Asia Plastic - AGM Information 2021

Stock code: 1337

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Asia Plastic Recycling Holding Ltd. 2021 Regular Meeting of Shareholders Proceedings

Date: June 16, 2021 (Weds.) 9:00 a.m. Place: No. 801, Chongde Road, Zuoying District, Kaohsiung City (R106, Garden Villa Kaosiung)

Page I. Procedures ............................................................................................... 1 II. Agenda .................................................................................................... 2 1. Reports ............................................................................................... 3 2. Recognitions .................................................................................. 5 3. Discussions .......................................................................................... 9 4. Incidental motions ........................................................................... 12 III. Attachment 1. Business Report ............................................................................... 15 2. Auditor’s report from the board of auditors .................................... 20 3. Auditor’s report and consolidated financial statements .................. 21 4. Comparison table of amendments to proceedings of shareholders’ meetings ...................................................................... 32 5. Comparison table of amendments to the rules on election and appointment of directors .................................................................. 34 IV. Appendix 1. Articles of Association. ..................................................................... 42 2. Proceedings of shareholders’ meetings (before amendment) ......... 80 3. Rules on election of directors and supervisors (before amendment) ........................................................................ 90 4. Shareholding List of Directors ........................................................ 95

Asia Plastic Recycling Holding Ltd. Procedures for 2021 Regular Meeting of Shareholders

I. Opening address
II. The chairman takes his place
III. Chairman’s address
IV. Reports
V. Recognitions
VI. Discussions

VII. Incidental motions

VIII. Closing

Asia Plastic Recycling Holding Ltd. Agenda of 2021 Regular Meeting of Shareholders

I. Date: June 16, 2021 (Weds.) 9:00 a.m.

Place: No. 801, Chongde Road, Zuoying District, Kaohsiung City (R106, Garden Villa Kaosiung)

II. Chairman’s address

III. Reports
2020 performance report of the company.
Auditor’s report from the board of auditors on 2020 annual final statement of the company.
IV. Recognitions
2020 annual business report and consolidated financial statements of the company.
2020 annual loss recovery statement of the company.

V. Discussions

Amendment to the company’s proceedings of shareholders’ meetings.
Amendment to the company’s rules on election of directors and supervisors.
VI. Incidental motions

VII. Closing

Reports

1. 2020 performance report of the company.

Description:

Refer to the business report attached hereto. (See pages 15-19 hereof)

Auditor’s report from the board of auditors on 2020 annual final statement of the company.

Description:

Refer to the auditor’s report from the board of auditors as attached hereto. (See page 20 hereof)

Recognitions

Case No. 1

As put forward by the company’s Board of Directors

Nature of Case:

2020 annual business report and consolidated financial statements of the company (as attached hereto) are presented for recognition.

Description:

2020 business report and consolidated financial statements of the company are provided on pages 15-19 and 21-31 hereof.

Resolution:

Case No. 2

As put forward by the company’s Board of Directors

Nature of Case:

2020 annual loss-to-be-made-up statement of the company is presented for recognition.

Description:

After-tax loss of the company in 2020 is intended to be made up by appropriation according to Article 105 of the company’s Articles of Association. The loss-to-be-made-up statement is attached hereto. (See page 8 hereof)

Resolution:

Appendix

Asia Plastic Recycling Holding Ltd. 2020 Annual Loss-to-be-made-up Statement

Unit: RMB

I. Undistributed profit at the beginning of the period $ 106,629,470.28 II. After-tax net loss in 2020 (303,506,743.17) Reverse special surplus reserve 26,278,253.13 Loss to be made up at the end of the period $ (170,599,019.76)

Note: The reverse special surplus reserve is converted based on the historical New Taiwan Currency-RMB exchange rate of 3.706 for undistributed surplus reserve on December 31, 2020.

Chairman: General Manager:

Accounting officer:

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Discussions

Case No. 1

As put forward by the company’s Board of Directors

Nature of Case:

Amendment to the company’s proceedings of shareholders’ meetings is presented for referendum.

Description:

I. The amendment to the proceedings is made in response to amended laws and decrees.
II. A comparison table of amendments to proceedings of shareholders’ meetings is provided in attachments hereto. (See pages 32-33 hereof)

Resolution:

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Case No. 2

As put forward by the company’s Board of Directors

Nature of Case:

Amendment to the company’s rules on election of directors and supervisors is presented for referendum.

Description:

I. The amendment to the measures is made in response to amended laws and decrees.
II. A comparison table of amendments to the rules on election of directors and supervisors is provided in attachments hereto. (See pages 34-40 hereof)

Resolution:

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Incidental motions

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Incidental motions

Closing

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Annexes

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Asia Plastic Recycling Holding Ltd.

2020 Annual Business Report

I. Business guidelines

The Group currently operates through SANSD (Fujian) Plastic Co., Ltd. (hereinafter referred to as “SANSD Fujian”) and SANSD (Jiangsu) Environmental Protection Technology Co., Ltd. (hereinafter referred to as “SANSD Jiangsu”), and will effectively oversee and assist Asia Plastic Recycle to satisfy the following business guidelines:

Solidify its leading position in the market by upstream-downstream integration

Promote automation to improve efficiency and reduce cost

Innovate channels and extend terminals to realize diversified development

II. Overview on implementation of the business guidelines
In response to the Chinese policy enacted in 2018 on banning import of plastic waste (implementation plan for reforming the management system of imported solid wastes by banning import of waste), the Group is now actively seeking for plastic recycling sources in China and overseas strategic partnerships, so as to secure future supply of recycled plastic.
Though the economic growth of Chinese mainland has slowed down in recent years, boosting domestic demand currently remains a major policy of the Chinese government, only that apparently more importance is attached to economic development quality and environmental protection. The Group will steadily maintain its leading position in the industry based on the production capacity of its facilities in Fujian and Jiangsu. It has drafted the “Technical requirements for safety of PE and EVA foam pads for children”, which has passed the review by the Standardization Administration and been promoted for application; besides, the PE foam jigsaw pads for children industrial standard drafted by the Group as instructed by the Ministry of Industry and Information Technology under the State Council has also come to the assessment stage. The EVA form sheet industrial standard reviewed was formally released on July 1, 2020 for implementation.
The Group is committed to integration of the industrial chain, while extending toward downstream products in a planned manner relying on its advantageous material cost control and supportive upstream and downstream business customers. It has continuous growth of highly processed products, and received stable orders from such super businesses as B. TOYS, Wal-Mart, RT-Mart and New Huadu.

III. Business achievements and analysis

As a result of China's policy enacted in 2018 on banning plastic waste import, most granules with recycled PE as the main raw material are no longer produced by the Group. Though the Group may source such materials at reasonable prices, it is confronted with some challenges, such as instable quality of purchased materials resulting in higher cost of product quality control and market price fluctuations. In the general context of reduced orders from downstream manufacturers due to the prevailing COVID-19 pandemic and uncertainty relating to Sino-US trade negotiations, and toughened regulation on environmental protection imposed by the Chinese government, no clear recovery across the industry is observed. Currently, seeking for

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domestic and foreign material sources of stable quality for long-term supply remains a primary way of the Group to improve its gross profit structure. Sales volumes and amounts in the two years:

Sales volumes and amounts in the last two years:

Unit: M[3] , *10[3] in New Taiwan Currency

Annual sales volume and amount Major products	2019	2019	2019		2020	2020	2020
	Domestic sales		Export	sales	Domestic sales		Export	sales
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Sole sheets	685	6,959	－	－	865	10,347	－	－
Bag sheets	45,067	211,872	－	－	26,395	192,794	－	－
Special sheets	68,933	318,295	－	－	54,846	267,799	－	－
Common sheets	78,907	326,446	－	－	41,833	198,169	－	－
Highly foamed material	26,124	82,296	－	－	22,869	74,877	－	－
High elasticity formed material	8,436	37,620	－	－	5,595	24,440	－	－
Anti-static formed material	699	6,660	－	－	280	2,607	－	－
Flame-retardant formed material	652	6,609	－	－	4	39	－	－
Floor mats	15,351	91,466	－	－	29,190	147,497	－	－
Other (note)	－	170,177	－	－	－	89,588	－	－
Total	244,854	1,258,400	－	－	181,877	1,008,157	－	－

Note: Others include slippers, finished shoes, surface lining, soles, rent income, and so on.

IV. Operating results analysis – amounts verified by accountants

Unit: *10[3] in New Taiwan Currency

		Unit: *1	03in New Taiwan Currency	03in New Taiwan Currency
Year Item	2019	2020	Difference
			Amount	%
Total operation revenues Net Sales Operating cost Gross operating loss Operating expense Net operating loss Other incomes Other income and loss Financial cost Net pre-tax loss Income taxes Net loss of the period	1,258,400 1,258,400 1,527,022 (268,622) 394,339 (662,961) 35,690 (5,638) 9,117 (642,026) - (642,026)	1,008,157 1,008,157 1,486,319 (478,162) 871,088 (1,349,250) 46,893 (2,330) 8,115 (1,312,802) - (1,312,802)	(250,243) (250,243) (40,703) (209,540) 476,749 (686,289) 11,203 3,308 (1,002) (670,776) - (670,776)	(19.89) (19.89) (2.67) 78.01 120.90 103.52 31.39 (58.67) (10.99) (104.48) - (104.48)

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V. Profitability in comparison with that in the precious year

The net operating loss in 2020 was NTD 1.349 billion, reduced by NTD 663 million or 103.47% compared to 2019; the net pre-tax loss in 2020 was NTD 1.313 billion, increased by NTD 642 million or 104.52% compared to 2019. The basic EPS was NTD 4.88 in 2020 and NTD 2.39 in 2019.

The differences were primarily caused by the cost attributable to asset impairment presented for the current period amounting to NTD 287.253 million and the operating cost attributable to asset impairment presented for the current period amounting to NTD 539.685 million. The total amount of asset impairment presented for the current period was NTD 826.938 million.

VI. Research and development

As a result of its consistent efforts, the R&D team has developed a new flame-retardant foaming material (PSD) and a purely bio-based and completely degradable forming material. A patent has been granted by China National Intellectual Property Administration on the new flame-retardant forming material (PSD). Following that, an additional patent is also expected to be granted on the purely bio-based and completely degradable foaming material. Furthermore, SANSD Jiangsu has successively developed, applied for and obtained patents on inventive production, processing and application of tens of products, including plasticizer, high resilient rubber, biodegradable plastic for use in production of foam pads for children, highly wearable rubber composition, SEBS thermoplastic elastomer jigsaw pads for children, maleic anhydride grafted LDPE, non-benzene butanone EVA forming material, antimonous oxide compound and its application in highly flame-retardant EVA forming material. In response to the development needs of the industry and the Group, SANSD Jiangsu has obtained certification of a provincial level enterprise technical center and qualification of a hi-tech enterprise in Jiangsu Province, following the certification of SANSD Fujian as a provincial level enterprise technical center and municipal R & D center in Fujian Province. Both companies have sustained advancement of their national industrial laboratories. SANSD Fujian and SANSD Jiangsu are making continuous efforts in promoting industry-university-research cooperation, facilitating establishment of strategic partnership with the Polymer Research Center of Fuzhou University Jinjiang Research Institute and Jiangsu Changzhou University, and boosting research and development of diversified products, process improvement and innovation.

Besides, the Group has also applied for patent on additional inventions and utility models. It is anticipated to obtain over 150 patents for protection.

Equipment employed by the Group in production of EVA material can be engineered and reconstructed according to product structures, characteristics and quality requirements, and may also be improved based on R&D to better the technological process of production lines and conformity rate. To effectively improve the production efficiency, reduce waste during the process, cut labor and material costs, the Group uses consistent production process from front-end waste plastic recycling, EVA granulation, EVA foam material formulation design and EVA foaming to rear-end formed material rolling and cutting, which helps form a low-cost advantage and provide customers with services of high quality, high efficiency and high economic benefits. While constantly improving the process efficiency, the Group is also active in automating the production process. Both SANSD Fujian and SANSD Jiangsu have
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worked closely with Harbin Institute of Technology, a well-reputed automation development institute in China, and jointly developed an automated recycling, foaming and deep processing process. It is expected that the process may effectively improve the product matching accuracy and production efficiency. It is also listed as a major science and technology project and a benchmarking project of Jinjiang City. Besides, to meet the increasingly tough environmental protection and supervision requirements, SANSD Fujian and SANSD Jiangsu have set up respective special environment improvement technology and equipment teams to assist environmental protection regulatory authorities and attend to technological improvement of environmental protection equipment, energy saving, emission reduction, clean production and others, so as to constantly improve the environmental conditions of production.

Looking forward, environment-friendly recycling of waste plastics for reproduction in China, as an extension of the plastic industry, will become a part of the emerging resource recycling industry that is valued and regulated by the Chinese government, since fossil energy resources are diminishing and self-sufficiency cannot be satisfied. On the other hand, the Chinese government also addresses treatment and disposal of solid wastes as a common environmental concern of all countries around the world. Imposing restriction on and banning import of solid wastes to prevent entry of “imported waste” into China is a significant measure taken by the country to promote ecological progress, and it is to the benefit of eco-environmental safety and the people’s physical health. On July 18, 2017, the General Office of the State Council of the People’s Republic of China printed and issued the Implementation Plan for Reforming the Management System of Imported Solid Wastes by Banning Import of Wastes . As of 2018, import of solid wastes highly hazardous to the environment or strongly opposed by the public has been fully banned in China, except for only several companies that have obtained approval for import of solid waste (but are only allowed to import single waste paper stock to the limit of less than 10,000 tons). Import of solid wastes that can be substituted by domestic resources has been gradually stopped as required by the government. Apart from adjusting the import control list and imposing the ban on import, China will combine application of legal, economical and administrative means to improve the regulatory system that blocks “imported waste” (even direct import of plastic granules produced by using recycled materials is subject to sample inspection by the Chinese quality supervision and customs from time to time) and strengthen control over entry of illegal imported waste, so as to form a long-term effective mechanism to keep out imported waste and realize overall control over imported waste.

The banning of China on import of wastes mainly covers plastic, waste paper, metals and other wastes that can be directly converted into resources, as well as waste hardware, waste chemical substances and other articles that require processing or extraction for reuse. These imported wastes are not all environmentally hazardous, and many of them, if proper treated, may be recycled for reuse to realize resource conservation and capital saving. For example, for the Group, it costs less to produce plastic granules by using recycled waste plastic than by direct synthesis of new plastic granules by using extracts from petroleum. Use of waste plastic may save the exhaustible petroleum resource, and also the production cost. In this case, the imported waste is actually imported resources. Use of such converted resources is an inevitable choice for development of circular economy. However, facing tens of millions of tons of imported waste, China has not been fully prepared, which is reflected by the evident immaturity in regulation on waste recycling and in sorting of wastes. Large quantities of wastes smuggled into China and imported waste containing toxins due to failure of full sorting or arbitrarily discharged without proper treatment have posed threat and harm to China’s ecological environment and the Chinese

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people’s health. Considering the foregoing, it will be unworkable in China to import plastic waste as raw material of granule reprocessing or reproduction. In recent years, a team of the Group has set out to explore and develop external resources. It ever travelled across Cambodia, Myanmar, Laos, the Philippines and Indonesia, as well as Germany and Poland close to sources of waste materials in 2018, and recently had trips to Taiwan and Pakistan. With continuing assessment and efforts, the Group has been tracking governmental regulations, production capacity of supporting facilities and logistics conditions in different countries, while deliberating over multiple modes of cooperation in waste processing, so as to secure stable supply of waste as raw material for upstream production of granules by the Group.

Following formulation and issue of the 13[th] Five-Year Plan for the Plastic Industry by China, oriented by energy saving, material saving and environmental friendliness, it is a trend of the plastic industry to develop new environment-friendly EVA and green recycling by combining physical and chemical technologies with equipment improvement, realize cyclic utilization of plastic, produce new plastic materials based on alloying, mixing and modification technologies, and achieve functional plastic of low cost and high performance through engineering. Noteworthily, EVA foam material has potential for application far from being fully explored, and is expected to be further applied in more emerging fields. Having been deeply engaged in this field for nearly three decades, the Group will continue seeking for stable supply of resources from overseas to sustain its leading position in the industry, with the anticipation to make more achievements.

Chairman: General Manager:

Accounting officer:

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Auditor’s report from the board of auditors

The Board of Directors prepared the Group’s business report, consolidated financial statements and loss-to-be-made-up statement for the year of 2020. The consolidated financial statements have been audited by auditors Wu Qiuyan and Jiang Jialing from Deloitte & Touche, with an auditor’s report issued. According to audit of the abovementioned business report, consolidated financial statements and loss-to-be-made-up statement by the board of auditors, no nonconformity has been identified. Hence this report is issued in accordance with the Item 5 of Article 14 of the Securities Exchange Act and Article 219 of the Company Law for your reference.

Yours faithfully

2021 Annual Shareholders’ Meeting of Asia Plastic Recycling Holding Ltd.

Asia Plastic Recycling Holding Ltd.

Convener of the board of auditors: Li Junde

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March 22, 2021

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Accountant’s audit report

For Asia Plastic Recycling Holding Ltd.:

Opinion

We audited the consolidated balance sheets as at December 31, 2019 and 2020, consolidated statement of changes in equity, consolidated statements of cash flows and notes to the consolidated financial statements (including a summary of major accounting policies) for the period from January 1to December 31, 2019 and 2020 of Asia Plastic Recycling Holding Ltd. (Asia Plastic Recycle) and its subsidiaries.

In our opinion, the consolidated financial statements above are, in all material aspects, sufficiently prepared as per the Rules of Taiwan for Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards accepted by the Financial Supervisory Commission, the International Accounting Standards, their interpretation and interpretation announcements to fairly reflect the consolidated financial conditions as at December 31, 2019 and 2020 and the consolidated financial performance and consolidated cash flows in the period from January 1to December 31, 2019 and 2020 of Asia Plastic Recycling Holding Ltd. and its subsidiaries.

Basis of the opinion

We conducted our audit in accordance with the rules of Taiwan on audit of financial statements by auditors and generally accepted auditing standards. Our responsibilities under these rules and standards are further described in “Our responsibilities for the audit of the consolidated financial statements” section of our report. All employees of our employer subject to independence regulation are independent of Asia Plastic Recycle and its subsidiaries in accordance with the Code of Ethics for Professional Accountants. Furthermore, we have complied with the Code with respect to other responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our pinion.

Key items of audit

Key items of audit refer to those most important items in the consolidated financial statements 2020 of Asia Plastic Recycle and its subsidiaries to be audited according to our professional judgment. Since such items were considered during audit of the consolidated financial statements and formation of the audit opinion, no separate opinion is given separately on these items.

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Key items audited in the consolidated financial statement 2020 of Asia Plastic Recycle and its subsidiaries are hereby described as follows:

Truthfulness of recognized and presented income from sale of special products

According to Note 19 to the consolidated financial statements, Asia Plastic Recycle and its subsidiaries derived primary income from sale of PE-EVA mixed foam products, and suffered a great decline in business income and significant operating loss due to decrease in sources of raw material and orders for the products, while a sharp rise occurred to the gross profit from sale of special products and unit selling prices of the products. Considering the foregoing and according to provisions of the Statements on Auditing on considering income as a significant risk, the truthfulness of recognized and presented income from sale of special products was included as a key item of audit.

We have implemented due audit procedures regarding the abovementioned key items of audit to a specific extent, including:

I. Gaining an understanding of and testing the internal control relating to truthfulness of recognized and presented income, such as effectiveness of internal control relating to order handling and shipment, based on which business income was recognized and presented.
II. Verifying sampled particulars of business income, outbound orders and invoices for consistency in terms of target customers and amounts; visually checking countersignature of outbound orders by customers and other evidence of delivery.
III. Verifying sampled records on collection of accounts receivable in the particulars of business income, payees and target customers for consistency.

Net value loss assessment of real property, factory buildings and equipment and impairment assessment of their use right

As at December 31, 2020, real property, factory buildings and equipment and their use right owned by Asia Plastic Recycle and its subsidiaries amounted to NTD (unless otherwise indicated) 3,218,378,000 in terms of book value, accounting for 49% in the total assets, and thus were considered as major assets. In light of the continuing operating loss suffered by Asia Plastic Recycle and its subsidiaries, the foregoing assets were assessed and showed a sign of impairment; according to the asset valuation report issued by an external independent expert, the Group and its subsidiaries determined the recoverable amount, with recognized and presented impairment loss of NTD 826,938,000 as at December 31, 2020. Considering material accounting estimates involved in impairment loss assessment and assumptions made by the management, impairment assessment of such assets was included as a key item of audit.

For accounting policies applicable to the foregoing asset impairment assessment and relevant matters disclosed, refer to Notes 4, 5, 11, 12 and 20 to the consolidated financial report.

We have implemented the following audit procedures:

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I. Evaluating the professional experience, competence and independence of independent assessment experts appointed by the management, discussing with the management about their work scope, and reviewing their appointment conditions, so as to ensure nothing present to affect their objectivity or constituting any restriction on their work scope.
ii. Evaluating the reasonableness of methods and major assumptions adopted by the independent experts engaged by the management in preparing the asset assessment report.
iii. Verifying the integrity of data and correctness of impairment loss recognition and presentation assessed by the independent experts engaged by the management.

Responsibilities of the management and those charged with governance for the consolidated financial statements

The management has the responsibility to prepare and fairly present the consolidated financial statements according to the Rules of Taiwan for Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards accepted by the Financial Supervisory Commission, the International Accounting Standards, their interpretation and interpretation announcements, and maintain necessary internal control relating to the consolidated financial statements, so as to ensure the consolidated financial statements are free from material misstatements, whether due to fraud or errors.

As at preparation of the consolidated financial statements, the management also has the responsibility to assess the ability of Asia Plastic Recycle and its subsidiaries to continue as going concerns, disclosure of related matters and the going concern basis of accounting, unless it either intends to liquidate Asia Plastic Recycle and its subsidiaries or cease operations, or has no realistic alternative but to do so.

Those charged with governance of Asia Plastic Recycle and its subsidiaries (including board of auditors) have the responsibility to oversee the financial reporting process.

Our responsibilities for the audit of the consolidated financial statements

Our objective in auditing the consolidated financial statements is to obtain reasonable assurance regarding whether the consolidated financial statements are free from any material misstatement, whether due to fraud or errors, and to issue an auditor’s report. Reasonable assurance is a high, but not absolute, level of assurance, which means we may not have detected all material misstatements in the consolidated statement during our audit conducted according to the generally accepted audit standards. Misstatements can arise from fraud or errors, and are considered material if, individually or in the aggregate, they could reasonably be expected to influence economic decisions of users taken on the basis of the consolidated financial statements.

We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with the generally accepted auditing standards. We performed the following work:

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I. Identifying and assessing the risks of material misstatement of the consolidated financial statements due to fraud or errors; designing and performing audit procedures responsive to those risks; obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from errors, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or override of internal control.
II. Obtaining an understanding of internal control relevant to audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of Asia Plastic Recycle and its subsidiaries.
III. Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
IV. Concluding on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on ability of Asia Plastic Recycle and its subsidiaries to continue as going concerns. If we conclude that a material uncertainty exists, we are required to draw attention to our auditor’s report to related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause Asia Plastic Recycle and its subsidiaries ceasing to continue as going concerns.
V. Evaluating the overall presentation, structure and content of the consolidated financial statements (including notes thereto), and whether the consolidated financial statements represents the underlying transactions and events in a manner that achieves fair presentation.
VI. Obtaining audit evidence, with respect to financial information of individuals comprising the Group, which is sufficient and appropriate to provide a basis for our opinion on the consolidated financial statements. We are also responsible for directing, supervising and performing the group audit, and give our opinion on the group audit.

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

We also provide those charged with governance an independence statement indicating our compliance with the independence requirement of the Code of Ethics for Professional Accountants, and communicate with them about relationships and other matters (including related protective measures) that may be considered to have an impact on our independence.

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We determine, among communications with those charged with governance, key items of audit in the consolidated financial statements 2020 of Asia Plastic Recycle and its subsidiaries. We clearly described such items in the auditor’s report, unless disclosure of certain items was prohibited by law, or in rare cases, we decide not to communicate about any special item since according to reasonable anticipation such communication would produce more negative impact than public interest.

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Deloitte Touche Tohmatsu Limited
Accountant Wu Qiuyan
Approval number from Securities
and Futures Commission
TCZLZ No. 0920123784
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Accountant Jiang Jialing
Approval number from Securities
and Futures Commission
TCZLZ No. 0920123784
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March 22, 2021

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Asia Plastic Recycling Holding Ltd. And its subsidiaries Consolidated Balance Sheet December 31, 2019 and 2020

Unit: *10[3] in New Taiwan Currency

Code 1100 1136 1150 1170 1200 1310 1419 11XX 1600 1755 1760 1920 1990 15XX 1XXX Code 2102 2108 2170 2219 2399 21XX 2570 2XXX 3100 3110 3200 3310 3320 3350 3300 3400 3410 3XXX	Asset Current assets Cash (Notes 4 and 6) Financial assets measured based on amortized cost (Note 7) Notes receivable (Notes 8, 19 and 27) Net accounts receivable (Notes 4, 8 and 19) Other receivables Inventory (Notes 4 and 9) Prepayments Total current assets Non-current assets Real property, factory buildings and equipment (Notes 4, 5, 11, 26, 27 and 28) Right-of-use assets (Notes 4, 5, 12 and 27) Investment real property (Notes 4, 13 and 26) Refundable deposits Other non-current assets Total non-current assets Total assets Liabilities and equity Current liabilities Short-term borrowings (Notes 14 and 27) Other short-term borrowings – stakeholders (Note 26) Accounts payable (Note 15) Other payables (Notes 12 and 16) Other current liabilities Total current liabilities Non-current liabilities Deferred tax liabilities (Notes 4, 5 and 21) Total liabilities Interests attributable to owners of the Group (Notes 4 and 18) Share capital Ordinary share capital Capital reserves Retained surplus Legal surplus reserves Special surplus reserve Undistributed profit (loss to be made up) Total retained profit Other interests Exchange differences of the translation of the financial statements in foreign operations Total equity Total liabilities and equities		December 31,2020 Amount % $ 1,297,562 20 1,314,000 20 75,601 1 214,020 3 3,847 - 269,982 4 18,590 1 3,193,602 49 2,415,261 37 803,117 12 118,871 2 2,015 - - - 3,339,264 51 $ 6,532,866 100 $ 188,340 3 159,616 2 232,502 4 80,479 1 14,622 - 675,559 10 62,317 1 737,876 11 2,689,547 41 3,028,767 46 708,876 11 716,985 11 729,588) (11) 696,273 11 619,597) ( 9) 5,794,990 89 $ 6,532,866 100	December 31,2020 Amount % $ 1,297,562 20 1,314,000 20 75,601 1 214,020 3 3,847 - 269,982 4 18,590 1 3,193,602 49 2,415,261 37 803,117 12 118,871 2 2,015 - - - 3,339,264 51 $ 6,532,866 100 $ 188,340 3 159,616 2 232,502 4 80,479 1 14,622 - 675,559 10 62,317 1 737,876 11 2,689,547 41 3,028,767 46 708,876 11 716,985 11 729,588) (11) 696,273 11 619,597) ( 9) 5,794,990 89 $ 6,532,866 100		December 31,2019	December 31,2019	December 31,2019
			Amount $ 1,297,562 1,314,000 75,601 214,020 3,847 269,982 18,590 3,193,602 2,415,261 803,117 118,871 2,015 - 3,339,264 $ 6,532,866 $ 188,340 159,616 232,502 80,479 14,622 675,559 62,317 737,876 2,689,547 3,028,767 708,876 716,985 729,588) 696,273 619,597) 5,794,990 $ 6,532,866			Amount $ 1,329,823 1,293,000 86,256 206,623 6,731 264,440 25,162 3,212,035 3,310,861 914,173 144,973 1,940 2,686 4,374,633 $ 7,586,668 $ 163,780 - 274,373 88,200 2,739 529,092 61,321 590,413 2,689,547 3,014,618 708,876 460,100 840,099 2,009,075 716,985) 6,996,255 $ 7,586,668		%
		( (		( (	(		(	18 17 1 3 - 3 - 42 44 12 2 - - 58 100 2 - 4 1 - 7 1 8 35 40 9 6 11 26 9) 92 100

Notes hereto constitute a part of the consolidated financial statements.

==> picture [54 x 53] intentionally omitted <==

Chairman: Ding Jinzao

==> picture [61 x 51] intentionally omitted <==

Manager: Ding Zhimeng

Accounting officer: Wang Weiming

==> picture [45 x 50] intentionally omitted <==

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Consolidated income statement

January 1 – December 31, 2019 and 2020

Unit: *10[3] in New Taiwan Currency, if per-share loss amounting to NTD

Code Business income (Notes 4, 19 and 26) 4100 Sales revenue 4300 Lease income 4000 Total operating income 5000 Operating costs (Notes 9, 11, 12, 20 and 26) 5900 Gross operating loss Operating expenses (Notes 11, 12 and 20) 6100 Marketing expense 6200 Administrative expense 6300 R&D expenses 6450 Expected credit impairment loss 6000 Total operating expenses 6900 Net operating loss Non-business income and non-operating expenditure (Note 20) 7100 Interest income 7190 Other incomes 7020 Other profits and losses 7050 Financial cost 7000 Total non-business income and non-operating expenditure 7900 Net pre-tax loss (To be continued)		2020

27 -

(Continued)

(Continued)
Code 7950 Income tax (Notes 4, 5 and 21) 8200 Net loss of the current year 8300 Other consolidated profits and losses 8310 Items not reclassified into profits or losses 8341 Currency translation difference (Note 18) 8500 Total consolidated profits and losses of the year 8600 Net loss attributable to: 8610 Owner of the company 8700 Total consolidated profits and losses attributable to: 8710 Owner of the company Per-share loss (Note 22) 9750 General 9850 Dilution		2020

Notes hereto constitute a part of the consolidated financial statements.

Chairman: Ding Jinzao

Manager: Ding Zhimeng

Accounting officer: Wang Weiming

==> picture [45 x 50] intentionally omitted <==

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Asia Plastic Recycling Holding Ltd. And its subsidiaries Consolidated statement of changes in equity January 1 – December 31, 2019 and 2020

Unit: *10[3] in New Taiwan Currency

Code A1 Balance on January 1, 2019 Profit distribution in 2018 (Note 18) B3 Special surplus reserve D1 Net loss in 2019 D3 Other after-tax consolidated profits and losses in 2019 D5 Total consolidated profits and losses in 2019 N1 Employee stock option cost (Note 23) Z1 Balance on December 31, 2019 Profit distribution in 2019 (Note 18) B3 Special surplus reserve D1 Net loss in 2020 D3 Other after-tax consolidated profits and losses in 2020 D5 Total consolidated profits and losses in 2020 N1 Employee stock option cost (Note 23) Z1 Balance on December 31, 2020	Ordinary share capital $ 2,689,547 - - - - - 2,689,547 - - - - - $ 2,689,547	Capital reserves $ 2,982,534 - - - - 32,084 3,014,618 - - - - 14,149 $ 3,028,767		Retained surplus	Undistributed profit (loss to be made up) $ 1,691,277 ( 209,152) ( 642,026 ) - ( 642,026) - 840,099 ( 256,885) ( 1,312,802 ) - (1,312,802) - ($ 729,588)	Other items of shareholders’ equity Exchange differences of the translation of the financial statements in foreign operations ($ 460,100) - - ( 256,885) ( 256,885) - ( 716,985) - - 97,388 97,388 - ($ 619,597)		Total equity
			Legal surplus reserves $ 708,876 - - - - - 708,876 - - - - - $ 708,876	Special surplus reserve $ 250,948 209,152 - - - - 460,100 256,885 - - - - $ 716,985
							$ 7,863,082 - ( 642,026 ) ( 256,885) ( 898,911) 32,084 6,996,255 - ( 1,312,802 ) 97,388 (1,215,414) 14,149 $ 5,794,990

Notes hereto constitute a part of the consolidated financial statements.

Chairman: Ding Jinzao

==> picture [55 x 53] intentionally omitted <==

Manager: Ding Zhimeng Accounting officer: Wang Weiming

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Consolidated Cash Flow Statement January 1 – December 31, 2019 and 2020

Unit: *10[3] in New Taiwan Currency

Code Cash flow from operating activities A10000 Pre-tax net loss of the current year A20010 Earnings, expenses and losses A20100 Depreciation costs A20200 Amortization expense A20300 Expected credit impairment loss A20900 Financial cost A21200 Interest income A21900 Employee stock option compensation cost A22500 Loss from disposal of real property, factory buildings and equipment (benefit) A23700 Retention (reverse) of allowance for loss from inventory depreciation A23700 Non-financial asset impairment loss A29900 Others Net change of business assets and liabilities A31130 Notes receivable A31150 Accounts receivable A31180 Other receivables A31200 Inventories A31230 Prepayments A32150 Accounts payable A32180 Other payables A32230 Other current liabilities A33000 Cash outflow from operations A33100 Collected interest A33300 Paid interest AAAA Net cash outflow from operations Cash flow from investment activities B00040 Acquisition of financial assets measured by post-amortization cost B00060 Principal repayment of financial assets measured by post-amortization cost B02700 Purchase of real property, factory buildings and equipment B03700 Increase in deposits paid	2020 ( $ 1,312,802 ) 282,716 - 9,810 8,115 ( 32,619 ) 14,149 ( 4 ) 19,626 826,938 2,655 12,054 ( 13,797 ) 2,825 ( 23,570 ) 6,982 ( 46,327 ) ( 8,747 ) 11,857 ( 240,139 ) 32,781 ( 8,115) ( 215,473) ( 1,314,000 ) 1,314,000 ( 18,094 ) ( 44 )	2019
		( $ 642,026 ) 299,558 63 5,460 9,117 ( 34,598 ) 32,084 5,334 ( 2,063 ) - 4,519 ( 73,299 ) 22,126 ( 2,490 ) ( 48,451 ) 11,255 54,002 ( 6,861 ) ( 210) ( 366,480 ) 34,880 ( 9,117) ( 340,717) ( 1,341,000 ) 1,341,000 ( 25,639 ) -

(To be continued)

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(Continued)

Code
B02800
Payments received for disposal of real
property, factory buildings and
equipment
BBBB
Net cash outflow from investment
activities
Cash flow of financing activities
C00100
Increase in short-term borrowings
C00200
Decrease in short-term borrowings

C01800
Other borrowings – increase in
stakeholders
CCCC
Net cash inflow of financing
activities
DDDD Impact of fluctuations in exchange rate on
cash
EEEE
Net reduction of cash

E00100 Cash balance at beginning of the year

E00200 Year-end cash balance

Notes hereto constitute a part of the consolidated financial statements.

==> picture [51 x 43] intentionally omitted <==

Chairman: Ding Jinzao Manager: Ding Zhimeng

Accounting officer: Wang Weiming

==> picture [45 x 49] intentionally omitted <==

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Asia Plastic Recycling Holding Ltd. Comparison table of amendments to proceedings of shareholders’ meetings

	Amended provisions		Currently applicable provisions	Explanation
	Article 3 The first, second and third items are intentionally omitted. Election, appointment or removal of directors or supervisors, amendment to the Articles of Association, decrease in registered capital, application for ceasing public issue, director’s competition licensing, conversion of profit into capital, conversion of reserve into capital, public dismissal of the company, merger, division or matters provided in the first item of Article 185 in the Taiwanese Company Law,matters provided in Article 26 (1), Article 43 (6) of the Securities Trading Law and in Article 56 (1) and Article 60 (2) of the Rules on Handling Securities Raised or Issued by Issuersshall be briefly described in the cause for convening the meeting, other than be presented in the form of a temporary motion. The fifth item is omitted. Shareholder(s) holding above 1% of the total outstanding shares may present at most one proposal to the Regular Meeting of Shareholders, and if any additional proposal is presented, such additional proposal will not be considered. If any proposal presented by shareholders is subject to a circumstance provided in the fourth item of Article 172 (1) in Taiwanese Company Law, such proposal shall not be considered by the Board of		Article 3 The first, second and third items are intentionally omitted. Election, appointment or removal of directors or supervisors, amendment to the Articles of Association, decrease in registered capital, application for ceasing public issue, director’s competition licensing, conversion of profit into capital, conversion of reserve into capital, public dismissal of the company, merger, division or matters provided in the first item of Article 185 in the Taiwanese Company Law shall be briefly described in the cause for convening the meeting, other than be presented in the form of a temporary motion;the main content of such proposal may be posted on the website designated by the competent securities authority or the company, with the website noted in the notice of the meeting. The fifth item is omitted. Shareholder(s) holding above 1% of the total outstanding shares may present at most one proposal to the Regular Meeting of Shareholders, and if any additional proposal is presented, such additional proposal will not be considered. Exceptionally, proposals presented by shareholders to give suggestions on promoting public interest or fulfillment of social responsibilities by the company will be considered by the Board of Directors. If any	To avoid the misunderstanding of listed companies that a temporary motion may be presented regarding any of the matters provided in the first item of Article 185 in Taiwanese Company Law, provisions on no presentation in the form of temporary motions, other than provisions of the Company Law, listed in the original clause before the amendment are intended to be incorporated. Change the way of public announcement in accordance with the provisions. Amend Item 6 in response to amendment to Item 5 of Article 172 in the Taiwanese Company Law and the letter (JS Zi No.: 10700105410).

Amended provisions	Currently applicable provisions	Explanation

Directors.Shareholders may present, according to related provisions of Article 172 (1) in Taiwanese Company, at most one proposal to give suggestions on promoting public interest or fulfillment of social responsibilities by the company, and any additional proposal will not be considered.	proposal presented by shareholders is subject to a circumstance provided in the fourth item of Article 172 (1) in Taiwanese Company Law, such proposal shall not be considered by the Board of Directors.
Article 9 Item 1 omitted. When it comes to the starting time of a meeting, the presider shall immediately announce start of the meeting,and pronounce the number of voting and non-voting shares represented by shareholders present at the meeting, among other information. If fewer than half of the total outstanding shares are represented by shareholders present at the meeting, the presider may announce to postpone the meeting. The meeting can be postponed for twice, and the total length of postponements may not exceed one hour. If after the second postponement, shares represented by shareholders present at the meeting are still fewer than half of the total outstanding shares, the presider shall announce abolishment of the meeting for lack of a quorum. The following is omitted.	Article 9 Item 1 omitted. When it comes to the starting time of a meeting, the presider shall immediately announce start of the meeting. If fewer than half of the total outstanding shares are represented by shareholders present at the meeting, the presider may announce to postpone the meeting. The meeting can be postponed for twice, and the total length of postponements may not exceed one hour. If after the second postponement, shares represented by shareholders present at the meeting are still fewer than half of the total outstanding shares, the presider shall announce abolishment of the meeting for lack of a quorum. The following is omitted.	To improve the corporate governance and protect shareholders’ interests, the second item is amended.

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Asia Plastic Recycling Holding Ltd. Comparison table of amendments to the rules on election and a ointment of directors pp

Amended provisions	Amended provisions	Currently applicable provisions	Description
Rules on election and directors	appointmentof	Rules on election of directors and supervisors	In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of the office term of the current directors and supervisors, with the title of measures modified.
Article 1 For just, fair and open election and appointment of directors, these measures are formulated in accordance with Articles 21 and 41 of the_Code of Practice for Governance_ of Listed and OTC Companies.		Article 1 For just, fair and open election and appointment of directors and supervisors,these measures are formulated in accordance with Articles 21 and 41 of the_Code of Practice for_ Governance of Listed and OTC Companies.	In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of the office term of the current directors and supervisors, with provisions on supervisors in the measures deleted.
Article 2 Election and appointment of directors for the company shall, unless otherwise specified by regulations or the Articles of Association, shall be bound by these measures.		Article 2 Election and appointment of directors and supervisors for the company shall, unless otherwise specified by regulations or the Articles of Association, shall be bound by these measures.	In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of the office term of the current directors and supervisors, with provisions on supervisors in the measures deleted.
Article 4 Delete this Article		Article 4 Supervisors of the company shall meet the conditions provided in the left	In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory

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	column: I. Honest and steadfast. II.Having a sense of unbiased judgment. III.Having professional knowledge. IV.Well-experienced. V.Capable of understanding financial statements. (The following is omitted)	Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of the office term of the current directors and supervisors, with provisions on supervisors in the measures deleted.
	I. II. III. IV. V.
Article4 Omitted	Article 5 Omitted	In response to deletion of Article 4, adjust the article numbers.
Article5 The Board of Directors or shareholders of the company may provide a list of recommended directors for the next Board of Directors as a reference for election and appointment of directors. Election of directors, unless otherwise specified by applicable regulations,shall be performed following procedures of the candidate nomination system provided in Article 192 (1) of the Taiwanese Company Law.	Article 6 The Board of Directors or shareholders of the company may provide a list of recommended directorsor supervisors for the next Board of Directors or the Board of Supervisors as a reference for election and appointment of directorsor supervisors. Election of directorsand supervisors, unless otherwise specified in applicable regulations,may be performed following procedures of the candidate nomination system provided in Article 192 (1) of the Taiwanese Company Law;for review of qualifications, education background, work experience and subjection to circumstances provided in Article 30 of the Taiwanese Company Law, no other qualification certificates shall be presented, and the review result shall be provided as reference to the shareholders for selection of appropriate directors and	In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of the office term of the current directors and supervisors, with provisions on supervisors in the measures deleted. In response to amendment to Article 192 (1) of the Taiwanese Company Law to simplify the procedure for director nomination, amend Item 1.

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supervisors. Nevertheless, election of a director shall be always subject to the candidate nomination system during the listing period of the company (namely from the day immediately preceding the listing date of the company’s stocks on Taiwan Stock Exchange, including any period thereafter when the company’s stocks are suspended from trading for any reason).

If the number of directors falls below five due to departure of any directors, the company shall conduct a by-election at the nearest shareholders’ meeting to come. If vacancies on the Board of Directors are up to one third of the seats set forth in the Articles of Association, the company shall convene an extraordinary shareholders' meeting for a by-election within sixty days after occurrence of the circumstance.

If the number of independent directors falls short of that provided in the proviso of the first item under Article 14 (2) of Taiwanese Securities Exchange Act, by-election shall be conducted at the closest shareholders’ meeting to come. If all independent directors depart, the company shall convene an extraordinary shareholders' meeting for a by-election within sixty days after occurrence of the circumstance.

Delete Item 5

If the number of directors falls below five due to departure of any directors, the company shall conduct a

by-election at the nearest shareholders’ meeting to come. If vacancies on the Board of Directors are up to one third of the seats set forth in the Articles of Association, the company shall convene an extraordinary shareholders' meeting for a by-election within sixty days after occurrence of the circumstance.

If the number of independent directors falls short of that provided in the proviso of the first item under Article 14 (2) in the Taiwanese Securities Exchange Act, relevant provisions of the Criteria of Taiwan Stock Exchange for Listing Review or “OTC Review Criteria for Exchange of Securities at Securities Business Offices - Article 10, Item 1, Paragraph 8: Specific criteria for OTC unsuitability” of Taiwan Securities OTC Exchange Center, a by-election shall be conducted at the nearest shareholders’ meeting to come; if all independent directors depart, the company shall convene an extraordinary shareholders' meeting for a by-election within sixty days after occurrence of the circumstance.

In response to the letter (JGZF Zi No. 1070345233) dated December 19, 2018 that requires all listed and OTC companies to set independent directors, adjust Item 4.

In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of the office term of the current directors and supervisors, with provisions on supervisors in the measures deleted.

If departure of supervisors results in the number of remaining supervisors falls less than that specified by the company’s Articles of Association, a

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by election shall be preferably conducted at the nearest shareholders’ meeting to come. If all supervisors depart, the company shall convene an extraordinary shareholders' meeting for - a by election within sixty days after occurrence of the circumstance.

	by-election shall be preferably conducted at the nearest shareholders’ meeting to come. If all supervisors depart, the company shall convene an extraordinary shareholders'meeting for a by-election within sixty days after occurrence of the circumstance.
Article6 The company shall adopt cumulative voting for election of directors; each share is entitled to a number of votes equal to the number of directors to be elected, and the votes may be cast for one person or allocated among several persons.	Article 7 The company shall adopt cumulative voting for election of directors and supervisors;each share is entitled to a number of votes equal to the number of directors and supervisorsto be elected, and the votes may be cast for one person or allocated among several persons.	In response to deletion of Article 4, adjust the article numbers. In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of the office term of the current directors and supervisors, with provisions on supervisors in the measures deleted.
Article7 The Board of Directors shall prepare a number of ballots equal to the number of directors to be elected, mark corresponding weights on the ballots, and then distribute them to shareholders present at the shareholders’ meeting. Voters may be identified by the attendance certificate numbers carried on the ballots.	Article 8 The Board of Directors shall prepare a number of ballots equal to the number of directorsand supervisors to be elected, mark corresponding weights on the ballots, and then distribute them to shareholders present at the shareholders’ meeting. Voters may be identified by the attendance certificate numbers carried on the ballots.	In response to deletion of Article 4, adjust the article numbers. In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of the office term of the current directors and supervisors, with provisions on supervisors in the measures deleted.
Article8 Voting rights exercised to elect directors are calculated separately for the number of non-independent directors and independent directors set forth in the company’s Articles of Association. Those receiving votes representing the highest weights are elected. If there are not enough seats	Article 9 Voting rights exercised to elect directorsand supervisorsare calculated separately for the number of non-independent directors, independent directorsand supervisors set forth in the company’s Articles of Association. Those receiving votes representing the highest weights are elected. If there are	In response to deletion of Article 4, adjust the article numbers. In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute

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for two or more persons winning the same voting weight, they have to draw lots to decide who is to be elected; if any of such persons is absent, the presider shall act on behalf in drawing lots.	not enough seats for two or more persons winning the same voting weight, they have to draw lots to decide who is to be elected; if any of such persons is absent, the presider shall act on behalf in drawing lots.	supervisors upon expiration of the office term of the current directors and supervisors, with provisions on supervisors in the measures deleted.
Article9 Omitted	Article 10 Omitted	In response to deletion of Article 4, adjust the article numbers.
	Article 11 If a person elected is a shareholder, the elector is required to fill the shareholder account and account number of the elected; or otherwise if the person elected is not a shareholder, it is required to fill the name and ID credential number of the elected. If a government or institutional shareholder is elected, the name of the government or institution may be filled in the account of the elected box, and the legal representative of institution shall also be provided; if there are more than one representative, names of the representatives shall be respectively provided.	In response to deletion of Article 4, adjust the article numbers. In response to the order (JGZJ Zi No. 1080311451) issued by Taiwan Financial Supervisory Commission on April 25, 2019, listed (OTC) companies shall adopt the candidate nomination system for election of directors and supervisors as of 2021; following the system, shareholders may know the names, education backgrounds, work experience and other information of candidates from the list of candidates before corresponding shareholders’ meetings held for election of directors and supervisors. It is no longer unnecessary to identify candidates by shareholder accounts or ID credential numbers. Therefore, this article is deleted.
Article10 A ballot is invalid in any of the circumstances listed in the left column: I. If no ballot prepared by the Board of Directors is used. II. If the ballot is cast blank into the ballot box. III. If the ballot is illegible or altered.	Article 12 A ballot is invalid in any of the circumstances listed in the left column: I. If no ballot prepared by the Board of Directors is used. II. If the ballot is cast blank into the ballot box. III. If the ballot is illegible or altered. IV. If the person filled to be elected being a shareholder,the	In response to deletion of Articles 4 and 11, adjust the article numbers. Shareholders may, according to Article 173 of the Taiwanese Company Law and with approval obtained from competent authorities under certain circumstances (such as the Board of Directors fails to give a notice on convening a meeting), act on themselves to

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IV. If the elected person marked is verified to fail specified conditions. V. If other words are carried along with allocation of voting weights marked.		V. VI.	shareholder account and account number are inconsistent with those recorded in the shareholder register, or if the person filled to be elected being not a shareholder, the name and ID credential number of the elected are inconsistent according to verification. If other words are carried along with theaccount name (name) or shareholder account number (ID credential number)of the elected. If a person filled to be elected has the same name with another shareholder and the shareholder account number or ID credential number of such person fails to be provided for identification.	convene the meeting intended for amending Item 1 under this Article. In response to the order (JGZJ Zi No. 1080311451) issued by Taiwan Financial Supervisory Commission on April 25, 2019, listed (OTC) companies shall adopt the candidate nomination system for election of directors and supervisors as of 2021, according to which shareholders shall elected and appoint directors from the list of candidates. Considering the foregoing, amend paragraphs 4 and 5 of this Article correspondingly, and delete paragraph 6.
Article11 After voting is completed, the votes shall be opened on the spot, and the presider shall announce the voting results, including the list of directors elected and voting weights received by the winning directors. Item 2 omitted.		Article 13 After voting is completed, the votes shall be opened on the spot, and the presider shall announce the voting results, including the list of directors and supervisorselected and voting weights received by the winning directors and supervisors. Item 2 omitted.		In response to deletion of Articles 4 and 11, adjust the article numbers. In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of the office term of the current directors and supervisors, with provisions on supervisors in the measures deleted.
Article12 Elected directors will receive a notice of election from the Board of Directors.		Article 14 Elected directorsand supervisorswill receive a notice of election from the Board of Directors.		In response to deletion of Articles 4 and 11, adjust the article numbers. In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of

39 -

				the office term of the current directors and supervisors, with provisions on supervisors in the measures deleted.
	Article 16 Delete this Article		Article 16 If the board of auditors system is adopted, provisions on supervisors herein shall not apply.	In response to the order (JGZF Zi No. 10703452331) issued by Taiwan Financial Supervisory Commission on December 19, 2018, all listed and OTC companies are required to set a board of auditors to substitute supervisors upon expiration of the office term of the current directors and supervisors. Therefore, this article is deleted.
	Article14 These measures initially taken effect on April 1, 2010, and revised for the first time on June 15, 2020; on June 16, 2021, it will be revised for the second time.		Article 17 These measures initially taken effect on April 1, 2010, and was revised for the first time on June 15, 2020.	Revise the date of the current revision.

40 -

Annex

41 -

Company limited by shares incorporated according to the Company Law (Rev. 2020)

Asia Plastic Recycling Holding Limited

The 11[th] Amendment to the Memorandum of Organization

(Passed by a special resolution of the Board of

Shareholders on June 15, 2020)

Name of the company: Asia Plastic Recycling Holding Limited.
The company is registered at the office of Vistra (Cayman) Limited at Grand Pavilion, Hibiscus Way, 802 West Bay Road, P.O. Box 31119, KY1-1205, Cayman Islands, or at any other place according to resolution of the Board of Directors.
Provided the following provisions of this memorandum are satisfied, the original purpose of the company is not restricted.
According to Article 27(2) of the Cayman Companies Law (Rev. 2020), if all the following provisions hereof are satisfied and no matter whether conducts are performed to the benefit of the company, the company has full capacity for act just as a natural person does.
Subject to this memorandum, the company may not operate a business that requires procurement of a license according to regulations of Cayman, unless such license has been procured.
Except for promotion of businesses out of Cayman Islands, the company may not conduct business transactions with any individual or firm or company on Cayman Islands; however, this provision does not prevent the company from establishing or concluding any contract within the territory of Cayman Islands, or from exercising any right within Cayman Islands for its operation of businesses out of Cayman Islands.
The company shall conduct business activities in compliance with regulations and Code of Business Ethics, and may act for the benefit of public interest, so as to fulfill its social responsibility.
Shareholders are simply obligated to pay for shares subscribed by them.
9 The total capital of the company amounts to NTD Three Billion Six Hundred Million Only (NTD 360,000,000), which is divided into three hundred and sixty million shares; each share has a par value of NTD 10.00.
42 -

Company limited by shares incorporated according to the Company Law (Rev. 2020)

Asia Plastic Recycling Holding Limited

The 11[th] Amendment to the Articles of Association

(Passed by a special resolution of the Board of

Shareholders on June 15, 2020)

Definitions

Provisions of Table A in the first attachment of Cayman Companies Law (Rev. 2020) do not apply to the company.
(1) Unless otherwise provided herein, words and expressions used in the Articles of Association shall have the following meanings:
Listing (OTC) Laws and regulations applicable to stocks traded or listed at any Regulation stock exchange in Taiwan, including without limitation to the Taiwan Securities Exchange Act, the Company Law and the Enterprises Mergers and Acquisitions Act, Regulations on the Relationship between People in Taiwan Region and Chinese Mainland, or other related laws and decrees formulated by competent authorities of Taiwan, as well as codes issued by the Financial Supervisory Commission under the Executive Yuan of Taiwan, OTC Exchange Center (including the emerging OTC stock market) and the stock exchange (if applicable);
The Articles of The Articles of Association of the company as amended, Association supplemented or replaced by special resolutions at a shareholders’ meeting;
Board of The Board of Directors comprising directors of the company; Directors
Capital reserves (1) Stock premium account, (2) amounts received as gift, and (3) other capital reserves according to the listing (OTC) specifications.
Chairman As defined in Article 63 hereof;
Stock Category Classes of shares issued by the company;
43 -
Financial Financial Supervisory Commission under the Executive Yuan of Supervisory Taiwan, or other competent executive authority authorized by the Commission currently applicable Taiwan Securities Exchange Act;

The Company Asia Plastic Recycling Holding Limited；

Merger for new A form of merger defined in Cayman regulations and listing (OTC) establishment specifications, in which two or more companies cease to exist by winding-up, and property and responsibilities of the wound-up companies are transferred to another new company jointly established the aforesaid companies;

Director Directors comprising the Board of Directors of the company; “directors” refer to two or more directors.

Electronic Electronic Transactions Law of Cayman Islands (as amended) and any amended or reenacted legislation currently in force, including all other incorporated or substituting laws;
Emerging OTC Emerging OTC stock market established by the OTC Exchange stock market Center;
Financial As defined in Article 109 hereof;
Statements
Independent Independent directors elected and appointed according to the listing director (OTC) specifications;
Legal person A company or other form of organization recognized as a legal entity by Cayman regulations and the listing (OTC) specifications;
Cayman Cayman Companies Act (Rev. 2020) and other Cayman laws, regulations orders, specifications and documents of legal effect (as amended) currently in force and applicable to the company, memorandum of organization and (or) Articles of Association of the company, and Cayman regulations (as amended) referenced in the Articles of Association;
Shareholder Holders of the company’s shares as recorded in the shareholder register, including share subscribers who have subscribed shares according to the memorandum of organization but not registered; “shareholders” refer to two or more shareholders;

Memorandum of The company’s Memorandum of Organization (as amended); Organization

44 -
Merger by A form of merger defined in Cayman regulations and listing (OTC) acquisition specifications, in which two or more companies transfer their property and responsibilities to one of them, and after merger only the company receiving the transferred property and responsibilities continue existing while other company or companies cease to exist by winding-up;
Month Calendar month;
NTD New Taiwan Currency;
Ordinary A resolution passed by shareholders or (in case of institutional Resolution shareholders) their duly authorized representatives present in person or by proxy at a shareholders’ meeting and representing over half of voting right;
Person Including any natural person, firm, company, joint venture, partnership, legal entity, organization or other entities (either of independent legal personality or not) or any of the foregoing entities as appropriate according to the context;
Special shares As defined in Article 4 hereof; Private Sale of the company’s shares, bonds or other securities approved by placement the Financial Supervisory Commission to a pre-selected number of individuals and institutions;
Shareholder The Shareholder Register maintained by the company within or out Register of the territory of Cayman Islands;
Registered The principal place of business registered of the company according premise of the to Cayman regulations; company
Listing period Counting from the day immediately preceding the initial listing date of the company’s stocks on the emerging OTC stock market, OTC Exchange Center, Taiwan Stock Exchange or any other stock exchange in Taiwan (including any period thereafter when the company’s stocks are suspended from trading for any reason);
Taiwan Including the realms, territories and other regions under the jurisdiction of Taiwan;
Court of Taiwan Local court of Taipei, Taiwan or other court within the jurisdiction of Taiwan;
Company seals Common seals of the company;
45 -

Company A person appointed by the directors (or the Board of Directors) to Secretary: take care of secretary work of the company, including any assistant secretary, acting secretary, executive secretary or temporary secretary;

Share Shares representing divided capital of the company. Shares herein shall include all classes of shares. For avoidance of doubts, shares herein shall include fractional shares.
Share premium Share premium accounts maintained of the company according to account the Articles of Association and Cayman regulations;
Stock affairs An agency that has an office located in Taiwan with approval of agency competent authorities of Taiwan and provides shareholder services for the company according to the listing (OTC) specifications and particularly rules on handling stock affairs of companies with public offerings;
Signature and Signature/seal affixed by hand or by mechanical means, or seal electronic symbol or procedure attached or logically related to electronic communications as is intentionally done by the signatories of such electronic communication;
Special surplus As defined in Article 102 hereof; reserve
Special A resolution passed by shareholders or (in case of institutional Resolution shareholders) their duly authorized representatives present in person or by proxy at a shareholders’ meeting and representing two thirds of voting rights; any proposal to be passed by means of a special resolution shall be expressly noted in the notice of the meeting.

Any proposal to be passed by means of an ordinary resolution according to the Articles of Association may also be passed by means of a special resolution;

Severance Transfer of all or any part of independently operated businesses by the company to an existing or newly established company in exchange for delivery of shares, cash or other property by such existing or newly established company to the company or its shareholders;
Legal surplus reserves

As defined in Article 101 hereof;

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Affiliated A company which has over half of its outstanding voting shares or company of its total capital held by the company. Any other company whose human resources, finance or business operations are directly or indirectly controlled by the company is also an affiliated company of the company.

Any other company is an affiliated company of the company if:

Such other company shares over half of its directors with the company; or
Such other company has over half of its outstanding voting shares or of its total capital held or contributed by shareholders of the company;
Supervisor Person(s) supervising business transactions, management and operation of the company according to the Articles of Association;

CDCH

Taiwan Centralized Depository and Clearing House

OTC Exchange Consortium OTC Exchange Center in Taiwan; Center

Treasury stock Shares not cancelled after repurchase according to Cayman regulations and listing (OTC) specification but held by the company of itself; and

Stock Exchange Taiwan Stock Exchange.

(2) Unless otherwise specified herein, words and expressions used in the Articles of Association shall have meanings defined in Cayman regulations.
(3) Unless otherwise specified in the context,
(a) Words importing the singular number includes the plural number and vice versa; (b) Words importing the masculine gender include the feminine gender;
(c) Unless otherwise specified, notices according to the Articles of Association shall be given in writing; “in writing” or “written” herein shall include printing, lithography printing, photographing or other means of displaying or replicating words in a permanently visible manner;
(d) “May” indicates an arbitrary provision; “shall” indicates a mandatory provision.
(4) Headings herein are provided for convenience of reference, and shall not affect the interpretation of the Articles of Association.

Subject to Cayman regulations and the Articles of Associations, as to unissued shares of the company, the Board of Directors of the company may:
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(a) issue, provide or distribute such shares to persons at such time, in such manner and based on such rights, conditions or restrictions as it deems appropriate; unless otherwise provided in Cayman regulations and the listing (OTC) specifications, no share of the company may be issued at a discount.
(b) Subject to Cayman regulations and the listing (OTC) specifications, stock option, share warrants or other similar securities may be issued against such unissued shares; for the foregoing purpose, the Board of Directors may reserve a proper number of unissued shares.
According to the Memorandum of Organization and the Articles of Association, including content passed by means of special resolutions at a shareholders’ meetings as per Article 5, the company may, if approved by over half of directors present at a directors’ meeting with presence of above two thirds of directors, issue shares of different classes and rights superior over or inferior to ordinary shares (“ special shares ”).
Before issue of special shares according to the preceding paragraph, the company shall amend the Articles of Association to specify rights and obligations attached to such special shares, including without limitation to the following (this provision shall apply in case of modification to rights attached to any issued special shares):
(a) The total number of the special shares authorized to be issued or already issued;
(b) The order and fixed amount or rate of dividend and bonus distribution with respect to the special shares;
(c) The order and fixed amount or rate of allocating the company’s residual property with respect to the special shares;
(d) The order of or restrictions (including grant of no voting right, and so on) on exercise of voting right by holders of the special shares;
(e) Other matters relating to rights and obligations carried by the special shares; and (f) If the company is authorized or mandated to redeem the special shares, the way of redemption, or a statement indicating the company has no right to mandatorily redeem the special shares.
Within the authorized capital amount of the company and subject to other provisions of the Articles of Association, issue of new ordinary shares by the company shall be passed by over half of directors present at the directors’ meeting with presence of above two thirds of directors. The company may not issue any unpaid or partially paid shares.
(1) The company may issue shares without printing stocks. All shares issued by the company are registered shares. Nevertheless, during the listing period, the company may not print physical stocks, and shall cancel any physical stocks issued previously; rights of shareholders with respect to shares held by them shall be according to records in the shareholder register.
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(2) During the listing period, the company shall, according to Cayman regulations and the listing (OTC) specifications and within thirty days after the Board of Directors passes corresponding resolution on issue of shares, act on its own or have a stock affairs agency to deliver shares by means of book transfer to subscribers of the shares, provided full payments for the subscribed shares have been received. Before the delivery, the company shall make an announcement according to the listing (OTC) specifications.
(3) The company shall, when the total number of shares issued each time is fully subscribed, call the subscribers to pay for their subscriptions; when shares are issued at a price greater than their par value, the premium shall be paid along with the share capital. If a subscriber defers payment due for subscribed shares and is called by the company by means of at least one-month’s notice to make the payment within a specified period, failure to make the payment within the specified period will deprive the subscriber of the right to take the subscribed shares, and this shall be stated in the notice. In this case, such shares will be made available for further subscription, and if any damage is incurred thereby, the company may claim compensation from the subscriber.
(4) For the avoidance of doubt, no share subscriber failing to make payment for subscribed shares according to the preceding paragraph is recognized as the holder of the shares before the payment is fully made; only after the subscribed shares are fully paid will the name of the subscriber be recorded in the shareholder register.
(5) The company may not issue no-par shares, nor convert par shares into no-par shares.
During the listing period:
(a) Upon issue of new shares, the Board of Directors may reserve no more than 15% of the total shares to be issued according to Cayman regulations and listing (OTC) specifications for preferential subscription by employees of the company and (or) of its affiliated companies. Employees eligible for preferential subscription of new shares are determined by the Board of Directors; and
(b) Upon issue of new shares by the company in Taiwan due to capital increase, the Company shall, after the Board of Directors reserving shares for preferential subscription by employees, set aside 10% (or a higher proportion according to an ordinary resolution passed at a shareholders’ meeting) of the total new shares for public issuance in Taiwan, unless (i) the Financial Supervisory Commission, the OTC Exchange Center and (or) the stock change (if applicable) deems issue to the public is unnecessary or inappropriate, or (ii) otherwise specified in the listing (OTC) specifications.
9 During the listing period, unless otherwise resolved at a shareholders’ meeting, the company shall, after setting aside new shares issued due to capital increase for
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preferential subscription by employees of the company and (or) of its affiliated companies and for issue to the public in Taiwan, make a public announcement and notify its original shareholders to subscribe remaining shares in their shareholding percentages, while stating in the notification that those failing to make a subscription within the specified period will lose the right to make such subscription according to Article 8. Only that:

(a) If the shareholding percentage of an original shareholder or shareholders is insufficient to entitle the shareholder or shareholders to subscribe a new share, the shareholder or shareholders may make a joint subscription or centralize the subscription right on one shareholder;
(b) The right of original shareholders to subscribe new shares may be transferred separately and independent of original shares;
(c) New shares failing to be subscribed by original shareholders may be publicly issued or made available for subscription by specific persons.
(1) The provisions of Article 8 (a) and Article 9 do not apply if the issue of new shares:
- (a) Relates to acquisition of another company, division or restructuring, unless otherwise specified herein;
- (b) Relates to the obligation of performing employee share warrants or options;
- (c) Relates to compensation for dispatched employees;
- (d) Relates to the obligation of fulfilling convertible bonds or bonds with warrant;
- (e) Relates to the obligation of performing share warrants or special shares with warrant; or
- (f) Is performed according to the articles of association by conversion of reserve into capital increase, and the new shares are issued to original shareholders.
(2)The provisions of Articles 8 and 9 do not apply if:
- (a) New shares are issued by the company for acquisition of an existing company, or for any of its subsidiaries to acquire another company;
- (b) All new shares are issued to the acquired for facilitation of acquisition;
- (c) All new shares issued are used to acquire the outstanding shares, business or property of another company;
- (d) New shares are issued by share conversion;
- (e) New shares are issued due to division upon share transfer;
- (f) New shares are issued upon private placement according to Article 11-2 hereof; or
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- (g) The issue of new shares relates to other prohibitions, restrictions or exceptions specified in Cayman regulations and (or) listing (OTC) specifications.
(3) For issue of new shares by the company in the circumstances above, capital contribution may be made in cash or by using property needed by the undertaking of the company.
11 According to the listing (OTC) specifications, the company may, by a resolution of the Board of Directors passed by over half of directors present at a directors’ meeting with presence of above two thirds of directors, sign a warrant contract with any employee of the company and (or) of its affiliated companies to agree upon a certain period within which the employee may subscribe a certain number of the company’s shares at an agreed price. After signing the contract, the company will issue a share warrant to the employee. The share warrant received by the employee may not be transferred, unless it is transferred to a successor.
11-1 The company may, by passing special resolutions, issue new shares with restricted employee rights to employees of the company and/or of its affiliated companies, in which case the provisions of Articles 8 and 9 do not apply. For issue of the aforesaid new shares with restricted employee rights, the number, issue price, issue conditions, restrictions and other matters of the new shares shall conform to the listing (OTC) specifications and Cayman regulations.
11-2 During the listing period, subject to the listing (OTC) specifications, the company may privately offer securities to the following persons according to special resolutions passed at shareholders’ meetings:
(a) legal entities or institutions of banking, ticket, trust, insurance, securities or others approved by the Financial Supervisory Commission;
(b) natural persons, legal entities or foundations conforming to conditions specified by the Financial Supervisory Commission; or
(c) directors, supervisors and managers of the company or of its associated enterprises.
The company may, following the procedures and conditions specified in Cayman regulations and the listing (OTC) specifications, reduce its capital by passing a special resolution at a shareholders’ meeting.
During the listing period, issue, conversion or cancellation of the company’s shares or any other securities with the nature of equity rights (including without limitation to share warrants, options or bonds), conversion into capital increase, and stock affairs, among others, shall be handled according to Cayman regulations, the listing (OTC) specifications and rules on handling stock affairs of companies with public offerings.
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Right variation

If special shares are issued by the company and rights of persons holding such special shares are impaired, the case shall be handled by means of a special resolution passed at a shareholders’ meeting and a special resolution passed at a meeting of shareholders of such special shares, unless otherwise specified in Article 38. Convening and adjournment of a meeting of shareholders of such special shares shall follow the procedures set forth herein for shareholders’ meetings.
Unless otherwise specified in the rules on issue of the special shares, the preferential rights or other rights of any special shares will not be adversely varied or abolished by the company’s creating, allocating or issuing other special shares carrying the same or inferior rights, or by the company’s redeeming or repurchasing any class of special shares.

Shareholder Register

(1) The Board of Directors shall maintain a shareholder register at an appropriate place within the territory of or beyond Cayman Islands. During the listing period, the shareholder register shall contain items of record required by Cayman regulations and the listing (OTC) specifications, and be maintained by a stock affairs agency in Taiwan. The Board of Directors or other person who has the right to convene a shareholders’ meeting may, upon convening a shareholders’ meeting, request the company or the stock affairs agency of the company to present the shareholder register.
(2) Notwithstanding any other provision hereof, provided Cayman regulations are satisfied, related shareholder information during the listing period shall be recorded by CDCH, and records provided by the CDCH recognized by shareholders of the company shall always apply. Shareholder records sourced by the company from the CDCH shall form a part of the company’s shareholder register.

Redemption and repurchase of shares

17 Special shares issued by the company during the listing period may be redeemed by means approved by Cayman regulations, provided compliance with Cayman regulations and the listing (OTC) specifications does not damage rights shareholders of such special shares are entitled to according to the Articles of Association.
18 (1) The company shall, if approved by over half of directors present at a directors’ meeting with presence of above two thirds of directors, decide on appropriate conditions for repurchase its shares for cancellation or holding as treasury shares in accordance with Cayman regulations, the listing (OTC) specifications and other
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provisions hereof; the repurchase of such shares shall certainly conform to Cayman regulations and the listing (OTC) specifications. Nevertheless, the number of shares repurchased by the company during the listing period, excluding shares repurchased according to Article 18-1 (1), may not exceed ten percent of the total outstanding shares upon the repurchase, and the total amount of shares so repurchased may not exceed the reserved profit plus the premium on issue and realized capital reserve. The resolution of the Board of Directors on repurchase of listed shares and implementation of the resolution or failure to make the repurchase according to the resolution (if so) shall be reported to the shareholders at the nearest shareholders’ meeting.

(2) According Cayman regulations, the company may cancel or transfer to employees of the company and (or) of its affiliated companies all or any part of treasury shares held by it; the Board of Directors is authorized to determine transfer conditions and eligibility of employees to receive the transferred shares in accordance with Item (3) of this Article. The Board of Directors may impose a restriction that treasury shares transferred according to this provision to employees shall not be further transferred within a certain period and such certain period may last at most two years.
(3) According to Item (4) of this Article, if the company transfers its shares to employees of the company and (or) of its affiliated companies at a price lower than the average price actually paid for repurchase of such shares (hereinafter referred to as “ Transfer at a Discount ”), such transfer shall be presented for special resolution other than a temporary motion at the nearest shareholders’ meeting, and the following matters shall listed and described in the notice of convening the shareholders’ meeting:
(a) the transfer price, discount rate, calculation basis and reasonableness of shares to be transferred at a discount;
(b) the number of shares transferred at the discount, and the purpose and reasonableness of the transfer;
(c) Eligibility of employees of the company and (or) of its affiliated companies to subscribe the shares at the discount, and the numbers of shares that may be subscribed by them; and
(d) matters affecting interests of shareholders:
- (i) dilution of the company’s per-share profit by possible expense incurred by transfer at a discount according to the listing (OTC) specifications; and
- (ii) description of the financial burden imposed by transfer at a discount on the company according to the listing (OTC) specifications.
(4) The number of treasury shares transferred by the company at a discount according to the preceding provisions to employees of the company and (or) of its affiliated companies may not exceed 5% of the company’s total outstanding shares, and the number of shares accumulatively subscribed by each single employee may not
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exceed 0.5% of the company’s total outstanding shares.

(5) According to Cayman regulations and the listing (OTC) specifications, the company has no shareholder entitlement to treasury shares held by it.
18-1.(1) Unless otherwise specified in Cayman regulations and the listing (OTC) specifications, the company may, by means of passing a special resolution at a shareholders’ meeting, mandatorily repurchase its shares for cancellation based on shareholding proportions (rounded to the nearest whole number). Upon repurchase of shares according to the preceding paragraph, a consideration shall be paid by cash or by using other property. If property other than cash is used as payment for consideration, it requires a special resolution at a shareholders' meeting, and shall be accepted by the shareholder(s) receiving such property; besides, the Board of Directors shall, before the shareholders’ meeting, present the value of such property and the amount to be offset by such property to an accountant certified in Taiwan for verification and endorsement.
- (2) For the avoidance of doubt, if shares intended to be repurchased and canceled are not done in shareholding proportions, such repurchase and cancellation may be determined by the Board of Directors without a special resolution being passed at a shareholders’ meeting according to the preceding paragraph, unless otherwise required by Cayman regulations and listing (OTC) specifications.
Shares redeemed by the company according to Article 17 hereof and repurchased by the company for the purpose of cancellation according to Article 18 (1) shall be deemed cancelled immediately upon such redemption or repurchase.

Share transfer

20 According to Cayman regulations and the listing (OTC) specifications, shares issued by the company may be freely transferred, unless otherwise specified in the Articles of Association.
Transfer of shares may not be made against the company unless the name or residence of the transferee is recorded in the shareholder register. Registration of share transfer in the shareholder register shall be suspended during the book closure period according to Article 22.

Closure period

22 (1) Subject to the Articles of Association, the Board of Directors may predetermine the base date of a book closure period against the following: (a) determining shareholders entitled to receive dividends, bonuses or other distributions; (b) determining shareholders entitled to receiving notices of shareholders’ meetings and to attend any regular or adjourned shareholders’ meeting in person or by proxy or by
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means of electronic communications; and (c) other purposes decided by the Board of Directors.

The base date determined by the Board of Directors according to Item (b) above shall go before the date of the shareholders’ meeting.

(2) During the listing period, no registration of change relating to share transfer shall be made in the shareholder register within sixty days prior to a regular meeting of shareholders, or within thirty days prior to an extraordinary meeting of shareholders, or within five days before the base date determined by the company for distribution of dividends and bonuses or other interests (hereinafter referred to as “book closure period”. The book closure period shall start from the meeting date or base date.

Meeting of Shareholders

The company shall hold a shareholders’ meeting within six months after the end of each fiscal year or within a period otherwise approved by the OTC Exchange Center or stock exchange (if applicable). Regular meetings of shareholders shall be convened by the Board of Directors.
Any other meeting of shareholders other than a regular meeting is an extraordinary meeting. The Board of Directors may convene an extraordinary meeting of shareholders when it deems necessary.
During the listing period, all meetings of shareholders shall be held within the territory of Taiwan.
(1) Shareholder(s) holding above 3% of the company’s shares continuously for one year or longer may request the Board of Directors to convene an extraordinary meeting of shareholders in writing with proposals to be presented and the reason for the request indicated. If the Board of Directors fails to give a notice within fifteen days after receiving the request on convening the meeting of shareholders, the requesting shareholders may act on themselves to convene the meeting.
(2) Shareholder(s) holding over half of all outstanding shares continuously for above three months may act to convene an extraordinary meeting of shareholders on their own. The shareholding periods of and shares held by individual shareholders as recorded on the starting date of book closure shall apply.
(3) Unless the Board of Directors fails or is unable to duly convene a shareholders’ meeting according to Cayman regulations, the listing (OTC) specifications or the Articles of Association, any independent director on the board of auditors may, when necessary for the benefit of the company, convene the shareholders’ meeting.
During the listing period, the company shall engage a stock affairs agency based in Taiwan to handle matters relating to the meetings of shareholders, including without limitation to taking care of shareholders’ votes.
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Notice of a Shareholders’ Meeting

During non-listing periods, shareholders shall be notified in writing seven days in advance in case of a regular meeting of shareholders, or five days in advance in case of an extraordinary meeting of shareholders. If during the listing period, the notification to shareholders shall be made thirty days in advance in case of a regular meeting of shareholders, or fifteen days in advance in case of an extraordinary meeting of shareholders. Notice to shareholders who separately hold less than 1,000 shares may be given by the company by means of public announcement according to Cayman regulations and the listing (OTC) specifications. The dates when each of such notices is given and when the shareholders’ meeting occurs are both excluded from the notice period above. The notice shall specify the place, date, time, procedure and cause of the meeting. A shareholders’ meeting may be held by means of electronic communication if prior consent from shareholders is obtained or it is permitted by Cayman regulations and the listing (OTC) specifications.
28-1.(1) The company shall make a public announcement of not less than thirty days in case of a regular meeting of shareholders or of not less than fifteen days in case of an extraordinary meeting of shareholders with respect to the notice of the meeting, requirement for paper used for the letter of authorization, related recognitions, discussions, election or removal of directors, causes of proposals and explanatory information.
(2) When voting rights are exercised in writing or by electronic means at a shareholders’ meeting according to Article 46, the company shall send the foregoing data and forms to shareholders for exercising voting rights.
For the purpose of the Articles of Association, the following matters shall be recognized as special matters that may not be discussed or presented for voting at a shareholders’ meeting or raised by means of a temporary motion if not listed and briefed in the statement that convenes the shareholders’ meeting; the content of such special matters shall be posted on the website designated by competent securities authority of Taiwan or by the company, with the address of the website provided in the notice of the meeting:
(a) Election or removal of directors and supervisors (if any);
(b) Modification to the company’s memorandum of organization and/or Articles of Association;
(c) Capital decrease or mandatory repurchase of the company’s shares for cancellation according to Article 18-1 (1) hereof;
(d) Application for ceasing public offerings;
(e) Dismissal, merger, share conversion or division of the company;
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(f) Conclusion, change or termination of all contracts relating to lease, entrusted operation or joint operation of businesses;
(g) Transfer all or substantial part of operations or property;
(h) Taking all operations or property of another person, which may have significant impact on the operation of the company;
(i) Private placement of securities with equity nature;
(j) Grant of permission to directors to engage in competitive activities;
(k) Distribution all or any part of dividends or bonuses by issue of new shares; and
(l) Allocation of the company’s legal reserve, stock premium account and capital reserve received by the company as gifts to original shareholders by issue of new shares and/or by cash.
For shareholders’ meeting during the listing period, the company shall prepare proceedings, and make a public announcement of the proceedings on the website specified by the Financial Supervisory Commission, the OTC Exchange Center or the stock exchange (if applicable) twenty-one days in advance in case of a regular meeting of shareholders or fifteen days in advance in case of an extraordinary meeting of shareholders.

Proceedings of Shareholders’ Meetings

No transaction other than selection of the meeting presider may be discussed or resolved at a shareholders’ meeting unless a quorum is present at the meeting. Unless otherwise specified herein, a shareholders’ meeting shall have presence of shareholders representing over half of the total voting shares issued by the company.
(1) Shareholder(s) holding above 1% of the total outstanding shares may present proposals to the company in writing or by electronic means at a regular meeting of shareholders.
(2) The company shall, before the book closure date prior to the regular meeting of shareholders, announce the place and period of handling proposals from the shareholders. Such period announced shall be no less than ten days.
(3) The proposing shareholders shall attend the regular meeting of shareholders in person or by proxy, and participate in discussion about their proposals.
(4) A proposal from shareholders shall be listed for consideration, unless:
- (a) the proposal is not subject to resolution at a shareholders’ meeting according to Cayman regulations, the listing (OTC) specifications or the Articles of Association;
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- (b) shares held of the company by the proposing shareholders upon start of the book closure period fail to reach 1%;
- (c) more than one proposal is presented;
- (d) the proposal contains more than 300 words; or
- (e) the proposal is presented beyond the period announced by the company.
(5) Notwithstanding the foregoing provisions, any proposal presented by shareholders to give suggestions on promoting public interest or fulfillment of social responsibilities by the company will be listed by the Board of Directors for consideration.
(6) The company shall notify the shareholders presenting the proposal of the result before sending the notice of the regular meeting of shareholders, and list proposals conforming to this provision in the notice of the meeting. For proposals not listed, the Board of Directors shall account for the rejection at the shareholders’ meeting.
Shareholders’ meetings convened by the Board of Directors shall be presided over by the Chairman of the Board. A shareholders’ meeting convened by any person other than the Board of Directors shall be presided over by such convening person; if there are more than two convening persons, one of them shall be selected to perform the duty.
34 If at a shareholders’ meeting, the Chairman fails to be present, he shall designate a person to act on his behalf; if no such person is designated, directors present at the meeting may elect a person to perform the duty.
If a shareholders’ meeting is adjourned according to an ordinary resolution to five days later at another place, no transaction other than those unfinished at the original meeting may be handled at the continuing meeting. If the adjournment lasts for over five days, a notice of the continuing meeting with respect to time and place shall be given in the same manner as for the original meeting.
Any matter presented for resolution at a shareholders’ meeting shall be decided by voting.
Any matter subject to resolution at a shareholders’ meeting shall be decided by ordinary resolution, unless otherwise expressly provided in Cayman regulations, the listing rules or the Articles of Association.
According to Cayman regulations and the listing (OTC) specifications, the following matters shall be subject to special resolution at a shareholders’ meeting:
(a) Conclusion, change or termination of all contracts relating to lease, entrusted operation or joint operation of businesses;
(b) Transfer all or substantial part of operations or property;
(c) Taking all operations or property of another person, which may have significant impact on operation of the company;
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(d) Distribution of all or any part of dividends and bonuses by issue of new shares;
(e) Company division and merger;
(f) Share conversion;
(g) voluntary liquidation;
(h) Private placement of securities;
(i) discharging directors from the non-competition obligation or permitting directors to engage in competitive activities;
(j) change of company name;
(k) currency change of capital;
(l) increase in the total capital, and division of the capital increase into shares of a different class and par value;
(m) re-division of all or any part of shares into shares of greater par value;
(n) re-division of all or any part of shares into shares of smaller par value;
(o) cancellation of shares failing to be subscribed or rejected to be subscribed on the date when corresponding resolution is passed, and decrease of the capital based such cancellation;
(p) amending all or any part of the memorandum of organization or the Articles of Association according to the Articles of Association (including but not limited to Articles 14 and 15);
(q) reducing the capital and capital redemption reserve by means permitted by Cayman regulations and the listing (OTC) specifications;
(r) dispatching inspectors to inspect the company’s affairs according to Cayman regulations;
(s) issue of new shares with restricted employees’ rights; and
(t) application for ceasing public offerings.
Notwithstanding the provisions hereof, unless otherwise specified in Cayman regulations or the listing (OTC) specifications, the company ceasing to exist after merger or ceasing to be listed (or OTC tradable) due to general transfer of the company (or of all its rights and obligations), transfer of the company’s operations or property, share conversion or division shall be subject to approval of shareholders representing above two thirds of the total outstanding shares of the company, if the continuing, existing, newly established or transferee company after such merger or transfer is a non-listed (non-OTC) company (at the stock exchange/OTC Exchange Center).
(1) Shareholders who have notified the company in writing of their objection to matters
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provided in Article 38 (a), (b) or (c) before a related resolution is passed at a shareholders’ meeting on such matters and expressed such objection at the shareholders’ meeting may request the company to repurchase at the current fair price shares held by them, unless at the shareholders’ meeting a resolution on dissolution of the company is passed along with the resolution passed according to Article 38 (b).

(2) Shareholders who have expressed objection to the resolution on division, merger by formation of a new company or by acquisition, acquisition or share transfer (hereinafter collectively referred to as “ mergers and acquisitions ”) according to the listing (OTC) specifications at a shareholders’ meeting may request the company to repurchase, at the current fair price, shares held by them according to Cayman regulations.
(3) Subject to Cayman regulations, if shareholders exercising the right to request for repurchase of shares according to Item 2 of this Article fails to arrive at a consensus with the company within sixty days after the resolution is made at the shareholders’ meeting, the company shall, within thirty days thereafter, apply to a court in Taiwan for adjudicating on the price against all shareholders failing to reach a consensus, and may refer to the jurisdiction of Taipei Local Court of Taiwan for first instance of such case.
(4) Subject to Cayman regulations, shareholders exercising the right to request for repurchase of shares according to Items 1 and 2 of this Article shall make such request in writing within twenty days after the resolution is made at a shareholders’ meeting, and the repurchase price requested shall also be expressly indicated. If a consensus is reached between the shareholders and the company, the company shall pay the price within ninety days after the resolution is made at the shareholders’ meeting. If no consensus is reached between the shareholders and the company, the company shall, within ninety days after the resolution is made, pay a fair price as it deems to the shareholders failing to reach a consensus; or otherwise if the company fails to make such payment, the repurchase price requested by the shareholders shall be deemed accepted.
(5) Notwithstanding the provisions of Items 2-4 in this Article, shareholders objecting merger of the company by formation of a new company or by acquisition may exercise the right granted by Article 238 of Cayman Companies Act (Rev. 2020) (as amended or otherwise modified) by requesting the company to repurchase at a fair price shares held by them of the company, which is exempted from the restriction or prohibition of this Article.
When the procedure of convening a shareholders’ meeting or the method of resolution at a shareholders’ meeting goes against Cayman regulations, the listing (OTC) specifications or the Articles of Association, shareholders may, within thirty days after such resolution, apply to Taipei Local Court or a court on Cayman Islands for
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appropriate relief, including without limitation to requesting the court to recognize the resolution as invalid or cancel the resolution.

Shareholders’ Voting Rights

Unless otherwise specified or restricted in the Articles of Association with respect to voting rights of shares, each shareholder present in person (by its duly authorized representative in case of an institutional shareholder) or by proxy at a shareholders’ meeting shall be entitled to one vote for each share registered under his/its name.
For shares jointly held by more than one person, one of the joint holders shall be elected to exercise the voting right represented by the shares.
In case of an institutional shareholder, it may authorize a natural person as it deems appropriate by resolution of its Board of Directors or other management organ to exercise its rights as a shareholder at any shareholders’ meeting or any meeting of shareholders of any class.
44-1. A shareholder holding shares for another person may unnecessarily exercise the voting rights represented by shares held for himself and for such other person as a whole. The eligibility, applicable scope, way of exercise, operating procedure and other compliances required with respect to separate exercise of voting rights shall be bound by the listing (OTC) specifications.
(1) Shares are of no voting rights if:
- (a) the shares are held by the company of its own (when holding of its own shares by the company is permitted according to Cayman regulations and the Articles of Association);
- (b) the shares are held of the company by an affiliated company which has over half of its total outstanding shares with voting right or of its total capital held by the company; or
- (c) the shares are held of the company by another company who has aggregately over half of its total outstanding shares with voting right or total capital held directly or indirectly by the company or any company controlled by or affiliated to the company.
(2) Shares held by non-voting shareholders are not counted in the total number of voting shares for a resolution at a shareholders’ meeting.
(3) Shareholders may not participate in voting at a shareholders’ meeting on any matter that they have interest in against the interest of the company, nor act on behalf of other shareholders to exercise the voting right. Shares held by shareholders who may not vote are not counted in the total voting shares held by shareholders present at the meeting.
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(4) In case a director or supervisor (if any) is also a shareholder of the company, if the shareholder has pledged shares held by him of the company (hereinafter referred to as “ pledged shares ”) and the number of such pledged shares exceeds one second of shares held by him of the company when he was last elected as a director or supervisor, then no voting right shall be exercised with respect to the beyond-one-second portion of pledged shares, and such portion of shares is not counted in the voting rights of shareholders present at the meeting.
To the extent permitted by Cayman regulations, the Board of Directors may have voting rights exercised in writing or by electronic means according to the listing (OTC) regulations at a shareholders’ meeting, and such way of exercising the voting rights shall be expressly provided in the notice calling for the meeting. Only if the company falls within the applicable scope of the rules issued by competent authorities of Taiwan on electronic voting of companies can the electronic means be listed as one of the pipelines for exercise of voting rights by shareholders.
For the purpose of the Articles of Association and Cayman regulations, shareholders exercising voting rights in writing or by electronic means shall be counted among shareholders present and voting at a meeting in person, but waive the right with respect to temporary motions and amendment to original proposals.
(1) Shareholders exercising voting rights in writing or by electronic means shall exercise their voting rights at least 2 days before a shareholders’ meeting by the means provided in the notice calling for the meeting; in case of repeated votes, the earliest vote shall apply, unless earlier votes are expressly withdrawn for replacement by a later vote.
(2) Unless otherwise provided in Article 54, if shareholders who have exercised their voting rights in writing or by electronic means desire to appear at the shareholders’ meeting in person, they shall, not less than two days before the shareholders’ meeting, withdraw their previous exercise of voting rights in the same manner as they exercised their voting rights. If they fail to withdraw their previous exercise within the specified period, then the voting in writing or by electronic means shall apply.
For the avoidance of doubt, for the purpose of the Articles of Association and Cayman regulations, shareholders exercising their voting rights in accordance with Articles 46, 47 and 54 of the listing (OTC) specifications shall be deemed as if they personally appeared and participated in voting at the shareholders’ meeting.
If no procedure or way of voting at shareholders’ meetings is provided in the Articles of Association, the proceedings of shareholders’ meetings of the company shall apply. Proceedings of shareholders’ meeting shall be formulated or amended at a shareholders’ meeting according to Cayman regulations, the listing (OTC) specifications, and particularly the “rules on proceedings of shareholders’ meetings of companies with public offerings”.
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When the company has only one shareholder, a resolution made by the shareholder in writing in accordance with the Articles of Association shall be as effective as if it were passed at a shareholders’ meeting duly convened.

Letter of Commitment

A shareholder may, for each shareholders’ meeting, authorize an agent to attend the shareholders’ meeting by issuing a letter of authorization printed and distributed by the company to specify the scope of such authorization. The agent so authorized is unnecessarily a shareholder.
A shareholder may issue at most a letter of authorization to authorize one agent, and the letter of authorization so issued shall be served to the company or its stock affairs agency 5 days before the shareholders’ meeting which the agent is authorized to attend. In case of repeated letters of authorization, the earliest one served shall apply, unless earlier ones are expressly withdrawn by a later one that is also served five days before the shareholders’ meeting.
If the shareholder desires to personally appear at the shareholders' meeting after service of the letter of authorization, a written notice shall be given to the company or stock affairs agency at least two days before the shareholders’ meeting to withdraw the authorization; or otherwise if the authorization fails to be withdrawn within the specified period, the voting right exercised by the authorized agent shall prevail.
If a shareholder has exercised his voting right in writing or by electronic means in accordance with Article 47 hereof and appointed an agent by a letter of authorization to attend a shareholders’ meeting, the exercise of voting right by the agent present at the shareholders’ meeting shall prevail.
A letter of authorization shall specify that it is only effective for a certain shareholders' meeting. In the form of the letter of authorization, the following shall be included: (a)Instructions for filling the form; (b)Voting rights granted by the authorizing shareholder to be exercised; and (c)basic ID information of the authorized agent and the solicitor (if any). Letters of authorization shall be sent to all shareholders on the same day along with the notice calling for the shareholders’ meeting to which such letters of authorization are effective.
Except for trust undertakings established according to the law of Taiwan or stock affairs agencies approved by competent securities authority of Taiwan, any person who is authorized simultaneously by two or more shareholders may represent a number of voting rights that does not exceed 3%of the voting rights represented by the total outstanding shares; or otherwise any excess is not counted. In case one person is authorized simultaneously by two or more shareholders of different opinions, voting rights not to be counted shall be excluded respectively from the voting rights of the authorizing shareholders in proportion to their shareholding percentages.
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Use and solicitation of a letter of authorization shall be handled according to the Rules on Use of Letters of Authorization for Attending Shareholders’ Meetings of Companies with Public Offerings and the rules of the company on use of letters of authorization for attending shareholders’ meetings. Rules of the company on use of letters of authorization for attending shareholders’ meetings shall be formulated or amended by the Board of Directors in accordance with Cayman regulations and the listing (OTC) specifications, particularly the Rules of Use of Letters of Authorization for Attending Shareholders’ Meetings of Companies with Public Offerings.

Board of Directors

(1) The company shall have at least five directors (including independent directors). The number of directors to be duly elected for each Board of Directors shall be specified in the notice of the shareholders' meeting held for such election.
(2) A director may be a natural person or a legal person. In case of a legal person director, it shall designate a representative acted by a natural person to perform its duties; the natural person so designated may, by reason of his job capacity, be replaced by another natural person to serve the remaining term of office.
(3) In case of an institutional shareholder that is not a director or supervisor, the representative of the institutional shareholder may be elected as a director or supervisor (if any) according to the Articles of Association, but may not be elected or appointed as both a director and a supervisor.
(4) Directors shall be elected and appointed at a shareholders’ meeting based on the cumulative voting system according to this Article. Upon election of directors at a shareholders’ meeting, each share is entitled to a number of votes equal to the number of directors to be elected, and the votes may be cast for one person or allocated among several persons. Those receiving votes representing the most voting rights are elected.
(5) If no procedure or way of electing directors is provided in the Articles of Association, the procedures of the company for electing directors and supervisors shall apply. The procedures of the company for electing directors and supervisors shall be formulated or amended by ordinary resolution at a shareholders’ meeting according to Cayman regulations and listing (OTC) specifications.
The company may implement a candidate nomination system based on consideration of specific conditions for election and appointment of directors. Only if the company is listed, election and appointment of any director shall be subject to the candidate nomination system. Subject to operation of the candidate nomination system, directors and independent directors shall be elected by shareholders respectively from the lists of candidates for directors and independent directors. The Board of Directors may formulate rules and procedures relating to the candidate nomination system according
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to the listing (OTC) specifications.

Each director has a three-year office term and may be reelected upon expiration of the term. If timely reelection cannot be performed upon expiration of directors’ office term, the directors shall remain in office until reelected directors take office.
(1) Directors may be removed by special resolution at a shareholders’ meeting. Nevertheless, all directors may be reelected prior to expiration of the office term.
(2) Unless otherwise specified in the Articles of Association, directors may be reelected at a shareholders’ meeting prior to expiration of the office term. In this case, if no resolution is passed at a shareholders’ meeting on expiration of the current directors’ office term or other specific date of removal, but new directors are elected at the same meeting, it shall be deemed that the current directors are removed in advance upon the resolution on election of the new directors is passed at the shareholders’ meeting.
A directors’ meeting requires presence of above two thirds of directors and consent of over half of the directors present at the meeting to election of a chairman among the directors. The Chairman acts externally as a representative of the company, and serves internally as the chairman of the Board of Directors and the presider of shareholders’ meetings convened by the Board of Directors. The Chairman shall, if failing to attend a directors’ meeting, appoint a person to act on behalf; or otherwise if no such person is appointed by the Chairman, the directors shall elect one of them to act on behalf.
No director is required to hold shares of the company.
Directors may receive different compensations, which shall be paid based on the following considerations regardless of the profit or loss of the company: (a)Degree of participation in the company's operations;; (b)Contribution to the company; (c)Reference to the normal level in the industry; and (d)Other related factors.
If the number of directors falls below five due to departure of directors for any reason, the company shall conduct a by-election at the nearest shareholders’ meeting to elect alternative directors that serve the remaining office term of the original directors. If vacancies reach up to one third of seats on the current Board of Directors, the company shall convene an extraordinary shareholders' meeting for a by-election within sixty days after occurrence of the circumstance.
66-1.(1) Without prejudice to the responsibilities of the directors to the company according to the common law of Cayman Islands, unless otherwise specified in Cayman regulations, directors shall perform the obligation of loyalty to the company, take due care, and exercise appropriate caution and skills, and carry out businesses of the company for the best interests of the company (including handling the company’s division, merger by formation of new companies/by acquisition, acquisition and other matters). Any director who breaches his obligations shall be held responsible for compensating the company; if the director breaches an
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obligation for benefits of his own or of any other person, such benefits derived may be attributed to the company by an ordinary resolution at a shareholders’ meeting.

(2) Directors shall be held jointly and severally liable with the company to any other person that suffers any damage due to performance of duties by such directors for the company against legal regulations.
(3) The preceding two provisions shall apply to managers and supervisors (if any) to the extent of performing authorized functions for business of the company.
66-2. During the listing period, the eligibility, election, appointment, removal, exercise of duties and powers and other compliance required of directors (including independent directors) of the company shall be bound by the listing (OTC) specifications.

Independent director

During the listing period, the company shall have at least two independent directors who shall occupy no fewer than one fifth seats of the Board of Directors, and at least one independent director has the citizenship of Taiwan. If the company has a board of auditors, independent directors shall have at least three seats and no fewer than one fifth seats of the Board of Directors. The number of independent directors to be duly elected for each Board of Directors shall be specified in the notice of the shareholders' meeting held for such election. If the number of independent directors falls below the number specified above due to departure of independent directors, a by-election shall be conducted at the nearest shareholders’ meeting. If all independent directors depart, the company shall convene an extraordinary shareholders' meeting for a by-election within sixty days after occurrence of the circumstance.
Independent directors shall have professional knowledge, and maintain their independence in the capacity of independent directors, without any direct or indirect stake in the company. . Professional qualifications, shareholding and restriction on part-time employment and independence recognition shall be bound by the listing (OTC) specifications. The Board of Directors or other person convening shareholders’ meetings shall ensure candidates for independent directors satisfy the requirements of this Article.

Authorities and Responsibilities of the Board of Directors

(1) Unless otherwise specified in Cayman regulations, the Articles of Association, the listing (OTC) specifications or otherwise resolved at a shareholders’ meeting, the Board of Directors shall be responsible for carrying out businesses of the company in the manner as it deems appropriate. The Board of Directors shall pay all reasonable expenses incurred in relation to performance of duties (including without limitation to expenses on incorporation and registration of the company),
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and may exercise all powers of the company.

(2) If the Board of Directors performs division, merger by formation of a new company or merger by acquisition, acquisition or other operations in violation of the listing (OTC) specifications, the Articles of Association or resolutions of the shareholders’ meeting, thereby resulting in any damage to the company, then directors participating in such performance shall be held liable for compensation to the company, while directors who have objected such performance as evidenced by records or written statements may be exempted from the liability.
As needed for management of the company, the Board of Directors may appoint managers and other officers, decide on their office terms and remuneration, and remove any of them from office.
The Board of Directors may appoint a secretary of the company (or assistant secretaries if necessary), and decide on an appropriate office term, remuneration and working conditions of the secretary. The secretary or assistant secretaries may be removed by the Board of Directors at any time. The secretary shall attend shareholders’ meetings, properly maintain meeting minutes and perform duties according to other Cayman regulations or resolutions of the Board of Directors.

Disqualification and Removal of Directors

(1) A person may not be appointed as a director, or in case he is in the position of a director, shall be conclusively removed if:
(a) he has ever committed a severe crime (including without limitation to crimes specified in the Organized Crime Prevention Act of Taiwan) and awarded a guilty verdict, and (i) the verdict has not been implemented, or(ii)the verdict has not been fulfilled, or (iii)less than five years has elapsed since fulfillment of the verdict, expiration of probation or pardon;
(b) he has ever been sentenced to one year or above imprisonment due to fraud, breach of faith or encroachment, and (i) the sentence has not been implemented, (ii)the sentence has not been fulfilled, or (iii)less than two years has elapsed since fulfillment of the sentence, expiration of probation or pardon;
(c) he has committed a crime according to the corruption control ordinance, and awarded a guilty verdict, and (i)the verdict has not been implemented, (ii)the verdict has not been completed, or (iii) less than two years has elapsed since fulfillment of the verdict, expiration of probation or pardon;
(d) he has become subject to declared bankruptcy or to liquidation proceedings according to a court order, without recovery of rights.
(e) The specified period for rejected use of notes has not expired;
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- (f) he is dead or in the condition, according to judgment by a competent court or authority, of sustained or likely mental deficiency or being incapable of handling his own affairs for any other reason, or his capacity for act is limited according to applicable laws;
- (g) he is removed from the position of director or is prohibited to act as a director by any judgment made according to Cayman regulations, regulations of Taiwan or the listing (OTC) specifications;
- (h) his election is invalid or he is conclusively removed from office according to Article 73;
- (i) he submits a written resignation to the company;
- (j) he is removed from office by a resolution made in accordance with the Articles of Association; or
- (k) he is removed from office by an order from a court of Taiwan due to his conduct during performance of duties having caused material damage to the company or severely violated Cayman regulations, the listing (OTC) regulations or the Articles of Association.
(2) During the listing period, directors (excluding independent directors) shall be conclusively removed from office if they have transferred all or any part of shares held by them of the company during their office term and thereby result in their remaining shares fewer than one second of the shares held by them when they are elected.
(3) For directors (excluding independent directors) elected, if they transfer all or any part of shares held by them of the company before taking the office and thereby result in their remaining shares fewer than one second of the number of shares held by them when they are elected, or if they transfer all or any part of shares held by them of the company during the book closure period before a shareholders’ meeting and thereby result in their remaining shares fewer than one second of the shares held by them at the beginning of the book closure period, the election shall go invalid.
Unless otherwise approved by the Financial Supervisory Commission, the OTC Exchange Center or the stock exchange (if applicable), directors occupying over half seats of the Board of Directors shall not be subject to any of the following relations: (a)Spouse, or (b) parents or equivalent relatives defined in the law of Taiwan. If such relations exist between directors, nonconforming directors receiving fewer votes for election shall lose the election or be conclusively removed from office.
If a director who has committed any conduct that results in material damage to the company or severe violation of regulations or the Articles of Association is not removed by resolution at a shareholders’ meeting, shareholders holding above 3% of the company’s total outstanding shares may apply to a competent court within thirty
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days after the shareholders’ meeting for removal of the director; in this case, Taipei Local Court of Taiwan shall be the competent court of the first instance.

Shareholders holding one percent of the company’s total outstanding shares for above six rolling months may request, in writing, the supervisors or independent directors on the board of auditors to lodge a suit against a director on behalf of the company; in this case, Taipei Local Court of Taiwan shall be the competent court of the first instance. If the supervisors or independent directors fail to lodge the suit within thirty days after receiving the request as mentioned above, the requesting shareholders may lodge a suit for the company.

Proceedings of directors

During the listing period, the Board of Directors shall convene at least one directors’ meeting each quarter basis in or out of the territory of Cayman Islands.
For convening the meeting, the Board of Directors shall give a written notice to all directors and supervisors (if any) seven days in advance, with the cause expressly provided in the notice. Nevertheless a directors’ meeting may be convened at any time in case of an emergency that is recognized by over half of the directors. The notice may be delivered in person, by fax, email or postal service to the directors and supervisors (if any).
Meetings of the Board of Directors or any committee of directors set up according to Article 86 may be held by means of video communication. Directors attending the aforesaid meetings by means of video communication shall be deemed personally present at the meeting.
A director attending a directors' meeting by proxy acted by another director shall be deemed personally present and vote at the meeting. In this case, the appointing director shall issue a letter of authorization for each meeting, and specify the scope of authorization. A director may act as s proxy only for one of the other directors.
Unless otherwise specified in the Articles of Association, Cayman regulations or the listing (OTC) specifications, resolutions of the Board of Directors shall be passed if so approved by over half of the directors present at a directors’ meeting with presence of over half of all directors. Subject to the Articles of Association, a director attending a meeting as a proxy of another director may simultaneously exercise the voting right of his own and of such other director.
Where a director has direct or indirect interest with any contract concluded or possibly concluded by the Company, such director shall disclose those important contents related to its own interests at the board meeting. In case of split, consolidation/ merger or acquisition of the Company, a director shall inform the Board of Directors and the Board of Shareholders of those important contents related to its own interest in such transaction as well as its reasons for voting for/ against the resolution corresponding to
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such transaction. Provided that the spouse or any relative by blood within the second degree of kinship (as defined in the Civil Law of the Republic of China) of a director, or a company having the control affiliation with a director has an interest in the subject matter of the board meeting, it shall be deemed that such director has its own interest in such matter. If such director has informed other directors that it is one member of the contracting company by notice and thus it has its own interest with the contract, it shall be deemed that such director has fully disclosed its interest. In the event that a director has its own interest in the matter mentioned at the board meeting and thus the company interests may be possibly prejudiced, such director shall be excluded from voting and must not exercise the voting right on behalf of any director. In addition, voting of such director that cannot exercise the voting right shall be excluded from the number of voting exercised by those directors present.

Unless otherwise specified in these Articles, all directors other than independent director shall simultaneously hold any other paid post of the Company during its term of office, while period and conditions of service (i.e. remuneration) shall be decided by the Board of Directors. A director shall not be disqualified from being a director for the reason that it holds such post under the contract concluded between such director and the Company or it receives some benefits therefrom; and a director shall not be responsible for the Company due to those benefits obtained from holding such post.
Unless otherwise specified in these Articles, all directors other than independent director shall render professional services to the Company and obtain the corresponding remuneration therefrom. The remuneration shall not be affected by their position acting as a director.
Unless otherwise specified in these Articles, vacancy of the Board of Directors shall not affect those in-service directors performing its duties continually.
Unless otherwise specified in these Articles, proceedings regarding the Board of Directors shall comply with the procedural rules of board meetings for the Company. Procedural rules of board meetings for the Company shall be developed or modified by the Board of Directors in accordance with Cayman decree, Regulations Governing Procedure for Board of Directors Meetings of Public Companies of the Republic of China, as well as such listing (OTC) rules, and shall be reported at the shareholders meeting.
Unless otherwise specified in Cayman decree or such listing (OTC) rules, the Board of Directors shall set up any committee (including but not limit to remuneration committee) comprised of one or several director(s). Organization, authority, duties and meeting procedure of such committee shall be determined by the Board of Directors.

Committee

86A. Unless otherwise specified in Cayman decree or such listing (OTC) rules, the Board of

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Directors shall, by itself or via an ordinary resolution at the shareholders meeting, set up the committee (including but not limit to audit committee, remuneration committee) comprised of fit and proper members at its own discretion and entrust a part of its authorities to the committee. Execution of authorities and procedures of such committee shall conform to the rules developed by the Board of Directors in accordance with the listing (OTC) rules. In the absence of related provisions, provisions regarding the Board of Directors (if applicable) herein may be applied for the committee comprised of more than two members.

86B. (1) During the listing period and prior to the date passing the resolution regarding the merger and acquisition matter at the board meeting of the Company, the Audit Committee shall review the fairness and reasonableness of the merger & acquisition plan and the transaction, and submit the result of review to the Board of Directors and the Board of Shareholders. But if no shareholders meeting is required for resolution in accordance with Cayman decree, such affair shall not be submitted to the Board of Shareholders.
(2) Before commencement of the foresaid review, the audit committee shall engage the independent experts to offer opinions on the reasonableness of exchange ratio or cash or other properties distributed to the shareholders.
(3) Review result of the audit committee and opinions of the independent experts shall be delivered to the shareholders together with the notice about convening shareholders meeting with respect to the resolution for merger & acquisition matter; but if no shareholders meeting is required for resolution in accordance with Cayman decree, report shall be submitted at the latest shareholders meeting with regard to the merger & acquisition matter.
(4) Provided that the foresaid review result and opinions of the independent experts have been announced by the Company on the website designated by the securities authority of the Republic of China and placed at the venue of the shareholders meeting for consultation of the shareholders, it shall be deemed as being delivered to the shareholders.

Supervisor

(1) To avoid doubt, provisions governing supervisors in Article 87~100 herein shall comply with Cayman decree. Provided that those provisions are in conflict with Cayman decree, the latter shall prevail. Without prejudice to Cayman decree, authorities or obligations of the supervisors shall conform to the listing (OTC) rules unless otherwise specified herein.
(2) During the listing period, the Company shall delegate the supervisor, who shall be elected by the Board of Shareholders. Supervisors shall be natural or legal persons. Provided that there are more than one representative acting on behalf of the
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corporate shareholder, those representatives shall not be simultaneously nominated as any director or supervisor of the Company.

(3) There shall be at least three supervisors and one of them, at the least, shall have a domicile within the Republic of China.
Whenever the number of supervisors is less than three, the vacancy shall be filled at the next shareholders meeting by election. In the event that all supervisors are removed, the Board of Directors shall convene an extraordinary shareholders meeting for supervisor election, within sixty (60) days.
(1) The Supervisors shall supervise the implementation of corporate business and from time to time, investigate the corporate business and financial conditions, check various books and request the Board of Directors or the Manager to present reports.
(2) When handling with the foregoing matters, the Supervisors shall entrust the attorney and accountant for review, on behalf of the Company.
Where a director finds out that the Company may possibly suffer any major damage, such director shall immediately report to the Supervisors.
(1) The Supervisors shall attend the board meeting and express their views. The Supervisors have no voting right at the board meeting.
(2) Provided that the Board of Directors or any director performs any business in violation of Cayman decree, listing (OTC) rules, the Articles of Association or any resolution of the shareholders meeting, the Supervisors shall immediately notify the Board of Directors or such director to stop the behaviors.
92.(1) The Supervisors shall check various lists developed and presented by the Board of Directors to the Board of Shareholders and give its comments to the Board of Shareholders.
(2) When handling with the foregoing matters, the Supervisors shall entrust the accountant for review.
Except that the Board of Directors fails to or cannot convene a shareholders meeting, the Supervisors shall, if necessary, convene the shareholders meeting for the benefit of the Company.
Each supervisor shall exercise its own authorities solely.
The Supervisors must not concurrently act as a director, manager or other employees of the Company.
Provided that a director engages in any purchase & sale, borrowing & lending or other legal act with the Company for the benefit of itself or others, the Supervisors shall act as the Company representative.
Where the Board of Shareholders has made a resolution to file a lawsuit against a supervisor, the Company shall file such lawsuit within thirty (30) days as from the date
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of resolution. The Company representative in charge of the lawsuit shall be elected by the Board of Shareholders, exclusive of directors.

The shareholder holding more than 1% total number of issued shares for six consecutive months shall request the Board of Directors to file a lawsuit against the supervisor in written form, and deem Taipei local court (Taiwan) as the court of first jurisdiction. Provided that the Board of Directors fails to file a lawsuit within thirty (30) days as from the date receiving the foresaid request, the shareholder presenting such request shall file such lawsuit for the benefit of the Company.
(1) Unless otherwise approved by Financial Supervisory Commission (FSC), GreTai Securities Market (GTSM) or Taiwan Stock Exchange (TWSE, if applicable), two or more supervisors shall have neither a spousal relationship nor a relationship within the second degree of kinship as defined in the civil law of the Republic of China, with any other supervisor or any director.
(2) Provided that the supervisors have such relationship as defined in Para. 1 above, the supervisor obtaining the votes with lower voting right shall have its election invalid, while the supervisor that has filled the post shall be removed.
(3) Provided that the supervisors and the directors have such relationship as defined in Para. 1 above, the supervisor obtaining the votes with lower voting right shall have its election invalid, while the supervisor that has filled the post shall be removed.
Para. 2, 3 & 4 of Article 59, as well as articles 61, 62, 64, 65, 66-2, 72 and 74 shall be applicable to the Supervisors.
100A. Notwithstanding anything to the contrary contained herein, the Company shall implement the Audit Committee system, instead of the Supervisors system, in compliance with Cayman decree and listing (OTC) rules. Provided that the Company has established the Audit Committee, Article 87-100 herein shall be inapplicable. Whenever the Company sets up the Audit Committee, all Supervisors shall be deemed as dismissal before the setting date.

Reserves

During the listing period, the Company shall, after paying all duties and taxes, firstly withdraw 10% as the statutory surplus reserves when earnings are distributed, except in the case that the statutory surplus reserves have reached the total sum of paid-in capital.
Unless otherwise specified in Cayman decree and the listing (OTC) rules, the Company shall, for specific purpose, withdraw special reserves other than statutory surplus reserves by the resolution of shareholders meeting, during the listing period.
Unless otherwise specified in Cayman decree, the listing (OTC) rules or these Articles, statutory surplus reserves and capital reserves can never be used other than making up the Company losses. Provided that the special reserves, other than statutory surplus
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reserves, withdrawn by the Company for the purpose of making up the losses are insufficient to filling the losses, capital reserves shall not be used as a supplementation.

Remuneration and dividends

In accordance with Cayman decree, listing (OTC) rules and these Articles, the Company shall not distribute dividends if there are no earnings. But if the statutory surplus reserves have exceeded 50% of the paid-in capital of the Company, the exceeded amount shall be distributed in full or in part, as the dividends according to the ordinary resolution of the shareholders meeting. During the listing period of the Company, dividends shall be distributed in Taiwan Dollar.
(1) Unless otherwise specified in Cayman decree, listing (OTC) rules or these Articles, if the Company has made profits in the current year during the listing period, at least two percentages (2%) shall be withdrawn as the employee remuneration (unless otherwise specified in Cayman decree or listing (OTC) rules, qualification of those employees shall be determined by the Board of Directors), which shall be distributed to the employees of the Company and (or) subsidiaries by issuing new shares and/ or cash, and no higher than one percentage (1%) shall be withdrawn as the director remuneration and shall be distributed to various directors, provided that at least 2/3 directors of the Board present and more than 1/2 directors have adopted the resolution. 數 But if the Company has some accumulated losses, the amount for making up such losses shall be reserved firstly, and employee & director remuneration shall be withdrawn from the remaining amount as per the foregoing percentages. Distribution plan for employee and director remuneration shall be submitted to the Board of Shareholders. Unless otherwise specified in listing (OTC) rules, director remuneration shall not be distributed by issuing new shares.
(2) Unless otherwise specified in Cayman decree, listing (OTC) rules or these Articles, where the Company has made profits at the end of any accounting year, after paying all related taxes, making up the losses (including all losses in the previous years), and withdrawing the statutory surplus reserves (except for the case where the total amount of statutory surplus reserves have reached the total paid-in capital of the Company) and special reserves (if any), dividends shall be distributed to the shareholders as per their shareholding ratio in the amount no less than ten percentages (10%) of the remaining profits of the current year, in accordance with the ordinary resolution of the regular shareholders meeting, among which the amount of cash dividends shall be no less than ten percentages (10%) of the total dividends distributed.
(3) The Company shall also distribute the dividends by making use of the unappropriated earnings from the previous years, in accordance with the ordinary resolution of the regular shareholders meeting.
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(4) The Board of Directors shall deduct any amount (if any) that is due and should be paid by the shareholder to the Company, from any dividend or other account payable related to the shares.
(5) Unless otherwise specified in Cayman decree and listing (OTC) rules, any special reserves shall be carried over into the unappropriated earnings of the Company.
(1) Unless otherwise specified in Cayman decree and listing (OTC) rules, the Company shall distribute the due dividends, in full or in part, by issuing new shares, in accordance with the special resolution of the shareholders meeting; and the amount less than one share shall be distributed in cash.
(2) Any dividend, distribution or other payment made by the Company related to the shares shall be interest free. All unreceived dividends or distributions shall be used for investment or other purpose for the benefit of the Company. Any dividend or distribution that has not been received by the shareholders within six (6) years as from the date of distribution shall be owned by the Company.

Accounting Books of the Company

Accounting books in connection with the Company business shall be kept in the form decided by the Board of Directors.
108.(1) Accounting books shall be kept at the main registered office of the Company or any appropriate place deemed by the Board of Directors, and from time to time, offered to Directors and Supervisors (if any) for consultation.
(2) Provided that the Company keeps the accounting records and books outside Cayman Islands in accordance with the foregoing provisions, the Company shall, after receiving the order or notice given in accordance with the tax & information authority law of Cayman Islands as well as its modification or other change, keep those books or any part of them at the registered office of the Company in electronic or other form as per the foresaid order or notice, for consultation.
At the end of each accounting year, the Board of Directors shall prepare the following lists: (a) business report; (b) financial statements and other documents & information (hereinafter referred to as “Financial Statements” ) presented in accordance with Cayman decree and listing (OTC) rules; and (c) profit distribution or loss reaching-up proposals, which shall be submitted to the Supervisors or the independent directors of the Audit Committee for review, at least thirty (30) days before the date of the regular shareholders meeting in accordance with these Articles, and presented at the regular shareholders meeting for acknowledgement. After being acknowledged at the regular shareholders meeting, the Board of Directors shall distribute the acknowledged financial statements as well as the resolution of profit distribution or loss reaching-up or give a notice to various shareholders.
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Various books prepared and issued by the Board of Directors as per the foregoing provisions as well as reports from the Supervisors or the Audit Committee shall be submitted to the service agency within the Republic of China ten (10) days before the date of the regular shareholders meeting, and various shareholders shall consult such information during the ordinary business hours of the service agency.
During the listing period, the Board of Directors shall submit the memorandum and articles of association, as well as all previous minutes of shareholders meeting, financial statements, register of shareholders and corporate bondholders’ list to the service agency within the Republic of China, and the shareholders shall check the proof of stake, designate scope and from time to time, and request for consultation, transcription or duplication. The Company shall also cause the service agency to provide.
The Board of Directors shall keep the annual statement and related declarations every year in accordance with Cayman decree, and submit duplicates of those documents to the Registrar of Company in Cayman Islands.

Capitalization realized from reserves

In accordance with Cayman decree, the Company shall, in case of no loss, distribute the statutory surplus reserves, share premium account and proceeds from receipt of gifts, in full or in part, to new shares or cash as per the original shareholding ratio of various shareholders, by following the special resolution of shareholders meeting in accordance with Cayman decree and listing (OTC) rules. However, the statutory surplus reserves shall be distributed only in the amount exceeding 25% of the paid-in capital.
The Board of Directors shall make appropriate arrangements as the case may be, to implement the resolution regarding capitalization received from reserves, including but not limit to the following case, when the share to be distributed is less than one, the Board of Director shall properly handle with this part of share.

Public Tender Offer

Unless otherwise specified in Cayman decree or listing (OTC) rules, the Company shall, during the listing period, announce the following matters within fifteen (15) days upon receipt of the duplicate of public tender offer, public tender offer prospectus and related documents made in accordance with the listing (OTC) rules:
(a) Type and quantity of shares held by the directors and shareholders holding over ten percentages (10%) of issued shares of the Company;
(b) The Board of Directors shall give advices to the Company shareholders with respect to the verification about identity and financial conditions of the offeror, fairness of the tender conditions, and reasonableness of the fund source, and indicate the clear opinions of the directors (agree or disagree) and reasons;
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(c) Material changes in financial conditions of the Company mentioned in the latest financial statements and contents about the change;
(d) Type, quantity and amount of shares held by the present directors or the major shareholders with over ten percentages (10%) shareholding ratio from the public offeror or its affiliates;
(e) Other related important information

Settlement

Subject to Cayman decree, the Company shall perform the liquidation procedure in accordance with the special resolution of the shareholders meeting. Where the residual property that can be distributed to the shareholders is insufficient to pay off all share capitals if the Company performs the liquidation procedure, the shareholders shall bear the losses as per their shareholding ratios after distributing the residual property. Provided that in the process of liquidation, the residual property that can be distributed to the shareholders is sufficient to pay off all share capitals determined at the beginning of liquidation, the residual property shall be distributed to all shareholders as per their shareholding ratio at the beginning of liquidation. Nothing in this Article shall affect the shareholders’ right of preferred stock.
Subject to Cayman decree, if the Company should be wound up, the liquidator may, with the sanction of a special resolution of shareholders meeting of the Company and any other sanction required by Cayman decree, divide amongst the shareholders in cash or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) as per the shareholding ratio. The liquidator shall also set such value as he deems fair upon any property to be divided as foresaid and may determine how such division shall be carried out as between the shareholders or different classes of shares. The liquidator may with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the shareholders as the liquidator, with the like sanction, shall think fit, but so that no shareholder shall be compelled to accept any property upon which there is any liability.
The Company shall keep all statements, records of account and documents for a period of ten years from the completion date of liquidation. The custodian thereof shall be appointed by the liquidator or by the ordinary resolution of the Company.

Notice

Subject to Cayman decree and except as otherwise provided in these Articles, any notice or document may be served by the Company to any shareholder either personally, or by facsimile, or mail (postage prepaid) or via a recognized courier service (fees prepaid), at the address as appearing in the register of shareholders, or to the extent permitted by
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applicable laws, by posting on the website designated by FSC, GTSM or TWSE (if applicable) or the Company website, or by electronic means by transmitting it to any email account or address such shareholder may have confirmed in writing for the purpose of such service of notices. In the case of joint holders of a share, all notices shall be given to that one whose name stands as the representative of such share in the register of shareholders.

Any shareholder who has attended the shareholders meeting in person or by proxy shall be deemed as having received the notice of shareholders meeting.
Any notice or document, if served by:
(a) post, shall be deemed to have been served one day after the time when the letter containing the same is delivered to the courier;
(b) facsimile, shall be deemed to have been served upon production by the transmitting facsimile machine of a report confirming transmission of the facsimile in full to the facsimile number of the recipient;
(c) courier service, shall be deemed to have been served forty-eight (48) hours after the time when the letter containing the same is delivered to the courier; or
(d) email, shall be deemed to have been served immediately upon transmission of the email.
Subject to these Articles, any notice or document given to the shareholders at the address appearing in the register of shareholders shall be deemed as being legally served to the separate or joint holders, even if such shareholder is dead, bankrupt or the Company has been informed of its death or bankruptcy.

Registered premise of the company

Registered office of the Company in Cayman Islands shall be decided by the Board of Directors.

Corporate Governance

(1) During the listing period, acquisition or disposal of assets (including financial derivatives), lending funds to other parties, and endorsement etc. shall be done in accordance with the procedures for acquisition or disposal of assets, as well as the procedures for lending funds and endorsement, as developed or amended by the Board of Shareholders in accordance with Cayman decree and the listing (OTC) rules.
(2) During the listing period, the conflict-of-interest transaction shall be performed in accordance with the corresponding management measures of the Company, as developed and amended by the Board of Directors in accordance with the listing
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(OTC) rules.

During the listing period, internal control system of the Company shall be established by the Board of Directors in accordance with Cayman decree and the listing (OTC) rules.

Fiscal year

Unless otherwise decided by the Board of Directors, accounting year of the Company shall be from January 01 to December 31.

Company seals

The Company has more than one seal according to the resolution of the board meeting. The company seals may not be used without the authorization of the Board of Directors. Unless otherwise specified herein, with respect to any marketable security on which company seal shall be affixed, such seal shall be used by the director, or secretary or other person designated by the Board of Directors; unless all shares, debentures or other marketable securities or those issued at the time shall use the company seal in other form or use electronic seal instead, as per the resolution of the board meeting.

Litigation/ non-litigation agent in the Republic of China

128.(1) The Company shall appoint the litigation/ non-litigation agent as defined in the Securities Law of the Republic of China, and deem such agent as the responsible person in the Republic of China under the law.
(2) The foregoing agent shall have a domicile or residence in the Republic of China.
(3) The Company shall inform the competent authority in the Republic of China of name, domicile or residence of the foregoing agent; and shall inform the competent authority in case of change in the foresaid content.
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Asia Plastic Recycling Holding Ltd.

Procedural Rules of Shareholders Meeting (before Amendment)

Article 1

To establish a strong governance system and sound supervisory capabilities for the Company’s shareholders meeting, and to strengthen management capabilities, these Rules are adopted pursuant to Article 5 of Corporate Governance Best Practice Principles for TWSE/TPEX Listed Companies.

Article 2

The procedural rules of the Company’s shareholders meeting, except as otherwise provided in the decree or the Articles of Association, shall be as provided in these Rules.

Article 3

Unless otherwise specified in the decree, the shareholders meeting of the Company shall be convened by the Board of Directors.

To convene the regular shareholders meeting, the agenda handbook shall be prepared and various shareholders shall be informed thirty (30) days in advance; and the shareholders holding less than 1,000 registered shares shall be informed by announcement on the market observation post system (MOPS) thirty (30) days in advance. To convene the special shareholders meeting, various shareholders shall be informed fifteen (15) days in advance; and the shareholders holding less than 1,000 registered shares shall be informed by announcement on MOPS fifteen (15) days in advance. In addition, no later than fifteen (15) days before the date of shareholders meeting, the Company shall also have prepared the shareholders meeting agenda handbook and supplemental meeting materials and made them available for review by shareholders at any time. The shareholders meeting agenda handbook and supplemental materials shall also be displayed at the Company and the professional shareholder service 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. The Company shall specify in its notice of shareholders meeting 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

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meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel shall be assigned to handle with the registrations.

Election, appointment or removal of directors or supervisors, amendment to the Articles of Association, decrease in registered capital, application for ceasing public issue, director’s competition licensing, conversion of profit into capital, conversion of reserve into capital, public dismissal of the company, merger, division or matters provided in the first item of Article 185 in the Taiwanese Company Law shall be briefly described in the cause for convening the meeting, other than be presented in the form of a temporary motion; the main content of such proposal may be posted on the website designated by the competent securities authority or the company, with the website noted in the notice of the meeting.

The reasons for convening a shareholders meeting shall indicate the supervisors and directors fully re-elected, as well as the date of assumption of duty. Upon completion of re-election at the shareholders meeting, the date of assumption of duty shall not be changed by extraordinary motion or other ways at the same meeting.

Shareholder(s) holding above 1% of the total outstanding shares may present at most one proposal to the Regular Meeting of Shareholders, and if any additional proposal is presented, such additional proposal will not be considered. Exceptionally, proposals presented by shareholders to give suggestions on promoting public interest or fulfillment of social responsibilities by the company will be considered by the Board of Directors. If any proposal presented by shareholders is subject to a circumstance provided in the fourth item of Article 172 (1) in Taiwanese Company Law, such proposal shall not be considered by the Board of Directors.

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

The proposals submitted by the shareholders 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, the Company 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. For proposals not listed, the Board of Directors shall account for the rejection at the shareholders’ meeting.

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Article 4

For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by the Company 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 the Company no later than five (5) days before the date of 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 the Company, 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 the Company no later than two (2) days before the meeting date. If the cancellation notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.

Article 5 (Principles determining the time and place of shareholders meeting)

The venue for a shareholders meeting shall be the premises of the Company, or a place easily accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier than 9:00 a.m. and no later than 3:00 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 (Preparation of documents such as the attendance book)

The Company 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.

The Company 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, ballots shall also be furnished.

Shareholders shall attend the shareholders meeting based on attendance cards, sign-in cards, or other certificates of attendance. The Company 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.

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

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appointed to attend as proxy, it may designate only one person to represent it in the meeting.

Article 7 (The chair and non-voting participants of a shareholder meeting)

If a shareholders meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairman of the Board. When the Chairman of the Board is on leave or for any reason unable to exercise its power, one director shall be appointed to act as chair. Where the Chairman does not make such a designation, the directors shall select from among themselves one person to serve as chair.

A shareholders meeting convened by the Board of Directors should better be chaired by the Chairman of the Board in person and attended by a majority of the Directors, at least one supervisor (if any) in person and at least one member of each functional committee on behalf of the committee. The attendance shall be recorded in the meeting minute.

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.

The Company may appoint its attorneys, accountants, or related persons retained by it to attend a shareholders meeting in a non-voting capacity.

Article 8 (Documentation of a shareholder meeting by audio or video recording)

The Company shall make an uninterrupted audio and video recording of the proceedings of the shareholders meeting, and the recorded materials shall be retained for one (1) year at the least. If, however, a shareholder files a lawsuit pursuant to Article 189 of Taiwan Company Act, the recording shall be retained until the conclusion of the litigation.

Article 9

Attendance at the shareholders meeting 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.

When it comes to the starting time of a meeting, the presider shall immediately announce start of the meeting. If fewer than half of the total outstanding shares are represented by shareholders present at the meeting, the presider may announce to postpone the meeting. The meeting can be postponed for twice, and the total length

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of postponements may not exceed one hour. If after the second postponement, shares represented by shareholders present at the meeting are still fewer than half of the total outstanding shares, the presider shall announce abolishment of the meeting for lack of a quorum.

Article 10 (Discussion of proposals)

If a shareholders meeting is convened by the Board of Directors, the meeting agenda shall be set by the Board of Directors. Related proposals (including extraordinary motions and amendment to the original proposal) shall be voted case by case. 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 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 procedural rules, 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 (Shareholder speech)

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.

An attending shareholder 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.

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

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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 relevant personnel designated to respond.

Article 12 (Calculation of voting shares and recusal system)

Voting at a shareholders meeting shall be calculated based on the number of shares.

With respect to resolutions of the 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 the Company, 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 three percent (3%) 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 or are deemed non-voting shares under Article 179, paragraph 2 of Taiwan Company Act.

When the Company holds a shareholders meeting, it may allow the shareholders to exercise voting rights by correspondence or electronic means. When voting rights 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 shall be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the

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extraordinary motions and amendments to original proposals of that meeting; it is therefore advisable that the Company 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 the Company no later than two (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 revoke the voting rights already exercised under the preceding paragraph shall be made known to the Company, by the same means by which the voting rights were exercised, no later than two (2) days before the date of the shareholders meeting. If the notice of revocation is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail.

When a shareholder has exercised voting rights by correspondence or electronic means and simultaneously appointed 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 the Articles of Association, pass 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.

To the extent permitted by the decree, a proposal shall be deemed passed if all attending shareholders consent without raising any objection when the chair puts forward the relevant proposal for approval, which has the same effect with vote by ballots. If any objection is raised, vote by ballots shall be adopted pursuant to the preceding paragraphs. Except for the proposals listed in the agenda, any other proposal or any amendment or alternative to the original proposal presented by a shareholder shall be supported by other shareholders. Voting rights represented by that shareholder raising the proposal and those shareholders supporting the proposal shall reach one percent (1%) of the voting rights represented by the total number of issued shares.

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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.

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 the Company.

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 (Election)

The election of directors and supervisors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors & 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 one (1) year. If, however, a shareholder files a lawsuit pursuant to Article 189 of Taiwan Company Act, the recording shall be retained until the conclusion of the litigation.

Article 15

Matters relating to the resolutions of the 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 twenty (20) days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form. The Company may distribute the meeting minutes by means of public announcement.

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 (including statistical tallies); in the event that the directors & supervisors are elected, number of votes received by

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each candidate shall be revealed. The meeting minutes shall be retained for the duration of the existence of the Company.

To the extent permitted by the decree, the resolution method mentioned in the preceding paragraph shall be recorded as “passed by all attending shareholders with no objection when the chair puts forward it for approval” if the shareholders raise no objection against the proposal when the chair puts forward the proposal for proposal; where any shareholder raises an objection against the proposal, voting method and number & proportion of affirmative votes shall be indicated.

Article 16 (Public disclosure)

On the day of a shareholders meeting, the Company 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 the Decree or under Taiwan Stock Exchange Corporation (or Taipei Exchange (TPEX, if applicable)) regulations, the Company shall upload the content of such resolution to the MOPS within the prescribed time period.

Article 17 (Maintaining order at the meeting place)

Staff handling administrative affairs of a shareholders meeting shall wear identification cards or armbands.

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 the Company, the chair may prevent the shareholder from doing so.

When a shareholder violates the procedural rules 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 (Recess and resumption of shareholders meeting)

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.

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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 five (5) days in accordance with Article 182 of Taiwan Company Act.

Article 19

These Rules, and any amendment hereto, shall be implemented after adoption by the shareholders meeting.

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Asia Plastic Recycling Holding Ltd.

Procedures for Election of Directors and Supervisors

(before Amendment)

Article 1 For just, fair and open election and appointment of directors and supervisors, these measures are formulated in accordance with Articles 21 and 41 of the Code of Practice for Governance of Listed and OTC Companies.
Article 2 Election and appointment of directors and supervisors for the company shall, unless otherwise specified by regulations or the Articles of Association, shall be bound by these measures.
Article 3 Overall composition of the Board of Directors shall be taken into consideration during the election of the Company’s directors.
Composition of the Board of Directors of the Company shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the Company’s business, operating dynamics and development needs. It is advisable that the policy shall include, but not limit to, the following two general standards:
- I. Basic requirements and value: Gender, age, nationality and culture etc.
- II. Professional knowledge and skills: Professional background (i.e. law, accounting, industry, finance, marketing, or technology), professional skills and industry experience etc.

Each board member shall have the necessary knowledge, skill and experience to perform their duties. The abilities that must be possessed by the whole board are as follows:

I. The ability to make judgments about operation;
II. Accounting & financial analysis ability;
III. Business management ability;
IV. Crisis management ability;
V. Knowledge of the industry;
VI. An international market perspective;
VII. Leadership ability; and

VIII. Decision-making ability

More than half of the directors shall be persons who have neither a spousal

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relationship nor a relationship within the second degree of kinship with any other director.

The Board of Directors of the Company shall consider adjusting its composition based on the results of performance evaluation.

Article 4 Supervisors of the company shall meet the conditions provided in the left column:

VI. Honest and steadfast.

VII. Having a sense of unbiased judgment.

VIII. Having professional knowledge.

IX. Well-experienced.
X. Capable of understanding financial statements.

Besides the preceding conditions, the Company’s Supervisors shall also meet the following requirement: at least one supervisor shall be accounting or financial professional.

The Supervisors shall be appointed in accordance with the provisions regarding independence as specified in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies of Taiwan. Competent and appropriate supervisors shall be appointed, to strength risk management as well as financial and operation control of the Company.

At least one of the supervisors shall be person who has neither a spousal relationship nor a relationship within the second degree of kinship with any other supervisor or any director.

The Supervisors shall not concurrently act as the Company’s director, manager or other employee; and at least one of the supervisors shall have a domicile in the Republic of China, to perform the supervision function in real time.

Article 5 The qualifications for the independent directors of the Company shall comply with Articles 2, 3, and 4 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies of Taiwan.

The election of independent directors of the Company shall comply with Articles 5, 6, 7, 8, and 9 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies of Taiwan, and shall be conducted in accordance with Article 24 of the Corporate Governance Best-Practice Principles for TWSE/Taipei Exchange Listed Companies of Taiwan.

Article 6 The Board of Directors or shareholders of the company may provide a list of recommended directors or supervisors for the next Board of Directors or the Board

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of Supervisors as a reference for election and appointment of directors or supervisors.

Election of directors and supervisors, unless otherwise specified in applicable regulations, may be performed following procedures of the candidate nomination system provided in Article 192 (1) of the Taiwanese Company Law; for review of qualifications, education background, work experience and subjection to circumstances provided in Article 30 of the Taiwanese Company Law, no other qualification certificates shall be presented, and the review result shall be provided as reference to the shareholders for selection of appropriate directors and supervisors. Nevertheless, election of a director shall be always subject to the candidate nomination system during the listing period of the company (namely from the day immediately preceding the listing date of the company’s stocks on Taiwan Stock Exchange, including any period thereafter when the company’s stocks are suspended from trading for any reason).

If departure of supervisors results in the number of remaining supervisors falls less than that specified by the company’s Articles of Association, a by-election shall be preferably conducted at the nearest shareholders’ meeting to come. If all supervisors depart, the company shall convene an extraordinary shareholders’ meeting for a by-election within sixty days after occurrence of the circumstance.

Article 7 The company shall adopt cumulative voting for election of directors and supervisors; each share is entitled to a number of votes equal to the number of directors and supervisors to be elected, and the votes may be cast for one person or allocated among several persons.

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Article 8 The Board of Directors shall prepare a number of ballots equal to the number of directors and supervisors to be elected, mark corresponding weights on the ballots, and then distribute them to shareholders present at the shareholders’ meeting. Voters may be identified by the attendance certificate numbers carried on the ballots.
Article 9 Voting rights exercised to elect directors and supervisors are calculated separately for the number of non-independent directors, independent directors and supervisors set forth in the company’s Articles of Association. Those receiving votes representing the highest weights are elected. If there are not enough seats for two or more persons winning the same voting weight, they have to draw lots to decide who is to be elected; if any of such persons is absent, the presider shall act on behalf in drawing lots.
Article 10 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 11 If a person elected is a shareholder, the elector is required to fill the shareholder account and account number of the elected; or otherwise if the person elected is not a shareholder, it is required to fill the name and ID credential number of the elected. If a government or institutional shareholder is elected, the name of the government or institution may be filled in the account of the elected box, and the legal representative of institution shall also be provided; if there are more than one representative, names of the representatives shall be respectively provided.
Article 12 A ballot is invalid in any of the circumstances listed in the left column:
VI. If no ballot prepared by the Board of Directors is used.
VII. If the ballot is cast blank into the ballot box.

VIII. If the ballot is illegible or altered.

IX. If the person filled to be elected being a shareholder, the shareholder account and account number are inconsistent with those recorded in the shareholder register, or if the person filled to be elected being not a shareholder, the name and ID credential number of the elected are inconsistent according to verification.
X. If other words are carried along with the account name (name) or shareholder account number (ID credential number) of the elected.
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XI. If a person filled to be elected has the same name with another shareholder and the shareholder account number or ID credential number of such person fails to be provided for identification.
Article 13 After voting is completed, the votes shall be opened on the spot, and the presider shall announce the voting results, including the list of directors and supervisors elected and voting weights received by the winning directors and supervisors.

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 (1) year. If, however, a shareholder files a lawsuit pursuant to Article 41 of the Articles of Association, the result shall be retained until the conclusion of the litigation.

Article 14 Elected directors and supervisors will receive a notice of election from the Board of Directors.
Article 15 Those Procedures, and any amendment hereto, shall be implemented after adoption by the shareholders meeting.
Article 16 If the board of auditors system is adopted, provisions on supervisors herein shall not apply.
Article 17 These measures initially taken effect on April 1, 2010, and was revised for the first time on June 15, 2020.
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Shareholding List of Directors

As of the book closure date at the regular shareholders meeting in the current year: April 18, 2021

Title	Name	Date of first appointment	Date of election (appointment)	Term	Number of shares held at the time of appointment	Number of shares held at the time of appointment	Number of shares held at present	Number of shares held at present	Number of shares held by it spouse and minor child at present	Number of shares held by it spouse and minor child at present
					Number of shares (share)	Share holding Ratio	No. of shares (share)	Share holding Ratio	No. of shares (share)	Share holding Ratio
Chairman	Ding Jinzao	2010.01	2019.06	3 years	15,993,089	5.95%	15,993,089	5.95%	－	－
Director	Ding Holding Limited	2013.06	2019.06	3 years	38,888,293	14.46%	38,888,293	14.46%	－	－
Vice-chairman	Zhang Huiqun	2016.06	2019.06	3 years	－	－	－	－	－	－
Director	Zhang Duozhong	2010.05	2019.06	3 years	－	－	－	－	－	－
Independent director	Li Junde	2016.06	2019.06	3 years	－	－	－	－	－	－
Independent director	Li Fan	2016.06	2019.06	3 years	－	－	－	－	－	－
Independent director	Liao Zhengpin	2010.03	2019.06	3 years	－	－	－	－	－	－

Note 1: total number of shares issued on April 18, 2021: 268,954,729 shares. Note 2: Article 26 of the Securities Law is not applicable to the Company.

AI assistant

Asia Plastic — AGM Information 2021

51781_rns_2021-08-19_5a7ca8ca-bdf6-43a6-99f3-fd9868a45237.pdf

Contents

Asia Plastic Recycling Holding Ltd. Procedures for 2021 Regular Meeting of Shareholders

VII. Incidental motions

Asia Plastic Recycling Holding Ltd. Agenda of 2021 Regular Meeting of Shareholders

II. Chairman’s address

V. Discussions

VII. Closing

Reports

Reports

1. 2020 performance report of the company.

Recognitions

Recognitions

Appendix

Discussions

Discussions

Case No. 2

Incidental motions

Incidental motions

Closing

Annexes

Asia Plastic Recycling Holding Ltd.

2020 Annual Business Report

IV. Operating results analysis – amounts verified by accountants

V. Profitability in comparison with that in the precious year

VI. Research and development

Auditor’s report from the board of auditors

Yours faithfully

Opinion

Basis of the opinion

Key items of audit

Responsibilities of the management and those charged with governance for the consolidated financial statements

Our responsibilities for the audit of the consolidated financial statements

Asia Plastic Recycling Holding Ltd. And its subsidiaries Consolidated Balance Sheet December 31, 2019 and 2020

Consolidated Cash Flow Statement January 1 – December 31, 2019 and 2020

Asia Plastic Recycling Holding Ltd. Comparison table of amendments to proceedings of shareholders’ meetings

Asia Plastic Recycling Holding Ltd. Comparison table of amendments to the rules on election and a ointment of directors pp

Annex

Asia Plastic Recycling Holding Limited

The 11[th] Amendment to the Memorandum of Organization

Shareholders on June 15, 2020)

Asia Plastic Recycling Holding Limited

The 11[th] Amendment to the Articles of Association

Definitions

Shares

Right variation

Shareholder Register

Redemption and repurchase of shares

Share transfer

Closure period

Meeting of Shareholders

Notice of a Shareholders’ Meeting

Proceedings of Shareholders’ Meetings

Shareholders’ Voting Rights

Letter of Commitment

Board of Directors

Independent director

Authorities and Responsibilities of the Board of Directors

Disqualification and Removal of Directors

Proceedings of directors

Committee

Supervisor

Reserves

Remuneration and dividends

Accounting Books of the Company

Capitalization realized from reserves

Public Tender Offer

Settlement

Notice

Registered premise of the company

Corporate Governance

Fiscal year

Company seals

Litigation/ non-litigation agent in the Republic of China

Asia Plastic Recycling Holding Ltd.

Procedural Rules of Shareholders Meeting (before Amendment)

Article 1

Article 2

Asia Plastic AGM Information 2021