CHC - AGM Information 2019 | FinancialReports.eu

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CHC Healthcare Group

Meeting Minutes for 2019 Annual Shareholders’ Meeting

Date: June 12, 2019 at 09:00 a.m.

Place: 7F., No. 369, Fuxing N. Rd., Taipei City 105, Taiwan

(Salt & Light Conference Center)

Attendants: CHC’s total outstanding shares are 139,386,871 shares (1,000,000 shares of treasury shares are excluded). 89,201,471 shares were represented by the shareholders and proxies present, which amounted to 63.99% of the Company’s 139,386,871 issued and outstanding shares.

Chairman: Pei-Lin, Lee, President

Recorder: Chia-Wen, Wang

Board Members Present: Tien-Ying, Lee, Vice President

Gui-Duan, Chen, Independent Director

Geng-Wang, Laiw, Independent Director

Yung-Shun, Chuang, representative of Yen-Hsin Investment Ltd, Juristic Person Director

In Attendance: Sheng-Wei, Teng, Independent Auditor, PricewaterhouseCoopers Taiwan Wen-Ling, Tsai, Attorney, GuoJu Law Firm

Commencement: The aggregate shareholdings of the shareholders and proxies present constituted a quorum. The Chairman called the meeting to order.
Chairman’s Address: Dear shareholders, thank you for visiting 2019 Annual Shareholders’ Meeting of CHC. Let’s proceed according to the agenda.

3. Report Items

(1). 2018 Business Report: Please refer to Attachment 1.
(2). Audit Committee’s Report on review of 2018 audited financial reports: Please refer to Attachment 2.

(3). To report the distribution of the compensations for employees and remunerations for directors of 2018
(4). To report the information of endorsements/guarantees in 2018: Please refer to Attachment 3.
(5). To report the status of execution of the Company’s share repurchase: Please refer to Attachment 4.
(6). To report the Company’s adoption of “Rules for the First Repurchase and Transfer of Shares to Employees”: Please refer to Attachment 5.
(7). To report the status of the private placement of common shares resolved by 2018 Annual Shareholders’ Meeting

4. Matters for Ratification

(1). 2018 Business Report and Financial Statements

(Proposed by Board of Directors)

Explanation: (1). The Company’s audit committee issued its report after reviewing 2018 Parent Company Only Financial Statements and Consolidated Financial Statements, which audited by independent auditors, Sheng-Wei, Teng and Hui-Chin, Chou Tseng of PricewaterhouseCoopers (PwC) Taiwan, together with 2018 Business Report.
(2). For 2018 Business Report, 2018 Audit Committee’s Review Report, Report of Independent Auditors and 2018 Parent Company Only Financial Statements and Consolidated Financial Statements, please refer to Attachment 1, Attachment 2 and Attachment 6.

(3). Please ratify it.

Resolution: Voting result of the proposal is as follows: Total shares represented by the shareholders at the time of voting are 89,201,471 shares. There are 87,195,016 votes in favor (including 23,539,174 votes are exercised by electronic voting method), 26,545 votes against (including 26,545 votes are exercised by electronic voting method), 0 vote invalid, 1,979,880 votes abstained (including 1,874,880 votes are exercised by electronic voting method). Votes in favor accounts for 97.75% of the total representation at the time of voting thus the proposal is ratified as proposed.

(2). Proposal for 2018 Earnings Distribution

(Proposed by Board of Directors)

Explanation: (1). The Company’s profit for the year 2018 is NT$ 323,421,688. After setting aside the legal reserve for NT$ 32,342,169, special reserve for NT$ 330,409,972 based on Article 41, paragraph 1 of “Securities and Exchange Act” and then adding adjusted unappropriated retained earnings at the beginning of 2018 for NT$ 439,712,148, the distributable unappropriated retained earnings for the year 2018 is NT$ 400,381,695. Proposal for earnings distribution is as follows:

CHC Healthcare Group Table of 2018 Earnings Distribution

Item	Amount(NT$)	Amount(NT$)
	Subtotal	Total
Unappropriated retained earnings at the beginningof theyear		188,105,118
Add: Adjustment to adoption of new IFRS	251,607,030
Adjusted unappropriated retained earnings at the beginning of the year		439,712,148
Add: Profit for the year	323,421,688
Deduct: Legal reserve	(32,342,169)
Deduct: Special reserve	(330,409,972)
Subtotal		(39,330,453)
Distributable unappropriated retained earnings for the year		400,381,695
Distribution items:
Cash dividends(NT$1.8per share)		250,044,518
Unappropriated retained earnings at the end of the year		150,337,177
President: Pei-Lin, Lee CEO: Pei-Lin, Lee CFO: Yi-Chun, Chen

(2). The proposal has been approved by the Company’s 10th audit committee’s meeting of the 1st term.
(3). 2018 earnings distribution is first distributed from earnings in 2018 which is distributable.
(4). 2018 earnings distribution is based on the number of outstanding shares on December 31, 2018 (138,913,621 shares), and will distribute cash dividend of NT$1.8 per share. The cash dividend will be paid with calculation rounded down to the nearest one NTD (any amount under one NTD will be discarded). The remaining fraction will be incorporated into other income of the Company.

(5). It requests shareholders’ approval on the Meeting that the President will be authorized to adjust the dividend distribution ratio based on the actual number of outstanding shares if there is any change in number of common shares of the Company which consequently leads to a change in the ratio.
(6). The record date and payment date for cash dividends’ payment will be decided by the President as authorized by shareholders after approved on the Meeting.
(7). Please ratify it.
Resolution: Voting result of the proposal is as follows: Total shares represented by the shareholders at the time of voting are 89,201,471 shares. There are 87,308,246 votes in favor (including 23,652,374 votes are exercised by electronic voting method), 25,545 votes against (including 25,545 votes are exercised by electronic voting method), 0 vote invalid, 1,867,680 votes abstained (including 1,762,680 votes are exercised by electronic voting method). Votes in favor accounts for 97.87% of the total representation at the time of voting thus the proposal is ratified as proposed.

5. Matters for Discussion

(1). Amendment to the Company's “Articles of Incorporation”
(Proposed by Board of Directors)
Explanation: (1). The wording is revised as appropriate to cater for the amendment to “Company Act” and to meet the Company’s operational needs.
- (2). For comparison table of revised articles, please refer to Attachment 7.
- (3). The proposal has been approved by the Company’s 10th audit committee’s meeting of the 1st term.
- (4). Please start discussion.

Resolution: Voting result of the proposal is as follows: Total shares represented by the shareholders at the time of voting are 89,201,471 shares. There are 87,306,046 votes in favor (including 23,650,174 votes are exercised by electronic voting method), 27,545 votes against (including 27,545 votes are exercised by electronic voting method), 0 vote invalid, 1,867,880 votes abstained (including 1,762,880 votes are exercised by electronic voting method). Votes in favor accounts for

97.87% of the total representation at the time of voting thus the proposal is approved as proposed.

(2). Amendment to the Company's “Procedures Governing the Acquisition or Disposal of Assets”

(Proposed by Board of Directors)

Explanation: (1). The wording is revised as appropriate in accordance with Letter No. 1070341072 issued on November 26, 2018 by Securities and Futures Bureau, Financial Supervisory Commission, and to meet the Company’s operational needs.
(2). For comparison table of revised articles, please refer to Attachment 8.
(3). The proposal has been approved by the Company’s 10th audit committee’s meeting of the 1st term.

(4). Please start discussion.

Resolution: Voting result of the proposal is as follows: Total shares represented by the shareholders at the time of voting are 89,201,471 shares. There are 87,307,046 votes in favor (including 23,651,174 votes are exercised by electronic voting method), 26,545 votes against (including 26,545 votes are exercised by electronic voting method), 0 vote invalid, 1,867,880 votes abstained (including 1,762,880 votes are exercised by electronic voting method). Votes in favor accounts for 97.87% of the total representation at the time of voting thus the proposal is approved as proposed.
(3). Amendment to the Company's “Operational Procedures for Loaning Funds to Others” and “Procedures for Endorsement & Guarantee” (Proposed by Board of Directors)
Explanation: (1). The wording is revised as appropriate in accordance with Letter No. 1080304826 issued on March 7, 2019 by Securities and Futures Bureau, Financial Supervisory Commission, and to meet the Company’s operational needs.
- (2). For comparison table of revised articles, please refer to Attachment 9 and Attachment 10.
- (3). The proposal has been approved by the Company’s 10th audit committee’s meeting of the 1st term.
- (4). Please start discussion.

Resolution: Voting result of the proposal is as follows: Total shares represented by the shareholders at the time of voting are 89,201,471 shares. There are 87,307,046 votes in favor (including 23,651,174 votes are exercised by electronic voting method), 26,545 votes against (including 26,545 votes are exercised by electronic voting method), 0 vote invalid, 1,867,880 votes abstained (including 1,762,880 votes are exercised by electronic voting method). Votes in favor accounts for 97.87% of the total representation at the time of voting thus the proposal is approved as proposed.
(4). Amendment to the Company's “Rules of Procedure for Shareholders’ Meetings” (Proposed by Board of Directors)
Explanation: (1). The wording is revised as appropriate to cater for the amendment to “Company Act”.
- (2). For comparison table of revised articles, please refer to Attachment 11.

(3). Please start discussion.

(5). To release the directors and their representatives from non-competition restrictions

(Proposed by Board of Directors)

Explanation: (1). According to Article 209 of “Company Act”, a director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.
(2). It requests shareholders’ approval on the Meeting to release the directors and their representatives from non-competition

restrictions in order to meet the Company’s business need and operations development. For relevant information, please refer to Attachment 12.

  - (3). The proposal has been approved by the Company’s 10th audit committee’s meeting of the 1st term.

  - (4). Please start discussion.

Resolution: Voting result of the proposal is as follows: Total shares represented by the shareholders at the time of voting are 89,201,471 shares. There are 87,306,046 votes in favor (including 23,650,174 votes are exercised by electronic voting method), 27,549 votes against (including 27,549 votes are exercised by electronic voting method), 0 vote invalid, 1,867,876 votes abstained (including 1,762,876 votes are exercised by electronic voting method). Votes in favor accounts for 97.87% of the total representation at the time of voting thus the proposal is approved as proposed.
(6). To transfer shares to employees at less than the average actual share repurchase price

(Proposed by Board of Directors)

Explanation: (1). Since expensing employee bonus leads to the decrease in the Company’s distribution of bonus, to reduce the impact of expensing employee bonus on the Company and to achieve the goal of motivating employees and retaining talents, the Company has proposed to transfer shares to employees at less than the average actual share repurchase price.
(2). In accordance with Article 10-1 of “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies”, when the Company intends to transfer shares to employees at less than the average actual share repurchase price, relevant matters shall be explained as follows:
- A. The exercise price, the valuation percentage, the bases of calculations, and the reasonableness:
  - The exercise price is 60% of the simple average closing price of the common shares for either the 1, 3, or 5 business days (temporary reference price) before the price determination date. The current exercise price of transferring treasury shares to employees is NT$ 20 dollars per share (calculated based on

the simple average closing price NT$ 33.66 per share of the common shares for 5 business days before March 14, 2019 multiplied by 60%). The valuation percentage is determined according to present economic conditions and the Company’s future business circumstance, which is deemed to be reasonable.

B. The number of shares to be transferred, the purpose, and the reasonableness:
(a). The number of shares to be transferred: 1,000,000 shares
(b). The purpose: To motivate employees and retain talents for the purpose of enhancing cohesion
(c). The reasonableness: The Company adequately gives incentive to employees by offering the exercise price of 60% of the simple average closing price of the common shares for either the 1, 3, or 5 business days (temporary reference price) before the price determination date (March 14, 2019). Also the cumulative number of shares planned to transfer to employees has not exceed 5% of the total issued shares of the Company regulated by Article 10-1 of “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies”. Therefore, it is deemed to be reasonable.
C. Qualification requirements for employees subscribing to shares, and the number of shares they are allowed to subscribe for:
(a). Qualification requirements for employees subscribing to shares: Perform in compliance with Article 4 of the Company’s “Rules for the First Repurchase and Transfer of Shares to Employees”
(b). The number of shares allowed to be subscribed for: Perform in compliance with Article 5 of the Company’s “Rules for the First Repurchase and Transfer of Shares to Employees”
D. Factors affecting shareholders' equity:
(a). The expensable amount and dilution of the Company's earnings per share:
- (i). The expensable amount: Temporarily calculated based on the closing price per share on March 14, 2019, the

amount will be adjusted on the basis of the actual record date of transfer.

(Market price per share (Closing price per share on share subscription record date) – Actual exercise price)

Actual number of shares exercise = NT$ 14,550 thousand
- (ii). Dilution of the Company's earnings per share: Dilution of earnings per share = Expensable amount / Current number of outstanding shares = NT$ 0.10
(b). Explain what financial burden will be imposed on the Company by transferring shares to employees at less than the average actual share repurchase price:
- For the Company to transfer shares to employees at less than the average actual share repurchase price, the estimated gap between the exercise price and the repurchase price is NT$ 14,960 thousand. Since there is no capital surplus generated from transaction of treasury shares, after deducted the expensable amount of NT$ 14,550, the unappropriated retained earnings will be offset by NT$ 410 thousand. The unappropriated retained earnings on the account is NT$ 150,337 thousand after distribution of 2018 earnings, which is still higher than the aforesaid gap. Considering the Company’s working capital will increase by NT$ 20,000 thousand after transferring of treasury shares to employees and the Company is now remain profitable, it will cause no critical financial burden.
(3). The proposal has been approved by the Company’s 10th audit committee’s meeting of the 1st term.

(4). Please start discussion.

Resolution: Voting result of the proposal is as follows: Total shares represented by the shareholders at the time of voting are 89,201,471 shares. There are 85,888,914 votes in favor (including 22,233,042 votes are exercised by electronic voting method), 1,444,681 votes against (including 1,444,681 votes are exercised by electronic voting method), 0 vote invalid, 1,867,876 votes abstained (including 1,762,876 votes are exercised by electronic voting method). Votes in favor accounts

for 96.28% of the total representation at the time of voting thus the proposal is approved as proposed.

(7). To propose the issuance plan for a private placement of common shares (Proposed by Board of Directors)
Explanation: (1). To enhance the long-term relationship with strategic investors and consider the effectiveness of raising capital, the Company has proposed a private placement of common shares within the limit of 20,000 thousand shares and may be carried out by installments (no more than 3 times) within one year of the date of the resolution of the Meeting in accordance with Article 43-6 of “Securities and Exchange Act”. Relevant information is as follows:
- A. The basis and reasonableness of the private placement pricing
  - (a). The price per share fixed for privately placed common shares may not be lower than 80% of the reference price. The reference price shall be the higher of the following two calculations:
    - (i). The simple average closing price of the common shares for either the 1, 3, or 5 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction.
    - (ii). The simple average closing price of the common shares for the 30 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends, or capital reduction.
  - (b). It will be proposed to the Meeting to authorize the Board of Directors to determine the actual price determination date and issuance price in accordance with the status of selecting the specific persons and the market situation, also the price can’t be lower than the percentage for the private placement pricing set by the Meeting.
  - (c). It is believed to be reasonable due to the basis for the method by which the price was set and terms above are all complied with relevant laws and regulations and in line

with market situation.

B. The method, objectives, necessity and anticipated benefits for selecting the specific persons
- (a). The method and objectives of selecting the placee: To enhance the relationship with strategic investors, the Company plans to select the specific persons in accordance with Article 43-6 of “Securities and Exchange Act”.
- (b). The necessity and anticipated benefits: The Company proposed to engage with strategic investors through private placement to raise capital for the Company’s long-term operating plan and future business development. It is expected that the private placement will strengthen future competitiveness, improve financial structure, enrich working capital and have advantage on the Company’s long-term development. Cooperation with strategic investors may lead to broader business territory, which also has positive influence on shareholders’ equity.
C. The reasons for the necessity for conducting the private placement
- (a). The reasons for not using a public offering: Considering the regulation of three year no-trading period, it will help assure the long-term relationship between the strategic investors and the Company through private placement.
- (b). The limit on the private placement: Within the limit of 20,000 thousand shares
- (c). The use of the funds raised by installments and the anticipated benefits: The funds raised by installments in the private placement will be used to enrich working capital and for future development needs. It is expected to strengthen financial structure, replenish working capital and improve competitiveness of the Company.
(2). The new private placement shares shall have the same rights and obligations as holders of common shares of the Company except the transfer limitation of privately placed securities within three years of the delivery date stated in Article 43-8 of “Securities and Exchange Act”. It will be proposed to the Meeting to authorize the Board of Directors to file with the competent

authority for retroactive handling of public issuance procedures for the private placement shares after three full years have elapsed since the delivery date based on “Securities and Exchange Act” and relevant rules.

(3). It will be proposed to the Meeting to authorize the Board of Directors to make amendment, supplement or take any actions toward the issuance price, terms and conditions, particulars of the plan and the actual status and other relevant matters related to the private placement if there occurs any update of R.O.C. laws or regulations, request by the authority, change of the market conditions or due to any subjective and objective factors.
(4). It will be proposed to the Meeting to authorize the President to represent the Company to negotiate and sign any document and contract with regard to the private placement plan, also to represent the Company for matters regarding the plan.
(5). The proposal has been approved by the Company’s 10th audit committee’s meeting of the 1st term.

(6). Please start discussion.

Resolution: Voting result of the proposal is as follows: Total shares represented by the shareholders at the time of voting are 89,201,471 shares. There are 86,096,805 votes in favor (including 22,440,933 votes are exercised by electronic voting method), 1,236,790 votes against (including 1,236,790 votes are exercised by electronic voting method), 0 vote invalid, 1,867,876 votes abstained (including 1,762,876 votes are exercised by electronic voting method). Votes in favor accounts for 96.51% of the total representation at the time of voting thus the proposal is approved as proposed.

6. Extempore Motions: None

7. Meeting Adjourned: At 09:37 a.m.

`【` Attachment 1 `】`

CHC Healthcare Group 2018 Business Report

Dear Shareholders,

Thank you very much for your continuous support and advice to let CHC Healthcare Group keep on growing in such a competitive environment. With all the efforts from employees, we hereby report that CHC has created the best performance over the years in 2018 and achieved double-digit net margin. Also, CHC has delivered good business results in both domestic and foreign markets. CHC believes the sustainable operation of a corporation requires economic foundations, so we will continue expanding our business to create both shareholders’ and employees’ maximum interest in the future.

1. Operating Results of 2018

(1). Implementation of 2018 Business Plan

2018 consolidated operating revenue totals NT$2,507,466 thousand, which is a growth compared with NT$2,117,116 thousand in 2017. Mainly reason for the growth is the increase in medical equipment sold. 2018 profit for the year is NT$317,829 thousand, which is a significant growth compared with 2017 loss for the year NT$89,286 thousand. Increase in medical equipment sold and no recognition of impairment loss of “Available-for-sale financial assets” are the main cause of the growth. Operating Results of 2018 is as follows:

of 2018 is as follows:
	NT$ Thousand
Item	2018
Operating revenue	2,507,466
Gross profit	730,786
Operating expenses	270,805
Operating profit	459,981
Profit before income tax	368,169
Profit for theyear	317,829

(2). Implementation of Budget

It’s unnecessary for the Company to disclose the implementation for budget because the 2018 financial forecast was not released previously.

(3). Financial Analysis

Financial Analysis
	Item	2018	2017
Capital Structure & Liquidity	Debts Ratio (%)	52.68%	53.61%
	Current Ratio(%)	236.84%	168.65%
Profitability	Return on Total Assets (%)	3.72%	(0.18)%
	Return on Equity (%)	6.33%	(1.81)%
	Net Margin (%)	12.68%	(4.22)%
	Basic Earnings Per Share	NT$2.32	NT$(0.62)

(4). Research and Developments Work

The Group is not in manufacturing industry, thus there is no R&D department. Only CHC has engaged in “IROIP(Integrated Radiation Oncology Information Platform) Development Program”, technology research and development programs partially subsidized by Ministry of Economic Affairs, in 2018. According to the program, CHC invests in research and development of the information platform from 2018 to 2020 on the basis of its technical service team and the past experience in cooperating with hospitals. The information platform is able to integrate Healthcare Information System with Oncology Information System to bring convenience, accuracy, effectiveness and completeness of various tasks related to radiation therapy.

Perspectives and Operating Strategy for 2019
(1). Product Development Strategy

CHC has always devoted to introducing high-end medical equipment and technology to the country in order to improve the standard of medical treatment. In recent years, we have actively promoted precision medicine, we have successfully brought in proton therapy system. Doctors are now able to customize personal treatment plans based on the physical condition and caring demand of individual patient, to maximize treatment effectiveness while minimizing side effect. CHC plans to introduce MR-Linac in 2019 for our next step. Radiation therapy combined linear accelerator with MRI enable doctors to visualize the target during treatment, which can spare healthy tissue at the ultimate while targeting the tumor. Besides maintaining sound relationships with our world renowned manufacturers, we are also in search of new products aggressively through joining exhibitions expected to extend our product line and improve sales revenue using existing sales channels. Ultimately achieve an all-win situation for CHC, patients and medical institutions.

(2). Technical Training Plan
We believe that quality service and professional employees are the biggest competing advantage of CHC Healthcare Group. We will keep recruiting and training well-qualified teammates, reproducing our profitable business model in Taiwan, no matter to cope with new product introduction or gain access to new market for maintaining high-quality service and good reputation whereas our fast expansion to create differentiated competitiveness. We have successfully entered China and South-East Asia market by offering our technical services, and will continue nurturing our talents to extend the service line.
(3). Medical Services Policy

Besides rooting in Taiwan’s medical centers by providing medical service of radiation oncology, CHC has established a full-service medical management business model with medical institutions in China in expectation of managing procedure improvement and revenue increase using our rich experience and resources operating radiation oncology departments throughout the years. These are now the demo sites for business expansion. CHC is also eager to understand trend of government policy and market overview in the China for the purpose of extending the width and depth in the field of medical service and finally becoming a comprehensive turn-key solution provider.

The assessment of introducing radiation oncology equipment into South-East Asia is constantly under process considering the lack of large medical equipment in the area. CHC has cooperated with Mayapada Hospital in Indonesia to help them to establish radiation oncology department. In the future, CHC will continue to provide medical management one-stop full service solution of oncology to improve medical quality and train medical talents for South-East Asia.

(4). Multidivisional Expansion

As aging population and long-term care become unneglectable issues in Taiwan, CHC Health group is planning on stepping into this field as well. We will take reference from the standard of well-reckoned international long-term care institution to break through the stereotype of the dimmed lighting, timeworn space. Use differentiation strategy to create safe, comfortable elder friendly spaces, in hope to construct heartwarming living environments that fit the need of seniors, and to improve the overall quality and dignity of aging life.

CFO: Yi-Chun, Chen

President: Pei-Lin, Lee

CEO: Pei-Lin, Lee

`【` Attachment 2 `】`

CHC Healthcare Group 2018 Audit Committee’s Review Report

TO: 2019 Annual Shareholders’ Meeting of CHC Healthcare Group

The Board of Directors reports 2018 Parent Company Only Financial Statements and Consolidated Financial Statements, and were audited by independent auditors, Sheng-Wei, Teng and Hui-Chin, Chou Tseng of PricewaterhouseCoopers (PwC) Taiwan, which they considered to present a fair view of the Company’s financial position, operating results and cash flows. 2018 Parent Company Only Financial Statements and Consolidated Financial Statements, together with 2018 Business Report and Proposal for 2018 Earnings Distribution, have all been reviewed by us as audit committee of the Company. We deem no inappropriateness on these documents. Pursuant to Article 14-4 of “Securities and Exchange Act” and Article 219 of “Company Act”, we hereby present the 2018 Audit Committee’s Review Report. Please review.

CHC Healthcare Group

By Gui-Duan, Chen Convener of Audit Committee March 22, 2019

`【` Attachment 3 `】`

CHC Healthcare Group

Information of Endorsements/Guarantees in 2018

The Company’s information of endorsements/guarantees by December 31, 2018:

Counterparty: Six 100% owned subsidiaries
Total Amount of Endorsements/Guarantees: NT$ 3,834,244 thousand
Purpose of Endorsements/Guarantees: For subsidiaries’ financing needs
According to the net worth on December 31, 2018, the ceiling on total amount of the Company’s endorsements/guarantees is NT$ 14,917,089 thousand and the ceiling on amount of the Company’s endorsements/guarantees to any individual entity is NT$ 9,944,726 thousand. All endorsements/guarantees the Company made are pursuant to “Procedures for Endorsement & Guarantee” and there is no circumstance that the amount exceeds the ceiling.

Item	Counterparty	Amount (NT$ thousand)
1	Chiu Ho Medical System Co.,Ltd.	1,917,145
2	Tomorrow Medical System Co.,Ltd.	1,460,000
3	Chiu Ho Scientific Co.,Ltd.	251,715
4	E CenturyHealth Care Corporation	57,000
5	Medlink Healthcare Limited	50,000
6	Guangzhou Chiuho Medical System Co.,Ltd.	98,384
	Total Amount	3,834,244

5. Subsidiaries’ information of endorsements/guarantees by December 31, 2018:

Item	Provider	Counterparty	Amount (NT$ thousand)
1	Hsing-Yeh Biotechnology Co., Ltd.	CHC Healthcare Group	828,236
2	Hsing-Yeh Biotechnology Co., Ltd.	Tomorrow Medical System Co., Ltd.	575,164
Total Amount			1,403,400

`【` Attachment 4 `】`

CHC Healthcare Group

Status of Execution of the Company’s Share Repurchase

According to Article 28-2, paragraph 1 of “Securities and Exchange Act”, the procedure of share repurchase shall comply with the provisions of “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies” announced by Financial Supervisory Commission. Status of execution is as follows:

Share repurchase in batches	1stBatch
Date of resolution byBoard of Director	August 13,2018
Purpose of share repurchase	Transfer shares to employees
Scheduled period for share repurchase	From August 14, 2018 to October 13,2018
Number of shares to be repurchased	1,000,000 shares
Repurchaseprice range	NT$30 to 48
Actual period for share repurchase	From August 15, 2018 to October 12,2018
Number of shares repurchased	1,000,000 shares
Total monetaryamount of shares repurchased	NT$34,955,961
Average repurchasepriceper share	NT$34.96
Number of shares cancelled	None
Cumulative number of own shares held	1,000,000 shares
Ratio of cumulative number of own shares held during the repurchase period to the total number of the Company’s issued shares	0.71%
Status of execution	Notyet transfer to employees

`【` Attachment 5 `】`

Rules for the First Repurchase and Transfer of Shares to Employees

Of

CHC Healthcare Group (The “Company”)

Article 1

To motivate employees and enhance cohesion, the Company adopted the “Rules for the First Repurchase and Transfer of Shares to Employees” in accordance with Article 28-2, paragraph 1, subparagraph 1 of “Securities and Exchange Act”, the provisions of “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies” announced by Financial Supervisory Commission and related regulations. Any repurchase of shares for the purpose of transferring to the employees by the Company, in addition to complying with related laws and regulations, shall be carried out in accordance with the Rule.

(Type of shares to be transferred, a description of the rights attaching thereto, and any restrictions on such rights)

Article 2

Shares in the present transfer of shares to employees will be common shares, and the rights and obligations associated with those shares, unless otherwise provided by applicable laws and regulations or the Rule, will be the same as other outstanding common shares of the Company.

(Transfer period)

Article 3

In accordance with the Rule, the shares in the present share repurchase may be transferred to employees in a single transfer or multiple transfers within three years from the date of the share repurchase. Any portion not yet transferred within the said time limit will be deemed unissued shares and an amendment registration of share cancellation shall be performed in compliance with laws.

(Eligibility requirements for transferees)

Article 4

Eligibility for transferees that entitled with the right to subscribe the shares according to Article 5 of the Rule is limited to those who are full-time formal employees in the organization of the Company and its subsidiaries home and abroad which the Company directly or indirectly holds more than 50% of the voting shares on the share subscription record date. Eligibility who resign (or on leave without pay) during the period since the share subscription record date to the conclusion of payment period will be disqualified from the right. Part-time employees, temporary employees, short-term workers and subcontracted labor are excluded from the Rule.

(Procedures for transfer of shares)

Article 5

The number of shares to which employees may subscribe will be determined by the President based on the criteria of employee ranks, service seniority and significant contribution to the

Company, also factors such as the total repurchase shares the Company holds on the share subscription record date and subscription limit for single employee shall be taken into consideration. Any employee that has duty as a managerial officer regulated by the Company’s “Compensation Committee Charter” that are qualified shall be first submitted to the compensation committee for review and the Board of Directors for approval.

Employees who have not subscribed and completed payment at the conclusion of the designated subscription and payment period will be deemed to have waived their subscription rights. In the event of an insufficient number of subscriptions, the President may contact other employees regarding subscription to the remaining shares. If the amount of subscriptions still remains insufficient, the Company shall proceed as provided in Article 3 of the Rule.

Article 6

Procedures for the present repurchase of shares and transfer to employees:

The repurchase of the Company’s shares will be publicly announced, reported, and carried out during the implementation period in accordance with the resolution of the Board of Directors.
For the matters related to each transfer such as the period for payment and others, the President is hereby authorized by the Board of Directors to adopt and to publicly announce operating procedures relating to the record date for employee subscriptions, the standards for number of shares to which employees may subscribe, the period for payment of subscriptions, the rights associated with share subscriptions and any restrictive conditions.
Statistics will be compiled on the numbers of shares actually subscribed and paid for, and the registration of share transfers will be carried out.

(Agreed transfer price per share)

Article 7

The share transfer price for the present repurchase of shares and transfer to employees will be the average of the actual share repurchase prices, provided that if, prior to the transfer, there is an increase in the number of issued shares of the Company’s common shares, the transfer price may be adjusted within a range proportional to the increase.

(Rights and obligations subsequent to execution of the transfer)

Article 8

Except where otherwise provided, the rights and obligations associated with the transferred shares, following the transfer of shares in the present share repurchase to employees and transfer registration procedures, will be the same as those originally associated with the shares.

Article 9

The Rule, and any amendments hereto, shall be effected after adoption by resolution of the Board of Directors, and shall be reported to the latest shareholders’ meeting.

Version	Date of Implementation/Amendment	Type of Approval
1	2018/08/13	Approved byBoard of Directors
2	2018/11/12	Approved byBoard of Directors

【 Attachment 6 】

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of CHC Healthcare Group

Opinion

We have audited the accompanying parent company only balance sheets of CHC Healthcare Group (the “Company”) as at December 31, 2018 and 2017, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other independent accountants, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended, in accordance with the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with this Code. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

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

Assessment of investments accounted for using equity method

Refer to Note 4(11) for accounting policy on investments accounted for using equity method, Note 5(2) for uncertainty of accounting estimates and assumptions in relation to impairment assessment of investments accounted for using equity method, and Note 6(4) for details of investments accounted for using equity method.

As of December 31, 2018, the Company’s subsidiary, Chiu Ho Medical System Co., Ltd. and its subsidiaries (“Chiu Ho Medical System Group”), recognised investments accounted for using equity method and investment income amounting to NT$3,395,576 thousand and NT$109,233 thousand, respectively. Because Chiu Ho Medical System Group’s investments accounted for using equity method constituted 44% of the Company’s total assets as of December 31, 2018, and investment income constituted 40% of the Company’s profit before tax for the year ended December 31, 2018, which are significant to the Company’s financial statements, we identified assessment of investments accounted for using equity method as a key audit matter as well as the key audit matters, impairment assessment of goodwill and property, plant and equipment included in Chiu Ho Medical System Group’s financial statements. The key audit matters in relation to Chiu Ho Medical System Group’s financial statements for the year ended December 31, 2018 are stated as follows:

Impairment assessment of goodwill

Description

As of December 31, 2018, Chiu Ho Medical System Group’s goodwill arising from business combination amounted to NT$150,617 thousand. After identifying the smallest cash generating unit which can generate independent cash flows, Chiu Ho Medical System Group used the recoverable amount of each cash generating unit to assess whether goodwill may be impaired. Since the assumptions that management used to assess whether goodwill is impaired involve subjective judgement and have high uncertainty, we considered the impairment assessment of goodwill as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

A. Obtained an understanding of whether the management identifies the objective evidence of

goodwill impairment by following the procedure and taking into account certain factors in a consistent manner and confirmed whether the management uses reliable information.

B. Obtained the report on the valuation of the subsidiary issued by an expert as per the management’s request and performed the following:
(1) Assessed the independence, objectiveness and competence by reviewing the expert’s qualification.
(2) Assessed whether the valuation model is reasonable based on our knowledge of the Chiu Ho Medical System Group’s businesses and industry.
(3) Confirmed whether the expert uses the same future cash flows relative to the budget for the next five years provided by the management.
(4) Checked whether the comparable assets adopted in appraisal report are consistent with the actual operation.
(5) Assessed whether the significant assumptions applied by the expert are relevant and reasonable and tested the mathematical accuracy.

Impairment assessment of property, plant and equipment

Description

Some of Chiu Ho Medical System Group’s leasing businesses were not as profitable as expected due to fierce competition in healthcare industry. The Chiu Ho Medical System Group assesses the impairment based on the estimated recoverable amounts of leasing assets (shown as property, plant and equipment) where there is an indication that they are impaired. Given that the calculation of recoverable amounts requires significant accounting estimates relying upon subjective judgement and uncertainty, we consider the impairment assessment of leasehold assets using the cash-generating units as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

A. Obtained an understanding of whether the management identifies the objective evidence of impairment by following the procedure and taking into account certain factors in a consistent manner and confirmed whether the management uses reliable information.
B. Acquired the asset appraisal report issued by an expert as per the management’s request and

performed the following:

(1) Assessed the expert’s independence, objectiveness and competence by reviewing the expert’s qualification.
(2) Assessed whether the valuation method is widely adopted and appropriate based on our knowledge of the Chiu Ho Medical System Group’s businesses and industry.
(3) Confirmed whether the replacement cost, comparative objects and the assets’ use indicated on the appraisal report truthfully reflect the actual operation.
(4) Assessed whether the significant assumptions applied by the expert is relevant and reasonable and tested the mathematical accuracy.

Responsibilities of management and those charged with governance for the parent company only financial statements

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

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

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

Auditor’s responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions

of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

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

For and on behalf of PricewaterhouseCoopers, Taiwan March 22, 2019

The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

CHC HEALTHCARE GROUP PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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December 31, 2018 December 31, 2017
Assets Notes Amount % Amount %
Current assets
1100 Cash and cash equivalents 6(1) $ 50,008 - $ 549,051 8
1110 Financial assets at fair value 6(2)(15)
through profit or loss - current 53,482 1 - -
1180 Accounts receivable - related 7
parties 3,370 - 1,011 -
1200 Other receivables - - 446 -
1210 Other receivables due from 7
related parties 541,975 7 121,223 2
1220 Current tax assets 2,576 - 2,185 -
1410 Prepayments 6,514 - 4,204 -
1470 Other current assets 8 - - 30,000 -
11XX Total current assets 657,925 8 708,120 10
Non-current assets
1510 Financial assets at fair value 6(2)(15)
through profit or loss - non-
current 492 - 660 -
1517 Financial assets at fair value 6(3)
through other comprehensive
income - non-current 14,394 - - -
1523 Available-for-sale financial assets
- non-current - - 62,890 1
1550 Investments accounted for using 6(4)
equity method 7,010,440 90 6,350,651 88
1600 Property, plant and equipment 1,832 - 2,996 -
1840 Deferred tax assets 6(18) 49,516 1 2,172 -
1980 Other financial assets - 8
non-current 57,053 1 53,802 1
1990 Other non-current assets 1,438 - 1,912 -
15XX Total non-current assets 7,135,165 92 6,475,083 90
1XXX Total assets $ 7,793,090 100 $ 7,183,203 100
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(Continued)

CHC HEALTHCARE GROUP PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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December 31, 2018 December 31, 2017
Liabilities and Equity Notes Amount % Amount %
Current liabilities
2100 Short-term borrowings 6(5) $ 180,000 3 $ - -
2150 Notes payable 1,464 - 892 -
2170 Accounts payable - - 31 -
2200 Other payables 20,565 - 7,532 -
2220 Other payables - related parties 7 - - 13,560 -
2300 Other current liabilities 6(6)(7) 929 - 487,502 7
21XX Total current liabilities 202,958 3 509,517 7
Non-current liabilities
2530 Bonds payable 6(6) 1,177,035 15 1,164,693 16
2540 Long-term borrowings 6(7) and 8 1,440,000 18 595,000 9
2570 Deferred tax liabilities 6(18) 734 - 625 -
25XX Total non-current liabilities 2,617,769 33 1,760,318 25
2XXX Total liabilities 2,820,727 36 2,269,835 32
Equity
Share capital 6(10)
3110 Share capital - common stock 1,399,136 18 1,399,136 19
Capital surplus 6(6)(9)(11)
3200 Capital surplus 2,930,253 38 2,927,016 41
Retained earnings 6(12)
3310 Legal reserve 245,206 3 245,206 3
3320 Special reserve 33,211 - 171,995 2
3350 Unappropriated retained earnings 763,134 10 203,226 3
Other equity 6(3)
3400 Other equity ( 363,621) ( 4) ( 33,211) -
3500 Treasury shares 6(10) ( 34,956) ( 1) - -
3XXX Total equity 4,972,363 64 4,913,368 68
Significant contingent liabilities 9
and unrecognised contract
commitments
3X2X Total liabilities and equity $ 7,793,090 100 $ 7,183,203 100
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The accompanying notes are an integral part of these parent company only financial statements.

CHC HEALTHCARE GROUP

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT FOR EARNINGS (LOSS) PER SHARE AMOUNTS)

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2018 2017
Items Notes Amount % Amount %
4000 Operating revenue 6(13) and 7 $ 435,545 100 $ 326,640 100
5000 Operating costs 6(8)(9)(17) and 7 ( 101,775) ( 23) ( 89,709) ( 28)
5900 Gross profit 333,770 77 236,931 72
Non-operating income and expenses
7010 Other income 6(14) and 7 3,986 1 2,988 1
7020 Other gains and losses 6(2)(15) ( 21,469) ( 5) ( 286,938) ( 88)
7050 Finance costs 6(16) ( 42,188) ( 10) ( 39,643) ( 12)
7000 Total non-operating income and
expenses ( 59,671) ( 14) ( 323,593) ( 99)
7900 Profit (loss) before income tax 274,099 63 ( 86,662) ( 27)
7950 Income tax benefit (expense) 6(18) 49,323 11 ( 33) -
8000 Profit (loss) from continuing operation 323,422 74 ( 86,695) ( 27)
Other comprehensive income
Components of other comprehensive
income that will not be reclassified to
profit or loss
8316 Unrealised gains (losses) from 6(3)
investments in equity instruments
measured at fair value through other
comprehensive income ( 48,496) ( 11) - -
8330 Share of other comprehensive income of
subsidiary, associates and joint
ventures accounted for using the equity
method, components of other
comprehensive income that will not be
reclassified to profit or loss 5,890 1 - -
Components of other comprehensive
income that will be reclassified to profit
or loss
8361 Financial statements translation
differences of foreign operations ( 8,676) ( 2) ( 8,487) ( 3)
8362 Unrealised gains (losses) on valuation of
available-for-sale financial assets - - 153,996 47
8380 Share of other comprehensive income
(loss) of associates and joint ventures
accounted for using equity method ,
components of other comprehensive
income that will be reclassified to
profit or loss 347 - ( 8,168) ( 2)
8399 Income tax related to components of
other comprehensive income that will
be reclassified to profit or loss ( 2,150) - 1,443 1
8300 Other comprehensive (loss) income for
the year ($ 53,085) ( 12) $ 138,784 43
8500 Total comprehensive income for the year $ 270,337 62 $ 52,089 16
Earnings (loss) per share
9750 Basic earnings (loss) per share $ 2.32 ($ 0.62)
9850 Diluted earnings (loss) per share $ 2.02 ($ 0.62)
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The accompanying notes are an integral part of these parent company only financial statements.

CHC HEALTHCARE GROUP

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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Capital Reserves Retained Earnings Other Equity Interest
Unrealised gains
Financial (loss) on financial
statements assets at fair value Unrealised gains
translation through other (losses) on
Treasury share Employee share Unappropriated differences of comprehensive available-for-sale
Notes Ordinary share Share premium transactions options Others Legal reserve Special reserve retained earnings foreign operations income financial assets Treasury shares Total equity
2017
Balance at January 1, 2017 $ 1,398,478 $ 2,806,521 $ 173 $ 57,416 $ 27,600 $ 229,313 $ 93,146 $ 526,742 ($ 11,320) $ - ($ 160,675) $ - $ 4,967,394
Loss for the year - - - - - - - ( 86,695 ) - - - - ( 86,695)
Other comprehensive income (loss) - - - - - - - - ( 7,438) - 146,222 - 138,784
Total comprehensive income (loss) - - - - - - - ( 86,695 ) ( 7,438) - 146,222 - 52,089
Appropriations of 2016 earnings 6(12)
Legal reserve - - - - - 15,893 - ( 15,893 ) - - - - -
Special reserve - - - - - - 78,849 ( 78,849 ) - - - - -
Cash dividends - - - - - - - ( 140,490) - - - - ( 140,490)
Redemption of convertible bonds - 18,765 - - ( 18,765 ) - - - - - - - -
Conversion of convertible bonds - - - - 30,842 - - - - - - - 30,842
Exercise of employee stock options 6(10) 658 5,104 - ( 3,277) - - - - - - - - 2,485
Compensation cost of employee stock options 6(9) - - - 1,279 - - - - - - - - 1,279
Compensation cost of employee stock options of
subsidiaries - - - 1,358 - - - - - - - - 1,358
Difference between consideration and carrying
amount of subsidiaries acquired or disposed - - - - - - - ( 1,589) - - - - ( 1,589)
Balance at December 31, 2017 $ 1,399,136 $ 2,830,390 $ 173 $ 56,776 $ 39,677 $ 245,206 $ 171,995 $ 203,226 ($ 18,758) $ - ($ 14,453 ) $ - $ 4,913,368
2018
Balance at January 1, 2018 $ 1,399,136 $ 2,830,390 $ 173 $ 56,776 $ 39,677 $ 245,206 $ 171,995 $ 203,226 ($ 18,758) $ - ($ 14,453 ) $ - $ 4,913,368
Effects of retrospective application and restatement - - - - - - - 251,607 - ( 291,778) 14,453 - ( 25,718)
Balance at January 1 after adjustments 1,399,136 2,830,390 173 56,776 39,677 245,206 171,995 454,833 ( 18,758) ( 291,778) - - 4,887,650
Profit for the year - - - - - - - 323,422 - - - - 323,422
Other comprehensive loss - - - - - - - - ( 10,479) ( 42,606) - - ( 53,085)
Total comprehensive income (loss) - - - - - - - 323,422 ( 10,479) ( 42,606) - - 270,337
Appropriations of 2017 earnings 6(12)
Cash dividends - - - - - - - ( 153,905) - - - - ( 153,905)
Reversal of special reserve - - - - - - ( 138,784) 138,784 - - - - -
Compensation cost of employee stock options 6(9) - - - 1,207 - - - - - - - - 1,207
Compensation cost of employee stock options of
subsidiaries - - - 2,030 - - - - - - - - 2,030
Expired employee stock warrants - - - ( 7,372) 7,372 - - - - - - - -
Purchase of treasury shares 6(10) - - - - - - - - - - - ( 34,956 ) ( 34,956)
Balance at December 31, 2018 $ 1,399,136 $ 2,830,390 $ 173 $ 52,641 $ 47,049 $ 245,206 $ 33,211 $ 763,134 ($ 29,237) ($ 334,384) $ - ($ 34,956 ) $ 4,972,363
29
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Note: The employees’ compensation were $170 and $0, and the directors’ and supervisors’ remuneration were $4,800 and $0 in 2016 and 2017, respectively, which had been deducted from net income for the years.

The accompanying notes are an integral part of these parent company only financial statements.

CHC HEALTHCARE GROUP

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit (loss) before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation charge
Amortisation expense
Net loss on financial assets or liabilities at
fair value through profit or loss
Interest expense
Interest income
Compensation cost of employee stock
options
Share of profit of associates and joint
ventures accounted for using equity
method
Amortisation of discount on bonds payable
Impairment loss on financial assets
Changes in operating assets and liabilities
Changes in operating assets
Financial assetsat fair value through profit
or loss-current
Accounts receivable due from related
parties, net
Other receivables
Prepayments
Other non-current assets
Changes in operating liabilities
Notes payable
Accounts payable
Other payables
Other payables to related parties
Other current liabilities
Cash (outflow) inflow generated from operations
Interest received during the year
Dividends received during the year
Interest paid during the year
Income tax paid
Net cash flows (used in) from operating
activities

Notes
2018
2017
$ 274,099
( $ 86,662 )
6(17)
1,164
1,148
6(17)
583
611
6(2)(15)
21,586
9,242
6(16)
26,333
26,070
6(14)
(
3,984 )
(
2,980 )
6(9)
1,207
1,279
6(13)
(
326,425 )
(
220,080 )
6(16)
15,855
13,573
6(15)
-
277,325
(
74,900 )
-
(
2,359 )
1,362
446
(
13 )
(
2,310 )
579
(
109 )
-
572
(
574 )
(
31 )
(
85 )
12,891
(
5,687 )
(
13,560 )
13,560
14
(
167 )
(
68,928 )
28,501
3,232
3,133
3,152
157,808
(
26,191 )
(
26,042 )
(
393 )
(
4,133 )
(
89,128 )
159,267

(Continued)

CHC HEALTHCARE GROUP

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other receivable due from related
parties
Decrease in other current assets
Acquisition of investments accounted for using
equity method
Proceeds from capital reduction of investments
accounted for using equity method
Acquisition of property, plant and equipment
Increase in other financial assets - non-current
Net cash flows (used in) from investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans
Proceeds from issuing bonds
Bonds issue cost
Repayments of bonds
Proceeds from long-term debt
Repayments of long-term debt
Payment of cash dividends
Exercise of employee stock options
Payments to acquire treasury shares
Net cash flows from financing activities
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Notes
2018
2017
( $ 420,000 )
( $ 30,000 )
30,000
70,000
7
(
739,503 )
(
259,670 )
7
376,800
319,000
-
(
233 )
(
3,251 )
(
50,000 )
(
755,954 )
49,097
6(20)
180,000
-
6(6)
-
1,200,000
-
(
6,800 )
(
320,100 )
(
693,566 )
6(20)
1,440,000
-
6(20)
(
765,000 )
(
85,000 )
6(12)
(
153,905 )
(
140,490 )
-
2,485
6(10)
(
34,956 )
-
346,039
276,629
(
499,043 )
484,993
549,051
64,058
$ 50,008
$ 549,051

The accompanying notes are an integral part of these parent company only financial statements.

REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of CHC Healthcare Group as of and for the year ended December 31, 2018, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, CHC Healthcare Group and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

CHC HEALTHCARE GROUP

Pei-Lin Lee Chairman

March 22, 2019

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of CHC Healthcare Group

Opinion

We have audited the accompanying consolidated balance sheets of CHC Healthcare Group and subsidiaries (the “Group”) as at December 31, 2018 and 2017, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for opinion

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

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our

opinion thereon, we do not provide a separate opinion on these matters.

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

Impairment assessment of goodwill

Description

As of December 31, 2018, the Group generated goodwill of NT$150,617 thousand as the result of a merger with Shih-Lu Co., Ltd.

After identifying the smallest cash generating unit which can generate independent cash flows, the Group used the recoverable amount of each cash generating unit to assess whether goodwill may be impaired. Since the assumptions that management used to assess whether goodwill is impaired involve subjective judgement and have high uncertainty, we considered the impairment assessment of goodwill a key audit matter.

Refer to Note 4(19) for the accounting policy on goodwill impairment and Note 5(2) for uncertainty of accounting estimates and assumptions in relation to goodwill impairment.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

A. Obtained an understanding of whether the management identifies the objective evidence of goodwill impairment by following the procedure and taking into account certain factors in a consistent manner and confirmed whether the management uses reliable information.
B. Obtained the report on the valuation of the subsidiary issued by an expert as per the management’s request and performed the following:
(1) Assessed the expert’s independence, objectiveness and competence by reviewing the expert’s qualification.
(2) Assessed whether the valuation model is reasonable based on our knowledge of the Group’s businesses and industry.
(3) Confirmed whether the expert uses the same future cash flows relative to the budget for the next five years provided by the management.

(4) Checked whether the comparable assets adopted in appraisal report are consistent with the actual operation.
(5) Assessed whether the significant assumptions applied by the expert are relevant and reasonable and tested the mathematical accuracy.

Impairment assessment of property, plant and equipment

Description

Some of the Group’s leasing businesses were not as profitable as expected due to fierce competition in healthcare industry. The Group assesses the impairment based on the estimated recoverable amounts of leasing assets (shown as property, plant and equipment) where there is an indication that they are impaired. Given that the calculation of recoverable amounts requires significant accounting estimates relying upon subjective judgement and uncertainty, we consider the impairment assessment of leasehold assets using the cash-generating units as a key audit matter.

Refer to Note 4(19) for the accounting policy on asset impairment and Note 5(2) for accounting estimates and assumption uncertainty of asset impairment.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

A. Obtained an understanding of whether the management identifies the objective evidence of impairment by following the procedure and taking into account certain factors in a consistent manner and confirmed whether the management uses reliable information.
B. Acquired the asset appraisal report issued by an expert as per the management’s request and performed the following:
(1) Assessed the independence, objectiveness and competence by reviewing the expert’s qualification.
(2) Assessed whether the valuation method is widely adopted and appropriate based on our knowledge of the Group’s businesses and industry.
(3) Confirmed whether the replacement cost, comparative objects and the assets’ use indicated on the appraisal report truthfully reflect the actual operation.
(4) Assessed whether the significant assumptions applied by the expert is relevant and reasonable and tested the mathematical accuracy.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of CHC Healthcare Group as at and for the years ended December 31, 2018 and 2017.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditor’s responsibilities for the audit of the consolidated financial statements

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

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

For and on behalf of PricewaterhouseCoopers, Taiwan March 22, 2019

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

CHC HEALTHCARE GROUP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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December 31, 2018 December 31, 2017
Assets Notes Amount % Amount %
Current assets
1100 Cash and cash equivalents 6(1) $ 1,209,636 11 $ 1,444,363 14
1110 Financial assets at fair value through 6(2) (23)
profit or loss - current 53,482 1 - -
1140 Contract assets - current 6(21) and 7 40,959 - - -
1150 Notes receivable, net 6(4) and 8 44,838 1 45,082 -
1170 Accounts receivable, net 6(4) 501,782 5 511,801 5
1180 Accounts receivable - related parties 7 240,038 2 231,771 2
1200 Other receivables 205 - 1,937 -
1210 Other receivables due from related 7
parties 153,369 1 88,659 1
1220 Current tax assets 3,671 - 20,644 -
130X Inventories 6(5) 489,977 5 290,360 3
1410 Prepayments 6(6) 459,705 4 348,650 3
1470 Other current assets 8 6,923 - 58,316 1
11XX Total current assets 3,204,585 30 3,041,583 29
Non-current assets
1510 Financial assets at fair value through 6(2)(23) and
profit or loss - non-current 12(4) 492 - 660 -
1517 Financial assets at fair value through 6(3)
other comprehensive income - non-
current 47,231 - - -
1523 Available-for-sale financial assets - 12(4)
non-current - - 89,837 1
1550 Investments accounted for using equity 6(7)
method 18,484 - 14,241 -
1600 Property, plant and equipment 6(8), 7 and 8 4,752,936 44 4,609,262 43
1760 Investment property, net 6(9) and 8 1,194,580 11 1,152,185 11
1780 Intangible assets 6(29) 161,746 1 161,746 2
1840 Deferred tax assets 6(26) 68,298 1 22,543 -
1980 Other financial assets - non-current 6(10), 7 and 8 720,468 7 612,925 6
1990 Other non-current assets 6(8)(9)(11) 678,915 6 887,981 8
15XX Total non-current assets 7,643,150 70 7,551,380 71
1XXX Total assets $ 10,847,735 100 $ 10,592,963 100
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CHC HEALTHCARE GROUP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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December 31, 2018 December 31, 2017
Liabilities and equity Notes Amount % Amount %
Current liabilities
2100 Short-term borrowings 6(12) and 8 $ 686,932 6 $ 641,535 6
2130 Contract liabilities - current 6(21) 30,047 - - -
2150 Notes payable 4,346 - 4,139 -
2170 Accounts payable 204,951 2 136,576 1
2180 Accounts payable - related parties 7 11,229 - 4,696 -
2200 Other payables 6(8) 149,934 2 58,549 1
2230 Current tax liabilities 64,063 1 44,827 -
2250 Provisions for liabilities - current 10,685 - 9,752 -
2300 Other current liabilities 6(13)(14) 190,845 2 903,438 9
21XX Total current liabilities 1,353,032 13 1,803,512 17
Non-current liabilities
2527 Contract liabilities - non-current 6(21) 309,500 3 - -
2530 Bonds payable 6(13) and 8 1,177,035 11 1,164,693 11
2540 Long-term borrowings 6(14) and 8 2,812,608 26 2,349,362 22
2550 Provisions for liabilities - non-current 400 - 745 -
2570 Deferred tax liabilities 6(26) 40,431 - 40,131 1
2600 Other non-current liabilities 6(15) 21,210 - 320,083 3
25XX Total non-current liabilities 4,361,184 40 3,875,014 37
2XXX Total liabilities 5,714,216 53 5,678,526 54
Equity attributable to owners of the
parent
Share capital 6(18)
3110 Share capital - common stock 1,399,136 13 1,399,136 13
Capital surplus 6(13)(17)
(19)
3200 Capital surplus 2,930,253 27 2,927,016 27
Retained earnings 6(20)
3310 Legal reserve 245,206 2 245,206 2
3320 Special reserve 33,211 - 171,995 2
3350 Unappropriated retained earnings 763,134 7 203,226 2
Other equity 6(3) and
12(4)
3400 Other equity ( 363,621) ( 3) ( 33,211) -
3500 Treasury shares 6(18) ( 34,956) - - -
31XX Total equity attributable to owners
of the parent 4,972,363 46 4,913,368 46
36XX Non-controlling interest 161,156 1 1,069 -
3XXX Total equity 5,133,519 47 4,914,437 46
Significant contingent liabilities and 9
unrecognised contract commitments
3X2X Total liabilities and equity $ 10,847,735 100 $ 10,592,963 100
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The accompanying notes are an integral part of these consolidated financial statements.

CHC HEALTHCARE GROUP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT FOR EARNINGS (LOSS) PER SHARE AMOUNTS)

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2018 2017
Items Notes Amount % Amount %
4000 Operating revenue 6(9)(21)(28) and
7 $ 2,507,466 100 $ 2,117,116 100
5000 Operating costs 6(5)(9)(16)(25)
and 7 ( 1,776,680) ( 71) ( 1,428,463)( 67)
5950 Gross profit 730,786 29 688,653 33
Operating expenses 6(9)(16)(17)(25)
(28)
6100 Selling expenses ( 124,613) ( 5) ( 113,773)( 5)
6200 General and administrative
expenses ( 192,217) ( 7) ( 222,005)( 11)
6300 Research and development
- - -
expenses ( 1,193)
6450 Gain on expected credit
impairment loss 47,218 2 - -
6000 Total operating expenses ( 270,805) ( 10) ( 335,778)( 16)
6900 Operating profit 459,981 19 352,875 17
Non-operating income and
expenses
7010 Other income 6(22) and 7 15,621 - 22,285 1
7020 Other gains and losses 6(2)(23), 7 and
12(4) ( 20,840) ( 1) ( 322,035)( 15)
7050 Finance costs 6(13)(24) ( 82,066) ( 3) ( 71,509)( 4)
7060 Share of loss of associates 6(7)
and joint ventures
accounted for using equity
method ( 4,527) - ( 7,692) -
7000 Total non-operating
income and expenses ( 91,812) ( 4) ( 378,951)( 18)
7900 Profit (loss) before income tax 368,169 15 ( 26,076)( 1)
7950 Income tax expense 6(26) ( 50,340) ( 2) ( 63,210)( 3)
8200 Profit (loss) for the year $ 317,829 13 ($ 89,286)( 4)
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(Continued)

CHC HEALTHCARE GROUP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT FOR EARNINGS (LOSS) PER SHARE AMOUNTS)

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2018 2017
Items Notes Amount % Amount %
Other comprehensive income
Components of other comprehensive
income that will not be reclassified
to profit or loss
8316 Unrealised gains (losses) from 6(3)
investments in equity instruments
measured at fair value through other
comprehensive income ($ 42,606) ( 2) $ - -
Components of other comprehensive
income that will be reclassified to
profit or loss
8361 Financial statements translation
-
differences of foreign operations ( 8,676) ( 8,487) ( 1)
8362 Unrealised gain (losses) on valuation 12(4)
of available-for-sale financial assets - - 146,222 7
8370 Share of other comprehensive income
of associates and joint ventures
accounted for using equity method,
components of other comprehensive
income that will be reclassified to
profit or loss 347 - ( 453) -
8399 Income tax related to components of 6(26)
other comprehensive income that
- -
will be reclassified to profit or loss ( 2,150) 1,502
8300 Other comprehensive (loss) income for
the year ($ 53,085) ( 2) $ 138,784 6
8500 Total comprehensive income for the
year $ 264,744 11 $ 49,498 2
Profit (loss) attributable to:
8610 Owners of the parent $ 323,422 13 ($ 86,695) ( 4)
8620 Non-controlling interest ($ 5,593) - ($ 2,591) -
Comprehensive income attributable
to:
8710 Owners of the parent $ 270,337 11 $ 52,089 2
8720 Non-controlling interest ($ 5,593) - ($ 2,591) -
Earnings (loss) per share 6(27)
9750 Basic earnings (loss) per share $ 2.32 ($ 0.62)
9850 Diluted earnings (loss) per share $ 2.02 ($ 0.62)
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The accompanying notes are an integral part of these consolidated financial statements.

CHC HEALTHCARE GROUP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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Equity attributable to owners of the parent
Capital Reserves Retained Earnings Other Equity Interest
Unrealised gains
Financial (loss) on
statements financial assets Unrealised gains
translation at fair value (loss) on
Unappropriated differences of through other available-for-
Treasury share Employee share Special retained foreign comprehensive sale financial Treasury Non-controlling
Notes Ordinary share Share premium transactions options Others Legal reserve reserve earnings operations income assets shares Total interest Total equity
2017
Balance at January 1, 2017 $ 1,398,478 $ 2,806,521 $ 173 $ 57,416 $ 27,600 $ 229,313 $ 93,146 $ 526,742 ($ 11,320) $ - ($ 160,675) $ - $ 4,967,394 $ 2,071 $ 4,969,465
Consolidated net loss - - - - - - - ( 86,695 ) - - - - ( 86,695) ( 2,591) ( 89,286)
Other comprehensive income (loss) - - - - - - - - ( 7,438) - 146,222 - 138,784 - 138,784
Total comprehensive income (loss) - - - - - - - ( 86,695 ) ( 7,438) - 146,222 - 52,089 ( 2,591) 49,498
Appropriations of 2016 earnings 6(20)
Legal reserve - - - - - 15,893 - ( 15,893 ) - - - - - - -
Special reserve - - - - - - 78,849 ( 78,849 ) - - - - - - -
Cash dividends - - - - - - - ( 140,490 ) - - - - ( 140,490) - ( 140,490)
Redemption of convertible bonds 6(13) - 18,765 - - ( 18,765) - - - - - - - - - -
Conversion of convertible bonds 6(13) - - - - 30,842 - - - - - - - 30,842 - 30,842
Exercise of employee stock options 6(18) 658 5,104 - ( 3,277) - - - - - - - - 2,485 - 2,485
Compensation cost of employee stock 6(17)
options - - - 1,279 - - - - - - - - 1,279 - 1,279
Compensation cost of employee stock 6(17)
options of subsidiaries - - - 1,358 - - - - - - - - 1,358 - 1,358
Difference between consideration and
carrying amount of subsidiaries
acquired or disposed - - - - - - - ( 1,589 ) - - - - ( 1,589) - ( 1,589)
Non-controlling interest - - - - - - - - - - - - - 1,589 1,589
Balance at December 31, 2017 $ 1,399,136 $ 2,830,390 $ 173 $ 56,776 $ 39,677 $ 245,206 $ 171,995 $ 203,226 ($ 18,758) $ - ($ 14,453) $ - $ 4,913,368 $ 1,069 $ 4,914,437
2018
Balance at January 1, 2018 $ 1,399,136 $ 2,830,390 $ 173 $ 56,776 $ 39,677 $ 245,206 $ 171,995 $ 203,226 ($ 18,758) $ - ($ 14,453) $ - $ 4,913,368 $ 1,069 $ 4,914,437
Effects of retrospective application 12(4)
and restatement - - - - - - - 251,607 - ( 291,778) 14,453 - ( 25,718) - ( 25,718)
Balance at January 1 after adjustments 1,399,136 2,830,390 173 56,776 39,677 245,206 171,995 454,833 ( 18,758) ( 291,778) - - 4,887,650 1,069 4,888,719
Consolidated net income - - - - - - - 323,422 - - - - 323,422 ( 5,593) 317,829
Other comprehensive income (loss) - - - - - - - - ( 10,479) ( 42,606 ) - - ( 53,085) - ( 53,085)
Total comprehensive income (loss) - - - - - - - 323,422 ( 10,479) ( 42,606 ) - - 270,337 ( 5,593) 264,744
Appropriations of 2017 earnings 6(20)
Cash dividends - - - - - - - ( 153,905 ) - - - - ( 153,905) - ( 153,905)
Reversal of special reserve - - - - - - ( 138,784) 138,784 - - - - - - -
Compensation cost of employee stock 6(17)
options - - - 1,207 - - - - - - - - 1,207 - 1,207
Compensation cost of employee stock 6(17)
options of subsidiaries - - - 2,030 - - - - - - - - 2,030 - 2,030
Expired employee stock warrants - - - ( 7,372) 7,372 - - - - - - - - - -
Purchase of treasury shares 6(18) - - - - - - - - - - - ( 34,956 ) ( 34,956) - ( 34,956)
Non-controlling interest - - - - - - - - - - - - - 165,680 165,680
Balance at December 31, 2018 $ 1,399,136 $ 2,830,390 $ 173 $ 52,641 $ 47,049 $ 245,206 $ 33,211 $ 763,134 ($ 29,237) ($ 334,384) $ - ($ 34,956 ) $ 4,972,363 $ 161,156 $ 5,133,519
43
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The accompanying notes are an integral part of these consolidated financial statements.

CHC HEALTHCARE GROUP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit (loss) before tax
Adjustments
Adjustments to reconcile profit (loss)
Provision for bad debts expense
Expected credit gain
Depreciation charge
Gain on disposal of property, plant and
equipment
Interest expense
Interest income
Share of loss of associates and joint ventures
accounted for using equity method
Net loss on disposal of investments
accounted for using equity method
Loss on financial assets or liabilities at fair
value through profit or loss
Amortisation of discount on bonds payable
Compensation cost of employee stock
options
Impairment loss on financial assets
Impairment loss on non-financial assets
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through
through profit or loss
Contract assets-current
Notes receivable, net
Notes receivable due from related parties
Accounts receivable, net
Accounts receivable due from related
parties
Other receivables
Other receivables due from related parties
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Contract liabilities-current
Notes payable
Accounts payable
Accounts payable to related parties
Other payables
Other payables to related parties
Provisions for liabilities-current
Other current liabilities
Provisions for liabilities - non-current
Cash inflow generated from operations
Interest paid during the year
Interest received during the year
Income tax paid
Net cash flows from operating activities Notes
2018
2017
$
368,169
($
26,076 )
-
37,864
(
47,218 )
-
6(8)(9)(25)
428,598
432,245
6(23)
(
279 ) (
57 )
72,806
63,592
6(22)
(
8,250 ) (
4,581 )
6(7)
4,527
7,692
6(23)
350
-
6(2)(23)
21,586
9,242
6(24)
15,855
13,573
6(17)
3,237
2,637
6(23)
-
277,325
6(23)
1,350
-
6(2)
(
74,900 )
-
(
7,029 )
-
283
9,787
-
140,619
6,104
(
18,040 )
(
8,267 ) (
166,658 )
1,732
398
(
65,537 ) (
53,000 )
(
182,455 ) (
75,102 )
(
111,055 ) (
221,876 )
(
6,615 )
50,481
(
10,274 )
-
207
(
1,499 )
77,410
(
49,755 )
6,533
1,446
19,304
(
22,840 )
-
(
1,161 )
933
(
6,235 )
4,946
8,265
(
345 ) (
2,222 )
511,706
406,064
(
67,535 ) (
61,690 )
8,250
4,581
(
61,733 ) (
55,196 )
390,688
293,759

(Continued)

CHC HEALTHCARE GROUP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in other current assets
Acquisition of investments accounted for using
equity method
Acquisition of property, plant and equipment
Capitalised interest of property, plant and
equipment
Proceeds from disposal of property, plant and
equipment
Acquisition of investment property
Increase in refundable deposits
Decrease in refundable deposits
Decrease (increase) in other non-current assets
Capitalised interest from increase in other non-
current assets
Increase in other financial assets - non-current
Net cash flows used in investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans
Decrease in short-term loans
Proceeds from long-term debt
Repayments of long-term debt
Increase in guarantee deposits received
Decrease in guarantee deposits received
Increase in other non-current liabilities
Decrease in other non-current liabilities
Repayments of bonds
Proceeds from issuing bonds
Bonds issue cost
Payment of cash dividends
Exercise of employee stock options
Payments to acquire treasury shares
Acquisition of ownership interests in subsidiaries
Change in non-controlling interest
Net cash flows (used in) from financing
activities
Effect of changes in foreign currency exchange rates
on cash and cash equivalents
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Notes

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

CHC Healthcare Group

Comparison Table of Revised Articles of “Articles of Incorporation”

Article Before Revision	Article After Revision	Explanation

Article 1 The Company is incorporated as a company limited by shares under “Company Act”, and its name is “CHC Healthcare Group”.	Article 1 The Company is incorporated as a company limited by shares under “Company Act”, and its name is“`承業生醫投資控股股份有限公司`” in the Chinese language, and“CHC Healthcare Group”in the English language.	Revise wording as appropriate to cater for the amendment to “Company Act”.
(Newly added)	Article 5-1 To transfer treasury shares to employees at less than the average actual share repurchase price, the Company must have obtained the consent of at least two-thirds of the voting rights present at the most recent shareholders’meeting attended by shareholders representing a majority of total issued shares before transferring. Qualification requirements of employees with the right to subscribe the shares including the employees from parent company or affiliate companies meeting certain specific requirements.	Newly added contents to cater for the amendment to “Company Act” and to meet the Company’s operational needs.
Article 6 The share certificate of the Company shall all be name-bearing, numbering and shall be signed by, affixed with the seals or by signature of, at least three directors of the Company, and issued after duly authentication pursuant to the law. The Company may issue shares without printing share certificates, only shall be in custody or registration under centralized securities depository enterprise, which also applies in issuance of corporate bonds.	Article 6 The share certificate of the Company shall all be name-bearing~~,~~ ~~numbering and shall be signed by, affixed with the seals or by~~ ~~signature of, at least three directors of the Company, and issued after~~ ~~duly authentication pursuant to the law.~~The Company may issue shares without printing share certificates, only shall be in~~custody or~~ registration under centralized securities depository enterprise, which also applies in issuance of corporate bonds.	Revise wording as appropriate to cater for the amendment to “Company Act”.
Article 16 The Company shall have at least five but no more than nine directors to be elected at the shareholders’ meeting by the shareholders from any person with legal capacity to serve a term of three years. All of the directors are eligible for re-election. (Paragraph 2 is omitted) At least three directors or one-fifth of all directors, whichever is higher, shall be the independent directors. A candidates nomination system is adopted by the Company when electing independent directors. At the shareholders’ meeting, the shareholders shall elect the directors from among the nominees listed in the roster of independent director candidates. The terms, the qualification, the limitations of shareholding and concurrently serving other positions, the methods of nomination and election and other related matters of independent directors shall be subject to relevant laws.	Article 16 The Company shalladopt a candidates nomination system in accordance with Article 192-1 of“Company Act”andhave at least five but no more than nine directors to be elected at the shareholders’ meeting by the shareholders fromamong the nominees listed in the roster of director candidates~~any person with legal capacity~~to serve a term of three years. All of the directors are eligible for re-election. (Paragraph 2 is omitted) At least three directors or one-fifth of all directors, whichever is higher, shall be the independent directors.~~A candidates nomination~~ ~~system is adopted by the Company when electing independent~~ ~~directors. At the shareholders’ meeting, the shareholders shall elect~~ ~~the directors from among the nominees listed in the roster of~~ ~~independent director candidates.T~~he terms,thequalification,the	Revise wording as appropriate to cater for the change of election of directors to a candidates nomination system.

Article Before Revision	Article After Revision	Explanation
	limitations of shareholding and concurrently serving other positions, the methods of nomination and election and other related matters of independent directors shall be subject to relevant laws.
Article 24-1 (Paragraph 1 and paragraph 2 are omitted) Compensations for employees shall be paid by either shares or cash. The employees to receive compensations shall include certain qualified employees from affiliate companies and the rules of distribution shall be made bythe President.	Article 24-1 (Paragraph 1 and paragraph 2 are omitted) Compensations for employees shall be paid by either shares or cash. The employees to receive compensations shall include certain qualified employees fromparent company oraffiliate companies and the rules of distribution shall be made bythe President.	Revise wording as appropriate to cater for the amendment to “Company Act”.
Article 25 If the Company has earnings in a fiscal year, the Company shall, after paying all taxes, offsetting all prior losses, set aside a legal reserve at 10% of the earnings unless the accumulated amount of the legal reserve has reached the total authorized capital of the Company and set aside or reserving a special reserve according to relevant regulations when necessary. Any remaining amount after the abovementioned payments together with unappropriated retained earnings at the beginning of the fiscal year, shall set aside at least 50% as unappropriated retained earnings for shareholders. Proposal for Distribution shall be submitted to shareholders’ meeting for approval Board of Directors. (Paragraph 2 is omitted)	Article 25 If the Company has earnings in a fiscal year, the Company shall, after paying all taxes, offsetting all prior losses, set aside a legal reserve at 10% of the earnings unless the accumulated amount of the legal reserve has reached the total authorized capital of the Company and set aside or reserving a special reserve according to relevant regulations when necessary. Any remaining amount after the abovementioned payments together with unappropriated retained earnings at the beginning of the fiscal year, shall set aside at least 50% as unappropriated retained earnings for shareholders.Board of Directors shall submit theProposal for Distribution~~shall be submitted~~ to shareholders’ meeting for approvalif the distribution is in the form of issuing new shares ~~Board of Directors~~. In accordance with“Company Act”, the Company may authorize the Board of Directors to decide the distributable dividends and bonuses or legal reserve and capital surplus regulated in Article 241, paragraph 1 of“Company Act”in whole or in part may be paid in cash after a resolution has been adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’meeting. (Paragraph 3 is omitted)	Revise wording as appropriate to cater for the amendment to “Company Act”.
Article 28 The Article was enacted on Nov. 25, 2009 and amended on Nov. 28, 2009 for the first time, on Jan 15, 2010 for the second time, on Feb. 10, 2010 for the third time, on Jun. 30, 2011 for the fourth time, on Jan. 6, 2012 for the fifth time, on Jun. 14, 2013 for the sixth time, on Jun. 13, 2016 for the seventh time, for the eighth time on Jun 13, 2017.	Article 28 The Article was enacted on Nov. 25, 2009 and amended on Nov. 28, 2009 for the first time, on Jan 15, 2010 for the second time, on Feb. 10, 2010 for the third time, on Jun. 30, 2011 for the fourth time, on Jan. 6, 2012 for the fifth time, on Jun. 14, 2013 for the sixth time, on Jun. 13, 2016 for the seventh time,~~for the eighth timeo~~n Jun.13, 2017for the eighth time, on Jun. 12, 2019 for the ninth time.	Amending date added.

CHC Healthcare Group

Comparison Table of Revised Articles of “Procedures Governing the Acquisition or Disposal of Assets”

Article Before Revision		Article After Revision	Explanation
Article 2 Applicable Subjects of Assets 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. 2. Real property (including land, houses and buildings, investment property, rights to use land) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). 6. Derivatives. 7. Assets acquired or disposed of in connection with mergers and consolidations, splits, acquisitions or assignment of shares in accordance with law. 8. Other major assets.		Article 2 Applicable Subjects of Assets 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. 2. Real property (including land, houses and buildings, investment property~~, rights to use land)~~and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5. Right-of-use assets ~~65.~~ Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). ~~76.~~Derivatives. ~~87.~~ Assets acquired or disposed of in connection with mergers and consolidations, splits, acquisitions or assignment of shares in accordance with law. ~~98.~~Other major assets.	Revise wording as appropriate to cater for the amendment to laws and regulations.
Article 3 Definition of Terms 1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, and swap contracts, and compound contracts combining the above products, whose value is derived from assets, interest rates, foreign exchange rates, indexes or other interests. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) agreements. 2. Assets acquired or disposed through mergers and consolidations, splits, acquisitions or assignment of shares in accordance with law: Refers to assets acquired or disposed through mergers and consolidations, splits or acquisitions conducted under “Business Mergers and Acquisitions Act”, “Financial Holding Company Act”, “The Financial Institution Merger Act” and other laws related to assets acquired or disposed through mergers and consolidations, splits, acquisitions, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor(hereinafter "assignment of shares")underparagraph 8 of Article		Article 3 Definition of Terms 1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, and swap contracts,~~and compound contracts~~ ~~combining the above products,w~~hose value is derived from~~assets,~~ a specifiedinterest rates,financial instrument price, commodity price,foreign exchange rates, index~~es ~~of prices or rates~~or other~~ ~~interests,~~credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives.The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales)~~agreements~~ contracts. 2. Assets acquired or disposed through mergers and consolidations, splits, acquisitions or assignment of shares in accordance with law: Refers to assets acquired or disposed through mergers and consolidations,splits or acquisitions conducted under “Business	Revise wording as appropriate to cater for the amendment to laws and regulations.

Article Before Revision	Article After Revision	Explanation
156 in “Company Act”. (Item 3 to item 6 are omitted) 7. All audit committee members and all directors: Shall be counted as the actual number of persons currently holding those positions.	Mergers and Acquisitions Act”, “Financial Holding Company Act”, “The Financial Institution Merger Act” and other laws related to assets acquired or disposed through mergers and consolidations, splits, acquisitions, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "assignment of shares") under~~paragraph 8 of~~ Article 156-3 in “Company Act”. (Item 3 to item 6 are omitted) 7. Investment professional: Refers to financial holding companies, banks, insurance companies, bill finance companies, trust enterprises, securities firms operating proprietary trading or underwriting business, futures commission merchants operating proprietary trading business, securities investment trust enterprises, securities investment consulting enterprises, and fund management companies, that are lawfully incorporated and are regulated by the competent financial authorities of the jurisdiction where they are located. 8. Securities exchange: "Domestic securities exchange" refers to the Taiwan Stock Exchange Corporation; "foreign securities exchange" refers to any organized securities exchange market that is regulated by the competent securities authorities of the jurisdiction where it is located. 9. Over-the-counter venue ("OTC venue", "OTC"): "Domestic OTC venue" refers to a venue for OTC trading provided by a securities firm in accordance with the Regulations Governing Securities Trading on the Taipei Exchange; "foreign OTC venue" refers to a venue at a financial institution that is regulated by the foreign competent authority and that is permitted to conduct securities business. 1~~07.~~All audit committee members and all directors: Shall be counted as the actual number ofpersons currentlyholdingthosepositions.
Article 4 Professional appraisers and their officers, certified public accountants, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall not be a related party of any party to the transaction.	Article 4 Professional appraisers and their officers, certified public accountants, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall~~not be a related party of any~~ ~~party to the transaction. ~~meet the following requirements: 1. May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of “Securities and Exchange Act”,“Company Act”,“The Banking Act of	Revise wording as appropriate to cater for the amendment to laws and regulations.

Article Before Revision		Explanation

	2.
	3.
	in
	1.
	2.
	3.
	4.

Article 5 Appraisal Procedures for the Acquisition or Disposal of Real Property or Equipment In acquiring or disposing of real property or equipment where the transaction amount reaches 20% of the Company's paid-in capital or NT$300 million or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions:	Article 5 Appraisal Procedures for the Acquisition or Disposal of Real Property or Equipment In acquiring or disposing of real property,~~ore~~quipment, or right-of-use assets thereof where the transaction amount reaches 20% of the Company's paid-in capital or NT$300 million or more, the Company, unless transacting with adomesticgovernment agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipmentor right-of-use assets thereof heldfor business use, shall obtain an appraisal report	Revise wording as appropriate to cater for the amendment to laws and regulations.

Article Before Revision	Article After Revision	Explanation
1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction. (Item 2 to item 4 are omitted)	prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: 1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors, and the same procedure shall be followed for anysubsequent~~futurec~~hanges to the terms and conditions of the transaction. (Item 2 to item 4 are omitted)
Article 7 Appraisal Procedures for the Acquisition or Disposal of Memberships or Intangible Assets Where the Company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20% or more of paid-in capital or NT$300 million or more, except in transactions with a government agency, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price.	Article 7 Appraisal Procedures for the Acquisition or Disposal of ~~Memberships orI~~ntangible Assetsor Right-of-use Assets Thereof or Memberships Where the Company acquires or disposes of~~memberships or~~ intangible assetsor right-of-use assets thereof or membershipsand the transaction amount reaches 20% or more of paid-in capital or NT$300 million or more, except in transactions with adomestic government agency, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transactionprice.	Revise wording as appropriate to cater for the amendment to laws and regulations.
Article 11 When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20% or more of paid-in capital, 10% or more of total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by more than half of all audit committee members and submitted to the Board of Directors for resolution: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a trading counterparty. 3. With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 12 and Article 13. (Item 4 to item 7 are omitted) The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance withparagraph 2 of Article 34,and	Article 11 When the Company intends to acquire or dispose of real propertyor right-of-use assets thereoffrom or to a related party, or when it intends to acquire or dispose of assets other than real propertyor right-of-use assets thereoffrom or to a related party and the transaction amount reaches 20% or more of paid-in capital, 10% or more of total assets, or NT$300 million or more, except in trading of domesticgovernment bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by more than half of all audit committee members and submitted to the Board of Directors for resolution: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a trading counterparty. 3. With respect to the acquisition of real propertyor right-of-use assets thereoffrom a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 12 and Article 13.	Revise wording as appropriate to cater for the amendment to laws and regulations.

Article Before Revision		Article After Revision	Explanation
"within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the audit committee and the Board of Directors according to “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” need not be counted toward the transaction amount. With respect to the acquisition or disposal of business-use equipment between the Company and its parent or subsidiaries, the Company's Board of Directors may delegate the President to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next meeting of the Board of Directors. When a matter is submitted for discussion by the Board of Directors pursuant to paragraph 1, the Board of Directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the meeting minutes of the Board of Directors.		(Item 4 to item 7 are omitted) The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with paragraph 2 of Article 34, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the audit committee and the Board of Directors according to “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” need not be counted toward the transaction amount. With respect to the~~acquisition or disposal of business-use equipment~~ types of transactions listed below, when to be conductedbetween the Company and its~~parent ors~~ubsidiaries,or between its subsidiaries in which it directly or indirectly holds 100% of the issued shares or authorized capital,the Company's Board of Directors may delegate the President to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next meeting of the Board of Directors~~.:~~ 1. Acquisition or disposal of equipment or right-of-use assets thereof held for business use. 2. Acquisition or disposal of real property right-of-use assets held for business use. When a matter is submitted for discussion by the Board of Directors pursuant to paragraph 1, the Board of Directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the meetingminutes of the Board of Directors.
Article 12 The Company shall evaluate the reasonableness of the transaction costs by the following means when acquiring real property from a related party: 1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the Company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70% or more of the financial institution's appraised loan value of thepropertyand theperiod of the loan shall have		Article 12 The Company shall evaluate the reasonableness of the transaction costs by the following means when acquiring real propertyor right-of-use assets thereoffrom a related party: 1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the Company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as securityfor a loan; provided,the actual cumulative amount loaned	Revise wording as appropriate to cater for the amendment to laws and regulations.

Article Before Revision	Article After Revision	Explanation
been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. If land and structures thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. When the Company acquires real property from a related party and appraises the cost of the real property in accordance with paragraph 1 and paragraph 2, it shall also engage a CPA to check the appraisal and render a specific opinion. Where the Company acquires real property from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with Article 11 and the preceding three paragraphs are not applicable: 1. The related party acquired the real property through inheritance or as a gift. 2. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property to the signing date for the current transaction. 3. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the Company's own land or on rented land.	by the financial institution shall have been 70% or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. If land and structures thereupon are combined as a single property purchasedor leasedin one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. When the Company acquires real propertyor right-of-use assets thereoffrom a related party and appraises the cost of the real propertyor right-of-use assets thereofin accordance withthe preceding two paragraphs ~~paragraph 1 and paragraph 2,~~it shall also engage a CPA to check the appraisal and render a specific opinion. Where the Company acquires real propertyor right-of-use assets thereoffrom a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance withthe preceding article~~Article 11a~~nd the preceding three paragraphs are not applicable: 1. The related party acquired the real propertyor right-of-use assets thereofthrough inheritance or as a gift. 2. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real propertyor right-of-use assets thereofto the signing date for the current transaction. 3. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the Company's own land or on rented land. 4. The real property right-of-use assets for business use are acquired by the Company with its subsidiaries, or by its subsidiaries in which it directly or indirectly holds 100% of the issued shares or authorized capital.

Article 13 When the results of the Company's appraisal conducted in accordance with paragraph 1 and paragraph 2 of Article 12 are uniformly lower than the transaction price, the matter shall be handled in compliance with Article 14. However, it does not apply if the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA: 1. Where the relatedpartyacquired undeveloped land or leased land for	Article 13 When the results of the Company's appraisal conducted in accordance with paragraph 1 and paragraph 2 of Article 12 are uniformly lower than the transaction price, the matter shall be handled in compliance with Article 14. However, it does not apply if the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional realpropertyappraiser and a CPA:	Revise wording as appropriate to cater for the amendment to laws and regulations.

Article Before Revision

Article After Revision

Explanation

development, it may submit proof of compliance with one of the following conditions:
(1). Where undeveloped land is appraised in accordance with the means in Article 12, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.
(2). Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices.
(3). Completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, where the transaction terms are similar after calculation of reasonable price discrepancies among floors in accordance with standard property leasing market practices.
Where the Company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

Completed transactions for neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transaction for similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50% of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property.

Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions:
(1). Where undeveloped land is appraised in accordance with the means in Article 12, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.
(2). Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices.
~~(3). Completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, where the transaction terms are similar after calculation of reasonable price discrepancies among floors in accordance with standard property leasing market practices.~~
Where the Company acquiring real property, or obtaining real property right-of-use assets through leasing, from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

55	Article Before Revision		Article After Revision	Explanation
	Article 14 The following steps shall be taken when the Company acquires real property from a related party and the results of appraisals conducted in accordance with Article 12 and Article 13 are uniformly lower than the transaction price: 1. A special reserve shall be set aside in accordance with paragraph 1 of Article 41 of “Securities and Exchange Act” against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in the Company, then the special reserve called for under paragraph 1 of Article 41, of “Securities and Exchange Act” shall be set aside pro rata in a proportion consistent with the shareholding percentages of the Company. 2. Members of audit committee shall comply with Article 218 of “Company Act”. 3. Actions taken pursuant to subparagraph 1 and subparagraph 2 shall be reported to a shareholders’ meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. When the Company has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent. When the Company obtains real property from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arms length transaction.		Article 14 The following steps shall be taken when the Company acquires real propertyor right-of-use assets thereoffrom a related party and the results of appraisals conducted in accordance with~~Article 12 and~~ ~~Article 13t~~he preceding two articlesare uniformly lower than the transaction price: 1. A special reserve shall be set aside in accordance with paragraph 1 of Article 41 of “Securities and Exchange Act” against the difference between the~~real propertyt~~ransaction price and the appraised cost of real property or right-of-use assets thereof,and may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in the Company, then the special reserve called for under paragraph 1 of Article 41, of “Securities and Exchange Act” shall be set aside pro rata in a proportion consistent with the shareholding percentages of the Company. 2. Members of audit committee shall comply with Article 218 of “Company Act”. 3. Actions taken pursuant to~~subparagraph 1 and subparagraph 2~~the preceding two subparagraphsshall be reported to a shareholders’ meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. When the Company has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased or leasedat a premium, or they have been disposed of,or the leasing contract has been terminated,or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent. When the Company obtains real propertyor right-of-use assets thereoffrom a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arms length transaction.	Revise wording as appropriate to cater for the amendment to laws and regulations.
	Article 22 Regular Evaluation Methods and Handling of Irregular Circumstances (Revise wording as appropriate in Chinese) (English version is unaffected)		Article 22 Regular Evaluation Methods and Handling of Irregular Circumstances (Revise wording as appropriate in Chinese) (English version is unaffected)	Revise wording as appropriate to cater for the amendment to laws and regulations.

Article Before Revision	Article After Revision	Explanation
Article 29 (The above is omitted.) Where any of the companies participating in a merger and consolidation, split, acquisition, or assignment of shares is neither listed on an exchange nor has its shares traded on an OTC market, companies so listed or traded shall sign an agreement with such company whereby the latter is required to abide by the provisions of paragraphs 3 and 4.	Article 29 (The above is omitted.) Where any of the companies participating in a merger and consolidation, split, acquisition, or assignment of shares is neither listed on an exchange nor has its shares traded on an OTC market, companies so listed or traded shall sign an agreement with such company whereby the latter is required to abide by the provisions of ~~paragraphs 3 and 4 ~~the preceding two paragraphs.	Revise wording as appropriate to cater for the amendment to laws and regulations.
	~~pgp~~
Article 34 Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations within 2 days or before the commencement of trading hours of the trading day next from the date of occurrence of the event: 1. Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20% or more of paid-in capital, 10% or more of total assets, or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. 2. Merger and consolidation, split, acquisition, or assignment of shares. 3. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in “Chapter 4 Engaging in Derivatives Trading”. 4. Where the type of asset acquired or disposed is equipment for business use, the trading counterparty is not a related party, and the transaction amount meets any of the following criteria: (1). For a public company whose paid-in capital is less than NT$10 billion, the transaction amount reaches NT$500 million or more. (2). For a public company whose paid-in capital is NT$10 billion or more, the transaction amount reaches NT$1 billion or more. 5. Acquisition or disposal by a public company in the construction business of real property for construction use, where the trading counterparty is not a related party, and the transaction amount reaches NT$500 million. 6. Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housingunits, joint construction and	Article 34 Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations within 2 days or2 hoursbefore the commencement of trading hours of the trading day next from the date of occurrence of the event: 1. Acquisition or disposal of real propertyor right-of-use assets thereoffrom or to a related party, or acquisition or disposal of assets other than real propertyor right-of-use assets thereoffrom or to a related party where the transaction amount reaches 20% or more of paid-in capital, 10% or more of total assets, or NT$300 million or more; provided, this shall not apply to trading of domesticgovernment bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. 2. Merger and consolidation, split, acquisition, or assignment of shares. 3. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in “Chapter 4 Engaging in Derivatives Trading”. 4. Where~~the type of asset acquired or disposed ise~~quipmentor right-of-use assets thereoffor business useare acquired or disposed of,the trading counterparty is not a related party, and the transaction amount meets any of the following criteria: (1). For a public company whose paid-in capital is less than NT$10 billion, the transaction amount reaches NT$500 million or more. (2). For a public company whose paid-in capital is NT$10 billion or more, the transaction amount reaches NT$1 billion or more. ~~5. Acquisition or disposal by a public company in the construction~~ ~~business of realproperty for construction use, where the trading~~	Revise wording as appropriate to cater for the amendment to laws and regulations.
	~~. ~~

Article Before Revision		Article After Revision	Explanation
allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction reaches NT$500 million. 7. Where an asset transaction other than any of those referred to in the preceding six subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20% or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1). Trading of government bonds. (2). Securities trading by investment professionals on foreign or domestic securities exchanges or over-the-counter markets, or subscription by investment professionals of ordinary corporate bonds or of general bank debentures without equity characteristics that are offered and issued in the domestic primary market, or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange. (3). Trading of bonds under repurchase/resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. 3. The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with relevant regulations need not be counted toward the transaction amount. The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by itself and any subsidiaries that are not domestic public companies and enter the information in the prescribed format into the information reporting website designated bythe FSC bythe 10th dayof each month.	~~counterparty is not a related party, and the transaction amount~~ ~~reaches NT$500 million.~~ ~~56.~~Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale,and furthermore the transaction counterparty is not a related party,and the amount the Company expects to invest in the transaction reaches NT$500 million. ~~67.~~Where an asset transaction other than any of those referred to in the preceding~~sixf~~ivesubparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20% or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1). Trading ofdomesticgovernment bonds. (2). Securities trading by investment professionals on~~foreign or~~ ~~domestics~~ecurities exchanges or over-the-counter markets, or subscription by investment professionals of ordinary corporate bonds or of general bank debentures without equity characteristics(excluding subordinated debt)that are offered and issued in the~~domesticp~~rimary market,or subscription or redemption of securities investment trust funds or futures trust funds,or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange. (3). Trading of bonds under repurchase/resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. 3. The cumulative transaction amount of~~real propertya~~cquisitions and disposals (cumulative acquisitions and disposals, respectively) of real property or right-of-use assets thereofwithin the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals,respectively)of the same

(3). Trading of bonds under repurchase/resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.
The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction.

Article Before Revision

Explanation

Article After Revision

Article Before Revision	Article After Revision	Explanation
When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission. When acquiring or disposing of assets, the Company shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the headquarters of the Company, where they shall be retained for 5 years except where another act provides otherwise.	security within the preceding year. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with relevant regulations need not be counted toward the transaction amount. The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by itself and any subsidiaries that are not domestic public companies and enter the information in the prescribed format into the information reporting website designated by the FSC by the 10th day of each month. When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission. When acquiring or disposing of assets, the Company shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at theoffice ~~headquarters of the Company,~~where they shall be retained for 5 years except where another actprovides otherwise.
Article 36 Total amount of acquisition of real property for non-business use and securities and limits on acquisition of individual securities by the Company and each subsidiary’s is as follows: (The followingis omitted.)	Article 36 Total amount of acquisition of real propertyor right-of-use assets thereoffor non-business use and securities and limits on acquisition of individual securities by the Company and each subsidiary’~~s is as follows:~~ (The followingis omitted.)	Revise wording as appropriate to cater for the amendment to laws and regulations.
Article 37 Procedures Controlling the Acquisition or Disposal of Assets of Subsidiary (Item 1 and item 2 are omitted) 3. The paid-in capital or total assets of the Company shall be the standard for determining whether or not a subsidiary referred to in the preceding subparagraph requiring a public announcement and regulatory filing in the event the type of transaction specified therein reaches 20% of paid-in capital or 10% of the total assets. (Item 4 is omitted)	Article 37 Procedures Controlling the Acquisition or Disposal of Assets of Subsidiary (Item 1 and item 2 are omitted) 3. The paid-in capital or total assets of the Company shall be the standard~~for determining whether or nota~~pplicable toasubsidiary referred to in the preceding subparagraphin determining whether, relative to paid-in capital or total assets, it reaches a threshold requiring a public announcement and regulatory filing in the event ~~the type of transaction specified therein reaches 20% of paid-in~~ ~~capital or 10% of the total assets.~~ (Item 4 is omitted)	Revise wording as appropriate to cater for the amendment to laws and regulations.
Article 40 (Revise wordingas appropriate in Chinese)	Article 40 (Revise wordingas appropriate in Chinese)	Revise wording as appropriate to cater

Article Before Revision	Article Before Revision	Article Before Revision	Article After Revision	Article After Revision	Article After Revision	Article After Revision	Article After Revision	Explanation
(English version is unaffected)			(English version is unaffected)					for the amendment to laws and regulations.
Version	Date of Implementation /Amendment	Type of Approval	Version	Date of Implementation /Amendment		Type of Approval		Amending date added.
1	2011/05/19	Approved byBoard of Directors	1		2011/05/19	Approved byBoard of Directors
	2011/06/30	Approved on Special Shareholders' Meeting			2011/06/30	Approved on Special Shareholders' Meeting
2	2012/03/27	Approved byBoard of Directors	2		2012/03/27	Approved byBoard of Directors
	2012/06/22	Approved on Shareholders' Meeting			2012/06/22	Approved on Shareholders' Meeting
3	2013/03/25	Approved byBoard of Directors	3		2013/03/25	Approved byBoard of Directors
	2013/06/14	Approved on Shareholders' Meeting			2013/06/14	Approved on Shareholders' Meeting
4	2014/03/27	Approved byBoard of Directors	4		2014/03/27	Approved byBoard of Directors
	2014/06/17	Approved on Shareholders' Meeting			2014/06/17	Approved on Shareholders' Meeting
	2017/03/24	Approved byBoard of Directors			2017/03/24	Approved byBoard of Directors
5	2017/06/13	Approved on Shareholders' Meeting	5		2017/06/13	Approved on Shareholders' Meeting
			6		2019/03/22		Approved by Board of Directors
					2019/06/12	Approved on Shareholders'Meeting

CHC Healthcare Group

Comparison Table of Revised Articles of “Operational Procedures for Loaning Funds to Others”

60	Article Before Revision		Article After Revision	Explanation
	Article 5 Procedures 1. Applicability The Company can only loan funds under the following circumstances and shall not loan funds to any of its shareholders or any other person. (1) Those companies or entities that have business relationships with the Company. (2) Those companies or entities that have short-term financing needs, provided that such financing amount shall not exceed 40% of the Company's net worth. The term "short-term" used in subparagraph 2 of this paragraph means one year, or where the Company's operating cycle exceeds one year, one operating cycle. The term "financing amount" used in subparagraph 2 of this paragraph means the cumulative balance of the public company's short-term financing. The restriction in subparagraph 2 of this paragraph shall not apply to loans of funds between foreign companies in which the Company holds, directly or indirectly, 100% of the voting shares. However, the provisions of paragraph 3 and 4 in this article concerning the setting of the amount limits and the durations of loans shall still apply. (Item 2 to item 8 are omitted) 9. Information Disclosure (1). The Company shall announce and report the previous month's loan balances of its own and subsidiaries by the 10th day of each month. (2). When the Company’s loans of funds reach one of the following levels, it shall announce and report such event within 2 days or before the commencement of trading hours of the trading day next from the date of occurrence:		Article 5 Procedures 1. Applicability The Company can only loan funds under the following circumstances and shall not loan funds to any of its shareholders or any other person. (1) Those companies or entities that have business relationships with the Company. (2) Those companies or entities that have short-term financing needs, provided that such financing amount shall not exceed 40% of the Company's net worth. The term "short-term" used in subparagraph 2 of this paragraph means one year, or where the Company's operating cycle exceeds one year, one operating cycle. The term "financing amount" used in subparagraph 2 of this paragraph means the cumulative balance of the public company's short-term financing. The restriction in subparagraph 2 of this paragraph shall not apply to loans of funds between foreign companies in which the Company holds, directly or indirectly, 100% of the voting shares, or when foreign companies in which the Company holds, directly or indirectly, 100% of the voting shares loan funds to the Company.However, the ~~provisions of paragraph 3 and 4 in this article concerning the setting of~~ ~~the amount limits anda~~ggregate amount of loans and the maximum amount permitted to a single borrower, together withthe durations of loans shall still apply. The responsible person of the Company who has violated the provisions of item 1 shall be liable, jointly and severally with the borrower, for the repayment of the loan at issue and for the damages, if any, to the Company resulted there-from. (Item 2 to item 8 are omitted)	Revise wording as appropriate to cater for the amendment to laws and regulations.

Article Before Revision	Article Before Revision	Article Before Revision	Article After Revision	Article After Revision	Article After Revision	Article After Revision	Article After Revision	Explanation
(The following is omitted.)			9. Information Disclosure (1). The Company shall announce and report the previous month's loan balances of its own and subsidiaries by the 10th day of each month. (2). When the Company’s loans of funds reach one of the following levels, it shall announce and report such event within 2 days or 2 hoursbefore the commencement of trading hours of the trading day next from the date of occurrence: (The followingis omitted.)
Article 7 Implementation and Amendment (Item 1 is omitted) 2. When submitting the Procedure to the Board of Directors, the comments of the Independent Directors shall be fully considered. Any objection reasons shall be clearly recorded in the minutes of the meeting of the Board of Directors.			Article 7 Implementation and Amendment (Item 1 is omitted) 2. When submitting the Procedure to the Board of Directors, the comments of the Independent Directors shall be fully considered. ~~Any objection reasonsW~~hen an independent director has a dissenting or qualified opinion, itshall be clearly recorded in the minutes of the meetingof the Board of Directors.					Revise wording as appropriate to cater for the amendment to laws and regulations.
Version	Date of Implementation /Amendment	Type of Approval	Version	Date of Implementation /Amendment		Type of Approval		Amending date added.
1	2010/01/15	Approved byBoard of Directors	1		2010/01/15	Approved byBoard of Directors
	2010/02/10	Approved on Special Shareholders' Meeting			2010/02/10	Approved on Special Shareholders' Meeting
2	2012/08/03	Approved byBoard of Directors	2		2012/08/03	Approved byBoard of Directors
	2013/06/14	Approved on Shareholders' Meeting			2013/06/14	Approved on Shareholders' Meeting
3	2014/03/27	Approved byBoard of Directors	3		2014/03/27	Approved byBoard of Directors
	2014/06/17	Approved on Shareholders' Meeting			2014/06/17	Approved on Shareholders' Meeting
4	2017/03/24 2017/05/02	Approved by Board of Directors	4		2017/03/24 2017/05/02	Approved by Board of Directors
	2017/06/13	Approved on Shareholders' Meeting			2017/06/13	Approved on Shareholders' Meeting
	2017/11/13	Approved byBoard of Directors			2017/11/13	Approved byBoard of Directors
5	2018/06/11	Approved on Shareholders' Meeting	5		2018/06/11	Approved on Shareholders' Meeting
			6		2019/03/22		Approved by Board of Directors
					2019/06/12	Approved on Shareholders'Meeting

CHC Healthcare Group

Comparison Table of Revised Articles of “Procedures for Endorsement & Guarantee”

Article Before Revision	Article After Revision	Explanation
Article 4 Procedures (The above is omitted.) 6. Exceeding Amount and Changes of Condition in Endorsements /Guarantees (Revise wording as appropriate in Chinese) (English version is unaffected) (The followingis omitted.)	Article 4 Procedures (The above is omitted.) 6. Exceeding Amount and Changes of Condition in Endorsements /Guarantees (Revise wording as appropriate in Chinese) (English version is unaffected) (The followingis omitted.)	Revise wording as appropriate.
Article 4 Procedures (The above is omitted.) 8. Public Announcement and Declaration (1) The Company shall monthly disclose and report the Company’s and its subsidiary’s remaining amount of endorsement /guarantee of the last month before the tenth day of every month. (2) If the Company and its subsidiary meet any of the following criteria, the Company shall disclose and report the relevant information within two days commencing immediately from the occurrence of the event or before the beginning of trading hours on the trading day following the date of occurrence of the event. A. The Company’s and its subsidiary’s remaining amount of the endorsement/guarantee reaches the amount higher than the 50% of the net worth of the Company’s latest financial report. B. The Company’s and its subsidiary’s remaining amount of the endorsement/guarantee to one single company reaches the amount higher than the 20% of the net worth of the Company’s latest financial report. C. The Company’s and its subsidiary’s remaining amount of the endorsement/guarantee to one single company reaches NT$10,000,000 or more, and the total remaining amount of endorsement/guarantee,investment with long-term nature	Article 4 Procedures (The above is omitted.) 8. Public Announcement and Declaration (1) The Company shall monthly disclose and report the Company’s and its subsidiary’s remaining amount of endorsement /guarantee of the last month before the tenth day of every month. (2) If the Company and its subsidiary meet any of the following criteria, the Company shall disclose and report the relevant information within two days commencing immediately from the occurrence of the event or2 hoursbefore the beginning of trading hours on the trading day following the date of occurrence of the event. A. The Company’s and its subsidiary’s remaining amount of the endorsement/guarantee reaches the amount higher than the 50% of the net worth of the Company’s latest financial report. B. The Company’s and its subsidiary’s remaining amount of the endorsement/guarantee to one single company reaches the amount higher than the 20% of the net worth of the Company’s latest financial report. C. The Company’s and its subsidiary’s remaining amount of the endorsement/guarantee to one single company reaches NT$10,000,000 or more,and the total remaining	Revise wording as appropriate to cater for the amendment to laws and regulations.

Article Before Revision	Article Before Revision	Article Before Revision							Explanation
						Article After Revision

and loan exceeds 30% of the net worth of the Company’s latest financial report. D. The Company’s and its subsidiary’s newly increased amount of the endorsement/guarantee reached NT$30,000,000 and more, and the amount exceeds 5% of the net worth of the Company’s latest financial report. (The following is omitted.)			amount of endorsement/guarantee,carrying amount of investment~~with long-term naturea~~ccounted for using the equity methodand loan exceeds 30% of the net worth of the Company’s latest financial report. D. The Company’s and its subsidiary’s newly increased amount of the endorsement/guarantee reached NT$30,000,000 and more, and the amount exceeds 5% of the net worth of the Company’s latest financial report. (The followingis omitted.)
Article 6 Implementation and Amendment (Item 1 is omitted) 2. When submitting the Procedure to the Board of Directors, the comments of the Independent Directors shall be fully considered. Any objection reasons shall be clearly recorded in the minutes of the meeting of the Board of Directors.			Article 6 Implementation and Amendment (Item 1 is omitted) 2. When submitting the Procedure to the Board of Directors, the comments of the Independent Directors shall be fully considered. ~~Any objection reasonsW~~hen an independent director has a dissenting or qualified opinion, itshall be clearly recorded in the minutes of the meetingof the Board of Directors.						Revise wording as appropriate to cater for the amendment to laws and regulations.
Version	Date of Implementation /Amendment	Type of Approval	Version	Date of Implementation /Amendment			Type of Approval		Amending date added.
1	2010/01/15	Approved byBoard of Directors	1		2010/01/15		Approved byBoard of Directors
	2010/02/10	Approved on Special Shareholders' Meeting			2010/02/10		Approved on Special Shareholders' Meeting
2	2012/08/03	Approved byBoard of Directors	2		2012/08/03		Approved byBoard of Directors
	2013/06/14	Approved on Shareholders' Meeting			2013/06/14		Approved on Shareholders' Meeting
3	2014/03/27	Approved byBoard of Directors	3		2014/03/27		Approved byBoard of Directors
	2014/06/17	Approved on Shareholders' Meeting			2014/06/17		Approved on Shareholders' Meeting
4	2015/03/23	Approved byBoard of Directors	4		2015/03/23		Approved byBoard of Directors
	2015/06/12	Approved on Shareholders' Meeting			2015/06/12		Approved on Shareholders' Meeting
5	2017/03/24	Approved byBoard of Directors	5		2017/03/24		Approved byBoard of Directors
	2017/06/13	Approved on Shareholders' Meeting			2017/06/13		Approved on Shareholders' Meeting
6	2017/11/13	Approved byBoard of Directors	6		2017/11/13		Approved byBoard of Directors
	2018/06/11	Approved on Shareholders' Meeting			2018/06/11		Approved on Shareholders' Meeting
			7		2019/03/22			Approved by Board of Directors
					2019/06/12		Approved on Shareholders'Meeting

CHC Healthcare Group

Comparison Table of Revised Articles of “Rules of Procedure for Shareholders’ Meetings”

Article Before Revision	Article Before Revision	Article Before Revision	Article After Revision	Article After Revision	Article After Revision	Article After Revision	Article After Revision	Article After Revision	Explanation
Article 3 (Paragraph 1 to paragraph 3 are omitted) Election or dismissal of directors, amendments to “Articles of Incorporation”, the dissolution, merger, or demerger of the Company, or any matter under Article 185, paragraph 1 of “Company Act”, Articles 26-1 and 43-6 of “Securities and Exchange Act”, or Articles 56-1 and 60-2 of “Regulations Governing the Offering and Issuance of Securities by Securities Issuers” shall be set out in the notice of the reasons for convening the shareholders’ meeting. None of the above matters may be raised by an extraordinary motion. (Paragraph 5 to paragraph 9 are omitted)			Article 3 (Paragraph 1 to paragraph 3 are omitted) Election or dismissal of directors, amendments to “Articles of Incorporation”,reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the Company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares,the dissolution, merger, or demerger of the Company, or any matter under Article 185, paragraph 1 of “Company Act”, Articles 26-1 and 43-6 of “Securities and Exchange Act”, or Articles 56-1 and 60-2 of “Regulations Governing the Offering and Issuance of Securities by Securities Issuers” shall be set out in the notice of the reasons for convening the shareholders’ meeting. None of the above matters may be raised by an extraordinary motion. (Paragraph 5 toparagraph 9 are omitted)						Newly added wording as appropriate to cater for the amendment to “Company Act”.
Version	Date of Implementation /Amendment	Type of Approval		Version	Date of Implementation /Amendment		Type of Approval		Amending date added.
1	2011/05/19	Approved byBoard of Directors		1		2011/05/19	Approved byBoard of Directors
	2011/06/30	Approved on Shareholders' Meeting				2011/06/30	Approved on Shareholders' Meeting
2	2012/01/06	Approved on Special Shareholders' Meeting		2		2012/01/06	Approved on Special Shareholders' Meeting
3	2013/03/25	Approved byBoard of Directors		3		2013/03/25	Approved byBoard of Directors
	2014/06/14	Approved on Shareholders' Meeting				2014/06/14	Approved on Shareholders' Meeting
4	2015/03/23	Approved byBoard of Directors		4		2015/03/23	Approved byBoard of Directors
	2015/06/12	Approved on Shareholders' Meeting				2015/06/12	Approved on Shareholders' Meeting
	2017/03/24	Approved byBoard of Directors				2017/03/24	Approved byBoard of Directors
5	2017/06/13	Approved on Shareholders' Meeting		5		2017/06/13	Approved on Shareholders' Meeting
				6		2019/03/22		Approved by Board of Directors
						2019/06/12	Approved on Shareholders'Meeting

`【` Attachment 12 `】`

CHC Healthcare Group

Detail List of the Directors and Their Representatives to be Released from Non-Competition Restrictions

Director	Restricted Position to Be Released
Representative of Juristic- person President Pei-Lin, Lee	1. President and Representative of a Juristic- Person Director of Swissray Global Healthcare Holding Ltd. 2. Representative of a Juristic-Person Director of Cheng-Hsin Biotechnology Co., Ltd 3. Director of Neusoft-CHC Office of Medical Intelligence & Services, Shenyang 4. President and Vice President of Dalian Neusoft Kangrui Jiuhe Medical Management Co.,Ltd.
Vice President Tien-Ying, Lee	1. President of SMTH AG 2. President of Swissray Medical AG 3. Representative of a Juristic-Person Director of Cheng-Hsin BiotechnologyCo.,Ltd
Independent Director Gui-Duan, Chen	Independent Director of Chumpower Machinery Corporation

AI assistant

CHC — AGM Information 2019

52389_rns_2019-06-27_39df60da-ba88-49f0-a81d-9339c5da983c.pdf

CHC Healthcare Group

Meeting Minutes for 2019 Annual Shareholders’ Meeting

3. Report Items

4. Matters for Ratification

(2). Proposal for 2018 Earnings Distribution

CHC Healthcare Group Table of 2018 Earnings Distribution

5. Matters for Discussion

6. Extempore Motions: None

7. Meeting Adjourned: At 09:37 a.m.

【 Attachment 1 】

CHC Healthcare Group 2018 Business Report

Dear Shareholders,

1. Operating Results of 2018

(1). Implementation of 2018 Business Plan

(2). Implementation of Budget

(3). Financial Analysis

(4). Research and Developments Work

【 Attachment 2 】

CHC Healthcare Group 2018 Audit Committee’s Review Report

TO: 2019 Annual Shareholders’ Meeting of CHC Healthcare Group

CHC Healthcare Group

【 Attachment 3 】

CHC Healthcare Group

Information of Endorsements/Guarantees in 2018

5. Subsidiaries’ information of endorsements/guarantees by December 31, 2018:

【 Attachment 4 】

CHC Healthcare Group

Status of Execution of the Company’s Share Repurchase

【 Attachment 5 】

Rules for the First Repurchase and Transfer of Shares to Employees

Of

CHC Healthcare Group (The “Company”)

Article 1

(Type of shares to be transferred, a description of the rights attaching thereto, and any restrictions on such rights)

Article 2

(Transfer period)

Article 3

(Eligibility requirements for transferees)

Article 4

(Procedures for transfer of shares)

Article 5

Article 6

(Agreed transfer price per share)

Article 7

(Rights and obligations subsequent to execution of the transfer)

Article 8

Article 9

【 Attachment 6 】

Opinion

Basis for opinion

Key audit matters

Assessment of investments accounted for using equity method

Impairment assessment of goodwill

Description

How our audit addressed the matter

Impairment assessment of property, plant and equipment

Description

How our audit addressed the matter

Responsibilities of management and those charged with governance for the parent company only financial statements

Auditor’s responsibilities for the audit of the parent company only financial statements

CHC HEALTHCARE GROUP PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

CHC HEALTHCARE GROUP PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

CHC HEALTHCARE GROUP

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

CHC HEALTHCARE GROUP

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

CHC HEALTHCARE GROUP

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

CHC HEALTHCARE GROUP

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

REPRESENTATION LETTER

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Impairment assessment of goodwill

CHC AGM Information 2019

`【` Attachment 1 `】`

`【` Attachment 2 `】`

`【` Attachment 3 `】`

`【` Attachment 4 `】`

`【` Attachment 5 `】`

`【` Attachment 12 `】`