CHROMA - AGM Information 2017 | FinancialReports.eu

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CHROMA ATE INC.

2017 Annual General Shareholders’ Meeting Meeting Agenda (Translation)

Date: 9:00am June 8, 2017 Venue: 66 Huaya 1st Road, Guishan, Taoyuan, Taiwan

CHROMA ATE INC.

Meeting Agenda for the 2017 Annual General Shareholders’ meeting

Meeting Procedures ......................................................................................................................... 1 2. Meeting Agenda ............................................................................................................................... 2 3. Report Items ..................................................................................................................................... 3 4. Acknowledgement Items ................................................................................................................. 4 5. Discussion Items ............................................................................................................................... 5 6. Election of Directors ......................................................................................................................... 7 7. Others ............................................................................................................................................... 9 8. Special Motions ................................................................................................................................ 9

Attachments

(1) Business Report .................................................................................................................. 10 (2) Audit Committee’s Review Report ....................................................................................... 11 (3) Itemized List of Endorsements and Guarantees in 2016...................................................... 12 (4) Comparison Table for the “Amendments to Code of Ethical Conduct” ............................. 13 (5) Independent Auditors’ Report and Financial Statements .................................................... 17 (6) Profit Allocation Proposal ..................................................................................................... 38 (7) Comparison Table for the “Amendments to Articles of Incorporation” ............................ 39 (8) Comparison Table for the “Amendments to Operating Procedures of Acquisition or Disposal of Assets” ............................................................................................................. 43 (9) Comparison Table for the “Amendments to Procedures of Endorsements and Guarantees” .............................................................................................................................................. 47 (10) Comparison Table for the “Amendments to Procedures for Lending of Capital to Other Parties” ............................................................................................................................... 49 (11) Comparison Table for the “Amendments to Procedures for Financial Derivatives Transactions” ...................................................................................................................... 51 (12) Comparison Table for the “Amendments to Rules for Election of Directors” ................. 52 Appendix (1) Articles of Incorporation ....................................................................................................... 54 (2) Code of Ethical Conduct ....................................................................................................... 62 (3) Operating Procedures of Acquisition or Disposal of Assets ................................................. 65 (4) Procedures of Endorsements and Guarantees ..................................................................... 74 (5) Procedures for Lending of Capital to Other Parties ............................................................. 79 (6) Procedures for Financial Derivatives Transactions............................................................... 83 (7) Rules for Election of Directors .............................................................................................. 87 (8) Rules and Procedures of Shareholders’ meeting ................................................................. 89 (9) Shareholdings of all directors and supervisors ..................................................................... 92

CHROMA ATE INC. Procedures for the 2017 Annual General Shareholders’ Meeting

Call Meeting to order
Chairman’s statements
Report items
Acknowledgement items
Discussion items
Election of Directors
Others
Special motions
Meeting adjourned
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CHROMA ATE INC. 2017 Annual General Shareholders’ Meeting Agenda

Time: 9:00am, June 8, 2017

Venue: 66 Huaya 1st Road, Guishan, Taoyuan, Taiwan (Chroma Headquarters)

1. Call meeting to order

2. Chairman’s statements

3. Report Items:

(1) To report the business of 2016
(2) Audit Committee’s review report
(3) Distribution of employee bonus, directors and supervisors’ remunerations
(4) Itemized List of Endorsements and Guarantees in 2016
(5) Amendments to Code of Ethical Conduct

4. Acknowledgement Items:

(1) To accept 2016 Business Report and Financial Statements
(2) To approve the proposal for distribution of 2016 profits

5. Discussion Items

(1) Discussion of Amendments to Articles of Incorporation
(2) Amendments to Operating Procedures of Acquisition or Disposal of Assets
(3) Amendments to Procedures of Endorsements and Guarantees
(4) Amendments to Procedures for Lending of Capital to Other Parties
(5) Amendments to Procedures for Financial Derivatives Transactions
(6) Amendments to Rules for Election of Directors

6. Election of Directors

7. Other

(1) Releasing the Directors from Non-competition Restrictions

8. Special Motion

9. Meeting Adjourned

Report Items

To report the business of 2016

Explanatory Notes: Please refer to Attachment (1)

Audit committee’s review report

Explanatory Notes: Please refer to Attachment (2)

To report the distribution of employee bonus, directors and supervisors’ remunerations Explanatory Notes:
(1) According to the resolutions of Company’s board of directors on 2/21 2017, the year 2016 employee bonus, directors and supervisors’ remunerations will be all paid in cash.
(2) The employees bonus is equivalent to 12.96% of the profit, amounted to NT$300,000,000 and directors’ remuneration is 0.35% of the profit, amounted to NT$8,000,000.
To report the List of Endorsements and Guarantees in 2016
Explanatory Notes: As end of December 31, 2016, please refer to attachment (3) for the details of endorsements and Guarantees
To report the amendments to Code of Ethical Conduct
Explanatory Notes: Amendments to Code of Ethical Conduct, due to establish the Audit Committee please refers to attachment (4) for the comparison table for the “Amendments to Code of Ethical Conduct”.
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Acknowledgement Items

Acknowledge the 2016 Business Report and Financial Statements (Proposed by the Board of Directors)

Explanation:

(1) Chroma 2016 Business Report, Individual Financial Statements and Consolidated Financial Statements were completed. The Individual Financial Statements and Consolidated Financial Statements were audited by independent auditors, Kuo, Wen-Chi and Wang, Yi-Wen of Deloitte & Touche, with Business Report have been reviewed by the Company’s Audit Committee.
(2) Please refer to the attachments (1) and (5).
(3) Please accept the aforementioned Business Report and Financial Statements.
Acknowledge the Proposal of 2016 Earnings Distribution (Proposed by the Board of Directors) Explanation:
(1) The proposal of 2016 earnings distribution is based on the Company Law and the Company’s Articles of Incorporation.
(2) The total amount of common shares outstanding is subject to change and the ultimate cash dividend to be distributed to each common share will be adjusted accordingly by subsequently convertible bonds, repurchase its common shares or issue new shares due to the exercise of the employee stock options. It is proposed that the Board of Directors of Chroma will 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.
(3) Each common share holder will be entitled to receive a cash dividend of NT$3.3. The cash dividend will be allotted after resolute by Annual General Shareholders’ Meeting, as authorized Board of Directors of Chroma to determine the record date for distribution.
(4) The 2016 Profit Allocation Proposal is attached hereto as Attachment (6).
(5) Please accept the aforementioned proposal of 2016 earnings distribution.
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Discussion Items

Discussion of Amendments to Articles of Incorporation (Proposed by Board of Directors) Explanation:
(1) In order to conform to the Company Law, the Audit Committee is established to replace supervisors.
(2) The Comparison Table for the “Amendments to Articles of Incorporation” is attached hereto as Attachment (7).
(3) The proposed amendments are submitted for discussion.
Discussion of Amendments to Operating Procedures of Acquisition or Disposal of Assets (Proposed by Board of Directors)

Explanation:

(1) In order to conform to the Company Law, the Audit Committee is established to replace supervisors.
(2) The Comparison Table for the “Amendments to Operating Procedures of Acquisition or Disposal of Assets” is attached hereto as Attachment (8).
(3) The proposed amendments are submitted for discussion.
Discussion of Amendments to Procedures of Endorsements and Guarantees (Proposed by Board of Directors)

Explanation:

(1) In order to conform to the Company Law, the Audit Committee is established to replace supervisors.
(2) The Comparison Table for the “Amendments to Procedures of Endorsements and Guarantees” is attached hereto as Attachment (9).
(3) The proposed amendments are submitted for discussion.
Discussion of Amendments to Procedures for Lending of Capital to Other Parties (Proposed by Board of Directors)

Explanation:

(1) In order to conform to the Company Law, the Audit Committee is established to replace supervisors.
(2) The Comparison Table for the “Amendments to Procedures for Lending of Capital to Other Parties” is attached hereto as Attachment (10).
(3) The proposed amendments are submitted for discussion.
Discussion of Amendments to Procedures for Financial Derivatives Transactions (Proposed by Board of Directors) Explanation:
(1) In order to conform to the Company Law, the Audit Committee is established to replace supervisors.
(2) The Comparison Table for the “Amendments to Procedures for Financial Derivatives Transactions” is attached hereto as Attachment (11).
(3) The proposed amendments are submitted for discussion.
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Discussion of Amendments to Rules for Election of Directors (Proposed by Board of Directors) Explanation:
(1) In order to conform to the Company Law, the Audit Committee is established to replace supervisors.
(2) The Comparison Table for the “Amendments to Rules for Election of Directors” is attached hereto as Attachment (12).
(3) The proposed amendments are submitted for discussion.
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Election of Directors

Election of the Company’s Directors (Proposed by the Board of Directors) Explanation:
(1) The term of the office of directors and supervisors (including three (3) independent directors) will be expired on 10[th] of June, 2017. All the directors and supervisors will be elected at the annual general shareholders’ meeting.
(2) According to the Company Articles of Incorporation clause 20, seven (7) directors (including three (3) independent directors) will be elected. The term of the office of new directors is three years, starting from 8[th] of June, 2017 to 7[th] of June 2020. The established Audit Committee which constituted by independent directors will replace the former supervisors.
(3) The Company adopted the candidates’ nomination system. The candidates’ list has reviewed by Board on 26[th] of April 2017. The relevant information stated as follow:

Directors (including Independent Directors)

Title	Name	Educational	Experiences	Current Shareholding (Unit: Shares)
Director	Leo Huang	Engineering, National Chiao Tung University	Chairman & CEO of Chroma Ate Inc. Chairman of DynaScan Technology Corp.	23,419,897
Director	Ishih Tseng	PhD, Mechanical Engineering, University of Pennsylvania	Current Position: General Manager of ISS Department, Chroma ATE Inc. Experiences: Senior Engineer, Institute for Information Industry	383,548
Director	Tsun-I, Wang	PhD, Department of Photonics, National Chiao Tung University Master and Undergraduate of Electronics Engineering, National Chiao Tung University	Current Position: Chief Technical Supervisor, DynaScan Technology Corp. Experiences: Vice President, Tailyn Technologies, Inc.	19,339
Director	Chung-Ju Chang	PhD, Electrical Engineering, National Taiwan University Master and Undergraduate of Electronics Engineering, National Chiao Tung University	Current Position: Juristic Director of Chroma Ate Inc. Experiences: Director of Research and Development, National Chiao Tung University Dean and Director of the Institute of Communications Engineering, National Chiao Tung University Chair Professor, Department of Electrical and Computer Engineering, National Chiao Tung University	0

Independent Director	Tsung-Ming Chung	Master of Business Administration, National Chengchi University Applied accounting , National Taiwan University	Current Position: Chairman of Dynapack International Technology Corporation. Experiences: CPA, Deloitte	0
Independent Director	Quincy Lin	PhD, Business Administration, University of Kentucky MBA, National Chiao Tung University and Undergraduate of Electronics Engineering, National Chiao Tung University	Current Position: Chairman of Rafel Micro and General Energy Solution Experiences Chairman of Neo Solar Power Corp. Senior Vice President, TSMC	0
Independent Director	Tai-Jen George Chen	Ph. D., Department of Atmospheric Sciences, State University of New York at Albany, U.S.A. Master Department of Atmospheric Sciences, State University of New York at Albany, U.S.A. B.S., Department of Geography (Division of Meteorology), National Taiwan University, R.O.C.	Current Position: Distinguished Chair Professor, National Taiwan University Experiences: Chair Professor, National Taiwan University Vice President for Academic Affairs, National Taiwan University Professor, Department of Atmospheric Sciences, National Taiwan University Executive Vice President for Academic Affairs, National Taiwan University Dean of Academic Affairs, National Taiwan University. President,Chinese Geophysical Union.	0

(4) Propose for election.

Other

Releasing the Directors from Non-competition Restrictions (Proposed by the Board of Directors) Explanation:
(1) According to Article 209 of the Company Act, the Company director who conducts business within the business scope of the Company for himself or others shall explain in the shareholders’ meeting the essential contents of such conduct and obtain the shareholders’ approval.
(2) The new directors concurrently work for other companies, which may constitute the act restricted under Article 209 of the Company Act, need to submit to the shareholders’ meeting for resolution to release the non-competition restrictions on the directors, without prejudice to the interests of the Company. The detailed information for each director’s position in other companies stated as below.

Title	Name	Position in Other Companies
Director	Leo Huang	Chairman of DynaScan Technology Corp. Chairman of Testar Electronic Corp. Chairman of EVT Technology Corp. Chairman of Weida electric Vehicle Co., Ltd. Director of ADIVIC Technology Co., Ltd. Director of I-Sheng Electric Wire & Cable Co., Ltd. Director of Leadtek Research Inc. Juristic director of Tian Zheng International Precision Machinery Co.,Ltd. Director of TwowayCommunications,Inc.
Director	Ishih Tseng	Chairman of ADIVIC Technology Co., Ltd. Supervisor of Testar Electronic Corp.
Director	Tsun-I,Wang	Director of DynaScan TechnologyCorp.
Independent Director	Tsung-Ming Chung	Chairman of Dynapack International Technology Corporation. Independent director of Taiwan Mobile Co., Ltd. Juristic director of Far Eastern International Bank. Director of Unity Opto Technology Co., Ltd. Director of Vactronics Technologies Inc. Director of Bridge Semiconductor Corporation Director of SYSTEMS AND CHIPS, INC. Director of RADIANTECH Incorporation. Director of Silicon Motion TechnologyCorporation.
Independent Director	Quincy Lin	Chairman of Rafel Micro and General Energy Solution Director of Neo Solar Power Corp. Independent director of Powertech TechnologyInc.

(3) The proposal is submitted for resolution.

Special Motion

Meeting Adjourned

ATTACHMENT 1

Business Report

Despite of flattish growth in IT industry, the global economy experienced a steady growth in 2016, which is mainly due to countries governments highly support in clean technology development. It was a fruitful and prosperous year for Chroma in 2016 benefited from increasing demand of capital expenditure for manufacturing. The financial results in fiscal year of 2016, the consolidated sales revenues was NTD 11.6 billion, while Chroma’s parent company sales revenues were NTD7.2 billion, with net income of 1.7 billion equals to earnings per share of NTD 4.53. This represented a growth in consolidated sales revenues to reach 20% year-on-year, while the year-on-year growth in parent company sales revenues were 59% and net income growth was 42% compared to year 2015.

In the year 2016, the reason for Chroma parent company sales to enjoy a strong growth of 59% compared to year 2015 was mainly contributed from Turnkey Solutions, which presented a significant growth of 303% due to the increasing demand of CAPEX needs from EV battery cell and solar cell industries. In addition, the fast development of IoT and Autonomous car have driving the semiconductor industry from 2015 consolidation, the Company’s semiconductor testing solution has benefited from these drivers and presented a strong growth of 59%. Meanwhile, the core business of Test Instruments and ATS also presented a double digits growth of 18%, mainly contributed from

Financial Performance for Year 2015 ~ 2016

Items		2016	2015
Capital Structure Analysis (%)	Debt Ratio (%)	42.10	40.65
	Long-term Fund to Fixed Assets Ratio (%)	512.48	467.83
Liquidity Analysis (%)	Current Ratio (%)	237.39	309.47
	Quick Ratio (%)	190.86	248.58
Profitability Analysis (%)	Return on Total Assets (%)	10.12	8.18
	Return on Equity Attributable to Shareholders of the Parent(%)	17.18	13.25
	Net Profit Margin (%)	14.80	12.76

Moving forward to year 2017, the Company expected the global economy will sustain a steady growth. The leading-edge technologies, such as AI, 3D Image Sensing and 5G+ communication will actively in the growth of semiconductor, EV, Smartphone development. Meanwhile, the clean technology industries will continue to grow from increasing adoption of energy conservation and carbon reduction. On the other hand, the trend of implementation of industry 4.0 will set to revolutionize the manufacturing and production industry. The Company sees these as future growth opportunities and continues to propel in technology development in providing an accuracy, high reliability and unique testing solutions and Turnkey Solutions to meet the market demand as our committed to creating value and generating strong sales and returns to our shareholders.

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ATTACHMENT 2

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2016 Business Report, Financial Statements, and proposal for allocation of profits. The CPA firm of Deloitte and Touche was retained to audit Chroma’s Financial Statements. The Business report, Financial Statements and profit allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of Chroma Ate Inc. According to Article 219 of the Company law, we hereby submit this report.

Chroma Ate Inc.

Supervisors:

Chi-Jen Chou

Tsun-I, Wang (Representative of Kai Sun Investment Co.,Ltd.)

March, 10[th] 2017

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ATTACHMENT 3

Status of endorsements and guarantees in 2016

										Unit: thousands NTD	Unit: thousands NTD	Unit: thousands NTD	Unit: thousands NTD
Number	Name of endorsers	End	orsee	Endorsement limit for a single entity (Note1)	Highest balance during the period	Outstanding balance	Actual amount drawn down	Balance secured by collateral	Ratio of accumulated amount to net worth of the Company	Maximum amount of endorsement (Note 2)	Provision of endorsements by parent company to subsidiary	Provision of endorsements by subsidiary to parent company	Provision of endorsements to the party in Mainland China
		Name of endorsees	Relationship
0	Chroma Ate Inc.	Chroma Ate Inc.	Subsidiary	NT$1,592,494	NT$129,000	NT$64,500	NT$64,500	$ -	0.61%	$3,184,988	Y	-	-
		Chroma Japan Corp.	Subsidiary	NT$1,592,494	NT$34,100	NT$34,100	NT$22,080	$ -	0.32%	$3,184,988	Y	-	-
		Quantel Private Ltd	Subsidiary	NT$1,592,494	NT$44,580	NT$44,580	$ -	$ -	0.42%	$3,184,988	Y	-	-

Note 1: The amount of transactions of endorsement to a single entity shall not over 15% of the Company’s net worth

(NT$ 10,616,627 * 15% = $1,592,494) and not over Endorsees’ paid-in capital, except 100% own subsidiary.

Note 2: The total amount of transactions of endorsement shall not over 30% of the Company’s net worth (NT$ 10,616,627 * 30% = $3,184,988).

Note 3: Foreign currencies were translated into New Taiwan Dollars. Exchange rates of foreign currency indicated as of December 31, 2016 are as follows: USD$1 = NT$32.250, JPY$1 = NT$0.276.

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ATTACHMENT 4

Comparison Table of Revised Codes of Ethical Conduct

Article	After Revision	Before Revision	Explanation
1	(Purpose and Basis of the Code of Ethics) For the purpose of encouraging directors and managerial officers of Chroma Ate Inc. (“the Company”), (included all president level, vice president level, assist directors, financial department supervisor, accounting department supervisors and other related authorized employees) to act in line with ethical standards, and to help stakeholders better understand the ethical standards of the Company. The company hereby enacted this “Code of Ethical Conduct of Chroma Ate Inc.” (“The Codes”).	(Purpose and Basis of the Code of Ethics) For the purpose of encouraging directors, supervisorsand managerial officers of Chroma Ate Inc. (“the Company”), (included all president level, vice president level, assist directors, financial department supervisor, accounting department supervisors and other related authorized employees) to act in line with ethical standards, and to help stakeholders better understand the ethical standards of the Company. The company hereby enacted this “Code of Ethical Conduct of Chroma Ate Inc.” (“The Codes”).	In order to conform to the Company Law for establishing the Audit Committee
2	(Scope of Application) The Codes applies to directors, managerial officers ethical best practice principle shall at least include preventive measures against the following: (1) Prevention of Conflict of Interest (2) No Self-Benefiting (3) Confidentiality (4) Fair Transaction (5) Proper Protection and Use of the Company’s Assets (6) Compliance of Laws and Regulations (7) Reporting a Violation of Code of Ethics	(Scope of Application) The Codes applies to directors, supervisors,managerial officers ethical best practice principle shall at least include preventive measures against the following: (1) Prevention of Conflict of Interest (2) No Self-Benefiting (3) Confidentiality (4) Fair Transaction (5) Proper Protection and Use of the Company’s Assets (6) Compliance of Laws and Regulations (7) Reporting a Violation of Code of Ethics	In order to conform to the Company Law for establishing the Audit Committee

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3	(Prevention of Conflict of Interest) The directors, managerial officers of the Company shall deal with corporate events objectively and efficiently, and shall not improperly take benefits base on the Personnel’s position for themselves, their spouses, parents, children or relatives within three degrees of kinship. In the event that the aforementioned Personnel’s affiliates receive loans or guarantees, engage in material assets transactions, or purchase (or sell) products from (or to) the Company, the relevant Personnel shall follow the Company’s procedures of “Internal Procedures of Lending of Capital by the Company”, “Procedures of endorsements and guarantees” and “Procedures of acquire material assets”. The relevant shall voluntarily and sufficiently explain to the Company and Board of Directors when there exists any potential conflict of interest with the Company.	(Prevention of Conflict of Interest) The directors,supervisors,managerial officers of the Company shall deal with corporate events objectively and efficiently, and shall not improperly take benefits base on the Personnel’s position for themselves, their spouses, parents, children or relatives within three degrees of kinship. In the event that the aforementioned Personnel’s affiliates receive loans or guarantees, engage in material assets transactions, or purchase (or sell) products from (or to) the Company, the relevant Personnel shall follow the Company’s procedures of “Internal Procedures of Lending of Capital by the Company”, “Procedures of endorsements and guarantees” and “Procedures of acquire material assets”. The relevant shall voluntarily and sufficiently explain to the Company and Board of Directors when there exists any potential conflict of interest with the Company.	In order to conform to the Company Law for establishing the Audit Committee
4	(No Self-Benefiting) In the event that the Company has the opportunity to obtain benefits, the directors, managerial officers of the Company shall ensure that the Company is able to acquire them lawfully. The directors, managerial officers of the Company shall not acquire the opportunities for benefit or benefit themselves by using the Company’s assets or information or by virtue of their positions with the Company; or compete with the Company.	(No Self-Benefiting) In the event that the Company has the opportunity to obtain benefits, the directors,supervisors,managerial officers of the Company shall ensure that the Company is able to acquire them lawfully. The directors,supervisors,managerial officers of the Company shall not acquire the opportunities for benefit or benefit themselves by using the Company’s assets or information or by virtue of their positions with the Company; or compete with the Company.	In order to conform to the Company Law for establishing the Audit Committee
5	(Confidentiality) The directors, managerial officers of the Company shall, unless otherwise authorized or required to disclose by law, keep the company information and the information of suppliers / customers in strict confidence. The confidential information includes all non-public information that may cause damage to the Company or the customers if such information is disclosed or used by a competitor.	(Confidentiality) The directors,supervisors,managerial officers of the Company shall, unless otherwise authorized or required to disclose by law, keep the company information and the information of suppliers / customers in strict confidence. The confidential information includes all non-public information that may cause damage to the Company or the customers if such information is disclosed or used by a competitor.	In order to conform to the Company Law for establishing the Audit Committee

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6	(Fair Transactions) The directors, managerial officers of the Company shall treat the Company’s suppliers, customers, competitors and competitors’ employees on a fair basis, and shall not manipulate, conceal or abuse the information acquired due to their position. The Personnel shall not make false statements on important issues or gain any improper advantage by unfair transactions.	(Fair Transactions) The directors,supervisors,managerial officers of the Company shall treat the Company’s suppliers, customers, competitors and competitors’ employees on a fair basis, and shall not manipulate, conceal or abuse the information acquired due to their position. The Personnel shall not make false statements on important issues or gain any improper advantage by unfair transactions.	In order to conform to the Company Law for establishing the Audit Committee
7	(Proper Protection and use of the Company’s Assets) The directors, managerial officers of the Company shall protect the assets of the Company ensure the asset to be validly and legally used for business purposes.	(Proper Protection and use of the Company’s Assets) The directors,supervisors,managerial officers of the Company shall protect the assets of the Company ensure the asset to be validly and legally used for business purposes.	In order to conform to the Company Law for establishing the Audit Committee
8	(Compliance of Laws and Regulations) The directors, managerial officers of the Company shall comply with all the laws, rules, and regulations and conduct any security transaction in accordance with the “Securities and Exchange Act”.	(Compliance of Laws and Regulations) The directors,supervisors,managerial officers of the Company shall comply with all the laws, rules, and regulations and conduct any security transaction in accordance with the “Securities and Exchange Act”.	In order to conform to the Company Law for establishing the Audit Committee
9	(Reporting a Violation of Code of Ethics) If any employee discovers or suspects that there is an event conflicting with the law, regulations, or the Code of Ethics, the employee shall voluntarily report to the audit committee, managers, internal audit officers or other appropriate officers, and shall provide sufficient information so that the Company may properly handle the subsequent matters. The Company shall handle the employee’s report in strict confidence and shall use its best endeavor to protect the reporting employee’s safety.	(Reporting a Violation of Code of Ethics) If any employee discovers or suspects that there is an event conflicting with the law, regulations, or the Code of Ethics, the employee shall voluntarily report to the supervisors,managers, internal audit officers or other appropriate officers, and shall provide sufficient information so that the Company may properly handle the subsequent matters. The Company shall handle the employee’s report in strict confidence and shall use its best endeavor to protect the reporting employee’s safety.	In order to conform to the Company Law for establishing the Audit Committee
10	(Penalty and Appeal) In the event that a director or manager is in violation of the Code of Ethics, the company shall deal with the violation in accordance with the relevant regulations. If any director or manager is in violation of the Code of Ethics, the Company shall establish an appeal procedure and resolute in Board of Directors meeting.	(Penalty and Appeal) In the event that a director orsupervisor or manager is in violation of the Code of Ethics, the company shall deal with the violation in accordance with the relevant regulations. If any director orsupervisoror manager is in violation of the Code of Ethics, the Company shall establish an appeal procedure and resolute in Board of Directors meeting.	In order to conform to the Company Law for establishing the Audit Committee

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11	(Exemption) In case any exemption from compliance with the Codes for the directors, managerial officers of the Company is needed, it shall be adopted by a resolution of the Board of Directors, and that information on the name and title of the person entitled to such exemption, the date on which the Board of Directors adopted the resolution for exemption, and the period of, reasons for, and principles behind the application of the exemption be disclosed immediately on the Market Observation Post System (“MOPS”).	(Exemption) In case any exemption from compliance with the Codes for the directors, supervisors,managerial officers of the Company is needed, it shall be adopted by a resolution of the Board of Directors, and that information on the name and title of the person entitled to such exemption, the date on which the Board of Directors adopted the resolution for exemption, and the period of, reasons for, and principles behind the application of the exemption be disclosed immediately on the Market Observation Post System (“MOPS”).	In order to conform to the Company Law for establishing the Audit Committee
13	(Enforcement) The Code of Ethics shall be adopted for enforcement after the resolution by the board of directors. The same procedures shall apply to the amendments.	(Enforcement) The Code of Ethics shall be adopted for enforcement after the resolution by the board of directors,delivered to the supervisors for reference and shall be reported to the shareholders’meeting. The same procedures shall apply to the amendments.	In order to conform to the Company Law for establishing the Audit Committee

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ATTACHMENT 5 Independent Auditors’ Report and Financial Statements

The Board of Directors and Shareholders Chroma Ate Inc.

Opinion

We have audited the accompanying consolidated financial statements of Chroma Ate Inc. and its subsidiaries (the Group), which comprise the consolidated balance sheets 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 Group as of 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 International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China (ROC).

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 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, we do not provide a separate opinion on these matters.

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Key audit matters for the consolidated financial statements for the year ended December 31, 2016 are stated as follows:

Impairment of Property, Plant and Equipment

In accordance with IAS 36 - Impairment of Asset, management assesses periodically whether there is any indication that property, plant and equipment may be impaired. If an indication of impairment exists, management considers the usage of the asset and industry condition to determine the recoverable amount of the cash-generating unit to which the asset belongs based on subjective judgment. Since the management’s assessment of impairment and determination of the recoverable amount of an asset require management’s subjective judgments and assumptions, impairment of asset is deemed to be a key audit matter.

For no impairment indication property, plant and equipment, we reviewed and assessed rationale of the information used. For those property, plant and equipment with impairment indication, we evaluated the methodologies adopted, including the assumptions of the forecasted cash flows and discount rates, to estimate the recoverable amount of the cash-generating unit in order to assess the appropriateness of the management’s impairment evaluation performed.

Please refer to Notes 5 and 16 of the consolidated financial statements for the details of the information about property, plant and equipment.

Evaluation of Write-down of Inventories

The Group’s inventories are primarily test instruments, widely used in technology industries including power supply, passive components, semiconductor, LED, and solar energy. The Group needs to change the product combinations in response to the rapid change in the market and business fluctuation. The market competition or technique replacement may result in the risk that inventories cannot be sold, or prices may be reduced due to lack of demand in the market. As stated in Note 5 - critical accounting judgments and key sources of estimation uncertainty, inventory valuation includes the consideration of whether the test instruments are obsolete or unmarketable and the estimation of demand for the products in the future. Since the evaluation process involves material assumptions and estimations, the valuation of inventories is deemed to be a key audit matter.

We assessed the rationale of the Group’s policy on providing allowance for inventory valuation and obsolescence losses, and we tested the accuracy of inventory aging report. We also reviewed the sales forecast of the products, tested the recent selling prices, and participated in annual inventory count to observe the condition of the inventories in order to evaluate the reasonableness of the inventory value.

Please refer to Note 13 of the consolidated financial statements for the details of the information about inventories.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS, IAS, IFRIC and SIC endorsed and issued into effect by the FSC of the ROC 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.

18 -

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.
19 -

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 statements that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2016 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Yi-Wen Wang and Wen-Chi Kuo.

Deloitte & Touche Taipei, Taiwan Republic of China (ROC)

February 21, 2017

Notice to Readers

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

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

20 -

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Available-for-sale financial assets - current (Notes 4 and 8) Investments in bonds with no active market - current (Notes 4, 10 and 32) Notes receivable Accounts receivable, net (Notes 4 and 11) Accounts receivable - related parties (Notes 4, 11 and 31) Construction contracts receivable (Notes 4 and 12) Inventories (Notes 4 and 13) Prepayments Other current assets (Note 31) Total current assets NON-CURRENT ASSETS Available-for-sale financial assets - non-current (Notes 4 and 8) Financial assets carried at cost - non-current (Notes 4 and 9) Investments accounted for using equity method (Notes 4 and 15) Property, plant and equipment (Notes 4, 16, 24 , 31 and 32) Goodwill (Notes 4 and 17) Other intangible assets (Notes 4 and 18) Deferred tax assets (Notes 4 and 25) Prepayments for land and equipment (Notes 4 and 33) Refundable deposits Prepayments for investments Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 19 and 32) Financial liability at fair value through profit or loss - current (Notes 4 and 7) Notes payable Notes payable - related parties (Note 31) Accounts payable Accounts payable - related parties (Note 31) Construction contracts payable (Notes 4 and 12) Dividends payable (Note 23) Other payables (Note 21) Current tax liabilities (Note 25) Receipts in advance (Note 12) Current portion of long-term liabilities (Notes 19 and 32) Other current liabilities - other Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Notes 4 and 20) Long-term borrowings (Notes 19 and 32) Deferred tax liabilities (Notes 4 and 25) Net defined benefit liabilities (Notes 4 and 22) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Notes 4, 23 and 27) Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury shares Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS Total equity TOTAL		2016 Amount % $ 3,149,970 17 9,161 - 2,291,504 12 378,515 2 61,769 - 2,988,773 16 7,890 - 214,816 1 1,906,496 10 76,076 1 127,722 1 11,212,692 60 314,233 2 198,649 1 641,497 4 2,714,127 15 220,236 1 7,267 - 220,064 1 3,035,154 16 20,045 - 20,000 - 28,814 - 7,420,086 40 $ 18,632,778 100 $ 196,705 1 - - 55,511 - 2,595 - 1,976,229 11 11,813 - 229,858 1 4,838 - 848,232 5 264,461 1 290,774 2 815,317 4 27,078 - 4,723,411 25 1,397,140 8 1,368,085 7 187,170 1 168,266 1 855 - 3,121,516 17 7,844,927 42 3,898,872 21 1,960,159 11 1,724,576 9 86,888 - 2,923,811 16 4,735,275 25 58,035 - (35,714) - 10,616,627 57 171,224 1 10,787,851 58 $ 18,632,778 100		2015
				Amount % $ 2,489,289 16 8,872 - 2,057,476 13 559,958 3 81,021 - 2,422,708 15 11,650 - 175,863 1 1,635,947 10 83,437 1 106,379 1 9,632,600 60 359,543 2 208,400 2 553,139 4 2,767,608 17 196,052 1 4,524 - 156,651 1 2,097,344 13 39,036 - - - 45,542 - 6,427,839 40 $ 16,060,439 100 $ 301,303 2 1,483 - 19,173 - 3,311 - 1,348,781 9 5,789 - 255,218 2 2,298 - 665,640 4 208,745 1 229,955 2 30,083 - 40,875 - 3,112,654 20 1,758,093 11 1,384,040 8 123,827 1 149,691 1 838 - 3,416,489 21 6,529,143 41 3,791,699 24 1,302,269 8 1,600,920 10 86,888 - 2,264,377 14 3,952,185 24 399,665 2 (35,714) - 9,410,104 58 121,192 1 9,531,296 59 $ 16,060,439 100

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

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

SALES REVENUES (Notes 4, 12 and 31) Sales revenues Less: Sales returns Sales allowances Net sales revenues OPERATING COSTS (Notes 4, 13, 24 and 31) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES AND JOINT VENTURES REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES AND JOINT VENTURES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 24 and 31) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses OPERATING INCOME NON-OPERATING INCOME AND EXPENSES Dividend income (Note 4) Rental income (Note 31) Interest income (Note 4) Subsidy income Other income - other Share of profits of associates and joint ventures, net (Notes 4 and 15) Exchange loss, net (Notes 4 and 34) Gain on disposal of investments, net Foreign currency exchange gain, net (Notes 4 and 34) Impairment loss on financial assets (Notes 4 and 9)		2016 Amount % $ 11,761,604 101 (14,550) - (122,685) (1) 11,624,369 100 6,196,250 53 5,428,119 47 - - 203 - 5,428,322 47 1,619,664 14 760,936 6 1,034,541 9 3,415,141 29 2,013,181 18 52,101 - 22,487 - 19,323 - 3,384 - 19,504 - 61,979 1 (110,497) (1) 2,442 - - - - -		2015
				Amount % $ 9,782,005 101 (74,896) (1) (14,744) - 9,692,365 100 5,470,761 57 4,221,604 43 (264) - - - 4,221,340 43 1,421,138 15 707,237 7 872,966 9 3,001,341 31 1,219,999 12 35,620 - 26,538 - 28,503 - 18,302 - 69,806 1 76,166 1 - - 381 - 61,260 1 (14,674) - (Continued)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Valuation gain on financial assets (liabilities) at fair value through profit, net (Note 4) Gain on disposal of property, plant and equipment, net (Note 4) Valuation loss on financial assets (liabilities) at fair value through loss, net (Note 4) Other expenses Finance costs (Notes 4 and 24) Total non-operating income and expenses CONSOLIDATED INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 25) CONSOLIDATED NET INCOME OTHER COMPREHENSIVE INCOME (LOSS), NET (Note 23) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit plans Share of other comprehensive income of associates accounted for using the equity method Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations Unrealized loss from available-for-sale financial assets Share of other comprehensive income of associates and joint ventures accounted for using the equity method Total other comprehensive income (loss), net of tax TOTAL COMPREHENSIVE INCOME		2016 Amount % $ 2,219 - 1,126 - - - (3,140) - (42,052) - 28,876 - 2,042,057 18 346,491 3 1,695,566 15 (25,981) - (736) - (132,555) (1) (38,796) (1) (25,084) - (223,152) (2) $ 1,472,414 13		2015
				Amount % $ - - 3,605 - (322) - (3,518) - (38,994) - 262,673 3 1,482,672 15 288,130 3 1,194,542 12 (27,368) - 732 - (14,736) - (98,651) (1) 8,283 - (131,740) (1) $ 1,062,802 11 (Continued)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET INCOME ATTRIBUTED TO Owners of the Corporation Non-controlling interests COMPREHENSIVE INCOME ATTRIBUTED TO: Owners of the Corporation Non-controlling interests EARNINGS PER SHARE (Note 26) From continuing operating segment Basic Diluted		2016 Amount % $ 1,719,935 15 (24,369) - $ 1,695,566 15 $ 1,501,612 13 (29,198) - $ 1,472,414 13 $4.53 $4.23		2015
				Amount % $ 1,236,557 13 (42,015) (1) $ 1,194,542 12 $ 1,102,621 11 (39,819) - $ 1,062,802 11 $3.28 $3.10

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

								Total Equity	$ 9,373,088		-	(987,433 )				-		1,194,542		(131,740 )		1,062,802	281		4,994	44,909		32,655	9,531,296		-	(910,200 )				27,978		1,695,566		(223,152 )		1,472,414	386,028	196,883		4,545		78,907	$ 10,787,851
							Non-controlling	Interests	$ 120,140		-	-				7,525		(42,015 )		2,196		(39,819 )	-		-	691		32,655	121,192		-	-				-		(24,369 )		(4,829 )		(29,198 )	-	323		-		78,907	$ 171,224
								Total Equity	$ 9,252,948		-	(987,433 )				(7,525 )		1,236,557		(133,936 )		1,102,621	281		4,994	44,218		-	9,410,104		-	(910,200 )				27,978		1,719,935		(218,323 )		1,501,612	386,028	196,560		4,545		-	$ 10,616,627
								Treasury Stock	$ (35,714 )		-	-				-		-		-		-	-		-	-		-	(35,714 )		-	-				-		-		-		-	-	-		-		-	$ (35,714 )
								Total	507,104		-	-				-		-		(107,439 )		(107,439 )	-		-	-		-	399,665		-	-				-		-		(191,678 )		(191,678 )	-	(149,952 )		-		-	58,035
			Equity Attributable toOwners of the Corporation	Other Equity	Exchange Unrealized Gain	Differences on (Loss) from	Translating Available-for- sale Unearned	Total Foreign Operations Financial Assets Employee Benefit	$ 3,737,083 $ 136,756 $ 370,348 $ - $		- - - -	(987,433 ) - - -				(7,525 ) - - -		1,236,557 - - -		(26,497 ) (8,788 ) (98,651 ) -		1,210,060 (8,788 ) (98,651 ) -	- - - -		- - - -	- - - -		- - - -	3,952,185 127,968 271,697 -		- - - -	(910,200 ) - - -				- - - -		1,719,935 - - -		(26,645 ) (152,882 ) (38,796 ) -		1,693,290 (152,882 ) (38,796 ) -	- - - -	- - - (149,952 )		- - - -		- - - -	$ 4,735,275 $ (24,914 ) $ 232,901 $ (149,952 ) $		25
						Retained Earnings	Unappropriated	Special Reserve Earnings	$ 86,888 $ 2,180,919		- (131,644 )	- (987,433 )				- (7,525 )		- 1,236,557		- (26,497 )		- 1,210,060	- -		- -	- -		- -	86,888 2,264,377		- (123,656 )	- (910,200 )				- -		- 1,719,935		- (26,645 )		- 1,693,290	- -	- -		- -		- -	$ 86,888 $ 2,923,811
								Legal Reserve	$ 1,469,276		131,644	-				-		-		-		-	-		-	-		-	1,600,920		123,656	-				-		-		-		-	-	-		-		-	$ 1,724,576
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015	(In Thousands of New Taiwan Dollars, Except Dividends Per Share)						Issued Capital Capital Surplus	BALANCE, JANUARY 1, 2015 $ 3,787,821 $ 1,256,654	Appropriation of the 2014 earnings	Legal reserve - -	Cash dividends - NT$2.6 per share - -	Other changes in capital surplus	Change in capital surplus from investments in	associates and joint ventures accounted for	using the equity method - -	Consolidated net income (loss) for the year	ended December 31, 2015 - -	Other comprehensive income (loss) for the year	ended December 31, 2015 - -	Consolidated comprehensive income (loss) for	the year ended December 31, 2015 - -	Conversion of convertible bonds 42 239	Adjustment of capital surplus for corporation's	cash dividends received by subsidiaries - 4,994	Share-based payment transaction 3,836 40,382	Increase in non-controlling interests for the year	ended December 31, 2015 - -	BALANCE, DECEMBER 31, 2015 3,791,699 1,302,269	Appropriation of the 2015 earnings	Legal reserve - -	Cash dividends - NT$2.4 per share - -	Other changes in capital surplus	Change in capital surplus from investments in	associates and joint ventures accounted for	using the equity method - 27,978	Consolidated net income (loss) for the year	ended December 31, 2016 - -	Other comprehensive income (loss) for the year	ended December 31, 2016 - -	Consolidated comprehensive income (loss) for	the year ended December 31, 2016 - -	Conversion of convertible bonds 59,823 326,205	Share-based payment transaction 47,350 299,162	Adjustments of capital surplus for corporation's	cash dividends received by subsidiaries - 4,545	Increase in non-controlling interests for the year	ended December 31, 2016 - -	BALANCE, DECEMBER 31, 2016 $ 3,898,872 $ 1,960,159	The accompanying notes are an integral part of the consolidated financial statements.

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income before income tax
Adjustments for:
Depreciation
Compensation cost of shared-based payment
Share of profits of associates and joint venture accounted for
using the equity method, net
Dividend income
Finance costs
Exchange loss (gain), net
Interest income
Impairment loss on nonfinancial assets
(Reversal of) provision for bad debts expense
Amortization
Gain on disposal of investments, net
Gain on disposal and retirement of property, plant and
equipment, net
Realized gain on transactions with associates and joint
ventures
Unrealized gain on transactions with associates and joint
ventures
Impairment loss on financial assets
Net changes related to operating assets and liabilities
Financial assets held for trading
Notes receivable
Accounts receivable
Construction contracts receivable
Inventories
Prepayments
Other current assets
Financial liabilities held for trading
Notes payable
Accounts payable
Construction contracts payable
Other payables
Receipts in advance
Other current liabilities
Net define benefit liabilities
Cash generated from operations
Income tax paid
Net cash generated from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payment to acquire property, plant and equipment
Payment to acquire available-for-sale financial assets
Proceeds from disposal of available-for-sale financial assets

2016
2015
$ 2,042,057
$ 1,482,672
336,514
329,582
86,941
25,768
(61,979)
(76,166)
(52,101)
(35,620)
42,052
38,994
39,114
(58,015)
(19,323)
(28,503)
16,619
39,379
(4,675)
86,551
2,849
2,009
(2,442)
(381)
(1,126)
(3,605)
(203)
-
-
264
-
14,674
(965)
(234)
19,252
(47,705)
(550,370)
676,838
(38,953)
(79,918)
(413,050)
(160,642)
7,361
(27,119)
(19,653)
3,417
(1,483)
556
35,622
(36,841)
626,284
66,726
(25,360)
251,422
193,355
(48,725)
60,819
145,634
(13,817)
(3,569)
(7,406)
(5,379)
2,295,933
2,552,064
(295,067)
(283,511)
2,000,866
2,268,553
(1,093,975)
(960,436)
(650,000)
(300,000)
423,410
127,020
(Continued)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

Proceeds from disposal of investment in bonds with no active market Dividend received Payments to acquire investment accounted for using the equity method Net cash (outflows) inflows from business combination Proceeds from disposal of property, plant and equipment Interest received Increase in prepayments for investments Decrease in refundable deposits Decrease in other non-current assets Cash returned of capital reduction of financial assets carried at cost Proceeds on sale of financial assets measured at cost Payment to acquire financial assets carried at cost Payment to acquire investment in bonds with no active market Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends paid Proceeds of the issue of long-term debts Decrease in short-term borrowings Exercise of employee stock options Increase in non-controlling interest Interest paid Repayment of long-term debts Exercise of employee restricted stock Increase in guarantee deposits Decrease in short-term bills payable Net cash 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, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR	2016 $ 163,274 110,904 (82,821) (56,249) 29,306 21,203 (20,000) 19,791 16,728 9,587 1,521 - - (1,107,321) (907,953) 770,000 (122,606) 80,049 53,225 (39,795) (14,951) 31,000 3 - (151,028) (81,836) 660,681 2,489,289 $ 3,149,970	2015 $ - 76,100 - 10,897 14,893 23,588 - 4,647 941 11,750 - (16,140) (160,965) (1,167,705) (982,439) 582,165 (84,000) 19,141 29,400 (24,064) (6,659) - - (16,000) (482,456) 23,249 641,641 1,847,648 $ 2,489,289

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

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Chroma Ate Inc.

Opinion

We have audited the financial statements of Chroma Ate Inc. (the “Corporation”), which comprise the balance sheets as of December 31, 2016 and 2015, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Corporation as of December 31, 2016 and 2015, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2016. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters of the financial statements for the year ended December 31, 2016 are described as follows:

Impairment of Property, Plant and Equipment

In accordance with IAS 36 - Impairment of Asset, management assesses periodically whether there is any indication that property, plant and equipment may be impaired. If there is an indication that an asset may be impaired, management should estimate the recoverable amount of the asset or the cash-generating unit to which the asset belongs based on subjective judgements about the asset’s usage and industry conditions. Since the management’s evaluation of impairment and determination of the recoverable amount of an asset require management’s subjective judgements and assumptions, impairment of asset is deemed to be a key audit matter.

Management determined that there is no indication that the property, plant and equipment may be impaired based on the assessment of industry trend, market conditions, and the Corporation’s operation performance and financial status. We have performed the audit procedures, included reviewing the impairment assessment of property, plant and equipment prepared by the management and assessing the rationale of underlying information used, to evaluate the appropriateness of the impairment indication assessment performed by the management.

Other information related to property, plant and equipment is disclosed in Notes 5 and 13.

Evaluation of Write-down of Inventories

The Corporation’s inventories are primarily test instruments widely used in technology industries including power supply, passive components, semiconductor, LED, and solar energy. The Corporation needs to change the product combinations in response to the rapid change in the market and business fluctuation. The market competition or technique replacement may result in the risk that inventories cannot be sold, or prices may be reduced due to lack of demand in the market. As stated in Note 5 - Critical accounting judgments and key sources of estimation uncertainty, inventory valuation includes the consideration of whether the test instruments are obsolete or unmarketable and the estimation of demand for the products in the future. Since the evaluation process involves material assumptions and estimations, the valuation of inventories is deemed to be a key audit matter.

We assessed the rationale of the Corporation’s policy on providing allowance for inventory valuation and obsolescence losses, and we tested the accuracy of inventory aging report. We also reviewed the sales forecast of the products, tested the recent selling prices, and participated in annual inventory count to observe the condition of the inventories in order to evaluate the reasonableness of the inventory value.

Please refer to Note 11 to the financial statements for the details of the information about inventories.

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

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

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

Those charged with governance, including supervisor, are responsible for overseeing the Corporation’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 financial statements.

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

Identify and assess the risks of material misstatement of the 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 Corporation’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 Corporation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Corporation to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2016 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Yi-Wen Wang and Wen-Chi Kuo.

Deloitte & Touche Taipei, Taiwan Republic of China February 21, 2017

Notice to Readers

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

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

CHROMA ATE INC.

BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets of fair value through profit or loss - current (Notes 4 and 7) Available-for-sale financial assets - current (Notes 4 and 8) Notes receivable Notes receivable - related parties (Note 26) Accounts receivable, net (Notes 4 and 10) Accounts receivable - related parties (Notes 4, 10 and 26) Other receivables - related parties (Note 26) Inventories (Notes 4, 5 and 11) Prepayments Other current assets (Note 26) Total current assets NON-CURRENT ASSETS Available-for-sale financial assets non-current (Notes 4 and 8) Financial assets carried at cost non-current (Notes 4 and 9) Investments accounted for using equity method (Notes 4 and 12) Property, plant and equipment (Notes 4, 13 and 27) Goodwill (Notes 4 and 14) Deferred tax assets (Notes 4 and 21) Prepayments for land and equipment Refundable deposits Prepayments for investments Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 15) Financial liability at fair value through profit or loss - current (Notes 4 and 7) Notes payable (Note 26) Accounts payable Accounts payable - related parties (Note 26) Other payables (Note 17) Current tax liabilities (Notes 4 and 21) Receipts in advance (Note 26) Current portion of long-term borrowings (Notes 4 and 15) Other current liabilities - other (Note 26) Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Notes 4 and 16) Long-term borrowings (Notes 4 and 15) Deferred tax liabilities (Notes 4 and 21) Net defined benefit liabilities (Notes 4 and 18) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Notes 19 and 23) Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury shares Total equity TOTAL		2016 Amount % $ 1,624,838 10 725 - 2,030,362 12 4,478 - 354 - 683,832 4 1,604,262 10 161,874 1 1,458,032 9 30,995 - 109,537 - 7,709,289 46 314,233 2 172,173 1 3,301,105 20 1,805,031 11 94,424 1 131,806 1 3,035,154 18 2,076 - 20,000 - 960 - 8,876,962 54 $ 16,586,251 100 $ - - - - 510 - 1,070,615 6 81,610 - 658,120 4 248,414 2 167,082 1 800,000 5 10,651 - 3,037,002 18 1,397,140 9 1,200,000 7 177,153 1 157,760 1 569 - 2,932,622 18 5,969,624 36 3,898,872 23 1,960,159 12 1,724,576 10 86,888 1 2,923,811 18 4,735,275 29 58,035 - (35,714) - 10,616,627 64 $ 16,586,251 100		2015
				Amount % $ 878,892 6 - - 1,824,521 13 6,784 - 3,920 - 591,750 4 1,063,503 8 168,854 1 1,300,519 9 51,834 1 109,114 1 5,999,691 43 359,543 2 181,760 1 3,339,519 24 1,844,215 13 94,424 1 88,429 1 2,046,426 15 1,943 - - - 8,966 - 7,965,225 57 $ 13,964,916 100 $ 100,000 1 1,483 - 35 - 534,402 4 34,647 - 459,173 4 136,340 1 28,111 - - - 16,515 - 1,310,706 10 1,758,093 12 1,230,000 9 115,166 1 140,281 1 566 - 3,244,106 23 4,554,812 33 3,791,699 27 1,302,269 9 1,600,920 11 86,888 1 2,264,377 16 3,952,185 28 399,665 3 (35,714) - 9,410,104 67 $ 13,964,916 100

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

CHROMA ATE INC.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUES (Notes 4 and 26) Sale revenues Less: Sales returns Sales allowances Net operating revenues OPERATING COSTS (Notes 11, 20 and 26) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 20 and 26) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses OPERATING INCOME NON-OPERATING INCOME AND EXPENSES Share of profit of subsidiaries, associates and joint ventures, net (Notes 4 and 12) Dividend income (Note 4) Rental income (Note 26) Interest income (Note 26) Management service income (Note 26) Subsidy income (Note 4) Gain on reversal of bad debts Other income - other (Note 26) Foreign currency exchange loss, net (Notes 4 and 29) (Losses) gain on disposal of property, plant and equipment, net (Note 4) Valuation gain on financial assets (liabilities), at fair value through profit, net (Notes 4 and 16) Impairment loss (Notes 4 and 9)		2016 Amount % $ 7,254,581 100 (18,534) - (2,732) - 7,233,315 100 (3,389,602) (47) 3,843,713 53 (80,134) (1) 3,763,579 52 651,576 9 449,079 6 936,526 13 2,037,181 28 1,726,398 24 246,007 3 46,998 1 29,738 1 8,793 - 8,600 - 3,384 - - - 20,424 - (57,580) (1) (3,387) - 2,884 - - -		2015
				Amount % $ 4,605,024 101 (62,184) (1) (3,399) - 4,539,441 100 (1,977,863) (44) 2,561,578 56 (41,744) (1) 2,519,834 55 552,449 12 357,284 8 784,380 17 1,694,113 37 825,721 18 416,646 9 29,724 1 30,882 1 6,141 - 8,650 - 18,302 - 9,000 - 20,735 1 - - 394 - - - (14,674) - (Continued)

CHROMA ATE INC.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Valuation loss on financial assets (liabilities) at fair value through loss, net Gain on disposal of investments, net (Note 4) Foreign currency exchange gain, net (Notes 4 and 29) Other expenses Interest expense (Notes 4 and 20) Total nonoperating income and expense INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 21) NET INCOME OTHER COMPREHENSIVE INCOME, NET (Note 19) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit plans Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using the equity method Item that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations Unrealized loss from available-for-sale financial assets Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using the equity method Total other comprehensive income TOTAL COMPREHENSIVE INCOME EARNINGS PER SHARE (NT$; Note 22) Basic Diluted		2016 Amount % $ - - 2,431 - - - (29) - (27,140) - 281,123 4 2,007,521 28 287,586 4 1,719,935 24 (24,936) - (1,709) - (127,798) (2) (39,469) (1) (24,411) - (218,323) (3) $ 1,501,612 21 $4.53 $4.23		2015
				Amount % $ (556) - 368 - 52,536 1 (850) - (28,834) (1) 548,464 12 1,374,185 30 137,628 3 1,236,557 27 (26,849) (1) 352 - (17,071) - (99,791) (2) 9,423 - (133,936) (3) $ 1,102,621 24 $3.28 $3.10

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

					Total Equity	$ 9,252,948		-	(987,433 )			(7,525 )	1,236,557	(133,936 )	1,102,621	281		4,994	44,218	9,410,104		-	(910,200 )			27,978	1,719,935	(218,323 )	1,501,612	386,028		4,545	196,560	$ 10,616,627
					Treasury Stock	$ (35,714 )		-	-			-	-	-	-	-		-	-	(35,714 )		-	-			-	-	-	-	-		-	-	$ (35,714 )
					Total	507,104		-	-			-	-	(107,439 )	(107,439 )	-		-	-	399,665		-	-			-	-	(191,678 )	(191,678 )	-		-	(149,952 )	58,035
Other Equity	Exchange	Differences on Unrealized Gain	Translating (Loss) from	Foreign Available-for-sale Unearned	Operations Financial Assets Employee Benefit	$ 136,756 $ 370,348 $ - $		- - -	- - -			- - -	- - -	(8,788 ) (98,651 ) -	(8,788 ) (98,651 ) -	- - -		- - -	- - -	127,968 271,697 -		- - -	- - -			- - -	- - -	(152,882 ) (38,796 ) -	(152,882 ) (38,796 ) -	- - -		- - -	- - (149,952 )	$ (24,914 ) $ 232,901 $ (149,952 ) $
					Total	3,737,083		-	(987,433 )			(7,525 )	1,236,557	(26,497 )	1,210,060	-		-	-	3,952,185		-	(910,200 )			-	1,719,935	(26,645 )	1,693,290	-		-	-	4,735,275
			Retained Earnings	Unappropriated	Special Reserve Earnings	$ 86,888 $ 2,180,919 $		- (131,644 )	- (987,433 )			- (7,525 )	- 1,236,557	- (26,497 )	- 1,210,060	- -		- -	- -	86,888 2,264,377		- (123,656 )	- (910,200 )			- -	- 1,719,935	- (26,645 )	- 1,693,290	- -		- -	- -	$ 86,888 $ 2,923,811 $
					Capital Surplus Legal Reserve	$ 1,256,654 $ 1,469,276		- 131,644	- -			- -	- -	- -	- -	239 -		4,994 -	40,382 -	1,302,269 1,600,920		- 123,656	- -			27,978 -	- -	- -	- -	326,205 -		4,545 -	299,162 -	$ 1,960,159 $ 1,724,576
					Issued Capital	$ 3,787,821		-	-			-	-	-	-	42		-	3,836	3,791,699		-	-			-	-	-	-	59,823		-	47,350	$ 3,898,872
						BALANCE, JANUARY 1, 2015	Appropriation of the 2014 earnings	Legal reserve	Cash dividends - NT$2.6 per share	Change in other capital surplus	Change in capital surplus from investments in subsidiaries, associates	and joint ventures accounted for using the equity method	Net income for the year ended December 31, 2015	Other comprehensive income for the year ended December 31, 2015	Total comprehensive income for the year ended December 31, 2015	Conversion of convertible bonds	Adjustments of capital surplus for the Corporation's cash dividends	received by subsidiaries	Compensation recognized on employee stock options	BALANCE, DECEMBER 31, 2015	Appropriation of the 2015 earnings	Legal reserve	Cash dividends - NT$2.4 per share	Change in other capital surplus	Change in capital surplus from investments in subsidiaries, associates	and joint ventures accounted for using the equity method	Net income for the year ended December 31, 2016	Other comprehensive income for the year ended December 31, 2016	Total comprehensive income for the year ended December 31, 2016	Conversion of convertible bonds	Adjustment of capital surplus for the Corporation's cash dividends	received by subsidiaries	Share-based payment transaction	BALANCE, DECEMBER 31, 2016

CHROMA ATE INC.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Net income before income tax
Adjustments for:
Share of profits of subsidiaries, associates and joint venture
accounted for by the equity method, net
Depreciation
Compensation cost of share-based payments
Unrealized gain on the transactions with subsidiaries and
associates
Unrealized loss (gain) on foreign currency exchange, net
Dividend income
Finance cost
Provision (reversal of provision) for bad debts expense
Interest income
Impairment loss on non-derivative financial assets
Loss (gain) on disposal and retirement of property, plant and
equipment, net
Gain on disposal of investments, net
Impairment loss on financial assets
Net changes in operating assets and liabilities
Financial assets held for trading
Notes receivable
Accounts receivable
Inventories
Prepayments
Other current assets
Financial liabilities held for trading
Notes payable
Accounts payable
Other payables
Receipts in advance
Other current liabilities
Net defined benefit liabilities
Cash generated from operating
Income tax paid
Net cash generated from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payment to acquire property, plant and equipment
Payment to acquire available-for-sale financial assets
Proceeds from disposal of available-for-sale financial assets
Dividend received
Payment to acquire investments accounted for using the equity
method
Increase in prepayments for long-term investments
Cash returned of capital reduction of financial assets carried at
cost

2016
2015
$ 2,007,521
$ 1,374,185
(246,007)
(416,646)
157,159
158,264
86,618
25,077
80,134
41,744
52,244
(43,566)
(46,998)
(29,724)
27,140
28,834
11,000
(9,000)
(8,793)
(6,141)
8,500
32,452
3,387
(394)
(2,431)
(368)
-
14,674
(1,401)
-
5,872
(2,577)
(684,082)
662,903
(249,471)
(118,162)
20,839
(23,180)
2,969
(6,175)
(1,483)
556
475
(1,016)
586,054
30,657
196,817
(40,500)
138,971
20,296
(5,864)
348
(7,457)
(5,438)
2,131,713
1,687,103
(156,902)
(164,175)
1,974,811
1,522,928
(1,008,799)
(658,699)
(600,000)
(300,000)
400,910
119,942
353,099
259,269
(225,749)
(131,840)
(20,000)
-
9,587
11,750
(Continued)

CHROMA ATE INC.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

Decrease in other non-current assets Decrease in other receivables - related parties Interest received Proceeds from disposal of property, plant and equipment Proceeds on sale of financial assets measured at cost (Increase) decrease in refundable deposits Proceeds from disposal of investments in bonds with no active market Increase in prepayments for investments Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Cash dividend Increase in long-term borrowings Decrease in short-term borrowings Exercise of employee stock options Exercise of employee restricted stock Interest paid Increase in guarantee deposits Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR	2016 $ 8,006 5,594 7,905 7,046 1,521 (133) - - (1,061,013) (910,200) 770,000 (100,000) 80,049 31,000 (25,245) 3 (154,393) (13,459) 745,946 878,892 $ 1,624,838	2015 $ 15,846 11,384 6,303 3,452 - 732 51,091 (16,140) (626,910) (987,433) 530,000 (50,000) 19,141 - (13,480) - (501,772) 2,631 396,877 482,015 $ 878,892

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

ATTACHMENT 6

Chroma Ate Inc. Profit Allocation Proposal For Year ended December 31, 2016

	Unit: NT$	Unit: NT$
Undistributed Earnings of Previous Year Retain earnings adjustments due to long term investments Accrued pension costs under retain earnings Adjusted undistributed Earnings Plus: Net Income 2016 Less: 10% Legal Reserve Earnings in 2016 Available for Distribution Distribution Item: Cash Dividends to Common Share Holders (NT$3.3 per Share) Unappropriated Retained Earnings	$ 1,230,518,544 (1,708,768) (24,936,241) 1,203,873,535 1,719,935,190 (171,993,519) 2,751,815,206 (1,314,425,224)
		1,203,873,535 1,719,935,190 (171,993,519)
		2,751,815,206 (1,314,425,224)
		1,437,389,982

Note:

Net Income of 2016 shall be preferred in the profit distribution.
Each common shareholder will be entitled to receive the cash dividends in dollar amount. The fractional parts would be allotted to shareholders based on shareholders’ number in order.

Chairman Leo, Huang CEO Leo, Huang CFO Cheng, Ying

ATTACHMENT 7

Comparison Table of Revised Articles of the Articles of Incorporation

Article	After Revision	Before Revision	Explanation
20	The Company shall establish the Board of Directors constituted by five (5) to seven (7) directors. The shareholders’ meeting votes shall be casted among candidates on the candidates list through cumulative ballot system specified in Article 198 of the Company Law. The term of office for Directors shall be three (3) years, and all Directors shall be eligible for re-election. To conform to the Company Law and Securities and Exchange Act, the Company shall have, among the aforementioned directors, at least three independent directors. The directors (including independent directors) shall be elected from among the nominees listed in the roster of director candidates pursuant to the candidates’ nomination system. Compliance matters with respect to independent directors shall be subject to the regulations prescribed by the Company Law and the securities authority. When the posts of one-third or more of the directors have been vacated, a special meeting of shareholders shall be convened to elect directors to fill the vacancies within sixty (60) days. The term of office of the new directors shall be the same as the original director(s)’ term(s). The Company could purchase liability insurance for Directors and management in accordance with business requirement.	The Company shall establish the Board of Directors constituted by five (5) to seven (7) directors andtwo supervisors.The shareholders’ meeting votes shall be casted among candidates on the candidates list through cumulative ballot system specified in Article 198 of the Company Law. The term of office for Directors andSupervisorsshall be three (3) years, and all Directors andSupervisors shall be eligible for re-election. To conform to the Company Law and Securities and Exchange Act, the Company shall have, among the aforementioned directors, at leastone to two independent directors. The directors (including independent directors) shall be elected from among the nominees listed in the roster of directors andsupervisors candidates pursuant to the candidates’ nomination system. Compliance matters with respect to independent directors shall be subject to the regulations prescribed by the Company Law and the securities authority. In compliance with Articles 14-4 of the ROC Securities and Exchange Law, from year 2017 the Company shall establish an Audit Committee to replace supervisors, which shall consist by all independent directors. The independent director is constituted by three (3) directors. The Audit Committee or the members of Audit	In order to conform to the Company Law for establishing the Audit Committee
		Committee shall be responsible for those responsibilities of supervisors specified under the ROC Company Law, Securities and Exchange Law and other relevant regulations. When the posts of one-third or more of the directors have been vacatedor all of the supervisors have been discharged,a special meeting of shareholders shall be convened to elect directorsor supervisors to fill the vacancies within sixty (60) days. The term of office of the new directors shall be the same as the original director(s)’ term(s). The Company could purchase liability insurance for Directors,Supervisorsand management in accordance with business requirement.


22	Except for the first meeting of each term of the Board which shall be convened by the Director who received a ballot representing the largest number of votes at the election of Directors, Board meetings shall be convened by the Chairman, who shall also be the chairman of the meeting. The agenda of the Board of Directors meeting shall be arranged in advance and send to all directors before seven (7) days with detailed information of meeting’s date, venue and agenda. The Board meeting may be convened at any time, without such prescribed notice in case of urgent circumstances. Notifications for the meetings of the Board of Directors may be communicated through written notice, fax and electronic mails.	Except for the first meeting of each term of the Board which shall be convened by the Director who received a ballot representing the largest number of votes at the election of Directors, Board meetings shall be convened by the Chairman, who shall also be the chairman of the meeting. The agenda of the Board of Directors meeting shall be arranged in advance and send to all directors and supervisors before seven (7) days with detailed information of meeting’s date, venue and agenda. The Board meeting may be convened at any time, without such prescribed notice in case of urgent circumstances. Notifications for the meetings of the Board of Directors may be communicated through written notice, fax and electronic mails.	In order to conform to the Company Law for establishing the Audit Committee
27	The established Audit Committee will be constituted by all the independent directors and replace the duty of supervisors.	The supervisors may, other than exercising the supervisory powers, attend the Board of Directors meeting to speak up opinions but shall have no voting power there.	In order to conform to the Company Law for establishing the Audit Committee
28	The Audit Committee or the members of Audit Committee shall be responsible for those responsibilities specified under the ROC Company Law, Securities and Exchange Law and other relevant regulations.	The duties of the supervisors are as follows: 1. Audit the Corporation’s business operation and financial standing. 2. Audit books and documents. 3. Oversee employees in their performance of duties or potential fraudulent practice. 4. Supervise budget and closing accounting. 5. Propose profit allocation plan. 6. Other authorized terms required by the laws and regulations.	In order to conform to the Company Law for establishing the Audit Committee

29	The remuneration to the directors shall be determined by the Board of Directors in consideration of the directors’ participation in and devotion to the operation of the Corporation as well as reference to the common practical standards, no matters the Corporation’s profits or losses. If the Corporation has earnings, the remuneration will be paid in accordance with Article 34 of the Corporation’s Articles of Incorporation.	The remuneration to the directors and supervisorsshall be determined by the Board of Directors in consideration of the directors’ andsupervisors’ participation in and devotion to the operation of the Corporation as well as reference to the common practical standards, no matters the Corporation’s profits or losses. If the Corporation has earnings, the remuneration will be paid in accordance with Article 34 of the Corporation’s Articles of Incorporation.	In order to conform to the Company Law for establishing the Audit Committee
32	The fiscal year of the Corporation shall begin on 1 January and end on 31 December of each. Upon closing of each fiscal year, the Board of Directors shall prepare the following statements and reports and shall submit the same to the Audit Committee for inspection no later than thirty (30) days prior to the meeting date of the general shareholders meeting for ratification: 1. Report of operations. 2. Financial statements. 3. Proposal for distributing earnings or covering losses.	The fiscal year of the Corporation shall begin on 1 January and end on 31 December of each. Upon closing of each fiscal year, the Board of Directors shall prepare the following statements and reports and shall submit the same to the supervisorsfor inspection no later than thirty (30) days prior to the meeting date of the general shareholders meeting for ratification: 1. Report of operations. 2. Financial statements. 3. Proposal for distributing earnings or covering losses.	In order to conform to the Company Law for establishing the Audit Committee
34	If the Company is surplus of that fiscal year, shall be allocated the profit to (1)5-20% to employee bonuses, either share or cash, persons eligible for such distribution shall included employees of the Company’s subsidiaries who meet certain qualifications. (2) No more than 1.5% as the remuneration for directors. Employee bonuses and remuneration for directors should be presented in the shareholders’ meeting for a resolution. The Company shall make up losses for preceding years before above mentioned payments are made.	If the Company is surplus of that fiscal year, shall be allocated the profit to (1)5-20% to employee bonuses, either share or cash, persons eligible for such distribution shall included employees of the Company’s subsidiaries who meet certain qualifications. (2) No more than 1.5% as the remuneration for directors andsupervisors.Employee bonuses and remuneration for directors and supervisorsshould be presented in the shareholders’ meeting for a resolution. The Company shall make up losses for preceding years before above mentioned payments are made.	In order to conform to the Company Law for establishing the Audit Committee

	36	…… The twentieth-nine amendment was made on 6 June 2012. The thirtieth amendment is made on 10 June, 2015. The 31stamendment is made on 7 June, 2016. The 32ndamendment is made on 8 June, 2017.	…… The twentieth-nine amendment was made on 6 June 2012. The thirtieth amendment is made on 10 June, 2015. The 31stamendment is made on 7 June, 2016.	The shareholders’ meeting date shall be the date of these amendments.

ATTACHMENT 8

Comparison Table of Revised Operating Procedures of Acquisition or Disposal of Assets

Article	After Revision	Before Revision	Explanation
8	Procedures of Public Announcement and Report: For the Company to acquire or dispose assets, if any of the following occurs, the Company shall proceed with the public announcement and report on the website designated by the FSC within two (2) days starting immediately from the day such event occurs in the format and with contents prescribed. 8.1 Acquire or dispose of real property from or to a related party, or 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 total assets, or NT$300 million or more, excluding trading of government bonds or bonds under repurchase or resale agreements andsubscribing or redeeming domestic investment trust from money market funds. 8.2 and 8.3 (Abbreviate) 8.4 Where the type of asset acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party, and the transaction amount is less than NT$500 million. 8.5Acquisition of real estate by way of contracting third parties to construct on land owned or rented by this Company, distribution of building under joint construction project, distribution of profit under joint construction project, or selling building under joint construction project, and the amount of transaction not exceeding NT$ 500 million (based on the amount this Company plans to contribute). 8.6 Where an asset transaction other than any of those referred to in the precedingfivesubsections, or an investment in Mainland China area reaches 20 percent or more of paid-in capital or three hundred million NT dollars (NT$300,000,000); provided, this shall not apply to the following circumstances:	Procedures of Public Announcement and Report: For the Company to acquire or dispose assets, if any of the following occurs, the Company shall proceed with the public announcement and report on the website designated by the FSC within two (2) days starting immediately from the day such event occurs in the format and with contents prescribed. 8.1 Acquire or dispose of real property from or to a related party, or 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 total assets, or NT$300 million or more, excluding trading of government bonds or bonds under repurchase or resale agreements. 8.2 and 8.3 (Abbreviate) 8.4 Where an asset transaction other than any of those referred to in the preceding three subsections, or an investment in Mainland China area reaches 20 percent or more of paid-in capital or three hundred million NT dollars (NT$300,000,000); provided, this shall not apply to the following circumstances: (1) Trading of government bonds. (2)Investment in overseas and domestic security market or securities that are not traded on any centralized trading market or over-the-counter trading center. (3) Buying or selling bonds under repurchase and resale agreements, or subscribing or redeeming domestic money market funds; (4) Where the type of asset acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party, and the transaction amount is less than NT$500 million. (5) Acquisition of real estate by way of contracting third parties to construct on land owned or rented bythis Company,distribution of	In order to conform to the Company Law

	(1) Trading of government bonds. (2) Buying or selling bonds under repurchase and resale agreements, or subscribing orredeeming the investment trust issueddomestic money market funds; Following (Abbreviate) If any item subject to the requirement of public announcement is erroneous or missing and needs to be corrected, all items shall be re-filed for public announcementwithin two (2) days.	building under joint construction project, distribution of profit under joint construction project, or selling building under joint construction project, and the amount of transaction not exceeding NT$ 500 million (based on the amount this Company plans to contribute). Following (Abbreviate) If any item subject to the requirement of public announcement is erroneous or missing and needs to be corrected, all items shall be re-filed for public announcement.
10	In acquiring or disposing of real property or other fixed assets where the transaction amount reaches 20percent of the Company's paid-in capital or three hundred million NT dollars (NT$300,000,000) or more, the Company, unless transacting with a government, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of machinery and 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:	In acquiring or disposing of real property or other fixed assets where the transaction amount reaches 20percent of the Company's paid-in capital or three hundred million NT dollars (NT$300,000,000) or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of machinery and 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:	In order to conform to the Company Law
12	If this Company’s acquisition or disposal of membership or intangible assets reaches 20% of this Company’s paid-in capital or NT$300 million, excluding transactions with government, opinions in respect of a rational transaction price shall be sought from certified public accountant prior to the Date of the Event of the subject acquisition or disposal of assets. Certified public accountant shall handle the matter in accordance with the provision of Auditing Standard No.20.	If this Company’s acquisition or disposal of membership or intangible assets reaches 20% of this Company’s paid-in capital or NT$300 million, excluding transactions with governmentagency(ies), opinions in respect of a rational transaction price shall be sought from certified public accountant prior to the Date of the Event of the subject acquisition or disposal of assets. Certified public accountant shall handle the matter in accordance with the provision of Auditing Standard No.20.	In order to conform to the Company Law

16	If this Company intends to acquire or dispose of real estate from or to a related party, or when it intends to acquire or dispose of assets other than real estate from or to a related party and the transaction amount reaches 20% of this Company’s paid-in capital, 10% of this Company’s total assets, or NT$300 million, except for buying or selling government bonds, bonds under repurchase and resale agreements and subscribing orredeeming the investment trust issueddomestic money market funds, this Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by theAudit Committee and then submitted to the Board for a resolution: (1) to (7) (Abbreviate) The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 8, Section 2, 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 theAudit Committee in accordance with the Handling Procedures need not be counted toward the transaction amount. (Abbreviate)	If this Company intends to acquire or dispose of real estate from or to a related party, or when it intends to acquire or dispose of assets other than real estate from or to a related party and the transaction amount reaches 20% of this Company’s paid-in capital, 10% of this Company’s total assets, or NT$300 million, except for buying or selling government bonds, bonds under repurchase and resale agreements and subscribing or redeeming domestic money market funds, this Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by theSupervisors and then submitted to the Board for a resolution: (1) to (7) (Abbreviate) The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 8, Section 2, 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 thesupervisors in accordance with the Handling Procedures need not be counted toward the transaction amount. (Abbreviate)	In order to conform to the Company Law for establishing the Audit Committee
18	When the Company acquires real estate from a related party, if the transaction cost calculated from the evaluation in accordance with the previous article is lower than the transaction price, the following shall be carried out: (1) (Abbreviate) (2) TheAudit Committeeshall proceed in accordance with Article 218 of the Company Law. Following (Abbreviate)	When the Company acquires real estate from a related party, if the transaction cost calculated from the evaluation in accordance with the previous article is lower than the transaction price, the following shall be carried out: (1) (Abbreviate) (2) Thesupervisorsshall proceed in accordance with Article 218 of the Company Law. Following (Abbreviate)	In order to conform to the Company Law for establishing the Audit Committee
20	When the Company engages in a merger, split, acquisition or transfer of shares, accountant, attorney or securities underwriter shall be engaged prior to convening a board meeting for resolution in order for opinions to be provided about the reasonableness of the share exchange ratio, acquisition price or distribution of cash or other asset to the shareholders. The proposal shall then be submitted to the board of directors for discussion and approval.The above clause doesn’t apply to the Company directly or indirectly 100%	When the Company engages in a merger, split, acquisition or transfer of shares, accountant, attorney or securities underwriter shall be engaged prior to convening a board meeting for resolution in order for opinions to be provided about the reasonableness of the share exchange ratio, acquisition price or distribution of cash or other asset to the shareholders. The proposal shall then be submitted to the board of directors for discussion and approval. Following (Abbreviate)	In order to conform to the Company Law

	owned subsidiaries or other directly and indirectly 100% affiliates. Following (Abbreviate)
25	Amendments and Execution These procedures and their amendments shallreceive over one-third of Audit Committee’s consent and approved by the	Amendments and Execution These procedures and their amendments shall be approved by the Board of Directors, and then sent to allsupervisors and proposed at the shareholders’ meeting for approval. If any director expresses objection on the record or in a written statement, the Company shall submit the objection to thesupervisors and the shareholders’ meeting for discussion. Following (Abbreviate) 1stamendment approved …….. 4thamendment approved by General Shareholder’s Meeting held on 11 June, 2014.	In order to conform to the Company Law for establishing the Audit Committee. The shareholders’ meeting date shall be the date of these amendments.
	Board of Directors,and proposed at the shareholders’ meeting for approval. If any director expresses objection on the record or in a written statement, the Company shall submit the objection to theAudit Committeeand the shareholders’ meeting for discussion. Following (Abbreviate) If the Company has an Audit Committee, any restatement or amendment to the Operating Procedure for Acquisition or Disposal of Asset shall be subject to approval by one-half of all members of the
	Audit Committee to the approval by resolution of the board of directors. If the above-mentioned matter is not approved by one-half or more of all members of the Audit Committee, it may be approved instead by two-thirds of all members of board of directors. The resolution by the Audit Committee shall be
	specified in the minutes of the board meeting. All members of the Audit Committee and board of directors as referred shall be calculated based on the number of members who are currently in position. 1stamendment approved …….. 4thamendment approved by General Shareholder’s Meeting held on 11 June, 2014. 5thamendment approved by General Shareholder’s Meeting held on 8 June, 2017.

ATTACHMENT 9

Comparison Table for the Amendments to Procedures of Endorsements and Guarantees

Article	After Revision	After Revision	Before Revision	Explanation
7	Endorsement Procedures: 7.1 The internal auditing staff of the Company shall perform audits on the procedures and performance of endorsements and guarantees on a quarterly basis and written records shall be prepared. If any significant breach of this rule is discovered, each Audit Committeeshall be notified in writing. 7.2 If the recipient company qualification changed cause by the Company, which the amount of endorsement or guarantee exceeds the amount limit due to change to the basis of calculation, the internal audit of the Company shall supervise the finance division to eliminate the contract upon expiry date or the fixed deadline under provision plan and report shall be made to theAudit Committeeand report to the board of directors. 7.3 If any business requirements of the enterprise receiving the endorsement or guarantee above the amount limit, shall receive over half ofthe Audit Committee consents then to the board of directors’ consents and revise the procedures accordingly. Amendments of endorsements and guarantees shall be reported to the shareholders meeting for reference. If the Company has independent directors, opinions of each independent director shall be taken into consideration during discussions at the board and their consents or clear opinion against the proposal and the reasons for such objection shall be include into the minutes of the board meetings.		Endorsement Procedures: 7.1 The internal auditing staff of the Company shall perform audits on the procedures and performance of endorsements and guarantees on a quarterly basis and written records shall be prepared. If any significant breach of this rule is discovered, each supervisor shall be notified in writing. 7.2 If the recipient company qualification changed cause by the Company, which the amount of endorsement or guarantee exceeds the amount limit due to change to the basis of calculation, the internal audit of the Company shall supervise the finance division to eliminate the contract upon expiry date or the fixed deadline under provision plan and report shall be made to thesupervisorsand report to the board of directors. 7.3 If any business requirements of the enterprise receiving the endorsement or guarantee above the amount limit, shall receive over half ofthe board of directorsconsents and revise the procedures accordingly. Amendments of endorsements and guarantees shall be reported to the shareholders meeting for reference. If the Company has independent directors, opinions of each independent director shall be taken into consideration during discussions at the board and their consents or clear opinion against the proposal and the reasons for such objection shall be include into the minutes of the board meetings.	In order to conform to the Company Law for establishing the Audit Committee
		of directors’ consents and revise the procedures accordingly. Amendments of endorsements and guarantees shall be reported to the shareholders meeting for reference. If the Company has independent directors, opinions of each independent director shall be taken into consideration during discussions at the board and their consents or clear opinion against the proposal and the reasons for such objection shall be include into the minutes of the board meetings.

9	Control Procedure for Endorsements and Guarantees by Subsidiaries (1) and (2) (Abbreviate) (3) The internal auditing staff of the Company shall perform audits on the procedures and performance of endorsements and guarantees on a quarterly basis and written records shall be prepared. If any significant breach of this rule is discovered, each Audit Committee shall be notified in writing. (4) (Abbreviate)	Control Procedure for Endorsements and Guarantees by Subsidiaries (1) and (2) (Abbreviate) (3) The internal auditing staff of the Company shall perform audits on the procedures and performance of endorsements and guarantees on a quarterly basis and written records shall be prepared. If any significant breach of this rule is discovered, each supervisor shall be notified in writing. (4) (Abbreviate)	In order to conform to the Company Law for establishing the Audit Committee
13	Amendments and Execution These procedures and their amendments shall be approved bythe Audit Committee and then the Board of Directors,and proposed at the shareholders’ meeting for approval.Same as amendments.If any director expresses objection on the record or in a written statement, the Company shall submit the objection to theAudit Committeeand the shareholders’ meeting for discussion. (Abbreviate) 1stamendment ………… 5thamendment approved by General Shareholder’s Meeting held on 10 June, 2013. 5thamendment approved by General Shareholder’s Meeting held on 10 June, 2013. 6thamendment approved by General Shareholder’s Meeting held on 8 June, 2017.	Amendments and Execution These procedures and their amendments shall be approved by the Board of Directors, and then sent toall supervisors and proposed at the shareholders’ meeting for approval. If any director expresses objection on the record or in a written statement, the Company shall submit the objection to thesupervisors and the shareholders’ meeting for discussion.Same as amendments. (Abbreviate) 1stamendment ………… 5thamendment approved by General Shareholder’s Meeting held on 10 June, 2013.	In order to conform to the Company Law for establishing the Audit Committee

ATTACHMENT 10

Comparison Table for the Amendments to Procedures for Lending of Capital to Other Parties

Article	After Revision	Before Revision	Explanation
9	Additional Guidelines of Lending Funds to Others 1. Before lending funds, the Company shall carefully evaluate whether such lending is in compliance with the Operating Procedures and submit the evaluation results to the Board of Directors for resolution, and shall not authorize any other person to make the decision of lending of funds. 2. (Abbreviate) 3. The Company’s internal auditor shall audit the procedures for lending of funds to others and the implementation thereof no less frequently than each quarter and prepare written audit report accordingly. If there is any material violation of the operating procedures, the auditors shall promptly notify theAudit Committee of the Company in writing. 4. Where the recipients of the fund lending are not in compliance with the Procedures or the amount of funds lent exceeds the limit as set forth in the Procedures as a result of changes of condition, the auditors shall urge the Finance Department to withdraw the excess amount within a specified period and submit a corrective plan to the Audit Committee of the Company and rectify as scheduled under the corrective plans.	Additional Guidelines of Lending Funds to Others 1. Before lending funds, the Company shall carefully evaluate whether such lending is in compliance with the Operating Procedures and submit the evaluation results to the Board of Directors for resolution, and shall not authorize any other person to make the decision of lending of funds. 2. (Abbreviate) 3. The Company’s internal auditor shall audit the procedures for lending of funds to others and the implementation thereof no less frequently than each quarter and prepare written audit report accordingly. If there is any material violation of the operating procedures, the auditors shall promptly notify thesupervisors of the Company in writing. 4. Where the recipients of the fund lending are not in compliance with the Procedures or the amount of funds lent exceeds the limit as set forth in the Procedures as a result of changes of condition, the auditors shall urge the Finance Department to withdraw the excess amount within a specified period and submit a corrective plan to the supervisors of the Company and rectify as scheduled under the corrective plans.	In order to conform to the Company Law for establishing the Audit Committee
10	Procedures for Controlling Fund Lending Made by Subsidiaries 1. (Abbreviate) 2. (Abbreviate) 3. The internal auditors of the Subsidiary shall include the operating specifics of the lending funds to be audited quarterly. If there is any material violation, the written notification shall promptly send to the Company’s internal auditor and the Company internal auditor shall promptly notify in written document to allAudit Committee. 4.(Abbreviate)	Procedures for Controlling Fund Lending Made by Subsidiaries 1. (Abbreviate) 2. (Abbreviate) 3. The internal auditors of the Subsidiary shall include the operating specifics of the lending funds to be audited quarterly. If there is any material violation, the written notification shall promptly send to the Company’s internal auditor and the Company internal auditor shall promptly notify in written document to allsupervisors. 4. (Abbreviate)	In order to conform to the Company Law for establishing the Audit Committee

	13	Other Matters These procedures and their amendments shall be approved by the Audit Committee and Board of Directors, and proposed at the shareholders’ meeting for approval. If any director expresses objection on the record or in a written statement, the Company shall submit the objection to the Audit Committeeand the shareholders’ meeting for discussion. 1stamendment …….. 5thamendment approved by General Shareholder’s Meeting held on 10 June, 2015. 6thamendment approved by General Shareholder’s Meeting held on 8 June, 2017.	Other Matters These procedures and their amendments shall be approved by the Board of Directors, and then sent to allsupervisors and proposed at the shareholders’ meeting for approval. If any director expresses objection on the record or in a written statement, the Company shall submit the objection to thesupervisors and the shareholders’ meeting for discussion.Same as amendments. 1stamendment …….. 5thamendment approved by General Shareholder’s Meeting held on 10 June, 2015.	In order to conform to the Company Law for establishing the Audit Committee

ATTACHMENT 11

Comparison Table for the Amendments to Procedures for Financial Derivatives Transactions

Article	After Revision	Before Revision	Explanation
11	Internal Audit Internal audit personnel is required to evaluate the suitability of the internal control system in connection with financial derivative transactions on a regular basis, to conduct auditing on how well the related departments follow the Procedures, and to produce report with trading cycle analysis on a monthly basis. Should there be any violation found, a written report is needed to notify the Audit Committee.	Internal Audit Internal audit personnel is required to evaluate the suitability of the internal control system in connection with financial derivative transactions on a regular basis, to conduct auditing on how well the related departments follow the Procedures, and to produce report with trading cycle analysis on a monthly basis. Should there be any violation found, a written report is needed to notify the supervisors.	In order to conform to the Company Law for establishing the Audit Committee
15	Amendments and Execution These procedures and their amendments shall be approved by the Board of Directors, and then sent to allAudit Committeeand proposed at the shareholders’ meeting for approval. If any director expresses objection on the record or in a written statement, the Company shall submit the objection to theAudit Committeeand the shareholders’ meeting for discussion. Same as amendments. (Abbreviate) 1stamendment approved by General ……. 4thamendment approved by General Shareholder’s Meeting held on 11 June, 2014. 5thamendment approved by General Shareholder’s Meeting held on 8 June, 2017.	Amendments and Execution These procedures and their amendments shall be approved by the Board of Directors, and then sent to allsupervisors and proposed at the shareholders’ meeting for approval. If any director expresses objection on the record or in a written statement, the Company shall submit the objection to thesupervisors and the shareholders’ meeting for discussion. Same as amendments. (Abbreviate) 1stamendment approved by General ……. 4thamendment approved by General Shareholder’s Meeting held on 11 June, 2014.	In order to conform to the Company Law for establishing the Audit Committee

ATTACHMENT 12

Comparison Table for the Amendments to Rules for Election of Directors and Supervisors

Article	After Revision	Before Revision	Explanation
	Headline: Rules for Election of Directors	Headline: Rules for Election of Directors andSupervisors.	Amendments to Rules’ headline.
1	Purpose: To ensure a justice, fair and open election of directors.	Purpose: To ensure a justice, fair and open election of directors andsupervisors.	In order to conform to the Company Law for establishing the Audit Committee
2	2. Election: 2.1 The elections of board of directors shall be taken in the annual general shareholders meeting. 2.1.1~2.1.3 (Abbreviate) 2.2 The cumulative ballot system is adopted for the election of directors of the Company. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. Attendance card number printed on the ballots may be used instead of recording the names of voting shareholders. 2.3(Abbreviate) 2.4 The number of directors will be specified in the Company article of incorporation, with voting rights separately calculated for common and independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance. 2.5(Abbreviate)	2. Election: 2.1 The elections of board of directors andsupervisorsshall be taken in the annual general shareholders meeting. 2.1.1~2.1.3 (Abbreviate) 2.2 The cumulative ballot system is adopted for the election of directors andsupervisorsof the Company. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. The supervisorsare same procedures as directors. Attendance card number printed on the ballots may be used instead of recording the names of voting shareholders. 2.3(Abbreviate) 2.4 The number of directors and supervisorswill be specified in the Company article of incorporation, with voting rights separately calculated for common and independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When candidate received both director and supervisorposition shall select one position by himself / herself. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance. 2.5(Abbreviate)	In order to conform to the Company Law for establishing the Audit Committee

	4	Voting Rights: 4.1The election results shall be released on site. 4.2The counting procedure will be monitor by scrutinist. 4.3 The new directors will be announced by chair or designee by chair after the completion of counting procedures.	Voting Rights: 4.1Directors and supervisors election can set up several ballot counters and two counting sites. 4.2 When all the ballots have been collected, the scrutinist and ballot teller will open the box together. 4.3 The counting procedure will be monitor by scrutinist. 4.4 The board of directors of the Company shall issue certificate to the persons elected as directors.	Voting Rights: 4.1Directors and supervisors election can set up several ballot counters and two counting sites. 4.2 When all the ballots have been collected, the scrutinist and ballot teller will open the box together. 4.3 The counting procedure will be monitor by scrutinist. 4.4 The board of directors of the Company shall issue certificate to the persons elected as directors.	In order to conform to the Company Law for establishing the Audit Committee
		4.3

				shall issue certificate to the persons elected as directors.

APPENDIX 1

Chroma Ate Inc. Articles of Incorporation

Chapter One General Provisions Article 1

The Corporation shall be incorporated, as a company limited by shares, under the Company Law of the Republic of China, and its name shall be Chroma Ate Inc.

Article 2

The scope of business of the Corporation shall be as follow:

CC01110 Computers and computing peripheral equipments manufacturing.
F113050 Wholesale of computing and business machinery equipment.
F213030 Retail sale of computing and business machinery equipment.
E605010 Computing equipment installation construction.
CC01080 Electronic parts and components manufacturing.
F119010 Wholesale of electronic materials.
F219010 Retail sale of electronic materials.
JA02010 Household electrical appliances repair shops.
CC01120 Data storage media manufacturing and duplicating.
F118010 Wholesale of computer software.
F218010 Retail sale of computer software.
I301010 Software design services.
CE01010 Precision instruments manufacturing.
F113030 Wholesale of precision instruments.
F213040 Retail sale of precision instruments.
EZ05010 Apparatus installation construction.
CC01060 Wired communication equipment and apparatus manufacturing.
CC01070 Telecommunication equipment and apparatus manufacturing.
CC01101 Restrained telecom radio frequency equipments and materials manufacturing.
F401021 Restrained telecom radio frequency equipments and materials import.
F401010 International trade.
CB01010 Machinery and equipment manufacturing.
CE01030 Photographic and optical equipment manufacturing.
CF01011 Medical materials and equipment manufacturing.
F113070 Wholesale of telecom instruments.
F213060 Retail sale of telecom instruments.
H701040 Specialized field construction and development.
H701060 New county and community construction and investment.
H701010 Residence and buildings lease construction and development.
H701020 Industrial factory buildings lease construction and development.
H702010 Construction management.
H703090 Real estate commerce.
H703100 Real estate rental and leasing.
All businesses that are not prohibited or restricted by laws and regulations other than those requiring special permits.

Article 3

Where the Corporation is required to render guarantee (including endorsement) to a third party.

Article 4

When the Corporation invests in other companies as a shareholder, it shall not be subject to the restriction of the Company Law which provides that the total amount of such investment shall not exceed forty percent (40%) of the amount of this Corporation’s paid-in capital. Any such investment by this Corporation shall be made in accordance with a resolution adopted by the Board of Directors.

Article 5

The head office of the Company shall be in Tao Yuan City, Taiwan. Pursuant to the resolutions adopted by the Board of Directors, the Company may, if necessary, set up branches or factories within and outside the R.O.C.

Article 6

Any public announcement by this Corporation shall be made in accordance with the Company Law.

Chapter Two Capital Stock

Article 7

The total authorized capital stock of the Corporation is Five Billion New Taiwan Dollars (NT$5,000,000,000), divided into Five Hundred Million (500,000,000) shares with a par value of Ten New Taiwan Dollars (NT$10). The Board of Directors is authorized to issue the un-issued shares in installments, of which Three Hundred Million New Taiwan Dollars (NT$300,000,000), divided into Thirty Million (30,000,000) shares with a par value of Ten New Taiwan Dollars (NT$10) are reserved for issuance of employee stock option. The Board of Directors is authorized to issue the unissued shares at a premium in installments.

Article 7-1

Where the exercise price of the employee stock options is set to be lower than the closing price of the Corporation’s common shares on the date that the options are issued, the Corporation may need over two-thirds of the votes in the shareholders’ meeting attended by over 50% of shares represented by the shareholders present at the meeting.

Where the exercise price of the employee stock options is set to be lower than the average buyback price of common shares, the Corporation may transfer the buy-back common shares to the employees, by over two-thirds of the votes in the shareholders’ meeting attended by over 50% of shares presented by the shareholders present at the meeting.

Article 8

All share certificates of this Corporation shall be issued in registered form after being signed by and affixed with the seals of at least three directors.

Where the representative of juristic person shareholder shall record its name and address in the shareholders’ roster. If the representative is more than two persons, shall be only one person as major representative.

The Corporation may issue registered stock by combine and print multiple shares in one share certificate and placed under the custody of custodian.

The Corporation may issue registered stock without printing share certificates. Any shares shall be recorded by a centralized securities custodian, not applicable to aforementioned two articles.

Article 9

The shareholder shall provide a seal specimen card and submit it to the Corporation for record. Claims for collection of share dividend, bonus for exercise of shareholder’s right must be verified truthful with the imprint of the seal shown in the specimen card.

Article 10

All transfer of stocks and pledge of rights, the shareholder shall fill in the application form signed and sealed by the transferor and transferee, pledgor and pledgee, and apply to the Corporation for alternation of the entries in the shareholders’ roster. Inheritance and Gift needs supporting documents.

Article 11

The Corporation shall charge for administrative fees for the reissue of share certificates due to loss and worn of the original share certificates or for other reasons.

Article 12

Registration of share transfers shall be suspended for sixty (60) days prior to any ordinary meeting of shareholders, thirty (30) days prior to any extraordinary meeting of shareholders, and five (5) days prior to any ate on which dividends, and bonuses or any other benefits are scheduled to be distributed by this Corporation.

Article 13

All matters regarding this Corporation’s shares shall be conducted in accordance with the Company Law and relevant laws and regulations.

Chapter Three Shareholders Meetings

Article 14

Shareholders meetings may be ordinary meetings or extraordinary meetings. Ordinary meetings shall be convened annually by the Board of Directors within six months after the end of each fiscal year, and extraordinary meetings may be convened when necessary in accordance with applicable laws.

Article 15

The Chairman of the Board of Directors shall preside at each meeting of shareholders. In the event the Chairman of the Board of Directors is absent, he shall designate one director to act on his behalf. In the absence of such a designation, the directors shall elect a director from among themselves to preside at the meeting.

If the shareholders’ meeting is called by any convener other than the board of directors, the chairperson shall be assumed by the convener. If there are more than two conveners, the chairperson shall be elected out of the conveners.

Article 16

If a shareholder is unable to attend a meeting, he / she may appoint a representative to attend it, and to exercise, on his / her behalf, all rights at the meeting, in accordance with Article 177 of the Company law.

Article 17

A shareholder shall be entitled to one vote for each share held by him / her; except those shares for which the voting rights are restricted or excluded as stipulated in Article 179 Item 2 of the Company Law.

Article 18

Unless otherwise provided in the Company Law, any resolution at a shareholders’ meeting shall be adopted if voted in favor by the majority of votes at a Shareholders’ meeting at which shareholders of more than one-half of the total issued and outstanding shares are present.

A shareholder who exercises his voting right in the way of electronic transmission shall be deemed to have attended the shareholders’ meeting in person.

Article 19

The resolution adopted by the shareholders meeting shall be recorded in writing; the meeting minutes must be signed by or imprinted with the seal of the chairperson and distributed to shareholders within twenty (20) days after the meetings. The minutes of shareholders’ meeting shall record the date and place of the meeting, the name of the chairman, the method of adopting resolutions, and a summary of the essential points of the proceedings and results of the meetings. The minutes shall be kept persistently throughout the life of the Corporation.

The attendance list bearing the signatures of shareholders present at the meeting and the powers of attorney of the proxies shall be kept by the Corporation for the minimum period of at least one year.

Chapter 4 Directors and Supervisors and Audit Committee Article 20

The Company shall establish the Board of Directors constituted by five (5) to seven (7) directors and two supervisors. The shareholders’ meeting votes shall be casted among candidates on the candidates list through cumulative ballot system specified in Article 198 of the Company Law. The term of office for Directors and Supervisors shall be three (3) years, and all Directors and Supervisors shall be eligible for re-election.

To conform to the Company Law and Securities and Exchange Act, the Company shall have, among the aforementioned directors, at least one to two independent directors. The directors (including independent directors) shall be elected from among the nominees listed in the roster of directors and supervisors candidates pursuant to the candidates’ nomination system. Compliance matters with respect to independent directors shall be subject to the regulations prescribed by the Company Law and the securities authority.

In compliance with Articles 14-4 of the ROC Securities and Exchange Law, from year 2017 the Company shall establish an Audit Committee to replace supervisors, which shall consist by all independent directors. The independent director is constituted by three (3) directors. The Audit Committee or the members of Audit Committee shall be responsible for those responsibilities of supervisors specified under the ROC Company Law, Securities and Exchange Law and other relevant regulations.

When the posts of one-third or more of the directors have been vacated or all of the supervisors have been discharged, a special meeting of shareholders shall be convened to elect directors or supervisors to fill the vacancies within sixty (60) days. The term of office for the new directors shall be the same as the original director(s)’ term(s).

The Company could purchase liability insurance for Directors, Supervisors and management in accordance with business requirement.

Article 21

The Board of Directors shall be organized by the directors. The Chairman of the Board of Directors shall be elected by a majority of the directors present at a meeting attended by two-thirds of the directors. The Chairman of the Board of Directors shall be the authorized representative of this Corporation. If necessary, Chairman may appoint numbers of consultant as resolute by the Board of Directors.

Article 22

Except for the first meeting of each term of the Board which shall be convened by the Director who received a ballot representing the largest number of votes at the election of Directors, Board meetings shall be convened by the Chairman, who shall also be the chairman of the meeting. The agenda of the Board of Directors meeting shall be arranged in advance and send to all directors and supervisors before seven (7) days with detailed information of meeting’s date, venue and agenda.

The Board meeting may be convened at any time, without such prescribed notice in case of urgent circumstances.

Notifications for the meetings of the Board of Directors may be communicated through written notice, fax and electronic mails.

Article 23

Unless provided in the Company Law or the Corporation’s Articles of Incorporation, all resolutions of the Board shall be passed by over 50% of the Directors present at the Board meetings attended by at least 50% of all the Directors.

Article 24

In case the Chairman of the Board of Directors is on leave or cannot exercise his powers, he may designate in accordance with Article 208 of the Company Law.

Article 25

Directors shall attend the Board meeting in person. A director who is unable to attend the Board meeting may designate only a proxy among the other directors. In case a director appoints another director to attend a meeting of the Board of Directors in his / her behalf, 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. A director may accept the appointment to act as the proxy referred to in the preceding paragraph of one director only.

Article 26

The duties of the Board of Directors are as follows:

Approve business plan.
Propose profit allocation plan.
Propose for increase / decrease of capital.
Formulate and amend the Articles of Incorporation.
Deliberate and approve important contracts.
Approve the appointment, dismissal of and remuneration payable to the Managerial Officers.
Branch office set up or dissolves.

Approve proposed budget and closing accounting.
Approve the merchandise of real estate or investment of other companies.
Other matters required by the laws and regulations and authorized by the Board of Directors meeting.

Article 27

The supervisors may, other than exercising the supervisory powers, attend the Board of Directors meeting to speak up opinions but shall have no voting power there.

Article 28

The duties of the supervisors are as follows:

Audit the Corporation’s business operation and financial standing.
Audit books and documents.
Oversee employees in their performance of duties or potential fraudulent practice.
Supervise budget and closing accounting.
Propose profit allocation plan.
Other authorized terms required by the laws and regulations.

Article 29

The remuneration to the directors and supervisors shall be determined by the Board of Directors in consideration of the directors’ and supervisors’ participation in and devotion to the operation of the Corporation as well as reference to the common practical standards, no matters the Corporation’s profits or losses. If the Corporation has earnings, the remuneration will be paid in accordance with Article 34 of the Corporation’s Articles of Incorporation.

Chapter 5 Managerial Officers

Article 30

The Corporation has one President and several Vice Presidents. The President shall be nominated by the Chairman; and his appointment shall be approved by more than 50% of the Directors. The Vice President shall be nominated by the President; and their appointment shall be approved by Chairman of the Directors and report to Board of Directors.

Article 31

The President is authorized by the Board of Directors to execute the Corporation business in accordance with this Articles of Incorporation and excluded from managerial officers defined in the Article 26 Item 6.

Chapter 6 Accounting

Article 32

The fiscal year of the Corporation shall begin on 1 January and end on 31 December of each. Upon closing of each fiscal year, the Board of Directors shall prepare the following statements and reports and shall submit the same to the supervisors for inspection no later than thirty (30) days prior to the meeting date of the general shareholders meeting for ratification:

Report of operations.
Financial statements.
Proposal for distributing earnings or covering losses.

Article 33

The allocation of net profits will be distributed after taking into consideration of the Corporation’s business environment and growth phase as well as the profitability, capital expenditures and future development’s capital need. Such distribution may be made in ways and amount of payout. The Corporation is situated in a growth phase, in concerning the cash needs for future development, the distributable earnings as of that year should no less than 20% of the total distributed dividends shall be in the form of cash.

Article 34

If the Company is surplus of that fiscal year, shall be allocated the profit to (1)5-20% to employee bonuses, either share or cash, persons eligible for such distribution shall included employees of the Company’s subsidiaries who meet certain qualifications. (2) No more than 1.5% as the remuneration for directors and supervisors. Employee bonuses and remuneration for directors and supervisors should be presented in the shareholders’ meeting for a resolution. The Company shall make up losses for preceding years before above mentioned payments are made.

Article 34-1

The Corporation shall allocate the earnings for each fiscal year in the order of paying tax, making up losses for preceding years, a legal reserve at 10% of the earnings unless the accumulated amount of the legal reserve has reached the total authorized capital of the Corporation, setting aside for operation or reversing a special reserve according to relevant regulations when necessary. The balance is surplus after the above mentioned payments are made, together with the undistributed earnings as of the beginning of that fiscal year, shall be allocated pursuant to resolution of the shareholders’ meeting. The Company adopts a dividend distribution policy whereby only surplus profits of the Company shall be distributed to shareholders.

Where the Corporation incurs no loss, it may, pursuant to a resolution to be an adopted by a shareholders’ meeting as required in the preceding Article, distribute its legal reserve and the following capital reserve, in whole or in part. The legal reserve can be distributed by issuing new shares or by cash, for only the portion of legal reserve which exceeds 25% of the paid-in capital may be distributed.

Chapter 7 Supplementary Articles

Article 35

Any matters not provided for in these Articles of Incorporation shall be governed by the Company law.

Article 36

The Articles of Incorporation were made on 23 October, 1984. The first amendment was made on 15 November, 1986. The second amendment was made on 16 May, 1987. The third amendment was made on 3 October, 1988. The fourth amendment was made on 20 September, 1989. The fifth amendment was made on 14 May, 1990. The sixth amendment was made on 8 November, 1990. The seventh amendment was made on 30 April, 1991. The eighth amendment was made on 20 June, 1991. The ninth amendment was made on 28 December, 1991.

The tenth amendment was made on 25 June, 1993. The eleventh amendment was made on 10 September, 1993. The twelfth amendment was made on 7 April, 1994. The thirteenth amendment was made on 21 July, 1995. The fourteenth amendment was made on 25 March, 1996. The fifteenth amendment was made on 11 October, 1996 The sixteenth amendment was made on 24 May, 1997. The seventeenth amendment was made on 28 April, 1998. The eighteenth amendment was made on 13 May, 1999. The nineteenth amendment was made on 10 May, 2000. The twentieth amendment was made on 30 May, 2001. The twentieth-first amendment was made on 21 May, 2002. The twentieth-second amendment was made on 15 May, 2003. The twentieth-third amendment was made on 18 May, 2005. The twentieth-four amendment was made on 16 May, 2006. The twentieth-five amendment was made on 30 May, 2007. The twentieth-six amendment was made on 13 June, 2008. The twentieth-seven amendment was made on 22 May, 2009. The twentieth-eight amendment was made on 9 June, 2011. The twentieth-nine amendment was made on 6 June 2012. The thirtieth amendment is made on 10 June, 2015. The 31[st] amendment is made on 7 June, 2016.

APPENDIX 2

Chroma Ate Inc. Codes of Ethical Conduct (Before Amendment)

Article 1: (Purpose and Basis of the Code of Ethics)

For the purpose of encouraging directors, supervisors and managerial officers of Chroma Ate Inc. (“the Company”), (included all president level, vice president level, assist directors, financial department supervisor, accounting department supervisors and other related authorized employees) to act in line with ethical standards, and to help stakeholders better understand the ethical standards of the Company. The company hereby enacted this “Code of Ethical Conduct of Chroma Ate Inc.” (“The Codes”).

Article 2: (Scope of Application)

The Codes applies to directors, supervisors, managerial officers, and all employees of the Company (“All Personnel”) Ethical best practice principle shall at least include preventive measures against the following:

(1) Prevention of Conflict of Interest

(2) No Self-Benefiting

(3) Confidentiality

(4) Fair Transaction

(5) Proper Protection and Use of the Company’s Assets

(6) Compliance of Laws and Regulations

(7) Reporting a Violation of Code of Ethics

Article 3: (Prevention of Conflict of Interest)

The directors, supervisors, managerial officers of the Company shall deal with corporate events objectively and efficiently, and shall not improperly take benefits base on the Personnel’s position for themselves, their spouses, parents, children or relatives within three degrees of kinship.

In the event that the aforementioned Personnel’s affiliates receive loans or guarantees, engage in material assets transactions, or purchase (or sell) products from (or to) the Company, the relevant Personnel shall follow the Company’s procedures of “Internal Procedures of Lending of Capital by the Company”, “Procedures of endorsements and guarantees” and “Procedures of acquire material assets”. The relevant shall voluntarily and sufficiently explain to the Company and Board of Directors when there exists any potential conflict of interest with the Company.

Article 4: (No Self-Benefiting)

In the event that the Company has the opportunity to obtain benefits, the directors, supervisors, managerial officers of the Company shall ensure that the Company is able to acquire them lawfully. The directors, supervisors, managerial officers of the Company shall not acquire the opportunities for benefit or benefit themselves by using the Company’s assets or information or by virtue of their positions with the Company; or compete with the Company.

Article 5: (Confidentiality)

The directors, supervisors, managerial officers of the Company shall, unless otherwise authorized or required to disclose by law, keep the company information and the information of suppliers / customers in strict confidence. The confidential information includes all non-public information that may cause damage to the Company or the customers if such information is disclosed or used by a competitor.

Article 6: (Fair Transactions)

The directors, supervisors, managerial officers of the Company shall treat the Company’s suppliers, customers, competitors and competitors’ employees on a fair basis, and shall not manipulate, conceal or abuse the information acquired due to their position. The Personnel shall not make false statements on important issues or gain any improper advantage by unfair transactions.

Article 7: (Proper Protection and use of the Company’s Assets)

The directors, supervisors, managerial officers of the Company shall protect the assets of the Company ensure the asset to be validly and legally used for business purposes.

Article 8: (Compliance of Laws and Regulations)

The directors, supervisors, managerial officers of the Company shall comply with all the laws, rules, and regulations and conduct any security transaction in accordance with the “Securities and Exchange Act”.

Article 9: (Reporting a Violation of Code of Ethics)

If any employee discovers or suspects that there is an event conflicting with the law, regulations, or the Code of Ethics, the employee shall voluntarily report to the supervisors, managers, internal audit officers or other appropriate officers, and shall provide sufficient information so that the Company may properly handle the subsequent matters. The Company shall handle the employee’s report in strict confidence and shall use its best endeavor to protect the reporting employee’s safety.

Article 10: (Penalty and Appeal)

In the event that a director or supervisor or manager is in violation of the Code of Ethics, the company shall deal with the violation in accordance with the relevant regulations. If any director or supervisor or manager is in violation of the Code of Ethics, the Company shall establish an appeal procedure and resolute in Board of Directors meeting.

Article 11: (Exemption)

In case any exemption from compliance with the Codes for the directors, supervisors, managerial officers of the Company is needed, it shall be adopted by a resolution of the Board of Directors, and that information on the name and title of the person entitled to such exemption, the date on which the Board of Directors adopted the resolution for exemption, and the period of, reasons for, and principles behind the application of the exemption be disclosed immediately on the Market Observation Post System (“MOPS”).

Article 12: (Method of Disclosure)

The Company shall disclose the Code of Ethics in the annual report, public prospectus,

and Market Observation Post System, and the same procedure shall apply to the amendments.

Article 13: (Enforcement)

The Code of Ethics shall be adopted for enforcement after the resolution by the board of directors, delivered to the supervisors for reference and shall be reported to the shareholders’ meeting. The same procedures shall apply to the amendments.

APPENDIX 3 Chroma Ate Inc. Operational Procedures of Acquisition or Disposal of Assets

(Before Amendment)

1. Purpose:

This Company’s acquisition or disposal of assets should be made in accordance with the following Procedures.

2. Basis

The acquisition or disposal of assets by the Company shall be done in accordance the this Procedure in addition to the “Rules Governing the Acquisition or Disposal of Assets by Public Companies” promulgated by the Financial Supervisory Commission of the Executive Yuan (hereinafter the “FSC”) in Article 36-1 and any other laws and regulations.

3. Definition

3.1“Assets” used herein should mean:
(1) Long/short term security investments (including stocks, bonds, corporate bonds, bank indentures, fund securities, depository receipts, warrants, beneficiary securities, asset-based securities, etc.);
(2) Real estate (including lands, plants and buildings, investment property, and right to use land) and equipment;
(3) Membership;
(4) Patent, copyright, trademark, charter right, any intangible assets, etc.;
(5) Creditor right of financial institution (including accounts receivable, foreign exchange discounting and debt release and collection).
(6) Derivative products;
(7) Assets that are acquired or disposed through merger, spin-off, acquisition or share transfer, and other major assets;
(8) Other important assets.
3.2 “Date of the Event” used herein should mean, in principle, the contracting day, the payment day, the transaction day, the title transferring day, the day of board resolution or other date when the transaction party and the transaction amount can be ascertained (whichever is earlier); for investments required to be approved by government authority, the Date of the Event will be any of the above-mentioned dates or the date on which the approval letter of government authority is received, whichever is earlier.
3.3 “Professional Appraiser” used herein should mean any appraisers/appraisal institutions specialized in real estate or other lawful appraisers/appraisal institutions of real estate and equipment.
3.4 “Related Parties” and “Subsidiaries” used herein should mean the companies meeting with the definition stipulated in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

3.5 The term “10% of the company’s total asset” used herein shall be calculated based on the total asset stated in the most recent standalone financial report prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Any unspecified terms in the Procedures shall be subject to the “Guidelines for Handling Acquisition or Disposal of Assets by Public Companies” announced by the regulatory authority.

4. Assessment Procedure:

4.1 For the acquisition or disposal of securities that are not traded on any centralized trading market or over-the-counter trading center, the price shall be determined in consideration of the net value per share, technical and profit-making capabilities, future development potential, market interest rate, face value interest rate of the bond and debtor’s creditworthiness, etc. and also in reference to the latest closing price at that time.
4.2 For the acquisition or disposal of securities that are already traded on any centralized trading market or over-the-counter trading center, the price shall be determined based on the price of the stock or bond at the time of trading.
4.3 For the acquisition or disposal of other than above mentioned assets, the price shall be determined in reference to the current value under public announcement, appraised current value, actual closing price or book value of real estate in the vicinity. If the assets meet the criteria to make a public announcement, an appraisal report need from Professional Appraiser.

5. Processing Procedure:

5.1 When the Company intends to acquire or dispose of assets, the undertaking department needs to report the purpose, target, trading counterparty, transfer price, transaction term and condition for evaluation and approval. The approved items will be executed in accordance with the Handling Procedures.
5.2 For acquisition or disposal of long/short term security investment, the departments responsible therefore should be Finance Division or other related department. For any purchase and sale of fixed assets, the affiliated department is authorized to make engage in transaction. Other assets are authorized to related execution department.
5.3 If the personnel of the Company responsible for the acquisition or disposal of assets violates the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” or the Handling Procedures any violation of related regulations or the Procedures, subsequent castigation is subject to the related Personnel Articles of the Company.

6. Resolution

When the Company engages in any acquisition or disposal of assets, the resolution is based on division of functions in accordance to the Handling Procedures.

7. Limits of Amounts

The acquisition of real estate by this Company for non-operating purpose should not exceed 30% of this Company’s net worth. The total amount of all long/short term security investments by this Company should not exceed 80% of this Company’s net worth. The amount of investment by this Company in each respective security should not exceed 25% of this Company’s net worth.

8. Procedures of Public Announcement and Report:

For the Company to acquire or dispose assets, if any of the following occurs, the Company shall proceed with the public announcement and report on the website designated by the FSC within two (2) days starting immediately from the day such event occurs in the format and with contents prescribed.

8.1 Acquire or dispose of real property from or to a related party, or 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 total assets, or NT$300 million or more, excluding trading of government bonds or bonds under repurchase or resale agreements.
8.2 Engage in merger, split, acquisition or transfer of shares
8.3 Engage in transactions of derivative products where the loss thereof reaches the ceiling amount for loss of all or individual contract as specified in these Handling Procedures.
8.4 Where an asset transaction other than any of those referred to in the preceding three subsections, or an investment in Mainland China area reaches 20 percent or more of paid-in capital or three hundred million NT dollars (NT$300,000,000); provided, this shall not apply to the following circumstances:
(1) Trading of government bonds.
(2) Investment in overseas and domestic security market or securities that are not traded on any centralized trading market or over-the-counter trading center.
(3) Buying or selling bonds under repurchase and resale agreements, or subscribing or redeeming domestic money market funds;
(4) Where the type of asset acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party, and the transaction amount is less than NT$500 million.
(5) Acquisition of real estate by way of contracting third parties to construct on land owned or rented by this Company, distribution of building under joint construction project, distribution of profit under joint construction project, or selling building under joint construction project, and the amount of transaction not exceeding NT$ 500 million (based on the amount this Company plans to contribute).
The amount of transactions specified in the preceding section shall be calculated as follows: (1) The amount of an individual transaction.
(2) The accumulative transaction amount of acquisition or disposal of the same type of underlying asset with the same counterparty within the preceding year.
(3) The accumulative transaction amount of real property acquired or disposed under the same development project within the preceding year (with acquisition and disposal calculating separately).
(4)The accumulative transaction amount of the same security acquired or disposed within the preceding year (with acquisition and disposal calculating separately)

The aforesaid “the preceding” year period shall mean the one (1) year period immediately preceding the date of occurrence of the current transaction, and items duly announced in accordance with the Handling Procedures need not be counted toward the transaction amount.

With regard to transactions of derivative products carried out by the Company and its subsidiaries which are not publicly listed companies, the Company shall file information designated by the FSC as of the end of the previous month on the website under the format shown in the attachment on a monthly basis by the tenth day of each month.

If any item subject to the requirement of public announcement is erroneous or missing and needs to be corrected, all items shall be re-filed for public announcement.

The contracts, memorandum, appraisal reports, and opinions of certified public accounts, lawyers or securities underwriters in connection with this Company’s acquisition or disposal of assets shall, except as otherwise specified by relevant laws, be kept in this Company for at least five years.

Filing and Public Announcement

Should any of the following conditions occur after the filing and public announcement of transactions, this Company needs to file and make public announcement accordingly within two days commencing immediately from the Date of the Event:

(1) Amendment, termination or cancellation of the original agreement;
(2) Merger, spin-off, acquisition or share transfer not completed as scheduled in the agreement; (3) Change to the originally publicly announced and reported information.
In acquiring or disposing of real property or other fixed assets where the transaction amount reaches 20percent of the Company's paid-in capital or three hundred million NT dollars (NT$300,000,000) or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of machinery and 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:
10.1 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.
10.2 Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.
10.3 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 CPA shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:
- (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.
- (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount.
10.4 No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.
Before the Date of the Event of the acquisition or disposal of securities, the latest financial statements of the object company audited or reviewed by certified public accountant should

be acquired for the assessment and reference of transaction price. Should the transaction price reaches 20% of this Company’s paid-in capital or NT$300 million, opinions in respect of a rational transaction price have to be sought from certified public accountant before the Date of the Event of the subject acquisition or disposal of securities. If the certified public accountant engaged needs to use the report of an expert as evidence, such certified public accountant shall do so in accordance with the provisions of Auditing Standard No. 20; provided however, these requirements are not applicable if such securities have a public price from an active market or if the regulatory authorities require otherwise.

If this Company’s acquisition or disposal of membership or intangible assets reaches 20% of this Company’s paid-in capital or NT$300 million, excluding transactions with government agency(ies), opinions in respect of a rational transaction price shall be sought from certified public accountant prior to the Date of the Event of the subject acquisition or disposal of assets. Certified public accountant shall handle the matter in accordance with the provision of Auditing Standard No.20.
12.1 The calculation of the transaction price referred to in the preceding paragraph shall be done in accordance with Article 8, item 2, and “within one year” refers to one year preceding the Date of Event of the current transaction. Items for which an appraisal report from a professional appraiser or an opinion by the certified public accountant has been obtained need not be counted toward the transaction price.
For acquisition or disposal of assets through auction procedures of courts, the appraisal report or certified public accountants opinion can be replaced by documents issued by the courts.
Any Professional Appraiser and its appraisal personnel, certified public accountants, lawyers, or securities underwriters whom this Company has acquired appraisal reports and opinions from, shall not be a related party of this Company or the other party of the transaction.
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 in accordance with both the previous Chapter and this Chapter 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 section. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article 12, Section 1 herein. When judging whether a trading counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered.
If this Company intends to acquire or dispose of real estate from or to a related party, or when it intends to acquire or dispose of assets other than real estate from or to a related party and the transaction amount reaches 20% of this Company’s paid-in capital, 10% of this Company’s total assets, or NT$300 million, except for buying or selling government bonds, bonds under repurchase and resale agreements and subscribing or redeeming domestic money market funds, this Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Supervisors and then submitted to the Board for a resolution:
(1) The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.

(2) The reason for choosing the related party as a trading counterparty.
(3) With respect to the acquisition of real estate from a related party, information regarding the evaluation of the reasonableness of the preliminary transaction terms in accordance with applicable regulations.
(4) The date and price at which the related party originally acquired the real estate, the original trading counterparty, and that trading counterparty’s relationship to this Company and the related party.
(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.
(6) An appraisal report from a professional appraiser or an opinion by the certified public accountant.
(7) Restrictive covenants and other important stipulations associated with the transaction

The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 8, Section 2, 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 in accordance with the Handling Procedures need not be counted toward the transaction amount.

With respect to the acquisition or disposal of operation-purpose equipment between this Company and its subsidiaries, the Board may delegate the Chairman to decide such matters when the transaction is within the 20% of net value of the Company and have the decisions subsequently submitted to and ratified at the next Board meeting.

If the Company has independent directors, opinions of each independent director shall be taken into consideration during discussions at the board and their consents or clear opinion against the proposal and the reasons for such objection shall be include into the minutes of the board meetings.

When the Company acquires real estate from a related party, the reasonableness of the transaction cost shall be evaluated in the following of “Rules Governing the Acquisition or Disposal of Assets by Public Companies” and an accountant shall be engaged to verify the result and provide substantial opinion, unless the any of following item occurs. Any of following item shall not apply to the circumstances stated above:
(1) Related party acquired the real estate pursuant to succession or gift.
(2) Five years have lapsed since the time when the related party signed a contract for the acquisition of such real estate and the date of signature for this transaction.
(3) The related party acquired the real estate pursuant to signature of a contract for joint construction with others.
When the Company acquires real estate from a related party, if the transaction cost calculated from the evaluation in accordance with the previous article is lower than the transaction price, the following shall be carried out:
(1) The difference between the real estate transaction price and the evaluation cost shall be provided as special profit reserve and may not be distributed or used for capital increase and share distribution. Same procedures for investor, who invests the Company as equity method investment, shall be provided as special profit reserve.
(2) The supervisors shall proceed in accordance with Article 218 of the Company Law.

(3) The processing under subsections 1 and 2 shall be reported to the shareholders meeting and the details of the transaction shall be disclosed in the annual report and prospectus.

The special profit reserve so provided may only be used when the decrease in value has been provided for the asset purchased at high price, or when the asset is disposed, or has been duly compensated or reinstated to its original condition, or when there is other evidence confirming that the price is not unreasonable and consent from the FSC has been obtained. If there is an unreasonable manner when the Company acquires real estate from a related party, the Company shall follow the procedures stated above.

This Company’s financial derivatives transactions shall be in compliance with this Company’s “Procedures for Financial Derivatives Transactions”.
When the Company engages in a merger, split, acquisition or transfer of shares, accountant, attorney or securities underwriter shall be engaged prior to convening a board meeting for resolution in order for opinions to be provided about the reasonableness of the share exchange ratio, acquisition price or distribution of cash or other asset to the shareholders. The proposal shall then be submitted to the board of directors for discussion and approval.

When the Company engages in a merger, split, acquisition or transfer of shares and related matters shall be included into public documents to the attention of shareholders prior to the shareholders meeting. Such documents shall be submitted to the shareholders together with the expert opinions referred to in the previous article and the notice for the meeting as reference for whether such proposed merger, split or acquisition should be approved. However, this provision shall not be applicable if other laws allow the merger, split or acquisition without resolution by the shareholders meeting. If the shareholders meeting of any party participating in the merger, split or acquisition cannot be convened, resolution cannot be reached or if the proposal is denied by the shareholders meeting, the Company shall immediately make a public announcement to explain the reasons therefore, subsequent handling process and the expected date for convening the shareholders meeting.

Unless otherwise provided by law or if there is any special reason requiring prior approval by the FSC, when the Company participates in any merger, split or acquisition, it shall convene the board meeting and the shareholders meeting on the same day as the other participating companies to resolve on matters of merger, split or acquisition. When the Company participates in any transfer of shares, it shall convene the board meeting on the same day as the other participating companies.

When the Company participates in any merger, split, acquisition or transfer of shares shall complete written records for the following information shall be prepared and maintained for five years for future verification.

(1) Basic staff information: including persons who participated in the project of merger, split, acquisition or transfer of shares or who executed the project prior to the announcement of the news, including their titles, names, ID numbers (passport numbers in case of foreign nationals).
(2) Dates of important matters: including the dates on which the letter of intent or memorandum of understanding is signed, financial or legal advisors is engaged, contract is signed and the board meetings, etc.

(3) Important documents and minutes: including the report, letter of intent or memorandum of understanding, important contract and minutes of board of director meeting.

The Company that participates in any merger, split, acquisition or transfer of shares shall file the information referred to under subsections 1and 2 of the previous section in the specified format on the internet information system within two days from the date on which the board resolution is passed.

When the Company that participates in any merger, split, acquisition or transfer of shares and who is not a listed company or whose shares are not traded in any securities dealer’s business premises, the Company shall sign an agreement with the former company and proceed in accordance with provisions under the third and fourth sections.

The share exchange ratio or acquisition price for any merger, split, acquisition or transfer of shares shall not be changed unless there are any of the following events:
(1) Capital increase in cash, issuance of convertible corporate bonds, issuance of shares without consideration, issuance of corporate bonds with warrants attached, special shares with warrants attached, warrants for share subscription and other securities with the nature of shareholding entitlement.
(2) Disposal of significant assets of the Company that impact the financial business of the Company.
(3) Occurrence of any significant disaster or significant change of technology that impacts the shareholders interest or price of the securities.
(4) Adjustment made pursuant to repurchase of treasury shares by any company participating in the merger, split, acquisition or transfer of shares in accordance with law.
(5) Change of entity, or increase or decrease of the number of entities participating in the merger, split, acquisition or transfer of shares.
(6) Change of any other condition that may be changed under the contract and for which public disclosure has been made.

The Company’s policy for any merger, split, acquisition or transfer of shares have stated in the Handling Procedures in order to protect the Company’s rights and benefits.

Control procedures for the acquisition and disposal of assets by subsidiaries:
(1) Subsidiaries’ to acquisition and disposal of assets shall follow the procedures stated by the parent company.
(2) If any subsidiary of the Company is not a publicly listed company and if the asset acquired or disposed of reaches the threshold for public announcement filing, the Company shall make filing for public announcement on the designated website in accordance with the rules.
(3) The subsidiaries’ filing criteria is the transaction price reaches 20% of the Company’s paid-in capital or 10% of total assets.
(4) The Company shall supervise the subsidiaries to establish the “Subsidiaries of the Company shall establish the “Processing Procedure for Acquisition or Disposal of Asset” in accordance with the “Rules Governing the Acquisition or Disposal of Asset by Public Companies”.
(5) The internal audit staff of the Company shall follow the annual audit plan regularly review the subsidiaries in processing procedure for acquisition or disposal of assets. If any significant breach of this rule is discovered, the president (or chairman) shall be notified in writing.

24. Financial Report Disclosure

Based on the Company’s “Operational Procedure for Acquisition or Disposal of Asset” in Article 8 Procedures of Public Announcement and Report, the transaction with related parties need to disclose in the notes of financial report and report in the shareholders meeting.

25. Amendments and Execution

These procedures and their amendments shall be approved by the Board of Directors, and then sent to all supervisors and proposed at the shareholders’ meeting for approval. If any director expresses objection on the record or in a written statement, the Company shall submit the objection to the supervisors and the shareholders’ meeting for discussion. The Company has established independent directors, it shall consider the dissenting opinions from all independent directors fully and list the consenting and objecting opinions and their reasons in the meeting minutes of the Board of Directors.

1[st] amendment approved by General Shareholder’s Meeting held on 15 May, 2003.
2[nd] amendment approved by General Shareholder’s Meeting held on 30 May, 2007.
3[rd] amendment approved by General Shareholder’s Meeting held on 6 June, 2012.
4[th] amendment approved by General Shareholder’s Meeting held on 11 June, 2014.

APPENDIX 4 Chroma Ate Inc. Operational Procedures for Endorsements and Guarantees

(Before Amendment)

1. Purpose

All matters related to endorsements and guarantees by the Company for another entity shall be in accordance with these Rules.

2. Endorsements and Guarantees

(1) Any company having direct business dealings with the Company.
(2) Any subsidiary of which more than 50% ordinary shares are directly and indirectly held by the Company.
(3) Any parent company that owns more than 50% of ordinary shares of the Company directly or indirectly.

Any subsidiary of which ninety percent or more voting shares are held directly or indirectly by the Company may provide endorsement or guarantee for any other subsidiary meeting the same requirement. Such endorsement or guarantee shall be subject to prior approval by the board of directors through resolution and the amount of endorsement or guarantee shall not exceed ten percent of the net value of the Company.

However, the above restriction shall not apply for any endorsement or guarantee provided by any subsidiary of which the Company holds directly or indirectly 100% of voting shares for any other subsidiary meeting the same requirement.

Where a public company fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project, or where all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages, or where companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other, such endorsements/guarantees may be made free of the restriction of the preceding two paragraphs. Capital contribution referred to in the preceding paragraph shall mean capital contribution directly by the public company, or through a company in which the public company holds 100% of the voting shares.

3. Scope

3.1 Financing endorsements / guarantees including:
(1) Bill discount financing.
(2) Endorsement or guarantee made to meet the financing needs of another company.
(3) Issuance of a separate negotiable instrument to a non-financial enterprise as security to meet the financing needs of the Company itself.
3.2 Customs duty endorsement/guarantee, meaning an endorsement or guarantee for the company itself or another company with respect to customs duty matters.
3.3 Other endorsements/guarantees, meaning endorsements or guarantees beyond the scope of the above two subparagraphs.

Amount Limit of Endorsements and Guarantees
4.1 The Company’s total amount of liabilities under endorsements and guarantees shall be limited to 30% of the net value of the Company. The amount of an endorsement and guarantee provided to any single enterprise shall be limited to 15% of the net value of the Company and limited to the paid-in capital of the guarantee company.
4.2 The total amount of endorsements and guarantees provided by the Company and its subsidiaries shall not exceed 40% of the net value of the Company. The amount of endorsements provided to any single enterprise shall not exceed 15% of the net value of the Company and limited to the paid-in capital of guarantee company.
4.3 the above restriction shall not apply for any subsidiary of which the Company holds directly or indirectly 100% of voting shares.
4.4 For any endorsement or guarantee provided by the Company due to business dealings, the amount of endorsement or guarantees shall be equivalent to product purchase or sale amount of the enterprise receiving the endorsement or guarantee during the previous year or during the current year up to the time of endorsement or guarantee, whichever is higher.
4.5 However, if any endorsement or guarantee is required on urgent basis, the board may authorize the chairman to proceed within an amount limit to 15% of net value of the Company and report may be submitted to the board of directors subsequently for ratification. Provisions of endorsements and guarantees and relevant matters shall be reported to the shareholders meeting for reference.
Procedures for Endorsements and Guarantees by the Company
5.1 For any amount of endorsement and guarantee with the amount limit, the recipient enterprise should provide the company information and financial statement with application to the Company finance division for evaluation to complete the endorsement procedures. The Company shall review and assess the purpose and use of the loan by the recipient of endorsement or guarantee, consider the impact of the Company’s total amount of endorsements and guarantees on the Company’s operational risk, financial condition and shareholders’ interest and evaluate possible risks and determine whether the appropriate collateral should be required.
5.2 After the endorsement or guarantee has been approved, the checks will be process by cashier or seal keeper to process and record in endorsement registration form.
5.3 The finance division of the Company shall establish the endorsement registration form for detailed record the following items in providing for auditor review, evaluation and public announcement purpose.
- (1) Matters of guarantees
- (2) Names of recipient enterprise
- (3) Amount of endorsement and guarantee.
- (4) Conditions for release of endorsement and guarantee liabilities.
5.4 The seal used for any endorsement or guarantee shall be the Company seal registered with the Ministry of Economic Affairs.
5.5 The finance division of the Company shall evaluate possible risk of endorsement and disclose the relevant information in the financial report in providing for auditor review.
5.6 The Company every year shall report all endorsement and guarantee items to board of directors for resolution.

6. Termination

The recipient company shall file the “Endorsement or Guarantee Cancellation Form” to the Company finance division to terminate the endorsement or guarantee.

7. Endorsement Procedures:

7.1 The internal auditing staff of the Company shall perform audits on the procedures and performance of endorsements and guarantees on a quarterly basis and written records shall be prepared. If any significant breach of this rule is discovered, each supervisor shall be notified in writing.
7.2 If the recipient company qualification changed cause by the Company, which the amount of endorsement or guarantee exceeds the amount limit due to change to the basis of calculation, the internal audit of the Company shall supervise the finance division to eliminate the contract upon expiry date or the fixed deadline under provision plan and report shall be made to the supervisors and report to the board of directors.
7.3 If any business requirements of the enterprise receiving the endorsement or guarantee above the amount limit, shall receive over half of the board of directors consents and revise the procedures accordingly. Amendments of endorsements and guarantees shall be reported to the shareholders meeting for reference.
If the Company has independent directors, opinions of each independent director shall be taken into consideration during discussions at the board and their consents or clear opinion against the proposal and the reasons for such objection shall be include into the minutes of the board meetings.

8. Public Announcement Procedure

The Company shall make relevant public announcements with regard to matters related to endorsements and guarantees in accordance with the criteria for public announcement.

8.1 The Company shall make a public announcement for the balance amount of endorsements and guarantees on a monthly basis before 10[th] of each month.
8.2 If the balance amount of endorsements and guarantees meet any of following criteria, the Company shall make a public announcement within two (2) days from the date of effective. (1) The Company and its subsidiaries’ balance amount of endorsements and guarantees reach over 50% net value of the Company, based on latest financial report.
(2) The Company and its subsidiaries’ balance amount of endorsements and guarantees to single recipient company reach 20% net value of the Company, based on latest financial report.
(3) The Company and its subsidiaries’ balance amount of endorsements and guarantees to single recipient company reach over NT$ 10 million. Also the sums of the endorsement, investment capital and lending capital have reached 30% net value of the Company, based on latest financial report.
(4) The Company and its subsidiaries new added balance amount of endorsements and guarantees have reached over NT$ 30 million and also reached 5% net value of the Company, based on latest financial report.
8.3 If the Company’s subsidiary is not a domestic public company, the Company will follow the requirement on behalf of its subsidiary to make a public announcement.
The effective date is defined as contract date, payment date, board of directors’ resolution date or other sufficient information to indicate the date of counterparties and transaction.

Control Procedure for Endorsements and Guarantees by Subsidiaries
(1) Any endorsement or guarantee provided by any subsidiary of the Company to any other entity shall be done in accordance with the applicable “Operating Rules for Endorsements and Guarantees” established by such subsidiary. The net value is based on each provided subsidiary.
(2) The balance amount and recipients of endorsements and guarantees for the previous month shall be submitted to the Company in writing by the 10th day of each month.
(3) The internal auditing staff of the Company shall perform audits on the procedures and performance of endorsements and guarantees on a quarterly basis and written records shall be prepared. If any significant breach of this rule is discovered, each supervisor shall be notified in writing.
(4) The Company Internal Audit need to review on subsidiary’s endorsements and guarantee procedures and execution in accordance to annual audit plan. If there is any violation, the internal audit shall submit a report the Company’s chairman and CEO.

10. Penalty

The Company’s managers and persons-in-charge shall follow the Procedures. Should there be any violation of related regulations or the Procedures, subsequent castigation is subject to the related Personnel Articles of the Company.

If the Company or its subsidiaries provides any endorsement or guarantee for any subsidiary whose net value is lower than one-half of its paid-in capital, the Company or subsidiary shall review the necessity, rationality and risk control of endorsement or guarantee in accordance to Article 5. Also it has to review the recipient’s statements in accordance to Article 7 in order to prevent the risks from endorsement and guarantee.
If the subsidiaries has no par value or par value is not equal to NT$ 10 for paid-in capital, the paid-in capital will be referred to sum of capital stock and legal reserve minus issue premium.
Any subsidiary of which ninety percent or more voting shares are held directly or indirectly by the Company may provide endorsement or guarantee for any other subsidiary meeting the same requirement. Such endorsement or guarantee shall be subject to prior approval by the board of directors through resolution. However, the above restriction shall not apply for any endorsement or guarantee provided by any subsidiary of which the Company holds directly or indirectly 100% of voting shares for any other subsidiary meeting the same requirement.

13. Amendments and Execution

The Company has established independent directors, it shall consider the dissenting opinions from all independent directors fully and list the consenting and objecting opinions and their reasons in the meeting minutes of the Board of Directors.

1[st] amendment approved by General Shareholder’s Meeting held on 15 May, 2003.
2[nd] amendment approved by General Shareholder’s Meeting held on 16 May, 2006.

3[rd] amendment approved by General Shareholder’s Meeting held on 22 May, 2009.
4[th] amendment approved by General Shareholder’s Meeting held on 26 May, 2010. 5[th] amendment approved by General Shareholder’s Meeting held on 10 June, 2013.

APPENDIX 5

Chroma Ate Inc. Procedures for Lending of Capital to Other Parties (Before Amendment)

Article 1 General

These directions are promulgated under Article 15 of the Company Law of “the capital of the Company shall not be lent to any shareholder of the Company or any other person”. Any other matters not set forth in the procedures shall be dealt with in accordance with the applicable laws, rules and regulations.

Article 2 Recipients

Unless otherwise under any of the following circumstances, the capital of the Company shall not lent to any shareholder of the Company or any other person:

Companies having business relationship with the Company.
Companies in need of funds for a short-term period. For the purpose of this procedure, “short-term period” shall mean the period of one (1) year.

Fund-lending to companies having business relationship with the Company shall be limited to the circumstance that the said companies need working capital.

Fund-lending to companies which need funds for a short-term period shall be limited to

subsidiaries in which the Company directly or indirectly holds more than fifty percent (50%) of the voting shares.

Article 3 Limits on Loan

The aggregate amount of loans provided by the Company shall not exceed 40% of the net worth of the Company as shown in the latest financial report audited or reviewed by the CPA.

Funds lent to companies that have business relationship with the Company shall not exceed 20% of the net worth of the Company’s net value.
The amount of any individual loan hereunder shall not exceed the total amount involved in the business transactions between both parties in the most recent year. (The amount involved in the business transactions refers to the amount represented by orders, sales or transactions contemplated by the parties, whichever is the highest) and also shall not exceed 10% of the net worth of the Company’s net value.
Funds lent to companies having short-term capital needs with The company shall not exceed 20% of the net worth of the Company’s net value. The amount of any individual loan hereunder shall not exceed 10% of the net worth of the Company’s net value.
For the short-term capital needs among the offshore companies which are 100% owned directly and indirectly by the Company, the total lending amount and the lending amount for any individual entity shall not exceed 70% of the net value of the lending subsidiary.

Article 4 Loan Term and Interest Calculation

In general, the term of the loan shall be limited to one year. The date of repayment shall be determined. For companies that have business relationship with the Company, the term of loans can be extended after the resolution of Board of Directors approval.
The interest rate shall be determined by counterparties, but in no event shall it be lower than the Company’s highest short-term bank borrowing rate at the time of lending. The interest shall be calculated on a monthly basis.

Article 5 Procedures for Fund Lending

Any borrower, when applying for a loan from the Company, shall submit an application describing in detail the loan amount requested, term and purpose together with certain basic information and financial data.
Funds lent to companies that have business relationship, the Finance Department of the Company, base on the aforesaid information, shall then evaluate the necessity and rationality of the loan application. For short-term capital needs, shall list the details of loan’s purpose.
The finance department shall evaluate the necessity of the loan application based on the borrower’s financial status, profitability, credibility as well as the impact towards the Company’s operating risk, financial position and shareholders’ equity. The assessment report shall included a proposal of loan interest and term and submit to the resolution of Board meeting after President and Chairman’s approval.
The Company lending of capital to other parties, it shall consider the dissenting opinions from all directors fully and list the consenting and objecting opinions and their reasons in the meeting minutes of the Board of Directors.
Except for subsidiaries in which the Company directly or indirectly holds, any other borrower shall provide a promissory note, collateral and / or other guarantee as requested by the Company in an amount equivalent to that of the loan. If any collateral is provided, legal procedures for mortgage and evaluation must be fulfilled to protect the Company’s interest.
After the resolution of the Board of Directors, the persons-in-charge for funding procedures shall structure a written agreement, the written agreement shall be the same as loan conditions and sign by lender and borrower. The content of the agreement shall be sent for verification conducted by the competent authorities and relevant personnel.

Article 6 Repayment

After a loan is extended, the Company shall periodically evaluate the financial and operation status and credit of the borrower. In cases involving collateral, the Company shall pay attention to its guarantee value and any change thereto. Notification shall be sent to the borrower to payback the principal and interest one (1) month before the end of the term.

When the borrower repays its borrowed amount on or before the due date, the relevant guarantee notes shall not be released or relevant liens shall not be cancelled until the borrower has repaid the full amount of principal together with interests accrued.
The borrower shall repay the entire principal, before lender agrees to precede the cancellation of collateral registration.

Article 7

The one (1) year term of loans do not apply to the Company to any overseas subsidiary, over which the Company owns directly or indirectly 100% voting shares. The term of loans can be extended after the resolution of Board of Directors approval.

Article 8 Procedures for Control and Management of Loans

The Company shall prepare a registry containing the basic information of the Borrower, amount, the date for Board of Directors’ approval, the date of lending and items in accordance to this Procedure.
After providing of loans, the persons-in-charge shall include the written agreement, promissory note, collateral documents, insurance, and transaction documents in a depositary bag. The bag

shall label the contents and borrower and send to Finance Department Officer for examination. The bag will be stored after examination and sign or stamp on the registry.

Article 9 Additional Guidelines of Lending Funds to Others

Before lending funds, the Company shall carefully evaluate whether such lending is in compliance with the Operating Procedures and submit the evaluation results to the Board of Directors for resolution, and shall not authorize any other person to make the decision of lending of funds.
Loans between the Company and subsidiaries or between different subsidiaries of the Company shall be decided by a resolution of the Board of Directors and authorization may also be given to the chairman, within a certain capital limit resolved by the Board of Directors, for a specific borrowing counterparty and with a period not to exceed on year, to give loans in installments or to make a revolving credit line available for the counterparty to draw down. Unless as provided by section 2 of Article 3 hereof, the “Capital limit” referred in the previous section provided by the Company or its subsidiaries for any single enterprise shall not exceed ten percent (10%) of the net value of the Company based on its latest financial statements.
The Company’s internal auditor shall audit the procedures for lending of funds to others and the implementation thereof no less frequently than each quarter and prepare written audit report accordingly. If there is any material violation of the operating procedures, the auditors shall promptly notify the supervisors of the Company in writing.
Where the recipients of the fund lending are not in compliance with the Procedures or the amount of funds lent exceeds the limit as set forth in the Procedures as a result of changes of condition, the auditors shall urge the Finance Department to withdraw the excess amount within a specified period and submit a corrective plan to the supervisors of the Company and rectify as scheduled under the corrective plans.

Article 10 Procedures for Controlling Fund Lending Made by Subsidiaries

For a Subsidiary that wishes to lend funds to others, the Subsidiary shall stipulate its operating procedures in accordance with this Procedure for Lending of Capital to Others Act accordingly. But “net worth” in the Procedures means the equity attributable to owner of the subsidiary in the balance sheet.
The Subsidiary shall report the balance of loaned funds to the Company in the preceding month, before the 10[th] day of the month.
The internal auditors of the Subsidiary shall include the operating specifics of the lending funds to be audited quarterly. If there is any material violation, the written notification shall promptly send to the Company’s internal auditor and the Company internal auditor shall promptly notify in written document to all supervisors.
4.The internal auditors of the Company in proceeding of annual audit of the Subsidiary, shall include the operation specifics of the lending funds and review the Subsidiary’s audit report. If there is any material violation, the follow-up reports shall report to President (or Chairman) depending on reporting structure.

Article 11 Disclosure

The Company shall report the balance of loaned funds by the Company and its subsidiaries in the preceding month, before the 10[th] day of the month.
If the loan meets any of the following circumstances, it shall be reported within two days upon occurrence of the fact on MOPS:

(1) The balance of the loaned funds by the Company and its subsidiaries exceeds 20% of the net value of the Company, as specified in its latest financial statement.
(2) The balance of funds lent to any single entity by the Company and its subsidiaries exceeds 10% of the net worth of the Company, as specified in its latest financial statement.
(3) The increase of new loans by the Company or its subsidiaries reached NTD 10 million or more, or is more than 2% of the net worth of the Company, as specified in its latest financial statement.
The Company shall announce and report on behalf of any of its subsidiaries that are not a domestic public company any matters that such subsidiary is required to announce and report pursuant to Section 2 (c) above.
The Company shall evaluate the status of loans of funds, and shall set aside sufficient allowance for bad debts. It shall also adequately disclose relevant information in its financial reports and provide the certifying CPAs with relevant materials for the performance of necessary audit procedures.

Article 12 Penalty

In accordance with the Company’s personnel management regulations and employee handbook, managers and persons-in-charge who violate these procedures shall be punished based on the severity of violation.

Article 13 Other Matters

These procedures and their amendments shall be approved by the Board of Directors, and then sent to all supervisors and proposed at the shareholders’ meeting for approval. If any director expresses objection on the record or in a written statement, the Company shall submit the objection to the supervisors and the shareholders’ meeting for discussion. Same as amendments. The Company has established independent directors, it shall consider the dissenting opinions from all independent directors fully and list the consenting and objecting opinions and their reasons in the meeting minutes of the Board of Directors.

1[st] amendment approved by General Shareholder’s Meeting held on 15 May, 2003.
2[nd] amendment approved by General Shareholder’s Meeting held on 22 May, 2009.
3[rd] amendment approved by General Shareholder’s Meeting held on 26 may, 2010.
4[th] amendment approved by General Shareholder’s Meeting held on 10 June, 2013.
5[th] amendment approved by General Shareholder’s Meeting held on 10 June, 2015.

APPENDIX 6 Chroma Ate Inc. Policies and Procedures for Financial Derivatives Transactions

(Before Amendment)

1. Purpose:

“Procedures for Financial Derivatives Transactions” outlined herein are set up to effectively control the risks arising from financial derivative transactions. Any other matters not set forth in the procedures shall be dealt with in accordance with the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies”.

2. Instruments:

Financial derivatives referred herein are broadly defined as instruments that derive their value from the performance of underlying assets, interest, currency exchange, rates, or others. Such instruments include forward, options, futures, swaps and various combinations thereof. Forwards referred herein excluded insurance, performance, post-sale service, long-term lease and long-term sales / procurement contracts.

3. Policy and Strategy:

3.1 Types

The Company’s policy for financial derivatives transactions are limited to forward contract for currency exchange and rate. Other financial derivatives transactions need to resolute by the Company board of directors.

3.2 Management and Hedge Strategy
Financial derivatives are mainly used for hedging purpose to limit the Company’s net exposure after netting of income against expenses. The transaction parties’ selection shall be based on the Company operation needs to avoid the credit risk. Transactions involving financial derivatives for currency exposure needs to be assured as for hedging or investment gain purpose as a reference for accounting policy.

3.3 Authorization and Delegation:

(1) Treasury
- (a) The functions of trading, market research, confirmation and risk control as well as derivative transaction, rules and regulations. Also it has to provide enough and instant information to related counterparty.
- (b) The Company overall hedging position.
- (c) The evaluation, monitoring and control of risks arising from derivative transaction.
- (d) Report and make a public announcement of the financial derivative transactions in accordance with relevant regulations.
(2) Accounting

Complete the accounting procedures and financial statements.

(3) Internal Audit
Internal audit personnel are required to evaluate the suitability of the internal control system in connection with financial derivative transactions on a regular basis.
3.4 Transaction Contract Dollar Amount
(1) Hedging

The dollar amount of total contracts outstanding shall not exceed the Company latest six month’s sales revenues.

(2) Trading

Chroma shall not engage in any transactions for trading purpose without the Company’s board of directors’ approval.

3.5 Performance Evaluation

(1) Hedging performance is evaluated against the pre-determined strategy.
(2) Performance needs to compare to per-determined strategy and use for future strategy determination.

3.6 Loss Control

The loss limit for each contract is 20% of the contract amount and aggregate to 10 million losses for any individual control. The lost limit for total contracts is 20% of total contracts’ amount and aggregate to 30 million losses.

4. Level of Delegation and Authorization

4.1 Financial Derivative Transaction Ratification

Transaction Amount	Applicant	Review	Approval	Approval
US$ 1 million and below	Finance Personnel	Finance Manager	CFO	-
US$ 1 million above	Finance Personnel	Finance Manager	CFO	CEO

4.2 The financial derivative transactions are all process by the Company finance personnel.

5. Regulatory Reporting

5.1 The Company should report and make a public announcement of the financial derivative transactions (individual or all contracts) within two (2) days when the losses reach the limitation set herein these procedures.
5.2 If there is any reporting and announcement, as aforesaid, required for the Company’s subsidiary which is not a domestic public company, the Company will follow the requirement on behalf of its subsidiary report and make a public announcement on a monthly basis before 10[th] of each month.

6. Accounting Procedures

The financial derivatives transactions shall be established and maintained the record in accordance with the accounting policy and relevant regulations.

7. Internal Control

7.1 Risk Management

(1) Credit Risk Control: credit risk is controlled by restricting the counterparties that Chroma deals with to those who either have banking relationship with Chroma and can provide sufficient information.
(2) Market Rick Control: Market risk arising from the fluctuations of interest rates and foreign exchange rates or from other factors shall be closely monitored and controlled.
(3) Liquidity Rick Control: Liquidity risk should be controlled by restricting counterparties to those who have adequate facility, sufficient information and sizable trading capacity and capability to enter into transactions in any markets around the world.

(4) Operating Risk Control: Delegation systems and operating procedures set forth herein are employed to control operating risk.
(5) Legal Risk Control: Any legal documents in respect of financial derivative transaction shall first be reviewed by in-house and/or outside legal counsel before being executed to control legal risk.
(6) Cash Flow: The Company shall maintain adequate level of quick assets and credit facilities to meet the cash settlement requirement.

7.2 Internal Control

(1) The respective functions of trading, confirmation and settlement should be performed by different personnel.
(2) The trading personnel shall submit the confirmation and settlement to record personnel.
(3) Once the trading personnel execute any transactions, the confirmation personnel shall confirm the transaction terms with the counterparty and obtain relevant supervisory ratification.
(4) The record personnel shall constantly monitor total transaction dollar amount whether it has exceed currency assets, liability and netting position.
(5) Finance Division should prepare a monthly report in connection with the transactions profit and loss for the review of the senior management.

8. Evaluation

Finance Division shall evaluate financial derivative on weekly basis, except the transaction entered for operation hedging purpose need to evaluate on bi-weekly basis and the report need to submit for review by board of directors designed appointed senior management. The Board appointed vice president of Finance and Administration Center for the evaluation, monitoring and control of risks arising from financial derivative transactions. Also the hedging performance and results on regular basis to oversee how well they fit in the Company’s overall business and operating strategies and to review if the associated risks thereof have exceeded the Company’s risk tolerance.

Designated by the Board, the designee should also be responsible for regularly reviewing the level of adequacy of the current risk control process and its degree of consistency with the principles and procedures set forth herein and report to the next coming meeting of the Board.

9. Abnormal Situation

Once having identified unusual performances and results, the designee should report to the Board immediately and undertake any actions deemed necessary to correct the situation. The Company’s independent directors need to attend the meeting and undertake any actions.

10. Record

A reference book shall be established and maintained to record the Company’s financial derivative transactions, type, amount, Board’s approval and evaluation items.

11. Internal Audit

Internal audit personnel is required to evaluate the suitability of the internal control system in connection with financial derivative transactions on a regular basis, to conduct auditing on how well the related departments follow the Procedures, and to produce report with trading cycle analysis on a monthly basis. Should there be any violation found, a written report is needed to notify the supervisors.

12. Subsidiary

12.1 When financial derivative transactions are contemplated by the Company’s subsidiary to enter into, the Company shall supervise its subsidiary to establish relevant procedures for financial derivative transactions.
12.2 If there is any reporting and announcement required for the Company’s subsidiary which is not a domestic public company, the Company will follow the requirement on behalf of its subsidiary.

13. Penalty

The Company’s managers and persons-in-charge shall follow the Procedures in order to prevent the Company from incurring any losses. Should there be any violation of related regulations or the Procedures, subsequent castigation is subject to the related Personnel Articles of the Company.

14. Others

Any matters insufficiently provided for herein shall be subject to the Company Law.

15. Amendments and Execution

1[st] amendment approved by General Shareholder’s Meeting held on 15 May, 2003.
2[nd] amendment approved by General Shareholder’s Meeting held on 30 May, 2007.
3[rd] amendment approved by General Shareholder’s Meeting held on 6 June, 2012.
4[th] amendment approved by General Shareholder’s Meeting held on 11 June, 2014.

APPENDIX 7 Chroma Ate Inc. Rules of Procedure for Election of Directors and Supervisors

(Before Amendment)

1. Purpose:

To ensure a justice, fair and open election of directors and supervisors.

2. Election:

2.1 The elections of board of directors and supervisors shall be taken in the annual general shareholders meeting.
2.1.1 The qualifications for the independent directors of the Company shall comply with Articles 2, 3 and 4 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.
2.1.2 The election of independent directors of the Company shall comply with Articles 5, 6, 7, 8 and 9 of the Regulations Governing Appoint of Independent Directors and Compliance matters for Public Companies and shall be conducted in accordance with Article 24 of the Corporate Governance principles for the company.
2.1.3 Elections of independent directors of the Company shall be conducted in accordance with the candidate nomination system and procedures set out in Article 192-1 of the Company Act.
2.2 The cumulative ballot system is adopted for the election of directors and supervisors of the Company. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. The supervisors are same procedures as directors. Attendance card number printed on the ballots may be used instead of recording the names of voting shareholders.
2.3 The Company shall prepare separate ballots with specified written of attendance card number and voting right in numbers and seal up with the Company stamp.
2.4 The number of directors and supervisors will be specified in the Company article of incorporation, with voting rights separately calculated for common and independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When candidate received both director and supervisor position shall select one position by himself / herself. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.
2.5 Before the election begins, the chair shall appoint a number of persons with shareholder status to perform the respective duties of vote monitoring and counting personnel. The ballot boxes for the election of directors shall be set up by the Company and publicly checked by the vote monitoring personnel before voting commences.

3. Ballot:

3.1 If the candidate is a shareholder, a voter must enter the candidate’s account name and shareholder account number in the “candidate” column of the ballot. For a non-shareholder, the voter shall enter the candidate’s full name and ID card number. However, when the candidate is a governmental organization or juristic-person shareholder, the name of the governmental organization or juristic-person shareholder shall be entered in the column for the candidate’s account name in the ballot paper or both the name of the governmental

organization or juristic-person shareholder and the name of its representative may be entered. When there are multiple representatives, the name of each respective representative shall be entered.

3.2 A ballot is invalid under any of the following circumstances:
3.2.1 The ballot was not prepared by the Company.
3.2.2 The ballot was not in the ballot box.
3.2.3 A blank ballot is cased into the ballot box.
3.2.4 The total number of votes casted exceeds the total number of votes held by the shareholder.
3.2.5 The candidate elected is a shareholder, the identity and shareholder account number thereof are not in conformity with those specified in the shareholders’ roster; or if the candidate elected is not a shareholder, the name and uniform ID number are proven non-conformity.
3.2.6 Other than the name and the shareholder account number or uniform ID number of the candidate, other contexts are included.
3.2.7 The handwriting is unclear and illegible.
3.2.8 The name of candidate elected is same with name of other shareholders, and the shareholder account number or the uniform ID number is not provided for verification.
3.2.9 The number of persons elected exceeds the limitation.

4. Voting Rights:

4.1 Directors and supervisors election can set up several ballot counters and two counting sites.
4.2 When all the ballots have been collected, the scrutinist and ballot teller will open the box together.
4.3 The counting procedure will be monitor by scrutinist.
4.4 The board of directors of the Company shall issue certificate to the persons elected as directors.
These Procedures and any amendments hereto, shall be implemented after approval by a shareholders meeting.

APPENDIX 8

Chroma Ate Inc. Rules of Procedure for Shareholders’ Meeting

Shareholders’ Meeting of the Company (the “Meeting”) shall be conducted in accordance with these Rules and Procedures.
The term “shareholders” as set forth herein denotes the shareholders themselves and the proxies authorized by shareholders.
Shareholders attending the Meeting shall 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.
The meeting shall be held at the head office of the Company or at any other appropriate place that is convenient for the shareholders to attend. The time to start the Meeting shall not be earlier than 9:00am or later than 3:00pm.
The Chairman of the Board of Directors shall be the chairman presiding at the meeting in the case that the meeting is convened by the Board of Directors. If, for any reason, the Chairman of the Board of Directors cannot preside at the meeting the Vice Chairman of the Board of Directors or one of the Directors shall preside at the Meeting. Where no such designee is designated, the Directors shall be elected out of the directors.
If the Meeting is convened by any other person entitled to convene the Meeting, such person shall be the chairman to preside at the Meeting. If there are more than two conveners, the Chairman shall be elected from the conveners.
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 videotaped and these tapes shall be preserved for at least one year.
Chairman 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 chairman may postpone the time for the Meeting. The postponements shall be limited to two times at the most and Meeting shall not be postponed for longer than one hour in the aggregate. If after two postponements no quorum can yet be constituted 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 Law of the Republic of China. The aforesaid tentative resolutions shall be executed in accordance with relevant provisions of the Company Law.
If during the process of the Meeting the number of outstanding shares represented by the shareholders present becomes sufficient to constitute the quorum, the chairman may submit the tentative resolutions to the Meeting for approval in accordance with Article 174 of the Company Law of the Republic of China.
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 set forth in the preceding paragraph shall apply 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 chairman cannot announce adjournment of the

Meeting before all the discussion items (including special motions) listed in the agenda are resolved.

In the case that Chairman adjourns the Meeting in violation of these Rules and Procedures, the shareholders may designate, by a majority of votes represented by shareholders attending the Meeting, one person as chairman to continue the Meeting.

The shareholders cannot designate any other person as chairman and continue the Meeting in the same or other place after the Meeting is adjourned.

When a shareholder present at the Meeting wishes to speak, a Speech Note should be filled out with 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 chairman.

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 chairman and the shareholder in speaking, no shareholder shall interrupt the speeches of the other shareholders, otherwise the chairman shall stop such interruption.

Unless otherwise permitted by the chairman, each shareholder shall not, for each discussion item, speak more than two times (each time not exceeding 5 minutes). In case the speech of any shareholder violates the above provision or exceeds the scope of the discussion item, the chairman may stop the speech of such shareholder.

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 chairman may respond himself / herself or appoint an appropriate person to respond.

The chairman may announce to end the discussion of any resolution and go into voting if the Chairman deems it appropriate.

The person(s) to check and the person(s) to record the ballots during a vote by casting ballots shall be appointed by the chairman. 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 chairman may announce a break as appropriate during the proceedings of a shareholders’ meeting.

Except otherwise specified in the Company Law of the Republic of China 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. The resolution shall be deemed adopted and shall have the same effect as if it was voted by casting ballots if no objection is voiced after solicitation by the chairman.

If there is amendment to or substitute for a discussion item, the chairman shall decide the sequence of voting for such discussion item, 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.

The chairman 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.
Any matters insufficiently provided for herein shall be subject to the Company Law, Articles of Incorporation and other laws and regulations concerned.

These Rules and Procedures shall be effective from the date it is approved by the Shareholders’ Meeting. The same applies in case of revision.

APPENDIX 9

Shareholding of Directors and Supervisors

			Book Closure Date: April 10th2017	Book Closure Date: April 10th2017	Book Closure Date: April 10th2017	Book Closure Date: April 10th2017
Title	Name	Date Elected	Shareholding when Elected		Current Shareholding
			Shares	%	Shares	%
Chairman	Leo Huang	2014.6.11	23,419,897	6.22%	23,419,897	5.78%
Independent Director	Quincy Lin	2014.6.11	0	0%	0	0
Independent Director	Tsung-Ming Chung	2014.6.11	0	0%	0	0
Director	Fer Mo Investment Co., Ltd. Representative：Chung-Ju Chang	2014.6.11	1,250,505	0.33%	1,250,505	0.31%
Director	Chroma Investment Co., Ltd. Representative：I-Shih Tseng	2014.6.11	1,925,579	0.51%	1,915,579	0.47%
Supervisor	Chi-Jen Chou	2014.6.11	0	0	0	0
Supervisor	Kai Sun Investment Co.,Ltd. Tsun-I,Wang	2014.6.11	3,380,922	0.90%	3,200,922	0.79%

Note:

Total issued shares: 405,206,057 shares on April 10, 2017.
The minimum required combined shareholding of all directors by law: 16,000,000 shares. The minimum required combined shareholding of all supervisors by law: 1,600,000 shares.
The combined shareholding of all directors on the book closure date: 26,585,981 shares. The combined shareholding of all supervisors on the book closure date: 3,200,922 shares.
The shares held by all directors and supervisors meet the minimum required combined shareholding.

AI assistant

CHROMA — AGM Information 2017

52029_rns_2017-07-20_a21167e9-a187-47e8-b5c1-4f1bfcdb0148.pdf

CHROMA ATE INC.

2017 Annual General Shareholders’ Meeting Meeting Agenda (Translation)

CHROMA ATE INC.

Meeting Agenda for the 2017 Annual General Shareholders’ meeting

Table of Contents

Attachments

CHROMA ATE INC. Procedures for the 2017 Annual General Shareholders’ Meeting

CHROMA ATE INC. 2017 Annual General Shareholders’ Meeting Agenda

1. Call meeting to order

2. Chairman’s statements

3. Report Items:

4. Acknowledgement Items:

5. Discussion Items

6. Election of Directors

7. Other

8. Special Motion

9. Meeting Adjourned

Report Items

Acknowledgement Items

Discussion Items

Election of Directors

Other

Special Motion

Meeting Adjourned

ATTACHMENT 1

Business Report

ATTACHMENT 2

Audit Committee’s Review Report

ATTACHMENT 3

Status of endorsements and guarantees in 2016

ATTACHMENT 4

Comparison Table of Revised Codes of Ethical Conduct

Opinion

Basis for Opinion

Key Audit Matters

Impairment of Property, Plant and Equipment

Evaluation of Write-down of Inventories

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Impairment of Property, Plant and Equipment

Evaluation of Write-down of Inventories

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

CHROMA ATE INC.

BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

CHROMA ATE INC.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHROMA ATE INC.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHROMA ATE INC.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

CHROMA ATE INC.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

Chroma Ate Inc. Profit Allocation Proposal For Year ended December 31, 2016

Note:

ATTACHMENT 7

Comparison Table of Revised Articles of the Articles of Incorporation

ATTACHMENT 8

Comparison Table of Revised Operating Procedures of Acquisition or Disposal of Assets

CHROMA AGM Information 2017