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FocalTech AGM Information 2019

Jun 27, 2019

52342_rns_2019-06-27_c47986e3-7a68-40b0-ac49-922bbe40471e.pdf

AGM Information

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Handbook for 2019 Annual General Meeting of Shareholders (Translation)

Time: June 20, 2019 9:00AM Location: No.1, Gongye E. 2nd Rd., East Dist., Hsinchu City 300, Taiwan (R.O.C.)

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Table of Contents

I.Meeting Agenda ............................................................................................................ 2 1.Meeting Agenda for 2019 Annual General Meeeting of Shareolders ............ 2 2.Matters for Report ........................................................................................... 3 3.Matters for Ratification ................................................................................... 5 4.Matters for Discussion .................................................................................... 6 5.Extempore Motions ......................................................................................... 7 6.Adjournment ................................................................................................... 7 II. Attachment ............................................................................................................... 8 1.2018 Annual Business Report ......................................................................... 8 2. Audit Committee Review Report ................................................................. 10 3. The Transferring Rules of the 4th , and 5th Share Buy-Back Programs ... 11 4. Independent Auditors’ Report and Consolidated/Standalone Financial Statements ........................................................................................................ 15 5. 2018 Deficit Compensation Table ............................................................. 38 6. Amendment to the “Articles of Incorporation” Comparison Table ........... 39 7. Amendment to the “Operational Procedures for Acquisition and Disposal of Assets” Comparison Table ............................................................................. 45 8. Amendment to the“Operational Procedures for Loaning of Company Funds” Comparison Table .......................................................................................... 58 III.Appendix .................................................................................................................. 60 1.Rules of Procedure for Shareholders’ Meeting ............................................. 60 2. Articles of Incorporation for FocalTech (before amended) ......................... 67 3.Director’s Stockholding Status ..................................................................... 75

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Meeting Agenda

Meeting Agenda for 2019 Annual General Meeting of Shareholders

Time ： 9:00AM June 20, 2019

Location ： No.1, Gongye E. 2nd Rd., East Dist., Hsinchu City 300, Taiwan

  • (R.O.C.)

  • Attendance: Shareholders and equity representatives

  • Chairman: Chairman Genda Hu

  • Announce the start of the meeting(report the number of shares attended)

  • Chairman's speech

  • Matters for Report

  • 2018 business report

  • Audit committee review report

  • Status report of the company's share buyback program

  • Matters for Ratification

  • Adoption of 2018 annual business report and financial statements

  • Adoption of the proposal for 2018 deficit compensation

  • Matters for Discussion

  • Proposal for cash distribution from Additional Paid-in Capital

  • Amendment to the “Articles of Incorporation”

  • Amendment to the “Operational Procedures for Acquisition and Disposal of Assets”

  • Amendment to the “Operational Procedures for Loaning of Company Funds”

  • Extempore Motions

  • Adjournment

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Matters for Report

Report item (1)

Subject: 2018 Annual Business Report

Descriptions: 2018 Annual Business Report is attached on page 8, Attachment 1

Report item (2)

Subject: Audit Committee Review Report

Descriptions: Audit Committee Review Report is attached on page 10, Attachment 2

Report item (3)

Subject: Status report of the company's share buyback program

Descriptions: please refer the table below:

Buy-Back Batch 4th 5th
Board of Directors Resolution Day 2018.July.26 2018.August.23
The Purpose for Buying Transfer shares to employees Transfer shares to employees
Planned Buying Back Period 2018.July.27~2018.September.26 2018.August.24~2018.October.23
Upper Limit of Dollar Amount to Be
Used for Buying Back Shares		 NT$7,689,512,172 NT$7,781,439,865
Share Type and Quantity Planned to
Buy Back		 8,000,000 shares of common stock 8,000,000 shares of common stock
Planned Price Range for Buying Back NT$17.68- NT$39.65, but will
continue to buy back shares, once the
stock price is under the minimum of
planned range		 NT$17.22- NT$37.26, but will
continue to buy back shares, once the
stock price is under the minimum of
planned range
Actual Buying Back Period 2018.August.2~2018.August.20 2018.August.24~2018. October.23
Quantity and Type of Shares Bought 8,000,000 shares of common stock 7,689,000 shares of common stock
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Back
Actual Dollar Amount Used for
Buying Back		 NT$192,810,452 NT$192,095,557
Average Share Bought Price NT$24.1 NT$24.98
Execution Result of Buying Back
Program		 Completely bought back during the
planned buy-back period.		 During the planned buy-back period, the
shares bought were less than those
planned due to stable share price and the
consideration of cash usage efficiency.
Shares Eliminated and Transferred 0 shares of common stock 0 shares of common stock
Cumulative Holding Quantity of
Company Shares		 8,281,000 shares of common stock
(186,000 shares of common stocks
remained from the2ndbatch in 2016,
95,000 shares of common stocks
remained from the 3rdbatch in 2017,
8,000,000 shares of common stocks
remained from the 4thbatch in 2018)		 15,970,000 shares of common stock
(186,000 shares of common stocks
remained from the 2ndbatch in 2016,
95,000 shares of common stocks
remained from the 3rdbatch in 2017,
8,000,000 shares of common stocks
remained from the 4thbatch in 2018,
7,689,000 shares of common stocks
remained from the 5thbatch in 2018)
Proportion of Cumulative Holding
Quantity of Company Shares in the
Total Issued Shares		 2.77% 5.33%
  1. The Transferring Rules to employees of the 4[th] and 5[th] Share Buy-Back

Programs are referred to Page11, Attachment 3

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Matters for Ratification

Ratification item (1):

  • [Proposed by the Board]

Subject: Adoption of the 2018 Business Report and Financial Statements Descriptions:

  • （ 1 ） FocalTech 2018 business report and financial statements had been approved by the Board and the financial statements were audited by independent auditors Xu Xiu Ming and Lin Su Wan of Deloitte accounting firm.

  • （ 2 ） Independent auditor report, 2018 business report and financial statements are attached on page 8, Attachment 1 and attached on page 15, Attachment 4.

Resolution:

Ratification item (2):

  • [Proposed by the Board]

Subject: Adoption of the proposal for 2018 deficit compensation

Descriptions:

  • （ 1 ） 2018 beginning inappropriate retained earnings are NT$ 1,058,983,658, and the annual net loss after tax was NT$2,451,641,570. After adding the remeasurement of the welfare plan and the impact of adjusting the IFRS9, the total deficit compensation is NT$1,434,755,743, so no shareholder dividend is allocated. In addition, it is proposed to compensate the deficit with the statutory surplus reserve and capital reserve. After the compensation, there is no accumulated net loss.

  • （ 2 ） 2018 deficit compensation table is attached on page 38, as attachment 5. Resolution:

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Matters for Discussion

Discussion item (1):

[Proposed by the Board]

Subject: Discussion for Cash Distribution from Additional Paid-in Capital Descriptions:

  • （ 1 ） In accordance with Article 241 of the Company Law, the additional paid-in capital of NT$150,000,000, which comes from the premium over the par value when issuing, is proposed to distribute based on the register book of shareholders on the distribution base date, approximately NT$0.5 per share.

  • （ 2 ） The cash allotted by each shareholder will be paid up to the unit of NT$ (abandon less than 1 NT$), and the total amount of the round down will be recognized as Company’s other income

  • （ 3 ） After the shareholders' meeting approval, please authorize the chairman to set the base date, payment date, and follow-up related matters.

  • （ 4 ） It is proposed that the shareholders’ meeting could authorize the chairman’s full power to adjust the payment rate per share due to repurchase or repossession of company shares, cancellation of share capital or other factors that would affect the outstanding shares.

Resolution:

Discussion item (2):

[Proposed by the Board]

Subject: Discussion for the Amendment to the “Articles of Incorporation” Descriptions:

  • （ 1 ） According to paragraph 1 of Article 228 and Article 240 of the amended Company Act, it is proposed to adjust the distribution of surplus and dividends and dividend distribution procedures and to amend the Company's Articles of Incorporation in response to the Company's operational needs.

  • （ 2 ） Amended paragraph comparison table is attached on page 39, as attachment 6.

Resolution:

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Discussion item (3):

[Proposed by the Board]

Subject: Amendment to the “Operational Procedures for Acquisition and Disposal of Assets”

Descriptions:

  • （ 1 ） According to the amendment of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” on November 26[th] .2018 and for the Company's operational requirements, the Company has amended the “Operational Procedures for Acquisition and Disposal of Assets”.

  • （ 2 ） Amended paragraph comparison table is attached on page 45, as attachment 7.

Resolution:

Discussion item (4):

[Proposed by the Board]

  • Subject: Amendment to the “Operational Procedures for Loaning of Company Funds”

Descriptions:

  • （ 1 ） According to the amendment of the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” on March 7[th] 2019 and for the Company's operational requirements, the Company has amended the “Operational Procedures for Acquisition and Disposal of Assets”.

  • （ 2 ） Amended paragraph comparison table is attached on page 58, as attachment 8.

Resolution:

Extempore Motions

Adjournment

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Attachment

Attachment 1

2018 Annual Business Report

Looking back on 2018, it was the most challenging year for FocalTech as being in the adversity of the smart phone market for the first time in the recent ten years, and also suffered from a serious shortage of foundry capacity, which let FocalTech faced a double dilemma from both supply and demand side. However, FocalTech didn’t been knocked down. Through the optimal adjustment of product mix, production capacity provisioning, pricing strategy and other operational guideline adjustments, the impact resulted minimized, as FocalTech’s final annual revenue declined only in single digits, and the operations remained stable.

According to the statistics of the research organization Canalys, the decline of the shipment in the mainland smart phone market in 2018 was 14%, which is the largest annual decline in shipments in history. It is evident that FocalTech suffered from a sharp decline in demand. Fortunately, the penetration rate of the full in-cell solution which FocalTech had long-term invested R&D, has gradually increased from approximately 15% in 2017 to over 30%, and drove the IDC (Integrated Driver Controller) annual shipment to reach 90 million units in 2018, as a growth nearly 50% against 2017.

In addition, with the positive expanding of the application for discrete touch and driver solutions, and the pricing strategy benefits, the performance of the FocalTech still resulted relatively stable in the adversity. 2018 The annual revenue was NT$9.92 billion, as a 8.14% decrease annually. But at the end of the year, FocalTech recognized a loss from LCM assessment and slow-moving inventories up to approximately NT$ 630 million resulting in a net operating loss of NT$675 million. And the impact of impairment loss of goodwill and intangible assets accounting to NT$2 billion resulted FocalTech’s 2018 annual after-tax loss at NT$2.488 billion, and the net loss per share was NT$8.66. FocalTech believes that with the two losses been recognized, the company's finances could be more sound, lightly loaded and more positive for the operation.

In 2018, although FocalTech did not have outstanding performance in operations, but still insisted on investment of expansion in research and development. As an important supplier of human-machine interface for global mobile devices, FocalTech continues to contribute efforts in new application solutions and development of various innovative technologies. In 2018 the total research and development expenses of FocalTech increased to NT$1.481 billion which is an increase of more than 10% compared with 2017. Nearly 50 patents were obtained, and 50 new patent applications were filed. This shows that FocalTech insists on innovation and research and development.

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In terms of products and technology, FocalTech continued to dig deep into the IDC market and launched new products. In 2018, for FHD and HD resolution, it successfully developed Mux 1:6 and Dual Gate to realize advanced specification chips for ultra-narrow bezel full-screen smart phones, in order to maintain the leading position in the IDC market. And also, FoclTech successfully developed the world's first automotive IDC and sampled out to global car manufacturers and automotive panel suppliers.

For AMOLED panels, 2018 was also a year of success for FocalTech. First, FocalTech 's touch controller IC for AMOLED panels not only successfully entered wearable device applications, but also expanded into smart phone applications. In addition, FocalTech has also successfully developed display driver ICs for AMOLED panels, and has already entered pilot run production with panel customers. In the future, as the penetration rate of AMOLED panels expands in the smart phone market, it is expected to simultaneously drive FocalTech’s revenue.

Finally, FocalTech’s fingerprint product has been officially mass-produced in capacitive type, and continues to be refined in the field of optical fingerprints, that can be implemented in both TFT-LCD and AMOLED panels, and through algorithms and optical components adjustments, the heart rate and other bio measurement functions were successfully realized.

Looking forward to 2019, even the international trade atmosphere and the mobile device market is not clear, FocalTech is expected to continue to increase its shipments. AMOLED and fingerprint product’s are also well prepared to go to the market. 2019 is the year for FocalTech to reborn from low ebb. And FocalTech will continue to adhere to the core values of the leader in human-machine interface solutions, and store up powers in technology and intellectual property rights through technological innovation to provide customers, supply chain, and the industry with the best solutions. FocalTech will continue the leading position, and most importantly create higher shareholder value to appreciate the long-term support and love of shareholders.

Chairman and General Manager: Genda Hu

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Attachment 2

FocalTech Audit Committee Review Report

The board of directors has prepared the company’s 2018 annual business report, financial statements, and the 2018 deficit compensation proposal. Deloitte CPA firm was engaged to audit the financial statements and issued an audit report.

The above-mentioned 2018 annual business report, financial statements and the 2018 deficit compensation proposal have been reviewed by the Audit Committee and no discrepancy and irregularity was found. We hereby report as above in accordance with the Securities Exchange Act and the Company Law. Please kindly verify and approve.

To 2019 Annual General Shareholders’ Meeting

Chairman of the Audit Committee: Lin Yujuan 2019.May.7

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Attachment 3

The Transferring Rule of the 4[th] Share Buy-Back Program

Article One:

To motivate employees and in accordance with R.O.C. Securities and Exchange Law article 28-2-1-1 and regulation of Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan, R.O.C. on “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies”, FocalTech (the Company) establishes the “Transferring Rule of the 4[th] Share Buy-Back Program” (this procedure). The repurchased shares will be transferred to employees according to related laws and this procedure.

Article Two:

The shares to be transferred are the common shares with the same right and obligation as other outstanding shares except defined and ruled by related laws and this procedure.

Article Three:

The repurchased shares could be transferred to employees in 3 years from the buying back day in one or multiple batches.

Article Four:

On the record date, the employees officially hired by the Company or the Company’s subsidiaries, 50% or more owned by the Company directly or indirectly, are entitled to subscribe the shares specified in article five of this procedure.

Article Five:

The shares allocated to eligible employees would be based on job grade, seniority and contribution level to the Company, which needs Chairman and the Board of Directors approvals. Allocation and subscription of Board members and General Manager would need the Compensation Committee’s approval.

Article Six:

The transfer procedure:

  • According to the previous board resolution, announcement and application, the shares are purchased from the market during the repurchase period.

  • The Chairman is authorized under this procedure to establish and announce the subscription record date, the subscription amount, the payment period, the rights contents and restrictions etc.

  • Calculate the actual share amounts with payments and transfer the shares accordingly.

Article Seven:

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The transfer price to employees for the shares comes from the average actual repurchase price. However, prior to the transfer, in the event of an increase or decrease in the number of outstanding common shares issued by the company, the transfer price may be adjusted according to the increase or decrease pro-rata. Or according to the articles of incorporation of the company, if the transfer price is planned to be lower than the actual repurchase price, the special shareholder meeting resolution, 2/3 voting approval with more than 50% shareholder representatives attending, is required. The agenda of the shareholder meeting should include the description defined by “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies” Article 10-1.

Transfer price adjustment formula:

Adjusted Transfer Price = the average price of the actually bought back shares X (the total number of common shares that have been issued at the time of repurchasing the shares ÷ the total number of common shares that have been issued when the repurchased shares are transferred to employees)

Remark: the total common shares should exclude those the Company bought back.

Article Eight:

After the repurchased shares are being transferred and registered under employees’ names, unless otherwise specified, the rights and obligations of the shares are the same as the other common shares.

Article Nine:

The shares bought back should be transferred in full within three years from the date of purchase. Overdue non-transferred parts shall be regarded as unissued shares of the company and shall be cancelled in accordance with the law. The eligibility of subscription be disqualified if the employee leaves during the subscription base date to the subscription payment due date.

Employees who have not subscribed for payment at the end of their payment period shall be deemed to have abstained from the grant; the Chairman shall be authorized to contact other employees to purchase the unsubscribed shares.

Article Ten:

This procedure is valid by the approval of the Board of Directors but should be reported in the Shareholder’s meeting. This rule shall be applied to any amendments.

Article Eleven:

This procedure was established on July 26, 2018

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The Transferring Rule of the 5[th] Share Buy-Back Program

Article One:

To motivate employees and in accordance with R.O.C. Securities and Exchange Law article 28-2-1-1 and regulation of Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan, R.O.C. on “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies”, FocalTech (the Company) establishes the “Transferring Rule of the 5[th] Share Buy-Back Program” (this procedure). The repurchased shares will be transferred to employees according to related laws and this procedure.

Article Two:

The shares to be transferred are the common shares with the same right and obligation as other outstanding shares except defined and ruled by related laws and this procedure.

Article Three:

The repurchased shares could be transferred to employees in 3 years from the buying back day in one or multiple batches.

Article Four:

On the record date, the employees officially hired by the Company or the Company’s subsidiaries, 50% or more owned by the Company directly or indirectly, are entitled to subscribe the shares specified in article five of this procedure.

Article Five:

The shares allocated to eligible employees would be based on job grade, seniority and contribution level to the Company, which needs Chairman and the Board of Directors approvals. Allocation and subscription of Board members and General Manager would need the Compensation Committee’s approval.

Article Six:

The transfer procedure:

  • According to the previous board resolution, announcement and application, the shares are purchased from the market during the repurchase period.

  • The Chairman is authorized under this procedure to establish and announce the subscription record date, the subscription amount, the payment period, the rights contents and restrictions etc.

  • Calculate the actual share amounts with payments and transfer the shares accordingly.

Article Seven:

The transfer price to employees for the shares comes from the average actual

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repurchase price. However, prior to the transfer, in the event of an increase or decrease in the number of outstanding common shares issued by the company, the transfer price may be adjusted according to the increase or decrease pro-rata. Or according to the articles of incorporation of the company, if the transfer price is planned to be lower than the actual repurchase price, the special shareholder meeting resolution, 2/3 voting approval with more than 50% shareholder representatives attending, is required. The agenda of the shareholder meeting should include the description defined by “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies” Article 10-1.

Transfer price adjustment formula:

Adjusted Transfer Price = the average price of the actually bought back shares X (the total number of common shares that have been issued at the time of repurchasing the shares ÷ the total number of common shares that have been issued when the repurchased shares are transferred to employees)

Remark: the total common shares should exclude those the Company bought back.

Article Eight:

After the repurchased shares are being transferred and registered under employees’ names, unless otherwise specified, the rights and obligations of the shares are the same as the other common shares.

Article Nine:

The shares bought back should be transferred in full within three years from the date of purchase. Overdue non-transferred parts shall be regarded as unissued shares of the company and shall be cancelled in accordance with the law. The eligibility of subscription be disqualified if the employee leaves during the subscription base date to the subscription payment due date.

Employees who have not subscribed for payment at the end of their payment period shall be deemed to have abstained from the grant; the Chairman shall be authorized to contact other employees to purchase the unsubscribed shares.

Article Ten:

This procedure is valid by the approval of the Board of Directors but should be reported in the Shareholder’s meeting. This rule shall be applied to any amendments.

Article Eleven:

This procedure was established on August 23, 2018

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Attachment 4

Independent Auditors’ Report and Consolidated/Unconsolidated Financial Statements

敦泰電子股份有限公司 公鑒：

查核意見

敦泰電子股份有限公司民國 107 年及 106 年 12 月 31 日之個體資產負債 表，暨民國 107 年及 106 年 1 月 1 日至 12 月 31 日之個體綜合損益表、個體 權益變動表、個體現金流量表以及個體財務報表附註（包括重大會計政策彙 總），業經本會計師查核竣事。

依本會計師之意見，上開個體財務報表在所有重大方面係依照證券發行 人財務報告編製準則編製，足以允當表達敦泰電子股份有限公司民國 107 年 及 106 年 12 月 31 日之個體財務狀況，暨民國 107 年及 106 年 1 月 1 日至 12 月 31 日之個體財務績效及個體現金流量。

查核意見之基礎

本會計師係依照會計師查核簽證財務報表規則及一般公認審計準則執行
查核工作。本會計師於該等準則下之責任將於會計師查核個體財務報表之責
任段進一步說明。本會計師所隸屬事務所受獨立性規範之人員已依會計師職
業道德規範，與敦泰電子股份有限公司保持超然獨立，並履行該規範之其他
責任。本會計師相信已取得足夠及適切之查核證據，以作為表示查核意見之
基礎。

關鍵查核事項

關鍵查核事項係指依本會計師之專業判斷，對敦泰電子股份有限公司民 國 107 年度個體財務報表之查核最為重要之事項。該等事項已於查核個體財 務報表整體及形成查核意見之過程中予以因應，本會計師並不對該等事項單 獨表示意見。

茲對敦泰電子股份有限公司民國 107 年度個體財務報表之關鍵查核事項 敘明如下：

商譽之減損評估

關鍵查核事項說明

敦泰電子股份有限公司民國 107 年 12 月 31 日商譽 1,237,268 仟元，占資

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產總額 14% ，對整體財務報表係屬重大。敦泰電子股份有限公司之商譽係反 向併購敦泰電子股份有限公司（原名旭曜科技股份有限公司）所產生。管理 階層於評估商譽是否減損時，係以觸控和驅動整合晶片為獨立之現金產生單 位，依未來營運現金流量並使用適當之折現率衡量可回收金額，用可回收金 額與帳列之商譽金額比較，評估商譽有無減損情事。

管理階層於決定未來營運現金流量時涉及管理階層之主觀判斷，且可能 受未來市場或經濟景氣影響，包括上述現金產生單位之銷售成長率、利潤率 及折現率等，因此將商譽之減損評估列為 107 年度之關鍵查核事項。 

與商譽之減損評估相關會計政策、會計估計及假設之不確定性估計與攸
關揭露資訊，請參閱附註四、五及十三。

本會計師對於上述關鍵查核事項所執行之主要查核程序如下：

  1. 取得及複核管理階層編製之觸控和驅動整合晶片之資產減損評估；

  2. 了解管理階層估計該觸控和驅動整合晶片之未來營運展望市場成長率、 市場佔有率、銷售成長率及利潤率之過程及依據，並取得外部相關產業 未來趨勢分析，評估管理階層預測市場成長率之合理性及其他假設；及

  3. 評估及諮詢本事務所內部專家，包括無風險報酬利率、波動性及風險溢 酬等假設，以判斷加權帄均資金成本率所屬產業係屬允當。

存貨評價 

關鍵查核事項說明

本會計師關注此風險，係因存貨之價值受到市場需求波動及技術變化快 速，可能導致存貨滯銷過時或淨變現價值降低而產生損失。敦泰電子股份有 限公司，其提列存貨跌價及呆滯損失之會計政策係按照存貨庫齡及存貨成本 與淨變現價值孰低提列存貨跌價及呆滯損失，該資料來源係管理階層根據存 貨之銷售情形與過時狀況，進行各項產品可能損失情形之判斷與評估。因此 本會計師認為存貨評價可能存有風險，故列為 107 年度之關鍵查核事項。 

本會計師對於上述關鍵查核事項所執行之主要查核程序如下：

  1. 取得管理階層編製之存貨成本與淨變現價值孰低之評估資料，瞭解其存 貨備抵跌價損失所採用提列政策與程序，包括決定淨變現價值之方式。 測試存貨庫齡分析之分類及金額正確性，抽核近期銷售及進貨紀錄，以 評估其銷售情形與淨變現價值之合理性。

  2. 16 -

  3. 瞭解取得管理階層另外針對過時陳舊存貨項目提列存貨跌價及呆滯損失 之判斷，與其討論存貨近期銷售狀況及未來可能去化估計之合理性，並 抽核存貨近期銷售狀況，以評估其針對過時存貨提列存貨跌價及呆滯損 失之金額是否適當。

  4. 子公司銷貨收入

  5. 關鍵查核事項說明

  6. 敦泰電子股份有限公司之子公司銷售觸控和驅動整合晶片之收入係投資

  7. 人及管理階層評估敦泰電子股份有限公司財務或業務績效之主要指標。由於 管理階層可能存有達成預計財務目標的壓力，敦泰電子股份有限公司銷售觸 控和驅動整合晶片可能會有收入認列不正確之風險，因此將銷銷售觸控和驅 動整合晶片之收入認列列為 107 年度之關鍵查核事項。 本會計師對於上述關鍵查核事項所執行之主要查核程序如下：

  8. 測試銷貨及收款作業循環內控制度設計及執行之有效性；

  9. 取得 107 年度銷貨客戶排行，針對本年度主要客戶消長變化及其銷貨金 額增減變動，予以分析原因；

  10. 分析產品別銷貨數量、銷貨收入及銷貨毛利有無重大異常；及

  11. 在銷售客戶中，抽樣核對訂購單、出貨單及收款紀錄，以確認收入之真 實性。

管理階層與治理單位對個體財務報表之責任

管理階層之責任係依照證券發行人財務報告編製準則編製允當表達之個
體財務報表，且維持與個體財務報表編製有關之必要內部控制，以確保個體
財務報表未存有導因於舞弊或錯誤之重大不實表達。

於編製個體財務報表時，管理階層之責任亦包括評估繼續經營之能力、
相關事項之揭露，以及繼續經營會計基礎之採用，除非管理階層意圖清算敦
泰電子股份有限公司或停止營業，或除清算或停業外別無實際可行之其他方
案。

敦泰電子股份有限公司之治理單位（含審計委員會）負有監督財務報導
流程之責任。

會計師查核個體財務報表之責任

本會計師查核個體財務報表之目的，係對個體財務報表整體是否存有導
  • 17 - 
因於舞弊或錯誤之重大不實表達取得合理確信，並出具查核報告。合理確信
係高度確信，惟依照一般公認審計準則執行之查核工作無法保證必能偵出個
體財務報表存有之重大不實表達。不實表達可能導因於舞弊或錯誤。如不實
表達之個別金額或彙總數可合理預期將影響個體財務報表使用者所作之經濟
決策，則被認為具有重大性。

本會計師依照一般公認審計準則查核時，運用專業判斷並保持專業上之
懷疑。本會計師亦執行下列工作：

  1. 辨認並評估個體財務報表導因於舞弊或錯誤之重大不實表達風險；對所 評估之風險設計及執行適當之因應對策；並取得足夠及適切之查核證據 以作為查核意見之基礎。因舞弊可能涉及共謀、偽造、故意遺漏、不實 聲明或踰越內部控制，故未偵出導因於舞弊之重大不實表達之風險高於 導因於錯誤者。

  2. 對與查核攸關之內部控制取得必要之瞭解，以設計當時情況下適當之查 核程序，惟其目的非對敦泰電子股份有限公司內部控制之有效性表示意 見。

  3. 評估管理階層所採用會計政策之適當性，及其所作會計估計與相關揭露 之合理性。

  4. 依據所取得之查核證據，對管理階層採用繼續經營會計基礎之適當性， 以及使敦泰電子股份有限公司繼續經營之能力可能產生重大疑慮之事件 或情況是否存在重大不確定性，作出結論。本會計師若認為該等事件或 情況存在重大不確定性，則須於查核報告中提醒個體財務報表使用者注 意個體財務報表之相關揭露，或於該等揭露係屬不適當時修正查核意 見。本會計師之結論係以截至查核報告日所取得之查核證據為基礎。惟 未來事件或情況可能導致敦泰電子股份有限公司不再具有繼續經營之能 力。

  5. 評估個體財務報表（包括相關附註）之整體表達、結構及內容，以及個 體財務報表是否允當表達相關交易及事件。

  6. 對於敦泰電子股份有限公司內組成個體之財務資訊取得足夠及適切之查 核證據，以對個體財務報表表示意見。本會計師負責查核案件之指導、 監督及執行，並負責形成敦泰電子股份有限公司查核意見。

  7. 18 - 

本會計師與治理單位溝通之事項，包括所規劃之查核範圍及時間，以及
重大查核發現（包括於查核過程中所辨認之內部控制顯著缺失）。

本會計師亦向治理單位提供本會計師所隸屬事務所受獨立性規範之人員
已遵循會計師職業道德規範中有關獨立性之聲明，並與治理單位溝通所有可
能被認為會影響會計師獨立性之關係及其他事項（包括相關防護措施）。

本會計師從與治理單位溝通之事項中，決定對敦泰電子股份有限公司民 國 107 年度個體財務報表查核之關鍵查核事項。本會計師於查核報告中敘明 該等事項，除非法令不允許公開揭露特定事項，或在極罕見情況下，本會計 師決定不於查核報告中溝通特定事項，因可合理預期此溝通所產生之負面影 響大於所增進之公眾利益。

==> picture [447 x 163] intentionally omitted <==

==> picture [467 x 12] intentionally omitted <==

  • 19 -

敦泰電子股份有限公司

個體資產負債表

民國 107 年及 106 年 12 月 31 日

民國107 年及106 年 12 月31 日
代
碼
1100
1170
130X
1476
1479
11XX
1510
1550
1600
1805
1821
1840
1990
15XX
1XXX
代碼
2170
2209
2230
2399
21XX
2570
2640
2645
2670
25XX
2XXX
3110
3210
3220
3235
3271
3280
3200
3310
3350
3300
3410
3420
3425
3400
3500
3XXX
3X2X		 資
產
流動資產
現金及約當現金（附註四及六）
應收帳款淨額（附註四、九及二八）
存貨（附註四、五及十）
其他金融資產（附註四及八）
其他流動資產（附註二一及二八）
流動資產總計
非流動資產
透過損益按公允價值衡量之金融資產－非流動（附註四及七）
採用權益法之投資（附註四及十一）
不動產、廠房及設備（附註四及十二）
商譽（附註四、五及十三）
其他無形資產（附註四及十四）
遞延所得稅資產（附註四及二一）
其他非流動資產
非流動資產總計
資 產 總 計
負
債
及
權
益
流動負債
應付帳款（附註十五及二八）
其他應付款（附註十六）
本期所得稅負債（附註四及二一）
其他流動負債（附註十九及二八）
流動負債總計
非流動負債
遞延所得稅負債（附註四、五及二一）
淨確定福利負債－非流動（附註四及十七）
存入保證金
其他非流動負債－其他
非流動負債總計
負債總計
權益（附註四、十八及二三）
股 本
普 通 股
資本公積
發行溢價
庫 藏 股
認列對子公司所有權權益變動數
員工認股權
員工認股權－逾期失效
資本公積總計
保留盈餘（累積虧損）
法定盈餘公積
未分配盈餘（待彌補虧損）
保留盈餘（累積虧損）總計
其他權益
國外營運機構財務報表換算之兌換差額
透過其他綜合損益按公允價值衡量之金融資產未實現損失
備供出售金融資產未實現損失
其他權益總計
庫藏股票
權益總計
負 債 及 權 益 總 計		 107年12月31日 ％
7
7
6
-

1

21
-
63
-
14
1
1

-

79

100
4
2
-

-

6
1
-
1

-

2

8

34
74
-
-
1

-

75
2

16)

14)
2
-

-

2

5)

92

100		 單位：新台幣仟元
106年12月31日
金
額
$ 614,709
616,655
535,965
-

21,842

1,789,171
22,129
5,427,022
30,753
1,237,268
91,361
112,897

13,125

6,934,555
$ 8,723,726
$ 306,212
185,647
-

14,060

505,919
30,998
26,096
106,040

10,400

173,534

679,453

2,987,432
6,422,355
40,868
20,448
47,476

20,334

6,551,481
186,154
(
1,434,755)
(
1,248,601)
149,454
(
2,290 )

-

147,164
(
393,203)

8,044,273
$ 8,723,726		 金
額
$ 846,774
959,711
856,976
24,500

139,139

2,827,100
-
5,569,492
27,744
3,237,268
113,010
82,855

11,405

9,041,774
$ 11,868,874
$ 720,867
239,646
6,478

5,676

972,667
15,876
29,620
104,231

10,400

160,127

1,132,794

2,983,700
6,565,204
40,868
1,269
30,179

17,356

6,654,876
186,154

1,058,985

1,245,139
47,154
-
(
2,791)

44,363
(
191,998)

10,736,080
$ 11,868,874		 ％













(
(


(
















(

(
















(

 7
8
7
1

1

24
-
47
-
27
1
1

-

76

100
6
2
-

-

8
-
-
1

-

2

10

25
55
1
-
-

-

56
2

8

10
-
-

-

-

1)

90

100		 
後附之附註係本個體財務報告之一部分。

==> picture [51 x 50] intentionally omitted <==

==> picture [51 x 50] intentionally omitted <==

會計主管：

==> picture [48 x 46] intentionally omitted <==

董事長：

經理人：
  • 20 -

敦泰電子股份有限公司 個體綜合損益表

民國 107 年及 106 年 1 月 1 日至 12 月 31 日 

單位：新台幣仟元，惟
每股虧損為元
代碼
107年度
金
額
4000營業收入（附註四、十九及
二八）
$ 4,298,242
5000營業成本（附註四、十、二
十及二八）
(
3,618,702)
5900營業毛利

679,540

營業費用（附註二十、二三
及二八）
6100
推銷費用
(
98,149 )
6200
管理費用
(
180,123 )
6300
研究發展費用
(
596,823)

6000
營業費用合計
(
875,095)

6900營業淨（損）利
(
195,555)

營業外收入及支出


7050
財務成本（附註二十）(
783 )
7060
採用權益法認列之子公
司損失份額（附註四）
(
313,129 )
7100
利息收入（附註四）

5,632
7235
透過損益按公允價值衡
量之金融資產利益
（附註四）
756
7679
商譽減損損失（附註
四、五及十三）
(
2,000,000 )
7590
其他利益及損失－淨額
（附註二八）
2,284
7610
處分不動產、廠房及設
備損失（附註四）
-		 107年度 
（接次頁）

（承前頁）
  • 21 -
代碼
107年度
106年度
金
額
％
金
額
7630
外幣兌換利益（損失）
（附註四）
$ 27,022

1
($ 52,450)
7000
營業外收入及支出
合計
(
2,278,218)
(
53)
(
347,946)
7900稅前淨損
(
2,473,773 ) (
58 ) (
44,541 )
7951所得稅（利益）費用（附註
四及二一）

22,131

-
(
35,139)
8200本年度淨損
(
2,451,642)
(
57)
(
79,680)

其他綜合損益




不重分類至損益之項目



8311
確定福利計畫之再
衡量數（附註四
及十七）
3,275
-
16,581
8349
與不重分類之項目
相關之所得稅
（附註四及二
一）
(
733)

-
(
1,990)
8310
不重分類至損益之
項目

2,542

-

14,591
後續可能重分類至損益
之項目
8380
採用權益法認列之
子公司之其他綜
合損益之份額
（附註四）

102,801

2
(
387,723)
8300
本年度其他綜合損
益合計

105,343

2
(
373,132)
8500本年度綜合損益總額
($ 2,346,299)
(
55)
($ 452,812)

每股盈餘（附註二二）




9750
基 本
($ 8.66)
($ 0.28)
後附之附註係本個體財務報告之一部分。		 106年度
％
(
1)
(
7)
(
1 )
(
1)
(
2)


-

-

-
(
7)
(
7)
(
9)
 
董事長：

==> picture [51 x 50] intentionally omitted <==

經理人：會計主管：

==> picture [48 x 46] intentionally omitted <==

  • 22 - 
敦泰電子股份有限公司
個體權益變動表

民國 107 年及 106 年 1 月 1 日至 12 月 31 日 

單位：新台幣仟元
代
碼
A1
106年1月1日餘額
105年度盈餘指撥及分配
B1
提列法定盈餘公積
B5
現金股利
D1
106年度淨損
D3
106年度稅後其他綜合損益
D5
106年度綜合損益總額
L1
庫藏股買回（附註十八）
F3
庫藏股轉讓（附註十八及二三）
M7
對子公司所有權權益變動（附註二四）
N1
員工認股權酬勞成本（附註十八及二三）
N1
執行認股權計畫下發行之普通股（附註十八及二三）
N1
既得限制員工權利股票（附註十八）
N1
限制員工權利股票酬勞成本（附註十八及二三）
N1
註銷限制員工權利股票（附註十八）
N1
未既得限制員工權利限票退還股利
Z1
106年12月31日餘額
A3
追溯適用及追溯重編之影響數
A5
107年1月1日重編後餘額
C5
資本公積配發現金股利
D1
107年度淨損
D3
107年度稅後其他綜合損益
D5
107年度綜合損益總額
L1
庫藏股買回（附註十八）
F3
庫藏股轉讓（附註十八及二三）
M7
對子公司所有權權益增加（附註二四）
N1
員工認股權酬勞成本（附註十八及二三）
N1
執行認股權計畫下發行之普通股（附註十八及二三）
Z1
107年12月31日餘額		 股
本
普
通
股
$ 2,965,344
-
-
-

-

-
-
-
-
-
18,619
-
-
(
263 )

-
2,983,700

-
2,983,700
-
-

-

-
-
-
-
-

3,732
$ 2,987,432		 資
本
公
積
$ 6,625,846
-
-
-

-

-
-
-
687
36,339
20,762
(
28,972 )
-
214

-
6,654,876

-
6,654,876
(
150,000 )
-

-

-
-
-
19,179
26,474

952
$ 6,551,481		 保
留
盈
餘
（		 累
積
虧
損
）
未
分
配
盈
餘
（待彌補虧損）
$ 1,335,160
(
21,109 )
(
189,985 )
(
79,680 )

14,591
(
65,089)
-
-
-
-
-
-
-
-

8
1,058,985
(
44,640)
1,014,345
-
(
2,451,642 )

2,542
(
2,449,100)
-
-
-
-

-
($ 1,434,755)		 其 他 權 益
員工未賺得酬勞
( $ 36,040 )
-
-
-

-

-
-
-
-
-
-
28,972
7,068
-

-
-

-
-
-
-

-

-
-
-
-
-

-
$ -		 庫
藏
股
票
( $ 62,992 )
-
-
-

-

-
(
245,812 )
116,806
-
-
-
-
-
-

-
(
191,998 )

-
(
191,998 )
-
-

-

-
(
384,906 )
183,701
-
-

-
($ 393,203)		 權
益
總
額
國
外
營
運
機
構
財
務
報
表
換
算
之
兌
換
差
額
$ 433,584
-
-
-
(
386,430)
(
386,430)
-
-
-
-
-
-
-
-

-
47,154

-
47,154
-
-

102,300

102,300
-
-
-
-

-
$ 149,454		 備
供
出
售
金
融
資
產
之
未
實
現
損
失
( $ 1,498 )
-
-
-
(
1,293)
(
1,293)
-
-
-
-
-
-
-
-

-
(
2,791 )

2,791
-
-
-

-

-
-
-
-
-

-
$ -		 透過其他綜合損益
按公允價值衡量之
金融資產未實現損益
$ -
-
-
-

-

-
-
-
-
-
-
-
-
-

-
-
(
2,791)
(
2,791 )
-
-

501

501
-
-
-
-

-
($ 2,290)
法
定
盈
餘
公
積
$ 165,045
21,109
-
-

-

-
-
-
-
-
-
-
-
-

-
186,154

-
186,154
-
-

-

-
-
-
-
-

-
$ 186,154
















$ 11,424,449
-
(
189,985 )
(
79,680 )
(
373,132)
(
452,812)
(
245,812 )
116,806
687
36,339
39,381
-
7,068
(
49 )

8
10,736,080
(
44,640)
10,691,440
(
150,000 )
(
2,451,642 )

105,343
(
2,346,299)
(
384,906 )
183,701
19,179
26,474

4,684
$ 8,044,273		 
後附之附註係本個體財務報告之一部分。

董事長：

==> picture [51 x 50] intentionally omitted <==

經理人：

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

會計主管：

==> picture [48 x 46] intentionally omitted <==

  • 23 -

敦泰電子股份有限公司 個體現金流量表

民國 107 年及 106 年 1 月 1 日至 12 月 31 日

單位：新台幣仟元

代
碼
營業活動之現金流量

A10000
本年度稅前淨損

收益費損項目：

A20100
折舊費用

A20200
攤銷費用

A20300
預期信用減損損失迴轉利益

A20400
透過損益按公允價值衡量金融
資產之淨利益
A20900
財務成本

A21200
利息收入

A21900
認股權酬勞成本

A21900
限制員工權利新股酬勞成本

A22300
採用權益法認列之子公司損失
份額
A22500
處分不動產、廠房及設備損失
A23700
存貨跌價及呆滯損失

A23800
商譽減損損失

A30000
營業資產及負債之淨變動數

A31115
強制透過損益按公允價值衡量
之金融資產
A31150
應收帳款

A31200
存 貨

A31240
其他流動資產

A32150
應付帳款

A32180
其他應付款

A32230
其他流動負債

A32240
淨確定福利負債

A33000
營運產生之現金

A33300
支付之利息

A33500
支付之所得稅

AAAA
營業活動之淨現金流入
 107年度


( $ 2,473,773 )



15,089

21,649
(
6,084 )
(
756 )

783
(
5,632 )

13,075

-
313,129

-

360,000

2,000,000


(
21,373 )

349,140
(
38,989 )

117,939
(
414,655 )
(
53,999 )

8,384
(
249)


183,678
(
783 )
(
472)


182,423
 106年度

( $ 44,541 )

14,518
19,641
-
-
401
(
4,611 )
15,787
2,315
303,960
3
60,000
-

-
(
51,396 )
138,655
(
43,384 )
10,362
(
19,431 )
(
47,878 )
(
185)
354,216
(
401 )
(
604)

353,211		 
（接次頁）
  • 24 -

（承前頁）

代
碼
投資活動之現金流量

B01800
取得採用權益法之投資

B02700
購置不動產、廠房及設備

B04500
購置無形資產

B06500
其他金融資產減少

B06800
其他非流動資產（增加）減少

B07500
收取之利息

BBBB
投資活動之淨現金流出

籌資活動之現金流量

C03100
存入保證金增加（減少）

C04500
發放現金股利

C04800
員工執行認股權

C04900
庫藏股票買回

C05100
庫藏股轉讓

C09900
註銷限制員工權利新股

C09900
未既得限制員工權利股票返還股利
CCCC
籌資活動之淨現金流出

EEEE
現金及約當現金淨（減少）增加

E00100年初現金及約當現金餘額

E00200年底現金及約當現金餘額
 107年度


( $ 79,920 )
(
18,098 )

-

24,500
(
1,720 )

5,462

(
69,776)




1,809
(
150,000 )

4,684
(
384,906 )

183,701

-

-

(
344,712)

(
232,065 )

846,774

$ 614,709
 106年度

$ -
(
13,428 )
(
4,810 )
-
443

4,283
(
13,512)

(
9,044 )
(
189,985 )
39,381
(
245,812 )
116,806
(
77 )

8
(
288,723)
50,976

795,798
$ 846,774		 
後附之附註係本個體財務報告之一部分。

董事長：

==> picture [51 x 50] intentionally omitted <==

經理人：

==> picture [51 x 50] intentionally omitted <==

會計主管：

==> picture [48 x 46] intentionally omitted <==

  • 25 -

會計師查核報告

敦泰電子股份有限公司 公鑒：

查核意見

敦泰電子股份有限公司及其子公司（敦泰集團）民國 107 年及 106 年 12 月 31 日之合併資產負債表，暨民國 107 年及 106 年 1 月 1 日至 12 月 31 日之 合併綜合損益表、合併權益變動表、合併現金流量表，以及合併財務報表附 註（包括重大會計政策彙總），業經本會計師查核竣事。

依本會計師之意見，上開合併財務報表在所有重大方面係依照證券發行 人財務報告編製準則及經金融監督管理委員會認可並發布生效之國際財務報 導準則、國際會計準則、解釋及解釋公告編製，足以允當表達敦泰集團民國 107 年及 106 年 12 月 31 日之合併財務狀況，暨民國 107 年及 106 年 1 月 1 日 至 12 月 31 日之合併財務績效及合併現金流量。

查核意見之基礎

本會計師係依照會計師查核簽證財務報表規則及一般公認審計準則執行
查核工作。本會計師於該等準則下之責任將於會計師查核合併財務報表之責
任段進一步說明。本會計師所隸屬事務所受獨立性規範之人員已依會計師職
業道德規範，與敦泰集團保持超然獨立，並履行該規範之其他責任。本會計
師相信已取得足夠及適切之查核證據，以作為表示查核意見之基礎。
關鍵查核事項

關鍵查核事項係指依本會計師之專業判斷，對敦泰集團民國 107 年度合 併財務報表之查核最為重要之事項。該等事項已於查核合併財務報表整體及 形成查核意見之過程中予以因應，本會計師並不對該等事項單獨表示意見。

  • 26 -

茲對敦泰集團民國 107 年度合併財務報表之關鍵查核事項敘明如下： 商譽之減損評估 

關鍵查核事項說明

敦泰集團民國 107 年 12 月 31 日商譽 1,237,268 仟元，占合併資產總額 11% ，對整體合併財務報表係屬重大。敦泰集團之商譽係反向併購敦泰電子股 份有限公司（原名旭曜科技股份有限公司）所產生。管理階層於評估商譽是 否減損時，係以敦泰集團之觸控和驅動整合晶片為獨立之現金產生單位，依 未來營運現金流量並使用適當之折現率衡量可回收金額，用可回收金額與帳 列商譽金額比較，評估商譽有無減損情事。

管理階層於決定未來營運現金流量時涉及管理階層之主觀判斷，且可能 受未來市場或經濟景氣影響，包括上述現金產生單位之銷售成長率、利潤率 及折現率等，因此將商譽之減損評估列為 107 年度之關鍵查核事項。 

商譽減損評估之相關會計政策、會計估計及假設之不確定性估計與攸關
揭露資訊，請參閱附註四、五及十六。

本會計師對於上述關鍵查核事項所執行之主要查核程序如下：

  1. 取得及複核管理階層編製之觸控和驅動整合晶片之資產減損評估；

  2. 了解管理階層估計該觸控和驅動整合晶片之未來營運展望市場成長率、 市場佔有率、銷售成長率及利潤率之過程及依據，並取得外部相關產業 未來趨勢分析，評估管理階層預測市場成長率之合理性及其他假設；及

  3. 評估及諮詢本事務所內部專家，包括無風險報酬利率、波動性及風險溢 酬等假設，以判斷加權帄均資金成本率所屬產業係屬允當。

存貨評價

關鍵查核事項說明

本會計師關注此風險，係因存貨之價值受到市場需求波動及技術變化快 速，可能導致存貨滯銷過時或淨變現價值降低而產生損失，敦泰電子股份有 限公司及其子公司其提列存貨跌價及呆滯損失之會計政策，係按照存貨庫齡 及存貨成本與淨變現價值孰低提列存貨跌價及呆滯損失，該資料來源係管理 階層根據存貨之銷售情形與過時狀況，進行各項產品可能損失情形之判斷與 評估。因此本會計師認為存貨評價可能存有風險，故列為 107 年度之關鍵查 核事項。

  • 27 - 
本會計師對於上述關鍵查核事項所執行之主要查核程序如下：

  1. 取得管理階層編製之存貨成本與淨變現價值孰低之評估資料，瞭解其存 貨備抵跌價損失所採用提列政策與程序，包括決定淨變現價值之方式。 測試存貨庫齡分析之分類及金額正確性，抽核近期銷售及進貨紀錄，以 評估其銷售情形與淨變現價值之合理性。

  2. 瞭解取得管理階層另外針對過時陳舊存貨項目提列存貨跌價及呆滯損失 之判斷，與其討論存貨近期銷售狀況及未來可能去化估計之合理性，並 抽核存貨近期銷售狀況，以評估其針對過時存貨提列存貨跌價及呆滯損 失之金額是否適當。

銷貨收入

關鍵查核事項說明

銷售觸控和驅動整合晶片之收入係投資人及管理階層評估敦泰集團財務 或業務績效之主要指標。由於管理階層可能存有達成預計財務目標的壓力， 集團對銷售觸控和驅動整合晶片之收入可能會有收入認列不正確之風險，因 此將銷售觸控和驅動整合晶片之收入認列列為 107 年度年度之關鍵查核事項。 本會計師對於上述關鍵查核事項所執行之主要查核程序如下：

  1. 測試銷貨及收款作業循環內控制度設計及執行之有效性；

  2. 取得 107 年度銷貨客戶排行，針對本年度主要客戶消長變化及其銷貨金 額增減變動，予以分析原因。

  3. 分析產品別銷貨數量、銷貨收入及銷貨毛利有無重大異常；及

  4. 在銷售客戶中，抽樣核對訂購單、出貨單及收款紀錄，以確認收入之真 實性。

其他事項

敦泰電子股份有限公司業已編製民國 107 及 106 年度之個體財務報表， 並經本會計師出具無保留意見之查核報告在案，備供參考。 管理階層與治理單位對合併財務報表之責任 

管理階層之責任係依照證券發行人財務報告編製準則及經金融監督管理
委員會認可並發布生效之國際財務報導準則、國際會計準則、解釋及解釋公
告編製允當表達之合併財務報表，且維持與合併財務報表編製有關之必要內
部控制，以確保合併財務報表未存有導因於舞弊或錯誤之重大不實表達。
  • 28 - 
於編製合併財務報表時，管理階層之責任亦包括評估敦泰集團繼續經營
之能力、相關事項之揭露，以及繼續經營會計基礎之採用，除非管理階層意
圖清算敦泰集團或停止營業，或除清算或停業外別無實際可行之其他方案。

敦泰集團之治理單位（含審計委員會）負有監督財務報導流程之責任。
會計師查核合併財務報表之責任

本會計師查核合併財務報表之目的，係對合併財務報表整體是否存有導
因於舞弊或錯誤之重大不實表達取得合理確信，並出具查核報告。合理確信
係高度確信，惟依照一般公認審計準則執行之查核工作無法保證必能偵出合
併財務報表存有之重大不實表達。不實表達可能導因於舞弊或錯誤。如不實
表達之個別金額或彙總數可合理預期將影響合併財務報表使用者所作之經濟
決策，則被認為具有重大性。

本會計師依照一般公認審計準則查核時，運用專業判斷並保持專業上之
懷疑。本會計師亦執行下列工作：

  1. 辨認並評估合併財務報表導因於舞弊或錯誤之重大不實表達風險；對所 評估之風險設計及執行適當之因應對策；並取得足夠及適切之查核證據 以作為查核意見之基礎。因舞弊可能涉及共謀、偽造、故意遺漏、不實 聲明或踰越內部控制，故未偵出導因於舞弊之重大不實表達之風險高於 導因於錯誤者。

  2. 對與查核攸關之內部控制取得必要之瞭解，以設計當時情況下適當之查 核程序，惟其目的非對敦泰集團內部控制之有效性表示意見。

  3. 評估管理階層所採用會計政策之適當性，及其所作會計估計與相關揭露 之合理性。

  4. 依據所取得之查核證據，對管理階層採用繼續經營會計基礎之適當性， 以及使敦泰集團繼續經營之能力可能產生重大疑慮之事件或情況是否存 在重大不確定性，作出結論。本會計師若認為該等事件或情況存在重大 不確定性，則須於查核報告中提醒合併財務報表使用者注意合併財務報 表之相關揭露，或於該等揭露係屬不適當時修正查核意見。本會計師之 結論係以截至查核報告日所取得之查核證據為基礎。惟未來事件或情況 可能導致敦泰集團不再具有繼續經營之能力。

  5. 評估合併財務報表（包括相關附註）之整體表達、結構及內容，以及合

  6. 29 - 

併財務報表是否允當表達相關交易及事件。

  1. 對於集團內組成個體之財務資訊取得足夠及適切之查核證據，以對合併 財務報表表示意見。本會計師負責集團查核案件之指導、監督及執行， 並負責形成集團查核意見。

  2. 本會計師與治理單位溝通之事項，包括所規劃之查核範圍及時間，以及

  3. 重大查核發現（包括於查核過程中所辨認之內部控制顯著缺失）。 

本會計師亦向治理單位提供本會計師所隸屬事務所受獨立性規範之人員
已遵循會計師職業道德規範中有關獨立性之聲明，並與治理單位溝通所有可
能被認為會影響會計師獨立性之關係及其他事項（包括相關防護措施）。

本會計師從與治理單位溝通之事項中，決定對敦泰集團民國 107 年度合 併財務報表查核之關鍵查核事項。本會計師於查核報告中敘明該等事項，除 非法令不允許公開揭露特定事項，或在極罕見情況下，本會計師決定不於查 核報告中溝通特定事項，因可合理預期此溝通所產生之負面影響大於所增進 之公眾利益。

==> picture [447 x 164] intentionally omitted <==

==> picture [467 x 12] intentionally omitted <==

  • 30 -

敦泰電子股份有限公司及子公司 合併資產負債表

民國 107 年及 106 年 12 月 31 日

民國107 年及106 年 12 月31 日
代
碼
1100
1120
1125
1170
130X
1476
1479
11XX
1510
1517
1523
1543
1600
1805
1821
1840
1990
15XX
1XXX
代碼
2170
2209
2230
2399
21XX
2570
2640
2645
2670
25XX
2XXX
3110
3210
3220
3235
3271
3280
3200
3310
3350
3300
3410
3420
3425
3400
3500
31XX
36XX
3XXX
3X2X		 資
產
流動資產
現金及約當現金（附註四及六）
透過其他綜合損益按公允價值衡量之金融資產－流動（附註四及八）
備供出售金融資產－流動（附註四及九）
應收帳款淨額（附註四及十二）
存貨（附註四、五及十三）
其他金融資產（附註四及十一）
其他流動資產（附註二四）
流動資產總計
非流動資產
透過損益按公允價值衡量之金融資產－非流動（附註四及七）
透過其他綜合損益按公允價值衡量之金融資產－非流動（附註四及
八）
備供出售金融資產－非流動（附註四及九）
以成本衡量之金融資產－非流動（附註四及十）
不動產、廠房及設備（附註四及十五）
商譽（附註四、五及十六）
其他無形資產（附註四及十七）
遞延所得稅資產（附註四及二四）
其他非流動資產（附註三二）
非流動資產總計
資 產 總 計
負
債
及
權
益
流動負債
應付帳款（附註十八）
其他應付款（附註十九）
本期所得稅負債（附註四及二四）
其他流動負債（附註二二）
流動負債總計
非流動負債
遞延所得稅負債（附註四、五及二四）
淨確定福利負債－非流動（附註四及二十）
存入保證金
其他非流動負債－其他
非流動負債總計
負債總計
歸屬於本公司業主之權益（附註四、二一及二六）
股 本
普 通 股
資本公積
發行溢價
庫 藏 股
認列對子公司所有權權益變動數
員工認股權
員工認股權－逾期失效
資本公積總計
保留盈餘（累積虧損）
法定盈餘公積
未分配盈餘（待彌補虧損）
保留盈餘（累積虧損）總計
其他權益
國外營運機構財務報表換算之兌換差額
透過其他綜合損益按公允價值衡量之金融資產未實現損失
備供出售金融資產未實現損失
其他權益總計
庫藏股票
本公司業主權益總計
非控制權益
權益總計
負 債 及 權 益 總 計		 107年12月31日 ％
21
1
-
9
19
20

1

71
1
2
-
-
12
11
1
1

1

29

100
14
7
3

1

25
-
-
3

-

3

29

26
58
-
-
-

-

58
2
(
13)
(
11)
1
-

-

1
(
3)
71

-

71

100		 單位：新台幣仟元
106年12月31日
金
額
$ 2,355,926
130,716
-
983,496
2,120,600
2,283,900

158,385


8,033,023

112,063
183,253
-
-
1,394,372
1,237,268
148,998
134,858

56,286


3,267,098

$ 11,300,121

$ 1,625,756
794,104
394,493

64,875


2,879,228

30,998
26,096
275,784

10,400


343,278


3,222,506


2,987,432

6,422,355
40,868
20,448
47,476

20,334


6,551,481

186,154
(
1,434,755)

(
1,248,601)

149,454
(
2,290 )

-


147,164

(
393,203)

8,044,273

33,342


8,077,615

$ 11,300,121
 金
額
$ 2,596,128
-
35,814
1,257,525
2,685,765
1,385,904

212,037


8,173,173

-
-
245,640
74,400
1,408,474
3,237,268
210,714
104,501

89,898


5,370,895

$ 13,544,068

$ 1,310,390
738,870
411,977

82,620


2,543,857

15,876
29,620
200,951

10,400


256,847


2,800,704


2,983,700

6,565,204
40,868
1,269
30,179

17,356


6,654,876

186,154

1,058,985


1,245,139

47,154
-
(
2,791)


44,363

(
191,998)

10,736,080

7,284


10,743,364

$ 13,544,068
 ％
19
-
-
9
20
10

2

60
-
-
2
-
10
24
2
1

1

40

100
10
5
3

1

19
-
-
2

-

2

21

22
49
-
-
-

-

49
1

8

9
-
-

-

-
(
1)
79

-

79

100		 
後附之附註係本合併財務報告之一部分。

董事長：胡正大經理人：胡正大

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

==> picture [48 x 46] intentionally omitted <==

會計主管：廖俊杰
  • 31 -

敦泰電子股份有限公司及子公司

合併綜合損益表

民國 107 年及 106 年 1 月 1 日至 12 月 31 日 

單位：新台幣仟元，惟
每股虧損為元
代碼

4000營業收入（附註四及二二）
5000營業成本（附註四、十三及二
三）
5900營業毛利

營業費用（附註二三、二六及
三一）
6100
推銷費用

6200
管理費用

6300
研究發展費用

6000
營業費用合計

6900營業淨（損）利

營業外收入及支出

7050
財務成本（附註二三）
7100
利息收入（附註四）

7235
透過損益按公允價值衡
量之金融資產損益（附
註四）
7679
商譽減損損失（附註四、
五及十六）
7590
其他利益及損失－淨額
7630
外幣兌換利益（損失）
（附
註四）
7000
營業外收入及支出
合計		 107年度 
（接次頁）
  • 32 -

（承前頁）

代碼

7900稅前淨（損）利

7951所得稅利益（費用）（附註四
及二四）
8200本年度淨損

其他綜合損益

不重分類至損益之項目
8311
確定福利計畫之再
衡量數（附註四及
二十）
8349
與不重分類之項目
相關之所得稅（附
註四及二四）
8310
不重分類至損益之
項目
後續可能重分類至損益
之項目
8361
國外營運機構財務
報表換算之兌換
差額（附註四）
8367
透過其他綜合損益
按公允價值衡量
之債務工具投資
未實現評價利益
（附註四）
8362
備供出售金融資產
未實現評價損失
（附註四）
8360
後續可能重分類至
損益之項目
8300
本年度其他綜合損
益合計
8500本年度綜合損益總額
 107年度
金
額
％

( $ 2,503,649 ) (
25 )

15,531

-
(
2,488,118)
(
25)







3,275
-
(
733)

-

2,542

-
104,532
2
501
-

-

-

105,033

2

107,575

1
($ 2,380,543)
(
24)
 106年度
金
額
％
$ 203,733
2
(
306,943)
(
3)
(
103,210)
(
1)




16,581
-
(
1,990)

-

14,591

-
(
386,430 )
(
3 )
-
-
(
1,293)

-
(
387,723)
(
3)
(
373,132)
(
3)
($ 476,342)
(
4)		 
（接次頁）
  • 33 -

（承前頁）

代碼

淨損歸屬於：

8610
本公司業主

8620
非控制權益

8600

綜合損益總額歸屬於：

8710
本公司業主

8720
非控制權益

8700

每股虧損（附註二五）

9750
基 本
 107年度
金
額
％




( $ 2,451,642 ) (
25 )
(
36,476)

-

($ 2,488,118)
(
25)




( $ 2,346,299 ) (
24 )
(
34,244)

-

($ 2,380,543)
(
24)




($ 8.66)
 106年度
金
額
％


( $ 79,680 ) (
1 )
(
23,530)

-
($ 103,210)
(
1)


( $ 452,812 ) (
4 )
(
23,530)

-
($ 476,342)
(
4)


($ 0.28)		 
後附之附註係本合併財務報告之一部分。

董事長：胡正大經理人：胡正大

==> picture [51 x 50] intentionally omitted <==

會計主管：廖俊杰

==> picture [48 x 46] intentionally omitted <==

  • 34 - 
敦泰電子股份有限公司及子公司
合併權益變動表

==> picture [160 x 7] intentionally omitted <==

----- Start of picture text -----

民國 1 0 7 年及 10 6 年 1 月 1 日至 1 2 月 3 1 日
----- End of picture text -----

單位：新台幣仟元


代
碼

A1
106年1月1日餘額

105年度盈餘指撥及分配
B1
提列法定盈餘公積
B5
本公司股東現金股利
D1
106年度淨損
D3
106年度稅後其他綜合損益

D5
106年度綜合損益總額

L1
庫藏股買回（附註二一）
F3
庫藏股轉讓（附註二一及二六）
M7
對子公司所有權益增加（附註二七）
N1
員工認股權酬勞成本（附註二一及二六）
N1
執行認股權計畫下發行之普通股（附註二一及二六）
N1
既得限制員工權利股票（附註二一及二六）
N1
限制員工權利股票酬勞成本（附註二一及二六）
N1
註銷限制員工權利股票（附註二一）

N1
未既得限制員工權利股票返還股利
O1
非控制權益增加（附註二七）

Z1
106年12月31日餘額
A3
追溯適用及追溯重編之影響數

A5
107年1月1日重編後餘額
C5
資本公積配發現金股利
D1
107年度淨損
D3
107年度稅後其他綜合損益

D5
107年度綜合損益總額

L1
庫藏股買回（附註二一）
F3
庫藏股轉讓（附註二一及二六）
M7
對子公司所有權益增加（附註二七）
T1
員工認股權酬勞成本（附註二一及二六）
N1
執行認股權計畫下發行之普通股（附註二一及二六）
O1
非控制權益增加（附註二七）

Z1
107年12月31日餘額
 歸
股
本		 屬


資
本
公
積		 於
本
公

保
留
盈
餘
（
累
積
虧
損
）
未
分
配
盈
餘
（待彌補虧損）
法定盈餘公積
$ 165,045 $ 1,335,160
21,109 (
21,109 )
- (
189,985 )
- (
79,680 )

-

14,591


-
(
65,089)

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8

-

-

186,154
1,058,985

-
(
44,640)

186,154
1,014,345
-
-
- (
2,451,642 )

-

2,542


-
(
2,449,100)

-
-
-
-
-
-
-
-
-
-

-

-

$ 186,154
($ 1,434,755)
 於
本
公

保
留
盈
餘
（
累
積
虧
損
）
未
分
配
盈
餘
（待彌補虧損）
法定盈餘公積
$ 165,045 $ 1,335,160
21,109 (
21,109 )
- (
189,985 )
- (
79,680 )

-

14,591


-
(
65,089)

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8

-

-

186,154
1,058,985

-
(
44,640)

186,154
1,014,345
-
-
- (
2,451,642 )

-

2,542


-
(
2,449,100)

-
-
-
-
-
-
-
-
-
-

-

-

$ 186,154
($ 1,434,755)
 於
本
公

保
留
盈
餘
（
累
積
虧
損
）
未
分
配
盈
餘
（待彌補虧損）
法定盈餘公積
$ 165,045 $ 1,335,160
21,109 (
21,109 )
- (
189,985 )
- (
79,680 )

-

14,591


-
(
65,089)

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8

-

-

186,154
1,058,985

-
(
44,640)

186,154
1,014,345
-
-
- (
2,451,642 )

-

2,542


-
(
2,449,100)

-
-
-
-
-
-
-
-
-
-

-

-

$ 186,154
($ 1,434,755)
 司 司 業 主 之 權

庫
藏
股
票		 益
總
計
非
控
制
權
益		 權
益
總
額
其 他 權 益
國外營運機構
財務報表換算
之
兌
換
差
額
 備供出售金融資產
未
實
現
損
失
 透過其他綜合
損益按公允價值
衡量之金融資產
未
實
現
損
益		 員工未賺得酬勞
普
通
股
$ 2,965,344
-
-
-

-


-

-
-
-
-
18,619
-
-
(
263 )
-

-

2,983,700

-

2,983,700
-
-

-


-

-
-
-
-
3,732

-

$ 2,987,432
 $ 6,625,846
-
-
-

-


-

-
-
687
36,339
20,762
(
28,972 )
-
214
-

-

6,654,876

-

6,654,876
(
150,000 )
-

-


-

-
-
19,179
26,474
952

-

$ 6,551,481







$ 165,045
21,109
-
-

-


-

-
-
-
-
-
-
-
-
-

-

186,154

-

186,154
-
-

-


-

-
-
-
-
-

-

$ 186,154
 $ 1,335,160
(
21,109 )
(
189,985 )
(
79,680 )

14,591

(
65,089)

-
-
-
-
-
-
-
-
8

-

1,058,985
(
44,640)

1,014,345
-
(
2,451,642 )

2,542

(
2,449,100)

-
-
-
-
-

-

($ 1,434,755)







$ 433,584
-
-
-
(
386,430)

(
386,430)

-
-
-
-
-
-
-
-
-

-

47,154

-

47,154
-
-

102,300


102,300

-
-
-
-
-

-

$ 149,454
 ( $ 1,498 )
-
-
-
(
1,293)

(
1,293)

-
-
-
-
-
-
-
-
-

-

(
2,791 )

2,791

-
-
-

-


-

-
-
-
-
-

-

$ -
$ -
-
-
-

-


-

-
-
-
-
-
-
-
-
-

-

-
(
2,791)

(
2,791 )
-
-

501


501

-
-
-
-
-

-

($ 2,290)
 ( $ 36,040 )
-
-
-

-


-

-
-
-
-
-
28,972
7,068
-
-

-

-

-

-
-
-

-


-

-
-
-
-
-

-

$ -
 ( $ 62,992 )
-
-
-

-


-

(
245,812 )
(
116,806 )
-
-
-
-
-
-
-

-

(
191,998 )

-

(
191,998 )
-
-

-


-

(
384,906 )
183,701
-
-
-

-

($ 393,203)
 $ 11,424,449
-
(
189,985 )
(
79,680 )
(
373,132)

(
452,812)

(
245,812 )
116,806
687
36,339
39,381
-
7,068
(
49 )
8

-

10,736,080
(
44,640)

10,691,440
(
150,000 )
(
2,451,642 )

105,343

(
2,346,299)

(
384,906 )
183,701
19,179
26,474
4,684

-

$ 8,044,273
 $ 13,933
-
-
(
23,530 )

-

(
23,530)

-
-
(
687 )
-
-
-
-
-
-

17,568

7,284

-

7,284
-
(
36,476 )

2,232

(
34,244)

-
-
(
19,179 )
-
-

79,481

$ 33,342
 $ 11,438,382
-
(
189,985 )
(
103,210 )
(
373,132)
(
476,342)
(
245,812 )
116,806
-
36,339
39,381
-
7,068
(
49 )
8

17,568
10,743,364
(
44,640)
10,698,724
(
150,000 )
(
2,488,118 )

107,575
(
2,380,543)
(
384,906 )
183,701
-
26,474
4,684

79,481
$ 8,077,615		 
後附之附註係本合併財務報告之一部分。

董事長：胡正大

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經理人：胡正大

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會計主管：廖俊杰

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  • 35 -

敦泰電子股份有限公司及子公司 合併現金流量表

民國 107 年及 106 年 1 月 1 日至 12 月 31 日

單位：新台幣仟元

代
碼
營業活動之現金流量

A10000
本年度稅前淨（損）利

收益費損項目：

A20100
折舊費用

A20200
攤銷費用

A20300
預期信用減損損失迴轉利益

A20400
透過損益按公允價值衡量金融
資產之淨損失
A20900
財務成本

A21200
利息收入

A21900
認股權酬勞成本

A21900
限制員工權利新股酬勞成本

A22500
處分不動產、廠房及設備損失
A23700
存貨跌價及呆滯損失

A23800
商譽減損損失

A24100
未實現外幣兌換損益

A30000
營業資產及負債之淨變動數

A31115
強制透過損益按公允價值衡量
之金融資產
A31150
應收帳款

A31200
存 貨

A31240
其他流動資產

A32150
應付帳款

A32180
其他應付款

A32230
其他流動負債

A32240
淨確定福利負債

A33000
營運產生（使用）之現金

A33300
支付之利息

A33500
支付之所得稅

AAAA
營業活動之淨現金流入
（出）		 107年度


( $ 2,503,649 )



64,564

67,402
(
6,084 )
1,415

786
(
96,737 )

26,474

-

-

750,433

2,000,000

15,856


(
81,672 )

290,765
(
134,052 )

65,080

286,289

41,828
(
17,680 )
(
249)


770,769
(
786 )
(
30,348)


739,635		 106年度

$ 203,733

46,616
70,096
-
-
9,676
(
65,475 )
36,339
7,068
27
51,120
-
(
13,905 )

-
46,223
(
322,093 )
(
87,563 )
(
169,037 )
(
128,262 )
22,305
(
185)
(
293,317 )
(
9,721 )
(
24,635)
(
327,673)		 
（接次頁）
  • 36 -

（承前頁）

代
碼
投資活動之現金流量

B00010
取得透過其他綜合損益按公允價值
衡量之金融資產
B00020
處分透過其他綜合損益按公允價值
衡量之金融資產
B00300
取得備供出售金融資產

B02700
購置不動產、廠房及設備

B04500
購置無形資產

B06500
其他金融資產（增加）減少

B06800
其他非流動資產減少

B07500
收取之利息

BBBB
投資活動之淨現金流（出）入
籌資活動之現金流量

C00100
短期借款減少

C03000
存入保證金增加

C04500
發放現金股利

C04800
員工執行認股權

C04900
庫藏股買回

C05100
庫藏股轉讓

C05500
非控制權益增加

C05800
未既得限制員工權利股票返還股利
C09900
註銷限制員工權利新股

CCCC
籌資活動之淨現金流出

DDDD匯率變動對現金及約當現金之影響

EEEE
現金及約當現金淨減少

E00100年初現金及約當現金餘額

E00200年底現金及約當現金餘額
 107年度


( $ 59,090 )
36,179

-
(
73,996 )
(
3,512 )
(
846,904 )

33,026

86,828

(
827,469)




-

70,539
(
150,000 )

4,684
(
384,906 )

183,701

79,481

-

-

(
196,501)


44,133

(
240,202 )

2,596,128

$ 2,355,926
 106年度

$ -
-
(
123,620 )
(
75,208 )
(
84,203 )
768,087
58,273

60,945

604,274

(
608,630 )
89,858
(
189,985 )
39,381
(
245,812 )
116,806
17,568
8
(
77)
(
780,883)
(
165,369)
(
669,651 )

3,265,779
$ 2,596,128		 
後附之附註係本合併財務報告之一部分。

董事長：胡正大經理人：胡正大會計主管：廖俊杰

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  • 37 -

Attachment 5

FocalTech 2018 Deficit Compensation Table

Unit: NT$
Item Amount
Undistributed Earnings at Year Beginning
1,058,983,658
Minus: Tracking the number of impacts of IFRS9
(44,640,000)
Minus: Net Loss of 2018 (2,451,641,570)
Plus: Remeasurement of defined welfare plan for this period 2,542,169
Deficit to be Compensated for this period (1,434,755,743)
Compensation Items:
Statutory 186,154,915
Additional paid-in capital in excess of par 1,248,600,828
Amount after the compensation 0

Chairman: CEO:

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----- Start of picture text -----

CFO:
----- End of picture text -----

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  • 38 -

Attachment 6

Amendment to the “Articles of Incorporation” Comparison Table

Article Content Content Change Cause
Before Amended After Amended
5-3 Article newly added. The employees in subordinate companies
are eligible for the transfer of treasury
shares, allotment of new shares, the issue
of employee stock options and the
restriction shares with particular
requirements, which are authorized to the
board of directors to define.		 In accordance with
Article 167-1,
Article 167-2 and
Article 267 of the
Companies Law
Amendment.
9 The shareholders' meeting is divided into
two, ordinary meetings and temporary
meetings,~~which are convened by the board~~
~~of directors according to law. The regular~~
~~ti i hld d hld ithi~~		 The shareholders' meeting is divided into
two, ordinary meetings and temporary
meetings,the regular meeting shall be
convened by the board of directors within		 In accordance with
Article 173-1 of the
Companies Law
Amendment.

six months after the end of each fiscal
year; the convening of the temporary
meeting shall be conducted in accordance
~~meeng s e once a year an e wn~~
~~i th ft th d f h fil~~
~~sx mons aer e en o eac sca year.~~
~~The temporary meeting will be convened~~
~~according to law when necessary.~~For the
shareholders' meeting convening, shall
notify the shareholders and announce the
date, place and convening of the meeting
before 30 days for ordinary meetings and
15 days for temporary meetings. For a
shareholder holding a registered stock of
less than one thousand shares, the notice
could be done by announcing.

with the relevant laws and regulations of
the Republic of China.For the
shareholders' meeting convening, shall
notify the shareholders and announce the
date, place and convening of the meeting
before 30 days for ordinary meetings and
15 days for temporary meetings. For a
shareholder holding a registered stock of
less than one thousand shares, the notice
could be done by announcing.
16 The Company has9 to 11directors, and
adopts the nomination system for
candidates and is elected by the
shareholders' meetingwith the abilityto act		 The Company has7 to 9directors, and
adopts the nomination system for
candidates and is elected by the
shareholders' meetingwith the abilityto		 Company's
operational needs.
  • 39 -
Article Content Content Change Cause
Before Amended After Amended
for a term of three years. If a representative
of a legal person shareholder is elected as a
director, the legal person may be reassigned
at any time, but only to supplement the
original term. The company may with the
approval of relevant laws and regulations,
purchase liability insurance for directors by
resolution of the board of directors, so as to
reduce the risk of directors being sued by
shareholders or other related parties for
performing their duties according to law.		 act for a term of three years. If a
representative of a legal person
shareholder is elected as a director, the
legal person may be reassigned at any
time, but only to supplement the original
term. The company may with the
approval of relevant laws and regulations,
purchase liability insurance for directors
by resolution of the board of directors, so
as to reduce the risk of directors being
sued by shareholders or other related
parties for performing their duties
according to law.
26-1 If the company makes a profit in the year, it
should extract no less than 1% for the
employee's remuneration, and be resolute
by the board of directors whether to
distribute it by stock or cash. The object
must be employees who meet certain
conditions.
The company can base on the profit
amount, and let the the board of directors
resolute the director's remuneration which
is less than 1.5%. The employee’s
compensation and the directors'
compensation shall be reported to the
shareholders' meeting.
However, when the company still has
accumulated losses,it should retain the		 If the company makes a profit in the year,
it should extract no less than 1% for the
employee's remuneration, and be resolute
by the board of directors whether to
distribute it by stock or cash. The object
must be employees who meet certain
conditions, and the conditions are
authorized by the board of directors to
resolute.
The company can base on the profit
amount, and let the board of directors
resolute the director's remuneration
which is less than 1.5%. The employee’s
compensation and the directors'
compensation shall be reported to the
shareholders' meeting.		 In accordance with
Article 235-1 of the
Companies Law
Amendment.
  • 40 -
Article Content Content Change Cause
Before Amended After Amended
amount of compensation in advance, and
then provide employees' compensation and
directors' compensation according to the
proportion of the preceding paragraph.		 However, when the company still has
accumulated losses, it should retain the
amount of compensation in advance, and
then provide employees' compensation
and directors' compensation according to
the proportion of the preceding
paragraph.
26-2 Article newly added. The Company's earning distribution or
deficit compensation could be done after
the end of each quarter. Before the
earning is distributed in the first three
quarters, the tax liability, compensation
for the accumulated deficit, and the
estimated employee compensation and
the directors' renumeration should be
reserved frist. Then 10% of the rest
amount should be extracted to the legal
reserve. After the special surplus reserve
is proposed or rescheduled according to
the law, the remaining amount plus the
year beginning undistributed retained
rarnings is available for distribution.
Considering the operating conditions, the
board of directors could make the
proposal for earning distribution in terms
of cash or shares. The earning
distribution proposal in shares is vaild
only after the approval of shareholders
meeting.		 In accordance with
Article 228-1 of the
Companies Law
Amendment.
  • 41 -
Article Content Content Change Cause
Before Amended After Amended
27 If the Company has earnings annually, the
payments to tax liability and the
compensation of the accumulated deficit
should be done first. Then 10% of the rest
amount should be extracted to the legal
reserve. If the legal reserve has reached the
amount of paid-in capital of the company,
this extraction may not be required. In
addition, the special reserve shall be
reversed or reserved, according to the law
or operating requirements. The remaining
amount plus the year beginning
undistributed retained earnings is available
for distribution in terms of cash or shares,
which is proposed by the Board of
Directors~~and approved by the shareholders’~~
~~meeting.~~
The company's dividend policy is based on
the current and future development plans,
If the Company has earnings annually,
the payments to tax liability and the
compensation of the accumulated deficit
should be done first. Then 10% of the rest
amount should be extracted to the legal
reserve. If the legal reserve has reached
the amount of paid-in capital of the
company, this extraction may not be
required. In addition, the special reserve
shall be reversed or reserved, according
to the law or operating requirements. The
remaining amount plus the year
beginning undistributed retained earnings
is available for distribution in terms of
cash or shares, which is proposed by the
Board of Directors. If the distribution is
made in terms of shares, it is required to
be approved by the shareholders’
meeting.
In accordance with the provisions of the
Company Law, the Company authorizes
the board of directors, with more than
two-thirds of the directors attendance and
the agreement of more than half of the
attending directors, to distribute the
dividends from the earnings, or dividends
from legal reserve and additional paid-in
capital fully or partially specified in the
first paragraph of Article 241 of the
Company Law. This resolution should be
reported to the shareholders' meeting
after the execution.
In accordance with
Article 240 of the
Companies Law
Amendment.
  • 42 -
Article Content Content Change Cause
Before Amended After Amended
considering the investment environment,
capital needs and domestic and
international competition, and taking into
account the interests of shareholders, etc.,
the annual earning is not less than 10% of
the annual dividend distribution dividends.
When distributing dividends to
shareholders, it can be cash or stock, in
which the cash dividend is not less than
10% of the total dividend, but the cash
dividend of less than NT$0.5 per share will
not be issued.		 The company's dividend policy is based
on the current and future development
plans, considering the investment
environment, capital needs and domestic
and international competition, and taking
into account the interests of shareholders,
etc., the annual earning is not less than
10% of the annual dividend distribution
dividends. When distributing dividends to
shareholders, it can be cash or stock, in
which the cash dividend is not less than
10% of the total dividend, but the cash
dividend of less than NT$0.5 per share
will not be issued.
31 These Articles of Incorporation are agreed
to and signed on December 25, 2005 and
the first Amendment was approved on
January 19, 2006, the second Amendment
on March 28, 2006, the third Amendment
on October 5, 2006, the fourth Amendment
on May 10,2007, the fifth Amendment on
June 6, 2009, the sixth Amendment on June
16, 2009, the seventh Amendment on June
fifteenth ,2011, the eighth Amendment on
June 13, 2012, the ninth Amendment on
June 18, 2013, the tenth Amendment on
June 30, 2014, the eleventh Amendment on
January 5, 2015, the twelfth Amendment
on June 10, 2015, the thirteenth
Amendment on June 22, 2016.		 These Articles of Incorporation are
agreed to and signed on December 25,
2005 and the first Amendment was
approved on January 19, 2006, the second
Amendment on March 28, 2006, the third
Amendment on October 5, 2006, the
fourth Amendment on May 10,2007, the
fifth Amendment on June 6, 2009, the
sixth Amendment on June 16, 2009, the
seventh Amendment on June
fifteenth ,2011, the eighth Amendment on
June 13, 2012, the ninth Amendment on
June 18, 2013, the tenth Amendment on
June 30, 2014, the eleventh Amendment
on January 5, 2015, the twelfth
Amendment on June 10, 2015, the
thirteenth Amendment on June 22, 2016,
The fourteenth
Amendment date
added.
  • 43 -
Article Content Content Change Cause
Before Amended After Amended
the fourteenth Amendment on June 20,
2019.
  • 44 -

Attachment 7

Amendment to the “Operational Procedures for Acquisition and Disposal of Assets” Comparison Table

Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
Article 2:
The term "assets" as used in these Regulations
includes the following:
1.Investments in stocks, government bonds,
corporate bonds, financial bonds, securities
representing interest in a fund, depositary receipts,
call (put) warrants, beneficial interest securities, and
asset-backed securities.
2.Real property (including land, houses and
buildings, investment property, and construction
enterprise inventory) and equipment.
3.Memberships.
4.Patents, copyrights, trademarks, franchise rights,
and other intangible assets.
5.Claims of financial institutions (including
receivables, bills purchased and discounted, loans,
and overdue receivables).
6. Derivatives
7. Assets acquired or disposed of in connection with
mergers, demergers, acquisitions, or transfer of
shares in accordance with law.
8.Other major assets.		 Article 2:
The term "assets" as used in these
Regulations includes the following:
1.Investments in stocks, government bonds,
corporate bonds, financial bonds, securities
representing interest in a fund, depositary
receipts, call (put) warrants, beneficial
interest securities, and asset-backed
securities.
2.Real property (including land, houses and
buildings, investment property, and
construction enterprise inventory) and
equipment.
3.Memberships.
4.Patents, copyrights, trademarks, franchise
rights, and other intangible assets.
5.Right-of-use assets.
6.Claims of financial institutions (including
receivables, bills purchased and discounted,
loans, and overdue receivables).
7.Derivatives.
8.Assets acquired or disposed of in
connection with mergers, demergers,
acquisitions, or transfer of shares in
accordance with law.
9.Other major assets.

In accordance
with Article 3 of
“Regulations
Governing the
Acquisition and
Disposal of Assets
by Public
Companies”
that defines the
range of assets
Article 4:
Professional appraisers and their officers, certified
public accounts, attorneys, and securities
underwriters that provide public companies with
appraisal reports, certified public accountant's
opinions, attorney's opinions, or underwriter's
opinions~~shall not have relationship with the trader:~~		 Article 4:
Professional appraisers and their officers,
certified public accounts, attorneys, and
securities underwriters that provide public
companies with appraisal reports, certified
public accountant's opinions, attorney's
opinions, or underwriter's opinions shall
meet the following requirements:
1.May not have previously received a final
and unappealable sentence to imprisonment
for 1 year or longer for a violation of the
Act, the Company Act, the Banking Act of
The Republic of China, the Insurance Act,
the Financial Holding Company Act, or the
Business Entity Accounting Act, or for
fraud, breachoftrust, embezzlement,
In accordance
with Article 5 of
“Regulations
Governing the
Acquisition and
Disposal of Assets
by Public
Companies” about
note to external
experts.
  • 45 -
Content Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）











































forgery of documents, or occupational
crime. However, this provision does not
apply if 3 years have already passed since
completion of service of the sentence, since
expiration of the period of a suspended
sentence, or since a pardon was received.
2.May not be a related party or de facto
related party of any party to the transaction.
3.If the company is required to obtain
appraisal reports from two or more
professional appraisers, the different
professional appraisers or appraisal officers
may not be related parties or de facto
related parties of each other.
When issuing an appraisal report or
opinion, the personnel referred to in the
preceding paragraph shall comply with the
following:
1.Prior to accepting a case, they shall
prudently assess their own professional
capabilities, practical experience, and
independence.
2.When examining a case, they shall
appropriately plan and execute adequate
working procedures, in order to produce a
conclusion and use the conclusion as the
basis for issuing the report or opinion. The
related working procedures, data collected,
and conclusion shall be fully and accurately
specified in the case working papers.
3.They shall undertake an item-by-item
evaluation of the comprehensiveness,
accuracy, and reasonableness of the sources
of data used, the parameters, and the
information, as the basis for issuance of the
appraisal report or the opinion.
4.They shall issue a statement attesting to
the professional competence and
independence of the personnel who
prepared the report or opinion, and that
they have evaluated and found that the
information used is reasonable and
accurate, and that they have complied with
applicable laws and regulations.

Article 6:
Inacquiring ordisposing of realproperty, or		 Article 6:
Inacquiring ordisposing of realproperty,		 In accordance
with “Regulations
- 46 -
Content Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
equipment thereof where the
transaction amount reaches 20 percent of
the company's paid-in capital or NT$300
million or more, the company, unless
transacting with government agency,
engaging others to build on its own land,
engaging others to build on rented land,
or acquiring or disposing of equipment
thereof held 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:
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; the same procedure shall also
be followed whenever there is any
subsequent change to the terms and
conditions of the transaction~~should be~~
~~handled in accordance with the above~~
~~procedures.~~
2.Where the transaction amount is NT$1
billion or more, appraisals from two or
more professional appraisers shall be
obtained.
3.Where any one of the following
circumstances applies with respect to the
professional appraiser's appraisal results,
unless all the appraisal results for the
assets to be acquired are higher than the
transaction amount, or all the appraisal
results for the assets to be disposed of
are lower than the transaction amount, a
certified public accountant shall be
engaged to perform the appraisal in
accordance with the provisions of
Statement of Auditing Standards No. 20
published by the ROC Accounting
Research and Development Foundation
(ARDF) and render a specific opinion
regarding the reason for the discrepancy
and the appropriateness ofthe
equipment, or right-of-use assetsthereof
where the transaction amount reaches 20
percent of the company's paid-in capital or
NT$300 million or more, the company,
unless transacting witha domestic
government agency, engaging others to
build on its own land, engaging others to
build on rented land, or acquiring or
disposing of equipmentor right-of-use
assets thereof held 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:
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; the same
procedure shall also be followed whenever
there is any subsequent change to the terms
and conditions of the transaction.
2.Where the transaction amount is NT$1
billion or more, appraisals from two or
more professional appraisers shall be
obtained.
3.Where any one of the following
circumstances applies with respect to the
professional appraiser's appraisal results,
unless all the appraisal results for the assets
to be acquired are higher than the
transaction amount, or all the appraisal
results for the assets to be disposed of are
lower than the transaction amount, a
certified public accountant shall be
engaged to perform the appraisal in
accordance with the provisions of
Statement of Auditing Standards No. 20
published by the ROC Accounting
Research and Development Foundation
(ARDF) and render a specific opinion
regarding the reason for the discrepancy
and the appropriateness of the transaction
price:
A.The discrepancy betweenthe appraisal
Governing the
Acquisition and
Disposal of Assets
by Public
Companies”
increase the right
to use assets and
make
discretionary
amendments.
  • 47 -
Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
transaction price:
A.The discrepancy between the appraisal
result and the transaction amount is 20
percent or more of the transaction
amount.
B.The discrepancy between the appraisal
results of two or more professional
appraisers is 10 percent or more of the
transaction amount.
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.
Except where a limited price, specified
price, or special price is employed by a
construction enterprise as the reference
basis for the transaction price, if an
appraisal report cannot be obtained in
time and there is a legitimate reason for
the delay, the report, and the certified
public accountant's opinion under
subparagraph 3 of the preceding
paragraph, shall be obtained within 2
weeks counting inclusively from the date
of occurrence.



result and the transaction amount is 20
percent or more of the transaction amount.
B.The discrepancy between the appraisal
results of two or more professional
appraisers is 10 percent or more of the
transaction amount.
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.
Except where a limited price, specified
price, or special price is employed by a
construction enterprise as the reference
basis for the transaction price, if an
appraisal report cannot be obtained in time
and there is a legitimate reason for the
delay, the report, and the certified public
accountant's opinion under subparagraph 3
of the preceding paragraph, shall be
obtained within 2 weeks counting
inclusively from the date of occurrence.
Article 8:
Where a public company acquires or disposes of
intangible assets or memberships and the
transaction amount reaches 20 percent or more of
paid-in capital or NT$300 million or more, except
in transactions with a government agency, the
company shall engage a certified public accountant
prior to the date of occurrence of the event to render
an opinion on the reasonableness of the transaction
price; the CPA shall comply with the provisions of
Statement of Auditing Standards No. 20 published
by the ARDF.		 Article 8:
Where a public company acquires or
disposes of intangible assets orright-of-use
assetsthereof or memberships and the
transaction amount reaches 20 percent or
more of paid-in capital or NT$300 million
or more, except in transactions with a
domesticgovernment agency, the company
shall engage a certified public accountant
prior to the date of occurrence of the event
to render an opinion on the reasonableness
of the transaction price; the CPA shall
comply with the provisions of Statement of
Auditing Standards No. 20 published by
the ARDF.
In accordance
with “Regulations
Governing the
Acquisition and
Disposal of Assets
by Public
Companies”
increase the right
to use assets.
  • 48 -
Content Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
Article 8-1:
The calculation of the transaction amounts referred
to in the preceding three articles shall be done in
accordance with Article 3, paragraph 2 herein, and
"within the preceding year" as used herein refers to
the year preceding the date of occurrence of the
current transaction. Items for which an appraisal
report from a professional appraiser or a CPA's
opinion has been obtained need not be counted
toward the transaction amount.		 Article 8-1:
The calculation of the transaction amounts
referred to in the preceding three articles
shall be done in accordance with Article
31,paragraph 2 herein, and "within the
preceding year" as used herein refers to the
year preceding the date of occurrence of
the current transaction. Items for which an
appraisal report from a professional
appraiser or a CPA's opinion has been
obtained need not be counted toward the
transaction amount.		 Cooperate the
“Regulations
Governing the
Acquisition and
Disposal of
Assets by
Public
Companies”
and adjust the
order
Article 16:
Information required to be publicly announced and
reported in accordance with the provisions of the
preceding Chapter on acquisitions and disposals of
assets by a public company's subsidiary that is not
itself a public company in Taiwan shall be reported
by the public company.
The paid-in capital or total assets of the public
company shall be the standard applicable to a
subsidiary referred to in the preceding paragraph in
determining whether, relative to paid-in capital or
total assets, it reaches a threshold requiring public
announcement and regulatory filing under Article
3~~0,~~paragraph 1.		 Article 16:
Information required to be publicly
announced and reported in accordance with
the provisions of the preceding Chapter on
acquisitions and disposals of assets by a
public company's subsidiary that is not
itself a public company in Taiwan shall be
reported by the public company.
The paid-in capital or total assets of the
public company shall be the standard
applicable to a subsidiary referred to in the
preceding paragraph in determining
whether, relative to paid-in capital or total
assets, it reaches a threshold requiring
public announcement and regulatory filing
under Article31, paragraph 1.
Cooperate the
“Regulations
Governing the
Acquisition and
Disposal of
Assets by
Public
Companies”
and adjust the
order
Article 16-1:
For the calculation of 10 percent of total assets
under these Regulations, the total assets stated in the
most recent parent company only financial report or
individual financial report prepared under the
Regulations Governing the Preparation of Financial
Reports by Securities Issuers shall be used.
In the case of a company whose shares have no par
value or a par value other than NT$10-for the
calculation of transaction amounts of 20 percent of
paid-in capital under these Regulations, 10 percent
of equity attributable to owners of the parent shall
be substituted
Article 16-1:
For the calculation of 10 percent of total
assets under these Regulations, the total
assets stated in the most recent parent
company only financial report or individual
financial report prepared under the
Regulations Governing the Preparation of
Financial Reports by Securities Issuers
shall be used.
In the case of a company whose shares
have no par value or a par value other than
NT$10-for the calculation of transaction
amounts of 20 percent of paid-in capital
under these Regulations, 10 percent of
equity attributable to owners of the parent
shall be substituted; for the threshold and
rules of the transaction amount applied to
those companies withthe paidincapital
The amendment
in accordance
with “Regulations
Governing the
Acquisition and
Disposal of Assets
by Public
Companies” , if
the stock is not
denominated or
the denomination
is not NT$10, the
relevant paid-in
capital will be
calculated at
NT$10 billion.
  • 49 -
Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
more than NT 10 billion would samely be
applied to those companies issuing shares
without par value or the par value other
than NT 10 but the equity value
attributable to parent companies more than
NT$20 billion.
Article 18
When a public company intends to acquire or
dispose of real property or to a related party, or
when it intends to acquire or dispose of assets other
than real property or to a related party and the
transaction amount reaches 20 percent or more of
paid-in capital, 10 percent or more of the company's
total assets, or NT$300 million or more, except in
trading of government bonds or bonds under
repurchase and resale agreements, or subscription or
redemption of money market funds issued by
securities investment trust enterprises, the company
may not proceed to enter into a transaction contract
or make a payment until the following matters have
been approved by the board of directors and
recognized by the supervisors:
1.The purpose, necessity and anticipated benefit of
the acquisition or disposal of assets.
2.The reason for choosing the related party as a
transaction counterparty.
3.With respect to the acquisition of real property
from a related party, information regarding appraisal
of the reasonableness of the preliminary transaction
terms in accordance with Article 16 and Article 17.
4.The date and price at which the related party
originally acquired the real property, the original
transaction counterparty, and that transaction
counterparty's relationship to the 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 a CPA's opinion obtained in compliance with the
preceding article.
7.Restrictive covenants and other important

Article 18
When a public company intends to acquire
or dispose of real propertyor right-of-use
assets thereof fromor to a related party, or
when it intends to acquire or dispose of
assets other than real property or
right-of-use assets thereof fromor to a
related party and the transaction amount
reaches 20 percent or more of paid-in
capital, 10 percent or more of the
company's total assets, or NT$300 million
or more, except in trading ofdomestic
government bonds or bonds under
repurchase and resale agreements, or
subscription or redemption of money
market funds issued by domestic securities
investment trust enterprises, the company
may not proceed to enter into a transaction
contract or make a payment until the
following matters have been approved by
the board of directors and recognized by
the supervisors:
1.The purpose, necessity and anticipated
benefit of the acquisition or disposal of
assets.
2.The reason for choosing the related party
as a transaction counterparty.
3.With respect to the acquisition of real
propertyor right-of-use assets thereoffrom
a related party, information regarding
appraisal of the reasonableness of the
preliminary transaction terms in
accordance with Article 16 and Article 17.
4.The date and price at which the related
party originally acquired the real property,
the original transaction counterparty, and
that transaction counterparty's relationship
to the company and therelated party.		 Cooperate the
“Regulations
Governing the
Acquisition and
Disposal of
Assets by
Public
Companies”
and adjust the
order
  • 50 -
Content Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
stipulations associated with the transaction.
The calculation of the transaction amounts referred
to in the preceding paragraph shall be made in
accordance with Article 31, paragraph 2 herein, and
"within the preceding year" as used herein refers to
the year preceding the date of occurrence of the
current transaction. Items that have been approved
by the board of directors and recognized by the
supervisors need not be counted toward the
transaction amount.
With respect to the types of transactions listed
below, when to be conducted between a public
company and its parent or subsidiaries, or between
its subsidiaries in which it directly or indirectly
holds 100 percent of the issued shares or authorized
capital, the company's board of directors may
pursuant to Article 11to delegate the board chairman
to decide such matters when the transaction is
within a certain amount and have the decisions
subsequently submitted to and ratified by the next
board of directors meeting Where the position of
independent director has been created in accordance
with the provisions of the Act, when a matter is
submitted for discussion by the board of directors
pursuant to paragraph 1, the board of directors shall
take into full consideration each independent
director's opinions. If an independent director
objects to or expresses reservations about any
matter, it shall be recorded in the minutes of the
board of directors meeting.
Where an audit committee has been established in
accordance with the provisions of the Act, the
matters for which paragraph 1 requires recognition
by the supervisors shall first be approved by more
than half of all audit committee members and then
submitted to the board of directors for a resolution,
and shall be subject to mutatis mutandis application
of Article 6, paragraphs 4 and 5.
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 a CPA's opinion obtained in
compliance with the preceding article.
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 31,
paragraph 2 herein, and "within the
preceding year" as used herein refers to the
year preceding the date of occurrence of
the current transaction. Items that have
been approved by the board of directors
and recognized by the supervisors need not
be counted toward the transaction amount.
With respect to the types of transactions
listed below, when to be conducted
between a public company and its parent or
subsidiaries, or between its subsidiaries in
which it directly or indirectly holds 100
percent of the issued shares or authorized
capital, the company's board of directors
may pursuant to Article 11 to delegate the
board chairman to decide such matters
when the transaction is within a certain
amount and have the decisions
subsequently submitted to and ratified by
the next board of directors meeting:
1.Acquisition or disposal of equipment or
right-of-use assets thereof held for business
use.
2.Acquisition or disposal of real property
right-of-use of real property held for
business use.
Where the position of independent director
has been created in accordance with the
provisions of the Act, when a matter is
submitted for discussion by the board of
directors pursuant to paragraph 1, the board
of directors shall take into full
considerationeach independent director's


  • 51 -
Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
opinions. If an independent director objects
to or expresses reservations about any
matter, it shall be recorded in the minutes
of the board of directors meeting.
Where an audit committee has been
established in accordance with the
provisions of the Act, the matters for which
paragraph 1 requires recognition by the
supervisors shall first be approved by more
than half of all audit committee members
and then submitted to the board of directors
for a resolution, and shall be subject to
mutatis mutandis application of Article 6,
paragraphs 4 and5.

Article 19
any that acquires real property from a related party
shall evaluate the reasonableness of the transaction
costs by the following means:
1.Based upon the related party's transaction price
plus necessary interest on funding and the costs to
be duly borne by the buyer. "Necessary interest on
funding" is imputed as the weighted average interest
rate on borrowing in the year the company
purchases the property; provided, it may not be
higher than the maximum non-financial industry
lending rate announced by the Ministry of Finance.
2.Total loan value appraisal from a financial
institution where the related party has previously
created a mortgage on the property as security for a
loan; provided, the actual cumulative amount loaned
by the financial institution shall have been 70
percent or more of the financial institution's
appraised loan value of the property and the period
of the loan shall have been 1 year or more.
However, this shall not apply where the financial
institution is a related party of one of the transaction
counterparties.
Where land and structures thereupon are combined
as a single property purchased in one transaction,
the transaction costs for the land and the structures
may be separately appraised in accordance with
either of the means listed in the preceding
paragraph.
A public company that acquires real property from a
related party and appraises the cost of the real
propertyin accordance with theprecedingtwo



Article 19
A public company that acquires real
propertyor right-of-use assets thereoffrom
a related party shall evaluate the
reasonableness of the transaction costs by
the following means:
1.Based upon the related party's transaction
price plus necessary interest on funding
and the costs to be duly borne by the buyer.
"Necessary interest on funding" is imputed
as the weighted average interest rate on
borrowing in the year the company
purchases the property; provided, it may
not be higher than the maximum
non-financial industry lending rate
announced by the Ministry of Finance.
2.Total loan value appraisal from a
financial institution where the related party
has previously created a mortgage on the
property as security for a loan; provided,
the actual cumulative amount loaned by the
financial institution shall have been 70
percent or more of the financial
institution's appraised loan value of the
property and the period of the loan shall
have been 1 year or more. However, this
shall not apply where the financial
institution is a related party of one of the
transaction counterparties.
Where land and structures thereupon are
combined as a single property purchasedor
leasedin one transaction,the transaction



In accordance
with
“Regulations
Governing the
Acquisition and
Disposal of
Assets by
Public
Companies”
increase the
right to use
assets.
  • 52 -
Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
paragraphs shall also engage a CPA to check the
appraisal and render a specific opinion.
Where a public company acquires real property
from a related party and one of the following
circumstances exists, the acquisition shall be
conducted in accordance with the Article 18, and the
preceding three paragraphs do not apply:
1.The related party acquired the real property
through inheritance or as a gift.
2.More than 5 years will have elapsed from the time
the related party signed the contract to obtain the
real property or right-of-use assets thereof to the
signing date for the current transaction.
3.The real property is acquired through signing of a
joint development contract with the related party, or
through engaging a related party to build real
property, either on the company's own land or on
rented land.
costs for the land and the structures may be
separately appraised in accordance with
either of the means listed in the preceding
paragraph.
A public company that acquires real
propertyor right-of-use assets thereoffrom
a related party and appraises the cost of the
real propertyor right-of-use assets thereof
in accordance with the preceding two
paragraphs shall also engage a CPA to
check the appraisal and render a specific
opinion.
Where a public company acquires real
propertyor right-of-use assets thereof from
a related party and one of the following
circumstances exists, the acquisition shall
be conducted in accordance with the
Article 18, and the preceding three
paragraphs do not apply:
1.The related party acquired the real
propertyor right-of-use assets thereof
through inheritance or as a gift.
2.More than 5 years will have elapsed from
the time the related party signed the
contract to obtain the real propertyor
right-of-use assets thereofto the signing
date for the current transaction.
3.The real property is acquired through
signing of a joint development contract
with the related party, or through engaging
a related party to build real property, either
on the company's own land or on rented
land.
4.The real property right-of-use assets for
business use are acquired among the public

company, its parent, itssubsidiaries, or
affiliates which directly or indirectly 100

percent of the issued shares or authorized
capital are owned.
Article 20:
When the results of a public company's appraisal
conducted in accordance with paragraph 1 and
paragraph 2 of the preceding Article are uniformly
lower than the transaction price, the matter shall be
handled in compliance with Article 21. However,
where the followingcircumstances exist,objective		 Article 20:
When the results of a public company's
appraisal conducted in accordance with
paragraph 1 and paragraph 2 of the
preceding Article are uniformly lower than
the transaction price, the matter shall be
handled in compliance with Article 21.		 In accordance
with
“Regulations
Governing the
Acquisition and
Disposal of
  • 53 -
Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
evidence has been submitted and specific opinions
on reasonableness have been obtained from a
professional real property appraiser and a CPA have
been obtained, this restriction shall not apply:
1.Where the related party acquired undeveloped
land or leased land for development, it may submit
proof of compliance with one of the following
conditions:
A.Where undeveloped land is appraised in
accordance with the means in the preceding Article,
and structures according to the related party's
construction cost plus reasonable construction profit
are valued in excess of the actual transaction price.
The "Reasonable construction profit" shall be
deemed the average gross operating profit margin of
the related party's construction division over the
most recent 3 years or the gross profit margin for the
construction industry for the most recent period as
announced by the Ministry of Finance, whichever is
lower.
B.Completed transactions by unrelated parties
within the preceding year involving other floors of
the same property or neighboring or closely valued
parcels of land, where the land area and transaction
terms are similar after calculation of reasonable
price discrepancies in floor or area land prices in
accordance with standard property market sale or
leasing practices.
2.Where a public company acquiring real property,
or obtaining real property through leasing, from a
related party provides evidence that the terms of the
transaction are similar to the terms of completed
transactions involving neighboring or closely valued
parcels of land of a similar size by unrelated parties
within the preceding year.
Completed transactions involving neighboring or
closely valued parcels of land in the preceding
paragraph in principle refers to parcels on the same
or an adjacent block and within a distance of no
more than 500 meters or parcels close in publicly
announced current value; transactions involving
similarly sized parcels in principle refers to
transactions completed by unrelated parties for
parcels with a land area of no less than 50 percent of
the property in the planned transaction; within the
preceding year refers to theyearprecedingthe date


However, where the following
circumstances exist, objective evidence has
been submitted and specific opinions on
reasonableness have been obtained from a
professional real property appraiser and a
CPA have been obtained, this restriction
shall not apply:
1.Where the related party acquired
undeveloped land or leased land for
development, it may submit proof of
compliance with one of the following
conditions:
A.Where undeveloped land is appraised in
accordance with the means in the
preceding Article, and structures according
to the related party's construction cost plus
reasonable construction profit are valued in
excess of the actual transaction price. The
"Reasonable construction profit" shall be
deemed the average gross operating profit
margin of the related party's construction
division over the most recent 3 years or the
gross profit margin for the construction
industry for the most recent period as
announced by the Ministry of Finance,
whichever is lower.
B.Completed transactions by unrelated
parties within the preceding year involving
other floors of the same property or
neighboring or closely valued parcels of
land, where the land area and transaction
terms are similar after calculation of
reasonable price discrepancies in floor or
area land prices in accordance with
standard property market saleor leasing
practices.
2.Where a public company acquiring real
property,or obtaining real property
right-of-use assets through leasing,from a
related party provides evidence that the
terms of the transaction are similar to the
terms of completed transactions involving
neighboring or closely valued parcels of
land of a similar size by unrelated parties
within the preceding year.
Completed transactions involving
Assets by
Public
Companies”
increase the
right to use
assets.
  • 54 -
Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
of occurrence of the acquisition of the real property. neighboring or closely valued parcels of
land in the preceding paragraph in
principle refers to parcels on the same or
an adjacent block and within a distance of
no more than 500 meters or parcels close in
publicly announced current value;
transactions involving similarly sized
parcels in principle refers to transactions
completed by unrelated parties for parcels
with a land area of no less than 50 percent
of the property in the planned transaction;
within the preceding year refers to the year
preceding the date of occurrence of the
acquisition of the real property or
obtainmentof the right-of-use assets
thereof.
Article 21:
Where a public company acquires real property
from a related party and the results of appraisals
conducted in accordance with the preceding two
articles are uniformly lower than the transaction
price, the following steps shall be taken:
1.A special reserve shall be set aside in accordance
with Article 41, paragraph 1 of the Act against the
difference between the real property transaction
price and the appraised cost, and may not be
distributed or used for capital increase or issuance
of bonus shares. Where a public company uses the
equity method to account for its investment in
another company, then the special reserve called for
under Article 41, paragraph of the Act shall be set
aside pro rata in a proportion consistent with the
share of public company's equity stake in the other
company.
2.Supervisors shall comply with Article 218 of the
Company Act. Where an audit committee has been
established in accordance with the provisions of the
Act, the preceding part of this subparagraph shall
apply mutatis mutandis to the independent director
members of the audit committee.
3.Actions taken pursuant to the preceding two
subparagraphs shall be reported to a shareholders
meeting, and the details of the transaction shall be
disclosed in the annual report and any investment
prospectus.
Apublic companythat has set aside a special		 Article 21:
Where a public company acquires real
propertyor right-of-use assets thereoffrom
a related party and the results of appraisals
conducted in accordance with the
preceding two articles are uniformly lower
than the transaction price, the following
steps shall be taken:
1.A special reserve shall be set aside in
accordance with Article 41, paragraph 1 of
the Act against the difference between the
real propertyor right-of-use assets thereof
transaction price and the appraised cost,
and may not be distributed or used for
capital increase or issuance of bonus
shares. Where a public company uses the
equity method to account for its investment
in another company, then the special
reserve called for under Article 41,
paragraph of the Act shall be set aside pro
rata in a proportion consistent with the
share of public company's equity stake in
the other company.
2.Supervisors shall comply with Article
218 of the Company Act. Where an audit
committee has been established in
accordance with the provisions of the Act,
the preceding part of this subparagraph
shall apply mutatis mutandis to the
independent director members of the audit
In accordance
with
“Regulations
Governing the
Acquisition and
Disposal of
Assets by
Public
Companies”
increase the
right to use
assets.
  • 55 -
Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
reserve under the preceding paragraph may not
utilize the special reserve until it has recognized a
loss on decline in market value of the assets it
purchased at a premium, or they have been disposed
of, or adequate compensation has been made, or the
status quo ante has been restored, or there is other
evidence confirming that there was nothing
unreasonable about the transaction, and the FSC has
given its consent.
When a public company obtains real property a
related party, it shall also comply with the preceding
two paragraphs if there is other evidence indicating
that the acquisition was not an arms length
transaction.

committee.
3.Actions taken pursuant to the preceding
two subparagraphs shall be reported to a
shareholders meeting, and the details of the
transaction shall be disclosed in the annual
report and any investment prospectus.
A public company that has set aside a
special reserve under the preceding
paragraph may not utilize the special
reserve until it has recognized a loss on
decline in market value of the assets it
purchasedor leased at a premium, or they
have been disposed of,or the leasing
contract has been terminated,or adequate
compensation has been made, or the status
quo ante has been restored, or there is other
evidence confirming that there was nothing
unreasonable about the transaction, and the
FSC has given its consent.
When a public company obtains real
propertyor right-of-use assets thereof from
a related party, it shall also comply with the
preceding two paragraphs if there is other
evidence indicating that the acquisition was
not an arms length transaction.

Article 22:
The total amount of the real estate that can be
purchased by the Company and its subsidiaries for
the use of real estate that is not for business use or
securities and the individual securities that can be
invested are as follows:
1. The total amount of real property that the
company obtains for non-business use shall not
exceed 20% of the net value of the company. The
subsidiaries of the company may obtain real estate
that is not for business use. The total amount shall
not exceed 20% of the company's net value.
2. The total investment in securities of the Company
shall not exceed 50% of the net value; the total
investment of the securities of the Company's
subsidiaries shall not exceed 50% of the net value of
the Company.
3. The amount of individual securities invested by
the Company shall not exceed 30% of the net value;
the amount of individual securities of the company's
subsidiaries shall not exceed 30% of the net value of



Article 22:
The total amount of the real estate that can
be purchased by the Company and its
subsidiaries for the use of real estate that is
not for business useor its right to use
assetsor securities and the individual
securities that can be invested are as
follows:
1. The total amount of real propertyor its
right-of-use assets that the company
obtains for non-business use shall not
exceed 20% of the net value of the
company. The subsidiaries of the company
may obtain real estate that is not for
business useor its right to use assets.The
total amount shall not exceed 20% of the
company's net value.
2. The total investment in securities of the
Company shall not exceed 50% of the net
value; the total investment of the securities
of the Company's subsidiaries shall not		 In accordance
with
“Regulations
Governing the
Acquisition and
Disposal of
Assets by
Public
Companies”
increase the
right to use
assets.
  • 56 -
Content Amendment
Description
Before the Amendment（Version 6.0） After the Amendment（Version 7.0）
the Company.
The 100% shareholding subsidiary investment is not
within the above limits.
exceed 50% of the net value of the
Company.
3. The amount of individual securities
invested by the Company shall not exceed
30% of the net value; the amount of
individual securities of the company's
subsidiaries shall not exceed 30% of the
net value of the Company.
The 100% shareholding subsidiary
investment is not within the above limits.
  • 57 -

Attachment 8

Amendment to the“ Operational Procedures for Loaning of Company Funds” Comparison Table

Content

Before the Amendment After the Amendment Amendment Description （ Version 5.0 ） （ Version 6.0 ） Article 3: Capital Loan and Total Article 3: Capital Loan and Total In accordance with and Individual Object Limits and Individual Object Limits Article 3 of the The total amount of the company's The total amount of the company's “Guidelines for the and its subsidiaries' funds and loans and its subsidiaries' funds and loans Treatment of Capital shall not exceed 20% of the net shall not exceed 20% of the net Loans and Endorsement value of the Company and its value of the Company and its Guarantees of Public subsidiaries. subsidiaries. Issuance Companies”, in The limits on the funds and The limits on the funds and order to increase the individual targets of the Company individual targets of the Company flexibility of the internal and its subsidiaries are as follows: and its subsidiaries are as follows: fund allocation of the 1. For loans and companies with 1. For loans and companies with Group, the foreign business operations, the total amount business transactions, the total companies that directly of loans and loans shall not exceed amount of loans and loans shall not and indirectly hold 100% 20% of the net value of the exceed 20% of the net value of the of the voting shares of Company; the amount of loans to lending company; the amount of the public offering individual investors shall be the total loans to individual investors shall be company are released for amount of the business between the the total amount of the business the public offering. The two parties in the period of the loan between the two parties in the company is engaged in and the business within the previous period of the previous 12-month fund lending and is not 12 months ( The amount of the period. (The amount of the business subject to a net value of referred business refers to the referred to is the highest amount of 40%. In addition, when amount of the purchase or sales purchase or sales between the two the company is engaged volume between the two parties, the parties), and the lending company's in fund lending and company's net worth of 10% or the net worth of 10% or the borrower's exceeding the limit, the borrower's net value of 30%. net worth of 30% is limited. person in charge of the 2. For loans and companies with 2. For loans and companies with company shall jointly short-term financing, the total short-term financing, the total bear the responsibility amount of loans and loans shall not amount of loans and loans shall not for returning the damage exceed 20% of the net value of the exceed 20% of the net value of the and the liability for lending company; the amount of lending company; the amount of damages; loans to individual investors shall loans to individual investors shall not exceed the lower amont of 10% not exceed the lower amount of 10% of the net value of the lending of the net value of the lending company and the net value of the company and 30% of the net value borrower. of the borrower. The loan between foreign companies The loan between foreign directly and indirectly 100% held subsidiaries directly or indirectly shall not exceed 100% of the net 100% owned by the Company or the value of the lending company. Company’s loan from those The company's financial report is subsidiaries described above shall prepared by the International not exceed 100% of the net value of Financial Reporting Standards. The the lending company. term "net value" as used in these

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Content Content Amendment Description
Before the Amendment
（Version 5.0）		 After the Amendment
（Version 6.0）
Measures refers to the equity of the
securities issuer's financial report
preparation standards attributable to
the owners of the parent company.		 When the company engages in
capital loans and exceeds the limit,
the person in charge of the company

shall be jointly responsible for the
return and damages.
The company's financial report is
prepared by the International
Financial Reporting Standards. The
term "net value" as used in these
Measures refers to the equity of the
securities issuer's financial report
preparation standards attributable to
the owners of theparent company.
Article 5: Loans and Term and
Interest-bearing Method The term of
the loan of the Company and its
subsidiaries shall be based on the
period of time required by the
borrower and may not exceed one
year.
The company shall directly and
indirectly hold 100% of the voting
shares of foreign companies engaged
in loan lending and the term shall
not exceed three years.
loan interest rate refers to the
short-term capital borrowing rate of
financial institutions and the
adjustment of the cost of funds. The
calculation of the loan interest of the
Company and its subsidiaries shall
be based on the principle of monthly
interest payment. In case of special
circumstances, it may be adjusted
according to the actual situation after
the approval of the board of
directors.

Article 5: Loans and maturities and
interest-bearing methods
The term of the loan of the company
and its subsidiaries shall be based on
the period of time required by the
borrower and may not exceed one
year.
~~The company shall directly and~~
~~indirectly hold 100% of the voting~~
~~shares of foreign companies~~
~~engaged in loan lending and the~~
~~term shall not exceed three years~~.
The loan interest rate refers to
the short-term capital borrowing rate
of financial institutions and the
adjustment of the cost of funds. The
calculation of the loan interest of the
Company and its subsidiaries shall
be based on the principle of monthly
interest payment. In case of special
circumstances, it may be adjusted
according to the actual situation
after the approval of the board of
directors.
The term of the loan between
foreign subsidiaries directly or
indirectly 100% owned by the
Company or the Company’s loan
from those subsidiaries described
above could not be more than three
years, but it is not subject to the
restrictions of the preceding
paragraph.



In accordance with
Article 3 of the
“Guidelines for the
Treatment of Capital
Loans and
Endorsement
Guarantees of Public
Issuance Companies”,
in order to increase the
flexibility of the
internal fund
allocation of the
Group, the foreign
companies that
directly and indirectly
hold 100% of the
voting shares of the
public offering
company are released
for the public offering.
The company is
engaged in capital
loans and is not
subject to the one-year
time limit; the
company also relaxes
the restrictions on loan
interest rates and
interest payments; and
makes text paragraph
adjustments.
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Appendix 1

Rules of Procedure for Shareholders’ Meeting Approved by Shareholders’ meeting on June 13, 2012

  1. In order to establish a good shareholders' governance system, improve the supervision function, and strengthen management functions of the company, these rules are established in accordance with the relevant requirements of the “Listed Guiding Practices for Corporate Governance”, to follow.

  2. Unless provided in the Act or the articles of incorporation, otherwise the rules of procedure of the shareholders' meeting of the company shall be governed by the provisions of these rules.

  3. The shareholders' meeting of the company shall be convened by the board of directors unless specified by the Act.

  4. The company shall upload the shareholders meeting notice, power of attorney, the subject and the description of the approval, the discussion, the election or the dismissal of directors to MOPS 30 days before the shareholders' meeting or 15 days before the shareholders' interim meeting..

In addition, the shareholders' meeting manual and the supplementary information of the meeting and the production of electronic files shall be transmitted to MOPS 21 days before the shareholders' meeting or 15 days before the shareholders' interim meeting.

And 15 days before the meeting of shareholders, the shareholders' meeting manual and supplementary information for the meeting shall be prepared for the shareholders to read and display at the company and its stock agency, and shall be distributed on the spot of the shareholders meeting.

The matters of selecting or dismissing directors, changing the articles of association, dissolving, merging, splitting, or the first paragraph of Article 185 of the company law, or Article 26-1 and Article 43-6 of the Securities Exchange Act shall be Listed in the cause of the convocation, no provision may be made on a provisional motion.

Shareholders who hold more than 1 percent of the total shares can submit a written meeting to the company, but with one limitation. And if proposed motion being like what’s written in the fourth paragraph of Article 172-1 of the Company Law, the board of directors may not list as a bill.

The Company shall announce the acceptance of shareholders' proposals, the acceptance of premises and the acceptance period prior to the termination of the share transfer prior to the convening of the regular shareholders meeting; the acceptance period shall not be less than ten days.

The motion proposed by the shareholders is limited to 300 words. If the number exceeds 300 words, it shall not be included in the proposal; the shareholder who

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proposes shall personally or entrust another person to attend the regular meeting and participate in the discussion of the resolution.

The company shall notify the shareholders of the process of the proposals before the date of the notice convening the shareholders meeting, and shall list the proposals in this section to the meeting notice. For those proposals that are not included in the bill, the board of directors should explain the reasons for not including them in the shareholders' meeting.

  1. At each shareholder meeting, shareholders must issue a power of attorney issued by the company, specifying the scope of the authorization, entrusting agents, and attending the shareholders' meeting.

  2. A shareholder shall issue a power of attorney and limit it to one person. It shall be delivered to the company five days before the meeting of the shareholders' meeting. When the power of attorney is repeated, the first person to be delivered shall prevail. However, the delegator before revoking the statement shall not be limited to this.

  3. After the power of attorney is delivered to the company, if the shareholder desires to attend the shareholders' meeting in person or wishes to exercise voting rights electronically or in writing, he shall notify the company in writing of cancellation of the appointment two days prior to the meeting of the shareholders; The voting rights of the person attending the exercise shall prevail.

  4. (Principle of the place and time for holding shareholders meeting) The place of the shareholders' meeting shall be in the place where the company is located or where the convenience shareholders are present and suitable for the meeting of the shareholders. The meeting shall not begin earlier than 9:00 am or later than 3:00 pm. The independent directors' opinions shall be fully considered to decide the place and time of the meeting.

  5. (Preparation of documents such as signature books) The company shall establish a scrapbook for the attendance of the shareholders themselves or the agents entrusted by the shareholders, or the attendance of the shareholders to attend the attendance cards to sign.

  6. The company shall deliver the manuals, annual reports, attendance cards, speeches, voting papers, and other meeting materials to the shareholders attending the shareholders meeting; if there are elected directors, an election vote shall be attached.

  7. Shareholders should attend the shareholders' meeting with their attendance cards, attendance cards or other attendance certificates; they should be the solicitors of the solicitation request letter and should bring their identity documents for verification.

When an institution is a shareholder, the representative who attends the

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shareholder meeting is not limited to one person. When an institution is entrusted to attend a shareholders' meeting, only one person may be appointed to attend the meeting.

  1. (Chairman of the shareholders' meeting, attendees) If the shareholders' meeting is convened by the board of directors and the president is the chairman, the chairman appoints one person to represent the board of directors; if the chairman does not assign, the board of directors will push one person to represent each other.

If the shareholder meeting is convened by a convener other than the board of directors, the chairman is assumed by the convener. If there are more than two conveners, one person should be elected.

The company may appoint appointed lawyers, accountants or related personnel to attend the shareholders' meeting and answer relevant questions during the agenda.

  1. (Conservation of recording or video recording during the meeting of shareholders)

  2. The company shall record or videotape the entire meeting of the shareholders meeting and keep it for at least one year. However, if a shareholder filed a lawsuit in accordance with Article 189 of the Corporation Law, it shall be kept until the end of the lawsuit.

  3. The attendance of shareholders' meetings should be calculated on the basis of shares. The number of shares attending is calculated based on the scrapbook or the paid-in card, plus the number of shares in which voting rights are exercised in writing or electronically.

  4. At the time of the meeting, the chairman shall immediately announce the meeting. However, when no shareholder representing more than half of the total number of shares already issued is present, the chairman may announce a postponement of the meeting. The number of postponements shall be limited to the second time, and the total delay time shall not exceed one hour. After the second time of the postponement, the present shares are still insufficient to represent more than one-third of the total number of issued shares, the chairman shall announce the cancel of the meeting.

If the foregoing item is delayed for the second time and the shareholder represents more than one-third of the total number of shares already issued, it may be subject to a semi-resolution in accordance with the first item of article 175 of the company law, and shall notify each of the semi-resolutions. Shareholders will re-convene the shareholders meeting within a month. Before the end of the current meeting, if the number of shares represented by the shareholders attending the meeting exceeds half of the total number of issued shares, the chairman may make a semi-resolution to be resubmitted to

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the shareholder meeting according to Article 174 of the Company Law.

10.(Motion Discussion)

If the shareholders' meeting is convened by the board of directors, its agenda is set by the board of directors. The meeting shall be conducted in accordance with the scheduled agenda, and may not be changed without the resolution of the shareholders' meeting.

If the shareholders' meeting is convened by a caller other than the board of directors, the same rules shall apply.

Before the end of the agenda (including the provisional motion) of the first two scheduled agendas, the chairman shall not announce the adjournment without resolution.

If the chairman violates the rules of procedure and announces the adjournment, the other members of the board of directors shall promptly assist the shareholders in attending the proceedings according to law, and appoint one person to chair the meeting with the consent of more than half of the voting rights of the shareholders, and continue the meeting.

When the chairman thinks that the amendment and the provisional motion proposed reached the level to vote, he may announce to stop the discussion and put it to the vote.

11.(Shareholders' speeches)

Before attending a shareholder's speech, a statement should be filled in with the statement of speech, the shareholder number and the name of the account, and the chairman should set the order of his speech.

Shareholders who only provide speech notes will be considered as not speaking. And if the speech is not consistent with the note of the speech, the speech shall prevail.

The shareholder’s speech shall be made after all reports have been reported by the chairman. Each person shall not speak more than twice, and each time shall not exceed five minutes. However, with the permission of the chairman, it may be extended by five minutes and shall be limited to one extension. Shareholders shall use the provisions of the preceding paragraph for the time and frequency of speeches for each of the items listed on the agenda for recognition and discussion, as well as various Ratifications in the temporary motion procedure.

Shareholders shall speak in response to various items in the agenda of the temporary motion that are not part of the motion. The time and frequency shall be subject to the provisions above.

If the shareholder makes a speech that violates the provisions of the preceding paragraph or exceeds the scope of the topic, the chairman may stop his speech. When a shareholder is making a speech, other shareholders shall not interrupt except with the consent of the chairman.

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When an institutional shareholder appoints more than two representatives to attend the shareholders' meeting, the same motion may only be delivered by one person.

After attending the shareholder's speech, the chairman may answer the question in person or by a designated person.

  • 12.(Calculation of voting shares, avoidance of interest conflict) The voting of the shareholders' meeting shall be based on the shares. Resolutions of the shareholders' meeting shall not be counted as the total number of shares issued to non-voting shareholders. When a shareholder has a stake in the matter of the meeting that is detrimental to the interests of the company, he shall not be included in the voting and shall not exercise his voting rights on his behalf. The number of shares not entitled to vote in the preceding paragraph shall not be counted as the number of voting rights that have been present at the shareholders.

Except for the trust business or the share agency approved by the securities regulatory authority, when a person is entrusted by more than two shareholders at the same time, the voting rights of its agent shall not exceed 3% of the total voting shares of the issued shares, and those exceeding will not count in the voting.

  • 13.Shareholders have one voting right per share; however, those who do not have the voting power listed in the second paragraph of Article 179 of the Company Law are not subject to this rule.

  • When the company convenes a shareholders' meeting, it may vote exercise its voting rights in writing or electronically; when it exercises voting rights in writing or electronically, its method of exercise shall be clearly stated in the shareholders' meeting convening notice. Shareholders who exercise voting rights in writing or electronically are deemed to have attended the shareholders meeting in person. However, the temporary motion of the shareholders meeting and the amendment of the original motion are deemed as abstentions. For those who have voted in writing or electronically in the preceding paragraph, their meaning means that they should be delivered to the company two days before the meeting of shareholders. If there is any duplication of the meaning, the person who delivered the first shall prevail. However, the statement of the meaning before revocation is not limited to this.

  • After a shareholder has exercised voting rights in writing or electronically, if he wishes to attend the shareholder meeting he shall withdraw the meaning of the previous exercise of voting rights in the same manner as the exercise of voting rights two days prior to the meeting of the shareholders; overdue withdrawals will be made in writing or electronically. The exercise of voting rights shall prevail. If the voting rights are exercised in writing or electronically, and the proxy is entrusted to attend the shareholders' meeting, the principal's right to

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vote at the time of exercise shall prevail. Voting of the resolution is subject to the consent of more than half of the voting rights of the shareholders in addition to the company law and the articles of association of the company. If the chairman consults all the attending shareholders and no objection to the proposal, the proposal shall be deemed as passed and approved. The effectiveness shall be the same as voting. If there is any objection, voting shall be conducted in accordance with the provisions of the preceding paragraph. When there are amendments or alternatives to the same motion, the chairman and the original case set the voting order. If one of the cases attending has been passed, other motions will be considered veto and no one will be required to vote again.

The scrutineer for the vote on the motion and the vote counting staff shall be appointed by the chairman but the scrutineers shall be the shareholder. The vote count shall be publicly disclosed in the shareholders' meeting room. The result of the vote shall be reported on site and recorded.

14.(Election Matters)

When a election for directors is held, should be according to the relevant election rules set by the company and announce the results of the election right away.

Election tickets shall be sealed and signed by the scrutineers for safekeeping and kept for at least one year. However, if a shareholder filed a lawsuit in accordance with Article 189 of the Corporation Law, it shall be kept until the end of the lawsuit.

  • 15.The resolutions of the shareholders' meeting shall be made into conference record, signed or sealed by the chairman, and the conference record shall be distributed to all shareholders within 20 days after the meeting. The production and distribution of the proceedings were made electronically.

The conference record can be announced by uploading to the MOPS. The conference record should be written in accordance with the year, month, day, place, name of the chairman, resolution method, method, and the results of the meeting. It shall be kept forever during the existence of the company. The method of the above resolution is subject to the chairman's advice to the shareholders. If the shareholders have no objection to the ratification, they should record that “the chairman has consulted all shareholders to attend without objection”; however, if the shareholders object to the ratification, the voting method and vote result by ratio and shares should be recorded.

16.(External announcement)

The number of shares sought by the solicitor and the number of shares entrusted by the agent shall be clearly disclosed in the shareholders' meeting at the meeting on the day when the shareholders meeting is held.

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If the resolutions of the shareholders' meeting are stipulated by laws and regulations and the major information stipulated by the Taiwan Stock Exchange Co., Ltd., the company shall transmit the content to the MOPS.

17.(Maintenance of Venue Order)

The personnel attending the shareholders meeting should wear an identification card or an armband.

The chairman has to command pickers or security personnel to help maintain order at the venue. When pickets or security guards are present to help maintain order, they should wear the “picker’s” armband or ID card.

The chairman of the venue shall be equipped with sound reinforcement equipment. When the shareholders do not speak in accordance with the equipment allocated by the company, the chairman may stop it.

If a shareholder violates the rules of procedure and fails to obey the chairman's correction, the person precluding the meeting from proceeding to prevent him from doing so may be asked by the chairman to direct a picket or security officer to leave the venue.

18.(Taking a Break and Continue Meeting)

  • When the meeting is held, the chairman may announce a break at a discretionary time. When an irresistible situation occurs, the chairman may rule that the meeting should be suspended temporarily and announce the time for the meeting to continue.

Before the scheduled agenda is finalized, if the venue does not continue to be used, the shareholders’ meeting may decide to move to other location to continue.

The shareholders’ meeting may be postponed within 5 days or continue subject to the provisions of Article 182 of the Company Law.

  • 19.This rule will be implemented after approval by the shareholders' meeting and the amendment will follow the same procedure.

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Appendix 2

Articles of Incorporation for FocalTech (before amended)

Section I General Provisions

  • Article 1 The Company shall be incorporated as a limited liability company with shares defined by the Company Act and its name shall be “FocalTech Systems Co., Ltd.”.

  • Article 2 The scope of business of the Company shall be as follow:

  • CC01080 Electronic component manufacturing

  • I301010 Information Software Services

  • IG02010 Research and Development Service

  • I501010 Product Design

  • Research, development, design, manufacture, and sales of various integrated circuits:

  • (1) Providing hardware, software, application design, testing, maintenance, and technical consulting services for various integrated circuits.

  • (2) Research, development and sales of IP.

  • (3) Import and export activities related to the previous business.

  • Article 3 The Company shall have its head-office in Hsinchu Science-based Industrial Park and, if necessary, may set up branches domestically or overseas after the approval its Board of Directors and the authority.

  • Article 4 Public notices of the Company shall be made in accordance with Article 28 of the Company Act.

Section II Shares

  • Article 5 The total capital amount of the Company shall be five billion New Taiwan Dollars accounting for five hundred million shares, at a par value of Ten New Taiwan Dollars (NT$10) per share. The Board of Directors is authorized to issue the unissued shares in installments

  • Article 5-1 If the company intends to issue employee stock options at a share price lower than the market price (net book value per share), it shall comply with the provisions of Article 56-1 and 76 of the Code of Dealing with the Offering and Issuance of Securities of the Issuer. After being resolved by the shareholders' meeting, the shares could be issued.

  • Article 5-2 If the company intends to transfer the shares of the company to the

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employees at the price lower than the average actual purchase price, it shall comply with the provisions of Article 10-1 and Article 13 of the Measures for Buying Back Stocks of the Company by the Listed and OTC company. The approval by 2/3 of the more than 50% of the attending voting shares in the latest shareholders’ meeting is required.

  • Article 6 The share certificate of the Company shall be all name registered share certificates and shall be signed by, and affixed with the seals or by signature of, at least three directors of the Company, and issued after duly authentication pursuant to the law. The Company can also issue shares by registering or wiring into account books based on related regulations, rather printing physical shares.

  • Article 7 The company's stock handling operations, besides the provisions of laws and securities regulations, also shall be in accordance with the "Standards for the Issuance of Stocks of Public Share Issuing Companies". When the relevant laws and regulations are changed, they shall be executed at any time after the change.

  • Article 8 Registration for transfer of shares shall all be suspended 60 days before the convocation of any ordinary shareholders’ meeting, 30 days before the convocation of extraordinary shareholders’ meeting, or 5 days before the record day for distribution of dividend, interest and bonus or any other benefit as scheduled by the Company.

Section III Shareholder Meeting

  • Article 9 There are two types of shareholders' meetings: ordinary meetings and extraordinary meetings. The regular meetings are convened by the board of directors. The ordinary meetings are held once a year and are held within six months after the end of each fiscal year. The extraordinary meeting is convened according to law when necessary. The convening of the ordinary shareholders' meeting must be announced 30 days before the meeting. The extraordinary meeting shall announce the date, location and convening of the meeting 15 days before the meeting. The convening notice to shareholders holding less than 1,000 shares can be in the form of an announcement.

  • Article 9-1 Shareholders who hold 1 per cent of the total number of issued shares at the time when the company convened a regular meeting of shareholders could submit no more than one shareholder meeting proposal to the company in writing. Any proposal more than one shall not be included in the shareholders meeting. The operations are

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handled in accordance with the company law and related regulations.

  • Article 10 Resolutions of the shareholders' meeting may be processed in writing or electronically. Except specified by the provisions of the Company Law, the resolution should be made by the agreement of more than half of the attending voting shares, which are more than half of the issued shares.

  • Article 11 When the shareholders are unable to attend the shareholders' meeting, according to Article 177 of the company law, the power of attorney shall specify the scope of authorization and entrust the agent to attend the meeting. The power of attorney shall reach the company five days before the meeting.

  • The method of entrusting the shareholders to attend shall be handled in accordance with the provisions of the "Provisional Regulations on the Use of Public Companies to Attend Shareholders' Meetings" issued by the competent authority, besides to the provisions of the company law.

  • Article 12 Each share has one voting right except for the case defined in Article 179 of the Company Law.

  • Article 13 When the shareholder meeting is held, the Company chairman shall be the meeting chairman. In the absence of the chairman of the board of directors, the chairman shall appoint one director to act as the agent. If not, the directors shall elect one director to represent. If the meeting is not convened by the board of directors, the meeting chairman could be the convener. When there are two or more concentrators, one of them should be elected to be the meeting chairman.

  • Article 14 The resolutions of the shareholders' meeting shall be made into meeting records, signed or sealed by the chairman, and the minutes shall be distributed to the shareholders within 20 days after the meeting. The distribution of the records shall be announced in the form of an announcement. The period of record of the minutes of the proceedings and proceedings, attendance at the shareholders' signature book or attendance card, and power of attorney attendance shall be subject to the provisions of Article 183 of the Company Law.

  • Article 15 When the company's shares are proposed not to be traded publicly, this shall be subject to the resolution of the shareholders' meeting, and this provision will not be changed during the listing period.

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Section IV Directors and Audit Committee

  • Article 16 The company has nine to eleven directors. It adopts the nomination system for candidates. The shareholders' meeting elect and choose those capable to be the Board members in a term of three years. The Board members could be reelected term by term. If a representative of an institutional shareholder is elected as a director, the institution may change the representative at any time in the of service. The company may, subject to relevant laws and regulations, under the resolution by the board of directors, purchases liability insurance for the directors to reduce the risk of the directors being sued by the shareholders or other related parties for performing their duties according to law.

  • Article 16-1 The number of independent directors shall not be less than three, and shall not be less than one-fifth of the number of directors. The candidate nomination system shall be used. The shareholders’ meeting shall elect the list of candidates for independent directors.

  • The professional qualifications of the independent directors referred to in the preceding paragraph, restrictions on shareholding and part-time work, nomination methods, and other compliance matters shall be handled in accordance with the relevant provisions of the competent securities authority.

  • Article 16-2 When the directors of the company perform the duties of the company, regardless of the operating profit and loss of the company, the compensation may be paid and the remuneration is authorized by the board of directors considering the normal level of the industry.

  • Article 16-3 In accordance with the provisions of Article 14-4 of the

  • Securities and Exchange Act, the company sets up an audit committee and the audit committee is responsible for executing the company's law, securities trading law and other laws and regulations stipulating the authority of the supervisor. The audit committee shall consist of all independent directors, the number of whom shall be no less than three, one of which shall be the convener, and at least one shall have accounting or financial expertise. The resolution of the audit committee shall have the agreement of more than one-half of all members.

  • Article 17 When the missing amount of directors is up to one-third, the board of directors shall convene a shareholders meeting to elect new Board members within sixty days.

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  • Article 18 When the term of office of the director is expired but not till the re-election, except as otherwise provided in the company law, he or she shall extend his or her duties until the re-election.

  • Article 19 The Chairman shall be elected by more than 2/3 majority in the Board meeting with at least half members attending. The Chairman conducts all company affairs in accordance with laws, regulations, shareholders' meetings and board resolutions.

  • Article 20 Except as otherwise provided in the company law, the board of directors shall be convened in accordance with the provisions of the company law. When the board of directors meets at the meeting, the directors should attend in person unless they are otherwise required by the company law. When the directors are unable to attend in person, they will produce a power of attorney, list the scope of the authorization for the cause of the meeting, and appoint other directors to represent the board of directors. The director acts as an agent for other directors to attend the board of directors, bit limited by the commission of one person.

  • Article 20-1 The convening of the board of directors shall be notified to all directors by written, E-mail or fax seven days ago.

  • The Board meeting could be called at any time in an emergency by notify in writing, by e-mail or by fax.

  • Article 21 The chairman of the board represents the company. If the chairman leave or other reasons that makes him cannot exercise authority, the chairman of the board of directors shall appoint one person to act as the agent. In the absence of such designation, the deputy shall be elected by the directors.

  • Article 22 Matters to be resolved by the board of directors shall be made into records and shall be signed or sealed by the chairman. Within 20 days after the meeting, the records will be distributed to all directors. The records of the board meeting shall notice the proceedings of the board of directors, the attendance of the board of directors shall be recorded. The agent’s power of attorney attendance will be handled in accordance with Article 207 of the company law.

  • Article 23 The Board of Directors shall have the following functions and responsibilities:

  • Decision on business policy

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  • Validation of the budget

  • Prepare financial statements to report shareholders' meeting.

  • Amend the proposed articles of association.

  • Execute resolutions of the shareholders meeting.

  • Validation of the main contract.

  • Propose a Ratification for surplus distribution or loss provision.

  • Ratifications for capital increase or reduction.

  • Employment of key staff.

  • 10.The organization rules and business rules formulation

  • 11.Other duties defined by laws and shareholder meeting resolutions

Section V Managers and staff

Article 24 The company may have the position of the manager, whose appointment, dismissal and remuneration are in accordance with Article 29 of the company law.

  • Article 24-1 The Company may, subject to the relevant laws and regulations, obtain resolutions from the board of directors and purchase liability insurance for the managers to reduce the risk of the managers being prosecuted by shareholders or other related parties for performing their duties according to law.

  • Article 25 The company may hire important staffs based on Board resolutions in accordance with the provisions of Article 24 of the Articles of Incorporation.

Section VI Accounting

  • Article 26 The Board of Directors shall prepare after the close of each accounting fiscal year for the Company (1) Business Report, (2) Financial Statements, (3) Ratification of Distribution of Profit or Making Up of Loss, etc. and submit the same to the general shareholders meeting for acceptance.

  • Article 26-1 If the company is profitable for the year, it shall be remunerated to employees no less than 1% of the profit. The board of directors shall make a resolution to distribute the remuneration in shares or cash. The remuneration could include the employees in subsidiaries that meet certain conditions; the remuneration of the board of directors shall be no more than 1.5% of the profit. The profit sharing to employees and Board members should be reported to the shareholders' meeting. However, when the company still has the accumulated loss, the remuneration shall be used to make up the deficit until the

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accumulated loss turns to the profit.

  • Article 27 If the company has annual profit before tax, the company shall pay taxes in accordance with the law, make up the deficit and reserve 10% of the rest as a statutory surplus reserve. However, if the statutory surplus reserve has reached the company’s paid-in capital, it will be no longer to reserve. According to the statutory decree, special surplus reserve shall be provided or turned back; after the reserves and reductions above, the rest of the profit and the accumulated undistributed surplus in previous years could be considered together as the proposal of dividend distribution by the Board of Directors for shareholders meeting approval.

The company’s dividend policy is based on current and future development plans, consideration of the investment environment, funding needs, and domestic and foreign competition conditions, and the interests of shareholders. Each year the dividends shall be no less than 10% of the annual profit, distributed in cash, shares or both. Cash dividend portion shall not be less than 10% of total dividends. If the cash dividends is less than NT$0.5 per share, the Company may decide not to distribute the dividends.

  • Article 28 The company may endorse the external endorsement and may, depending on the needs of the business, lend the funds to others. Its operating methods are determined by the board of directors according to law.

  • Article 29 The total amount of the company's investment is not subject to the limit of 40 percent of the paid-in capital of the company law in Article 13.

  • Article 30 The company's organization rules and operation procedures are set by the board of directors.

  • Article 30-1 For matters not regulated in this statute, shall be handled in accordance with the provisions of the company law and other statutes.

  • Article 31 This Article was established on December 15,2005.The first amendment was made on January 19, 2006. The second amendment was made on March 28, 2006. The third amendment was made on October 5, 2006. The fourth amendment was made on May 10, 2007. The fifth amendment was made on June 6, 2008. The sixth amendment was made on June 16, 2009. The seventh amendment was made on June 15, 2011. The eighth amendment was made on June 13, 2012. The ninth amendment was made on June 18, 2013. The tenth

  • 73 -

amendment was made on June 30, 2014. The eleventh amendment was made on January 5, 2015. The twelfth amendment was made on June 10, 2015. The thirteenth amendment was made on June 22, 2016.

  • 74 -

Appendix 3

FocalTech Directors’ Shareholding Status

Record Date: April 22, 2019

Position Name Shareholding Status Shareholding Status
Number of shares Shareholding
Ratio
Chairman Genda Hu 1,094,341 0.37%
Director James Liao 643,474 0.21%
Director GWAA LLC
Representative Person：
Hsieh Han-Ping		 5,940,047 1.98%
Director CTBC Bank Trusteeship for
Jifu Holding Group (shares)
Investment Account
Representative Person：Shen
Yen
8,236,703		 2.75%
Independent
Director		 Shih Chin-Tay 0 0%
Independent
Director		 Lin Chan-Jane 0 0%
Independent
Director		 Lee Lin-Shan 0 0%
Independent
Director		 Tu Neng-Mo 0 0%
Total of All Directors 15,914,565 5.31%

Note:

  1. Total shares issued: 299,416,416 common shares.

  2. Minimum number of shares that all directors should hold in total is 12,000,000 shares on April 22, 2019

  3. The number of shares held by individual and all directors are listed above summarized from the shareholders' register on the date of suspension of transfer, which fulfills the requirement of Article 26 of the Securities Exchange Act.

  4. 75 -

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