CHIN-POON - AGM Information 2017 | FinancialReports.eu

Stock Symbol: 2355

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CHIN-POON INDUSTRIAL CO., LTD.

2017 ANNUAL SHAREHOLDERS’ MEETING

MEETING AGENDA

(Translation)

The meeting will be held

on Tuesday, June 22, 2017 at 9:00 a.m. GMT+8, at Jinzhong Community Center,

3F., No.99, Jinxi Rd., Luzhu Dist., Taoyuan City 338, Taiwan

I.	Procedures	3
II.	Agenda	4
III.	Reports	6
	1. Business Report for 2016 & Business Plan for 2017	7
	2. Supervisors’ Review Report of 2016	14
	3. Report on the Compensation of Employees and the	16
	Remuneration of Directors of 2016
IV.	Proposed Resolutions	17
	1. To accept 2016 Business Report and Financial	18
	Statements
	2. To approve the Proposal for Distribution of 2016 Profits	19
V.	Deliberation Proposals	21
	1. To amend the Articles of Incorporation of the Company	22
	2. To amend the Rules and Procedures of Shareholders’	26
	Meeting
	3. To amend the Rules for Election of Directors and	27
	Supervisors
	4. To amend the Operational Procedures for Derivatives	30
	Transactions
	5. To amend the Operational Procedures for Loaning of	41
	Company Funds
	6. To amend the Operational Procedures for Acquisition	43
	and Disposal of Assets
	7. To amend the Operational Procedures for	55
	Endorsements and Guarantees
	8. To abolish the Rules of Supervisors’ Authority	59
VI.	Directors Election	60

	1. To elect nine Directors (including three	61
	Independent Directors)
VII.	Deliberation Proposals	62
	1. To release the Prohibition on Directors from	63
	Participation in Competitive Business
VIII.	Special Motions	64
IX.	Appendix	66
	1. 2015 Audit Report of Independent Auditors and	67
	Financial Statements
	2. Articles of Incorporation	86
	3. Rules and Procedures of Shareholders’ Meeting	93
	4. Rules for Election of Directors and Supervisors	97
	5. Operational Procedures for Derivatives Transactions	99
	6. Operational Procedures for Loaning of Company Funds	110
	7. Operational Procedures for Acquisition and Disposal of	114
	Assets
	8. Operational Procedures for Endorsements and	135
	Guarantees
	9. Rules of Supervisors’ Authority	141
	10. Shareholdings of All Directors and Supervisors	144

Procedures

Call the Meeting to Order
Chairperson’s Remarks
Reports
Proposed Resolutions
Deliberation Proposals
Directors Election
Deliberation Proposals
Special Motions
Adjournment

Agenda

Time: Tuesday, June 22, 2017 at 9:00 a.m. GMT+8

Venue: Jinzhong Community Center, 3F., No.99, Jinxi Rd., Luzhu Dist., Taoyuan City 338, Taiwan

Agenda:

Call the Meeting to Order (Reports on the number of shares in attendance)
Chairperson’s Remarks
Reports
3.1 Business Report for 2016 & Business Plan for 2017
3.2 Supervisors’ Review Report of 2016
- 3.3 Report on the Compensation of Employees and the Remuneration of Directors of 2016
Proposed Resolutions
4.1 To accept 2016 Business Report and Financial Statements
4.2 To approve the Proposal for Distribution of 2016 Profits
Deliberation Proposals
5.1 To amend the Articles of Incorporation of the Company
5.2 To amend the Rules and Procedures of Shareholders’ Meeting
5.3 To amend the Rules for Election of Directors and Supervisors
5.4 To amend the Operational Procedures for Derivatives Transactions
5.5 To amend the Operational Procedures for Loaning of Company Funds

5.6 To amend the Operational Procedures for Acquisition and Disposal of

Assets

  - 5.7 To amend the Operational Procedures for Endorsements and

     - Guarantees

5.8 To abolish the Rules of Supervisors’ Authority
Directors Election
6.1 To elect nine Directors (including three Independent Directors)
Deliberation Proposals
- 7.1 To release the Prohibition on Directors from Participation in Competitive Business
Special Motions
Adjournment

Reports

Report 1

Business Report for 2016 & Business Plan for 2017

Dear Shareholders

We really appreciate your continuous support all these years. We are reporting the following items here so that you can understand more about what we have done, what we are planning to do and what challenges we are facing.

Our Performance in 2016

Our consolidated operating revenue in 2016 was NT$ 23,939,699 thousands and increased by 5.72% and by NT$ 1,295,594 thousands from 2015. The main factor for revenue growth was capacity expansion to meet our customers’ demand. Our operating income in 2016 was NT$ 3,019,123 thousands and increased by 46.30% and by NT$ 955,438 thousands from 2015. Our profit before tax in 2016 was NT$ 2,489,038 thousands and increased by 25.88% and by NT$ 511,715 thousands from 2015. The main reasons for profit growth were decent revenue growth and further control of all costs. Our net income in 2016 was NT$ 2,489,038 thousands and increased by 25.88% and by NT$ 511,715 thousands from 2015. So our earnings per share (EPS) in 2016 was NT$ 6.26 which was better than that of 4.97 in 2015.

Operating Results in 2016

Unit: NTD in thousands

Amount Item	2015	2014	Plus or Minus (Amount)	Plus or Minus (%)
OperatingRevenue	23,939,699	22,644,105	1,295,594	5.72
OperatingCosts	19,555,849	19,310,837	245,012	1.27
Gross Profit	4,383,850	3,333,268	1,050,582	31.52
OperatingExpenses	1,364,727	1,269,583	95,144	7.49
OperatingIncome	3,019,123	2,063,685	955,438	46.30
Non-operating Income andExpenses	302,374	502,126	(199,752)	(39.78)
Profit before Tax	3,321,497	2,565,811	755,686	29.45
Consolidated Profit	2,456,514	1,914,455	542,059	28.31
Profit, attributable to owners of parent company	2,489,038	1,977,323	511,715	25.88

Our budget achievement of operating revenue and operating costs were 103.68% and 99.14% of the 2016 budget targets. They were on budget substantially. Our budget achievement of profit before tax was 137.95%. It showed that our actual operation improvement was beyond our planning and expectation.

Budget Achievement in 2016

		Unit: NTD in thousands	Unit: NTD in thousands
Amount Item	Actual Amount	Budget Amount	Achievement Rate (%)
OperatingRevenue	23,939,699	23,089,125	103.68
OperatingCosts	19,555,849	19,726,455	99.14
Gross Profit	4,383,850	3,362,670	130.37
OperatingExpenses	1,364,727	1,309,179	104.24
OperatingIncome	3,019,123	2,053,491	147.02
Non-operating Income and Expenses	302,374	354,218	85.36
Profit before Tax	3,321,497	2,407,709	137.95

Our long-term and short-term financial position is very healthy because of our stable growth both in the aspects of revenue and of profits. Our ratio of debt to total assets and current ratio in 2016 were 36% and 183%, which indicates our strong financial position.

We have been dedicating significant efforts on R&D for our development in the future. We manage to keep ahead of our competitors in development of new products and new technology. The following was our results of R&D in 2016.

Results of R&D in 2016

A. Development of modified copper inlay process for cost reduction
B. Middle/High current carrying PCB - Mini-busbar
C. Middle/High current carrying PCB - Wirelaid
D. Development of pseudo rigid-flex
E. Development of Cavity PCB
F. Assisting Changshu plant & Draco plant to upgrade the capabilities
G. Others

Our Plan for 2017

I. Operating Strategies:

We have been focusing on the niche market of printed circuit board (PCB) for automobiles and of PCB of medium volume, which are hugely demanding on more flexible production capability. We also have been facing the challenges of how to deal with the micro-profit era and the fast changes of global economy. We have set the following operating strategies to cope with those challenges and to respond to the changes in the markets and in the environments.

The Executives Committee plays a key role of integrating all departments, realigning resources and converging all efforts to fulfill our visions and strategies.
Dynamically target the potential products and niche markets to respond to global competitions and rapidly changing markets.
Realign all our resources to develop creativity of R&D, to build excellent production capability and to setup effective cost control systems in order to provide value-added products, services and total solutions with innovativeness and cost-competitiveness.
Build a cluster of Asian production and service bases which has a center in Taiwan and supporting bases in Mainland China and Thailand.
Provide Taiwan’s resources of technology, marketing and administration to our bases in Mainland China and Thailand in order for them to rapidly upgrade their operating capabilities and to grasp the opportunities in the local markets of Mainland China, Southeast Asia and South Asia.
Integrate production processes and managerial resources to strengthen the supportive systems for production and to promote specialization center and sophisticated technical capabilities.
Enhance automation and smart production to raise production efficiency, to improve quality and to reduce costs.
Implement total quality control and utilize the six sigma methodology to build an edge in competitiveness of stable quality.
Continue to upgrade the capabilities of ERP （ Enterprise Resource Planning ） and CIM (Computer integrated manufacturing) ,and to participate in government-subsidized Technology Development Programs in order to strength our abilities and efficiency of operation and administration.
Build a learning organization and knowledge management system

to store, accumulate and share management wisdom among all employees in the company. Activate a cost control system and a incentive plan to guide resources of knowledge into increasing high value-added activities, reducing activities of low efficiency and of low value, and strengthen our core competitiveness.

II. Operational Goals:

Volume of Single-sided: 2,683,044 M[2] (square meter) Volume of Double-sided & Multilayer: 4,538,418 M[2] (square meter)

III. Strategies for Marketing and Production:

1. Production Strategies

Grasp the trends of technology and products and continue to improve our costs, quality, speed, flexibility and services.

、、
(1) Enhance the quality systems of ISO-9002 ISO-14001 、、
QS-9000 TL9000 TS 16949 and utilize the six sigma methodology to achieve the targets of our quality policy.
(2) Upgrade our capabilities of fine line, high density and micro via.
(3) Strengthen our capabilities of HDI (High Density Interconnect) and other high value-added technology.
(4) Continues to expand niche products such as aluminum PCB, Middle/High current carrying PCB, heavy copper board and etc.
(5) Upgrade automation, enhance our analytic ability for big data of production and enhance smart production. Our vision is to build smart factories.
(6) Build a cluster of Asian production and service bases. In particular, strengthen the production base in Thailand and capitalize on its double edges on low cost structure and nearness to the biggest automobiles production base in Southeast Asia.
Marketing Strategies

Keep up with market trends.

(1) Actively develop global markets and be a key supplier of global main players in different electronics industries. Simultaneously, increase the pocket share of our customers.
(2) Develop the markets in Mainland China, Southeast Asia, South Asia and other emerging countries.
(3) Build global marketing channels and strengthen global

competitiveness.

(4) Build a complete platform of logistics and provide our customers more value-added services.

IV. R&D Plans:

Upcoming R&D plans:
Development of Mid./High current carrying PCB
Development of heat dissipation PCB
Development of special flexible PCB
Development of high frequency PCB
Development of aluminum core PCB
Development of cavity PCB
Optimization of conductive polymer process
Feasibility study of HDI production with direct metallization
Evaluation of direct pattern plating process for DS & MLB production
Evaluation of thermally conductive material for EPS PCB making
Evaluation of automatic robotic arm for precise handling and automatic process flow of production

2. R&D Budget

The total budget for research and development is around NT$ 117 millions.

Our Strategies

Continue to expand the niche market of printed circuit board (PCB) for automobiles and of PCB of medium volume.
Build a cluster of Asian production bases. We are planning to expand the production bases in Taiwan, in China and in Thailand in the next 2-3 years. We have started initial expansion of NT$ 3.5 billion in Taiwan since 2015, the whole project of which will be expected to

finish in 2017. We have increased our ownership on Draco, our production base in Thailand, from 24% to 53% after the flood of Thailand in 2012 and further to 95.53% in 2016. We have been building a new capacity of double-sided and multilayer since 2015. New capacity in Thailand has a very important significance to our strategy of grasping the opportunities of Southeast Asia and South Asia, providing extra capacity to our production bases in Taiwan and Mainland China, and becoming our main source of future growth. We have a new plan of building another plant in China this year and the new plant is expected to be put into operation in 2019.

Strengthen R&D of niche products to avoid shrinking of profit margins owing to excessive competition in the industry.
Enhance automation and smart production to improve quality and to enhance production flexibility.

Challenges

Taiwan's PCB industry has been developing for more than 30 years and has built a complete supply chain and industrial clusters. Taiwan's PCB makers have an edge on yield, quality, price, speed and service over global competitors and have a great share of global demand of PCB for automotive electronics, telecommunication, information technology and consumers’ electronics. According to the statistics of TPCA and IEK, total revenue of Taiwan’s PCB makers in 2016 was NT$ 566 billion and increased by 1.62%.

Global economic growth in 2016 was 3.0% which was not as good as expected mainly due to global trade stagnation, increased political uncertainty and weak investment. The slowdown in advanced countries and the sluggish exports of major commodity nations led to global trade stagnation, and global trade stagnation fostered the rise of trade protectionism. Political uncertainty resulted from the Brexit and election of President of the United States had impact on global economy. Weak investment was owing to disappointment of slow economic recovery. Enterprises waited for the economy to improve and suspend their investment. However, due to the prudent response of countries, the global economy remained stable. At the same time, US dollar against Taiwan dollar began to depreciated in the middle of the year, but the yearly exchange rate for US dollar was still beneficial for exporters due to the sharp appreciation of US dollar at the beginning of the year. It is still a profitable year for exporters.

The global economy is expected to boom as the US economy recovers rapidly. According to the forecasts of IMF and the World Bank, the global economic growth rate will rise to 3.4% and 3.5% respectively. 2017 will be the best year among the recent years. The economic recovery is expected to get greater momentum this year. The biggest risk factors in 2017 were Trump's trade protectionism and the uncertainty of EU politics. However, the recovery of the global economy is relatively solid. This year will be quite a year to look forward to.

According to the forecast of IEK, total revenue of Taiwan’s PCB makers in 2017 is expected to be NT$ 584 billion and increased by 3.16%. Taiwan’s PCB makers have always beaten the market and got a bigger share even in global adverse economic situations. They are competitive in the aspects of cost and production bases so they will still remain profitable in the future of growing electronics industries.

Taiwan PCB industry are facing many challenges and rapidly changing external environments which have a great impact on Taiwan's PCB industry. Facing stable global economy in 2016, Chin-poon align our strategy to enhance our edge on integration, globalization, niche products, key technology, logistics platform, cost control and knowledge management to achieve our profit targets. We are planning to take active approaches and to expand more production in Asia benefit from new opportunities of growing electronics industries.

In the past year, the company has achieved the goals of growth for our revenue and profits under the support of all shareholders. We are going to continue improving our core competitiveness to enhance our performance so that we can keep enhancing shareholders' equity.

Sincerely yours,

Chairman Chief Executive Officer Principal Accounting Officer

Report 2

Supervisors’ Review Report of 2016

CHIN-POON INDUSTRIAL CO., LTD.

Supervisors’ Review Report

The Board of Directors has prepared the Company’s 2016 Business Report, Financial Statement, and proposal for allocation of profits. The CPA firm of KPMG was retained to audit the Company’s Financial Statements. KPMG has completed audit procedures and issued Audit Opinion. The Business Report, Financial Statements, and profit allocation proposal have been reviewed and determined to be correct and accurate by the supervisors of the Company. According to Article 219 of the Company Act, we hereby submit this report.

CHIN-POON INDUSTRIAL CO., LTD.

Supervisor: Mr. LAI, HWEI-SHAN

March 22, 2017

CHIN-POON INDUSTRIAL CO., LTD.

Supervisors’ Review Report

CHIN-POON INDUSTRIAL CO., LTD.

Supervisor: Mr. TSENG, WEN-YU

March 22, 2017

Report 3

Report on the Compensation of Employees and the Remuneration of Directors of 2016

The decided amount of the Compensation of Employees in cash is NT$ 163,781,833. There are no differences between the amount decided by the Board of Directors and the amount of expense for the compensation accrued in the 2016 financial statements of the Company.
The decided amount of the Remuneration of Directors in cash is NT$ 16,200,000. There are no differences between the amount decided by the Board of Directors and the amount of expense for the Remuneration accrued in the 2016 financial statements of the Company.
The total amount of expense for the Compensation of Employees and the Remuneration of Directors is NT$ 179,981,833.

Proposed Resolutions

Proposal 1

(Proposed by Board of Directors)

Subject: To accept 2016 Business Report and Financial Statements.

Explanation:

CHIN-POON’s 2016 Financial Statements, including Balance Sheets, Statements of Comprehensive Income, Statements of Changes in Equity, and Statements of Cash Flows, were audited by CPA Lily Lu and CPA Ann-Tien Yu of KPMG, who then issued an Audit Report with an Unqualified Opinion with regard to those financial statements.
The aforementioned Financial Statements and 2016 Business Report have been accepted by the Board of Directors and reviewed by the supervisors of the Company. (The aforementioned Financial Statements are attached hereto as Appendix I. As to 2016 Business Report, please refer to Report 1.)
Please accept the aforementioned Business Report and Financial Statements.

Resolution:

Proposal 2

(Proposed by Board of Directors)

Subject: To approve the Proposal for Distribution of 2016 Profits.

Explanation:

The following Profit Allocation Proposal has been approved and proposed by the Board of Directors.

the Board of Directors.
Profit Allocation Proposal
	Unit: NT$
Unappropriated Retained Earnings of Previous Years	6,189,383,030
Plus:
- Net Income of 2016	2,489,037,956
Less:
- Remeasurements of Defined Benefit Plans	30,834,626
- Difference Between Acquisition or Disposal Price for Subsidiaries	47,513,714
and Their Book Values
Retained Earnings Available for Distribution as of December 31, 2015	8,600,072,646
Distribution Item:
- 10% Legal Reserve	248,903,796
- Cash Dividends to Common Share Holders (NT$ 3.2 per share)	1,271,985,344
Unappropriated Retained Earnings	7,079,183,506
Chairman Chief Executive Officer Principal Accounting Officer

We have deducted from the profits in 2016 the legal reserve according to applicable laws. Then it is proposed that each common share holder will be entitled to receive a cash dividend of NT$ 3.2 per share. (The total amount of dividend for each shareholder will be rounded down to an integer. And the

fractional amount less than one dollar should be recorded as other income of the Company.)

3.1 The total number of common shares outstanding is subject to change and the ultimate cash dividend to be distributed to each common share will be adjusted accordingly if the Company subsequently repurchase its common shares, or transfers and retires treasury stocks, or executes conversion of convertible bonds to stocks etc. It is proposed that the Board of Directors be authorized to adjust the cash dividend to be distributed to each common share based on the total amount of profits resolved to be distributed and the number of actual common shares outstanding on the record date for distribution.
3.2 Upon the Profit Allocation Proposal for the year 2016 having approved in the shareholders’ meeting, it is proposed to authorize the Board of Director to set the ex-dividend date and the payment date of cash dividend.
Please approve the Proposal for Distribution of 2016 Profits.

Resolution:

Deliberation Proposals

Proposal 1

(Proposed by Board of Directors)

Subject: To amend the Articles of Incorporation of the Company.

Explanation:

To comply with the laws and regulations of the competent authority, including Securities and Exchange Act and Company Act, it is proposed to amend the Articles of Incorporation of the Company. Please refer to the following cross reference table that shows the clauses before and after amendment.

Cross Reference Table

	Clause before Amendment		Clause after Amendment		Reason for Amendment
	Chapter Four Directors and Supervisor		Chapter Four Directors and Committee	Audit	To comply with the regulations.
	Article 15 The Company shall have seven (7) to nine (9) Directorsand two (2) Supervisorsfor a term of three (3) years, who shall be elected under candidates nomination system as specified in Article 192-1 of the Company Act ,and shall be persons with disposing capacity, and be elected and appointed by the Shareholders’ Meeting. The term may be renewed upon re-election. Starting from the year of 2017, there shall be three (3) Independent Directors among all elected directors. Independent directors shall be elected under candidate nominating system. The shareholders shall elect the Independent Directors from among the nominees listed in the roster of Independent Director Candidates. The professional qualifications, restrictions on both shareholding and concurrent positions held, method of nominating and electing, and other requirements with regard to the independent directors shallbe governedin		Article 15 The Company shall have seven (7) to nine (9) Directors and an Audit Committee for a term of three (3) years, who shall be elected under candidates nomination system as specified in Article 192-1 of the Company Act ,and shall be persons with disposing capacity, and be elected and appointed by the Shareholders’ Meeting. The term may be renewed upon re-election. There shall be three (3) Independent Directors among all elected directors. Independent directors shall be elected under candidate nominating system. The shareholders shall elect the Independent Directors from among the nominees listed in the roster of Independent Director Candidates. The professional qualifications, restrictions on both shareholding and concurrent positions held, method of nominating and electing, and other requirements with regard to the independent directors shall be governed in accordancewiththerules and		To comply with the regulations.

accordance with the rules and regulations of the regulatory agencies. The elected Directorsand Supervisorsmay pass the resolution of the Board of the Company to have the liability insurance coverage within the scope of their duties.	regulations of the regulatory agencies. The elected Directors may pass the resolution of the Board of the Company to have the liability insurance coverage within the scope of their duties.
Article 15.1 The Company shall establish an Audit Committee in accordance with Article 14.4 of the Securities and Exchange Act. The Audit Committee shall be composed of all independent directors. The exercising authority and matters relevant to the audit committee and its members shall be governed in accordance with the rules and regulations of the regulatory agencies. Starting from the year of 2017 and upon the expiration of their terms, the supervisors shall be abolished on the day when the audit committee is established.	Article 15.1 The Company shall establish an Audit Committee in accordance with Article 14.4 of the Securities and Exchange Act. The Audit Committee shall be composed of all independent directors. The exercising authority and matters relevant to the audit committee and its members shall be governed in accordance with the rules and regulations of the regulatory agencies.	To comply with the regulations.
Article 16 In the absence of more than one third of the total number of Directorsor when both Supervisors are dismissed,the BOD shall call a special Shareholders’ Meeting within 60 days for re-election of their replacements, who shall continue to serve their remaining terms.Provided no Director replacement has yet been made through re-election and it is urgent to have their replacements, the candidates who have got the most votes except the ones elected as directors and supervisors during the original election shall stand in for the duties.	Article 16 In the absence of more than one third of the total number of Directors, the BOD shall call a special Shareholders’ Meeting within 60 days for re-election of their replacements, who shall continue to serve their remaining terms.	To comply with the regulations.
Article 17 Provided no re-election is possible at the time when the term of Directorsor Supervisors expires,their term maybe	Article 17 Provided no re-election is possible at the time when the term of Directors expires, their term may be extended until the	To comply with the regulations.

extended until the date when new Directors and Supervisors are elected.	date when new Directors are elected.
Article 18 The board of directors shall elect a chairperson of the board from among the directors by a majority vote at a meeting attended by over two-thirds of the directors. Each director shall attend the meeting of the board of directors in person. A director may be represented by another director. In case a director appoints another director to attend a meeting of the board of directors in his/her behalf, he/she shall, in each time, issue a written proxy and state therein the scope of authority with reference to the subjects to be discussed at the meeting.	Article 18 The board of directors shall elect a chairperson of the board from among the directors by a majority vote at a meeting attended by over two-thirds of the directors. Each director shall attend the meeting of the board of directors in person. A director may be represented by another director.	To comply with the regulations.
Article 19.1 In calling a meeting of the board of directors, a notice setting forth therein the subject(s) to be discussed at the meeting shall be given to each directorand supervisorno later than 7 days prior to the scheduled meeting date. However, in the case of emergency, the meeting may be convened at any time. The notice of meeting of Board to be convened should be given to the directors and supervisors in writing, by e-mail or by fax.	Article 19.1 In calling a meeting of the board of directors, a notice setting forth therein the subject(s) to be discussed at the meeting shall be given to each director no later than 7 days prior to the scheduled meeting date. However, in the case of emergency, the meeting may be convened at any time. The notice of meeting of Board to be convened should be given to the directors in writing, by e-mail or by fax.	To comply with the regulations.
Article 22 Supervisors may be present at the Board Meeting, but shall not have voting rights.	(The article will be deleted.)	To comply with the regulations.
Article 22.1 All Directorsand Supervisorsof the Company shall be paid a certain amount of traveling fees. Provided any Director is concurrently acting other positions of the Company, he/she shall be paid a salary per normal standards.	Article 22 All Directors of the Company shall be paid a certain amount of traveling fees. Provided any Director is concurrently acting other positions of the Company, he/she shall be paid a salary per normal standards.	To change the article number and to comply with the regulations.

	Article 24 At the end of each fiscal year, the BOD shall compile the following statements, which shall be submitted to the regular Shareholders’ Meeting 30 days in advance, and apply for approval by the Shareholders’ Meeting after verification by the Supervisors: I. the business report; II. the financial statements; and III. the surplus earnings distribution or loss make-up proposal.		Article 24 At the end of each fiscal year, the BOD shall compile the following statements, which shall be submitted to the regular Shareholders’ Meeting 30 days in advance, and apply for approval by the Shareholders’ Meeting after verification by the Audit Committee: I. the business report; II. the financial statements; and III. the surplus earnings distribution or loss make-up proposal.	To comply with the regulations.
	Article 25 When the Company makes profits in a year, 2%~10% of the yearly profits shall be allocated for employee bonuses, and not more than 3% of the yearly profits for the remuneration of directorsand supervisors. However, when the company has accumulated losses, the profit shall be used to cover the accumulated losses beforehand. The employees for bonus distribution shall include qualified employees of subsidiary companies.		Article 25 When the Company makes profits in a year, 2%~10% of the yearly profits shall be allocated for employee bonuses, and not more than 3% of the yearly profits for the remuneration of directors. However, when the company has accumulated losses, the profit shall be used to cover the accumulated losses beforehand. The employees for bonus distribution shall include qualified employees of subsidiary companies.	To comply with the regulations.
	Article 29 These Articles of Association were enacted on Aug. 11, 1979 and amended -------------------------------------------- -------------------------------------------- -------------------------------------------- and on Jun. 14,2016 for the thirty-second time.		Article 29 These Articles of Association were enacted on Aug. 11, 1979 and amended -------------------------------------------- -------------------------------------------- -------------------------------------------- on Jun. 14, 2016 for the thirty-second time. andon Jun. 22, 2017 for the thirty-third time.	To add a new entry in the history of revision.

Resolution:

Proposal 2

(Proposed by Board of Directors)

Subject: To amend the Rules and Procedures of Shareholders’ Meeting.

Explanation:

To comply with the laws and regulations of the competent authority, including

Securities and Exchange Act and Company Act, it is proposed to amend the Rules and Procedures of Shareholders’ Meeting. Please refer to the following cross reference table that shows the clauses before and after amendment.

Cross Reference Table

	Clause before Amendment	Clause after Amendment	Reason for Amendment
	19. The person(s) to check and the person(s) to record the ballots during a vote by casting ballots for resolution of proposals or election of directorsand supervisorsshall be appointed by the chairperson. The person(s) checking the ballots shall be a shareholder(s). The result of voting shall be announced at the Meeting and placed on record.	19. The person(s) to check and the person(s) to record the ballots during a vote by casting ballots for resolution of proposals or election of directors shall be appointed by the chairperson. The person(s) checking the ballots shall be a shareholder(s). The result of voting shall be announced at the Meeting and placed on record.	To comply with the regulations.

Resolution:

Proposal 3

(Proposed by Board of Directors)

Subject: To amend the Rules for Election of Directors and Supervisors.

Explanation:

To comply with the laws and regulations of the competent authority, including Securities and Exchange Act and Company Act, it is proposed to amend the Rules for Election of Directors and Supervisors. Please refer to the following cross reference table that shows the clauses before and after amendment.

Cross Reference Table

Clause before Amendment	Clause after Amendment	Reason for Amendment
Rules for Election of Directors and Supervisors	Rules for Election of Directors	To comply with the regulations.
1. Unless otherwise provided in the Company Act or the Articles of Incorporation of this Company, the directorsand supervisorsof this Company shall be elected in accordance with the rules specified herein.	1. Unless otherwise provided in the Company Act or the Articles of Incorporation of this Company, the directors of this Company shall be elected in accordance with the rules specified herein.	To comply with the regulations.
2. Election of directorsand supervisorsof the Company shall be held separately at the shareholders' meeting.	2. Election of directors of the Company shall be held separately at the shareholders' meeting.	To comply with the regulations.
3. All persons with disposing capacity shall be elected as directorsor supervisorsof the Company.	3. All persons with disposing capacity shall be elected as directors of the Company.	To comply with the regulations.
4. The number of directorsand supervisorsof the Company is subject to the number of directorsand supervisorsas set out in the Articles of Association of the Company.	4. The number of directors of the Company is subject to the number of directors as set out in the Articles of Association of the Company.	To comply with the regulations.
5.	5.	To comply with

	The Company adopts the cumulative voting method for the election of the directorsand supervisors.The number of votes exercisable in respect of one share shall be the same as the number of directorsor supervisorsto be elected, and the total number of votes per share may be consolidated for election of one candidate or may be split for election of two or more candidates.	The Company adopts the cumulative voting method for the election of the directors. The number of votes exercisable in respect of one share shall be the same as the number of directors to be elected, and the total number of votes per share may be consolidated for election of one candidate or may be split for election of two or more candidates.	the regulations.
	6. In the election of directorsand supervisorsof the Company, candidates who acquire more votes should win the seats of directorsor supervisors. A candidate who is elected as a director and a supervisor at the same time shall, at his own discretion, select to be a director or a supervisor and claim to have given up as a supervisor or a director. The vacancy shall be taken by the candidate who have gotten votes next to that of the last candidate who has been elected as a director or a supervisor. If two or more persons acquire the same number of votes and the number of such persons exceeds the specified seats available, such persons acquiring the same votes shall draw lots to decide who should win the seats available, and the Chairperson shall draw lots on behalf of the candidate who is not present.	6. In the election of directors of the Company, candidates who acquire more votes should win the seats of directors. If two or more persons acquire the same number of votes and the number of such persons exceeds the specified seats available, such persons acquiring the same votes shall draw lots to decide who should win the seats available, and the Chairperson shall draw lots on behalf of the candidate who is not present.	To comply with the regulations.
	12. The ballot boxes for the election of directors and for the election of supervisors are set up separately.The persons who monitor the voting and record the ballots are responsible for opening the ballot boxes after the vote casting has finished. The ballots should be calculated during the meeting right after the vote casting has finished and the	12. The persons who monitor the voting and record the ballots are responsible for opening the ballot boxes after the vote casting has finished. The ballots should be calculated during the meeting right after the vote casting has finished and the results of the election should be announced by the Chairperson at the meeting.	To comply with the regulations.

results of the election should be announced by the Chairperson at the meeting. 13. 13. To comply with The board of directors shall issue The board of directors shall issue the regulations. notifications to the directors and notifications to the directors supervisors elected. elected.

Resolution:

Proposal 4

(Proposed by Board of Directors)

Subject: To amend the Operational Procedures for Derivatives Transactions.

Explanation:

To comply with the laws and regulations of the competent authority, including Securities and Exchange Act and Company Act, it is proposed to amend the Operational Procedures for Derivatives Transactions. Please refer to the following cross reference table that shows the clauses before and after amendment.

Cross Reference Table

Clause before Amendment	Clause after Amendment	Reason for Amendment
Article 2 Trading Principles and Evaluation Procedures 2.1 Instruments 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. 2.2 Strategy 2.2.1 For the purpose of trading: It means that holding or trading derivatives is for the purpose of earning profits from derivatives. 2.2.2 For the purpose of hedging: It is in order to avoid the risk of holding some assets or liabilities or to avoid the expected transaction risk. Since the amount of accounts receivable and the expected time of	Article 2 Trading Principles and Evaluation Procedures 2.1 Instruments 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. 2.2 Strategy 2.2.1 For the purpose of trading: It means that holding or trading derivatives is for the purpose of earning profits from derivatives. 2.2.2 For the purpose of hedging: It is in order to avoid the risk of holding some assets or liabilities or to avoid the expected transaction risk. Since the amount of accounts receivable and the expected time of	To comply with the regulations.

collection can hardly match perfectly the amount and the time against which derivatives transactions are intended to hedge, the best hedging we can achieve is the hedging which almost match the amount of accounts receivable and the expected time of collection, rather than the strict hedging stipulated by the accounting standards. 2.2.3 The purpose of the Company engaged in derivatives transactions should be mainly for hedging. The selection of derivatives shall be in order to avoid the risks of the Company's business operations. 2.3 Segregation of Duties 2.3.1 Duties of the board of directors (the “BOD”) a. The BOD is responsible for approving and revising the Procedures. The BOD shall propose the Procedures to the stockholders’ meeting. b. With regard to derivatives transactions for the purpose of trading, each contract amount of more than US $ 10 million or accumulated unhedged position of more than US $ 15 million should be approved by the BOD and derivatives transactions below the aforesaid limit can be approved and monitored by general manager (“GM”) and the chairperson. c. At the time of the Board meeting, the BOD shall hear the report from general manager on the performance of the derivatives transactions, and shall decide to stop the derivatives transactions if the risk is not in accordance with the Company's business strategy or the risks are more than the Company is able to bear or exceed the originally anticipated plan.		collection can hardly match perfectly the amount and the time against which derivatives transactions are intended to hedge, the best hedging we can achieve is the hedging which almost match the amount of accounts receivable and the expected time of collection, rather than the strict hedging stipulated by the accounting standards. 2.2.3 The purpose of the Company engaged in derivatives transactions should be mainly for hedging. The selection of derivatives shall be in order to avoid the risks of the Company's business operations. 2.3 Segregation of Duties 2.3.1 Duties of the board of directors (the “BOD”) a. The BOD is responsible for approving and revising the Procedures. The BOD shall propose the Procedures to the stockholders’ meeting. b. With regard to derivatives transactions for the purpose of trading, each contract amount of more than US $ 10 million or accumulated unhedged position of more than US $ 15 million should be approved bythe audit committee and theBOD and derivatives transactions below the aforesaid limit can be approved and monitored by general manager (“GM”) and the chairperson. c. At the time of the Board meeting, the BOD shall hear the report from general manager on the performance of the derivatives transactions, and shall decide to stop the derivatives transactions if the risk is not in accordance with the Company's business strategy or the risks are more than the Company is able to bear or exceed the originally anticipated

2.3.2 Duties of general manager (“GM”) a. GM shall propose derivatives transaction to the BOD for approval in accordance with the article 2.3.1.b of the Procedures. b. GM is responsible for approving derivatives transactions below the amount authorized by the BOD. c. GM is responsible for approving derivatives transactions below the amount authorized by the BOD. d. GM is responsible for approving the performance report on derivatives transactions, for monitoring all transactions complying with the Procedures, for preventing the losses from exceeding the allowed limit and for auditing the difference between the actual performance and the planned performance. e. If GM find significant anomalies, GM should report them to the BOD, and proposed solutions to them. If the Company has independent directors, independent directors shall attend the board meeting and express their opinions on them. f. GM is responsible for regularly assessing the adequacy of risk management measures currently in use and whether those measures are in accordance with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies. 2.3.3 Duties of Chief Financial Officer (“CFO”) a. CFO is responsible for writing the assessment report on derivatives transactions. b. CFO is responsible for executing the approved derivatives transactions. c. CFO is responsible for regularly writing the performance report on derivatives transactions		plan. 2.3.2 Duties of general manager (“GM”) a. GM shall propose derivatives transaction tothe audit committee andthe BOD for approval in accordance with the article 2.3.1.b of the Procedures. b. GM is responsible for approving derivatives transactions below the amount authorized by the BOD. c. GM is responsible for approving derivatives transactions below the amount authorized by the BOD. d. GM is responsible for approving the performance report on derivatives transactions, for monitoring all transactions complying with the Procedures, for preventing the losses from exceeding the allowed limit and for auditing the difference between the actual performance and the planned performance. e. If GM find significant anomalies, GM should report them tothe audit committee and the BOD, and proposed solutions to them. If the Company has independent directors, independent directors shall attend the board meeting and express their opinions on them. f. GM is responsible for regularly assessing the adequacy of risk management measures currently in use and whether those measures are in accordance with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies. 2.3.3 Duties of Chief Financial Officer (“CFO”) a. CFO is responsible for writing the assessment report on derivatives transactions. b. CFO is responsible for executing the approved derivatives transactions. c. CFO is responsible for

for GM’s approval. d. CFO is responsible for proposing new projects of derivatives transactions. e. CFO is responsible for writing the performance report of the derivatives transactions which is for GM or BOD to decide on whether those transactions need to be closed or adjusted if the market encounters significant changes or the losses of the approved derivatives transactions exceed the allowed limit or hugely different from the originally anticipated plan. 2.3.4 Duties of finance department a. Finance department is responsible for applying for derivatives transactions. b. Finance department is responsible for executing the approved derivatives transactions and the settlement of them on behalf of CFO. c. Finance department is responsible for logging the daily transactions and verifying the correctness with the accounting documents. d. Finance department is responsible for archiving the daily transactions records in the order of transaction time, and for checking the records with the transaction counterparty on a regular basis. e. Finance department is responsible for providing the performance data for CFO to write the performance report. f. When the Company engages in derivatives transactions, it shall establish a log book, the type and the amount of the derivatives transactions, the date of approval by the BOD and the assessment items in accordance with the article of 2.4.2, 2.3.1.c and 2.3.2.f should be recorded in the log book in details. g. The Company shall disclose		regularly writing the performance report on derivatives transactions for GM’s approval. d. CFO is responsible for proposing new projects of derivatives transactions. e. CFO is responsible for writing the performance report of the derivatives transactions which is for GM or BOD to decide on whether those transactions need to be closed or adjusted if the market encounters significant changes or the losses of the approved derivatives transactions exceed the allowed limit or hugely different from the originally anticipated plan. 2.3.4 Duties of finance department a. Finance department is responsible for applying for derivatives transactions. b. Finance department is responsible for executing the approved derivatives transactions and the settlement of them on behalf of CFO. c. Finance department is responsible for logging the daily transactions and verifying the correctness with the accounting documents. d. Finance department is responsible for archiving the daily transactions records in the order of transaction time, and for checking the records with the transaction counterparty on a regular basis. e. Finance department is responsible for providing the performance data for CFO to write the performance report. f. When the Company engages in derivatives transactions, it shall establish a log book, the type and the amount of the derivatives transactions, the date of approval bythe audit committee andthe BOD and the assessment items in accordance with the article of 2.4.2, 2.3.1.c

information of derivatives transactions in accordance with Directives on Accounting Disclosure of Public Companies’ Derivatives Transactions. 2.3.5 Duties of internal audit office a. Internal audit office is responsible for regularly finding whether the internal control of derivatives transactions is adequate, monthly conducting audit of the compliance of the persons responsible for dealing with derivatives transactions and writing monthly audit report to GM. If a significant violation is found, thesupervisorshould be notified in writing. b. Internal audit office is responsible for filing to the Securities and Futures Bureau (“SFB”) the aforesaid audit report of derivatives transactions with the implementation report of yearly internal auditing before the end of February each year and the report of correcting the violations of derivatives transactions before the end of May each year. 2.4 Performance Assessment 2.4.1 Finance department shall classify derivatives transactions by the following categories: a. For the purpose of trading. b. For the purpose of hedging CFO shall send to GM or the BOD a weekly report of the position held in the derivatives transactions. 2.4.2 Evaluation of the position held in the derivatives transactions a. The position held in the derivatives transactions for the purpose of trading shall be evaluated at least once a week. b. The position held in the derivatives transactions for the		and 2.3.2.f should be recorded in the log book in details. g. The Company shall disclose information of derivatives transactions in accordance with Directives on Accounting Disclosure of Public Companies’ Derivatives Transactions. 2.3.5 Duties of internal audit office a. Internal audit office is responsible for regularly finding whether the internal control of derivatives transactions is adequate, monthly conducting audit of the compliance of the persons responsible for dealing with derivatives transactions and writing monthly audit report to GM. If a significant violation is found, theaudit committee should be notified in writing. b. Internal audit office is responsible for filing to the Securities and Futures Bureau (“SFB”) the aforesaid audit report of derivatives transactions with the implementation report of yearly internal auditing before the end of February each year and the report of correcting the violations of derivatives transactions before the end of May each year. 2.4 Performance Assessment 2.4.1 Finance department shall classify derivatives transactions by the following categories: a. For the purpose of trading. b. For the purpose of hedging CFO shall send to GM orthe audit committee andthe BOD a weekly report of the position held in the derivatives transactions. 2.4.2 Evaluation of the position held in the derivatives transactions a. The position held in the derivatives transactions for the purpose of trading shall be

purpose of hedging shall be evaluated at least once a week. evaluated at least twice a month. b. The position held in the derivatives transactions for the 2.4.3 The assessment principles purpose of hedging shall be for the performance report of evaluated at least twice a month. derivatives transactions are as follows: 2.4.3 The assessment principles a. If the derivatives are trading in for the performance report of the market, the net profits or derivatives transactions are as losses shall be evaluated against follows: the market price. a. If the derivatives are trading in b. If no market price is found, the the market, the net profits or best estimate of their value under losses shall be evaluated against the adequate evaluation the market price. methods and some significant b. If no market price is found, the hypothesis shall be used. best estimate of their value under c. If their fair value cannot be the adequate evaluation evaluated reasonably, the methods and some significant information of their possible fair hypothesis shall be used. value shall be provided. c. If their fair value cannot be d. The fair value and the book evaluated reasonably, the value of the approved derivatives information of their possible fair transactions shall be expressed value shall be provided. separately and their amount of d. The fair value and the book profits and losses are classified value of the approved derivatives by the purpose for trading and for transactions shall be expressed hedging respectively. separately and their amount of profits and losses are classified 2.5 The total amount of by the purpose for trading and for unhedged position of derivatives hedging respectively. transactions must be below US $ 90 million (or the same value if in 2.5 The total amount of other currencies). unhedged position of derivatives 2.5.1 The authorized persons transactions must be below US $ and their authorized limits on the 90 million (or the same value if in amount of the accumulated other currencies). unsettled derivatives shall be 2.5.1 The authorized persons handled in accordance with the and their authorized limits on the division of authority of the amount of the accumulated Company. unsettled derivatives shall be handled in accordance with the 2.6 All and individual contracts division of authority of the 2.6.1 The total amount of Company. unrealized losses of all derivatives transactions for the 2.6 All and individual contracts purpose of trading in the same 2.6.1 The total amount of fiscal year shall not be more than unrealized losses of all NT $ 20 million or one fifth of the derivatives transactions for the retained earnings in the last purpose of trading in the same audited financial statements. fiscal year shall not be more than 2.6.2 The total amount of NT $ 20 million or one fifth of the unrealized losses of individual retained earnings in the last derivatives transaction for the audited financial statements.

purpose of trading shall not be more than NT $ 3 million per contract amount of US $ 1 million. 2.6.3 The total amount of unrealized losses of over-hedged positon which is the extra position of all position for the purpose of hedging minus the position which need to be hedged shall not be more than one fifth of the retained earnings in the last audited financial statements. 2.7 Maturity of derivatives contracts 2.7.1 Financial futures: according to contracts provided by foreign futures exchanges. 2.7.2 Options: according to contracts provided by foreign futures exchanges. If traded in the over-the-counter market, no more than one year in principle. 2.7.3 Forward rate agreements: no more than two years in principle. 2.7.4 Interest rate swaps: no more than five years in principle. 2.7.5 Currency swaps: no more than two years in principle. The maturity more than the aforesaid limits shall be approved by the BOD.		2.6.2 The total amount of unrealized losses of individual derivatives transaction for the purpose of trading shall not be more than NT $ 3 million per contract amount of US $ 1 million. 2.6.3 The total amount of unrealized losses of over-hedged positon which is the extra position of all position for the purpose of hedging minus the position which need to be hedged shall not be more than one fifth of the retained earnings in the last audited financial statements. 2.7 Maturity of derivatives contracts 2.7.1 Financial futures: according to contracts provided by foreign futures exchanges. 2.7.2 Options: according to contracts provided by foreign futures exchanges. If traded in the over-the-counter market, no more than one year in principle. 2.7.3 Forward rate agreements: no more than two years in principle. 2.7.4 Interest rate swaps: no more than five years in principle. 2.7.5 Currency swaps: no more than two years in principle. The maturity more than the aforesaid limits shall be approved bythe audit committee and the BOD.
Article 3 Operating Procedures 3.1 Finance department submits "Application of Derivatives Transactions" in duplicate to CFO who will assess the transactions. 3.2 CFO shall carry out the assessment procedure and write the " Assessment Report of Derivatives Transactions ".		Article 3 Operating Procedures 3.1 Finance department submits "Application of Derivatives Transactions" in duplicate to CFO who will assess the transactions. 3.2 CFO shall carry out the assessment procedure and write the " Assessment Report of Derivatives Transactions ".	To comply with the regulations.

3.3 If the case is not feasible 3.3 If the case is not feasible after CFO’s assessment, GM will after CFO’s assessment, GM will disapprove the application. The disapprove the application. The assessment report will be assessment report will be numbered and the reasons for numbered and the reasons for disapproval will be recorded in disapproval will be recorded in the " Application of Derivatives the " Application of Derivatives Transactions ". One copy of " Transactions ". One copy of " Application of Derivatives Application of Derivatives Transactions " will be returned to Transactions " will be returned to finance department and another finance department and another copy will be archived with the " copy will be archived with the " Assessment Report of Assessment Report of Derivatives Transactions ". Derivatives Transactions ". 3.4 If the case is feasible after 3.4 If the case is feasible after CFO’s assessment, it shall be CFO’s assessment, it shall be sent to GM or the BOD for sent to GM or the audit approval. committee and the BOD for 3.4.1 If GM or the BOD does not approval. approve it, handle it according to 3.4.1 If GM or the audit the article 3.3. committee and the BOD does not 3.4.2 If GM or the BOD instructs approve it, handle it according to the case to be partially amended the article 3.3. or to increase the contents, items 3.4.2 If GM or the BOD instructs or explanations of the the case to be partially amended assessment report, CFO shall or to increase the contents, items revise the assessment report or explanations of the and submit it again for approval. assessment report, CFO shall 3.4.3 If the " Assessment Report revise the assessment report of Derivatives Transactions " and submit it again for approval. approved by GM or the BOD, 3.4.3 If the " Assessment Report CFO shall execute the of Derivatives Transactions " derivatives transactions. approved by GM or the audit committee and the BOD, CFO 3.5 Each contract amount of shall execute the derivatives more than US $ 10 million for the transactions. purpose of trading should be approved by the BOD and the 3.5 Each contract amount of contract amount below the more than US $ 10 million for the aforesaid limit can be approved purpose of trading should be by GM and the chairperson. approved by the audit committee and the BOD and the contract 3.6 CFO shall submit the amount below the aforesaid limit approved transactions to finance can be approved by GM and the department or otherwise to other chairperson. offices for the execution of the transactions, and the authorized 3.6 CFO shall submit the amount for each of the traders approved transactions to finance shall be within the amount of US department or otherwise to other $ 5 million (including US $ 5 offices for the execution of the million). transactions, and the authorized amount for each of the traders

3.7 CFO shall submit weekly to GM the " Performance Report of Derivatives Transactions " which represent changes of the position held. GM is responsible for reviewing the position held in the derivatives transactions and their performance, for supervising the adequacy of the transaction procedures and for monitoring whether the performance is within the control range. 3.8 In the event of significant anomalies, GM shall immediately report to the BOD for new resolutions. GM or CFO shall report their impacts and propose new solutions to deal with the impacts for the BOD’s resolution.	shall be within the amount of US $ 5 million (including US $ 5 million). 3.7 CFO shall submit weekly to GM the " Performance Report of Derivatives Transactions " which represent changes of the position held. GM is responsible for reviewing the position held in the derivatives transactions and their performance, for supervising the adequacy of the transaction procedures and for monitoring whether the performance is within the control range. 3.8 In the event of significant anomalies, GM shall immediately report tothe audit committee and the BOD for new resolutions. GM or CFO shall report their impacts and propose new solutions to deal with the impacts for the BOD’s resolution.
Article 8 Internal Audit In order to enable the Company to engage in derivatives transactions healthily, in addition to the internal audit by the company's internal audit office and to the self-check of the operating units, the BOD, GM and theSupervisorsshall supervise the derivatives transactions to carry out the above-mentioned "internal control". The audit focus is as follows: 8.1 Before the Company conducts derivatives transactions, a report on the nature and the type of the transactions, on the approved loss limit, on the internal control items and on the performance of profits and losses shall be made and sent for approval. 8.2 Thereport onthe position	Article 8 Internal Audit In order to enable the Company to engage in derivatives transactions healthily, in addition to the internal audit by the company's internal audit office and to the self-check of the operating units, the BOD, GM and theaudit committeeshall supervise the derivatives transactions to carry out the above-mentioned "internal control". The audit focus is as follows: 8.1 Before the Company conducts derivatives transactions, a report on the nature and the type of the transactions, on the approved loss limit, on the internal control items and on the performance of profits and losses shall be made and sent for approval. 8.2 Thereport onthe position	To comply with the regulations.

	and performance of derivatives transactions should be reviewed weekly and sent to GM. 8.3 The correctness of Information on the assessment report, transaction history, the performance report and etc. should be checked regularly. And the integrity and correctness of their transaction records should be reviewed. 8.4 The internal auditors of the Company shall regularly check adequacy of the internal control of the derivatives transactions, make an audit report on compliance with the derivatives transactions procedures on a monthly basis and make a notice in writing to thesupervisorsif they find significant violations.		and performance of derivatives transactions should be reviewed weekly and sent to GM. 8.3 The correctness of Information on the assessment report, transaction history, the performance report and etc. should be checked regularly. And the integrity and correctness of their transaction records should be reviewed. 8.4 The internal auditors of the Company shall regularly check adequacy of the internal control of the derivatives transactions, make an audit report on compliance with the derivatives transactions procedures on a monthly basis and make a notice in writing to theaudit committee if they find significant violations.
	Article 10 Others 10.1 In the event that the Company is engaged in derivatives transactions, the Company shall authorize the relevant persons in accordance with the provisions of The Procedures and submit the relevant reports of derivatives transactions to the BOD. 10.2 The Procedures shall be approved by the BOD, be sent to thesupervisorsand be proposed to the Shareholders’ Meeting for deliberation. Any amendment is subject to the same procedures. If any director expresses his objection which appears on the minutes of the board meeting or is written in a statement, the Company shall submit such objection to thesupervisors. 10.3After the Company has established the position of independent directors,the BOD shall take opinions of independent directorsintofull		Article 10 Others 10.1 In the event that the Company is engaged in derivatives transactions, the Company shall authorize the relevant persons in accordance with the provisions of The Procedures and submit the relevant reports of derivatives transactions to the BOD. 10.2 The Procedures shall be approved by the BOD, be sent to theaudit committeeand be proposed to the Shareholders’ Meeting for deliberation. Any amendment is subject to the same procedures. If any director expresses his objection which appears on the minutes of the board meeting or is written in a statement, the Company shall submit such objection to the audit committee. 10.3 The BOD shall take opinions of independent directors into full consideration when The Procedures are proposed to the	To comply with the regulations.

	consideration when the Procedures are proposed to the BOD for deliberation. All and any of independent directors’ consent and objection shall be noted in the minutes of the board meeting. 10.4 The Procedures shall be approved by the BOD before their implementation and be reportedon the Shareholders’ Meeting. Any amendment is subject to the same procedures.		BOD for deliberation. All and any of independent directors’ consent and objection shall be noted in the minutes of the board meeting. 10.4 The Procedures shall be approved bythe audit committee andthe BOD before their implementation and beproposed to the Shareholders’ Meetingfor approval.Any amendment is subject to the same procedures.
	Article 12 on June 13, 2003, on June 14, 2006, and on June 16, 2009.		Article 12 on June 13, 2003, on June 14, 2006, on June 16, 2009, andon June 22, 2017.	To add a new entry in the history of revision.

Resolution:

Proposal 5

(Proposed by Board of Directors)

Subject: To amend the Operational Procedures for Loaning of Company Funds.

Explanation:

To comply with the laws and regulations of the competent authority, including Securities and Exchange Act and Company Act, it is proposed to amend the Operational Procedures for Loaning of Company Funds. Please refer to the following cross reference table that shows the clauses before and after amendment.

Cross Reference Table

Clause before Amendment	Clause after Amendment	Reason for Amendment
10. The company's internal auditors shall audit the implementation of the Procedures no less frequently than quarterly and prepare written records accordingly. They shall promptly notify thesupervisorsin writing of any material violation found.	10. The company's internal auditors shall audit the implementation of the Procedures no less frequently than quarterly and prepare written records accordingly. They shall promptly notify theaudit committeein writing of any material violation found.	To comply with the regulations.
12. If a borrower no longer satisfies the criteria set forth in the relevant regulations and/or the Procedures or there is any excess over the lending limit due to unexpected changes of the Company, a corrective plan has to be provided to thesupervisors and the proposed correction actions should be implemented within the period specified in such plan.	12. If a borrower no longer satisfies the criteria set forth in the relevant regulations and/or the Procedures or there is any excess over the lending limit due to unexpected changes of the Company, a corrective plan has to be provided to theaudit committeeand the proposed correction actions should be implemented within the period specified in such plan.	To comply with the regulations.
15. The Procedures shall be approved by the BOD, be sent to thesupervisorsand be proposed to the Shareholders’ Meeting for approval.If any director expresses his objection which appears on the minutes of the board meeting or is written in a	15. The Procedures shall be approved by the BOD, be sent to theaudit committeeand be proposed to the Shareholders’ Meeting for approval.	To comply with the regulations.

	statement, the Company shall submit such objection to the supervisors and the Shareholders’Meeting for deliberation. Any amendment is subject to the same procedures. After the Company has established the position of independent directors, the BOD shall take opinions of independent directors into full consideration when the Procedures are proposed to the BOD for deliberation. All and any of independent directors’consent and objection shall be noted in the minutes of the board meeting.
	16. The Procedures were enacted on June 14, 2006 and amended on June 13, 2007 for the first time, on June 16, 2009 for the second time. on June 15, 2010 for the third time. and on June 18, 2013 for the fourth time.		16. The Procedures were enacted on June 14, 2006 and amended on June 13, 2007 for the first time, on June 16, 2009 for the second time, on June 15, 2010 for the third time, on June 18, 2013 for the fourth time, and onJune 22, 2017 for the fifth time.	To add a new entry in the history of revision.

Resolution:

Proposal 6

(Proposed by Board of Directors)

Subject: To amend the Operational Procedures for Acquisition and Disposal of Assets.

Explanation:

To comply with the laws and regulations of the competent authority, including Securities and Exchange Act and Company Act, it is proposed to amend the Operational Procedures for Acquisition and Disposal of Assets. Please refer to the following cross reference table that shows the clauses before and after amendment.

Cross Reference Table

	Clause before Amendment		Clause after Amendment	Reason for Amendment
	Article 5 Establishment of the Procedures 5.1 The Company follows the following procedure to establish the Procedures. After the Procedures have been approved bythe board of directors, they shall be submitted to each supervisor, and then to a shareholders' meeting for approval. The same applies when the procedures are amended.If any director expresses dissent and it is contained in the minutes or a written statement, the company shall submit the director's dissenting opinion to each supervisor. Where the position of independent director has been created, when the Procedures are submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.		Article 5 Establishment of the Procedures 5.1 The Company follows the following procedure to establish and revise the Procedures. After the Procedures have been approved bymore than half of all audit committee members, they shall be submitted to the board of directors for approvaland then to a shareholders' meeting for resolution. The same applies when the procedures are amended. If approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. The Procedures contains at least the following items: 5.1.1 Appraisal procedures and operating procedures. 5.1.2 The procedure of deciding the transaction terms shall include the means of price determination, supporting	To comply with the regulations.

	Where an audit committee has been established, when the Procedures are adopted or amended they shall be approved by more than half of all audit committee members and submitted to the board of directors for a resolution. If approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. The Procedures contains at least the following items: 5.1.1 Appraisal procedures and operating procedures. 5.1.2 The procedure of deciding the transaction terms shall include the means of price determination, supporting reference materials and system of authority. 5.1.3 Units in charge. 5.1.4 Public announcement and regulatory filing procedures. 5.1.5 The scope of investment and the limit of the authorized amount. 5.1.6 Total amounts of real property and securities acquired by the company and each subsidiary for business use, and limits on individual securities. 5.1.7 Penalties for personnel violating these Regulations or the Procedures. 5.1.8 Other important matters. 5.2 The subsidiaries of the Company follow the above procedure to establish the Operational Procedures for Acquisition and Disposal of Assets. After the Procedures have been approved by the		reference materials and system of authority. 5.1.3 Units in charge. 5.1.4 Public announcement and regulatory filing procedures. 5.1.5 The scope of investment and the limit of the authorized amount. 5.1.6 Total amounts of real property and securities acquired by the company and each subsidiary for business use, and limits on individual securities. 5.1.7 Penalties for personnel violating these Regulations or the Procedures. 5.1.8 Other important matters. 5.2 The subsidiaries of the Company follow the above procedure to establish the Operational Procedures for Acquisition and Disposal of Assets. After the Procedures have been approved by the board of directors, they shall be submitted to a shareholders' meeting for approval. the same applies when the procedures are amended. 5.3 With respect to The Company's acquisition or disposal of assets that is subject to the approval of the board of directors under the company's procedures or other laws or regulations, if a director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to eachaudit committee member. Where the position of independent director has been created, when a transaction involving the acquisition or disposal of assets is submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent

board of directors, they shall be submitted to a shareholders' meeting for approval. the same applies when the procedures are amended. 5.3 With respect to The Company's acquisition or disposal of assets that is subject to the approval of the board of directors under the company's procedures or other laws or regulations, if a director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to each supervisor. Where the position of independent director has been created, when a transaction involving the acquisition or disposal of assets is submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. Where an audit committee has been established,any transaction involving major assets or derivatives shall be approved by more than half of all audit committee members and submitted to the board of directors for a resolution. If approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee	director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. Any transaction involving major assets or derivatives shall be approved by more than half of all audit committee members and submitted to the board of directors for a resolution. If approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. 5.4 The terms "all audit committee members" and "all directors" in the preceding paragraphs shall be counted as the actual number of persons currently holding those positions.

shall be recorded in the minutes of the board of directors meeting. 5.4 The terms "all audit committee members" and "all directors" in the preceding paragraphs shall be counted as the actual number of persons currently holding those positions.
Article 10 Related Party Transactions 10.1 When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised, if the transaction amount reaches 10 percent or more of the company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of the preceding articles. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with the Article 11, paragraph 1 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies. When judging whether a trading counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered. 10.2 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 percent or more of paid-in capital, 10 percent or more of the company's totalassets, or	Article 10 Related Party Transactions 10.1 When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised, if the transaction amount reaches 10 percent or more of the company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of the preceding articles. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with the Article 11, paragraph 1 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies. When judging whether a trading counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered. 10.2 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 percent or more of paid-in capital, 10 percent or more of the company's totalassets, or	To comply with the regulations.

NT$300 million or more, except NT$300 million or more, except in trading of government bonds in trading of government bonds or bonds under repurchase and or bonds under repurchase and resale agreements, or resale agreements, or subscription or redemption of subscription or redemption of money market funds issued by money market funds issued by domestic securities investment domestic securities investment trust enterprises, the Company trust enterprises, the Company may not proceed to enter into a may not proceed to enter into a transaction contract or make a transaction contract or make a payment until the following payment until the following matters have been approved by matters have been approved by the board of directors and the board of directors and the recognized by the supervisors: audit committee: 10.2.1 The purpose, necessity 10.2.1 The purpose, necessity and anticipated benefit of the and anticipated benefit of the acquisition or disposal of assets. acquisition or disposal of assets. 10.2.2 The reason for choosing 10.2.2 The reason for choosing the related party as a trading the related party as a trading counterparty. counterparty. 10.2.3 With respect to the 10.2.3 With respect to the acquisition of real property from acquisition of real property from a related party, information a related party, information regarding appraisal of the regarding appraisal of the reasonableness of the reasonableness of the preliminary transaction terms in preliminary transaction terms in accordance with the Article 15 accordance with the Article 15 and Article 16 of the Regulations and Article 16 of the Regulations Governing the Acquisition and Governing the Acquisition and Disposal of Assets by Public Disposal of Assets by Public Companies. Companies. 10.2.4 The date and price at 10.2.4 The date and price at which the related party originally which the related party originally acquired the real property, the acquired the real property, the original trading counterparty, and original trading counterparty, and that trading counterparty's that trading counterparty's relationship to the company and relationship to the company and the related party. the related party. 10.2.5 Monthly cash flow 10.2.5 Monthly cash flow forecasts for the year forecasts for the year commencing from the anticipated commencing from the anticipated month of signing of the contract, month of signing of the contract, and evaluation of the necessity and evaluation of the necessity of the transaction, and of the transaction, and reasonableness of the funds reasonableness of the funds utilization. utilization. 10.2.6 Restrictive covenants and 10.2.6 Restrictive covenants and other important stipulations other important stipulations associated with the transaction. associated with the transaction. 10.2.7 An appraisal report from a 10.2.7 An appraisal report from a professional appraiser or a professional appraiser or a CPA's opinion. CPA's opinion. The calculation of the transaction The calculation of the transaction

	amounts referred to in the preceding paragraph shall be made in accordance with the Article 30, paragraph 2 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies, 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 board of directors and recognized by the supervisors need not be counted toward the transaction amount. With respect to the acquisition or disposal of business-use equipment between a company and its parent or subsidiaries, the company's board of directors may pursuant to the Article 7, paragraph 1, subparagraph 3 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies delegate the board chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board of directors meeting. Where the position of independent director has been created,when a matter is submitted for discussion by the board of directors pursuant to the 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 minutes of the board of directors meeting. Where an audit committee has been established,the mattersfor which the preceding paragraph		amounts referred to in the preceding paragraph shall be made in accordance with the Article 30, paragraph 2 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies, 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 board of directors andthe audit committeeneed not be counted toward the transaction amount. With respect to the acquisition or disposal of business-use equipment between a company and its parent or subsidiaries, the company's board of directors may pursuant to the Article 7, paragraph 1, subparagraph 3 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies delegate the board chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board of directors meeting. When a matter is submitted for discussion by the board of directors pursuant to the 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 minutes of the board of directors meeting. The matters in the preceding paragraph shall first be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution.

	requires recognition by the supervisorsshall first be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution. If approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. The terms "all audit committee members" and "all directors" in the preceding paragraphs shall be counted as the actual number of persons currently holding those positions. 10.3 The Company that acquires real property from a related party shall evaluate the reasonableness of the transaction costs by the following means: 10.3.1 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. But it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance. 10.3.2 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. And the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value	If approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. The terms "all audit committee members" and "all directors" in the preceding paragraphs shall be counted as the actual number of persons currently holding those positions. 10.3 The Company that acquires real property from a related party shall evaluate the reasonableness of the transaction costs by the following means: 10.3.1 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. But it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance. 10.3.2 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. And the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties.

of the property and the period of the loan shall have been 1 year Where land and structures or more. However, this shall not thereupon are combined as a apply where the financial single property purchased in one institution is a related party of transaction, the transaction costs one of the trading counterparties. for the land and the structures may be separately appraised in Where land and structures accordance with either of the thereupon are combined as a means listed in the preceding single property purchased in one paragraph. transaction, the transaction costs for the land and the structures The Company that acquires real may be separately appraised in property from a related party and accordance with either of the appraises the cost of the real means listed in the preceding property in accordance with the paragraph. paragraph 1 and paragraph 2 shall also engage a CPA to The Company that acquires real check the appraisal and render a property from a related party and specific opinion. appraises the cost of the real property in accordance with the Where the Company acquires paragraph 1 and paragraph 2 real property from a related party shall also engage a CPA to and one of the following check the appraisal and render a circumstances exists, the specific opinion. acquisition shall be conducted in accordance with the article 10.2 Where the Company acquires and the preceding three real property from a related party paragraphs do not apply: and one of the following 10.3.2.1 The related party circumstances exists, the acquired the real property acquisition shall be conducted in through inheritance or as a gift. accordance with the article 10.2 10.3.2.2 More than 5 years will and the preceding three have elapsed from the time the paragraphs do not apply: related party signed the contract 10.3.2.1 The related party to obtain the real property to the acquired the real property signing date for the current through inheritance or as a gift. transaction. 10.3.2.2 More than 5 years will 10.3.2.3 The real property is have elapsed from the time the acquired through signing of a related party signed the contract joint development contract with to obtain the real property to the the related party, or through signing date for the current engaging a related party to build transaction. real property, either on the 10.3.2.3 The real property is company's own land or on rented acquired through signing of a land. joint development contract with 10.4 When the results of the the related party, or through Company's appraisal conducted engaging a related party to build in accordance with the article real property, either on the 10.3.1 and 10.3.2 are uniformly company's own land or on rented lower than the transaction price, land. the matter shall be handled in 10.4 When the results of the compliance with the article 10.5. Company's appraisal conducted However, where the following

in accordance with the article 10.3.1 and 10.3.2 are uniformly lower than the transaction price, the matter shall be handled in compliance with the article 10.5. However, where 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 have been obtained, this restriction shall not apply: 10.4.1 Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: 10.4.1.1 Where undeveloped land is appraised in accordance with the means in the article 10.3, and structures is appraised according to the related party's construction cost plus reasonable construction profit, the total appraised amount of both are in excess of the actual transaction price. The "Reasonable construction profit" shall be 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. 10.4.1.2 If there are completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, the land area and transaction terms of the Company’s acquisition are similar to them after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market

circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply: 10.4.1 Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: 10.4.1.1 Where undeveloped land is appraised in accordance with the means in the article 10.3, and structures is appraised according to the related party's construction cost plus reasonable construction profit, the total appraised amount of both are in excess of the actual transaction price. The "Reasonable construction profit" shall be 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. 10.4.1.2 If there are completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, the land area and transaction terms of the Company’s acquisition are similar to them after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices. 10.4.1.3 If there are completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, the transaction

practices.

10.4.1.3 If there are completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, the transaction terms of the Company’s acquisition are similar to them after calculation of reasonable price discrepancies among floors in accordance with standard property leasing market practices. 10.4.2 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 percent 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. 10.5 Where the Company acquires real property from a related party and the results of appraisals conducted in accordance with the article 10.3 and 10.4 are uniformly lower than the transaction price, the following steps shall be taken: 10.5.1 A special reserve shall

terms of the Company’s acquisition are similar to them after calculation of reasonable price discrepancies among floors in accordance with standard property leasing market practices. 10.4.2 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.

be set aside in accordance with the Article 41, paragraph 1 of the 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 another company, then the special reserve called for under the Article 41, paragraph of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company. 10.5.2 The supervisors shall comply with the Article 218 of the Company Act. 10.5.3 Actions taken pursuant to the subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent.

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

may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in another company, then the special reserve called for under the Article 41, paragraph of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company. 10.5.2 The audit committee shall comply with the Article 218 of the Company Act. 10.5.3 Actions taken pursuant to the subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent. When a public company obtains real property from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm’s length transaction.


Article 11 Other Matters 11.1 The Company engaging in derivatives trading shall establish a log book in which details of the types and amounts of derivatives transactions and the approval dates by the board of directors shall be recorded in detail. Internal audit personnel shall periodically conduct a monthly audit of how faithfully derivatives transactions by the trading department adheres to the procedures for engaging in derivatives transactions. If any material violation is discovered, allsupervisorsshall be notified in writing. 11.2 The Company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and opinions provided by CPA, attorney, and securities underwriter at the company headquarters, where they shall be retained for 5 years except where another Act provides otherwise. 11.3 The employees of the Company who violate the provisions of the Procedures shall be disciplined depending on the seriousness of their violations.		Article 11 Other Matters 11.1 The Company engaging in derivatives trading shall establish a log book in which details of the types and amounts of derivatives transactions and the approval dates by the board of directors shall be recorded in detail. Internal audit personnel shall periodically conduct a monthly audit of how faithfully derivatives transactions by the trading department adheres to the procedures for engaging in derivatives transactions. If any material violation is discovered, allaudit committee members shall be notified in writing. 11.2 The Company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and opinions provided by CPA, attorney, and securities underwriter at the company headquarters, where they shall be retained for 5 years except where another Act provides otherwise. 11.3 The employees of the Company who violate the provisions of the Procedures shall be disciplined depending on the seriousness of their violations.	To comply with the regulations.
Article 13 History of Revision 13.1 The Procedures were enacted on June 28, 2012. 13.2 Amended on June 18, 2013. 13.3 Amended on June 24, 2014.		Article 13 History of Revision 13.1 The Procedures were enacted on June 28, 2012. 13.2 Amended on June 18, 2013. 13.3 Amended on June 24, 2014. 13.4 Amended on June 22, 2017.	To add a new entry in the history of revision.

Resolution:

Proposal 7

(Proposed by Board of Directors)

Subject: To amend the Operational Procedures for Endorsements and Guarantees.

Explanation:

To comply with the laws and regulations of the competent authority, including Securities and Exchange Act and Company Act, it is proposed to amend the Operational Procedures for Endorsements and Guarantees. Please refer to the following cross reference table that shows the clauses before and after amendment.

Cross Reference Table

Clause before Amendment		Clause after Amendment	Reason for Amendment
6. After the relevant department has applied for endorsements/guarantees, the finance department of the Company shall assess the application for the necessity and reasonableness of the endorsements/guarantees and review the credit of the counterparties and the risk of negative impacts on the business risks, financial position and stockholders’ equity of the Company. Collateral for the endorsements/guarantees should be obtained if necessary. And then the finance department shall make a proposal of endorsements/guarantees on its counterparties, type, reasons and amount to the board of directors for approval. The board of directors can authorize the general manager to make endorsements/guarantees below NT$200 million, which shall be reported to the board meeting for recognition. If independent directors have been set up, the opinions of the independent directors shall be fully		6. After the relevant department has applied for endorsements/guarantees, the finance department of the Company shall assess the application for the necessity and reasonableness of the endorsements/guarantees and review the credit of the counterparties and the risk of negative impacts on the business risks, financial position and stockholders’ equity of the Company. Collateral for the endorsements/guarantees should be obtained if necessary. And then the finance department shall make a proposal of endorsements/guarantees on its counterparties, type, reasons and amount tothe audit committee andthe board of directors for approval. The board of directors can authorize the general manager to make endorsements/guarantees below NT$200 million, which shall be reported tothe audit committee andthe board meeting for recognition. If independent directors have been set up, the	To comply with the regulations.

	considered, and their opinion of consent and objection and the reasons for their objection shall be included in the minutes of the board meeting. Before the Company’s subsidiaries in which the Company holds directly and indirectly 90% or more of the voting shares make endorsements/guarantees for each other in accordance with the Article 2, their proposals of endorsements/guarantees shall be proposed to the board meeting for approval. But this restriction shall not apply to endorsements/guarantees made between its subsidiaries in which the Company holds directly and indirectly 100% of the voting shares.		opinions of the independent directors shall be fully considered, and their opinion of consent and objection and the reasons for their objection shall be included in the minutes of the board meeting. Before the Company’s subsidiaries in which the Company holds directly and indirectly 90% or more of the voting shares make endorsements/guarantees for each other in accordance with the Article 2, their proposals of endorsements/guarantees shall be proposed tothe audit committee andthe board meeting for approval. But this restriction shall not apply to endorsements/guarantees made between its subsidiaries in which the Company holds directly and indirectly 100% of the voting shares.
	10.The company's internal auditors shall audit the implementation of the Procedures no less frequently than quarterly and prepare written records accordingly. They shall promptly notify the supervisorsin writing of any material violation found.		10.The company's internal auditors shall audit the implementation of the Procedures no less frequently than quarterly and prepare written records accordingly. They shall promptly notify theaudit committeein writing of any material violation found.	To comply with the regulations.
	13. Where the Company needs to exceed the limits set out in the Procedures, it shall obtain approval from the board of directors and half or more of the directors shall act as joint guarantors for any loss that may be caused to the Company owing to the excess endorsement/guarantee. It shall also amend the Procedures accordingly and submit it to the shareholders' meeting for ratification after the fact. If the shareholders' meeting does not give consent, the Company shall adopt a plan to discharge the		13. Where the Company needs to exceed the limits set out in the Procedures, it shall obtain approval fromthe audit committee andthe board of directors and half or more of the directors shall act as joint guarantors for any loss that may be caused to the Company owing to the excess endorsement/guarantee. It shall also amend the Procedures accordingly and submit it to the shareholders' meeting for ratification after the fact. If the shareholders' meeting does not give consent, the Company shall	To comply with the regulations.

	amount in excess within a given time limit. Where the Company has established the position of independent director, when it makes endorsements/guarantees for others, it shall take into full consideration the opinions of each independent director; independent directors' opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors' meeting. Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the requirements of the Procedures, or the amount of endorsement/guarantee exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to all the supervisors,and shall complete the rectification according to the timeframe set out in the plan. If the counterparties of endorsement/guarantee meet the requirements of the Article 2 and then does not meet those criteria, or if the amount of the endorsement/guarantee exceeds the allowed amount based on new circumstances, the amount of the endorsement/guarantee for the counterparties with new status or the excess amount shall be eliminated at the time of expiration of the contracts or within a certain period of time by adopting rectification plans.		adopt a plan to discharge the amount in excess within a given time limit. Where the Company has established the position of independent director, when it makes endorsements/guarantees for others, it shall take into full consideration the opinions of each independent director; independent directors' opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors' meeting. Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the requirements of the Procedures, or the amount of endorsement/guarantee exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to the audit committee,and shall complete the rectification according to the timeframe set out in the plan. If the counterparties of endorsement/guarantee meet the requirements of the Article 2 and then does not meet those criteria, or if the amount of the endorsement/guarantee exceeds the allowed amount based on new circumstances, the amount of the endorsement/guarantee for the counterparties with new status or the excess amount shall be eliminated at the time of expiration of the contracts or within a certain period of time by adopting rectification plans.
	16. The Procedures shall be approved by the board of directors, be sent to the supervisorsand be proposed to the Shareholders’ Meeting for approval. If any director expresseshis objection which		16. The Procedures shall be approved by the board of directors, be sent to theaudit committeeand be proposed to the Shareholders’ Meeting for approval. If any director expresseshis objection which	To comply with the regulations.

	appears on the minutes of the board meeting or is written in a statement, the Company shall submit such objection to the supervisorsand the Shareholders’ Meeting for deliberation. Any amendment is subject to the same procedures. After the Company has established the position of independent directors, the board of directors shall take opinions of independent directors into full consideration when the Procedures are proposed to the board of directors for deliberation. All and any of independent directors’ consent and objection shall be noted in the minutes of the board meeting.		appears on the minutes of the board meeting or is written in a statement, the Company shall submit such objection to the audit committeeand the Shareholders’ Meeting for deliberation. Any amendment is subject to the same procedures. After the Company has established the position of independent directors, the board of directors shall take opinions of independent directors into full consideration when the Procedures are proposed to the board of directors for deliberation. All and any of independent directors’ consent and objection shall be noted in the minutes of the board meeting.
	17. The Procedures were enacted on June 14, 2006 and amended on June 16, 2009 for the first time, on June 15, 2010 for the second time, and on June 18, 2013 for the third time.		17. The Procedures were enacted on June 14, 2006 and amended on June 16, 2009 for the first time, on June 15, 2010 for the second time, on June 18, 2013 for the third time, and onJune 22, 2017 for the fourth time.	To add a new entry in the history of revision.

Resolution:

Proposal 8

(Proposed by Board of Directors)

Subject: To abolish the Rules of Supervisors’ Authority.

Explanation:

To comply with the laws and regulations of the competent authority, including

Securities and Exchange Act and Company Act, it is proposed to abolish the Rules of Supervisors’ Authority after having established an Audit Committee.

Resolution:

Directors Election

Proposal 1

(Proposed by Board of Directors)

Subject: To elect nine Directors (including three independent directors).

Explanation:

Upon the expiration of the terms of all CHIN-POON’s Directors, the Board of Directors resolved that nine Directors (including three independent directors) will be elected at this Annual Shareholders’ Meeting. The tenure of newly elected directors shall commence on June 22, 2017 and expire on June 21, 2020.
The directors shall be elected by adopting candidate nominating system as specified in the Article 192-1 of the Company Act. The directors shall be elected from the nominated candidates, whose education and professional qualifications, experience and relevant information are attached hereto as the following table.

Title / Name	Education & Professional Qualifications	Shareholdings (shares)
Director LIN, PI-CHI	National Tao-yuan Agricultural & Industrial Vocational High School Director, CHIN-POON Industrial Co., Ltd.	8,287,649
Director TSENG-LIU,YU-CHIH	St. Fransic Xavier High School Director,CHIN-POON Industrial Co.,Ltd.	9,603,279
Director TSENG,WEN-YU	LeeMing Institute Of Technology Supervisor,CHIN-POON Industrial Co.,Ltd.	5,546,357
Director HUANG, WEI-JIN	National Cheng Kung University Chairman, CHIN-POON Industrial Co., Ltd.	13,238,409
Director LAI, HWEI-SHAN	National Chung Hsing University Supervisor, CHIN-POON Industrial Co., Ltd.	6,283,114
Director TUNG, HSIAO-HUNG	National Taipei College of Business Director, CHIN-POON Industrial Co., Ltd.	6,344,043
Independent Director HSU, SUNG-TSAI	Chinese Culture University Senior Vice Manager, Standard Chartered Bank	1,242
Independent Director CHEN, HSIANG-SHENG	National Taiwan Normal University Former Vice President, CHIN-POON Industrial Co., Ltd. Independent Director, Elite Material Co., Ltd. Supervisor, Sunnic Technology & Merchandise Inc.	56,637
Independent Director CHEN, SHI-SHU	National Chung Hsing University CPA, Kudos & Co., CPAs	0

Resolution:

Deliberation Proposals

Proposal 1

(Proposed by Board of Directors)

Subject: To release the Prohibition on Directors from Participation in Competitive

Business.

Explanation:

To comply with the Article 209 of the Company Act, it is proposed to release the prohibition on newly elected directors from participation in competitive business.
Please refer to the following table that shows elected directors’ participation in
competitive business.

Title	Name	Competitive Business	Participation
Director	LIN, PI-CHI	1. CHIN-POON (Changshu) Electronics Co., Ltd. 2. Draco PCB Public Co., Ltd 3. CHIN POON Japan Co., Ltd 4. Uniplus Electronics Co.,Ltd.	1. Director 2. Director 3. Director 4. Director
Director	TSENG-LIU, YU-CHIH	1. CHIN-POON (Changshu) Electronics Co.,Ltd.	1. Director
Director	TSENG, WEN-YU	1. CHIN-POON (Changshu) Electronics Co.,Ltd.	1. Director
Director	HUANG, WEI-JIN	1. CHIN-POON (Changshu) Electronics Co., Ltd. 2. VEGA International Enterprise Co., Ltd 3. CHIN-POON Holdings Cayman Limited 4. Draco PCB Public Co.,Ltd	1. Director 2. Director 3. Director 4. Director
Director	LAI, HWEI-SHAN	1. CHIN-POON (Changshu) Electronics Co., Ltd.	1. Director
Director	TUNG, HSIAO-HUNG	1. CHIN-POON (Changshu) Electronics Co., Ltd.	1. Director
Independent Director	CHEN, HSIANG-SHENG	1. Elite Material Co., Ltd.	1. Independent Director

Resolution:

Special Motions

Adjournment

Appendix

Appendix 1 2016 Audit Report of Independent Auditors and Financial Statements

Independent Auditors’ Report And 2016 Consolidated Financial Statements
Independent Auditors’ Report And 2016 Parent Company Only Financial Statements

Stock Code:2355

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

CHIN-POON INDUSTRIAL CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2016 and 2015 (With Independent Auditors’ Report Thereon)

Address: No. 46, Nei-Tsuoh St., 3rd Lin, Nei-Tsuoh Village, Lu-Chu County, Taoyuan City, Taiwan, R.O.C. Tel: (03)322-2226

The auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and consolidated financial statements, the Chinese version shall prevail.

Independent Auditors’ Report

The Board of Directors Chin-Poon Industrial Co., Ltd.:

Opinion

We have audited the accompanying consolidated financial statements of Chin-Poon Industrial Co., Ltd. ("the Company") and its subsidiaries ("the Consolidated Company"), which comprise the consolidated statement of financial position as of December 31, 2016 and 2015, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2016 and 2015, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Consolidated Company as at December 31, 2016 and 2015, and its consolidated financial performance and its consolidated cash flows for the years ended December 31, 2016 and 2015 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards ("IFRSs"), International Accounting Standards ("IASs"), interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Consolidated Company in accordance with the Certified Public Accountants Code of Professional Ethics in 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 of 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 year ended December 31, 2016. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Subsequent measurements of inventories

Please refer to note 4(h), note 5(a) and 6(d) for the disclosure on subsequent measurements of inventories of the consolidated financial statements.

Description of key audit matter:

The inventories of the Consolidated Company are mainly electronic printed circuit boards and electronic materials. The products may be outdated or no longer meet the market demand due to the rapid changes in technology. In addition, with the price competition in the same industry, the demand on related products and their prices may fiercely fluctuate, which may result in a risk wherein the cost of inventories may exceed its net realizable value. As a result, the subsequent measurements of inventories has to be based on the managements' assessment using internal and extemal evidences. Therefore, the subsequent measurements of inventories was identified as one of the key audit matters.

How the matter was addressed in our audit:

The procedures included assessing the rationality of accounting policy for inventory subsequent measurements; reviewing the inventory aging documents and analyzing their changes; obtaining the documents of inventory subsequent measurements and understanding the rationality of sales prices adopted by the management while the inventory subsequent measurements was still in progress; selecting samples and examining relevant documents to verify the accuracy of net realizable value of inventories; and assessing whether the disclosure of the inventory subsequent measurements made by the management was appropriate.

Provision of sales returns and discounts

Please refer to note 4(l), note 5(b) and note 6(h) for the disclosure on the provision for sales returns and discounts of the consolidated financial statements.

Description of key audit matter:

The Consolidated Company recorded a provision for its estimated future returns and discounts for specific electronic circuit boards by using historical trend and other known factors in the same period when related revenue is recorded. Since the provision for sales rectums and discounts was subject to significant judgment of the management, the procedures of estimation can be complicated. Therefore, the provision for sales returns and discounts was identified as one of the key audit matters.

How the matter was addressed in our audit:

The procedures included understanding the management's methodology used in estimating sales returns and allowances; assessing the reasonableness of relevant assumptions made by the management; obtaining the documents of provision for sales returns and allowances, selecting samples and examining relevant documents to verify the reasonableness of the management's methodology used in estimating provision for sales returns and discounts; and assessing whether the disclosure on provision for sales returns and allowances made by the management was appropriate.

Other Matter

Chin-Poon Industrial Co., Ltd. has prepared its parent company-only financial statements as of and for the years ended December 31, 2016 and 2015, on which we have issued an unqualified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Consolidated 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 Consolidated Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Consolidated Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

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

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

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

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

The engagement partners on the audit resulting in this independent auditor’s report are Lily Lu and Yu Ann Tien.

KPMG

Taipei, Taiwan (Republic of China) March 22, 2017

Note to Readers

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

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Chin-Poon Industrial Co., Ltd. and subsidiaries

Consolidated Statements of Financial Position

December 31, 2016 and 2015

(All amounts expressed in thousands of New Taiwan dollars)

Assets Current assets: Cash and cash equivalents (note 6(a)) Available-for-sale financial assets－current (note 6(b)) Notes receivable, net (note 6(c)) Accounts receivable, net (note 6(c)) Other receivable (note 6(c)) Inventories (notes 6(d) and 9) Prepayments Other financial assets－current (note 6(b)) Other current assets Total current assets Non-current assets: Available-for-sale financial assets－non-current (note 6(b)) Property, plant and equipment (notes 6(f), 7, 8 and 9) Deferred tax assets (note 6(l)) Prepayments for equipment (note 9) Other financial assets－non-current (note 6(b)) Long-term prepaid rental Other non-current assets (note 8) Total non-current assets Total assets	December 31, 2016 December 31, 2015 Amount % Amount % $ 4,827,194 19 3,909,412 16 1,101,307 4 1,098,770 4 11,736 - 8,468 - 4,945,972 20 4,858,982 20 96,508 - 120,456 - 3,924,838 16 3,243,435 13 113,420 - 140,166 1 94,193 - 1,182,046 5 145,888 1 189,217 1 15,261,056 60 14,750,952 60 11,755 - 13,286 - 8,372,088 33 8,948,615 37 136,776 1 120,220 - 118,299 - 198,160 1 1,424,794 6 374,266 2 60,406 - 67,655 - 5 - 1,846 - 10,124,123 40 9,724,048 40 $ 25,385,179 100 24,475,000 100 Liabilities and Equity Current liabilities: Short-term loans (notes 6(g), 8 and 9) Financial liabilities at fair value through profit or loss－current (note 6(b)) Current portion of long-term loans (notes 6(g), 8 and 9) Notes payable Accounts payable Other payables (notes 6(k) and 6(p)) Current tax liabilities Provisions－current (note 6(h)) Other current liabilities Total current liabilities Non-current liabilities: Bond payables (note 6(i)) Long-term loans (notes 6(g), 8 and 9) Deferred tax liabilities (note 6(l)) Net defined benefit liability (note 6(k)) Total long-term liabilities Total liabilities Equity attributable to shareholders of the Company (notes 6(e), 6(i), 6(k), 6(l) and 6(m)): Common stock Capital surplus Retained earnings: Legal reserve Unappropriated earnings Other equity: Foreign currency translation differences for foreign operations Unrealized gain (loss) on valuation of available-for-sale financial assets Total equity attributable to shareholders of the Company Non-controlling interests (notes 6(e) and 6(i)) Total equity Total liabilities and equity	December 31, 2016 December 31, 2015 Amount % Amount % $ 1,640,164 6 1,834,087 7 - - 53 - 41,763 - 42,358 - 912,874 3 931,896 4 2,735,380 11 2,394,744 10 1,987,773 8 1,758,433 7 381,963 1 315,595 1 478,514 2 426,786 2 140,789 1 176,665 1
		8,319,220 32 7,880,617 32
		136,467 1 136,019 1 49,668 - 92,733 - 641,860 3 563,254 2 29,887 - 4,966 -
		857,882 4 796,972 3
		9,177,102 36 8,677,589 35
		3,974,954 16 3,974,954 16
		1,568,318 6 1,574,389 7
		1,920,537 8 1,722,804 7 8,600,073 34 7,420,603 31
		10,520,610 42 9,143,407 38
		37,522 - 564,866 2 34,846 - 32,977 -
		72,368 - 597,843 2
		16,136,250 64 15,290,593 63
		71,827 - 506,818 2
		16,208,077 64 15,797,411 65
		$ 25,385,179 100 24,475,000 100

See accompanying notes to the consolidated financial statements.

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2016 and 2015

(All amounts expressed in thousands of New Taiwan dollars)

Operating revenue (notes 6(h) and 6(o)) Operating costs (notes 6(d) and 6(k)) Gross profit Operating expenses (notes 6(c), 6(l), 6(p) and 7): Selling expenses Administrative expenses Research and development expenses Total operating expenses Operating income Non-operating income and expenses (notes 6(f), 6(i) and 6(q)): Other income Other gains and losses Finance costs Total non-operating income and expenses Income before income tax Less: income tax expenses (note 6(l)) Net income Other comprehensive income (loss) (notes 6(k), 6(l) and 6(r)): Items that may not be reclassified subsequently to profit or loss: Remeasurements of defined benefit plans Income tax related to items that will not be reclassified subsequently to profit or loss Total items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Foreign currency translation differences for foreign operations Unrealized gain on valuation of available-for-sale financial assets Income tax related to items that may be reclassified subsequently to profit or loss Total Items that may be reclassified subsequently to profit or loss Other comprehensive income (loss), net of tax Total comprehensive income Net income attributable to: Shareholders of the Company Non-controlling interests Total comprehensive income attributable to: Shareholders of the Company Non-controlling interests Basic earnings per share (expressed in New Taiwan dollars) (note 6(n)) Diluted earnings per share (expressed in New Taiwan dollars) (note 6(n))	2016 2015 Amount % Amount % $ 23,939,699 100 22,644,105 100 19,555,849 82 19,310,837 85
	4,383,850 18 3,333,268 15 686,087 3 631,334 3 522,758 2 440,891 2 155,882 1 197,358 1
	1,364,727 6 1,269,583 6
	3,019,123 12 2,063,685 9
	429,635 2 478,424 3 (89,802) - 55,226 - (37,459) - (31,524) -
	302,374 2 502,126 3
	3,321,497 14 2,565,811 12 864,983 4 651,356 3
	2,456,514 10 1,914,455 9
	(37,222) - 28,811 - 6,355 - (4,760) -
	(30,867) - 24,051 -
	(508,738) (2) (43,307) - 1,869 - (30,264) - - - - -
	(506,869) (2) (73,571) -
	(537,736) (2) (49,520) -
	$ 1,918,778 8 1,864,935 9
	$ 2,489,038 10 1,977,323 9 (32,524) - (62,868) -
	$ 2,456,514 10 1,914,455 9
	$ 1,932,729 8 1,960,241 9 (13,951) - (95,306) -
	$ 1,918,778 8 1,864,935 9
	$ 6.26 4.97
	$ 6.21 4.94

See accompanying notes to the consolidated financial statements.

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2016 and 2015

(All amounts expressed in thousands of New Taiwan dollars)

Equity attributable to shareholders of the Company

Balance at January 1, 2015 Appropriations and distributions: Legal reserve Cash dividends Net income for the year Other comprehensive income for the year Total comprehensive income for the year Changes in the ownership interests in subsidiaries Balance at December 31, 2015 Appropriations and distributions: Legal reserve Cash dividends Net income for the year Other comprehensive income for the year Total comprehensive income for the year Changes in the ownership interests in subsidiaries Balance at December 31, 2016	Other equity Foreign currency Unrealized gain (loss) on Total equity Retained earnings translation valuation of attributable to Common stock Capital surplus Legal reserve Unappropriated earnings Total differences for foreign operations available-for-s ale financial assets Total shareholders of the Company Non-controllin g interests Total equity $ 3,974,954 1,571,014 1,545,905 6,468,889 8,014,794 577,464 63,241 640,705 14,201,467 613,283 14,814,750 - - 176,899 (176,899) - - - - - - - - - - (874,490) (874,490) - - - (874,490) (11,159) (885,649) - - - 1,977,323 1,977,323 - - - 1,977,323 (62,868) 1,914,455 - - - 25,780 25,780 (12,598) (30,264) (42,862) (17,082) (32,438) (49,520)
	- - - 2,003,103 2,003,103 (12,598) (30,264) (42,862) 1,960,241 (95,306) 1,864,935
	- 3,375 - - - - - - 3,375 - 3,375
	3,974,954 1,574,389 1,722,804 7,420,603 9,143,407 564,866 32,977 597,843 15,290,593 506,818 15,797,411 - - 197,733 (197,733) - - - - - - - - - - (1,033,488) (1,033,488) - - - (1,033,488) - (1,033,488) - - - 2,489,038 2,489,038 - - - 2,489,038 (32,524) 2,456,514 - - - (30,834) (30,834) (527,344) 1,869 (525,475) (556,309) 18,573 (537,736)
	- - - 2,458,204 2,458,204 (527,344) 1,869 (525,475) 1,932,729 (13,951) 1,918,778
	- (6,071) - (47,513) (47,513) - - - (53,584) (421,040) (474,624)
	$ 3,974,954 1,568,318 1,920,537 8,600,073 10,520,610 37,522 34,846 72,368 16,136,250 71,827 16,208,077

See accompanying notes to the consolidated financial statements.

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2016 and 2015

(All amounts expressed in thousands of New Taiwan dollars)

Cash flows from operating activities: Income before tax Adjustments: Adjustments to reconcile profit and loss Depreciation Provision for bad debt expense Interest expense Interest income Dividend income Loss on disposal of property, plant and equipment Gain on disposal of investments Impairment loss on non-financial assets Amortization expense for long-term prepaid rental Total adjustments to reconcile profit and loss Changes in operating assets and liabilities relating: Net changes in operating assets: Notes receivable Accounts receivable Other receivables Inventories Prepayments Other current assets Total net changes in operating assets Net changes in operating liabilities: Financial liabilities at fair value through profit or loss－current Notes payable Accounts payable Other payables Provisions－current Other current liabilities Net defined benefit liability Total net changes in operating liabilities Total net changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest income received Interest paid Income tax paid Net cash flows from operating activities Cash flows from (used in) investing activities: Acquisition of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in other financial assets－current and non-current Decrease in other non-current assets Increase in prepayments for equipment Dividend received Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term loans Decrease in short-term loans Increase in long-term loans Repayments of long-term loans Cash dividends paid Cash dividends paid to non-controlling interests Changes in non-controlling interests Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year	2016 2015 $ 3,321,497 2,565,811 1,092,696 880,331 66,733 1,419 37,459 31,524 (98,887) (119,833) (886) (886) 17,815 21,635 (9,863) (40,473) - 14,718 1,622 1,688
	1,106,689 790,123
	(3,268) 5,330 (153,723) (571,863) 16,592 10,506 (681,403) 99,195 28,369 (41,151) 43,329 24,061
	(750,104) (473,922)
	(53) 53 (19,022) 16,684 340,636 (218,668) 234,269 (58,906) 51,728 255,087 5,290 9,210 (5,945) (15,509)
	606,903 (12,049)
	(143,201) (485,971)
	963,488 304,152
	4,284,985 2,869,963 98,290 128,434 (39,992) (24,081) (726,454) (536,794)
	3,616,829 2,437,522
	(1,314,032) (1,013,495) 1,323,451 2,254,500 (580,806) (2,141,081) 8,124 16,863 27,385 331,096 1,841 79 (143,990) (94,849) 886 886
	(677,141) (646,001)
	3,928,280 4,057,920 (4,122,203) (4,607,044) - 72,968 (43,660) (27,399) (1,033,488) (874,490) - (11,159) (474,624) -
	(1,745,695) (1,389,204)
	(276,211) 18,905
	917,782 421,222 3,909,412 3,488,190
	$ 4,827,194 3,909,412

See accompanying notes to the consolidated financial statements.

Stock Code:2355

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

CHIN-POON INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS

December 31, 2016 and 2015 (With Independent Auditors’ Report Thereon)

Address: No. 46, Nei-Tsuoh St., 3rd Lin, Nei-Tsuoh Village, Lu-Chu County, Taoyuan City, Taiwan, R.O.C. Tel: (03)3222226

The auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and parent company only financial statements, the Chinese version shall prevail.

Independent Auditor’s Report

The Board of Directors Chin-Poon Industrial Co., Ltd.:

Opinion

We have audited the accompanying parent company only financial statements of Chin-Poon Industrial Co., Ltd. ("the Company"), which comprise the parent company only statement of financial position as of December 31, 2016 and 2015, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2016 and 2015, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as at December 31, 2016 and 2015, and its parent company only financial performance and its parent company only cash flows for the years ended December 31, 2016 and 2015 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 Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in 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 of 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 year ended December 31, 2016. 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, and we do not provide a separate opinion on these matters.

Subsequent measurements of inventories

Please refer to note 4(g), note 5(a) and 6(d) for the disclosure on subsequent measurements of inventories of the parent company only financial statements.

Description of key audit matter:

The inventories of the Company are mainly electronic printed circuit boards and electronic materials. The products may be outdated or no longer meet the market demand due to the rapid changes in technology. In addition, with the price competition in the same industry, the demand on related products and their prices may fiercely fluctuate, which may result in a risk wherein the cost of inventories may exceed its net realizable value. As a result, the subsequent measurements of inventories has to be based on the managements' assessment using internal and external evidences. Therefore, the subsequent measurements of inventories was identified as one of the key audit matters.

How the matter was addressed in our audit:

The procedures included assessing the rationality of accounting policy for inventory subsequent measurements; reviewing the inventory aging documents and analyzing their changes; obtaining the documents on inventory subsequent measurements, and understanding the rationality of sales prices adopted by the management while the inventory subsequent measurements was still in progress; selecting samples and examining relevant documents to verify the accuracy of net realizable value of inventories; and assessing whether the disclosure of the inventory subsequent measurements made by the management was appropriate.

Provision of sales returns and discounts

Please refer to note 4(l), note 5(b) and note 6(i) for the disclosure on the provision for sales returns and discounts of the parent company only financial statements.

Description of key audit matter:

The Company recorded a provision for its estimated future returns and discounts for specific electronic circuit boards by using historical trend and other known factors in the same period when related revenue is recorded. Since the provision for sales rectums and discounts was subject to significant judgment of the management, the procedures of estimation can be complicated. Therefore, the provision for sales returns and discounts was identified as one of the key audit matters.

How the matter was addressed in our audit:

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 control 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 are responsible for overseeing the Company’s financial reporting process.

Auditors’ 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 is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

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 control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our 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.
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.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment on other entities accounted for under equity method to express an opinion on the parent company only 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 parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditor’s report are Lily Lu and Yu Ann Tien.

KPMG

Taipei, Taiwan (Republic of China) March 22, 2017

Note to Readers

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

(English Translation of Financial Statements and Report Originally Issued in Chinese)

Chin-Poon Industrial Co., Ltd.

Parent Company Only Statements of Financial Position

December 31, 2016 and 2015

(All amounts expressed in thousands of New Taiwan dollars)

Assets
urrent assets:
Cash and cash equivalents (note 6(a))
Available-for-sale financial assets－current (notes 6(b) and 7)
Notes receivable, net (note 6(c))
Accounts receivable, net (note 6(c))
Accounts receivable-related parties, net (notes 6(c) and 7)
Other receivables (note 6(c))
Other receivables-related parties (notes 6(c) and 7)
Inventories (notes 6(d) and 9)
Prepayments
Other current assets
Total current assets
on-current assets:
Available-for-sale financial assets－non-current (note 6(b))
Investments accounted for under equity method (notes 6(e) and 6(f))
Property, plant and equipment (notes 6(g), 7, 8 and 9)
Deferred tax assets (note 6(l))
Prepayments for equipment (note 9)
Net defined benefit assets－non-current (note 6(k))
Other financial assets－non-current
Total non-current assets

December 31, 2016 December 31, 2015
Amount
%
Amount
%
$ 2,806,344
12
2,256,144
11
1,334,681
6
1,332,769
6
11,736
-
8,468
-
3,191,008
14
3,097,552
14
325,904
1
341,446
2
41,734
-
52,559
-
34,015
-
23,874
-
2,682,641
12
2,210,133
10
42,139
-
34,850
-
81,727
-
81,025
-
10,551,929
45
9,438,820
43
11,755
-
13,286
-
7,509,927
32
7,156,971
33
5,083,884
22
5,139,842
23
110,772
1
94,169
-
9,525
-
112,644
1
-
-
6,700
-
4,913
-
5,009
-
12,730,776
55
12,528,621
57
Liabilities and Equity
Current liabilities:
Short-term loans (note
Notes payable
Accounts payable
Accounts payable－rel
Other payables (notes
Current tax liabilities
Provisions－current (n
Other current liabilitie
Total current liabili
Non-current liabilities:
Deferred tax liabilities
Net defined benefit lia
Total long-term liab
Total liabilities
Equity (notes 6(f), 6(k),
Common stock
Capital surplus
Retained earnings:
Legal reserve
Unappropriated retai

December 31,	December 31,	2016	December 31,	2015		December 31,	December 31,	2016	December 31,	2015
	Amount	%	Amount	%	Liabilities and Equity		Amount	%	Amount	%
					Current liabilities:
$	2,806,344	12	2,256,144	11	Short-term loans (notes 6(h), 8 and 9)	$	1,412,926	6	1,569,817	7
	1,334,681	6	1,332,769	6	Notes payable		912,874	4	931,896	4
	11,736	-	8,468	-	Accounts payable		1,493,346	7	1,289,557	6
	3,191,008	14	3,097,552	14	Accounts payable－related parties (note 7)		321,774	1	210,947	1
	325,904	1	341,446	2	Other payables (notes 6(k), 6(p) and 7)		1,507,988	7	1,356,794	6
	41,734	-	52,559	-	Current tax liabilities		303,565	1	274,523	1
	34,015	-	23,874	-	Provisions－current (note 6(i))		445,061	2	397,636	2
	2,682,641	12	2,210,133	10	Other current liabilities		90,989	-	82,424	-
	42,139	-	34,850	-	Total current liabilities		6,488,523	28	6,113,594	27
	81,727	-	81,025	-	Non-current liabilities:
	10,551,929	45	9,438,820	43	Deferred tax liabilities (note 6(l))		641,860	3	563,254	3
					Net defined benefit liabilities－non-current (note 6(k))		16,072	-	-	-
	11,755	-	13,286	-	Total long-term liabilities		657,932	3	563,254	3
	7,509,927	32	7,156,971	33	Total liabilities		7,146,455	31	6,676,848	30
	5,083,884	22	5,139,842	23	Equity (notes 6(f), 6(k), 6(l) and 6(m)):
	110,772	1	94,169	-	Common stock		3,974,954	17	3,974,954	18
	9,525	-	112,644	1	Capital surplus		1,568,318	7	1,574,389	7
	-	-	6,700	-	Retained earnings:
	4,913	-	5,009	-	Legal reserve		1,920,537	8	1,722,804	8
	12,730,776	55	12,528,621	57	Unappropriated retained earnings		8,600,073	37	7,420,603	34
							10,520,610	45	9,143,407	42
					Other equity:
					Foreign currency translation differences for foreign operations		37,522	-	564,866	3
					Unrealized gains(loss) on valuation of available-for-sale financial assets		34,846	-	32,977	-
							72,368	-	597,843	3
					Total equity		16,136,250	69	15,290,593	70
$	23,282,705	100	21,967,441	100	Total liabilities and equity	$	23,282,705	100	21,967,441	100

Assets

Current assets:

Non-current assets:

Total assets

See accompanying notes to the parent company only parent company only financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese)

CHIN-POON INDUSTRIAL CO., LTD.

Parent Company Only Statements of Comprehensive Income

For the years ended December 31, 2016 and 2015

(All amounts expressed in thousands of New Taiwan dollars)

Operating revenue (notes 6(i), 6(o) and 7) Operating costs (notes 6(d), 6(k) and 7) Gross profit Less: Unrealized gains(loss) on affiliated transactions Gross profit Operating expenses (notes 6(c), 6(k) and 6(p)): Selling expenses Administrative expenses Research and development expenses Total operating expenses Operating income Non-operating income and expenses (notes 6(q) and 7): Other income Other gains and losses Finance costs Share of profit from the subsidiaries, the associates and the joint ventures Total non-operating income and expenses Income before income tax Less: income tax expenses (note 6(l)) Net income Other comprehensive income (loss) (notes 6(j), (k), (l) and (q)): Items that may not be reclassified subsequently to profit or loss: Remeasurements of defined benefit plans Share of other comprehensive gains (losses) of subsidiaries, associates, and joint ventures accounted for under equity method Income tax related to items that will not be reclassified subsequently to profit or loss Total items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Foreign currency translation differences for foreign operations Unrealized gains (losses) on valuation of available-for-sale financial assets Share of other comprehensive gains (losses) of subsidiaries, associates, and joint ventures accounted for under equity method Income tax related to items that may be reclassified subsequently to profit or loss Total Items that may be reclassified subsequently to profit or loss Other comprehensive income (loss), net of tax Total comprehensive income Basic earnings per share (expressed in New Taiwan dollars) (note 6(n)) Diluted earnings per share (expressed in New Taiwan dollars) (note 6(n))	2016 2015 Amount % Amount % $ 18,240,972 100 17,293,414 100 15,051,169 82 14,718,670 85
	3,189,803 18 2,574,744 15 (2,258) - (420) -
	3,192,061 18 2,575,164 15
	526,393 3 484,703 3 301,879 2 265,384 1 117,257 1 106,615 1
	945,529 6 856,702 5
	2,246,532 12 1,718,462 10
	327,331 2 359,501 2 (110,228) (1) 52,450 - (16,249) - (17,293) - 642,837 4 367,913 2
	843,691 5 762,571 4
	3,090,223 17 2,481,033 14 601,185 3 503,710 3
	2,489,038 14 1,977,323 11
	(36,317) - 33,371 - (691) - (1,918) - 6,174 - (5,673) -
	(30,834) - 25,780 -
	(527,344) (3) (12,598) - (374) - (73,088) - 2,243 - 42,824 - - - - -
	(525,475) (3) (42,862) -
	(556,309) (3) (17,082) -
	$ 1,932,729 11 1,960,241 11
	$ 6.26 4.97
	$ 6.21 4.94

See accompanying notes to the parent company only parent company only financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese)

CHIN-POON INDUSTRIAL CO., LTD.

Parent Company Only Statements of Changes in Equity For the years ended December 31, 2016 and 2015

(All amounts expressed in thousands of New Taiwan dollars)

Other equity Foreign currency Unrealized gain (loss) on Retained earnings translation valuation of Common stock Capital surplus Legal reserve Unappropriated earnings Total differences for foreign operations available-for-s ale financial assets Total Total equity $ 3,974,954 1,571,014 1,545,905 6,468,889 8,014,794 577,464 63,241 640,705 14,201,467 - - 176,899 (176,899) - - - - - - - - (874,490) (874,490) - - - (874,490) - - - 1,977,323 1,977,323 - - - 1,977,323 - - - 25,780 25,780 (12,598) (30,264) (42,862) (17,082)	Other equity Foreign currency Unrealized gain (loss) on Retained earnings translation valuation of Common stock Capital surplus Legal reserve Unappropriated earnings Total differences for foreign operations available-for-s ale financial assets Total Total equity $ 3,974,954 1,571,014 1,545,905 6,468,889 8,014,794 577,464 63,241 640,705 14,201,467 - - 176,899 (176,899) - - - - - - - - (874,490) (874,490) - - - (874,490) - - - 1,977,323 1,977,323 - - - 1,977,323 - - - 25,780 25,780 (12,598) (30,264) (42,862) (17,082)	Other equity Foreign currency Unrealized gain (loss) on Retained earnings translation valuation of Common stock Capital surplus Legal reserve Unappropriated earnings Total differences for foreign operations available-for-s ale financial assets Total Total equity $ 3,974,954 1,571,014 1,545,905 6,468,889 8,014,794 577,464 63,241 640,705 14,201,467 - - 176,899 (176,899) - - - - - - - - (874,490) (874,490) - - - (874,490) - - - 1,977,323 1,977,323 - - - 1,977,323 - - - 25,780 25,780 (12,598) (30,264) (42,862) (17,082)	Other equity Foreign currency Unrealized gain (loss) on Retained earnings translation valuation of Common stock Capital surplus Legal reserve Unappropriated earnings Total differences for foreign operations available-for-s ale financial assets Total Total equity $ 3,974,954 1,571,014 1,545,905 6,468,889 8,014,794 577,464 63,241 640,705 14,201,467 - - 176,899 (176,899) - - - - - - - - (874,490) (874,490) - - - (874,490) - - - 1,977,323 1,977,323 - - - 1,977,323 - - - 25,780 25,780 (12,598) (30,264) (42,862) (17,082)
-	-	-	2,003,103 2,003,103 (12,598) (30,264) (42,862) 1,960,241
- 3,375 - - - - - - 3,375 3,974,954 1,574,389 1,722,804 7,420,603 9,143,407 564,866 32,977 597,843 15,290,593 - - 197,733 (197,733) - - - - - - - - (1,033,488) (1,033,488) - - - (1,033,488) - - - 2,489,038 2,489,038 - - - 2,489,038 - - - (30,834) (30,834) (527,344) 1,869 (525,475) (556,309)
- - - 2,458,204 2,458,204 (527,344) 1,869 (525,475) 1,932,729
- (6,071) - (47,513) (47,513) - - - (53,584)
$ 3,974,954 1,568,318 1,920,537 8,600,073 10,520,610 37,522 34,846 72,368 16,136,250

Note: For the years 2016 and 2015, the directors' and supervisors' enumeration were amounting to $16,200 thousand and $14,850 thousand, respectively, and the employee bonuses were amounting to $163,782 thousand and $105,196 thousand, respectively, were deducted from statements of comprehensive income of 2016 and 2015.

See accompanying notes to the parent company only parent company only financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese)

CHIN-POON INDUSTRIAL CO., LTD.

Parent Company Only Statements of Cash Flows

For the years ended December 31, 2016 and 2015

(All amounts expressed in thousands of New Taiwan dollars)

Cash flows from operating activities: Income before tax Adjustments: Adjustments to reconcile profit and loss Depreciation Provision for bad debt expense Interest expense Interest income Dividend income Share of loss of associates and joint ventures accounts for under equity method Loss on disposal of property, plant and equipment Gain on disposal of investments Unrealized gain on affiliated transactions Unrealized loss on foreign exchange Total adjustments to reconcile profit and loss Changes in operating assets and liabilities relating: Net changes in operating assets: Notes receivable Accounts receivable Accounts receivable-related parties Other receivables Other receivables-related parties Inventories Prepayments Other current assets Total net changes in operating assets Net changes in operating liabilities: Notes payable Accounts payable Accounts payable－related parties Other payables Provisions－current Other current liabilities Net defined benefit liabilities Total net changes in operating liabilities Total net changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest income received Interest paid Income tax paid Net cash flows from operating activities Cash flows from (used in) investing activities: Proceeds from disposal of available-for-sale financial assets Acquisition of investments accounted for under equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in other financial assets－non-current Decrease(increase) in prepayments for equipment Dividend received Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term loans Decrease in short-term loans Cash dividends paid Net cash flows used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year	2016 2015 $ 3,090,223 2,481,033 558,974 396,959 73,901 - 16,249 17,293 (38,533) (43,460) (886) (886) (642,837) (367,913) 8,580 16,691 - (32,265) (2,258) (420) 3,286 15,669
	(23,524) 1,668
	(3,268) 5,330 (167,357) (139,585) 15,542 (68,558) 14,282 1,739 (10,141) (1,066) (472,508) 100,797 (7,289) (24,376) (702) 20,633
	(631,441) (105,086)
	(19,022) 16,684 203,789 (333,051) 110,827 18,242 156,822 (27,617) 47,425 244,517 8,565 (3,813) (13,545) (13,817)
	494,861 (98,855)
	(136,580) (203,941)
	(160,104) (202,273)
	2,930,119 2,278,760 31,035 59,521 (17,213) (17,267) (503,966) (393,772)
	2,439,975 1,927,242
	- 1,233,816 (474,624) - (366,046) (1,803,831) 570 376 96 (167) (47,665) 61,289 188,273 129,214
	(699,396) (379,303)
	4,194,254 3,976,282 (4,351,145) (4,219,290) (1,033,488) (874,490)
	(1,190,379) (1,117,498)
	550,200 430,441 2,256,144 1,825,703
	$ 2,806,344 2,256,144

See accompanying notes to the parent company only parent company only financial statements.

Appendix 2

ARTICLES OF INCORPORATION OF CHIN-POON INDUSTRIAL CO., LTD.

Chapter One General Provisions

Article 1 The Company shall be incorporated under the Company Act. The company is named “CHIN-POON INDUSTRIAL CO., LTD”.
Article 2 The scope of business shall be as follow:
Manufacturing, processing and sale of printed circuit boards and electronic materials.
Manufacturing, processing and sale of punching machines and press dies for printed circuit boards.
Manufacturing, processing and sale of insulation boards.
Importing and exporting of the aforesaid items.
Article 2.1 The Company may make endorsements or provide guarantees for others in accordance with the Operational Procedures for making endorsements or providing guarantees.
Article 2.2 The total amount of the Company’s domestic and foreign business investments may not be subject to the restrictions on the amount of total investment by the Company Act, but shall not exceed twice the amount of paid-in capital.
Article 3 The Company shall set up its headquarters in Taoyuan County of Taiwan Province. Whenever necessary, branch companies or offices may be set up at any domestic or foreign locations by decision of the Board of Directors.
Article 4 Public announcements of the Company shall be made in accordance with Article 28 of the Company Act and the rules and regulations of the securities regulatory agency.

Chapter Two Shares

Article 5 The total capital amount of the Company shall be four billion and five hundred millions New Taiwan Dollars accounting for four hundred and fifty millions shares, at a par value of Ten New Taiwan Dollars (NT$10) per share. Board of Directors is authorized to issue the unissued shares in installments.
Article 6 The share certificate of the Company shall be affixed with the signatures or personal seals of three or more directors of the issuing company, and shall be duly certified or authenticated by the competent authority or a

certifying institution appointed by the competent authority before issuance. The company may be exempted from printing any share certificate for the shares issued and shall appoint a centralized securities custody enterprise/ institution/ agency to make recordation of the issue of such shares.

Article 7 The handling of stock affairs of the Company shall comply with applicable regulations and rules by the supervising authorities.
Article 8 The entries in its shareholders' roster shall not be altered within 60 days prior to the convening date of a regular shareholders' meeting, or within 30 days prior to the convening date of a special shareholders' meeting., or within 5 days prior to the reference date set by the issuing company for distribution of dividends, bonus or other benefits.

Chapter Three Shareholders’ Meeting

Article 9 Shareholders’ meeting shall be of two types, namely regular and special shareholders’ meeting; the former shall be convened once a year by the Board of Directors in accordance with laws within six months after the close of each fiscal year and the latter shall be convened in accordance with laws whenever necessary.
Article 10 In case a shareholder is unable to attend a shareholders’ meeting, he/she may issue proxy to delegate his representative to the Meeting in accordance with Article 177 of Company Act and the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies”.
Article 11 When the Shareholders’ meeting is convened by the Board of Directors (BOD), the Chairperson of the board shall act as the Shareholders’ Meeting Chairperson. In the absence of the Chairperson of the board, the Chairperson of the board shall delegate a Director to act on his/her behalf. The Chairperson of the board failing to do that, the attending Directors may elect one among themselves to act on behalf of the Chairperson of the board. When the Shareholders’ meeting is convened by any competent person beyond the BOD, the Shareholders’ meeting Chairperson shall be acted by such competent person. Provided there are two or more such competent persons, they shall elect one person among themselves to act as the Shareholders’ meeting Chairperson.
Article 12 Except otherwise ruled by the applicable regulations, a shareholder shall have one voting power in respect of each share in his/her/its possession.
Article 13 Except otherwise ruled by the Company Act or other applicable regulations, any resolution to be passed by the Shareholders’ meeting shall require a quorum of shareholders representing over half the number

of issued stock shares, and be approved by over half the number of attending shareholders with the voting rights. According to regulatory requirements, shareholders may also vote via an electronic voting system. Those who vote via an electronic voting system shall be deemed as attending the shareholders’ meeting in person. The matters with regard to electronic voting shall be conducted in accordance with the applicable laws and regulations.

Article 14 Any resolutions made at the Shareholders’ meeting shall be recorded in the Meeting Minutes, which shall clearly record the date and place of the meeting, the name of the chairperson, the resolution method, the main points and results of the discussion process, the number of attending shareholder and their voting rights. The Minutes shall be signed or sealed by the Chairperson and processed in accordance with Article 183 of the Company Act.

The meeting minutes shall be maintained in the company together with the record containing signatures of the shareholders attending the meeting and the proxy statements.

Chapter Four Directors and Supervisor

Article 15 The Company shall have seven (7) to nine (9) Directors and two (2) Supervisors for a term of three (3) years, who shall be elected under candidates nomination system as specified in Article 192-1 of the Company Act ,and shall be persons with disposing capacity, and be elected and appointed by the Shareholders’ Meeting. The term may be renewed upon re-election.
Starting from the year of 2017, there shall be three (3) Independent Directors among all elected directors. Independent directors shall be elected under candidate nominating system. The shareholders shall elect the Independent Directors from among the nominees listed in the roster of Independent Director Candidates. The professional qualifications, restrictions on both shareholding and concurrent positions held, method of nominating and electing, and other requirements with regard to the independent directors shall be governed in accordance with the rules and regulations of the regulatory agencies.
The elected Directors and Supervisors may pass the resolution of the Board of the Company to have the liability insurance coverage within the scope of their duties.
Article 15.1 The Company shall establish an Audit Committee in accordance with Article 14.4 of the Securities and Exchange Act. The Audit Committee shall be composed of all independent directors. The exercising authority

and matters relevant to the audit committee and its members shall be governed in accordance with the rules and regulations of the regulatory agencies.

Starting from the year of 2017 and upon the expiration of their terms, the supervisors shall be abolished on the day when the audit committee is established.
Article 16 In the absence of more than one third of the total number of Directors or when both Supervisors are dismissed, the BOD shall call a special Shareholders’ Meeting within 60 days for re-election of their replacements, who shall continue to serve their remaining terms. Provided no Director replacement has yet been made through re-election and it is urgent to have their replacements, the candidates who have got the most votes except the ones elected as directors and supervisors during the original election shall stand in for the duties.
Article 17 Provided no re-election is possible at the time when the term of Directors or Supervisors expires, their term may be extended until the date when new Directors and Supervisors are elected.
Article 18 The board of directors shall elect a chairperson of the board from among the directors by a majority vote at a meeting attended by over two-thirds of the directors. Each director shall attend the meeting of the board of directors in person. A director may be represented by another director. In case a director appoints another director to attend a meeting of the board of directors in his/her behalf, he/she shall, in each time, issue a written proxy and state therein the scope of authority with reference to the subjects to be discussed at the meeting.
Article 19 Except for the first Board Meeting of each term, which shall be convened per Article 203 of Company Act, the remaining Board Meetings shall be called and presided over by the Chairperson of the board. When the Chairperson of the board is on leave or for any reason unable to fulfill his/her duty as the chairperson, the proxy shall be appointed in accordance with Article 208 of the Company Act.
Article 19.1 In calling a meeting of the board of directors, a notice setting forth therein the subject(s) to be discussed at the meeting shall be given to each director and supervisor no later than 7 days prior to the scheduled meeting date. However, in the case of emergency, the meeting may be convened at any time.
The notice of meeting of Board to be convened should be given to the directors and supervisors in writing, by e-mail or by fax.
Article 20 Any resolution by the BOD, except otherwise ruled by the Company Act, shall require a meeting attendance by over half the number of total

Directors, and an approval by over half the attending Directors. Provided any Director cannot attend the Board Meeting due to any reason, he/she shall issue a written proxy, clearly stating the scope of authorized powers. A director may accept the appointment to act as the proxy of one other director only.

Article 21 For any issues discussed at the Board Meeting, they shall be recorded in a meeting minute, which shall be signed and sealed by the Chairperson, and be distributed to all Directors in the following twenty (20) days. The meeting minutes shall record a summary of the essential points of the proceedings and the results of the meeting. The meeting Minutes, as well as the attendance list bearing the signatures of Directors present at the meeting and the powers of attorney of the proxies shall be kept by the Company.
Article 22 Except for exercising the supervision power according to laws, the Supervisors may be present at the Board Meeting, but shall not have voting rights.
Article 22.1 All Directors and Supervisors of the Company shall be paid a certain amount of traveling fees. Provided any Director is concurrently acting other positions of the Company, he/she shall be paid a salary per normal standards.

Chapter Five Managers

Article 23 The Company may have a number of managers and one General Manager. The appointment and dismissal of managers, and their compensation and benefits shall be decided per Article 29 of the Company Act.

Chapter Six Accounting

Article 24 At the end of each fiscal year, the BOD shall compile the following statements, which shall be submitted to the regular Shareholders’ Meeting 30 days in advance, and apply for approval by the Shareholders’ Meeting after verification by the Supervisors:
I. the business report;
II. the financial statements; and
III. the surplus earnings distribution or loss make-up proposal.
Article 25 When the Company makes profits in a year, 2%~10% of the yearly profits shall be allocated for employee bonuses, and not more than 3% of the yearly profits for the remuneration of directors and supervisors. However, when the company has accumulated losses, the profit shall be used to cover the accumulated losses beforehand. The employees for

bonus distribution shall include qualified employees of subsidiary companies.

Article 26 Should there be any remaining earnings after making the final settlement of account every year and after allocating for tax payments according to laws, they shall first be used to cover accumulated losses, and then setting aside 10% for legal reserve. However, when the cumulative legal reserve has reached the amount of paid-in capital, no more legal reserve shall be allocated. Should there still be remaining earnings, a special reserve can be allocated because of operational consideration and regulatory imperatives. Among the rest of the remaining earnings of the yearly profits, the dividends or bonuses to shareholders shall range from 20% to 80%, The rest is unallocated remaining earnings and will be added to the remaining earnings of previous years. The board can make a proposal of distributing those remaining earnings for the Shareholders’ Meeting to approve.
Article 26.1 The Dividend policy shall take into consideration the actual business environment and stage of business growth. The BOD shall prepare and submit the specific distribution plans for implementation after approval by the Shareholders’ Meeting, in view of future fund needs and the financial plans under the optimal principle of cash dividend and stock dividend. The cash dividend shall not be less than 20% of the total current-time Distribution, and shall not be less than 50% of the total current-time Distribution if the Company can acquire enough external financing. The actual distribution amount, category and proportions of the earnings shall be decided and adjusted per actual profitability and capital status and be resolved by the Shareholders’ Meeting.

Chapter Seven Appendix

Article 27 The regulations governing the organizations of the Company and the rules on all kinds of operational procedures shall be separately decided by the BOD.
Article 28 For any other issues unstated herein, the Company Act and applicable regulations shall govern.
Article 29 These Articles of Association were enacted on Aug. 11, 1979 and amended
on Aug. 26, 1979 for the first time,
on Sep 11, 1979 for the second time,

on Jan. 13, 1981 for the third time, on Aug. 2, 1983 for the fourth time, on Oct. 15, 1985 for the fifth time, on Nov. 15, 1986 for the sixth time, on Apr. 22, 1987 for the seventh time, on Nov. 20, 1987 for the eighth time, on Jan. 9, 1988 for the ninth time, on Nov. 1, 1989 for the tenth time, on May 2, 1990 for the eleventh time, on May 12, 1991 for the twelfth time, on May 23, 1992 for the thirteenth time, on May 16,1993 for the fourteenth time, on May 7, 1995 for the fifteenth time, on May 19, 1996 for the sixteenth time, on Sep 14, 1996 for the seventeenth time, on Apr. 30, 1997 for the eighteenth time, on Jun. 9, 1999 for the nineteenth time, on May 23, 2000 for the twentieth time, on Apr. 25, 2001for the twenty-first time, on May 31, 2002 for the twenty-second time, on May 31, 2002 for the twenty-third time, on Jun. 13, 2003 for the twenty-fourth time, on Jun. 15, 2004 for the twenty-fifth time, on May 18, 2005 for the twenty-sixth time, on Jun. 13, 2007 for the twenty-seventh time, on Jun. 16, 2009 for the twenty-eighth time, on Jun. 15, 2010 for the twenty-ninth time, on Jun. 28, 2012 for the thirtieth time, on Jun. 24, 2015 for the thirty-first time, and on Jun. 14, 2016 for the thirty-second time.

Appendix 3

CHIN-POON INDUSTRIAL CO., LTD.

Rules and Procedures of Shareholders’ Meeting

Shareholders' Meeting of the Company (the "Meeting") shall be conducted in accordance with these Rules and Procedures. Any matter not provided in these Rules and Procedures shall be handled in accordance with applicable laws and regulations..
The shareholders referred to in The Rules and Procedures mean the shareholder attending the Meeting in person and the proxies of the shareholders unable to attend.
Shareholders attending the Meeting shall wear the attendance badges and submit the attendance card for the purpose of signing in. The number of shares represented by shareholders attending the Meeting shall be calculated in accordance with the attendance cards submitted by the shareholders.
Chairperson shall call the Meeting to order at the time scheduled for the Meeting. If the number of shares represented by the shareholders present at the Meeting has not yet constituted the quorum at the time scheduled for the Meeting, the chairperson may postpone the time for the Meeting. The postponements shall be limited to two times at the most and the Meeting shall not be postponed for longer than one hour in the aggregate. If no quorum can yet be constituted after two postponements but the shareholders present at the Meeting represent more than one-third of the total outstanding shares, tentative resolutions may be made in accordance with Section 1 of Article 175 of the Company Act. The aforesaid tentative resolutions shall be executed in accordance with applicable provisions of the Company Act.
If the number of outstanding shares represented by the shareholders present becomes sufficient to constitute the quorum during the process of the Meeting, the chairperson may submit the tentative resolutions to the Meeting for approval in accordance with Article 174 of the Company Act.
The agenda of the Meeting shall be set by the Board of Directors if the Meeting is convened by the Board of Directors. Unless otherwise resolved at the Meeting, the Meeting shall proceed in accordance with the agenda.
The above provision applies mutatis mutandis to cases where the Meeting is convened by any person, other than the Board of Directors, entitled to convene such Meeting.

Unless otherwise resolved at the Meeting, the chairperson cannot announce adjournment of the Meeting before all the items (including special motions) listed in the agenda are resolved. The shareholders cannot designate any other person as chairperson and continue the Meeting in the same or other place after the Meeting is adjourned.

During the meeting, the chairperson may announce a recess in a time as appropriate. If all the items in the agenda are not resolved in the Meeting, a resolution may be adopted at a shareholders’ meeting to defer or resume the Meeting within 5 days in accordance with Article 182 of the Company Act. In this case, the Company does not need to issue a public notice for that.
When a shareholder present at the Meeting wishes to speak, a Speech Note should be filled out with a summary of the speech, the shareholder's number (or the number of Attendance Card) and the name of the shareholder. The sequence of speeches by shareholders should be decided by the chairperson. If any shareholder present at the Meeting submits a Speech Note but does not speak, no speech should be deemed to have been made by such shareholder. In case the contents of the speech of a shareholder are inconsistent with the contents of the Speech Note, the contents of actual speech shall prevail. Unless otherwise permitted by the chairperson, no shareholder shall interrupt the speeches of the other shareholders. Otherwise the chairperson shall stop such interruption.
Unless otherwise permitted by the chairperson, each shareholder shall not, for each discussion item, speak more than two times (not exceeding 3 minutes each time). In case the speech of any shareholder violates the above provision or exceeds the scope of the discussion item, the chairperson may stop the speech of such shareholder. Other shareholders have the right to ask the chairperson to stop the speech of such shareholder.
The chairperson may announce to end the discussion of any resolution and go into voting if the Chairperson deems it appropriate.
Except otherwise specified in the Company Act or the Articles of Incorporation of the Company, a resolution shall be adopted by a majority of the votes represented by the shareholders present at the Meeting.
A shareholder shall be entitled to one vote for each share held. A shareholder may appoint a proxy to attend the Meeting on he/she/it behalf. With the exception of a trusted enterprise or a shareholder services agent approved by the competent securities authority, when one person is concurrently appointed as proxy by two or more shareholders, the voting rights represented by that proxy may not exceed three (3) percent of the voting rights represented by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.
When the Company holds a shareholders’ meeting, it may allow the shareholders

to exercise voting rights by correspondence or electronic means. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the Shareholders’ Meeting Notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her/its rights with respect to the special motions and any and all amendments to original proposals of that meeting; it is therefore advisable that the Company avoid the submission of special motions and amendments to original proposals.

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

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

At the time of a vote, for each proposal, the chairperson or a person designated by the chairperson shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the Market Observation Post System (MOPS).

The calculation of attendance and voting of the Meeting shall be based on the number of shares.
The venue for a shareholders’ meeting shall be in the same city of the Company, or a place easily accessible to shareholders and suitable for a shareholders’ meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m.
A shareholders' meeting shall be presided by the Chairperson of the Board if convened by the board of directors. In the event that the Chairperson of the Board is on leave or for whatever reason unable to perform his/her function in the meeting, the Vice Chairperson of the Board shall act in his/her stead. In case of

no Vice Chairperson of the Board or in the event that the Vice Chairperson of the Board is on leave or for whatever reason unable to perform his/her function in the meeting, the Chairperson of the Board shall appoint a director to act in his/her stead. In the event that the Chairperson of the Board does not appoint a proxy, a director shall be elected from among themselves to preside the meeting. In the event that a shareholders' meeting is convened by an eligible convener beyond the board of directors, the meeting shall be presided by that convener.

The Company may appoint designated counsel, CPA or other related persons to attend the Meeting. Persons handling affairs of the Meeting shall wear identification cards or badges.
The process of the Meeting shall be tape-recorded or video-taped and these tapes shall be preserved for at least one year.
If there is amendment to or substitute for a proposal, the chairperson shall decide the sequence of voting for such proposal, the amendment or the substitute. If any one of them has been adopted, the others shall be deemed vetoed and no further voting is necessary.
Any legal entity designated as proxy by a shareholder(s) to be present at the Meeting may appoint only one representative to attend the Meeting. If a corporate shareholder designates two or more representatives to attend the Meeting, only one representative can speak for each discussion item.
After the speech of a shareholder, the chairperson may respond by himself/herself or appoint an appropriate person to respond.
The person(s) to check and the person(s) to record the ballots during a vote by casting ballots for resolution of proposals or election of directors and supervisors shall be appointed by the chairperson. The person(s) checking the ballots shall be a shareholder(s). The result of voting shall be announced at the Meeting and placed on record.
The chairperson may conduct the disciplinary officers or the security guard to assist in keeping order of the Meeting place. Such disciplinary officers or security guards shall wear badges marked "Disciplinary Officers" for identification purpose.
In case of incident of force majeure, such as air strike, earthquake, fire and etc., the chairperson may immediately announce to stop or temporarily suspend the Meeting in order for all persons to evacuate from the dangerous places. The chairperson may announce a new schedule for the Meeting one hour later when the crisis is over.
Any matter not provided in The Rules and Procedures shall be handled in accordance with applicable laws and regulations.
The Rules and Procedures shall be effective from the date it is approved by the Shareholders' Meeting. The same applies in case of revision.

Appendix 4 CHIN-POON INDUSTRIAL CO., LTD.

Rules for Election of Directors and Supervisors

Unless otherwise provided in the Company Act or the Articles of Incorporation of this Company, the directors and supervisors of this Company shall be elected in accordance with the rules specified herein.
Election of directors and supervisors of the Company shall be held separately at the shareholders' meeting.
All persons with disposing capacity shall be elected as directors or supervisors of the Company.
The number of directors and supervisors of the Company is subject to the number of directors and supervisors as set out in the Articles of Association of the Company.
The Company adopts the cumulative voting method for the election of the directors and supervisors. The number of votes exercisable in respect of one share shall be the same as the number of directors or supervisors to be elected, and the total number of votes per share may be consolidated for election of one candidate or may be split for election of two or more candidates.
In the election of directors and supervisors of the Company, candidates who acquire more votes should win the seats of directors or supervisors. A candidate who is elected as a director and a supervisor at the same time shall, at his own discretion, select to be a director or a supervisor and claim to have given up as a supervisor or a director. The vacancy shall be taken by the candidate who have gotten votes next to that of the last candidate who has been elected as a director or a supervisor. If two or more persons acquire the same number of votes and the number of such persons exceeds the specified seats available, such persons acquiring the same votes shall draw lots to decide who should win the seats available, and the Chairperson shall draw lots on behalf of the candidate who is not present.
The Company shall prepare the ballots on which attendance card number and the number of voting rights shall be specified.
At the beginning of the election, the Chairperson shall appoint several persons to monitor the voting and to record the ballots.
The ballot box used for voting shall be prepared by the Company and checked in public before voting by the persons who monitor the voting.
If the candidate is a shareholder of the Company, voters shall fill in the "candidate" column the candidate's name and shareholder's number. If the candidate is not a shareholder of the Company, voters shall fill in the "candidate" column the candidate's name and the candidate's ID number. If the candidate is a legal entity,

the full name of the legal entity and the name(s) of their representative(s) should be filled in the column. If their representatives are more than one person, all of their names shall be listed.

The aforementioned candidate's name, his/her shareholder's number and

candidate's ID number can be in writing or by stamp.

Ballots shall be deemed void under the following conditions:
(1) Ballots not prepared by the Company;
(2) Ballots not placed in the ballot box;
(3) Blank ballots not completed by the voter;
(4) Illegible writing;
(5) If the candidate is a shareholder of the Company, the name or shareholder's number of the candidate filled in the ballot inconsistent with the shareholders' register. If the candidate is not a shareholder of the Company, the name or ID number of the candidate filled in the ballot is incorrect;
(6) The number of candidates filled in the ballot exceeding the number of the seats to be elected.
(7) Ballots with other written characters or symbols in addition to a candidate's name and his/her shareholder's number (ID number).
The ballot boxes for the election of directors and for the election of supervisors are set up separately. The persons who monitor the voting and record the ballots are responsible for opening the ballot boxes after the vote casting has finished. The ballots should be calculated during the meeting right after the vote casting has finished and the results of the election should be announced by the Chairperson at the meeting.
The board of directors shall issue notifications to the directors and supervisors elected.
These Rules and any revision thereof shall become effective after approval at the shareholders' meeting.

Appendix 5 CHIN-POON INDUSTRIAL CO., LTD.

Operational Procedures for Derivatives Transactions

Article 1 Objective

1.1 “Operational Procedures for Derivatives Transactions” (the
“Procedures”) outlined herein are set up to comply with the Article 36-1 of Securities and Exchange Act and Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
1.2 To protect investment, to implement information disclosure and to establish the Company's risk management system and information disclosure procedures for derivatives transactions.

Article 2 Trading Principles and Evaluation Procedures

2.1 Instruments

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.

2.2 Strategy

2.2.1 For the purpose of trading: It means that holding or trading derivatives is for the purpose of earning profits from derivatives.
2.2.2 For the purpose of hedging: It is in order to avoid the risk of holding some assets or liabilities or to avoid the expected transaction risk. Since the amount of accounts receivable and the expected time of collection can hardly match perfectly the amount and the time against which derivatives transactions are intended to hedge, the best hedging we can achieve is the hedging which almost match the amount of accounts receivable and the expected time of collection, rather than the strict hedging stipulated by the accounting standards.
2.2.3 The purpose of the Company engaged in derivatives transactions should be mainly for hedging. The selection of derivatives shall be in order to avoid the risks of the Company's

business operations.

2.3 Segregation of Duties

2.3.1 Duties of the board of directors (the “BOD”)
a. The BOD is responsible for approving and revising the Procedures. The BOD shall propose the Procedures to the stockholders’ meeting.
b. With regard to derivatives transactions for the purpose of trading, each contract amount of more than US $ 10 million or accumulated unhedged position of more than US $ 15 million should be approved by the BOD and derivatives transactions below the aforesaid limit can be approved and monitored by general manager (“GM”) and the chairperson.
c. At the time of the Board meeting, the BOD shall hear the report from general manager on the performance of the derivatives transactions, and shall decide to stop the derivatives transactions if the risk is not in accordance with the Company's business strategy or the risks are more than the Company is able to bear or exceed the originally anticipated plan.

2.3.2 Duties of general manager (“GM”)

a. GM shall propose derivatives transaction to the BOD for approval in accordance with the article 2.3.1.b of the Procedures.
b. GM is responsible for approving derivatives transactions below the amount authorized by the BOD.
c. GM is responsible for approving derivatives transactions below the amount authorized by the BOD.
d. GM is responsible for approving the performance report on derivatives transactions, for monitoring all transactions complying with the Procedures, for preventing the losses from exceeding the allowed limit and for auditing the difference between the actual performance and the planned performance.
e. If GM find significant anomalies, GM should report them to the BOD, and proposed solutions to them. If the Company has independent directors, independent directors shall attend the board meeting and express their opinions on them.
f. GM is responsible for regularly assessing the adequacy of

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risk management measures currently in use and whether those measures are in accordance with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.

2.3.3 Duties of Chief Financial Officer (“CFO”)
a. CFO is responsible for writing the assessment report on derivatives transactions.
b. CFO is responsible for executing the approved derivatives transactions.
c. CFO is responsible for regularly writing the performance report on derivatives transactions for GM’s approval.
d. CFO is responsible for proposing new projects of derivatives transactions.
e. CFO is responsible for writing the performance report of the derivatives transactions which is for GM or BOD to decide on whether those transactions need to be closed or adjusted if the market encounters significant changes or the losses of the approved derivatives transactions exceed the allowed limit or hugely different from the originally anticipated plan.
2.3.4 Duties of finance department
a. Finance department is responsible for applying for derivatives transactions.
b. Finance department is responsible for executing the approved derivatives transactions and the settlement of them on behalf of CFO.
c. Finance department is responsible for logging the daily transactions and verifying the correctness with the accounting documents.
d. Finance department is responsible for archiving the daily transactions records in the order of transaction time, and for checking the records with the transaction counterparty on a regular basis.
e. Finance department is responsible for providing the performance data for CFO to write the performance report.
f. When the Company engages in derivatives transactions, it shall establish a log book, the type and the amount of the derivatives transactions, the date of approval by the BOD and the assessment items in accordance with the article of 2.4.2, 2.3.1.c and 2.3.2.f should be recorded in the log book in details.

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g. The Company shall disclose information of derivatives
- transactions in accordance with Directives on Accounting Disclosure of Public Companies’ Derivatives Transactions.
2.3.5 Duties of internal audit office
a. Internal audit office is responsible for regularly finding whether the internal control of derivatives transactions is adequate, monthly conducting audit of the compliance of the persons responsible for dealing with derivatives transactions and writing monthly audit report to GM. If a significant violation is found, the supervisor should be notified in writing.
b. Internal audit office is responsible for filing to the Securities and Futures Bureau (“SFB”) the aforesaid audit report of derivatives transactions with the implementation report of yearly internal auditing before the end of February each year and the report of correcting the violations of derivatives transactions before the end of May each year.

2.4 Performance Assessment

2.4.1 Finance department shall classify derivatives transactions by the following categories:
a. For the purpose of trading.
b. For the purpose of hedging

CFO shall send to GM or the BOD a weekly report of the position held in the derivatives transactions.

2.4.2 Evaluation of the position held in the derivatives transactions
a. The position held in the derivatives transactions for the purpose of trading shall be evaluated at least once a week.
b. The position held in the derivatives transactions for the purpose of hedging shall be evaluated at least twice a month.
2.4.3 The assessment principles for the performance report of derivatives transactions are as follows:
a. If the derivatives are trading in the market, the net profits or losses shall be evaluated against the market price.
b. If no market price is found, the best estimate of their value under the adequate evaluation methods and some

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significant hypothesis shall be used.

  - c. If their fair value cannot be evaluated reasonably, the information of their possible fair value shall be provided.

  - d. The fair value and the book value of the approved derivatives transactions shall be expressed separately and their amount of profits and losses are classified by the purpose for trading and for hedging respectively.

2.5 The total amount of unhedged position of derivatives transactions must be below US $ 90 million (or the same value if in other currencies).
2.5.1 The authorized persons and their authorized limits on the amount of the accumulated unsettled derivatives shall be handled in accordance with the division of authority of the Company.

2.6 All and individual contracts

2.6.1 The total amount of unrealized losses of all derivatives transactions for the purpose of trading in the same fiscal year shall not be more than NT $ 20 million or one fifth of the retained earnings in the last audited financial statements.
2.6.2 The total amount of unrealized losses of individual derivatives transaction for the purpose of trading shall not be more than NT $ 3 million per contract amount of US $ 1 million.
2.6.3 The total amount of unrealized losses of over-hedged positon which is the extra position of all position for the purpose of hedging minus the position which need to be hedged shall not be more than one fifth of the retained earnings in the last audited financial statements.

2.7 Maturity of derivatives contracts

2.7.1 Financial futures: according to contracts provided by foreign futures exchanges.
2.7.2 Options: according to contracts provided by foreign futures exchanges. If traded in the over-the-counter market, no more than one year in principle.
2.7.3 Forward rate agreements: no more than two years in principle.
2.7.4 Interest rate swaps: no more than five years in principle.
2.7.5 Currency swaps: no more than two years in principle.

The maturity more than the aforesaid limits shall be approved by the

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BOD.

Article 3 Operating Procedures

3.1 Finance department submits "Application of Derivatives Transactions" in duplicate to CFO who will assess the transactions.
3.2 CFO shall carry out the assessment procedure and write the " Assessment Report of Derivatives Transactions ".
3.3 If the case is not feasible after CFO’s assessment, GM will disapprove the application. The assessment report will be numbered and the reasons for disapproval will be recorded in the " Application of Derivatives Transactions ". One copy of " Application of Derivatives Transactions " will be returned to finance department and another copy will be archived with the " Assessment Report of Derivatives Transactions ".
3.4 If the case is feasible after CFO’s assessment, it shall be sent to GM or the BOD for approval.
3.4.1 If GM or the BOD does not approve it, handle it according to the article 3.3.
3.4.2 If GM or the BOD instructs the case to be partially amended or to increase the contents, items or explanations of the assessment report, CFO shall revise the assessment report and submit it again for approval.
3.4.3 If the " Assessment Report of Derivatives Transactions " approved by GM or the BOD, CFO shall execute the derivatives transactions.
3.5 Each contract amount of more than US $ 10 million for the purpose of trading should be approved by the BOD and the contract amount below the aforesaid limit can be approved by GM and the chairperson.
3.6 CFO shall submit the approved transactions to finance department or otherwise to other offices for the execution of the transactions, and the authorized amount for each of the traders shall be within the amount of US $ 5 million (including US $ 5 million).
3.7 CFO shall submit weekly to GM the " Performance Report of

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Derivatives Transactions " which represent changes of the position held. GM is responsible for reviewing the position held in the derivatives transactions and their performance, for supervising the adequacy of the transaction procedures and for monitoring whether the performance is within the control range.

3.8 In the event of significant anomalies, GM shall immediately report to the BOD for new resolutions. GM or CFO shall report their impacts and propose new solutions to deal with the impacts for the BOD’s resolution.

Article 4 Regulatory Reporting

4.1 Items and Criteria of regulatory reporting
4.1.1 Data of derivatives transactions classified by the purpose of trading and hedging.
4.1.2 The top limit of losses resulted from all and individual contracts of derivatives transactions in accordance with the Procedures.
4.2 Deadline of regulatory reporting
4.2.1 Finance department is responsible for compiling the data of derivatives transactions of the Company and its subsidiaries which are not public companies in Taiwan on the fifth day of each month and for entering data to the information reporting website designated by the Financial Supervisory Commission (“FSC”).
4.2.2 If the amount related to the Company’s acquisitions or disposals meet the reporting criteria stipulated in the article of 4.1.2 or the transaction amount is above the reporting criteria stipulated in the Procedures, the required public announcements should be declared within 2 days from the date of occurrence of the fact.
4.3 Procedures of regulatory reporting
4.3.1 The Company shall declare public announcements to the information reporting website designated by FSC.
4.3.2 If there is any mistake or omission in the Company’s mandatory public announcements, the Company needs to repeat its public announcement on all items.
4.3.3 All of the relevant contracts, the minutes and the log book related to derivatives transactions shall be archived by the Company and shall be kept for at least five years except as

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otherwise specified by laws.

Article 5 Accounting Treatment

Accounting Treatment is done in accordance with the Financial Accounting Standards No. 27, No. 14, No. 9, and the Directives on Accounting Disclosure of Public Companies’ Derivatives Transactions, and other relevant directives issued by FSC and the newly announced financial accounting standards.

Article 6 Risk Management

6.1 Credit Risk Control: Credit risk is controlled by restricting the counterparties that the Company deals with to those who have banking relationship with the Company regularly and can provide sufficient information.
6.2 Market Risk Control: The changes in the market should be taken into account in the assessment of derivatives transactions. The market risk should be controlled through specific operating procedures and regular review of the profits and losses of the position related to derivatives transactions.
6.3 Liquidity Risk Control: Liquidity risk should be controlled by restricting counterparties to those who have adequate facilities, sufficient information, sizable trading capacity and capability to enter into transactions in any markets around the world.
6.4 Operating Risk Control: Authorization system and operating procedures set forth herein should be followed strictly to control operating risk.
6.5 Legal Risk Control: Any legal documents in respect of derivatives transactions shall first be reviewed by in-house and/or outside legal counsel before being executed to control legal risk.
6.6 Products Risk: Operating persons shall possess complete and correct professional knowledge about the derivatives to avoid misusing derivatives and causing any loss resulting from misunderstanding.
6.7 Cash Flow Risk: In addition to preventing the Operating persons from

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violating the authorized transaction amount, the Company shall maintain adequate level of quick assets and credit facilities to meet the cash settlement requirement.

Article 7 Internal Control

7.1 The confirmation and settlement of each transaction shall be approved by their supervisor.
7.2 Transactions shall not be executed in operating persons’ name.
7.3 The respective functions of trading, confirmation and settlement should be performed by different persons.
7.4 Operating persons shall deliver the transaction voucher or contract to accounting persons to log them. And then CFO shall review them.
7.5 Accounting persons shall check the account with the counterparty banks or ask for the statement of the account periodically.
7.6 Accounting persons should check whether the total amount of the transactions has exceeded the net position of foreign currency assets, liabilities and commitments.
7.7 Finance department shall compile an assessment report in which the transactions classified by the purpose of hedging and of trading were assessed separately for their profits and losses against the market prices.
7.8 The BOD shall review regularly whether the performance of the derivatives transactions meets the Company’s business strategy and shall decide whether the resulted risks are more than the Company is able to bear.

Article 8 Internal Audit

In order to enable the Company to engage in derivatives transactions healthily, in addition to the internal audit by the company's internal audit office and to the self-check of the operating units, the BOD, GM and the Supervisors shall supervise the derivatives transactions to carry out the above-mentioned "internal control". The audit focus is as follows:

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8.1 Before the Company conducts derivatives transactions, a report on the nature and the type of the transactions, on the approved loss limit, on the internal control items and on the performance of profits and losses shall be made and sent for approval.
8.2 The report on the position and performance of derivatives transactions should be reviewed weekly and sent to GM.
8.3 The correctness of Information on the assessment report, transaction history, the performance report and etc. should be checked regularly. And the integrity and correctness of their transaction records should be reviewed.
8.4 The internal auditors of the Company shall regularly check adequacy of the internal control of the derivatives transactions, make an audit report on compliance with the derivatives transactions procedures on a monthly basis and make a notice in writing to the supervisors if they find significant violations.

Article 9 Discipline

The employees of the Company who violate the provisions of The Procedures in undertaking derivatives transactions shall be disciplined depending on the seriousness of their violations.

Article 10 Others

10.1 In the event that the Company is engaged in derivatives transactions, the Company shall authorize the relevant persons in accordance with the provisions of The Procedures and submit the relevant reports of derivatives transactions to the BOD.
10.2 The Procedures shall be approved by the BOD, be sent to the supervisors and be proposed to the Shareholders’ Meeting for deliberation. Any amendment is subject to the same procedures. If any director expresses his objection which appears on the minutes of the board meeting or is written in a statement, the Company shall submit such objection to the supervisors.

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10.3 After the Company has established the position of independent directors, the BOD shall take opinions of independent directors into full consideration when the Procedures are proposed to the BOD for deliberation. All and any of independent directors’ consent and objection shall be noted in the minutes of the board meeting.
10.4 The Procedures shall be approved by the BOD before their implementation and be reported on the Shareholders’ Meeting. Any amendment is subject to the same procedures.
Article 11 The matters which are not stipulated by the Procedures are governed by the relevant laws and regulations and by the Company’s policies and procedures.

Article 12 The Procedures were enacted on July 29, 1996 and amended on June 13, 2003, on June 14, 2006, and on June 16, 2009.

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Appendix 6 CHIN-POON INDUSTRIAL CO., LTD.

Operational Procedures for Loaning of Company Funds

The Company shall follow the Procedures set forth below for lending funds to other parties in accordance with the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.
The party to whom the Company may lend its funds shall be limited to its subsidiaries (the “Borrower”).
The subsidiaries and parent companies referred to in the Procedures shall be determined in accordance with the International Financial Reporting Standards. “Having declared the public announcements” referred to in the Procedures means entering them into the information reporting website designated by the Financial Supervisory Commission (“FSC”).
The “net worth” referred to in the Procedures means the equity attributable to the shareholders of the Company in the balance sheet.
“The date of occurrence of the fact” referred to in the Procedures means the contract date, the date of payment, the date of approval by the board of directors (“BOD”), or the date on which the counterparties or the amount of the transaction, which occurs first, can be determined.
The total amount available for lending shall not exceed twenty five percent (25%) of the net worth of the Company. The total accumulated amount available for short-term lending shall not exceed twenty five percent (25%) of the net worth of the Company. The total accumulated amount available for lending between its subsidiaries of which the Company has directly and indirectly 100% ownership shall not exceed forty percent (40%) of the net worth of the Company. The lending limits for a single borrower are set forth below:
- (1) The total amount for short-term lending to a subsidiary shall not exceed twenty five percent (25%) of the net worth of the Company.
- (2) The total amount for lending to a subsidiary shall not exceed twenty five percent (25%) of the net worth of the Company.

The short term referred to in the preceding paragraph means one year. If the business cycle of the company is longer than one year, the short term will mean the business cycle.

The duration of lending to the foreign subsidiaries of which the Company has 100%

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direct or indirect ownership will be 3 years at most. The renewal of their loans shall be submitted to the BOD for approval.

The lending amount for a single borrower, if below the lending limit stipulated in the Procedures, can be proposed to the chairperson for approval.

With regard to the lending and borrowing between the Company and its subsidiaries of which the Company has 100% direct or indirect ownership, or between its subsidiaries of which the Company has 100% direct or indirect ownership, the BOD can authorize the chairperson to approve their lending within ten percent (10%) of the net worth of the Company and to use the revolving loan facility several times during the period of one year.

The Company's loan procedures are as follows:
(1) The borrower shall apply for the loan application with their financial information and guarantee documents in order to borrow from the Company.
(2) The finance department of the Company shall assess the application and its attachments for the necessity and reasonableness of the loan and review the credit of the borrower and the risk of default to calculate the impacts on the business risks, financial position and stockholders’ equity of the Company. Collateral for the loan should be obtained if necessary. And then the finance department shall make a proposal to the general manager and the general manager shall propose it to the board of directors for approval. If independent directors have been set up, the opinions of the independent directors shall be fully considered, and their opinion of consent and objection and the reasons for their objection shall be included in the minutes of the board meeting.
(3) After the loan has been approved, the borrower should fill the "Appropriation Application" to get the loan from the Company.
(4) Where the borrower applies for the loan in accordance with the provisions of the preceding paragraph, it shall provide as security for the loan a promissory note or other collateral of the same amount as the loan.
The term of lending form the Company shall be limited to one year and the renewal shall be proposed to the BOD for approval.
After the loan is lent, the financial department shall track the borrower's financial position on a monthly basis and, if necessary, require the borrower to provide financial information from time to time. If the borrower does not pay the loan more than 15 days after the notice of overdue loan has been sent, the Company has the discretion to petition a competent court to grant a decree for compulsory execution of its promissory note or dispose of its collateral.

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Loans use floating interest rate which is adjusted dynamically with the Company's fund costs or the market interest rate. The interest rate adjustment is proposed by the finance department for the general manager’s approval.
The subsidiaries of which the Company has 100% ownership are entitled to the payment of interest charges in other ways.

The interest receivable referred to in paragraph 1 of this article shall be settled on a quarterly basis.

The Company shall set up a log book for loaning of company funds, which record the details of the loan including the borrowers, the amount of the loans, the date of approval by the BOD, the date of the loans, the result of the risk assessment and the content of the collateral.
The finance department shall assess the loans, reserve adequate allowance for bad debts, properly disclose the relevant information in the financial statements and provide relevant information to the CPA to carry out the necessary auditing procedures.
The company's internal auditors shall audit the implementation of the Procedures no less frequently than quarterly and prepare written records accordingly. They shall promptly notify the supervisors in writing of any material violation found.
The Company shall announce the amount of funds lent to other parties by the Company and its subsidiaries in the preceding month, as well as the monthly balance, before the 10th day of the month.
If the balance of the fund lent by the Company meets any of the following criteria, it shall be announced and reported within two days upon occurrence of the fact:
(1) The balance of funds lent to other parties by the Company and its subsidiaries exceed more than 20% of the net worth of the Company specified in its latest financial statements.
(2) The balance of funds lent to any single enterprise by the Company and its subsidiaries exceed more than 10% of the net worth of the Company specified in its latest financial statements.
(3) The increase of funds lent by the Company or its subsidiaries reaches NT$10 million or more, and is more than 2% of the net worth of the Company specified in its latest financial statements.

The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to the subparagraph (3).

If a borrower no longer satisfies the criteria set forth in the relevant regulations

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and/or the Procedures or there is any excess over the lending limit due to unexpected changes of the Company, a corrective plan has to be provided to the supervisors and the proposed correction actions should be implemented within the period specified in such plan.

If there is any violation by the Company's managers and persons-in-charge of related regulations or the Procedures, they shall be disciplined in accordance with the related personnel policies and rules of the Company.
Where a subsidiary of the Company intends to make loans to others, the Company shall instruct it to establish its own Operational Procedures for Loaning of Company Funds in compliance with “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies”.
The Procedures shall be approved by the BOD, be sent to the supervisors and be proposed to the Shareholders’ Meeting for approval. If any director expresses his objection which appears on the minutes of the board meeting or is written in a statement, the Company shall submit such objection to the supervisors and the Shareholders’ Meeting for deliberation. Any amendment is subject to the same procedures. After the Company has established the position of independent directors, the BOD shall take opinions of independent directors into full consideration when the Procedures are proposed to the BOD for deliberation. All and any of independent directors’ consent and objection shall be noted in the minutes of the board meeting.
The Procedures were enacted on June 14, 2006 and amended

on June 13, 2007 for the first time,

on June 16, 2009 for the second time. on June 15, 2010 for the third time. and on June 18, 2013 for the fourth time.

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Appendix 7 CHIN-POON INDUSTRIAL CO., LTD.

Operational Procedures for Acquisition and Disposal of Assets

Article 1 Objective
To protect investment and implement information disclosure, this procedure has been established, and shall be adopted for any asset acquisition and disposal.
Article 2 Compliance
The Procedure is established in accordance with the Regulations
Governing the Acquisition and Disposal of Assets by Public Companies.

Article 3 Scope of Assets

“ Assets” used herein should mean:
3.1 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.
3.2 Real property (including land, houses and buildings, investment property, and rights to use land) and equipment.
3.3 Memberships.
3.4 Patents, copyrights, trademarks, franchise rights, and other intangible assets.
3.5 Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables).
3.6 Derivatives.
3.7 Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law.
3.8 Other major assets.

Article 4 Terminology

4.1 Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier. For investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of

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approval by the competent authority shall apply.

4.2 Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.
4.3 Subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
4.4 Related party: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
4.5 Within the preceding year: Refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted.
4.6 Latest financial statements: Refers to the financial statements audited or signed by accountants and announced right before the acquisition or disposal of asset.
4.7 Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.
4.8 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.
4.9 Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of shares") under the Article 156, paragraph 6 of the Company Act.

Article 5 Establishment of the Procedures

5.1 The Company follows the following procedure to establish the Procedures. After the Procedures have been approved by the board

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of directors, they shall be submitted to each supervisor, and then to a shareholders' meeting for approval. The same applies when the procedures are amended. If any director expresses dissent and it is contained in the minutes or a written statement, the company shall submit the director's dissenting opinion to each supervisor.

Where the position of independent director has been created, when the Procedures are submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

Where an audit committee has been established, when the Procedures are adopted or amended they shall be approved by more than half of all audit committee members and submitted to the board of directors for a resolution.

If approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting.

The Procedures contains at least the following items:

5.1.1 Appraisal procedures and operating procedures.
5.1.2 The procedure of deciding the transaction terms shall include the means of price determination, supporting reference materials and system of authority.
5.1.3 Units in charge.
5.1.4 Public announcement and regulatory filing procedures.
5.1.5 The scope of investment and the limit of the authorized amount.
5.1.6 Total amounts of real property and securities acquired by the company and each subsidiary for business use, and limits on individual securities.
5.1.7 Penalties for personnel violating these Regulations or the Procedures.
5.1.8 Other important matters.

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5.2 The subsidiaries of the Company follow the above procedure to establish the Operational Procedures for Acquisition and Disposal of Assets. After the Procedures have been approved by the board of directors, they shall be submitted to a shareholders' meeting for approval. the same applies when the procedures are amended.
5.3 With respect to The Company's acquisition or disposal of assets that is subject to the approval of the board of directors under the company's procedures or other laws or regulations, if a director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to each supervisor.

Where the position of independent director has been created, when a transaction involving the acquisition or disposal of assets is submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

Where an audit committee has been established, any transaction involving major assets or derivatives shall be approved by more than half of all audit committee members and submitted to the board of directors for a resolution.

5.4 The terms "all audit committee members" and "all directors" in the preceding paragraphs shall be counted as the actual number of persons currently holding those positions.

Article 6 The Appraisal for Assets Acquisition or Disposal

6.1 The appraisal for acquisition or disposal of real property or equipment In acquiring or disposing of real property or equipment where the transaction amount reaches 20 percent of the Company's paid-in capital or NT$300 million or more, the Company, unless transacting

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with a government agency, engaging others to build on its own 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:

6.1.1 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.
6.1.2 Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.
6.1.3 Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:
6.1.3.1 The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.
6.1.3.2 The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount.
6.1.4 No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date. Where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.
6.1.5 If an appraisal institution submits an "assessed current value report" or "evaluation report" to substitute for an appraisal

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report, the content thereof is still required to comply with the above-referred provisions on items required to be recorded in the appraisal report.

6.1.6 Where The Company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20 percent 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; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.
6.1.7 Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Companies 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.
6.2 The appraisal for acquisition or disposal of securities
6.2.1 The Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant, for reference in appraising the transaction price and shall adopt the following methods to determine the transaction price :
- 6.2.1.1 When the Company acquires or disposes of securities that are already traded on the stock exchange or at securities brokers' business offices, transactions shall be determined on the basis of market prices.
- 6.2.1.2 When the Company acquires or disposes of securities that are not traded on the stock exchange or at securities brokers' business offices, the Company shall refer to the target company's net worth per share, profitability, future prospect and the last transaction prices or refer to the interest rate in the market, the coupon rate of the bonds or the credit of the debtors to appraise the securities.
6.2.2 If the dollar amount of the transaction is 20 percent of the company's paid-in capital or NT$300 million or more, the company shall additionally engage a certified public

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accountant to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the Financial Supervisory Commission (FSC).

6.3 The Company’s derivatives transactions shall be in compliance with the Company’s “Operational Procedures for Derivatives Transactions”. The Company shall pay strict attention to control of the important risk management and auditing matters in order to implement the internal control of the derivatives transactions. The general manager is responsible for periodically evaluating whether derivatives transactions performance is consistent with established business strategy and whether the risk undertaken is within the company's permitted scope of tolerance. If the general manager find significant anomalies, the general manager should report them to the board of directors.

The Company shall authorize the relevant persons for them to do derivatives transactions in accordance with the provisions of the Operational Procedures for Derivatives Transactions and report the list of the authorized persons to the board of directors in the next board meeting.

6.4 The Company that conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit it to the board of directors for deliberation and resolution.
6.5 Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.
Article 7 The Limit on Acquisition for Real Property and for Investment of All Securities and a Single Security.
The acquisition by the Company or its subsidiaries of real property for

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nonbusiness use or of all securities shall not exceed two times of the relevant company's paid-in capital. The acquisition by the Company or its subsidiaries of a single security shall not exceed the relevant company's paid-in capital unless the limit is relieved by its shareholders’ meeting.

Article 8 Executing Unit and Optional Procedures

When the Company acquires or disposes of the assets, the executive unit shall collect the necessary information, compare and analyze the details, and proposes the terms of the transaction for approval through the relevant authorization system.

8.1 Executing Unit

Finance Department is responsible for execution of long-term and short-term investment of securities. The executing unit for real estate and equipment is their user and the relevant departments. Other assets except securities, real estate and equipment shall be assessed by the relevant departments before their acquisition and disposal.

8.2 The executing unit of disposal assets shall compile a report which contains the reason of disposal, disposal assets, the counterparties, the disposal price, the payment term, reference materials of determining the price and the mandatory items of public announcement , and submit it to their decisionmakers for approval in accordance with the relevant operational rules of the Company's internal control and the Procedures.
8.3 With regard to the appraisal of the disposal of assets, if the assets are real estate and equipment, their user or their administrator is responsible for it; if the assets are not real estate and equipment, the relevant executing unit is responsible for it.
8.4 The Company’s acquisition and disposal of securities shall be in compliance with the Company’s “Operational Procedures for Long-term and Short-term Investment”.
8.5 Operational Procedures for Merger, Demerger, Acquisition, or Transfer of Shares
8.5.1 The Company participating in a merger, demerger, acquisition, or transfer of shares shall prepare a public report to shareholders, which contains important contractual content and matters relevant to the merger, demerger, or acquisition, prior to the shareholders meeting and include it along with the expert opinion referred to in the preceding paragraphs when

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sending shareholders notification of the shareholders meeting for reference in deciding whether to approve the merger, demerger, or acquisition. Where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply.

8.5.2 Where the shareholders meeting of any one of the companies participating in the merger, demerger, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the companies participating in the merger, demerger or acquisition shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.
8.5.3 Where the shareholders meeting of any one of the companies participating in the merger, demerger, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the companies participating in the merger, demerger or acquisition shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.
8.5.4 The Company and other counterparties participating in a merger, demerger, or acquisition shall convene a board of directors meeting and shareholders meeting on the same day to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent.
8.5.5 The Company and other counterparties participating in a transfer of shares shall call a board of directors meeting on the same day, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent.
8.5.6 Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information

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and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition, or transfer of shares.

8.5.7 The Companies participating in a merger, demerger, acquisition, or transfer of shares may not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares:
8.5.7.1 Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities.
8.5.7.2 An action, such as a disposal of major assets, that affects the company's financial operations.
8.5.7.3 An event, such as a major disaster or major change in technology, that affects shareholder equity or share price.
8.5.7.4 An adjustment where any of the companies
- participating in the merger, demerger, acquisition, or transfer of shares from another company, buys back treasury stock.
8.5.7.5 An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares.
8.5.7.6 Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.
8.5.8 The contract of a merger, demerger, acquisition, or transfer of shares participated by the Company shall record the rights and obligations of the companies participating in the merger, demerger, acquisition, or transfer of shares, and shall also record the following:
8.5.8.1 Handling of breach of contract.
8.5.8.2 Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged.
8.5.8.3 The amount of treasury stock which the participating

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companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof.

8.5.8.4 The manner of handling changes in the number of participating entities or companies.
8.5.8.5 The execution schedule and expected completion date.
8.5.8.6 Scheduled date for convening the legally mandated shareholders meeting and the relevant procedures if the plan exceeds the deadline without completion.
8.5.9 After public disclosure of the information, if any company participating in the merger, demerger, acquisition, or share transfer intends further to carry out a merger, demerger, acquisition, or share transfer with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or share transfer; except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.
8.5.10 Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company in accordance with the provisions of Article 8.5.4 、 8.5.5 、 8.5.6 and 8.5.9.
8.5.11 When participating in a merger, demerger, acquisition, or transfer of another company's shares, the Company shall prepare a full written record of the following information and retain it for 5 years for reference:
8.5.11.1 Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of another company's shares prior to disclosure of the information.
8.5.11.2 Dates of material events: Including the signing of any

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letter of intent or memorandum of understanding, the hiring of a financial or legal advisor, the execution of a contract, and the convening of a board of directors meeting.

8.5.11.3 Important documents and minutes: Including merger, demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of board of directors meetings.

When participating in a merger, demerger, acquisition, or transfer of another company's shares, a company that is listed on an exchange or has its shares traded on an OTC market shall, within 2 days counting inclusively from the date of passage of a resolution by the board of directors, report (in the prescribed format and via the Internet-based information system) the information set out in the subparagraphs 1 and 2 of the preceding paragraph to the FSC for recordation.

Where any of the companies participating in a merger, demerger, acquisition, or transfer of another company's shares is neither listed on an exchange nor has its shares traded on an OTC market, the company(s) so listed or traded shall sign an agreement with such company whereby the latter is required to abide by the provisions of in the preceding paragraphs.

Article 9 Information Disclosure

9.1 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 counting inclusively from the date of occurrence of the event:
9.1.1 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 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more. 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

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domestic securities investment trust enterprises.

9.1.2 Merger, demerger, acquisition, or transfer of shares.
9.1.3 Losses from derivatives transactions reaching the limits on aggregate losses or on losses of individual contracts set out in the procedures adopted by the company.
9.1.4 Where an asset transaction other than any of those referred to in the preceding three subparagraphs, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million. But 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 a securities firm of securities in the primary market in accordance with the regulations.
(3) Trading of bonds under repurchase/resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.
(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 is less than NT$500 million.
(5) Acquisition or disposal by the Company in the construction business of real property for business use, where the trading counterparty is not a related party, and the transaction amount is less than 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 housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the company expects to invest in the transaction is less than NT$500 million.
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.

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(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 the Laws and Regulations need not be counted toward the transaction amount.

9.2 Information Disclosure of the Company’s Subsidiary
9.2.1 Acquisition or disposal of assets by the Company’s Subsidiary should follow the procedures of the Article 9.1 hereof.
9.2.2 Information required to be publicly announced and reported in accordance with the provisions of the Article 9.1 on acquisitions and disposals of assets by a subsidiary of the Company that is not itself a public company in Taiwan shall be reported by the Company.
9.2.3 The subsidiary should make a public announcement and regulatory filing if the type of transaction specified therein reaches 20 percent of paid-in capital or 10 percent of the total assets. The paid-in capital or total assets referred to in this criterion means the paid-in capital or total assets of the Company. For a foreign company whose stock has no par value or a par value other than NTD10, the "20 percent of paid-in capital" in this paragraph shall be calculated instead as 10 percent of shareholder equity.
9.2.4 Where any of the following circumstances occurs with respect to a transaction that the Company’s subsidiary has already publicly announced and reported in accordance with the preceding article, a public report of relevant information shall be made on the information reporting website designated by the FSC within 2 days counting inclusively from the date of occurrence of the event:
- (1) Change, termination, or rescission of a contract signed in regard to the original transaction.

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  - (2) The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract.

  - (3) Change to the originally publicly announced and reported information.

9.3 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.
9.4 Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the preceding article, a public report of relevant information shall be made on the information reporting website designated by the FSC within 2 days counting inclusively from the date of occurrence of the event:
(1) Change, termination, or rescission of a contract signed in regard to the original transaction.
(2) The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract.
(3) Change to the originally publicly announced and reported information.

Article 10 Related Party Transactions

10.1 When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised, if the transaction amount reaches 10 percent or more of the company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of the preceding articles. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with the Article 11, paragraph 1 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies. When judging whether a trading counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered.
10.2 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

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assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's 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 the board of directors and recognized by the supervisors:

10.2.1 The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.
10.2.2 The reason for choosing the related party as a trading counterparty.
10.2.3 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 the Article 15 and Article 16 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
10.2.4 The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company and the related party.
10.2.5 Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization.
10.2.6 Restrictive covenants and other important stipulations associated with the transaction.
10.2.7 An appraisal report from a professional appraiser or a CPA's opinion.

The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with the Article 30, paragraph 2 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies, 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 board of directors and recognized by the supervisors need not be counted toward the transaction amount.

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With respect to the acquisition or disposal of business-use equipment between a company and its parent or subsidiaries, the company's board of directors may pursuant to the Article 7, paragraph 1, subparagraph 3 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies delegate the board chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board of directors meeting.

Where the position of independent director has been created, when a matter is submitted for discussion by the board of directors pursuant to the 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 minutes of the board of directors meeting.

Where an audit committee has been established, the matters for which the preceding paragraph requires recognition by the supervisors shall first be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution.

The terms "all audit committee members" and "all directors" in the preceding paragraphs shall be counted as the actual number of persons currently holding those positions.

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

10.3.1 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. But it may not be higher

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than the maximum non-financial industry lending rate announced by the Ministry of Finance.

10.3.2 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. And the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties.

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

The Company that acquires real property from a related party and appraises the cost of the real property in accordance with the paragraph 1 and paragraph 2 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 the article 10.2 and the preceding three paragraphs do not apply:

10.3.2.1 The related party acquired the real property through inheritance or as a gift.
10.3.2.2 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.
10.3.2.3 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.
10.4 When the results of the Company's appraisal conducted in accordance with the article 10.3.1 and 10.3.2 are uniformly lower

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than the transaction price, the matter shall be handled in compliance with the article 10.5. However, where 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 have been obtained, this restriction shall not apply:

10.4.1 Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions:
10.4.1.1 Where undeveloped land is appraised in accordance with the means in the article 10.3, and structures is appraised according to the related party's construction cost plus reasonable construction profit, the total appraised amount of both are in excess of the actual transaction price. The "Reasonable construction profit" shall be 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.
10.4.1.2 If there are completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, the land area and transaction terms of the Company’s acquisition are similar to them after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices.
10.4.1.3 If there are completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, the transaction terms of the Company’s acquisition are similar to them after calculation of reasonable price discrepancies among floors in accordance with standard property leasing market practices.
10.4.2 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

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a similar size by unrelated parties within the preceding year.

10.5 Where the Company acquires real property from a related party and the results of appraisals conducted in accordance with the article 10.3 and 10.4 are uniformly lower than the transaction price, the following steps shall be taken:
10.5.1 A special reserve shall be set aside in accordance with the Article 41, paragraph 1 of the 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 another company, then the special reserve called for under the Article 41, paragraph of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company.
10.5.2 The supervisors shall comply with the Article 218 of the Company Act.
10.5.3 Actions taken pursuant to the subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

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

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consent.

Article 11 Other Matters

11.1 The Company engaging in derivatives trading shall establish a log book in which details of the types and amounts of derivatives transactions and the approval dates by the board of directors shall be recorded in detail. Internal audit personnel shall periodically conduct a monthly audit of how faithfully derivatives transactions by the trading department adheres to the procedures for engaging in derivatives transactions. If any material violation is discovered, all supervisors shall be notified in writing.
11.2 The Company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and opinions provided by CPA, attorney, and securities underwriter at the company headquarters, where they shall be retained for 5 years except where another Act provides otherwise.
11.3 The employees of the Company who violate the provisions of the Procedures shall be disciplined depending on the seriousness of their violations.
Article 12 The matters which are not stipulated by the Procedures are governed by the relevant laws and regulations and by the Company’s policies and procedures.

Article 13 History of Revision

13.1 The Procedures were enacted on June 28, 2012.
13.2 Amended on June 18, 2013.
13.3 Amended on June 24, 2014.

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Appendix 8 CHIN-POON INDUSTRIAL CO., LTD.

Operational Procedures for Endorsements and Guarantees

“Operational Procedures for Endorsements and Guarantees” (the “Procedures”) outlined herein are set up to comply with the Article 36-1 of Securities and Exchange Act and Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.
The Company may make endorsements/guarantees for its subsidiaries in which the Company holds directly and indirectly more than 50 percent of the voting shares. The Company’s subsidiaries in which the Company holds directly and indirectly 90% or more of the voting shares may make endorsements/guarantees for each other, and the amount of endorsements/guarantees may not exceed 10% of the net worth of the Company. But this restriction shall not apply to endorsements/guarantees made between its subsidiaries in which the Company holds directly and indirectly 100% of the voting shares.
"Subsidiary" and "parent company" as referred to in the Procedures shall be as determined under the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

The term "announce and report" as used in the Procedures means the process of entering data to the information reporting website designated by the Financial Supervisory Commission (FSC).

The “net worth” referred to in the Procedures means the equity attributable to the shareholders of the Company in the balance sheet.

“ The date of occurrence of the fact” referred to in the Procedures means the contract date, the date of payment, the date of approval by the board of directors, or the date on which the counterparties or the amount of the transaction, which occurs first, can be determined.

The term "endorsements/guarantees" as used in the Procedures refers to the following:
A. Financing endorsements/guarantees, including:
- a. Bill discount financing.
- b. Endorsement or guarantee made to meet the financing needs of another company.
- c. Issuance of a separate negotiable instrument to a non-financial enterprise as

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security to meet the financing needs of the company itself.

B. Customs duty endorsement/guarantee, meaning an endorsement or guarantee for the company itself or another company with respect to customs duty matters.
C. Other endorsements/guarantees, meaning endorsements or guarantees beyond the scope of the above two subparagraphs.

Any creation by the Company of a pledge or mortgage on its chattel or real property as security for the loans of another company shall also comply with the Procedures.

The total amount available for the Company’s endorsements/guarantees shall not exceed twenty five percent (25%) of the net worth of the Company. The total amount available for the Company’s endorsements/guarantees for a single enterprise shall not exceed twenty percent (20%) of the net worth of the Company. The total accumulated amount available for the Company’s and its subsidiaries’ endorsements/guarantees shall not exceed forty percent (40%) of the net worth of the Company. The total accumulated amount available for the Company’s and its subsidiaries’ endorsements/guarantees for a single enterprise shall not exceed forty percent (40%) of the net worth of the Company.
Procedures, Decision-making and Authorization System After the relevant department has applied for endorsements/guarantees, the finance department of the Company shall assess the application for the necessity and reasonableness of the endorsements/guarantees and review the credit of the counterparties and the risk of negative impacts on the business risks, financial position and stockholders’ equity of the Company. Collateral for the endorsements/guarantees should be obtained if necessary. And then the finance department shall make a proposal of endorsements/guarantees on its counterparties, type, reasons and amount to the board of directors for approval. The board of directors can authorize the general manager to make endorsements/guarantees below NT$200 million, which shall be reported to the board meeting for recognition. If independent directors have been set up, the opinions of the independent directors shall be fully considered, and their opinion of consent and objection and the reasons for their objection shall be included in the minutes of the board meeting.

Before the Company’s subsidiaries in which the Company holds directly and indirectly 90% or more of the voting shares make endorsements/guarantees for each other in accordance with the Article 2, their proposals of

endorsements/guarantees shall be proposed to the board meeting for approval. But this restriction shall not apply to endorsements/guarantees made between its subsidiaries in which the Company holds directly and indirectly 100% of the voting shares.

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When the Company makes endorsements/guarantees, the counterparty of endorsements/guarantees have to sign a promissory note bearing the same value as the amount of endorsements/guarantees for reciprocal guarantee. Other collateral for the endorsements/guarantees should be obtained if necessary. If the net worth of the counterparty of endorsements/guarantees is less than one-half of its paid-in capital, the Company's endorsements/guarantees for the counterparty shall not exceed 25% of its paid-up capital and the duration of the endorsements/guarantees shall not be longer than one year.

For the Company’s subsidiary whose stock has no par value or a par value other than NTD10, the “paid-in capital" in the preceding paragraph shall be calculated instead as the sum of its share capital and its paid-in capital in excess of par.

The seals for endorsement/guarantee should be the official corporate seals registered with the Ministry of Economic Affairs.
The seals of the Company shall be kept by persons appointed and authorized by the board of directors. The notes used for issuing endorsement/guarantee shall be kept by the finance department. The Procedures must be followed for sealing and note issuance purposes.

When providing endorsement/guarantee to a foreign company, the endorsement/guarantee letter should be executed and signed by the person delegated by the board of directors.

The Company shall establish and maintain a log book to record the details of endorsement/guarantee undertaken by the Company, including the objects of endorsement/guarantee, the name of the counterparties, the amount of endorsement/guarantee, the date of approval by the board of directors or the general manager, the date of endorsement/guarantee, the result of risk review, the contents of collateral, and the conditions and date for the removal of the liabilities for endorsement/guarantee.

The Company shall assess and recognize, if any, contingent losses brought about by the endorsement/guarantee, to adequately disclose information in the financial statements, and to provide external auditors with necessary information for conducting due auditing and issuing auditing report.

The company's internal auditors shall audit the implementation of the Procedures no less frequently than quarterly and prepare written records accordingly. They shall promptly notify the supervisors in writing of any material violation found.
Extinguishing of the Notes for Endorsement/Guarantee

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A. If the notes for endorsement/guarantee is extinguished due to the liquidation of the debt or the renewal of the endorsement/guarantee, the counterparties shall send a letter about it and return the original notes for endorsement/guarantee to the finance department of the Company who will seal them with the mark of "Extinguished". The letter shall be archived for future reference.
B. The finance department at any time record the extinguished notes for endorsement/guarantee in the log book and subtract the amount of the extinguished notes from the total accumulated amount of endorsement/guarantee.
C. If the financial institution requests the Company to issue new notes for endorsement/guarantee before they can return the original notes to the Company, the finance department should trace them and recollect the original one after the financial institution has received the new one.
The Company shall announce and report the previous month's balance of endorsements/guarantees of itself and its subsidiaries by the 10th day of each month.

The Company whose balance of endorsements/guarantees reaches one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence:

A. The aggregate balance of endorsements/guarantees by the Company and its subsidiaries reaches 50 percent or more of the Company's net worth as stated in its latest financial statements.
B. The balance of endorsements/guarantees by the Company and its subsidiaries for a single enterprise reaches 20 percent or more of the Company's net worth as stated in its latest financial statements.
C. The balance of endorsements/guarantees by the Company and its subsidiaries for a single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees for, investment of a long-term nature in, and balance of loans to, such enterprise reaches 30 percent or more of the Company's net worth as stated in its latest financial statements.
D. The amount of new endorsements/guarantees made by the Company or its subsidiaries reaches NT$30 million or more, and reaches 5 percent or more of the Company's net worth as stated in its latest financial statements.
The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to subparagraph 4 of the preceding paragraph.
The Company shall not exceed the limits set out in the Procedures except for its

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business requirements.

Where the Company needs to exceed the limits set out in the Procedures, it shall obtain approval from the board of directors and half or more of the directors shall act as joint guarantors for any loss that may be caused to the Company owing to the excess endorsement/guarantee. It shall also amend the Procedures accordingly and submit it to the shareholders' meeting for ratification after the fact. If the shareholders' meeting does not give consent, the Company shall adopt a plan to discharge the amount in excess within a given time limit. Where the Company has established the position of independent director, when it makes

endorsements/guarantees for others, it shall take into full consideration the opinions of each independent director; independent directors' opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors' meeting.

Where as a result of changes of condition the entity for which an

endorsement/guarantee is made no longer meets the requirements of the Procedures, or the amount of endorsement/guarantee exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to all the supervisors, and shall complete the rectification according to the timeframe set out in the plan.

If the counterparties of endorsement/guarantee meet the requirements of the Article 2 and then does not meet those criteria, or if the amount of the endorsement/guarantee exceeds the allowed amount based on new circumstances, the amount of the endorsement/guarantee for the counterparties with new status or the excess amount shall be eliminated at the time of expiration of the contracts or within a certain period of time by adopting rectification plans.

The managers or the persons in charge of the Company who violate the provisions of the Procedures shall be disciplined in accordance with the Company’s policy of disciplines.
Where a subsidiary of the Company intends to make endorsement/guarantee for others, the Company shall instruct it to establish its own Operational Procedures for Endorsements and Guarantees in compliance with “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies”.
The Procedures shall be approved by the board of directors, be sent to the supervisors and be proposed to the Shareholders’ Meeting for approval. If any director expresses his objection which appears on the minutes of the board meeting or is written in a statement, the Company shall submit such objection to the supervisors and the Shareholders’ Meeting for deliberation. Any amendment is

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subject to the same procedures. After the Company has established the position of independent directors, the board of directors shall take opinions of independent directors into full consideration when the Procedures are proposed to the board of directors for deliberation. All and any of independent directors’ consent and objection shall be noted in the minutes of the board meeting.

17. The Procedures were enacted on June 14, 2006 and amended

on June 16, 2009 for the first time, on June 15, 2010 for the second time, and on June 18, 2013 for the third time.

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Appendix 9 CHIN-POON INDUSTRIAL CO., LTD.

Rules of Supervisors’ Authority

Purposes
To ensure the normal business operation of this Company and to develop an effective, comprehensive, and robust supervisory system for the supervisors, allowing supervisors to fulfill their functions, and for the purpose of strengthening this Company's internal monitoring mechanisms and ensuring sound corporate governance, in order to fulfill the responsibility for safeguarding the rights and interests of this Company and all of its shareholders, these Rules are adopted pursuant to the provisions of Chapter IV of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.
Scope of application
Except as otherwise provided by law or regulation or by the articles of incorporation, the powers and duties of the supervisors of this Company and the matters to be carried out by this Company when the supervisors exercise their powers shall be as set forth in these Rules.
Scope of duties
The supervisors shall faithfully perform their duties and fulfill the obligation to exercise the due care of a good administrator. They shall maintain a high degree of self-discipline and adopt a prudential attitude in supervising the business and financial conditions of this Company, in order to safeguard the rights and interests of this Company and its shareholders.

If in the course of their duties a supervisor violates a law, regulation, or the articles of incorporation, or if a supervisor neglects his or her supervisory duties, thereby causing damage to this Company, the supervisor shall be legally held liable to this Company for damages.

Exercise of supervisory powers
A supervisor shall be familiar with the relevant laws and regulations, shall understand the rights, obligations, and duties of the directors of this Company and the respective functions, duties, and operations of each department. Supervisors shall attend meetings of the board of directors to oversee its operation and to state their opinions when appropriate so as to control or discover any irregularity as early as possible.

In the exercise of supervisory powers by each respective supervisor, a supervisor that deems it necessary may convene a meeting, in consideration the overall interest of this Company and the shareholders, to exchange opinions with

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other supervisors, provided that in so doing the independent exercise of powers by other supervisors is not obstructed.

Supervision of business operations, the management team, and the internal control system of this Company
The supervisors shall monitor the business operations of this Company, examine its financial and business conditions from time to time, and review its books and records. They may request reports to be presented by the board of directors or any of the managerial officers in order to understand the status of performance of their respective duties, and shall attend to the effectiveness and implementation of the internal control system so as to reduce the financial and operational risks of this Company.
Notification of meetings of the board of directors
When a meeting of the board of directors is held, each supervisor shall be notified of the meeting in accordance with the provisions of the Regulations Governing Procedure for Board of Directors Meetings of Public Companies, and the meeting notice and sufficient meeting materials shall be delivered to all supervisors.
Conflict of interest
The supervisors shall maintain a high degree of self-discipline; when a proposal put forward at a meeting bears on the personal interest of a supervisor, and such relationship is likely to prejudice the interest of this Company, the supervisor shall enter into recusal.
Limiting violations of law by the board or a director in the course of duties Upon discovering any violation of a law or regulation, the articles of incorporation, or a shareholders meeting resolution by the board of directors or by a director in the course of their duties, a supervisor shall immediately notify the board of directors or the director to cease such conduct.
Reviewing the books and records of this Company The supervisors shall thoroughly review and issue a report on the various books and records (including business reports, financial statements, proposals for distribution of earnings or for covering of losses) compiled by the board of directors and presented at shareholders meetings, and shall state their opinion at the shareholder meeting.
Review of the business and finances of this Company A supervisor may at any time investigate the financial and business conditions of this Company, and the relevant departments in this Company shall provide the books and documents that may be required by the investigation. When reviewing the financial or business conditions of this Company, a supervisor may retain attorneys or accountants on behalf of this Company to perform the review, provided that they shall inform the relevant persons of their confidentiality obligations.

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The board of directors or managerial officers shall submit reports at the request of a supervisor and may not for any reason obstruct, evade, or refuse the inspections of the supervisors.

When a supervisor performs his or her duties, this Company shall provide the necessary assistance in accordance with the needs of the supervisor, and any reasonable expenses required for such assistance shall be borne by this Company.

Communication channels with relevant personnel in this Company

The supervisors shall conduct periodic discussions with the internal auditors regarding their examination of deficiencies in the internal control system, and shall make a record of the discussions.

This Company shall establish a channel for communication between its employees, shareholders, and interested parties and the supervisors in order to facilitate the supervisory duties of the supervisors.

Upon discovering any misconduct, a supervisor shall take timely measures to curb its expansion, and if necessary shall file a report with the competent authority or relevant regulatory agencies.

If any of a TSWE or GTSM listed company's independent directors, general managers, heads of finance, accounting, research and development, or internal audit departments, or CPAs resigns or is removed from their position, the supervisors shall closely investigate the reasons and make necessary recommendations or take necessary measures.

Liability insurance for supervisors

It is advisable that this Company, in accordance with the articles of incorporation or the resolution of a shareholders meeting, take out liability insurance for the supervisors with respect to liabilities resulting from the performance of duties during their terms of office, so as to reduce and spread the risk of material damage to the rights and interests of this Company and the shareholders as a result of error or negligence on the part of a supervisor.

Continuing education for supervisors
Upon becoming a supervisor and throughout their term in that position, a supervisor is advised to participate in training courses covering subjects related to corporate governance, such as finance, risk management, business, commerce, accounting, law, or corporate social responsibility, offered by the institutions designated in the Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and GTSM Listed Companies.
Supplementary provisions

These Rules, and any amendments hereto, shall be implemented after approval by a shareholders meeting.

The Procedures were enacted on June 15, 2010.

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Appendix 10

CHIN-POON INDUSTRIAL CO., LTD.

Shareholdings of All Directors and Supervisors

The following table shows the shareholdings of all directors and supervisors on the record date of April 24, 2017.
The minimum number of statutory shares that should be held by all directors is 19,874,771 shares. The minimum number of statutory shares that should be held by all supervisors is 1,987,477 shares.

Title	Name	Election Date	Term	Shareholdings on the Election Date (Note 1)	Shareholdings on the Election Date (Note 1)	Shareholdings on the Record Date of April 24, 2017 (Note 2)	Shareholdings on the Record Date of April 24, 2017 (Note 2)
				Number of Shares	Shareholding Ratio	Number of Shares	Shareholding Ratio
Director	HUANG, WEI-JIN	2014.6.24	3 years	13,238,409	3.33	13,238,409	3.33
Director	LIN, PI-CHI	2014.6.24	3 years	8,539,649	2.15	8,287,649	2.08
Director	TSENG-LIU, YU-CHIH	2014.6.24	3 years	9,603,279	2.42	9,603,279	2.42
Director	TSENG, WEN-HSIEH	2014.6.24	3 years	3,227,060	0.81	3,209,060	0.81
Director	HSIAO, HSIEN-JEN	2014.6.24	3 years	3,743,369	0.94	3,743,369	0.94
Director	TUNG, HSIAO-HUNG	2014.6.24	3 years	6,344,043	1.60	6,344,043	1.60
Director	CHEN, SHU-CHEN	2014.6.24	3 years	247,000	0.06	247,000	0.06
	Total			44,942,809	11.31	44, 672,809	11.24
Supervisor	LAI, HWEI-SHAN	2014.6.24	3 years	6,283,114	1.58	6,283,114	1.58
Supervisor	TSENG, WEN-YU	2014.6.24	3 years	5,546,357	1.40	5,546,357	1.40
	Total			11,829,471	2.98	11,829,471	2.98

Note 1: Total shares issued as of June 24, 2014 were 397,495,420 Common Shares. Note 2: Total shares issued as of April 24, 2017 were 397,495,420 Common Shares.

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AI assistant

CHIN-POON — AGM Information 2017

52025_rns_2017-07-13_f0b07ac1-d138-4a5a-9c20-7c8caa67850f.pdf

CHIN-POON INDUSTRIAL CO., LTD.

2017 ANNUAL SHAREHOLDERS’ MEETING

MEETING AGENDA

Contents

Procedures

Agenda

Reports

Report 1

Business Report for 2016 & Business Plan for 2017

Dear Shareholders

Our Performance in 2016

Operating Results in 2016

Budget Achievement in 2016

Results of R&D in 2016

I. Operating Strategies:

II. Operational Goals:

III. Strategies for Marketing and Production:

1. Production Strategies

IV. R&D Plans:

2. R&D Budget

Our Strategies

Challenges

Report 2

Supervisors’ Review Report of 2016

CHIN-POON INDUSTRIAL CO., LTD.

Supervisors’ Review Report

CHIN-POON INDUSTRIAL CO., LTD.

Supervisors’ Review Report

Report 3

Report on the Compensation of Employees and the Remuneration of Directors of 2016

Proposed Resolutions

Proposal 1

Explanation:

Resolution:

Proposal 2

(Proposed by Board of Directors)

Explanation:

Resolution:

Deliberation Proposals

Proposal 1

Explanation:

Cross Reference Table

Resolution:

Proposal 2

Explanation:

Cross Reference Table

Resolution:

Proposal 3

Explanation:

Cross Reference Table

Proposal 4

Explanation:

Cross Reference Table

Resolution:

Proposal 5

Explanation:

Cross Reference Table

Resolution:

Proposal 6

Explanation:

Cross Reference Table

Resolution:

Proposal 7

Explanation:

Cross Reference Table

Resolution:

Proposal 8

Explanation:

Resolution:

Directors Election

Proposal 1

(Proposed by Board of Directors)

Explanation:

Resolution:

Deliberation Proposals

Proposal 1

Explanation:

CHIN-POON AGM Information 2017