committee and the
board of directors. Then reported to the
shareholders'meeting for approval.If the
directors express objection and have a
record or written statement, the company
shall send the objection to theAudit
Committee.And to report to the
shareholders meeting for discussion, the
same applies to the amendment.		 6.1 The Endorsement Guaranteed Operating
Procedures set by the company shall be
approved by the board of directors. Then
sent to supervisors and reported to the
shareholders'meeting for approval.If the
directors express objection and have a
record or written statement, the company
shall send the objection to thesupervisors.
And to report to the shareholders meeting
for discussion, the same applies to the
amendment.		 In order to establishment of an
audit committee to amend the
Endorsement Guaranteed
Operating Procedures.
6.2 The company has set up independent
directors. When the endorsement
guarantee operating procedures are
submitted to the board of directors for
discussion in accordance with the
provisions of the preceding paragraph,
the opinions of the independent directors
should be fully considered.If there is
any objection or reservation from an
independent director, it should be stated
in the proceedings of the board of
directors.		 6.2 The company has set up independent
directors. When the endorsement
guarantee operating procedures are
submitted to the board of directors for
discussion in accordance with the
provisions of the preceding paragraph,
the opinions of the independent directors
should be fully consideredand the
reasons for their consent or objection
and the reasons for objection should be
included in the board record.		 Adjust the article text in
accordance with Article 14-3 of
the Securities Exchange Act.

==> picture [23 x 23] intentionally omitted <==

- 63 -

【 Attachment 10 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

Rules of Procedures for Shareholders' Meeting

==> picture [26 x 28] intentionally omitted <==

Approved by the Board of Directors: Apr. 18, 2019

==> picture [26 x 27] intentionally omitted <==

  • Article 1 To establish a strong governance system and sound supervisory capabilities for this Corporation's shareholders meetings, and to strengthen management capabilities, these Rules are adopted pursuant to Article 5 of the Corporate Governance BestPractice Principles for TWSE/GTSM Listed Companies.

  • Article 2 The rules of procedures for this Corporation's shareholders meetings, except as otherwise provided by law, regulation, or the articles of incorporation, shall be as provided in these Rules.

  • Article 3 Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be convened by the board of directors.

  • This Corporation shall prepare electronic versions of the shareholders meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the Market Observation Post System (MOPS) before 30 days before the date of a regular shareholders meeting or before 15 days before the date of a special shareholders meeting. This Corporation shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS before 21 days before the date of the regular shareholders meeting or before 15 days before the date of the special shareholders meeting. In addition, before 15 days before the date of the shareholders meeting, this Corporation shall also have prepared the shareholders meeting agenda and supplemental meeting materials and made them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at this Corporation and the professional shareholder services agent designated thereby as well as being distributed on-site at the meeting place.

  • The reasons for convening a shareholders meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form.

  • Election or dismissal of directors or supervisors, amendments to the articles of incorporation, the dissolution, merger, or demerger of the corporation, or any matter

==> picture [23 x 23] intentionally omitted <==

- 64 -

under Article 185, paragraph 1 of the Company Act, Articles 26-1 and 43-6 of the Securities and Exchange Act, or Articles 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out in the notice of the reasons for convening the shareholders meeting. None of the above matters may be raised by an extraordinary motion.

A shareholder holding 1 percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda. In addition, when the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda.

Prior to the book closure date before a regular shareholders meeting is held, this Corporation shall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days.

Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. The shareholder making the proposal shall be present in person or by proxy at the regular shareholders meeting and take part in discussion of the proposal.

Prior to the date for issuance of notice of a shareholders meeting, this Corporation shall inform the shareholders who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. At the shareholders meeting the board of directors shall explain the reasons for exclusion of any shareholder proposals not included in the agenda.

  • Article 4 For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by this Corporation and stating the scope of the proxy's authorization.

A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders meeting, and shall deliver the proxy form to this Corporation before 5 days before the date of the shareholders meeting. When duplicate proxy forms are delivered, the one received earliest shall prevail unless a declaration is made to cancel the previous proxy appointment.

  • After a proxy form has been delivered to this Corporation, if the shareholder intends to attend the meeting in person or to exercise voting rights by correspondence or electronically, a written notice of proxy cancellation shall be submitted to this Corporation before 2 business days before the meeting date. If the cancellation notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.

==> picture [23 x 23] intentionally omitted <==

- 65 -

Article 5 The venue for a shareholders meeting shall be the premises of this Corporation, or a place easily accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting.

Article 6 This Corporation shall specify in its shareholders meeting notices the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel assigned to handle the registrations.

Shareholders and their proxies (collectively, "shareholders") shall attend shareholders meetings based on attendance cards, sign-in cards, or other certificates of attendance. This Corporation may not arbitrarily add requirements for other documents beyond those showing eligibility to attend presented by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for verification.

This Corporation shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in. This Corporation shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors or supervisors, preprinted ballots shall also be furnished.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

Article 7 If a shareholders meeting is convened by the board of directors, the meeting shall be chaired by the chairperson of the board. When the chairperson of the board is on leave or for any reason unable to exercise the powers of the chairperson, the vice chairperson shall act in place of the chairperson; if there is no vice chairperson or the vice chairperson also is on leave or for any reason unable to exercise the powers of the vice chairperson, the chairperson shall appoint one of the managing directors to act as chair, or, if there are no managing directors, one of the directors shall be appointed to act as chair. Where the chairperson does not make such a

==> picture [23 x 23] intentionally omitted <==

- 66 -

designation, the managing directors or the directors shall select from among themselves one person to serve as chair.

When a managing director or a director serves as chair, as referred to in the preceding paragraph, the managing director or director shall be one who has held that position for six months or more and who understands the financial and business conditions of the company. The same shall be true for a representative of a juristic person director that serves as chair.

It is advisable that shareholders meetings convened by the board of directors be chaired by the chairperson of the board in person and attended by a majority of the directors, at least one supervisor in person, and at least one member of each functional committee on behalf of the committee. The attendance shall be recorded in the meeting minutes.

If a shareholders meeting is convened by a party with power to convene but other than the board of directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.

This Corporation may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders meeting in a non-voting capacity.

  • Article 8 This Corporation, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures.

The recorded materials of the preceding paragraph shall be retained for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

  • Article 9 Attendance at shareholders meetings shall be calculated based on numbers of shares. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in plus the number of shares whose voting rights are exercised by correspondence or electronically.

  • The chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned.

==> picture [23 x 23] intentionally omitted <==

- 67 -

If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders meeting shall be convened within 1 month.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.

  • Article 10 If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting.

The provisions of the preceding paragraph apply mutatis mutandis to a shareholders meeting convened by a party with the power to convene that is not the board of directors.

The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders meeting. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the board of directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call for a vote.

  • Article 11 Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair.

A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.

==> picture [23 x 23] intentionally omitted <==

- 68 -

Except with the consent of the chair, a shareholder may not speak more than twice

on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.

When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chair shall stop any violation.

When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one of the representatives so appointed may speak on the same proposal.

After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.

  • Article 12 Voting at a shareholders meeting shall be calculated based the number of shares. With respect to resolutions of shareholders meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of this Corporation, that shareholder may not vote on that item, and may not exercise voting rights as proxy for any other shareholder.

The number of shares for which voting rights may not be exercised under the preceding paragraph shall not be calculated as part of the voting rights represented by attending shareholders.

With the exception of a trust enterprise or a shareholder services agent approved by the competent securities authority, when one person is concurrently appointed as proxy by two or more shareholders, the voting rights represented by that proxy may not exceed 3 percent of the voting rights represented by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.

  • Article 13 A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Article 179, paragraph 2 of the Company Act.

When this Corporation holds a shareholders meeting, it may allow the shareholders to exercise voting rights by correspondence or electronic means (in accordance with the proviso of Article 177-1 of the Company Act regarding companies that shall adopt electronic voting: When this Corporation holds a shareholder meeting, it shall adopt exercise of voting rights by electronic means and may adopt exercise of voting rights by correspondence). When voting rights

==> picture [23 x 23] intentionally omitted <==

- 69 -

are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting; it is therefore advisable that this Corporation avoid the submission of extraordinary motions and amendments to original proposals.

A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written declaration of intent to this Corporation before 2 days before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent.

After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to this Corporation, by the same means by which the voting rights were exercised, before 2 business days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall prevail.

Except as otherwise provided in the Company Act and in this Corporation's articles of incorporation, the passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the chair or a person designated by the chair shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the MOPS.

When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

==> picture [23 x 23] intentionally omitted <==

- 70 -

Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of this Corporation.

Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

  • Article 14 The election of directors or supervisors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by this Corporation, and the voting results shall be announced on-site immediately, including the names of those elected as directors and supervisors and the numbers of votes with which they were elected.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article 15 Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form.

This Corporation may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS.

The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the duration of the existence of this Corporation.

Article 16 On the day of a shareholders meeting, this Corporation shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at the place of the shareholders meeting.

If matters put to a resolution at a shareholders meeting constitute material information under applicable laws or regulations or under Taiwan Stock Exchange Corporation (or GreTai Securities Market) regulations, this Corporation shall

==> picture [23 x 23] intentionally omitted <==

- 71 -

upload the content of such resolution to the MOPS within the prescribed time period.

Article 17 Staff handling administrative affairs of a shareholders meeting shall wear identification cards or arm bands.

The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."

At the place of a shareholders meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by this Corporation, the chair may prevent the shareholder from so doing.

When a shareholder violates the rules of procedure and defies the chair's correction, obstructing the proceedings and refusing to heed calls to stop, the chair may direct the proctors or security personnel to escort the shareholder from the meeting.

Article 18 When a meeting is in progress, the chair may announce a break based on time considerations. If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

If the meeting venue is no longer available for continued use and not all of the items (including extraordinary motions) on the meeting agenda have been addressed, the shareholders meeting may adopt a resolution to resume the meeting at another venue.

A resolution may be adopted at a shareholders meeting to defer or resume the meeting within 5 days in accordance with Article 182 of the Company Act.

Article 19 These Rules, and any amendments hereto, shall be implemented after adoption by shareholders meetings.

==> picture [23 x 23] intentionally omitted <==

- 72 -

Chuwa Wool Industry Co., (Taiwan) Ltd.

Elections for Directors

==> picture [26 x 28] intentionally omitted <==

Approved by the Board of Directors: Apr. 18, 2019

==> picture [26 x 27] intentionally omitted <==

  • Article 1 To ensure a just, fair, and open election of directors, these Procedures are adopted under the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.

  • Article 2 Except as otherwise provided by law and regulation or by this Corporation's articles of incorporation, elections of directors shall be conducted in accordance with these Procedures.

  • Article 3 The overall composition of the board of directors shall be taken into consideration in the selection of this Corporation's directors. The composition of the board of directors shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the company's business operations, operating dynamics, and development needs. It is advisable that the policy include, without being limited to, the following two general standards:

  • Basic requirements and values: Gender, age, nationality, and culture.

  • Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, technology), professional skills, and industry experience.

Each board member shall have the necessary knowledge, skill, and experience to perform their duties; the abilities that must be present in the board as a whole are as follows:

  1. The ability to make judgments about operations.

  2. Accounting and financial analysis ability.

  3. Business management ability.

  4. Crisis management ability.

  5. Knowledge of the industry.

  6. An international market perspective.

  7. Leadership ability.

  8. Decision-making ability.

More than half of the directors shall be persons who have neither a spousal relationship nor a relationship within the second degree of kinship with any other director.

The board of directors of this Corporation shall consider adjusting its composition based on the results of performance evaluation.

==> picture [24 x 23] intentionally omitted <==

- 73 -

  • Article 4 The qualifications for the independent directors of this Corporation shall comply with the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.

  • Article 5 Elections of both directors at this Corporation shall be conducted in accordance with the candidate nomination system and procedures set out in Article 192-1 of the Company Act. This Corporation shall review the qualifications, education, working experience, background, and the existence of any other matters set forth in Article 30 of the Company Act with respect to nominee directors and may not arbitrarily add requirements for documentation of other qualifications. It shall further provide the results of the review to shareholders for their reference, so that qualified directors will be elected.

  • When the number of directors falls below five due to the dismissal of a director for any reason, this Corporation shall hold a by-election to fill the vacancy at its next shareholders meeting. When the number of directors falls short by one third of the total number prescribed in this Corporation’s articles of incorporation, this Corporation shall call a special shareholders meeting within 60 days from the date of occurrence to hold a by-election to fill the vacancies.

  • When the number of independent directors falls below that required under the proviso of Article 14-2, paragraph 1 of the Securities and Exchange Act, or the related provisions of the Taiwan Stock Exchange Corporation rules governing the review of listings, or subparagraph 8 of the Standards for Determining Unsuitability for GTSM Listing under Article 10, Paragraph 1 of the GreTai Securities Market Rules Governing the Review of Securities for Trading on the GTSM, a by-election shall be held at the next shareholders meeting to fill the vacancy. When the independent directors are dismissed en masse, a special shareholders meeting shall be called within 60 days from the date of occurrence to hold a by-election to fill the vacancies.

  • Article 6 The cumulative voting method shall be used for election of the directors at this Corporation. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates.

  • Article 7 The board of directors shall prepare separate ballots for directors in numbers corresponding to the directors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.

  • Article 8 The number of directors will be as specified in this Corporation's articles of incorporation, with voting rights separately calculated for independent and nonindependent director positions. Those receiving ballots representing the highest numbers

==> picture [24 x 23] intentionally omitted <==

- 74 -

of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.

  • Article 9 Before the election begins, the chair shall appoint a number of persons with shareholder status to perform the respective duties of vote monitoring and counting personnel. The ballot boxes shall be prepared by the board of directors and publicly checked by the vote monitoring personnel before voting commences.

  • Article 10 If a candidate is a shareholder, a voter must enter the candidate's account name and shareholder account number in the "candidate" column of the ballot; for a nonshareholder, the voter shall enter the candidate's full name and identity card number. However, when the candidate is a governmental organization or juristic-person shareholder, the name of the governmental organization or juristic-person shareholder shall be entered in the column for the candidate's account name in the ballot paper, or both the name of the governmental organization or juristic-person shareholder and the name of its representative may be entered. When there are multiple representatives, the names of each respective representative shall be entered.

Article 11 A ballot is invalid under any of the following circumstances:

  1. The ballot was not prepared by the board of directors.

  2. A blank ballot is placed in the ballot box.

  3. The writing is unclear and indecipherable or has been altered.

  4. The candidate whose name is entered in the ballot is a shareholder, but the candidate's account name and shareholder account number do not conform with those given in the shareholder register, or the candidate whose name is entered in the ballot is a non-shareholder, and a cross-check shows that the candidate's name and identity card number do not match.

  5. Other words or marks are entered in addition to the candidate's account name or shareholder account number (or identity card number) and the number of voting rights allotted.

  6. The name of the candidate entered in the ballot is identical to that of another shareholder, but no shareholder account number or identity card number is provided in the ballot to identify such individual.

  7. Article 12 The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, including the list of persons elected as directors and the numbers of votes with which they were elected, shall be announced by the chair on the site.

==> picture [24 x 23] intentionally omitted <==

- 75 -

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

  • Article 13 The board of directors of this Corporation shall issue notifications to the persons elected as directors.

  • Article 14 These Procedures, and any amendments hereto, shall be implemented after approval by a shareholders meeting.

==> picture [24 x 23] intentionally omitted <==

- 76 -

【 Annex 1 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

Company articles of association

Chapter 1 General

  • Article 1 The Company is organized according to the provisions of the Company Act and named Chuwa Wool Industry Co., (Taiwan) Ltd.

Article 2 The business scope of the company is as follows:

  1. C306010 Clothing Industry.

  2. C307010 Manufacture of Wearing Apparel and Clothing Accessories.

  3. C399990 Other Textile Products Manufacturing.

  4. F101990 Wholesale of Other Agricultural, Husbandry and Aquatic Products.

  5. F104110 Retail sale of Cloths, Clothes, Shoes, Hat, Umbrella and Apparel, Clothing Accessories and Other Textile Products.

  6. F204110 Retail sale of Cloths, Clothes, Shoes, Hat, Umbrella and Apparel, Clothing Accessories and Other Textile Products.

  7. F401010 International Trade.

  8. F601010 Intellectual Property.

  9. H703100 Real Estate Rental and Leasing.

  10. I101110 Textile Industry Consultancy.

  11. I501010 Product Designing.

  12. I502010 Costume Designing.

  13. ZZ99999 In addition to the licensed business, it can also operate businesses that are not prohibited or restricted by the Act.

  14. Article 2-1 The Company’s transfer of investment shall be handled in accordance with the resolution of the board of directors. The total investment can exceed 40% of the paid-up share capital.

  15. Article 2-2 Due to business needs, the company can guarantee endorsement according to the company's endorsement guarantee operating procedures.

  16. Article 3 The Company is established in Taipei City.

Chapter 2 Shares

  • Article 4 The total capital rating of the company is NT$1 billion, divided into 110 million shares. The new denomination of each share is NT$ pick-up, and the board of directors is authorized to issue the shares.

The company's stocks are all registered, signed or sealed by more than three directors and issued after being signed according to law.

The shares issued by the company may be free of printed shares, but should be consulted

by the securities centralized storage institution for registration.

==> picture [24 x 23] intentionally omitted <==

- 77 -

  • Article 5 The company's share dealing is handled in accordance with the regulations of the “Regulations Governing the Administration of Shareholder Services of Public Companies” promulgated by the competent authority.

  • Article 6 Within 60 days before the shareholders' general meeting, within 30 days before the temporary meeting of the shareholders' meeting or within five days before the date of the company's decision to distribute dividends, dividends and other benefits, the changes recorded in the shareholder list shall be stopped.

Chapter 3 Shareholders' Meeting

  • Article 7 The shareholders' meeting of the company is divided into general and temporary. Generally held by the board of directors within six months after the end of the fiscal year. Temporary will be convened in accordance with the law when necessary.

  • Article 8 Notice shall be given to the shareholders at least thirty days prior to an annual meeting, and at least fifteen days prior to a special meeting.

  • Article 9 The shareholders of the company have one vote for each share. In accordance with the resolutions of the shareholders' meeting, except as otherwise provided by the Company's Act, shareholders who represent more than half of the total number of issued shares shall be present and approved by a majority of the voting rights of the shareholders present. When the company convened a shareholders meeting, shareholders were able to exercise their voting rights electronically. Shareholders who exercise their voting rights by electronic means are deemed to be present in person, and their related matters are handled in accordance with the law.

  • Article 10: If the shareholder is unable to attend the shareholders' meeting in person for any reason, the company shall issue a power of attorney issued by the company, stating the scope of the authorization, and entrust the agent to attend. However, when one person is entrusted by a shareholder of two or more persons, the voting right of the agent shall not exceed 3 percent of the total voting rights of the issued shares. When exceeded, its excess voting rights are not counted. The method of entrusting the attendance of the shareholders, except as otherwise provided by the Company Act, shall be handled in accordance with the "Regulations Governing the Use of Proxies for Attendance at Shareholders of Public Companies" issued by the competent authority.

Chapter 4 Directors and Supervisors

  • Article 11 The company is set up with five to seven directors, organizes the board of directors, and is selected by the shareholders who have the capacity to act. The term of office is three years, but they can be re-elected.

Among the directors in the preceding paragraph, there are at least two independent directors and no less than five-fifths of the seats.

The election of independent directors of the Company adopts the candidate nomination system of Section 192-1 of the Company Act. The implementation of the relevant

==> picture [24 x 23] intentionally omitted <==

- 78 -

matters shall be handled in accordance with the relevant acts and regulations such as the Company Act and the Securities Exchange Act.

The resolution of the board of directors shall be attended by more than half of the

directors and shall be approved by a majority of the directors present. The minutes of the board shall be signed or sealed by the chairman. If a director is unable to attend in person for any reason, he may entrust other directors to attend. However, independent directors may only entrust other independent directors to attend. However, each person is limited to one person. Directors residing abroad can be entrusted to other shareholders in the country in writing and often represent the board of directors. However, the application should be registered with the competent official office, and the same applies to the change.

  • Article 11-1 The convening of the board of directors of the company shall be notified to the directors and supervisors seven days before the meeting. However, when there is an emergency, the directors may be called at any time.

  • The convening notice of the preceding paragraph shall state the cause in writing, by e- mail or by fax.

  • Article 12 The business operations of the Company are carried out in accordance with the resolution system of the Board of Directors.

  • Article 13 The Company shall have one chairman and one vice chairman if necessary, and the directors shall choose each other. The chairman of the board is the chairman of the company's shareholders' meeting and the board of directors, and convene the board of directors. The chairman of the board represents the company. When the chairman of the board asks for leave or fails to exercise his powers for any reason, the vice chairman shall act as the agent. When no vice chairman or vice chairman is also absent or unable to exercise his powers for any reason, the chairman of the board of directors shall appoint one of the directors. If the chairman does not appoint an agent, the director will push one agent for each other.

  • Article 14 The company has two supervisors, who are selected by the shareholders' meeting and have a capacity of three years, but the consecutive elections can be taken continuously.

  • Article 15 All directors and supervisors may receive a transportation subsidy, the amount of which is determined by the board of directors.

The remuneration of all directors and supervisors is delegated to the board of directors in accordance with the value of their participation in and contribution to the operation of the company, and is subject to the usual standards of the industry.

  • Article 15-1 The Company may, through the resolution of the Board of Directors, purchase liability insurance for the liability for damages within the scope of its business operations during the term of the directors. In this way, the risk of significant damage to the company and shareholders caused by violations of the law of the directors is reduced and diversified. The company's supervisor can handle it.

==> picture [24 x 23] intentionally omitted <==

- 79 -

Chapter 5 Manager

Article 16 The Company is established with one general manager and several managers, whose appointment, dismissal and remuneration are handled in accordance with the provisions of Article 29 of the Company Act.

Chapter 6 Accounting

Article 17 The Company’s fiscal year begins from January 1 to December 31. At the end of the fiscal year, the board of directors shall produce the following list, and shall submit it to the supervisor for review 30 days before the general meeting of the shareholders, and the supervisor shall issue a report to the general meeting of the shareholders for approval.

  1. Business report. 2. Financial statements. 3. Proposal for surplus distribution or loss allocation.

  2. Article 18 The Company shall deduct the compensation before the remuneration distributed to the employees and the pre-remuneration of the directors and supervisors in the pre-tax profit of the current year to make up for the accumulated loss. If there is still a balance, it should be paid 4 to 5 percent of the employee's remuneration and no more than 2 percent of the compensation of the director.

The compensation of employees, the decision on the distribution ratio of the compensation of the directors and the compensation of employees are based on stocks or cash. It shall be reported by the Board of Directors with a resolution of more than twothirds of the directors and a majority of the directors' consents and shall be reported to the shareholders' meeting. Employee compensation is paid to stocks or cash, including employees of subordinate companies that meet certain conditions.

  • Article 18-1 If the company's year-end final accounts have a surplus, in addition to the income tax in accordance with the law, the losses should be made up first, and 10% is the statutory surplus reserve. In addition, according to the provisions of the competent authority, the special reserve shall be transferred or renewed, and the balance of the arrears mentioned above shall be allocated and the surplus shall not be distributed in the same year. Each year, the board of directors proposes to distribute the proposal and submit it to the shareholders' meeting for resolution.

  • Article 18-2 The Company's dividend distribution will be distributed in the form of stock dividends and cash dividends based on factors such as future capital requirements, financial structure and consideration of shareholders' equity, in response to the current competitive environment and continuous expansion of scale. Among them, the cash dividend is not less than 20% of the total dividend.

Chapter 7 Supplementary Provisions

Article 19 Matters not specifically described in the Articles of Association shall be handled in accordance with the provisions of the Company Act.

Article 20 This articles of association was concluded on August 19, 1964. The 1st amendment was

==> picture [24 x 23] intentionally omitted <==

- 80 -

made on March 2, 1967. The 2nd amendment was made on May 16, 1967. The 3rd amendment was made on March 15, 1968. The 4th amendment was made on March 24, 1970. The 5th amendment was made on May 31, 1971. The 6th amendment was made on April 29, 1972. The 7th amendment was made on April 26, 1973. The 8th amendment was made on December 21, 1974. The 9th amendment was made on March 30, 1977. The 10th amendment was made on July 15, 1978. The 11th amendment was made on August 10, 1980. The 12th amendment was made on April 11, 1981. The 13th amendment was made on March 27, 1982. The 14th amendment was made on April 2, 1983. The 15th amendment was made on September 5, 1983. The 16th amendment was made on April 27, 1985. The 17th amendment was made on July 17, 1985. The 18th amendment was made on April 26, 1986. The 19th amendment was made on June 28, 1986. The 20th amendment was made on April 25, 1987. The 21st amendment was made on April 2, 1988. The 22nd amendment was made on May 16, 1988. The 23rd amendment was made on April 4, 1989. The 24th amendment was made on April 23, 1990. The 25th amendment was made on April 11, 1991. The 26th amendment was made on April 15, 1993. The 27th amendment was made on May 2, 1996. The 28th amendment was made on May 4, 1999. The 29th amendment was made on May 23, 2000. The 30th amendment was made on May 8, 2000. The 31st amendment was made on May 22, 2002. The 32nd amendment was made on May 27, 2004. The 33rd amendment was made on June 14, 2005. The 34th amendment was made on June 9, 2006. The 35th amendment was made on June 25, 2010. The 36th amendment was made on June 15, 2012. The 37th amendment was made on June 29, 2016. The 38th amendment was made on June 6, 2017. The 39th amendment was made on June 8, 2018.

Chairman CHEN, SHIH-HSIU

==> picture [24 x 23] intentionally omitted <==

- 81 -

【 Annex 2 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

Acquisition or Disposition of Asset Processing Procedures

Amended and adopted at the shareholders meeting on November 28, 2018

Article 1 Purpose

In order to protect assets and implement the disclosure of information, this procedure is specially designed.

Article 2 Decree and basis

This procedure is governed by the provisions of Section 36-1 of the Securities Exchange Act (hereinafter referred to as this Act) and related acts and regulations by the the Financial Supervisory Commission (hereinafter referred to as FSC).

Article 3 Scope of assets

  1. Investments in stocks, bonds, corporate bonds, financial bonds, securities of commendable funds, depositary receipts, subscription (sales) warrants, beneficiary securities and asset-based securities.

  2. Real estate (including land, housing and construction, investment real estate, land use rights, inventory of construction industry) and equipment.

  3. Membership card.

  4. Intangible assets such as patents, copyrights, trademarks, and concessions.

  5. The creditor's rights of financial institutions (including receivables, discounted bills and loans, collections).

  6. Derivative goods.

  7. Assets acquired or disposed of in accordance with legal mergers, divisions, acquisitions or transfer of shares.

  8. Other important assets.

Article 4 Definition of nouns

  1. Derivative goods: Refers to the forward contract, option contract, futures contract, leverage contract, swap contract whose value is derived from commodities, such as assets, interest rates, exchange rates, indices or other interests, and a combination contract of the above products. The so-called Forward Contract does not include insurance contracts, performance contracts, after-sales service contracts, long-term lease contracts and long-term purchase (invoicing) contracts.

  2. Assets acquired or disposed of by law, division, acquisition or share transfer: Merger, division, acquisition in accordance with the Enterprise Mergers and Acquisitions Act, the Financial Holding Company Act, and the Financial Institutions Merger Act or other laws The assets obtained or disposed of, or the issuance of new shares in accordance with the provisions of Article 156 Paragraph 8 of the Company Act, the transfer of

==> picture [24 x 23] intentionally omitted <==

- 82 -

shares of the company (hereinafter referred to as share transfer).

  1. Relationships and subsidiaries: It shall be determined in accordance with the provisions of the financial issuer's financial report preparation standards.

  2. Professional valuer: refers to the real estate appraisers or other persons who are engaged in real estate and equipment valuation according to the law.

  3. The date of the occurrence: refers to the date of the transaction signing date, payment date, entrusted transaction date, transfer date, board resolution date or other date on which the transaction object and transaction amount are determined. However, investors who are subject to the approval of the competent authority shall prevail on the date of the above opening or the date of approval by the competent authority.

  4. Investment in Mainland China: refers to investment in mainland China in accordance with Investment Board, Ministry of Economic Affairs, or in accordance with Regulations governing the approval of investment or technical cooperation.

  5. The term "within one year" is based on the factual date of the transaction in which the assets were acquired or disposed of. The retrospective calculation is made for one year. It has been announced that some of the exemptions are included.

  6. The term "recent financial statements" refers to the financial statements that the company has publicly audited and approved by the accountants before obtaining or disposing of assets.

Article 5 Investment of non-business for real estate and securities

The amount of the above assets obtained by the Company and each subsidiary individually is as follows:

  1. The total amount of real estate that is not for business use shall not exceed 50% of the net value.

  2. The total amount of investment in long-term and short-term securities shall not exceed one thousandth of the net value.

  3. The amount of investment in individual securities may not exceed one thousandth of the net value.

  4. Article 6 When the valuation report or the opinion of an accountant, lawyer or securities underwriter obtained by the company, the professional valuer and its appraisers, accountants, lawyers or securities underwriters and parties to the transaction may not be interested parties.

  5. Article 7 Procedures for acquisition or disposing of immovable property or equipment

  6. Assessment and operating procedures

    • The company acquires or disposes of real estate and equipment, and is in accordance with the internal control system of the company's internal control system, real estate, plant and equipment cycle procedures.

  7. The procedure for determining the terms of the transaction and the amount of the authorization

==> picture [24 x 23] intentionally omitted <==

- 83 -

  • (1) When acquiring or disposing real property, reference shall be made to the present value of the announcement, the assessed value, and the actual transaction price of the adjacent real estate. The resolution of the trading conditions and the transaction price, and the analysis report will be submitted to the chairman. If the amount is 20% of the company's paid-in capital or NT$300 million, it should be submitted to the chairman of the board for approval and should be submitted to the board of directors for the last time. If the amount exceeds 20% of the company's paid-up capital or NT$300 million, it must be approved by the board of directors.

  • (2) Acquisition or disposing of equipment shall be made by way of inquiry, price comparison, bargaining or bidding. If the amount is less than NT$5 million (inclusive), it will be submitted to the general manager for approval. If the amount is less than NT$10 million and NT$150 million (inclusive), it should be submitted to the chairman for approval. If the amount exceeds NT$150 million, it shall be submitted to the chairman of the board for approval and shall be approved by the board of directors.

  • (3) The company's acquisition or disposition of assets shall be approved by the board of directors in accordance with the procedures or other legal requirements. If a director expresses dissent and has a record or written statement, the company shall send the director's objection information to the supervisors. In addition, if the company has set up independent directors and submits or disposes of the asset transactions to the board of directors for discussion, it should fully consider the opinions of the independent directors and include their opinions and reasons for their consent or objection in the minutes of the meeting.

  • Execution unit

When the company acquires or disposes real estate or equipment, it shall be executed by the use department and the management department after the verification of the prior approval authority.

  1. Real estate or equipment valuation report

  2. When the company acquires or disposes of real estate or equipment, it not only deals with government agencies, establishes commissions from local governments, leases land, or acquires or disposes of equipment for business use, if the transaction amount reaches 20% of the company's paid-up capital or NT$300 million or more, the valuation report issued by the professional valuer shall be obtained before the date of the fact, and the following provisions shall be met:

  3. (1) For special reasons, when a limited price, a specific price or a special price is used as the reference basis for the transaction price, the transaction shall be approved by the board of directors first; and the future trading conditions shall be changed, and shall be handled in accordance with the above procedures.

  4. (2) If the transaction amount reaches NT$1 billion or more, more than two professional

==> picture [24 x 23] intentionally omitted <==

- 84 -

valuers should be invited to make an estimate. 

  - (3) If the valuation result of the professional valuer is one of the following, except the valuation result of the acquired asset is higher than the transaction amount, or the valuation result of the disposal asset is lower than the transaction amount. Accountants should be consulted in accordance with the provisions of Statements of Auditing Standards issued by the Accounting Research and Development Foundation in Taiwan (hereinafter referred to as the Accounting Research and Development Foundation), and express specific opinions on the reasons for the differences and the transaction price:

     - a. The difference between the valuation result and the transaction amount is more than 20% of the transaction amount.

     - b. The difference between the valuation results of two or more professional valuers is more than 10% of the transaction amount.

  - (4) The date of the report issued by the professional valuer and the date of establishment of the contract shall not exceed three months. However, if the current value of the same period announcement is applied and it has not exceeded six months, the original professional valuer may issue a written opinion.

  - (5) If the company acquires or disposes of assets through the court auction procedure, it can replace the valuation report or accountant's opinion with the certification documents issued by the court.

  • Article 8 Procedures for acquisition or disposition of securities investment, evaluation and operating procedures

  • The purchase and sale of long-term and short-term securities in the company are handled in accordance with the investment cycle operations in the company's internal control system.

  • The procedure for determining the terms of the transaction and the amount of the authorization

    • (1) The trading of securities in the centralized trading market or the securities firm's business premises shall be decided by the responsible unit according to the market conditions, and the amount of the company below NT$100 million (inclusive) shall be approved by the chairman of the board of directors. If the amount exceeds NT$100 million, it must be approved by the board of directors.

    • (2) If the securities are not traded in the centralized trading market or the securities firm's business premises, the financial statements of the most recent company's audited or verified financial statements shall be taken as the reference for evaluating the transaction price before the date of the fact. In the process, the net value per share, profitability and future development potential should be considered. The amount of NT$100 million or less is approved by the chairman of the board of directors. If the amount exceeds NT$100 million, it must be approved by the board

==> picture [24 x 23] intentionally omitted <==

- 85 -

of directors.

  • (3) If the company acquires or disposes of the assets according to the prescribed processing procedures or other legal requirements, it shall be approved by the board of directors. If any directors express objection and have a record or written statement, the company shall send the directors' objection information to the supervisors. In addition, if the company has set up independent directors and submits or disposes of the asset transactions to the board of directors for discussion, it should fully consider the opinions of the independent directors and include their opinions and reasons for their consent or objection in the minutes of the meeting.

  • Execution unit

If the company conducts long-term and short-term portfolio investment, it shall be executed by the investment department after it has been approved according to the preexisting authority.

  1. Obtaining expert opinions

  2. (1) When the company acquires or disposes of securities with a transaction amount of 20% of the company's paid-in capital or NT$300 million or more, the accountant should be advised on the reasonableness of the transaction price before the fact occurs. . If an accountant needs to use an expert reporter, it should be handled in accordance with the provisions of the Accounting Development Foundation's Statements on Auditing Standards No. 20. However, the following items or the public offering of the marketable securities in the active market or otherwise required by the FSC are not limited.

    • a. In accordance with the law, the securities that were established or raised and established and cashed in, and the rights recognized by the securities are equivalent to the capital contribution ratio.

    • b. Participated in the subscription of the company's capital increased by cash in accordance with the relevant acts and regulations and issued securities in denominations.

    • c. Participated in the subscription of direct or indirect 100% investment company's cash increase in the issuance of marketable securities, or 100% of the subsidiaries held by each other to subscribe for the securities issued by capital increased by cash.

    • d. The securities of listed stock exchanging, over-the-counter and emerging stock traded on the stock exchange or securities firm's business premises.

    • e. Bonds that are domestic public debts, repurchase agreement, and reverse repo.

    • f. Public fund.

    • g. According to the Taiwan Stock Exchange or Taipei Exchange listing (upper cabinet) securities bidding method or auction method to acquire or dispose of the listed (upper cabinet) company stock.

==> picture [24 x 23] intentionally omitted <==

- 86 - 

     - h. Participate in the domestic public offering company's cash increase and subscription or subscribe for corporate bonds (including financial bonds) in China, and the obtained securities are not private equity securities.

     - i. Purchasing domestic private equity funds before the establishment of the fund in accordance with the first paragraph of Article 11 of the Securities Investment Trust and Consulting Act, or the domestic private equity fund purchased or bought back, the investment contract has stated that the investment strategy is not only the securities credit transaction but also the relevant commodity parts of the unsold securities held, other scopes are the same as those of public funds.

  - (2) If the company is subject to the acquisition or disposition of assets by the court auction procedure, it may replace the valuation report or the accountant's opinion with the supporting documents produced by the court.

  • Article 9 Procedures for the transaction of related parties

  • The Company and its related parties acquire or dispose of assets. Except for matters relating to the relevant resolutions and the reasonableness of the trading conditions in accordance with the procedures of Articles 7 to 10, the transaction amount shall be more than 10% of the total assets of the company. The valuation report or accountant's opinion issued by the professional valuer shall also be obtained in accordance with the provisions of the preceding section. The calculation of the transaction amount of the preceding paragraph shall be handled in accordance with one of the provisions of Article 10. In addition, when judging whether the transaction object is a related party, in addition to paying attention to its legal form, the substantive relationship should be considered.

  • Assessment and operating procedures If the company acquires from the relationship or disposes real property to the relationship, or, the company acquires or disposes the property except real estate and the transaction amount reaches 20% of the company's paid-in capital, 10% of total assets or NT$300 million or more. . In addition to trading domestic bonds, bonds with Reverse Repo, Repurchase Agreement, purchase or purchase of money market funds issued by domestic securities investment trusts, the following information shall be submitted to supervisor and the board of directors for approval. After that, the parties must sign the transaction contract and pay the payment:

    • (1) The purpose, necessity and expected benefits of acquisition or disposing of assets.

    • (2) Reasons for selecting the person to be the transaction partner.

    • (3) Obtaining the real estate from the related party, and evaluating the relevant information of the reasonable conditions of the predetermined trading conditions according to the provisions of Item 1 and Item 4 in Paragraph 3 of the third point.

    • (4) The date and price of the relationship, the transaction object and its relationship with the company and its related parties.

==> picture [24 x 23] intentionally omitted <==

- 87 -

  • (5) The forecast of cash receipts and payments for each month in the coming year starting from the contract month, and assessing the necessity of the transaction and the rationality of the use of funds.

  • (6) The valuation report issued by the professional valuer obtained in accordance with the provisions of the preceding paragraph, or the opinion of the accountant.

  • (7) The restrictions and other important matters of this transaction.

  • Evaluation of the reasonableness of transaction costs:

  • (1) The Company obtains real estate from related parties and should evaluate the reasonableness of transaction costs in the following ways:

    • a. The necessary fund interest shall be added according to the transaction price of the related party and the cost that the buyer shall bear according to law. The socalled necessary capital interest cost is calculated based on the weighted average interest rate of the borrowings of the company's annual purchase of assets. However, it shall not be higher than the maximum borrowing rate of the nonfinancial industry announced by the Ministry of Finance.

    • b. If the related party has set a mortgage loan to the financial institution with the subject matter, the financial institution shall evaluate the total value of the loan of the subject matter. However, the cumulative value of the actual loan lending by the financial institution to the subject matter should be more than 70% of the total value of the loan assessment and more than one year during the loan period. However, financial institutions and one party to the transaction are related to each other and are not applicable.

  • (2) If the land and houses of the same subject matter are purchased together, the transaction costs shall be assessed on the land and houses in accordance with any of the methods listed in the preceding paragraph.

  • (3) When the Company obtains real estate from the related parties, it shall assess the cost of the real property in accordance with the provisions of Item 1 and Item 2 in Paragraph 3 of this Article, and shall contact the accountant for review and express specific opinions.

  • (4) When the company obtains the real estate from the related parties, the evaluation results are lower than the transaction price according to the provisions of Item 1 and Item 2 in Paragraph 3, and shall be handled in accordance with Item 5 in Paragraph 3. However, if the following circumstances, and the objective evidence and the specific reasonable opinions of the real estate appraisers and accountants are taken, this is not the case:

    • a. If the relationship is acquired by a plain land or a leased land, one of the following conditions must be proved:

      • (a) The plain land is assessed according to the method stipulated in this article. The house is calculated according to the construction cost of the related party

==> picture [24 x 23] intentionally omitted <==

- 88 -

plus the reasonable construction profit, and the total number exceeds the actual transaction price. The alleged reasonable construction profit shall be based on the average operating gross profit margin of the related party construction department in the last three years or the lower of the latest construction industry gross profit margin announced by the Ministry of Finance. 

  - (b) The transactions of other non-relevant persons within one year of other floors or adjacent areas of the same target premises are similar in area, and the trading conditions are equivalent to the reasonable floor or regional price difference as determined by the real estate trading practice.

  - (c) For other non-relevant lease cases within one year of the same floor of the same subject, the transaction conditions are estimated to be equivalent to the reasonable floor spreads required by the real estate leasing practice.

  • b. The Company provides evidence of the acquisition of real estate. The trading conditions are similar to those of other non-relevant transactions in the adjacent area within one year. The so-called trading cases in the neighboring areas are based on the same or adjacent street profiles and the distance from the object of the transaction is less than 500 meters or the present value of the announcement is similar. The so-called similar area is based on the principle that the area of other non-relevant person transactions is not less than 50% of the area of the transaction subject matter. In the so-called one year mentioned above, one year is calculated based on the date on which the fact that the real estate was acquired.

  • (5) If the real estate obtained by the company from the related party is lower than the transaction price according to the items 1 and 2 of the third paragraph of this point, the following matters shall be handled. In addition, the Company and the publicly issued company that evaluates the investment in the Company by the equity method, including the special reserve, shall be entitled to the depreciation loss or disposition of the asset purchased at a high price or to be properly compensated or reinstated. Or wait until there is other evidence and determine that there is no unreasonable, and the special reserve is used after the approval of the FSC.

  • a. The Company shall provide a special reserve for the difference between the transaction price of the real property and the estimated cost, and shall not assign or transfer the capital allotment in accordance with the provisions of Article 41, Paragraph 1, of the Securities Exchange Act. Investors who evaluate the company's investment using the equity method, if it is a public offering company, should also provide a special reserve for the proposed amount in accordance with the provisions of Article 41, Paragraph 1, of the Securities Exchange Act.

  • b. The supervisor shall proceed in accordance with the provisions of Article 218 of the Company Act.

==> picture [24 x 23] intentionally omitted <==

- 89 - 

  - c. The first and second sub-categories of this item should be reported to the shareholders' meeting, and the details of the transaction should be disclosed in the annual report and the prospectus.

  • (6) If the company obtains real estate from the related parties, one of the following circumstances shall be handled in accordance with the provisions of the first and second paragraphs of this article regarding the assessment and operational procedures. This condition does not apply to the assessment of the reasonableness of transaction costs in Item 1, 2, 3 of the third paragraph:

    • a. Related parties obtain real estate because of the factors of inheritance or bestowal.

    • b. Related parties contracted to obtain real estate time has been more than five years from the date of the transaction.

    • c. Signing a contract with a related party, or constructing a land for self-use, construction of a leased land, etc., requesting related parties to build real estate and obtain real estate.

  • (7) If the company obtains real property from the related party, if there is any other evidence that the transaction has irregular business practices, it shall also be handled in accordance with Item 5 of the third paragraph of this article.

  • Article 10 Procedures for obtaining or disposing of membership certificates or intangible assets

  • Assessment and operation procedures The Company obtains or disposes of membership certificates or intangible assets, and is handled in accordance with the internal control system of the Company's internal control system for real estate, plant and equipment.

  • The conditions for the transaction and the decision procedure for the amount of authorization

  • (1) In order to acquire or dispose of the membership card, it shall refer to the market fair market price, then decide the trading conditions and transaction price and make an analysis report to report to the chairman. If the amount is less than NT$30 million (inclusive), it should be submitted to the chairman for approval. If the amount exceeds NT$30 million, it must be submitted to the Board of Directors for approval.

  • (2) Obtaining or disposing of intangible assets to use shall refer to the expert evaluation report or the market fair market price resolution trading conditions and transaction price, and make an analysis report to report to the chairman. If the amount is less than NT$30 million (inclusive), it should be submitted to the chairman for approval. If the amount exceeds NT$10,000, it must be approved by the board of directors.

  • (3) The handling procedures or other acts and regulations in accordance with the company in order to acquire or dispose of the assets shall be approved by the board

==> picture [24 x 23] intentionally omitted <==

- 90 -

of directors. If a director expresses dissent and has a record or written statement, the company shall send the director's objection information to the supervisors. In addition, if the company has set up independent directors and submits transactions for acquisition or disposing of assets to the board of directors for discussion, it should fully consider the opinions of the independent directors and include their opinions and reasons for their consent or objection in the minutes of the meeting.

  1. Expert assessment report on membership card or intangible assets If the company acquires or disposes membership certificates or intangible assets, it shall be executed by the management department and the financial accounting department after the delegation of authorization.

  2. Expert assessment report on membership card or intangible assets If the transaction amount of the company's acquires or disposes membership certificates or intangible assets reaches 20% of the company's paid-in capital or NT$300 million, in addition to transactions with government agencies, it should be requested before the factual date. The accountant expressed his opinion on the reasonableness of the transaction price. Accountants should also follow the twentieth tenth of Statements on Auditing Standards issued by the Accounting Research and Development Foundation.

  3. Article 10-1 The calculation of the transaction amount of Articles 7 to 10 shall be handled in accordance with Article 14, Paragraph 1, Item 8. Moreover, within one year, based on the date of the fact of the transaction, the calculation is retroactively calculated for one year. The valuation report or accountant's opinion issued by the professional valuer has been re-incorporated according to the provisions of this standard.

  4. Article 11 Procedures for acquisition or disposing of claims of financial institutions In principle, the company does not engage in transactions that acquire or dispose of the claims of financial institutions. If there is a transaction in the future to acquire or dispose of the financial institution's claims, it will be submitted to the board of directors for approval before finalizing its assessment and operating procedures.

  5. Article 12 Procedures for acquisition or disposition of derivative goods

  6. Principles and guidelines for trading

    • (1) Types of transactions

      • a. The derivative financial products engaged by the company refer to assets, interest rates, exchange rates, indices or other interests. (Like Forward Contracts such as Forward Contract, options, futures, interest rates or exchange rates, exchanges, and composite contracts of the above commodities, etc.).

      • b. Matters relating to the bond trading of bonds shall be handled in accordance with the relevant provisions of this Procedures. Bond transactions in the repurchase agreement do not apply to the provisions of this Procedures.

    • (2) Business strategy (Hedging strategy)

==> picture [24 x 23] intentionally omitted <==

- 91 -

When the company engages in derivative financial products trading, it should aim at hedging. The traded goods should be selected to avoid the risks arising from the business operations of the company, and the currency held must be consistent with the foreign currency demand of the company's actual import and export transactions. Based on the principle that the company's internal parts (only foreign currency income and expenses) balance itself, it can reduce the overall foreign exchange risk of the company and save foreign exchange operating costs. Other specific use transactions must be carefully evaluated and submitted to the Board for approval.

  • (3) Division of powers and responsibilities

  • a. Investment department

    • (a) Trader

      • i. Responsible for the strategy of financial transactions of the entire company.

      • ii. Traders should regularly calculate the location every two weeks and collect market information to conduct trend judgments and risk assessments and develop operational strategies. The strategy is approved by the approval authority and is used as the basis for trading.

      • iii. Execute the transaction in accordance with the authorization authority and the established strategy.

      • iv. When there is a significant change in the financial market and the trader judges that the established strategy is not applicable, the assessment report should be submitted at any time and the strategy should be reformulated. The new strategy is approved by the general manager as the basis for trading.

  • b. Financial accounting department

    • (a) Accountant

      • i. Perform transaction confirmation.

      • ii. Review whether each transaction is conducted in accordance with the authorization authority and the established strategy.

      • iii. Conduct monthly evaluations and present the evaluation report to the general manager.

      • iv. Accounting treatment.

      • v. Reporting and announcement in accordance with FSC regulations.

    • (b) Finance staff: Perform the settlement task.

  • c. Authorization decision authority for derivative goods

    • (a) Authorization decision authority for hedging transaction

==> picture [24 x 23] intentionally omitted <==

- 92 -

==> picture [26 x 27] intentionally omitted <==

==> picture [26 x 27] intentionally omitted <==

==> picture [26 x 27] intentionally omitted <==

==> picture [26 x 27] intentionally omitted <==

Delegation of
authorization		 Daily trading
permissions		 Net accumulation site
tradingauthority
Head of
investment		 US$500,000 or less US$1.5 million or less
(inclusive)
General
manager		 US$500,000 - 2
million(inclusive)		 US$5 million or less
(inclusive)
Chairman US$2 million or
more		 US$10 million or less
(inclusive)

  • (b) For other specific-purpose transactions, report to the Board of Directors and approve them before proceeding.

  • (c) The handling procedures or other acts and regulations in accordance with the company in order to acquire or dispose of the assets shall be approved by the board of directors. If a director expresses dissent and has a record or written statement, the company shall send the director's objection information to the supervisors. In addition, if the company has set up independent directors and submits transactions for acquisition or disposing of assets to the board of directors for discussion, it should fully consider the opinions of the independent directors and include their Opinion and reasons for their consent or objection in the minutes of the meeting

  • d. Audit department

  • Responsible for understanding the admissibility of internal control of derivative commodity transactions and checking the compliance of relevant departments with the operating procedures, and analyzing the trading cycle, making audit reports, and reporting to the board of directors when there are major deficiencies.

  • e. Performance evaluation

  • (a) Hedging transactions

    • i. The profit and loss generated between the exchange rate cost on the company's books and the derivative financial transactions is the basis for performance evaluation.

    • ii. In order to fully grasp and express the evaluation risk of the transaction, the company evaluates the profit and loss by means of monthly evaluation.

    • iii. The investment department shall provide foreign exchange location evaluation and foreign exchange market trends and market analysis to the general manager as a management reference and instructions.

  • (b) Special purpose transactions

    • Based on the actual profit and loss, the accounting personnel must regularly report the parts to provide a management reference.

  • f. The total amount of the contract and the upper limit of the loss

  • (a) Total contract

==> picture [24 x 23] intentionally omitted <==

- 93 - 

     - i. the amount of hedging transactions

     - The investment department should master the entire company to avoid trading risks. The amount of the hedging transaction shall not exceed twothirds of the company's overall net position. If it exceeds two-thirds, it shall be reported to the general manager for approval.

     - ii. Specific use transactions

     - Based on the forecast of market changes, the investment department can formulate strategies according to needs and report it to the board of directors for approval.

  - (b) Determination of the upper limit of loss

     - i. Regarding the hedging transaction, the risk is avoided, so there is no need to set a loss limit.

     - ii. In the case of a special purpose transaction contract, after the location is established, a stop loss point should be established to prevent excess losses. For the setting of the stop loss point, the upper limit of 10% of the transaction contract amount is not exceeded. If the amount of the loss exceeds 10% of the transaction amount, it shall be reported to the general manager immediately and reported to the board of directors to discuss the necessary measures.

     - iii. The amount of loss for individual contracts shall not exceed US$20,000 or 55% of the transaction contract, and the lower amount shall be the upper limit of loss.

     - iv. The maximum annual loss for the company's specific purpose trading operations is US$300,000.

  1. Risk management measures

  2. (1) Credit risk management:

Due to changes in various factors in the market, it is easy to cause operational risks of derivative financial products. Therefore, in market risk management, the following principles are followed:

  • a. Trading objects: mainly domestic and foreign famous financial institutions.

  • b. Trading commodities: limited to the goods provided by famous financial institutions at home and abroad.

  • c. Transaction amount: The amount of open interest of the same transaction object is limited to 10% of the total authorized amount. However, those approved by the general manager are not limited to this.

  • (2) Risk management of market prices:

The open exchange market provided by the bank is the mainstay, and the futures market is not considered.

  • (3) Management of liquidity risk:

==> picture [24 x 23] intentionally omitted <==

- 94 -

In order to ensure market liquidity, financial products are selected with high liquidity (that is, they can be balanced in the market at any time). Financial institutions entrusted with transactions must have sufficient information and the ability to trade in any market at any time.

  • (4) Management of cash flow risk:

    • In order to ensure the stability of the company's working capital turnover, the company's source of funds for derivative commodity transactions is limited to its own funds, and its operating amount should consider the funding requirements for the cash revenue and expenditure forecast for the next three months.

  • (5) Management of operational risks:

    • a. Should strictly follow the company's authorization quota, operating procedures and incorporate internal audits to avoid operational risks.

    • b. Trading personnel engaged in derivative commodities and operators such as confirmation and settlement shall not concurrently serve each other.

    • c. Risk measurement, supervision and control personnel belong to different departments. It should also report to the board of directors or senior executives who are not responsible for the decision of the transaction or part.

    • d. The part held by the derivative commodity exchange shall be assessed at least once a week. However, if the business needs to handle the risk-averse transaction, it should be assessed at least twice a month. The evaluation report shall be submitted to the senior executives authorized by the board of directors.

  • (6) Management of commodity risks:

    • Internal traders should have complete and correct professional knowledge of financial commodities, and require banks to fully expose risks to avoid misuse of financial commodity risks.

  • (7) Management of legal risks:

    • Documents signed with financial institutions should be formally signed by special personnel of foreign exchange and legal or legal counsel before they can be formally signed to avoid legal risks.

  • Internal audit system

  • (1) Internal auditors should regularly understand the admissibility of internal control of derivative commodity transactions, and check the compliance of the trading department on the transaction procedures for derivative commodity transactions and analyze the trading cycle on a monthly basis to make an audit report. If major violations are found, notify the supervisor in writing.

  • (2) The internal auditor shall report the audit report and the annual audit of the internal audit work to the FSC by the end of February of the following year, and report the improvement of the abnormal matters to the FSC by the end of May of the following year.

==> picture [24 x 23] intentionally omitted <==

- 95 -

  1. Regular evaluation methods

    • (1) The board of directors shall authorize the senior executives to regularly supervise and evaluate whether the transactions in the derivative commodities are actually handled in accordance with the trading procedures set by the company and whether the risks assumed are within the scope of the allowable undertaking. When there is an abnormal situation in the market price assessment report (if the holding position has exceeded the loss), it shall immediately report to the board of directors and take the appropriate measures.

    • (2) The part held by the derivative commodity exchange shall be assessed at least once a week. However, if the business needs to handle the risk-averse transaction, it should be assessed at least twice a month. The evaluation report shall be submitted to the senior executives authorized by the board of directors.

  2. The principle of supervision and management of the board of directors when engaging in derivative commodity transactions

    • (1) The board of directors shall appoint high-level supervisors to pay attention to the supervision and control of the risk of derivative commodity transactions at any time. The management principles are as follows:

      • a. Regularly assess whether the currently used risk management measures are appropriate and do so in accordance with the Code and the company's procedures for dealing with derivative goods.

      • b. The transaction and profit and loss situation should be supervised. If an abnormal situation is found, the necessary response measures should be taken and reported to the board of directors immediately. If the company has set up independent directors, the board of directors should have independent directors to attend and express their opinions.

    • (2) The performance of the derivative commodity transactions shall be assessed periodically to determine whether it meets the established business strategy and whether the risks assumed are within the scope of the company.

    • (3) When the company engages in the transaction of derivative commodities, it shall authorize the relevant personnel to handle the procedures in accordance with the procedures for dealing with the derivatives transactions, and shall report to the most recent board of directors afterwards.

    • (4) When the company engages in the trading of derivative commodities, a record book should be established. The content is subject to the types and amounts of derivative commodity transactions, the date of passage of the board of directors, and the matters that should be carefully evaluated by Paragraph 4, Item 2 and Paragraph 5, Item 1 and 2 in accordance with this section.

  3. Article 13 Procedures for handling mergers, divisions, acquisitions or share transfers

  4. Procedures for assessment and operation

==> picture [24 x 23] intentionally omitted <==

- 96 -

  • (1) When the company handles mergers, divisions, acquisitions or share transfer, it is advisable to invite lawyers, accountants and underwriters to jointly study the estimated timetable for the statutory procedures and organize the ad hoc group to execute in accordance with legal procedures. Before convening a resolution of the board of directors, the accountant, lawyer or securities underwriter should be invited to express opinions on the proportion of the conversion, the purchase price or the reasonableness of the cash or other property of the allotment to the board of directors for discussion and approval. However, the merger of the Company's subsidiaries that directly or indirectly hold 100% of the issued shares or capital, or the subsidiaries that directly or indirectly hold 100% of the issued shares or total capital, may be exempted from the reasonable opinions of the aforementioned experts. .

  • (2) The company shall make the public documents of the mergers, divisions, and acquisitions important matters and related matters to be provided to the shareholders before the meeting of the shareholders' meeting. In addition, the expert opinion of paragraph 1, Item 2 and the notice of the meeting of the shareholders meeting are delivered to the shareholders as a reference for whether or not to agree to the mergers, divisions, and acquisitions. However, in accordance with other acts and regulations, it is not allowed to convene a shareholder meeting resolution of mergers, divisions, and acquisitions. In addition, the companies participating in the mergers, divisions, and acquisitions, the shareholders' meeting of either party may not be convened, the resolution or the proposal is rejected by the shareholders due to the number of attendees, insufficient voting rights or other legal restrictions, and participate in the mergers, divisions, and acquisitions companies. The cause of the occurrence, the subsequent processing operations, and the date of the expected shareholders meeting shall be disclosed immediately.

  • Other matters needing attention

  • (1) Date of the Board of Directors: The companies participating in the mergers, divisions and acquisitions shall convene the board of directors and the shareholders' meeting on the same day, unless otherwise stipulated by other laws or have special factors, they shall decide on the merged, divided or acquisitions matters.

  • (2) The company that participates in the transfer of shares shall, on the same day, convene the board of directors, unless otherwise stipulated by other laws or with special factors in advance to the consent of the FSC.

  • (3) Companies that participate in the listing of stocks, divisions, acquisitions or share transfers or stocks traded in the securities firm's business premises shall make the following written records in full and keep them for five years for verification: a. Basic information of personnel: including the person who participated in the

==> picture [24 x 23] intentionally omitted <==

- 97 -

merger, division, acquisition or share transfer plan or plan execution before the publication of the news, its title, name, identity card number (if it is a foreigner, the passport number).

  • b. Date of important matters: including the date of signing the letter of intent or memorandum, entrusting financial or legal counsel, signing the contract and the board of directors.

  • c. Important books and proceedings: including mercers, divisions, acquisitions or share transfer plans, letters of intent or memoranda, important contracts and minutes of the board of directors.

  • (4) For companies that participate in mergers, divisions, acquisitions or share transfer listings or where stocks are traded in the securities firm's place of business. Within 2 days from the date of the resolution of the board of directors, the information of the first sub-item and the second sub-item of the above items shall be reported to the FSC in the prescribed format in accordance with the prescribed format.

  • (5) When a company involved in mergers, divisions, acquisitions or share transfer is not a company listed or whose shares are traded in a securities firm's place of business, the company that is listed or traded in the securities firm's place of business shall sign an agreement with it and rely on the item. 3 and item 4.

  • (6) Prior confidentiality commitment: All persons who participate in or know the company's merchants, divisions, and acquisitions or share transfer plan shall issue a written confidentiality commitment. Prior to the disclosure of the information, it is promised that the contents of the plan may not be disclosed to the public, and that the shares of all companies related to the merchants, divisions, and acquisitions or the share transfer case and other securities of an equity nature may not be traded on its own or in the name of others.

  • (7) Principles for the formulation and change of the share conversion ratio or purchase price: The companies involved in the mergers, divisions, and acquisitions or share transfer shall appoint an accountant, lawyer or securities underwriter to the share conversion ratio and purchase price before the two parties convene the board of directors. Or express the opinion on the reasonableness of the cash or other property of the allotment and report it to the shareholders' meeting. In principle, the conversion ratio or the purchase price shall not be arbitrarily changed, but the conditions for the change have been set in the contract and have been publicly disclosed. The conversion ratio or purchase price may be changed as follows:

  • a. Capitalized by the cash, issued convertible bond, issue of bonus shares, issued corporate bonds with warrants, preferred shares with warrants, stock option certificates and other securities of an equity nature.

  • b. Dispose of the company's major assets and other activities that affect the company's financial business.

==> picture [24 x 23] intentionally omitted <==

- 98 -

  • c. Major disasters, major technological changes, etc. affecting the company's shareholders' equity or securities prices.

  • d. Participation in the merger of the merchants, divisions, and acquisitions or the company of the share transfer to buy the treasury stock according to law.

  • e. Participate in the increase or decrease of the number of subjects or households involved in merchants, divisions, and acquisitions or share transfers.

  • f. Other conditions that have been changed in the contract and have been publicly disclosed.

  • (8) The contract shall contain the contents of the mercers, divisions, and acquisitions or the contract of the share transfer company in addition to one of Article 171 of the Company Act and Article 22 of the Enterprises Mergers and Acquisitions Act. It should also state the following:

  • a. Treatment of default.

  • b. The principle of dealing with treasury stock with equity-type securities or bought back before the company that was eliminated or divided by the merger.

  • c. Participating companies can buy back the number of treasury shares and their handling principles after calculating the base date of the conversion ratio.

  • d. How to deal with the increase or decrease of the participating entities or the number of participants.

  • e. Estimate the progress of the project execution and the expected completion schedule.

  • f. When the plan is not completed within the time limit, the relevant processing procedures such as the scheduled date of the shareholders' meeting shall be convened in accordance with the law.

  • (9) When the number of companies involved in mergers, divisions, and acquisitions or share transfer is changed: Any party involved in the mergers, divisions, and acquisitions or share transfer is disclosed to other companies for mergers. , divisions, and acquisitions or when the shares are transferred, in addition to the reduction in the number of participating households, and the shareholders' meeting has resolved and authorized the board of directors to change the authority, the participating companies are exempted from convening the shareholders' meeting to re-issue the resolution, the original mergers, divisions, and acquisitions or share transfer cases have been completed or legal actions should be re-established by all participating companies.

  • (10) Companies involved in mergers, divisions, and acquisitions or share transfer are not affiliated companies. The company should sign a meeting with it. In accordance with Paragraph2, Item 1 of this article, the board date, Item 6 confidentiality commitment, Item 9 participation in merchants, divisions, and acquisitions or the transfer of shares of the company are handled.

==> picture [24 x 23] intentionally omitted <==

- 99 -

Article 14 Information disclosure procedures

  1. The project should be announced and the reporting standard should be announced.

  2. (1) When acquiring or disposing the real property to the person concerned, or with the relationship person to obtain or dispose of the real property other than the assets it uses, but the transaction amount reaches 20% of the company's paid-up capital, 10% of the total assets or NT$300 million. However, the trading of bonds, repurchase agreement, and reverse repo bonds, purchase or purchase of money market funds issued by domestic securities investment trusts are not limited.

  3. (2) Conducting mergers, divisions, and acquisitions or share transfers.

  4. (3) The maximum amount of all or individual contract losses stipulated in the procedures for handling derivative goods losses.

  5. (4) Acquisition and disposition of equipment for use in business, and the transaction object is not related to the transaction, the transaction amount of NT$500 million or more.

  6. (5) The company's acquisition and disposal of the construction business is for the construction of the real estate and its trading objects are not related, and the transaction amount is NT$500 million.

  7. (6) Real estate is obtained by self-use land construction, land lease construction, joint housing construction, profit sharing, and separate sales. The company expects to invest NT$500 million or more.

  8. (7) In addition to the asset trading of the first six items, financial institutions disposing of creditor's rights or investing in mainland China, the transaction amount shall reach 20% of the company's paid-in capital or NT$300 million. However, the following situations are not limited to this:

    • a. Buying and selling bonds.

    • b. Take investment as a professional, buy or sell securities of securities at the stock exchanges of securities companies or securities firms at home or abroad, or subscribe for common corporate bonds issued in the domestic primary market and general financial bonds not involving equity. Or securities dealers who are required by the underwriting business to serve as a listed company at the emerging stock market, recommend securities firms to subscribe for securities under the Taipei Exchange.

    • c. Buy or sell bonds with repurchase agreement, reverse repo conditions, purchase or buy back money market funds issued by domestic securities investment trusts.

  9. (8) The above-mentioned transaction amount of Item 1 to 7 is calculated as follows, and the alleged one year is retroactively calculated one year based on the date on which the fact of the transaction occurred. Partial reimbursement has been stipulated in accordance with the regulations:

    • a. The amount of each transaction.

==> picture [24 x 23] intentionally omitted <==

- 100 - 

     - b. Accumulate the amount of the same nature of the same person's acquisition and disposal within one year.

     - c. Accumulate the amount of acquisition and disposition (Acquisition and disposition separately) in the same development plan for real estate within one year.

     - d. Accumulate the amount of acquisition and disposal of the same security in one year (acquisition and disposal separately).

  1. Time limit for handling announcements and declarations

    • If the company acquires or disposes of assets and has the first item to be announced in this Article and the transaction amount reaches the reporting standard that should be announced in this article, it shall be reported within two days from the date of the fact.

  2. Announcement reporting procedure

    • (1) The company shall report the relevant information to the FSC designated website for announcement.

    • (2) The Company shall, on a monthly basis, enter into the information reporting website designated by the FSC by the Company and its subsidiaries not affiliated with the Company as at the end of last month in accordance with the prescribed format.

    • (3) The company shall announce the project according to the regulations. If there is any error or omission at the time of the announcement and should be corrected, all items shall be re-issued and declared within two days from the date of notification.

    • (4) The company's acquisition and disposal assets shall be placed in the company with relevant contracts, minutes, record books, valuation reports, accountants, lawyers or securities underwriters. Save for at least five years, unless otherwise stipulated by other laws.

    • (5) After the company announces the declared transaction in accordance with the provisions of this Article, one of the following circumstances shall, within two days from the date of the fact, report the relevant information on the designated website of the FCC:

      • a. The status of the relevant contract signed by the original transaction is changed, terminated or released.

      • b. Mergers., divisions, and acquisitions or share transfer is not completed on the contract schedule.

      • c. The original announcement has changed.

  3. Article 15 The subsidiaries of the Company shall be handled in accordance with the following provisions:

  4. If the subsidiary of the company is a public company: In accordance with Section 36-1 of the Securities and Exchange Act and "Regulations Governing the Acquisition and Disposal by Public Companies", "The procedures for

==> picture [24 x 23] intentionally omitted <==

- 101 -

acquisition or disposal of assets" is established. This content does not need to be reported to the board of directors of the company. The same applies to the amendment.

  1. If the subsidiary of the company is not a public company, it should be handled as follows:

    • (1) The board of directors and relevant units of the company shall verify and execute according to the processing procedures, and the subsidiaries shall cooperate to handle related matters.

    • (2) According to the relevant regulations of the Company, “The procedures for acquisition or disposal of assets” shall be formulated and submitted to the board of directors of the Company for approval. The same applies to the amendment.

  2. When a subsidiary acquires or disposes of assets, it shall provide relevant information to the Company for future reference.

  3. If the subsidiary is not a publicly-issued company, the company shall acquire or dispose of the assets to the announcement standard set out in Chapter III of the “Guidelines for the Acquisition or Disposal of Assets by the Public Issuance Company”. The parent company shall also handle the announcement of the declaration on behalf of the subsidiary.

  4. The “declared capital of the company is 20%” or “10% of the total assets” as stated in the announcement standard of the subsidiary, and the paid-in capital or total assets of the parent company (the company) is quasi.

  5. Article 15-1 The provisions of the Procedure for 10% of the total assets are calculated based on the total assets in the most recent individual or individual financial reports as stipulated in the financial issuer's financial reporting standards.

    • If the company's stock is not denominated or the amount is not NT$10 per share, the Procures transaction amount of 20% of the paid-up capital is calculated at 10% of the equity of the owner of the parent company.

  6. Article 16 Penalties

If employees of our company violate the provisions of this procedure when they undertake Acquisition and Disposal, they shall be regularly reported and evaluated according to the personnel management methods and work rules of the company, and shall be punished according to their circumstances.

Article 17 Implementation and revision

  • After the approval of the board of directors, the company's "The procedures for acquisition or disposal of assets" was sent to the supervisors and submitted to the shareholders' meeting for approval. The same applies to the amendment. If a director expresses dissent and has a record or written statement, the company shall send the director's objection information to the supervisors. In addition, if the company has set up an independent director, the "The procedures for acquisition or disposal of assets" should be fully considered in the discussion of the board of directors, and the opinions

==> picture [24 x 23] intentionally omitted <==

- 102 -

and reasons of their consent or objection should be included in the minutes. Article 18 Supplementary Provisions

If there is any unspecified matter, this Procedure is handled in accordance with the relevant acts and regulations.

==> picture [24 x 23] intentionally omitted <==

- 103 -

【 Annex 3 】

Chuwa Wool Industry Co., (Taiwan) Ltd. Loaning Other Party's Operating Procedures

Adopted at the shareholders meeting on June 8, 2018

1. Purpose

  • 1.1 The Operating Procedures Section 36-1 and the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies (hereinafter referred to as the Processing Guidelines) are referred.

  • Scope of application

  • 2.1 The company handles the loan of funds for others, and should handle according to the regulations, otherwise other acts and regulations provided for it.

  • 2.2 If a subsidiary of the Company intends to lend funds to others, it shall, in accordance with the Processing Guidelines and the Regulation, set the fund loan of the subsidiary and the operating procedures of others, and report it to the board of directors of the Company.

  • However, if the provisions of the Processing Guidelines or the Regulation are in conflict with the laws of the subsidiary, the local acts and regulations shall be applied first.

  • Noun definition

  • 3.1 The subsidiaries and parent companies referred to in this Regulation shall be determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

  • 3.2 The company's financial report is prepared in accordance with International Financial Reporting Standards. The net value referred to in this Procedure refers to the equity of the parent company owner attached to the balance sheet of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

  • 3.3 The “announcement” referred to in this Regulation refers to the information reporting website designated by the Financial Supervisory Commission.

  • 3.4 The date of occurrence of the facts referred to in this operating procedure refers to the date of the transaction signing date, the date of payment, the resolution date of the board of directors or other date on which the transaction object and transaction amount are determined.

  • Authority unit

  • 4.1 Finance Department: The proposal for the revision of this Procedure and the supervisory execution unit.

  • Operation process and description

  • 5.1 Fund loans and objects

    • 5.1.1 According to Article 15 of the Company Act, the company shall not lend to shareholders or any other person except for the following circumstances:

      • 1> Company or line number with which the company has business dealings.

==> picture [24 x 23] intentionally omitted <==

- 104 - 

  - 2> The company or line number necessary for the company to have short-term financing, but the financing amount shall not exceed 40% of the company's net value.

  • 5.1.2 The short term referred to in 5.1.1 refers to one year. However, if the company's business cycle is longer than one year, the business cycle shall prevail. The amount of financing herein refers to the accumulated balance of the company's short-term financing.

  • 5.1.3 The company directly and indirectly holds 100% of the voting shares of foreign companies, engaged in capital loans, is not subject to 5.1.1 2> However, it should still set the limit and term of the loan for funds in accordance with 5.3 and 5.4.

  • 5.2 Procedures for the evaluation of financial loans and others

  • 5.2.1 The company's loan and funds are subject to the provisions of this operating procedure 5.1.1.

  • 5.2.2 Standards for the evaluation of financial loans and others

    • 1> Engaged in financial loans due to business relationships: shall comply with the provisions of 5.3.2.

    • 2> Those who have short-term financing funds are limited to the following situations:

      • (1) When the company holds more than 50% of its subsidiaries, it is necessary for short-term financing due to business needs.

      • (2) When his company or line number is required for short-term financing due to purchase or operational turnover.

      • (3) Others have agreed to the fund loan by the board of directors of the company.

  • 5.3 Funding loans and total amount and limit amounts for individual objects

  • 5.3.1 The total amount of the company's fund loans and others, including business transactions and short-term financing, does not exceed 40% of the company's net worth.

  • 5.3.2 The limit on the loan of business transactions:

    • The company or line number that has business dealings with the company is limited to the amount of individual loans and amounts that do not exceed the amount of business transactions between the two parties. The so-called business transaction amount refers to the highest amount of purchase or sales of both parties. However, the maximum amount may not exceed 35 percent of the company's net worth.

  • 5.3.3 Necessary company or line number with the company's short-term financing: The loan and amount of individual objects shall be no more than 35 percent of the net value of the company.

  • 5.3.4 When the Company engages in the loan of funds between foreign companies that directly and indirectly hold 100% of the voting shares, the loan and total amount and the loan and amount of individual objects shall not exceed three times the net value of the company.

  • 5.4 Funding and term and interest-bearing methods

  • 5.4.1 Loans and maturities: The maximum period of financial financing is limited to one year or one business cycle, whichever is longer. However, the company may notify the borrower to repay the loan in advance according to actual needs. If the application is

==> picture [24 x 23] intentionally omitted <==

- 105 -

postponed if it is not repaid, it shall be submitted in advance and approved by the board of directors.

  • 5.4.2 Interest-bearing method: The capital loan and interest rate shall be subject to the deposit and interest rate of the company in the financial institution. In case of special circumstances, it may be adjusted according to the actual situation after the supervisor has agreed and sent to the board of directors for approval.

  • 5.5 Funding and handling procedures

  • 5.5.1 Before the company lends the company's funds to others, it should carefully evaluate whether it meets the requirements of Processing Guidelines and the Procedure, and submits the results of the evaluation of 5.6 to the board of directors for resolution, and may not authorize others to decide. However, major capital loans and loans shall be obtained after the relevant regulations have been approved by the supervisor and sent to the board of directors for approval.

  • 5.5.2 If the Company and the Company directly or indirectly hold 100% of the voting shares, or the Company directly and indirectly holds 100% of the voting rights of the subsidiaries, the board of directors shall make a resolution in accordance with 5.5.1. And, the chairman of the board of directors may be authorized to allocate or repay the same loan and the target in a certain amount of the resolution of the board of directors and within a period of not more than one year.

    • The certain amount referred to in the preceding paragraph shall not exceed the net value of the company's latest financial statements by 10%, except for those that meet the requirements of 5.1.3.

  • 5.5.3 If the borrower applies for a loan from the company, an application form should be issued. The application shall be detailed in the amount of the loan, the term, the purpose, the guarantee provided, and other matters specified in the company. The borrower should also provide basic information and financial information, and the contractor should transfer the financial department of the company to handle the credit investigation.

  • 5.5.4 After the credit investigation and evaluation, if the borrower's credit rating is not good, the loan will not be released. The handling personnel should report the loan and reply to the borrower as soon as possible. For credit information and those who agree to lend after evaluation, the handling personnel shall fill out the credit report and review opinions, and submit them to the board of directors for approval.

    • The Company has set up independent directors and should fully consider the opinions of independent directors and include the reasons for their consent or objection and the reasons for objection in the records of the board of directors.

    • In the case of continuing borrowers, in principle, the credit investigation should be reapplied when making an application for renewal.

  • 5.5.5 In the case of loan lending, the handling personnel shall formulate the terms of the loan contract according to the approved borrowing conditions. After being reviewed by the

==> picture [24 x 23] intentionally omitted <==

- 106 -

competent person and sent to the Legal Counsel for verification, the handling personnel shall go through the signing formalities. If there is a collateral in a loan case, the borrower shall provide the collateral and complete the pledge or mortgage setting procedures to ensure the company's claims. In addition to land and marketable securities, collateral should be covered by fire insurance and related insurance. The amount of insurance is based on the principle of not less than the amount of the secured credit. The insurance policy should be added to benefit the company. The name, quantity, storage location and policy conditions of the subject matter on the policy shall be in accordance with the original nuclear lending conditions of the Company. The handling personnel should pay attention to notify the borrower to continue to insure before the expiration of the insurance period.

  • 5.5.6 The loan release case is approved and signed by the borrower, and the collateral is set up for registration (such as the pledge). All the procedures are checked and the funds are approved.

  • 5.6 The detailed review process should include:

  • 5.6.1 The necessity and rationality of the loan of funds to others.

  • 5.6.2 Credit investigation and risk assessment of loans and objects.

  • 5.6.3 Impact on the Company's operational risk, financial position and shareholders' equity.

  • 5.6.4 Whether the assessed value of collateral and collateral should be obtained.

  • 5.7 Subsequent control measures for loans and amounts, overdue claims processing procedures 5.7.1 After the loan is released, the financial, business and credit status of the borrower and the guarantor should always be taken care of. If there is a collateral, attention should be paid to the change in the value of the guarantee. Before the expiration of the loan term, the borrower shall be notified to pay off the principal and interest or to apply for the extension. When the borrower repays the loan due to the loan, the borrower shall first calculate the interest payable, and together with the principal, the debtor's debts and debits will be written off and returned to the borrower. If the borrower applies for the execution of the mortgage or pledge setting, it should first find out whether there is the balance of the loan and the interest accrued, in order to decide whether to agree to the mortgage or the pledge setting.

  • 5.7.2 Before the borrower expires, if the borrower still needs it, he may apply for renewal of the extension once. After the resolution of the board of directors was passed, the relevant procedures were re-applied.

  • 5.7.3 In the case of loan handling, the handling personnel of the loan handling case shall, after lending the loan, vouch for the loan vouchers such as the loan contract and the promissory note, as well as the collateral documents, insurance policies and current documents, according to the customers. Enter the storage bag. After the contents of the storage and the customer's name are indicated on the bag, they shall be submitted to the supervisor for inspection. The inspection shall be sealed and sealed, and shall be kept after the affix a

==> picture [24 x 23] intentionally omitted <==

- 107 - 

  - seal of the handling personnel and the supervisor's seal at the joining of two papers.

  • 5.7.4 If the borrower fails to repay the principal and interest on time, the financial staff of the company shall call it. Except for special reasons and approved by the board of directors, the collateral or guarantor provided by the company for three consecutive months of noninterest will be subject to disciplinary action and recovery.

  • 5.8 Penalty: When the relevant personnel violates Processing Guidelines or this Procedure, they shall be handled in accordance with the internal management regulations of the company.

  • 5.9 Procedures for controlling the loan of subsidiaries and others: The internal auditors of the Company should regularly understand the financial loans of the subsidiaries and others, and regularly audit the compliance of the subsidiaries with the funds and other people's operating procedures, and make an audit report.

  • 5.10 When the company handles capital loans and matters, a checklist should be established. The content should be published for inspection in accordance with the target of the fund loan, the amount, the date of the board of directors, the date of the fund loan and the criteria that should be carefully assessed in accordance with the first paragraph of the preceding article.

  • 5.11 The internal auditors of the Company shall, at least quarterly, audit the funds and other people's operating procedures and their implementation, and make a written record. If a major violation is found, each supervisor should be notified in writing.

  • 5.12 If the company changes its status and the loan does not meet the requirements of the operating procedures or the balance exceeds the limit, an improvement plan shall be made, and the relevant improvement plan shall be sent to the supervisor and completed according to the planning schedule.

  • 5.13 Information disclosure

  • 5.13.1 The Company shall announce the capital loan and balance of the Company and its subsidiaries in the previous month before the 10th of each month.

  • 5.13.2 The company's fund loan and one of the following standards shall be announced within two days from the date of the fact:

    • 1> The balance of the company's and its subsidiaries' fund loans and others reached more than 20% of the company's most recent financial statements.

    • 2> The company's and its subsidiaries' loans and balances on a single enterprise accounted for more than 10% of the company's most recent financial statements.

    • 3> The newly-added funds and loans of the Company or its subsidiaries amounted to NT$10 million and reached the net value of the latest financial statements of the Company by more than 2%.

  • 5.13.3 If the subsidiary of the company is not a domestic public offering company, the subsidiary shall have 5.13.2 what should be announced and declared by the company.

  • 5.13.4 The Company shall evaluate the fund loan situation and provide an adequate allowance for bad debts, and properly disclose relevant information in the financial report, and provide relevant information to the visa accountant to perform the necessary check

==> picture [24 x 23] intentionally omitted <==

- 108 -

procedures.

  1. Supplementary

  2. 6.1 The Loaning Other Party's Operating Procedures set by the company shall be approved by the board of directors. Then sent to supervisors and reported to the shareholders' meeting for approval. If the directors express objection and have a record or written statement, the company shall send the objection to the supervisors. And to report to the shareholders meeting for discussion, the same applies to the amendment.

  3. 6.2 The Company has set up independent directors to fully report the opinions of each independent director when submitting the fund loan and other people's operating procedures to the board of directors in accordance with 6.1, the opinions of each independent director should be fully considered and include the reasons for their consent or objection and the reasons for objection in the board record.

==> picture [24 x 23] intentionally omitted <==

- 109 -

Chuwa Wool Industry Co., (Taiwan) Ltd. Endorsement Guaranteed Operating Procedures

Adopted at the shareholders meeting

on June 8, 2018

1. Purpose

  • 1.1 This Procedure is governed by Section 36-1 of the Securities Exchange Act and the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies (hereinafter referred to as the Processing Guidelines).

  • Scope of application

  • 2.1 If the company handles the endorsement of others, it shall be handled in accordance with the provisions of this operating procedure. However, if other acts and regulations provide otherwise, the provisions shall prevail.

  • 2.2 If a subsidiary of the Company intends to endorse or provide guarantees for others, it shall, in accordance with Processing Guidelines and the Company's Procedure, establish an endorsement guarantee operation procedure for the subsidiary and report it to the board of directors of the Company. The same applies to the amendment.

    • However, if the provisions of Processing Guidelines or the Procedure are in conflict with the laws of the subsidiary, the local acts and regulations may be applied first.

  • Noun definition

  • 3.1 The subsidiaries and parent companies referred to in this Procedure shall be identified in accordance with the provisions of the financial issuer's financial reporting standards.

  • 3.2 The company's financial report is prepared by International Financial Reporting Standards. The net value of this “Procedure” refers to the equity of the securities issuer's financial report preparation standards attributable to the owners of the parent company.

  • 3.3 The “reported declaration” referred to in this “Procedure” refers to the information reporting website designated by the FSC.

  • 3.4 The date of occurrence of the facts referred to in this operating procedure refers to the date of signing of the transaction, the date of payment, the resolution date of the board of directors, or other date on which the transaction object and the transaction amount are determined.

  • Authority unit

  • 4.1 Finance Department: The proposal for the revision of this operating procedure and the supervisory execution unit.

  • Operation process and description

  • 5.1 The endorsement warranty referred to in this operating procedure refers to the following:

    • 1> Financing endorsement guarantees, including:

      • (1) Discounted note financing.

      • (2) An endorsement or guarantee for the purpose of financing a third-party company.

==> picture [24 x 23] intentionally omitted <==

- 110 - 

  - (3) Separate bills for non-financial undertakings for the purpose of financing the Company.

  • 2> Tariff endorsement guarantee refers to the endorsement or guarantee of the relevant customs matters of the company or other company.

  • 3> Other endorsement guarantees refer to endorsements or guarantees that cannot be classified in the first two paragraphs.

  • 4> The company provides movable property or real estate for the third-party company to guarantee the pledge, mortgage, and should also be handled in accordance with the provisions of this Procedure.

  • 5.2 The object of the company's endorsement guarantee

  • 1> The company can endorse the following companies:

  • (1) A company that has business dealings with the company.

  • (2) The company that directly and indirectly holds more than 50% of the voting shares.

  • (3) Companies that directly and indirectly have more than 50% of the shares with voting rights of the Company.

  • 2> The company can endorse guarantees for companies that directly or indirectly hold more than 90% of the voting shares, and the amount cannot exceed 10% of the net value of the company. However, the Company does not guarantee the endorsement of 100% of the company's direct and indirect voting shares.

  • 3> The company may guarantee mutual insurance according to the contractual requirements based on the contractual requirements of the inter-department or co-creation of the project, or the endorsement of the invested company by the all-funded shareholders according to their shareholding ratio. Or the performance guarantee of the pre-sales sales contract in the inter-bank under the Consumer Protection Act. The above conditions are not subject to the restrictions set forth in the preceding paragraph and can be endorsed.

  • 4> The capital contribution referred to in the preceding paragraph belongs to the direct capital contribution of the company or the capital contribution of the company with 100% of the voting shares.

  • 5.3 Processes processed

  • 5.3.1 The company's endorsement guarantee operation procedures are as follows: 

     - 1> Objects that can be endorsed by the endorsement: This is limited to the provisions of 5.2 of this Procedure.

 - 2> Standards for the evaluation of endorsements due to business dealings The amount guaranteed by the company's endorsement shall not exceed the total amount of transactions with the company in the most recent year. The total amount of the alleged transaction refers to the higher of the purchase or sales of both parties. However, the company does not limit the number of subsidiaries that directly and indirectly hold 100% of the shares.

 - 3> Endorsement guarantee total and individual object limit

    - (1) The total amount of endorsement of the company is limited to 500% of the

==> picture [24 x 23] intentionally omitted <==

- 111 -

company's net value. The total amount of endorsements guaranteed by the Company and its subsidiaries is set at a maximum of 500% of the company's net value.

  • (2) The Company's endorsement guarantee amount for a single company is limited to 500% of the company's net value. The total amount of endorsements guaranteed by the Company and its subsidiaries to a single enterprise is set at a maximum of 500% of the company's net value.

  • 4> Endorsement guarantee procedures

  • (1) The applicant company should fill in an "endorsement guarantee application".

  • (2) The financial unit of the company shall be summarized and reported after detailed review procedures and detailed assessment. The guaranteed company can be required to provide a movable or real estate setting mortgage or pledge.

  • (3) When the company handles the external endorsement and guarantees, if it deems it necessary, it can issue the same amount of guarantee promissory note to the company for relative guarantee.

  • (4) If the promissory note guaranteed by the endorsement is due to be settled or renewed due to debts, the guaranteed company shall prepare a document to return the promissory note of the original endorsement to the contractor and stamp it with the "release" seal. The communication is left for future reference.

  • (5) The financial department shall, at any time, deactivate the endorsement guarantee ticket into the “endorsement guarantee checklist”, thereby reducing the accumulated endorsement guarantee amount.

  • 5> Detailed review procedures

  • (1) Before the company endorses or provides guarantees for others, it should be carefully evaluated whether it meets the requirements of Processing guidelines and this Procedure.

  • (2) The evaluation item of endorsement guarantee shall include:

    • A. The necessity and rationality of the endorsement guarantee.

    • B. The credit investigation and risk assessment of the endorsement guarantee object.

    • C. The Company's operational risks, financial status and impact on shareholders' equity.

    • D. Whether the valuation of collateral and collateral should be obtained.

  • 6> Procedures for controlling the endorsement of subsidiaries.

  • The internal auditors of the company should regularly understand the status of the external endorsement guarantees of the subsidiaries, and regularly audit the compliance of the subsidiaries with the endorsement guarantee procedures, thereby making an audit report.

  • 7> Procedures for the use and preservation of seals

==> picture [24 x 23] intentionally omitted <==

- 112 - 

  - (1) The company shall use the company seal applied for registration with the Ministry of Economic Affairs as a special seal for endorsement. The seal should be kept by a designated person. And according to the established procedures, the seal began to stamp or issue some notes.

  - (2) When the foreign company is guaranteed, the guarantee letter issued by the company shall be signed by the authorized person of the board of directors.

  • 8> Decision and authorization level

    • (1) When the company handles the endorsement guarantee, it shall be approved by the board of directors. However, in order to meet the needs of timeliness, the board of directors may authorize the chairman to conduct and decide within a certain amount, and then report to the board of directors for the most recent period. However, the more important endorsement guarantees shall be carried out only after the relevant regulations have been approved by the supervisor and sent to the board of directors for approval.

    • (2) For the subsidiaries that directly or indirectly hold more than 90% of the voting shares, according to the provisions of 5.2.1>, before the endorsement guarantee, the company should report it to the board of directors of the company.

    • (3) If the company has an endorsement guarantee, if it exceeds the endorsement guarantee limit due to business needs, it shall be approved by the supervisor and sent to the board of directors for approval and by more than half of the directors to give their names. And, the operating procedures should be revised and reported to the shareholders meeting for ratification. When the shareholders disagree, they should plan to eliminate the overruns within a certain period of time.

  • 9> Penalty: When the relevant personnel violate Processing guidelines or this Procedure, they should follow the internal management regulations of the company.

  • 5.3.2 The Company shall establish a checklist for the endorsement of the endorsement, according to the endorsement object, the amount, the date of the board of directors or the chairman's decision, the endorsement date and the items that should be carefully evaluated in accordance with 5.3.1 5>, and shall be published for reference.

  • 5.3.3 The internal auditors of the company shall at least quarterly audit the endorsement to ensure the operating procedures and their implementation, and make a written record. If a major violation is found, the supervisor shall be notified in writing.

  • 5.3.4 If the company's endorsement guarantee object does not meet the requirements of this operating procedure or the amount exceeds the limit due to the change of status, the improvement plan shall be formulated. The relevant improvement plans were sent to the supervisor, and the improvement was completed according to the schedule.

  • 5.3.5 If the company carries out endorsement guarantees for its subsidiaries, but its net value is less than one-half of the actual amount of capital received, the subsidiary should be required to issue a debt repayment plan and report it to the board of directors of the

==> picture [24 x 23] intentionally omitted <==

- 113 -

company for approval. In the future, the company's board of directors will report on the implementation of its debt repayment plan on a regular basis.

When the shares of the subsidiary are not denominated or the denomination of each share is not NT$10, the amount of paid-up capital calculated according to the regulations shall be calculated by adding the total amount of capital reserve and deducting the issue premium.

  • 5.4 Publicity of information

    • 5.4.1 The company shall announce the endorsement guarantee balance of the company and its subsidiaries for the previous month before the 10th of each month.

    • 5.4.2 The endorsement of the company guarantees that one of the following standards shall be announced within two days from the date of the fact:

      • 1> The endorsement of the Company and its subsidiaries guarantees a balance of more than 50% of the company's most recent financial statements.

      • 2> When the Company and its subsidiaries endorse the guarantee for a single enterprise, the balance will reach more than 20% of the company's latest financial statements.

      • 3> When the company and its subsidiaries endorse the guarantee for a single enterprise, the balance will reach NT$10 million or more. And its endorsement guarantee, longterm investment and fund loan and balance totaled more than 30% of the company's most recent financial statement.

      • 4> When the endorsement amount of the new company or subsidiary is NT$30 million or more, and the company's latest financial statement has a net value of more than 5%.

      • When the subsidiary of the company is not a domestic public issuance company, the subsidiary shall have the matters to be announced in the item 4 of the preceding paragraph, which shall be carried out by the company.

    • 5.4.3 The company shall evaluate or recognize the endorsement to ensure that there is any loss and properly disclose the endorsement guarantee information in the financial report. And, the company should provide relevant information to the visa accountant to perform the necessary check procedures.

  • Supplementary

  • 6.1 The operating procedures for the endorsements set by the company shall be sent to the supervisors and submitted to the shareholders' meeting for approval after being approved by the board of directors. If a director expresses dissent and has a record or written statement, the company shall send the objection to the supervisors and report to the shareholders meeting for discussion. The same applies to the amendment.

  • 6.2 The company has set up independent directors. When the endorsement guarantee operating procedures are submitted to the board of directors for discussion in accordance with the provisions of the preceding paragraph, the opinions of the independent directors should be fully considered and the reasons for their consent or objection and the reasons for objection should be included in the board record.

==> picture [24 x 23] intentionally omitted <==

- 114 -

【 Annex 4 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

Rules of Procedures for Shareholders' Meeting

Amended at the shareholders' meeting on May 22, 2002

Article 1 The shareholders' meeting of the company shall, in addition to the statutes, be handled in accordance with this Procedure. Article 2 When a shareholder attends a shareholder meeting, he or she attends the attendance card instead of signing it. The number of attendance shares is calculated based on the attendance card. Article 3 The voting of the shareholders' meeting shall be based on the shares. Article 4 The place where the shareholders' meeting is convened shall be at the place where the company's location or shareholders are convenient to attend and suitable for the meeting of the shareholders' meeting. The meeting should start no earlier than 9 am or later than 3 pm. Article 5 If the shareholders' meeting is convened by the board of directors, the chairman of the board of directors shall be the chairman. When the chairman of the board of directors asks for leave or fails to exercise his powers for any reason, the vice chairman shall act as the agent. If no vice chairman or vice chairman is also absent or unable to exercise his powers for any reason, the chairman of the board of directors shall appoint one of the managing directors. If there is no permanent director, the designated director shall be represented by one person. If the chairman of the board of directors does not appoint an agent, the managing director or director shall push one agent for each other. Article 6 The Company may assign lawyers, accountants or related personnel appointed by the company to attend the shareholders' meeting. The attending staff of the shareholders' meeting should wear a identification card or armband. Article 7 The Company shall record or record the entire meeting of the shareholders' meeting and keep it for at least one year. Article 8 At the time of the meeting, the President shall announce the meeting. However, when a shareholder who does not represent more than half of the total number of issued shares is present, the chairman may announce a postponement of the meeting. The number of delays is limited to two times, and the total delay time may not exceed one hour. If the second time is still insufficient and the shareholders representing more than one-third of the total number of issued shares are present, they may be subject to tentative resolution in accordance with the first paragraph of Article 175 of the Company Act. Before the end of the meeting, if the number of shares represented by the shareholders reaches more than half of the total number of issued shares, the chairman shall make a Tentative resolution, which shall be re-invited to the General Assembly for voting according to the provisions

==> picture [24 x 23] intentionally omitted <==

- 115 -

of Article 174 of the Company Act. Article 9 If the shareholders' meeting is convened by the board of directors, its agenda shall be determined by the board of directors. The meeting shall be conducted in accordance with the scheduled agenda and may not be changed without the resolution of the shareholders' meeting. If the shareholders' meeting is convened by other convener holders other than the board of directors, the provisions of the preceding paragraph shall apply. The agenda set out in the preceding two paragraphs shall not be directly declared before the end of the proceedings (including the provisional motion). After the meeting, the shareholders may not elect the chairman to continue the meeting at the original site or another place. However, when the chairman violated the rules of procedure and announced the meeting, he was able to attend the meeting by voting for more than half of the shareholders' voting rights. Article 10 Before attending a speech by a shareholder, a speech note must be included to indicate the main idea of the speech, the shareholder number (or attendance certificate number) and the account name. The chairman decides the order of speech. Those who attended the meeting only mentioned the speech note and did not speak were deemed not to have spoken. If the content of the speech is inconsistent with the speech note, the content of the speech shall prevail. When attending a shareholder's speech, other shareholders shall not interfere with the speech except with the approval of the chairman and the shareholders in the speech. If there is a violators, the chairman should stop it. Article 11 When the same proposal is made by each shareholder, it may not exceed two times without the consent of the chairman, and may not exceed five minutes at a time. The chairman may stop his speech when the shareholder speaks in violation of the provisions of the preceding paragraph or exceeds the scope of the issue. Article 12 A legal person shareholder shall appoint a representative of two or more persons to attend the shareholders' meeting. The same motion may only be made by one person. When a legal person is entrusted to attend a shareholder meeting, the legal person must assign one representative to attend. Article 13 After attending the speech of the shareholders, the chairman may personally or designate the relevant personnel to reply. Article 14 For the discussion of the motion, when the chairman thinks that the vote has reached the level of voting, he may announce that he will stop the discussion and put a vote. Article 15 The scrutineer and the counting person at the time of voting on the proposal shall be appointed by the chairman. However, the scrutineer should have the status of a shareholder. The results of the voting shall be reported and recorded. Article 16 The voting on the resolution, except as otherwise provided by the Company Act and the articles of association, is approved by a majority of the voting rights of the attending

==> picture [24 x 23] intentionally omitted <==

- 116 -

shareholders.

At the time of voting, if the chairman asks no objector, it shall be deemed as adopted and its validity shall be the same as the voting.

  • Article 17 When there is an amendment or substitute for the same motion, the chairman shall decide the order of voting with the original case. If one of the cases has been passed, the other motions are deemed to be vetoed and there is no need to vote again.

  • Article 18 When the meeting is going on, the chairman may decide to rest at a discretion.

  • Article 19 The chairman may direct the picket (or security personnel) to help maintain the order of the venue. When the picket (or security personnel) is present to help maintain order, the badge of the word "picket" should be worn.

  • Article 20 These rules shall be implemented after the approval of the shareholders' meeting, and the same shall apply to the amendments.

==> picture [24 x 23] intentionally omitted <==

- 117 -

Chuwa Wool Industry Co., (Taiwan) Ltd.

Director's Election Rules

Amended at the shareholders' meeting on June 29, 2016

Article 1 The election of the directors and supervisors of the Company shall be handled in accordance with this Procedure. The provisions of the Company's Articles of Association, the Company Act and relevant acts and regulations are not applicable to this Procedure. Article 2 In respect of the election of the directors and supervisors of the Company, each share shall have the same number of electors as the number of directors or supervisors to be elected, and one or more electors shall be elected. Those who have more voting rights on behalf of the votes obtained are elected as directors or supervisors. For the nomination system for candidates for the election of independent directors of the Company, candidates shall be in accordance with the nomination system for candidates under Section 192-1 of the Company Act. Independent directors and non-independent directors shall be elected together to calculate the number of elected candidates. At the same time, the shareholders elected as directors and supervisors shall decide to act as directors or supervisors at their own discretion, and their vacancies shall be replenished by the majority of the electors. If there are two or more people with the same weight, and if they exceed the prescribed quota, the same right holder will jointly decide by draw. Those who are not present will be drawn by the chairman on the spot. Article 3 At the beginning of the election, the chairman shall designate a number of scrutineers and tellers to serve as scrutiny or counting votes. Article 4 The ballot papers shall be presided over by the board of directors and the voting weights shall be pre-filled. The elector must state in the column of the voter's electors the shareholder number and account name of the elector. If the elector is not a shareholder, the name and unified number of the elector shall be indicated. However, when the government or legal person has a designated representative for the shareholder, the name of the government agency or legal person and its representative should be included in the voter's column. Article 5 The ballot box shall be prepared by the board of directors and shall be opened for inspection by the inspectors before voting. Article 6 The Chairman may discretion the voting time and, when the voting time limit expires, declare the voting to be completed and conduct polling on the spot. Polling results were announced by the chairman on the spot. Article 7 The occurrence of one of the following cases in the ballot paper is invalid. 1. The ballot papers issued by the board of directors of the company are not used. 2. Those who put in the ballot box with blank votes.

==> picture [24 x 23] intentionally omitted <==

- 118 -

  1. The written words are vague and cannot be identified.

  2. The account number and name of the selected elector are inconsistent with the company's shareholder list. Or if the selected elector is not a shareholder, the name and unified number of the candidate are not checked.

  3. The number of electors who have been filled exceeds the number of elections that the elector should have.

  4. The facts filled in are inconsistent with the format of the ballot paper, which affects the correctness of the election.

  5. Any missing or altered person of the account number and account name of the selected elector.

  6. Article 8 The elected directors and supervisors shall be notified by the board of directors respectively.

  7. Article 9 The implementation of this Procedure shall be implemented after the approval of the shareholders' meeting, and the same shall apply to the revision.

==> picture [24 x 23] intentionally omitted <==

- 119 -

【 Annex 5 】

Chuwa Wool Industry Co., (Taiwan) Ltd.

Shareholdings of all directors and supervisors of the company

As of the book closure date of this shareholder meeting (April 26, 2019), the number of shares held by individual and all directors and supervisors recorded in the shareholder list is as follows:

Job title Name Number of shares held Shareholding ratio
Director CHEN, SHIH-HSIU 0 -
Director SUN, YANG 0 -
Director Roo Hsing Co., Ltd
Representative:
CHANG,RYH-YAN		 49,139,065 53.41%
Independent
director		 TIEN, HUNG-MAO 0 -
Independent
director		 LEE, HUNG-CHING 0 -
Total of all directors 49,139,065 53.41%
Supervisor HSU, CHUNG-JUNG 0 -
Supervisor LIN, HSIU-YUAN 0 -
Total of all supervisors 0 -

Description:

  1. The paid-in capital of the company is NT$ 920,000,000 and the number of issued shares is 92,000,000 shares.

  2. According to Article 26 of the Securities Exchange Act and Article 2 of the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Company, the minimum number of shares that all directors and supervisors should hold is as follows: The number of shares that all directors should hold: 7,360,000 shares The actual number of shares held by all directors: 16,558,750 shares The number of shares that all supervisors should hold: 736,000 shares The total number of shares held by all supervisors: 0 shares.

  3. According to Article 2 of the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies”, two independent directors are elected at the same time, all directors and supervisors other than independent directors will reduce their shareholding to 80%.

==> picture [24 x 23] intentionally omitted <==

- 120 -

More from ASCENT

Director's Dealing 2026
Jun 2
Director's Dealing 2026
Jun 2
Interim / Quarterly Report 2026
May 29
AGM Information 2026
May 15
AGM Information 2026
May 15
AGM Information 2026
May 15
Proxy Solicitation & Information Statement 2026
May 15
AGM Information 2026
May 15
Interim / Quarterly Report 2026
May 12
Interim / Quarterly Report 2026
May 12
View all filings →