Stock Code: 1909

Longchen Paper & Packaging Co., Ltd.

2019 Annual Shareholders’ Meeting Meeting Agenda (Translation)

June 12, 2019

at No.1-1, Guangxing Lane, Guangxing Village, Erlin Township, Zhanghua County, Taiwan, ROC at Conference Room of Longchen P&P Erlin Mill

Meeting Agenda ....................................................................................................................... 2 Report Items 1. 2018 Annual Business Overview ..................................................................................... 4 2. Audit Committee’s Review Report of 2018 ..................................................................... 8 3. 2018 Annual Employee’s Bonus Distribution Report ...................................................... 9 4. Amendment on the Rules of Share Buyback and Transferring to Employees ................. 10 Ratification Items 1. 2018 Business Report and Financial Statements.............................................................. 13 2. 2018 Disposition of Net Earnings .................................................................................... 33 Discussion Items 1. Amendment of “Articles of Incorporation” ..................................................................... 36 2. Amendment of “The Procedures for Acquisition or Disposal of Assets” ........................ 39 3. Amendment of “The Procedures for Lending of Capital” ............................................... 56 4. Amendment of “The Procedures for Making Endorsements/Guarantees” ...................... 59 5. Amendment of “The Policies and Procedures for Derivatives Trading” ......................... 62 6. Intending to Terminate the Previously Signed “Non-Competition Agreement” with Our Subsidiary Jiangsu Longchen Greentech Co., Ltd. ................................................. 63 Extemporaneous motions ......................................................................................................... 63 Appendixes 1. Articles of Incorporation .................................................................................................. 65 2. Rules of Procedure for Shareholder Meeting ................................................................... 71 3. Directors' Shareholding .................................................................................................... 78

Longchen Paper & Packaging Co., Ltd. 2019 Annual Shareholders’ Meeting Agenda (Translation)

1. Time: June 12th, 2019, 9:00AM.

Place: No. 1-1, Guangxing Ln., Erlin Township, Changhua County, Taiwan (Will be held at the meeting room of Longchen P&P Erlin Mill)
Meeting Agenda
I. Announcing Meeting in Session.
II. Welcome Speech by the Chairman.
III. Report Items
- i. 2018 Annual Business Overview.
- ii. Audit Committee’s Review Report of 2018.
- iii. 2018 Annual Employee’s Bonus Distribution Report.
- iv. Amendment on the Rules of Share Buyback and Transferring to Employees.

4. Ratification Items

I. 2018 Business Report and Financial Statements.
II. 2018 Disposition of Net Earnings.

5. Discussion Items

I. Amendment of “Articles of Incorporation”.
II. Amendment of “The Procedures for Acquisition or Disposal of Assets”.
III. Amendment of “The Procedures for Lending of Capital”.
IV. Amendment of “The Procedures for Making Endorsements/Guarantees”.
V. Amendment of “The Policies and Procedures for Derivatives Trading”.
VI. Intending to Terminate the Previously Signed “Non-Competition Agreement” with Our Subsidiary Jiangsu Longchen Greentech Co., Ltd.

6. Extemporaneous Motions

7. Adjournment

Report Items

Report One: Business Report of 2018

Longchen Paper & Packaging Co., Ltd.

Business Report of 2018

The Company's revenue in 2018 was NT$ 52,313.6 million, with an increase by 12.0% compared with that in 2017, but the net operating profit was reduced by NT$2,651.8 million. In 2018, the pre-tax profit was NT$1,518.5 million and the net profit after tax was NT$911.5 million ; the net profit after tax charged to the parent company was NT$934.7 million, and the net earning per share after tax was NT$0.82. The Company's operation performance in 2018 is stated below:

I. Business Report of 2018

1. Incomes, expenses, profits and losses

1.1 Incomes:

1) In 2018, the net revenue was NT$52,313.6 million, with an increase by 12.0% compared with NT$46,716.8 million in 2017.
2) In 2018, the non-operating income was NT$845.3 million, including NT$349.4 million, as gains and losses of affiliates and joint ventures recognized under the equity method, NT$27.4 million as interest income, NT$8.2 million as dividend income, NT$394.2 million as government subsidy income, NT$1.5 million as rental income, NT$3.0 million as financial asset gains at fair value through profit and loss, and NT$61.6 million as other income.

1.2 Expenses:

1) In 2018, the operating cost was NT$45,066.5 million, with an increase by 21.5% compared with NT$37,106.9 million in 2017. The operating expense in 2018 was NT$4,589.1 million, with an increase by 6.7% compared with NT$4,300.2 million in 2017.
2) In 2018, the non-business expenditure was NT$1,984.8 million, including NT$1,642.5 million as financial cost, NT$169.6 million as net foreign exchange loss, NT$93.3 million as loss on the disposal of properties, plants and equipment, NT$17.6 million as loss on the impairment of properties, plants and equipment, and NT$61.9 million as other expenses.
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1.3 Profits and losses (P/L):

The net profit after tax in 2018 was NT$911.5 million, with a decrease by NT$3,040.3 million compared with NT$3,951.8 million in 2017.

The net profit after tax charged to the parent company in 2018 was NT$934.7 million, with a decrease by NT$2,948.1 million compared with NT$3,882.8 million in 2017.

2. Operations

Comparison of Business Performance between 2017 and 2018

Unit: NT$1,000

Item	Year 2018	Year 2017	Difference in amount	Variation (%)
Revenue	52,313,603	46,716,807	5,596,796	12.0
Operating Cost	45,066,481	37,106,907	7,959,574	21.5
Gross profit	7,247,122	9,609,900	(2,362,778)	(24.6)
Operating Expense	4,589,130	4,300,153	288,977	6.7
Net operating profit	2,657,992	5,309,747	(2,651,755)	(49.9)
Net non-operating income/expense	(1,139,490)	38,517	(1,178,007)	(3058.4)
Pre-tax profit	1,518,502	5,348,264	(3,829,762)	(71.6)
Net profit after tax	911,535	3,951,843	(3,040,308)	(76.9)
Net profit charged to theparent company	934,694	3,882,815	(2,948,121)	(75.9)

3. Research and development status

The R&D expense in 2018 was NT$1,383.5 million, with an increase by NT$286.6 million compared with NT$1,097.0 million in 2017. The Company has attached much importance to the coexistence and co-prosperity of enterprises and the environment, and is always dedicated to further improve the five advanced environmental-friendly techniques below with a view to sustainable operation and core competitiveness based on the solutions of efficient resources recycling: utilization of regenerated fiber, energyefficient production, water-saving production, treatment of air and water pollution and disposal of wastes, and space utilization. We are dedicated to research, development and continuous innovation. Each production step is constantly improved to ensure environmental benefits, quality and efficiency, and strive for low carbon papermaking and eco packaging.

II. Business policies and major production and marketing strategies

Business policies

Low carbon papermaking:

(1) Strengthen the Company's competitiveness in low carbon papermaking, and constantly improve the solution of energy conservation and emission reduction.
(2) Ensure that the production capacity expansion plan for additional 300,000 t of Hubei Longchen (Stage 2, Phase II) can be put into normal operation in Q3 of 2019.
(3) Commence the Erlin Paper Mill Construction and Machine Upgrade Project as scheduled to increase the market share, and decommission an obsolete paper machine as appropriate. The total production capacity of such mill will exceed 850,000 t after the plan is completed, leading to a further increase in the market share.

Eco packaging:

(1) Develop high-end eco packaging products and satisfy customers' needs with highquality cartons
(2) Complete the commissioning plans of the Wuhan Plant in Hubei and the Changsha Plant in Hunan as scheduled to increase the market share.
(3) Decommission and renew obsolete equipment of carton mills and carry out automatic and intelligent upgrading to improve the competitiveness.
Estimated sales volume and basis
(1) Estimated sales volume

The production capacity of 300,000 t (Stage 1, Phase II) for the Hubei Mill will be put into commercialization in Q3 of 2019. This will further increase the product portfolio in Central China, fully satisfy diversified requirements of customers, and also increase the proportion of Longchen's products in customers' product structure. Longchen's total production capacity of containerboard in mainland China will be up to 2,950,000 t. The sales volume is expected to have sustainable growth this year.

(2) Basis of estimation

Develop feasible plans based on the Company's business strategies and specific demands of corrugated carton markets in sales areas.

3. Major production and marketing strategies

(1) Taiwan

Based on the current production capacity of 650,000 t containerboard, we will respond to the "Welcome Taiwanese Entrepreneurs Back to Invest in Taiwan Program" sponsored by the Ministry of Economic Affairs (MOEA) and cooperate with Taiwanese entrepreneurs in their localized investment and increasing the demands in the product packaging market. Furthermore, we will carry out the Erlin Paper Mill Construction and Machine Upgrade Project, and decommission an obsolete paper machine as appropriate. The total production capacity of such mill will exceed 850,000 t after the plan is completed, leading to a further increase in the market share. Moreover, we will decommission and renew obsolete equipment of carton mills and carry out automatic and intelligent upgrading in the field of eco packaging to further increase our market share.

(2) Mainland China

Further reinforce our business in East China and energetically explore the local market in Central China. Introduce the portfolio of niche products continuously based on target customers' needs. Continue further research, development and innovation and promote product optimization and upgrading. Offer premium customized services to increase our market share in the field of containerboard and obtain the optimal return.

As a model enterprise implementing the concept of "Circular Economy" in a long run and committed to low carbon papermaking and eco packaging, Longchen Paper & Packaging Co., Ltd. adopts the business model of efficient resource recycling, participates in and promotes the further growth of circular economy. Guided by this concept, we choose the right way before our first move, pursue the goal of zero waste and system balance, and establish a production system with resource recovery and regeneration. This is also our business mission that we persistently strive for. Taiwan-based Longchen accomplished the "Salmon Return to Taiwan" investment plan totaling NT$4.3 billion in 2015, setting a good foundation for its long-term development and competitive edge in Taiwan. In 2019, Longchen will continuously respond to the "Welcome Taiwanese Entrepreneurs Back to Invest in Taiwan Program" sponsored by MOEA; its total capital expenditure on investment in Taiwan between 2019 and 2021 will exceed NT$6.0 billion as expected. After this action plan of localized investment in Taiwan is accomplished, Lonchen's market share will be increased in the Asian containerboard market, creating more interests for our shareholders.

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer:Wu, Kuo-Shan

Report Two: Audit Committee’s Review Report

Longchen Paper & Packaging Co., Ltd.

Audit Committee’s Review Report

The board of directors has prepared the business report, financial statements and the net earnings disposition proposal of 2018; BDO Taiwan is authorized to review the financial statements, and issued the review report. The audit committee has reviewed all the foregoing business report, financial statements and the net earnings disposition proposal and identified nothing inappropriate. This report is hereby issued for examination pursuant to Article 14.4 of the "Securities and Exchanges Act" and Article 219 of the "Company Act".

Longchen Paper & Packaging Co., Ltd.

Chairman of the Audit Committee: Qiu, Xian-Bi

March 18, 2019

Report Three: 2018 Annual Employee’s Bonus Distribution Report

I. The Company's profit in 2018 was NT$1,276,454,421. At least two percent (2%) from its pre-tax profit shall be allocated in cash as employees' bonuses as per Article 22.1 of the Articles of Incorporation, i.e. NT$26,050,090.
II. The Chairman will be authorized to determine the distribution amount and time of such employees' bonuses based on individual performance, overall contribution or special achievements, as well as employees' qualifications and other related factors.
III. This report is hereby presented for mutual supervision.
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Report Four: Amendment on the Rules of Share Buyback and

Transferring to Employees

I. In response to the latest laws and regulations and actual operational needs, the original "Rules of Share Buyback and Transferring to Employees" shall be amended. The clauses thereof before and after the amendment are presented as follows.

Amended clauses	Existingclauses	Remarks
Article 3 The shares subject to buyback shall be transferred to employees only once or in installments withinfive (5) years upon the buyback thereof pursuant to the Rules. If such transfer fails beyondfive (5) years, the cancellation thereof shall be carried out according to applicable regulations.	Article 3 The shares subject to buyback shall be transferred to employees only once or in installments withinthree (3) years upon the buyback thereof pursuant to the Rules. If such transfer fails beyondthree (3) years, the cancellation thereof shall be carried out according to applicable regulations.	Adjustments were made to comply with Article 28.2 of the “Securities and Exchange Act” (Executive Yuan’s HZYJ No. 10800037881 Amendment) amended on April 17, 2019. The permitted period of transfer will increase to improve financial flexibility.
Article 4 Only full-time employees of the Company and domestic and overseas companiescontrolled by or affiliated to the Company, who have served for at least one month prior to the subscription base date or made special contributions to the Company, and are approved by the board of directors, are entitled to subscribe the shares of the Company subject to Article 5 of the Rules regarding the number of shares subscribed. "Domestic and Overseas	Article 4 Only full-time employees of the Company and domestic and overseassubsidiaries,who have served for at least one month prior to the subscription base date or made special contributions to the Company, and are approved by the board of directors, are entitled to subscribe the shares of the Company subject to Article 5 of the Rules regarding the number of shares subscribed. "Domestic and Overseas Subsidiaries" refer toany	Subject to adjustment as per Circular JGZFZ No. 1070121068 issued by the Financial Supervisory Commission on December 27, 2018 For such employees defined herein, the specific audience shall include the employees of controlled or affiliated companies meeting some required conditions.

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CompaniesControlled by or Affiliated to the Company" refer to those as defined in Article 369.2 and 369.3, Paragraph 2 of Article 369.9 and Article 369.11 of the "Company Act".Where the shares of the Company are to be issued or transferred to an employee of any such "Controlled or Affiliated Company", except those employees of"Controlled or Affiliated Companies"as defined in Paragraph 1, Article 369.2 of the"Company Act", it is required to discuss with certified public accountants (CPAs), who will give opinions towards whether such employee is qualified for subscription; subsequently, the opinions shall be reported to the board of directors.	invested companies complying with all the following conditions: i) over 50% of voting shares, or at least 20%, are held by the Company directly or indirectly; ii) those meeting one of the following conditions as set out in Financial Accounting Standard Bulletin No. 5 and No. 7 issued by the Accounting Research and Development Foundation (ARDF); and iii) at the issuance of shares, the latest consolidated financial statements audited and attested or reviewed by CPAs have been presented: 4.1 That has the capacity to hold more than half of voting shares, upon agreement with other investors; 4.2 That can control its financial, operational and HR guidelines pursuant to laws, regulations or any contract; 4.3 That has the power to appoint and remove more than half of key board members, and its board of directors has control over such company; or 4.4 That has the power to manage more than half of the board's voting rights, and its board of directors has control over such company.
	4.1
	4.2
	4.3
	4.4

II. This report is hereby presented for mutual supervision.

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Ratification Items

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[Ratification Items]

Case 1 (proposed by the Board of Directors)

Summary: The business report and financial statements of 2018 are hereby presented for ratification.

Note: The Company's business report, separate and consolidated financial statements of 2018 have been prepared. (See Page 4-7 and 14-32.)

Resolution:

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INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders Longchen Paper & Packaging Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Longchen Paper & Packaging Co., Ltd and its subsidiaries (collectively referred to as the “Group”). which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion and based on our audit result and other auditors' audit reports (see "Other matters" paragraph), in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers,and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

For the year ended December 31, 2018, the key audit matters for the Group’s consolidated financial statements were as follows:

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Major transactions with related parties

Longchen Paper & Packaging Co., Ltd. and its subsidiaries strive for creating a verticallyintegrated management system throughout the whole industry chain. Subsidiaries of different nature within the group are responsible for all the operational processes, from overseas procurement of waste paper or local waste paper recycling, to production and marketing of industrial paper and cartons. As the amounts of transactions with related are considerable, the corporate incomes of such subsidiaries in different countries have to be recognized in different times. Moreover, transactions with upstream-downstream related parties and the evaluation on unrealized gross margin exclusion have effect on the recognition of sales revenue, cost of goods sold and gross profit on sales. Therefore, major transactions with related parties should be considered as key review issues. The information on such transactions with related parties is provided in Footnotes VII accompanying the consolidated financial statements.

Generally, we have reviewed and audited the aforesaid matters by following the procedure below:

Understand and verify the design and execution effectiveness of the internal control mechanism for the administration of transactions with related parties;
Understand and evaluate the rationality of assumptions and methods adopted by the management to write off estimated unrealized gross margin of companies of different nature and to adjust any timing differences;
Perform random inspection and verification on the quantity and amount of such transactions with related parties not put into production;
Repeat the combination and consolidated writing-off of transactions with related parties, and assess whether any calculation formulas used are correct; and
Perform analytical review procedures. By reference to the previous actual operating results and in consideration of the influence of the production capacity expansion this year, assess whether the financial information by departments is consistent with the expectation.

Government subsidy income

In 2018, the non-operating incomes of Longchen Paper & Packaging Co., Ltd. and its subsidiaries from government subsidies were about NT$ (hereinafter inclusive) 394,204 thousands, amounting to approx. 43.25% of the consolidated net profit in 2018. Accordingly, such government subsidy income was considered as a key review issue. The information on government subsidies is provided in Footnotes IV (18) and VI (26) accompanying the consolidated financial statements.

Generally, we have reviewed and audited the aforesaid matters by following the procedure below:

Understand and evaluate the rationality of methods used by the management to recognize such government subsidy income;
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Perform random inspection and verification on agreements for government subsidies, and confirm that: 1) they comply with additional conditions for government subsidies; and 2) such subsidy can be obtained; and
Perform random inspection and verification on whether the government subsidy income this year is recognized as deferred income or other income based on the subsidy nature pursuant to the general accounting practices. Analyze and challenge the management's assessment conditions to verify the rationality of income recognition.

Other matter -Report of other independent accountants

Among the subsidiaries listed in the consolidated financial statements above, the financial statements of Long Chen Paper (China) Holdings Co., Ltd. and its subsidiaries were reviewed and audited by other auditors rather than us. Thus, the amounts listed in the financial statements of such subsidiaries included in our review opinions towards the consolidated financial statements above were based on the review reports issued by other auditors. For Long Chen Paper (China) Holdings Co., Ltd. and its subsidiaries: 1) the total assets as at December 31, 2018 and 2017 were respectively NT$56,028,683 thousands and NT$55,766,680 thousands, amounting to 78.24% and 73.71% of the consolidated total assets; and 2) the net revenue for the periods as of January 1 thru December 31, 2018 and 2017 was respectively NT$42,963,139 thousands and NT$37,397,840 thousands, amounting to 82.13% and 80.05% of the consolidated net revenue.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Longchen Paper & Packaging Co., Ltd.. as at and for the years ended December 31, 2018 and 2017.

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

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

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

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Those charged with governance, including members of the Audit Committee are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Mu Fan Wang and Hong Wen Tao.

BDO Taiwan

Republic of China March 18, 2019

Notice to Readers

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

The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

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

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Longchen Paper & Packaging Co., Ltd. and its subsidiaries Consolidated Balance Sheets

December 31, 2017 and 2018

				Consolidated Balance Sheets December 31, 2017 and 2018	Consolidated Balance Sheets December 31, 2017 and 2018
				(expressed in thousands New Taiwan dollars)
Code 1100 1110 1150 1170 1180 1200 1220 130x 1410 1470 11xx 1510 1543 1550 1600 1760 1780 1840 1900 15xx	Asset	December 31,2018		December 31,2017 Code Amount % $2,006,609 2.66 2100 16,489 0.02 2110 9,112,085 12.04 2130 6,496,367 8.59 2150 652,668 0.86 2170 245,917 0.33 2200 12,955 0.02 2230 3,685,133 4.87 2250 2,416,663 3.19 2300 139,244 0.18 2310 24,784,130 32.76 2322 2365 21xx - - 2530 114,646 0.15 2540 8,633,096 11.41 2570 39,005,062 51.56 2600 7,728 0.01 2640 70,989 0.09 2645 275,516 0.36 25xx 2,766,027 3.66 2xxx 50,873,064 67.24 3100 3110 3200 3300 3310 3320 3350 3400 3410 3420 3425 31xx 36xx 3xxx $75,657,194 100.00	Li a b i l i t i e s a n d e q u i t y	December 31,2018 Amount % $11,432,165 15.97 1,299,431 1.82 174,607 0.24 4,788 0.01 3,995,657 5.58 3,095,273 4.32 551,690 0.77 - - 13,599 0.02 201 - 10,264,721 14.33 16,287 0.02 30,848,419 43.08 2,500,000 3.49 14,954,258 20.88 849,582 1.19 302,067 0.42 60,141 0.08 49,537 0.07 18,715,585 26.13 49,564,004 69.21 11,676,857 16.30 3,512,955 4.91 1,536,498 2.15 626,639 0.88 4,851,789 6.77 (1,019,040) (1.42) 309,164 0.43 - - 21,494,862 30.02 552,958 0.77 22,047,820 30.79 $71,611,824 100.00	December 31,2017
		Amount	%	Amount		Amount $11,432,165 1,299,431 174,607 4,788 3,995,657 3,095,273 551,690 - 13,599 201 10,264,721 16,287 30,848,419 2,500,000 14,954,258 849,582 302,067 60,141 49,537 18,715,585 49,564,004 11,676,857 3,512,955 1,536,498 626,639 4,851,789 (1,019,040) 309,164 - 21,494,862 552,958 22,047,820 $71,611,824	Amount	%
	Current assets Cash and cash equivalents Financial assets at fair value through profit or loss Notes Receivable , Net Accounts receivable, net Accounts receivable - related parties Other receivables Current income tax assets Inventory Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss - non-current Financial assets carried at cost - non-current Investments accounted for using equity method Property, plant and equipment Net amount of investment property Intangible assets Deferred Income tax assets Other non-current assets Total non-current assets TOTAL ASSETS	$2,169,611 2,872 5,946,626 6,514,646 147,846 335,477 11,304 4,147,409 3,019,190 103,058	3.03 - 8.30 9.10 0.21 0.47 0.02 5.79 4.22 0.14	$2,006,609 16,489 9,112,085 6,496,367 652,668 245,917 12,955 3,685,133 2,416,663 139,244	Current liabilities Short-term loans Short-term notes and bills payable Contract liability - current Notes payable Accounts payable Other payables Current income tax liabilities Provisions Other current liabilities Advance receipt Current protion of long-term loans Refund liability - current Total current liabilities Non-current liabilities Corporate bonds payable Long-term loans Deferred income tax liabilities Other non-current liabilities Net defined benefit liability - non-current Guarantee deposits received Total non-current liabilities Total liabilities Equity attributable to owners of the parent company Capital stock Common stock Capitalsurplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity interest Exchange differences ontranslating foreign operations Unrealized gain or loss on FVTOCI Unrealized gains orloss on available-for-sale financial assets Total equity attributable to owners of the parent company Non-controlling interest Total equity Total liabilities and equity		$12,557,991 949,047 - 90 4,964,461 4,130,349 445,976 28,287 18,307 220,110 1,956,358 -	16.60 1.25 - - 6.56 5.46 0.59 0.04 0.02 0.29 2.59 -
		22,398,039	31.28	24,784,130
		169,167 - 3,607,386 42,091,709 7,618 83,504 507,020 2,747,381	0.23 - 5.04 58.78 0.01 0.12 0.71 3.83	- 114,646 8,633,096 39,005,062 7,728 70,989 275,516 2,766,027
							25,270,976	33.40
							- 21,032,152 939,571 260,825 55,880 25,367	- 27.80 1.24 0.35 0.08 0.03
							22,313,795	29.50
							47,584,771	62.90
		49,213,785	68.72	50,873,064			11,336,857 3,300,065 1,148,216 626,639 6,292,097 (747,066) - 5,523,538	14.98 4.36 1.52 0.83 8.32 (0.99) - 7.30
		$71,611,824	100.00	$75,657,194
							27,480,346 592,077	36.32 0.78
							28,072,423	37.10
							$75,657,194	100.00

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

19 -

Longchen Paper & Packaging Co., Ltd. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2018and 2017

(expressed in thousands of New Taiwan dollars, except earnings per share)

Code 4000 5000 5900 5950 6000 6100 6200 6300 6000 6900 7000 7010 7020 7050 7060 7000 7900 7950 8200 8300 8310 8311 8320 8349 8360 8361 8370 8399 8300 8500 8600 8610 8620 8700 8710 8720 9750 9850	Item Operating revenue Cost of sales Gross profit Net operating margin Operating Expense Selling expenses General and administrative expenses Research and development expenses Total operating expenses Operating profit Non-operating income and expenses Other income Other gains and losses Finance cost Recognized share of associates and joint ventures accounted for equlty method Total non-operating income and expenses Profit before income-tax Income tax expenses Profit for the year Other comprehensive income Items that will not be reclassified subsequently to profit or loss Actuarial losses on defined benefit plans Share of other comprehensive income (loss) of associates and joint ventures accounted for using equity method Income tax related to items that will not be reclassified Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign financial statements Share of other comprehensive income (loss) of associates and joint ventures accounted for using equity method Income tax relating to items that may be reclassified to subsequently Other comprehensive income,net of tax Total comprehensive income Net profit attributable to: Owners of the parent Non-controlling interest Net income Comprehensive income attributable to: Owners of the parent Non-controlling interest Net comprehensive income Earnings per share (NT$): Basic earnings per share Diluted earnings per share	Year 2018 $52,313,603 (45,066,481) 7,247,122 7,247,122 (1,994,089) (1,211,497) (1,383,544) (4,589,130) 2,657,992 492,928 (339,379) (1,642,459) 349,420 (1,139,490) 1,518,502 (606,967) 911,535 (7,579) (5,674,777) 4,789 (384,791) (78) 101,746 (5,960,690) (5,049,155) 934,694 (23,159) 911,535 (5,009,704) (39,451) (5,049,155) $0.82 $0.82	% 100.00 (86.15) 13.85 13.85 (3.81) (2.32) (2.64) (8.77) 5.08 0.94 (0.65) (3.14) 0.67 (2.18) 2.90 (1.16) 1.74 (0.01) (10.85) 0.01 (0.73) - 0.19 (11.39) (9.65) 1.78 (0.04) 1.74 (9.58) (0.07) (9.65)	Year 2017 $46,716,807 (37,106,907) 9,609,900 9,609,900 (1,740,219) (1,462,956) (1,096,978) (4,300,153) 5,309,747 640,739 82,454 (1,220,526) 535,850 38,517 5,348,264 (1,396,421) 3,951,843 (5,355) - 910 (127,447) 4,467,629 21,148 4,356,885 8,308,728 3,882,815 69,028 3,951,843 8,238,660 70,068 8,308,728 $3.50 $3.43	%
					100.00 (79.43)
					20.57
					20.57
					(3.72) (3.13) (2.35)
					(9.20)
					11.37
					1.37 0.18 (2.62) 1.15
					0.08
					11.45 (2.99)
					8.46
					(0.01) - - (0.27) 9.56 0.05
					9.33
					17.79
					8.31 0.15
					8.46
					17.64 0.15
					17.79

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

20 -

Longchen Paper & Packaging Co., Ltd. and its subsidiaries Consolidated Statement of Changes in Equity For the years ended December 31, 2018 and 2017 (expressed in thousands New Taiwan dollars)

			Equityattributable to owners of theparent company	Equityattributable to owners of theparent company	Equityattributable to owners of theparent company	Equityattributable to owners of theparent company	Non-controlling interest	Total Equity
	Capital stock Common stock $10,063,678 - - - - - - 240,000 1,033,179 - - - - $11,336,857 $11,336,857 - 11,336,857 - - - - - 340,000 - - $11,676,857	Capital surplus $2,159,709 - - 4,513 - - - 564,000 540,870 (2,325) (8,256) 41,554 - $3,300,065 $3,300,065 - 3,300,065 - - - - - 210,800 2,090 - $3,512,955	Retained earnings Legal reserve Special reserve Unappropriated earnings $907,473 $626,639 $4,307,310 240,743 - (240,743) - - (1,652,840) - - - - - 3,882,815 - - (4,445) - - 3,878,370 - - - - - - - - - - - - - - - - - - $1,148,216 $626,639 $6,292,097 $1,148,216 $626,639 $6,292,097 - - - 1,148,216 626,639 6,292,097 388,282 - (388,282) - - (1,983,950) - - 934,694 - - (2,790) - - 931,904 - - - - - - - - 20 $1,536,498 $626,639 $4,851,789		Other equityitems Exchange differences ontranslating foreign operations Unrealized gain or loss on FVTOCI Unrealized gains orloss on available-for- sale financial assets $(643,816) $- $1,059,998 - - - - - - - - - - - - (103,250) - 4,463,540 (103,250) - 4,463,540 - - - - - - - - - - - - - - - - - - $(747,066) $- $5,523,538 $(747,066) $- $5,523,538 - 5,978,814 (5,523,538) (747,066) 5,978,814 - - - - - - - - - - (271,974) (5,669,634) - (271,974) (5,669,634) - - - - - - - - (16) - $(1,019,040) $309,164 $-
Balance as at January 1, 2017 Appropriation and distribution of retained earnings: Legal reserve Cash dividends Changes in capital surplus Changes in those of affiliates and joint ventures Accounted for using the equity method Current net incomeProfit for the year Other current comprehensive income Total other comprehensive incomet Issuance of shares Conversion of convertible bonds Difference between the acquisition or disposal price and carrying of subsidiaries Change of ownership interests to subsidiaries Share-based payments Changes in non-controlling interest Balance as at December 31, 2017 Balance as at January 1, 2018 Effects of modified retrospective approach Adjusted balance as at January 1, 2018 Appropriation and distribution ofretained earnings: Legal reserve Cash dividends Current net incomeProfit for the year Other current comprehensive income Total other comprehensive incoment Issuance of shares Share-based payments Disposal of financial assets at fair value through other comprehensive income - equity instrument Balance as at December 31, 2018			Legal reserve $907,473 240,743 - - - - - - - - - - - $1,148,216 $1,148,216 - 1,148,216 388,282 - - - - - - - $1,536,498	Special reserve	Exchange differences ontranslating foreign operations $(643,816) - - - - (103,250) (103,250) - - - - - - $(747,066) $(747,066) - (747,066) - - - (271,974) (271,974) - - - $(1,019,040)	Unrealized gain or loss on FVTOCI $- - - - - - - - - - - - - $- $- 5,978,814 5,978,814 - - - (5,669,634) (5,669,634) - - (16) $309,164
				$626,639 - - - - -			$427,737 - (737) 5 69,028 1,040	$18,908,728 - (1,653,577) 4,518 3,951,843 4,356,885
				-			70,068	8,308,728
				- - - - - -			85,849 - 468 8,256 638 (207)	889,849 1,574,049 (1,857) - 42,192 (207)
				$626,639			$592,077	$28,072,423
				$626,639 -			$592,077 455	$28,072,423 455,731
				626,639 - - - -			592,532 - (123) (23,159) (16,292)	28,528,154 - (1,984,073) 911,535 (5,960,690)
				-			(39,451)	(5,049,155)
				- - -			- - -	550,800 2,090 4
				$626,639			$552,958	$22,047,820

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

21 -

Longchen Paper & Packaging Co., Ltd. and its subsidiaries Consolidated Statements of Cash Flows

For the years ended December 31, 2018 and 2017

(expressed in thousands New Taiwan dollars)

Item Cash flow from operating activities: Pre-tax profit for the current period Adjustments: Income, expenses and losses without effect on cash flow Depreciation (investment property) Distribution cost Provision for expected credit impairment losses/gains/bad debts expense Net losses/gains on financial assets or liabilities at fair value through profit and loss Interest expense Interest income Dividend income Compensation cost of share-based payments Gains of affiliates and joint ventures accounted for using the equity method Loss on disposal and retirement of property, plant and equipment Reclassified expenses of property, plant and equipment Impairment losses on property, plant and equipment Losses/gains on disposal of financial assets at cost Impairment losses on financial assets at cost Losses/gains on disposal of investments in subsidiaries Impairments losses on non-current assets held for sale Total income, expenses and losses without effect on cash flow Change in assets/liabilities related to operating activities: Net change in assets related to operating activities Increase/decrease in notes receivable Increase/decrease in notes receivable - related parties Increase/decrease in accounts receivable Increase/decrease in accounts receivable - related parties Increase/decrease in other receivables Increase/decrease in inventory Increase/decrease in prepayments Increase/decrease in other current assets Total net change in assets related to operating activities Net change in liabilities related to operating activities Increase/decrease in contract liability - current Increase/decrease in notes payable Increase/decrease in accounts payable Increase/decrease in accounts payable - related parties Increase/decrease in other payables Increase/decrease in refund liability - current / Increase/decrease in liability reserves - current Increase/decrease in unearned revenue Increase/decrease in other current liabilities Increase/decrease in net defined benefit liability - non-current Total net change in liabilities related to operating activities Total net change in assets and liabilities related to operating activities Total adjustments Cash inflow (outflow) from operating activities Interests received Dividends received Interests paid Income tax paid Net cash inflow (outflow) from operating activities	Year 2018 $1,518,502 2,170,733 51,876 (2,601) (2,957) 1,579,857 (27,385) (8,198) 2,090 (349,420) 93,272 23,430 17,548 - - - - 3,548,245 3,165,459 - (5,158) 504,822 16,747 (466,870) (553,762) 36,186 2,697,424 (45,296) 4,698 (968,804) - (291,011) (12,000) (6) (4,708) (3,318) (1,320,445) 1,376,979 4,925,224 6,443,726 25,185 36,618 (1,559,284) (714,560) 4,231,685	Year 2017
		$5,348,264 1,704,020 46,493 118,560 38,058 1,174,959 (79,456) (22,334) 41,554 (535,850) 108,247 18,972 - (203,580) 27,307 6 32,410
		2,469,366
		(4,165,423) 28,315 (2,529,652) 72,382 (104,659) (1,236,243) (1,278,524) (114,631)
		(9,328,435)
		- - 1,119,971 (6,303) 484,003 (8,856) 14,671 35,317 (122,236)
		1,516,567
		(7,811,868) (5,342,502) 5,762 79,253 336,057 (1,076,642) (580,161)
		(1,235,731)

(Cont'd)

22 -

Item Cash flow from investing activities: Disposal/acquisition of financial assets at fair value through profit or loss Disposal/acquisition of financial assets at cost Disposal/acquisition of investments accounted for using the equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Disposal/acquisition of non-current assets held for sale Disposal/acquisition of intangible assets Increase/decrease in other non-current assets - prepayments for equipment Increase/decrease in other non-current assets - long-term prepaid rent Increase/decrease in other non-current assets - guarantee deposits paid Increase/decrease in other non-current assets Net cash inflow (outflow) from investing activities Cash flow from financing activities: Increase/decrease in short-term borrowing Increase/decrease in short-term notes and bills payable Issuance of corporate bonds Puttable corporate bonds Payments of long-term loans Repayments of long-term loans Increase/decrease in guarantee deposits received Increase/decrease in other non-current liabilities Cash dividends paid Cash issue Change in non-controlling interest Net cash inflow (outflow) from financing activities Effects of exchange rate movements on cash and cash equivalents Increase (decrease) in cash and cash equivalent in current period Opening cash and cash equivalents Closing cash and cash equivalents	Year 2018 (37,947) - - (6,525,438) 52,994 - (34,682) (375,506) (16,744) (20,340) (35,732) (6,993,395) (1,125,826) 350,384 2,500,000 - 5,893,801 (3,663,332) 24,170 41,242 (1,983,950) 550,800 (16,415) 2,570,874 353,838 163,002 2,006,609 $2,169,611	Year 2017
		32,534 754,963 233,028 (7,572,630) 132,803 121,474 (13,995) (535,979) (171,635) (16,652) (4,840)
		(7,040,929)
		6,449,298 (149,920) - (7,900) 8,759,832 (7,485,007) 17,845 129,585 (1,652,840) 804,000 95,312
		6,960,205
		92,266
		(1,224,189) 3,230,798
		$2,006,609

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

23 -

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholder Longchen Paper & Packaging Co., Ltd.

Opinion

We have audited the accompanying financial statements of Longchen Paper & Packaging Co., Ltd(the Company). which comprise the balance sheets as of December 31, 2018 and 2017, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion and based on our audit result and other auditors' audit reports (see "Other matters" paragraph), in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters

For the year ended December 31, 2018, the key audit matters to the Company’s financial statements were as follows:

Major transactions with related parties

Longchen Paper & Packaging Co., Ltd. strives for creating a vertically-integrated management system throughout the whole industry chain. Subsidiaries of different nature within the group are responsible for all the operational processes, from overseas procurement of waste paper or local waste paper recycling, to production and marketing of industrial paper and cartons. As the amounts of transactions with related parties are considerable, the

24 -

corporate incomes of such subsidiaries in different countries have to be recognized in different times. Moreover, transactions with upstream-downstream related parties and the evaluation on unrealized gross margin exclusion have effect on the recognition of sales revenue, cost of goods sold and gross profit on sales. Therefore, major transactions with related parties should be considered as key review issues. The information on such transactions with related parties is provided in Footnotes VII accompanying the separate financial statements.

Generally, we have reviewed and audited the aforesaid matters by following the procedure below:

Understand and verify the design and execution effectiveness of the internal control mechanism for the administration of transactions with related parties;
Understand and evaluate the rationality of assumptions and methods adopted by the management to write off estimated unrealized gross margin of companies of different nature and to adjust any timing differences;
Perform random inspection and verification on the quantity and amount of such transactions with related parties not put into production;
Reassess whether it is appropriate to write off unrealized gain or loss regarding investments accounted for using the equity method; and
Perform analytical review procedures. By reference to the previous actual operating results and in consideration of the influence of the production capacity expansion this year, assess whether the financial information by departments is consistent with the expectation.

Other matter -Report of other independent accountants

Among the invested companies listed in the separate financial statements above, the financial statements of invested companies were reviewed and audited by other auditors rather than us. Thus, the amounts listed in the financial statements of such invested companies included in our review opinions towards the separate financial statements above were based on the review reports issued by other auditors. The investment in such invested companies accounted for using the equity method as at December 31, 2018 and 2017 was respectively NT$ (hereinafter inclusive) 18,853,209 thousands and NT$19,737,154 thousands, amounting to 53.15% and 49.61% of the separate total assets. For the periods as of January 1 thru December 31, 2018 and 2017: 1) the gains and losses of related subsidiaries, affiliates and joint ventures recognized under the equity method were respectively NT$503,741 thousands and NT$2,951,912 thousands, amounting to 39.46% and 63.90% of the separate pre-tax net profit margin; and 2) other combined losses of subsidiaries, affiliates and joint ventures recognized under the equity method were respectively NT$380,204 thousands and NT$126,729 thousands, amounting to 6.40% and 2.91% of other separate net combined gains and losses.

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

Management is responsible for the preparation and fair presentation of the financial

25 -

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

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

Those charged with governance, including members of the Audit Committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report.
26 -

However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Mu Fan Wang and Hong Wen Tao.

BDO Taiwan

Republic of China

March 18, 2019

Notice to Readers

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

The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

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

27 -

Longchen Paper & Packaging Co., Ltd. Balance Sheet

December 31, 2017 and 2018

			Longchen Paper & Packaging Co., Ltd. Balance Sheet December 31, 2017 and 2018	Longchen Paper & Packaging Co., Ltd. Balance Sheet December 31, 2017 and 2018
			(expressed in thousands New Taiwan dollars)
Code 1100 1110 1150 1170 1180 1200 1210 1220 130x 1410 1470 11xx 1510 1543 1550 1600 1760 1840 1990 15xx	Asset	December 31,2018 Amount % $62,175 0.18 292 - 433,051 1.22 975,945 2.75 147,846 0.42 118,725 0.33 1,611,994 4.56 92 - 614,895 1.73 250,038 0.70 8,783 0.02 4,223,836 11.91 169,167 0.48 - - 22,436,357 63.25 7,973,939 22.48 7,618 0.02 338,538 0.95 324,308 0.91 31,249,927 88.09 $35,473,763 100.00	December 31,2017 Code Amount % $64,920 0.16 2100 457 - 2110 477,044 1.20 2150 865,404 2.19 2170 652,668 1.64 2200 56,769 0.14 2230 - - 2250 1,771 - 2300 673,022 1.69 2322 263,931 0.66 2365 24,001 0.06 21xx 3,079,987 7.74 2530 2540 2570 - - 2600 114,646 0.29 2640 28,352,819 71.27 25xx 7,863,057 19.76 2xxx 7,728 0.02 215,569 0.54 149,911 0.38 3100 36,703,730 92.26 3110 3200 3300 3310 3320 3350 3400 3410 3420 3425 3xxx $39,783,717 100.00	Liabilities and equity Current liabilities Short-term loans Short-term notes and bills payable Notes payable Accounts payable Other payables Current income tax liabilities Provisions Other current liabilities Current protion of long-term loans Refund liability - current Total current liabilities Non-current liabilities Corporate bonds payable Long-term loans Deferred income tax liabilities Other non-current liabilities Net defined benefit liability - non-current Total non-current liabilities Total liabilities Equity Capital stock Common stock Capitalsurplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity interest Exchange differences ontranslating foreign operations) Unrealized gain or loss on FVTOCI Unrealized gains orloss on available-for- sale financial assets Total equity Total liabilities and equity	December 31,2018 Amount % $1,780,000 5.02 1,299,431 3.66 89 - 750,129 2.11 515,239 1.45 372,863 1.05 - - 5,929 0.02 1,050,000 2.96 16,287 0.05 5,789,967 16.32 2,500,000 7.05 4,740,000 13.37 834,824 2.35 53,969 0.15 60,141 0.17 8,188,934 23.09 13,978,901 39.41 11,676,857 32.92 3,512,955 9.90 1,536,498 4.33 626,639 1.77 4,851,789 13.67 (1,019,040) (2.87) 309,164 0.87 - - 21,494,862 60.59 $35,473,763 100.00	December 31,2017
		Amount $62,175 292 433,051 975,945 147,846 118,725 1,611,994 92 614,895 250,038 8,783 4,223,836 169,167 - 22,436,357 7,973,939 7,618 338,538 324,308 31,249,927 $35,473,763	Amount $64,920 457 477,044 865,404 652,668 56,769 - 1,771 673,022 263,931 24,001 3,079,987 - 114,646 28,352,819 7,863,057 7,728 215,569 149,911 36,703,730 $39,783,717		Amount $1,780,000 1,299,431 89 750,129 515,239 372,863 - 5,929 1,050,000 16,287 5,789,967 2,500,000 4,740,000 834,824 53,969 60,141 8,188,934 13,978,901 11,676,857 3,512,955 1,536,498 626,639 4,851,789 (1,019,040) 309,164 - 21,494,862 $35,473,763	Amount	%
	Current assets Cash and cash equivalents Financial assets at fair value through profit or loss Notes Receivable , Net Accounts receivable,net Accounts receivable related parties Other receivables Other receivables - related parties Current income tax assets Inventory Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss - non-current Financial assets carried at cost - non-current Investments accounted for using equity method Property, plant and equipment Net amount of investment property Deferred Income tax assets Other non-current assets - other Total non-current assets TOTAL ASSETS					$2,270,000 949,047 89 727,652 489,801 138,850 28,287 3,875 1,170,000 -	5.71 2.39 - 1.83 1.23 0.35 0.07 0.01 2.93 -
						5,777,601	14.52
						- 5,490,000 925,921 53,969 55,880	- 13.80 2.33 0.14 0.14
						6,525,770	16.41
						12,303,371	30.93
						11,336,857 3,300,065 1,148,216 626,639 6,292,097 (747,066) - 5,523,538	28.48 8.30 2.89 1.58 15.81 (1.88) - 13.89
						27,480,346	69.07
						$39,783,717	100.00

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

28 -

Longchen Paper & Packaging Co., Ltd. Statements of Comprehensive Income For the years ended December 31, 2018and 2017

(expressed in thousands of New Taiwan dollars, except earnings per share)

Year 2018	Year 2018	Year 2017	Year 2017
Amount $10,286,390 (7,761,412) 2,524,978 (55,651) 2,469,327 (485,848) (416,328) (14,290) (916,466) 1,552,861 40,098 (25,409) (148,679) (142,416) (276,406) 1,276,455 (341,761) 934,694 (7,579) (5,669,634) 4,789 (373,720) 101,746 (5,944,398) $(5,009,704) $0.82 $0.82	%	Amount $9,734,730 (7,666,992) 2,067,738 - 2,067,738 (461,979) (471,497) (18,895) (952,371) 1,115,367 133,540 (23,326) (201,801) 3,595,608 3,504,021 4,619,388 (736,573) 3,882,815 (5,355) - 910 4,339,142 21,148 4,355,845 $8,238,660 $3.50 $3.43	%
	100.00 (75.45)		100.00 (78.76)
	24.55 (0.54)		21.24 -
	24.01		21.24
	(4.72) (4.05) (0.14)		(4.75) (4.85) (0.19)
	(8.91)		(9.79)
	15.10		11.45
	0.39 (0.25) (1.45) (1.38)		1.37 (0.24) (2.07) 36.94
	(2.69)		36.00
	12.41 (3.32)		47.45 (7.56)
	9.09		39.89
	(0.07) (55.12) 0.05 (3.63) 0.98		(0.06) - 0.01 44.57 0.22
	(57.79)		44.74
	(48.70)		84.63

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

29 -

Longchen Paper & Packaging Co., Ltd. Statement of Changes in Equity For the years ended December 31, 2018 and 2017 (expressed in thousands New Taiwan dollars)

Retained earnings	Retained earnings	Other equityitems	Other equityitems	Total Equity
Legal reserve $907,473 240,743 - - - - - - - - - - - $1,148,216 $1,148,216 - 1,148,216 388,282 - - - - - - - $1,536,498	Special reserve $626,639 - - - - - - - - - - - - $626,639 $626,639 - 626,639 - - - - - - - - $626,639	Exchange differences ontranslating foreign operations $(643,816) - - - - (103,250) (103,250) - - - - - - $(747,066) $(747,066) - (747,066) - - - (271,974) (271,974) - - - $(1,019,040)	Unrealized gain or loss on FVTOCI $- - - - - - - - - - - - - $- $- 5,978,814 5,978,814 - - - (5,669,634) (5,669,634) - - (16) $309,164
				$18,480,991 - (1,652,840) 4,513 3,882,815 4,355,845
				8,238,660
				804,000 1,574,049 (2,325) (8,256) 41,554 -
				$27,480,346
				$27,480,346 455,276
				27,935,622 - (1,983,950) 934,694 (5,944,398)
				(5,009,704)
				550,800 2,090 4
				$21,494,862

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

30 -

Longchen Paper & Packaging Co., Ltd. Statements of Cash Flows

For the years ended December 31, 2018 and 2017 (expressed in thousands New Taiwan dollars)

Item Cash flow from operating activities: Pre-tax profit for the current period Adjustments: Income, expenses and losses without effect on cash flow Depreciation (investment property) Distribution cost Provision for expected credit impairment losses/gains/bad debts expense (reclassified to incomes) Net losses/gains on financial assets or liabilities at fair value through profit and loss Interest expense Interest income Dividend income Compensation cost of share-based payments Gains and losses of subsidiaries, affiliates and joint ventures recognized under the equity method Loss (gain) on disposal and retirement of property, plant and equipment Reclassified expenses of property, plant and equipment Unrealized loss (gain) from sale Losses/gains on disposal of financial assets at cost Impairment losses on financial assets at cost Total income, expenses and losses without effect on cash flow Change in assets/liabilities related to operating activities: Net change in assets related to operating activities Increase/decrease in notes receivable Increase/decrease in notes receivable - related parties Increase/decrease in accounts receivable Increase/decrease in accounts receivable - related parties Increase/decrease in other receivables Increase/decrease in inventory Increase/decrease in prepayments Increase/decrease in other current assets Total net change in assets related to operating activities Net change in liabilities related to operating activities Increase/decrease in accounts payable Increase/decrease in accounts payable - related parties Increase/decrease in other payables Increase/decrease in refund liability - current / Increase/decrease in liability reserves - current Increase/decrease in other current liabilities Increase/decrease in net defined benefit liability - non-current Total net change in liabilities related to operating activities Total net change in assets and liabilities related to operating activities Total adjustments Cash inflow (outflow) from operating activities Interests received Dividends received Interests paid Income tax paid Net cash inflow (outflow) from operating activities	Year 2018 $1,276,455 425,876 7,935 (305) (2,907) 133,549 (3,536) (8,198) 2,090 142,416 (430) 23,430 55,651 - - 775,571 43,993 - (110,236) 504,822 (61,956) 58,127 64,239 15,218 514,207 22,477 - 25,313 (12,000) 2,054 (3,318) 34,526 548,733 1,324,304 2,600,759 1,462 138,519 (133,424) (213,600) 2,393,716	Year 2017
		$4,619,388 413,406 5,748 (753) (50) 196,990 (90,796) (22,334) 12,219 (3,595,608) (5,304) 18,972 - (42,356) 27,307
		(3,082,559)
		(98,968) 28,315 (35,092) 66,224 2,820 (231,114) (32,786) 612
		(299,989)
		(51,956) (6,178) (613,745) (8,856) (7,682) (122,236)
		(810,653)
		(1,110,642)
		(4,193,201)
		426,187 118,353 258,968 (196,181) (60,719)
		546,608

(Cont'd)

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Item Cash flow from investing activities: Other receivables - related parties' financing Disposal/acquisition of financial assets at fair value through profit or loss Disposal/acquisition of financial assets at cost Disposal/acquisition of investments accounted for using the equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Increase/decrease in other non-current assets - prepayments for equipment Increase/decrease in other non-current assets - guarantee deposits paid Increase/decrease in other non-current assets Net cash inflow (outflow) from investing activities Cash flow from financing activities: Increase/decrease in short-term borrowing Increase/decrease in short-term notes and bills payable Issuance of corporate bonds Puttable corporate bonds Payments of long-term loans Repayments of long-term loans Increase/decrease in other non-current liabilities Cash dividends paid Cash issue Net cash inflow (outflow) from financing activities Increase (decrease) in cash and cash equivalent in current period Opening cash and cash equivalents Closing cash and cash equivalents	Year 2018 (1,609,920) (51,449) - - (364,548) 3,655 (423,169) 494 (8,758) (2,453,695) (490,000) 350,384 2,500,000 - 2,530,000 (3,400,000) - (1,983,950) 550,800 57,234 (2,745) 64,920 $62,175	Year 2017
		3,001,050 - 21,996 159,891 (215,403) 11,224 93,303 377 (4,474)
		3,067,964
		1,830,000 (149,920) - (7,900) 860,000 (5,630,000) 53,895 (1,652,840) 804,000
		(3,892,765)
		(278,193) 343,113
		$64,920

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

32 -

Case 2 (proposed by the Board of Directors)

Summary: The proposal for net earnings disposition of 2018 is presented for ratification.

Notes: 1. The Company's "Earnings Appropriation Statement of 2018" was prepared. The net profit after tax in 2018 was NT$934,693,523. The number of its outstanding shares was 1,167,685,727, with the basic EPS of NT$0.82. The accumulated distributable earnings were NT$4,851,788,668 (see the "Earnings Appropriation Statement" below). Now, the Company intends to distribute NT$583,842,864 as cash dividends of common stock (NT$0.5 per share), except the provision of NT$93,469,352 for legal reserve.
After this proposal is ratified at the annual meeting of shareholders, July 6, 2019 is defined as the baseline date of dividend payout. The distribution of such cash dividends will be rounded off to NT$1 based on the shareholding percentage recorded in the register of shareholders on the date of dividend payout, and any cash dividends distributable less than NT$1 will be included in the Company's other income. The Chairman will be authorized to adjust the dividend payout ratio for shareholders and deal with other related matters in case of any change in the total number of outstanding shares and such ratio due to subsequent buyback of the Company's shares, transfer or cancellation of treasury stock, or obtaining proceeds from new issues.

Resolution:

33 -

Longchen Paper & Packaging Co., Ltd.

Earnings Distribution Proposal

December 31, 2018

Unit: NT$

	Unit: NT$
I. Distributable Items	Amount
Opening accumulated undistributed earnings	3,919,864,721
Plus/less:
Net current profit after tax	934,693,523
Effect of change in other comprehensive income	(2,769,576)
Total distributable earnings	4,851,788,668
II. Distributions
1. Legal reserve	93,469,352
2. Dividends of common stock (NT$0.5 cash dividend pershare)	583,842,864
Total	677,312,216
Ending accumulated undistributed earnings	4,174,476,452

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

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Discussion Items

35 -

[Discussion Items]

Case 1 (proposed by the Board of Directors)

Summary: The amendment to the Company's “Articles of Incorporation” is presented for discussion.

Note: In response to the related laws and regulations and actual operational needs, the clauses of the original "Articles of Incorporation" shall be amended. The clauses thereof before and after the amendment are presented as follows.

Amended clauses	Existingclauses	Remarks
Article 1 The Company is incorporated in accordance with the "Company Act", under the name of Longchen Paper & Packaging Co., Ltd. (English name: Longchen Paper & Packaging Co., Ltd.).	Article 1 The Company is incorporated in accordance with the "Company Act", under the name of Longchen Paper & Packaging Co., Ltd.	The English name is defined in response to the international trend.
Article 5 The Company has the authorized share capital ofFifteen Billion New Taiwan Dollars (NT$15,000,000,000), which is divided into500,000,000units to issuecommon or preferred shares, with NT$10 per share; wherein the board of directors is authorized to issue unissued shares in installments as needed.	Article 5 The Company has the authorized share capital of Thirteen BillionNew Taiwan Dollars(NT$13,000,000,000), which is divided into 1,300,000,000units, with NT$10 per share; wherein the board of directors is authorized to issue unissued shares in installments as needed.	Increasing the authorized share capital to maintain financial flexibility; Increasing the preferred shares to be issued according to the Company's operations
Article 7.1 Shares purchased by the Company pursuant to the"Company Act"can be transferred only to the employees of the Company and any domestic and overseas companies controlled or affiliated to the Company; specific subscription conditions and qualified transferee shall be decided by the board of directors		This is a new clause. Subject to adjustment as per Circular JGZFZ No. 1070121068 issued by the Financial Supervisory Commission on December 27, 2018 For such employees defined herein, the

36 -

Amended clauses	Existingclauses	Remarks
according to the"Company Act". Only the employees of the Company and any domestic and overseas companies controlled or affiliated to the Company are entitled to subscribe the Company's new shares pursuant to the "Company Act"; specific subscription conditions and qualified subscribers shall be decided by the board of directors according to the"Company Act". Only the employees of the Company and any domestic and overseas companies controlled or affiliated to the Company are entitled to the restricted stock awards (RSA) granted by the Company; specific conditions and qualified employees shall be decided by the board of directors according to the"Company Act".		specific audience shall include the employees of controlled or affiliated companies meeting some required conditions.
Article 22 The board of directors is responsible for preparing and submitting the following statements and reports according to the legal procedures at the annual meeting of shareholders for ratification at the end of each fiscal year. 22.1 Business report; 22.2 Financial statements; and 22.3 Earnings appropriation or loss reimbursement proposals The board of directors is authorized to distribute all or part of dividends and bonuses in cash based on the resolution of over half of attending directors and report at the annual meeting of shareholders, where more than two thirds of all directors shall be present, at the end of each fiscal year. The Company's earnings appropriation or loss reimbursement shall be carried out after the end of the first or second half of each fiscal year.	Article 22 The board of directors is responsible for preparing and submitting the following statements and reports according to the legal procedures at the annual meeting of shareholders for ratification at the end of each fiscal year. 22.1 Business report; 22.2 Financial statements; and 22.3 Earnings appropriation or loss reimbursement proposals	Article 22.2 is added pursuant to Article 240.5 of the "Company Act". Article 22.3 is added pursuant to Article 228.1 of the "Company Act"; accordingly, any earnings appropriation or loss reimbursement shall be carried out after the end of the first or second half of each fiscal year.

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Amended clauses	Existingclauses	Remarks
Article 22.1 The Company is required to allocate at least 2% of its annual pre-tax net profits (if any) in the form of cash or stock for employees' bonuses as ratified by over half of attending directors and as reported at the shareholders meeting, where more than two thirds of all directors shall be present. However, in case of previous losses, the reimbursement amount shall be retained, discussed and approved by the board of directors, and then reported at the shareholders meeting. Only the employees of the Company and any domestic and overseas companies controlled or affiliated to the Company are entitled to the bonuses in the form of stock or cash; specific conditions and qualified employees shall be decided by the board of directors according to the "Company Act".	Article 22.1 The Company is required to allocate at least 2% of its annual pre-tax net profits (if any) in the form of cash or stock for employees' bonuses as ratified by over half of attending directors and as reported at the shareholders meeting, where more than two thirds of all directors shall be present. However, in case of previous losses, the reimbursement amount shall be retained, discussed and approved by the board of directors, and then reported at the shareholders meeting.	Article 22.3 is added pursuant to Article 235.1 of the "Company Act"; accordingly, for such employees defined herein, the specific audience shall include the employees of controlled or affiliated companies meeting some required conditions.
Article 25 The Articles of Incorporation was established on January 25, 1978. (The 1st to 37th amendments: omitted) The 38th amendment will be made on June 12, 2019.	Article 25 The Articles of Incorporation was established on January 25, 1978. (The 1st to 37th amendments: omitted)	The date of the 38th amendment added

Resolution:

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Case 2 (proposed by the Board of Directors)

Summary: The proposal for amendment to the Company's “Procedures for Acquisition or Disposal of Assets” is presented for discussion.

Note: In response to the related laws and regulations and actual operational needs, the clauses of the original "Procedures for Acquisition or Disposal of Assets" shall be amended. The clauses thereof before and after the amendment are presented as follows.

Amended clauses	Existingclauses	Remarks
Article 3: Scope of assets 3.1 Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities; 3.2 Real property (including lands, houses, buildings, investment property, inventories of construction enterprises) and equipment; 3.3 Memberships; 3.4 Patents, copyrights, trademarks, franchise rights and other intangible assets; 3.5 Right-of-use asset; 3.6Derivatives (see our “The Policies and Procedures for Derivatives Trading”); 3.7Assets acquired or disposed of in connection with mergers, spin- off, acquisitions or share transfer in accordance with laws; and 3.8Other major assets	Article 3: Scope of assets 3.1 Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities; 3.2 Real property (including lands, houses, buildings, investment property,rights to use land, inventories of construction enterprises) and equipment; 3.3 Memberships; 3.4 Patents, copyrights, trademarks, franchise rights and other intangible assets; 3.5Derivatives (see our “The Policies and Procedures for Derivatives Trading”); 3.6Assets acquired or disposed of in connection with mergers, spin- off, acquisitions or share transfer in accordance with laws; and 3.7Other major assets	Amendments were made to comply with Article 3 of Taiwan's "Regulations Governing the Acquisition or Disposal of Assets of Public Companies".
Article 4: Definitions 4.1 Assets acquired or disposed by means of merger, divestment, acquisition or share transfer according to law: refer to any assets acquired or disposed by	Article 4: Definitions 4.1 Assets acquired or disposed by means of merger, divestment, acquisition or share transfer according to law: refer to any assets acquired or disposed by	Amendments were made to comply with Article 4 of Taiwan's "Regulations

39 -

Amended clauses	Existingclauses	Remarks
means of merger, divestment or acquisition pursuant to the "Enterprises Mergers and Acquisitions Act", the "Financial Holding Company Act", the "Financial Institutions Merger Act" or any other act, or those through issuance of new shares or transfer of another firm's shares (hereinafter referred to as "Share Transfer") subject to Article156.3of the "Company Act". (Sub-clause 4.2 through 4.6: omitted)	means of merger, divestment or acquisition pursuant to the "Enterprises Mergers and Acquisitions Act", the "Financial Holding Company Act", the "Financial Institutions Merger Act" or any other act, or those through issuance of new shares or transfer of another firm's shares (hereinafter referred to as "Share Transfer") subject to Article156.8 of the "Company Act". (Sub-clause 4.2 through 4.6: omitted)	Governing the Acquisition or Disposal of Assets of Public Companies".
Article 6: Regarding any appraisal report issued to the public company or any opinion issued by accountants, lawyers or securities underwriters, any such appraisers and valuators, accountants, lawyers or securities underwritersshall conform to the following provisions: 6.1 Any such personnel has never been convicted or sentenced to more than one year imprisonment because of his/her violation against the"Regulations Governing the Acquisition or Disposal of Assets of Public Companies", the"Company Act", the"Banking Act", the "Insurance Act", the"Financial Holding Company Act"or the "Business Accounting Act", or fraud, breach of faith, misappropriation, forged document or duty-related crime, unless such fixed-term imprisonment has been completed, or the probationary period expires, or such person has been pardoned for three years. 6.2 Any such person shall neither be related to, nor have a genuine and substantial relationship with any party to a transaction.	Article 6: Regarding any appraisal report issued to the public company or any opinion issued by accountants, lawyers or securities underwriters,nosuch appraiser or valuator, accountant, lawyer or securities underwriter shall berelated to the party to such transaction.	Amendments were made to comply with Article 5 of Taiwan's "Regulations Governing the Acquisition or Disposal of Assets of Public Companies".

40 -

	Amended clauses	Existingclauses	Remarks
6.3 If the Company has to obtain the appraisal reports issued by more than two appraisers, different appraisers or valuators shall neither be related to each other, nor have genuine and substantial relationships with each other. The foregoing personnel shall issue appraisal reports or opinions pursuant to the following provisions: 1. Such personnel shall carefully evaluate their own professional competence, actual experience and independence before undertaking any case. 2. When performing their audit duties, such personnel shall properly plan and implement applicable operating procedures to draw conclusions and issue reports or opinions accordingly, and record any procedures implemented, information and data collected, and conclusions in detail in the case draft. 3. Such personnel shall evaluate the integrity, correctness and rationality of any information sources, parameters and information used, item by item, which shall be the basis of his/her appraisal reports or opinions. 4. Required statements shall include the professional qualifications, competence and independence of related persons, as well as the fact that any information used is evaluated and determined reasonable and correct, and complies with relevant laws and statutes.
Article 8: Procedures for acquisition or disposal of property,equipmentor rights to use such assets 8.1 Evaluation and implementation procedures The Company's acquisition or		Article 8: Procedures for acquisition or disposal of property orequipment 8.1 Evaluation and implementation procedures The Company's acquisition or	Amendments were made to comply with Article 9 of Taiwan's "Regulations Governingthe

41 -

	Amended clauses	Existingclauses	Remarks
disposal of property,equipment or rights to use such assetsshall be subject to its internal control system regarding fixed asset cycle. (Sub-clause 8.2 and 8.3: omitted) 8.4 Appraisal report on the real property or equipment For the Company's acquisition or disposal of any property, equipment,or the right to use such asset,except for any transaction with adomestic government authority, authorized construction on its own or rented land, or acquisition or disposal of any equipment,or the right to use such assetfor the business purpose, if the transaction amount is over twenty percent (20%) of the Company's paid-up capital, or more than NT$300,000,000, an appraisal report shall be issued by an appraiser to the Company prior to the date of occurrence of the fact; it shall also conform to the following provisions: 8.4.1 If any price ceiling or specific price shall be the basis of the transaction value for special reasons, such transaction shall be approved with the board resolution in advance. In case of anysubsequentchange in the transaction conditions,the same procedure shall also apply. (Sub-clause 8.4.2 through 8.4.4: omitted)		disposal of property orequipment shall be subject to its internal control system regarding fixed asset cycle. (Sub-clause 8.2 and 8.3: omitted) 8.4 Appraisal report on the real property or equipment For the Company's acquisition or disposal of any propertyor equipment, except for any transaction with a government authority, authorized construction on its own or rented land, or acquisition or disposal of any equipment for the business purpose, if the transaction amount is over twenty percent (20%) of the Company's paid-up capital, or more than NT$300,000,000, an appraisal report shall be issued by an appraiser to the Company prior to the date of occurrence of the fact; it shall also conform to the following provisions: 8.4.1 If any price ceiling or specific price shall be the basis of the transaction value for special reasons, such transaction shall be approved with the board resolution in advance. In case of anyfuturechange in the transaction conditions,the aforesaid procedure shall also apply. (Sub-clause 8.4.2 through 8.4.4: omitted)	Acquisition or Disposal of Assets of Public Companies".
Article 10: Procedures for acquisition or disposal of intangible assets,or the right to use such assets, or memberships 10.1 Evaluation and implementation procedures The Company's acquisition or		Article 10: Procedures for acquisition or disposal ofmemberships orintangible assets 10.1 Evaluation and implementation procedures The Company's acquisition or	Amendments were made to comply with Article 11 of Taiwan's "Regulations Governing the Acquisition or

42 -

Amended clauses	Existingclauses	Remarks
disposal of intangible assets, or the right to use such assets, or memberships shall be subject to its internal control system regarding fixed asset cycle procedure. (Sub-clause 10.2: omitted) 10.3 Execution The department in use and the financial or administrative department shall be responsible for the execution of intangible assets,or the right to use such assets, or membershipsin accordance with the scope of authorization. 10.4 Expert evaluation report on intangible assets,or the right to use such assets, or memberships If the amount of the Company's acquisition or disposal of any intangible asset, or the right to use such asset, or memberships is over twenty percent (20%) of its paid-up capital, or more than NT$300,000,000, except for a transaction with anydomestic government authority, accountants shall be retained to provide their opinions towards the rationality of the transaction value prior to the date of occurrence of the fact; the accountants shall follow "Statement of Auditing Standard No. 20" issued by the Accounting Research and Development Foundation(ARDF).	disposal ofmemberships or intangible assets shall be subject to its internal control system regarding fixed asset cycle procedure. (Sub-clause 10.2: omitted) 10.3 Execution The department in use and the financial or administrative department shall be responsible for the execution of memberships orintangible assets in accordance with the scope of authorization. 10.4 Expert evaluation report on memberships orintangible assets If the amount of the Company's acquisition or disposal of memberships orintangible asset is over twenty percent (20%) of its paid- up capital, or more than NT$300,000,000, except for a transaction with any government authority, accountants shall be retained to provide their opinions towards the rationality of the transaction value prior to the date of occurrence of the fact; the accountants shall follow "Statement of Auditing Standard No. 20" issued by the Accounting Research and Development Foundation (ARDF).	Disposal of Assets of Public Companies".
Article 11: The transaction amounts referred to in Article 8, 9 and 10 above shall be calculated in accordance with Sub- clause 14.1.8and the period for one year shall commence from the date when the transaction takes place, provided, however, that the calculation should exclude any amount for which the appraiser has already issued an appraisal report, or a CPA's opinion has alreadybeen	Article 11: The transaction amounts referred to in Article 8, 9 and 10 above shall be calculated in accordance with Sub- clause 14.1.4and the period for one year shall commence from the date when the transaction takes place, provided, however, that the calculation should exclude any amount for which the appraiser has already issued an appraisal report, or a CPA's opinion has alreadybeen	Adjustment to the order of clauses referred to

43 -

Amended clauses	Existingclauses	Remarks
provided.	provided.
Article 12: Procedure for transaction with a related party 12.1 In acquiring or disposing any assetor right to use such asset from or with a related party subject to Article 8, 9 and 10, the Company shall ensure that the necessary resolutions are adopted, the reasonableness of the transaction terms is appraised, and other relevant matters are carried out in compliance with the following provisions, including without limitation, in case where the transaction amount is 10% or more of the aggregate assets of the Company, obtaining an appraisal report issued by a professional appraiser or a CPA's opinion, in addition to compliance with the procedures set forth above. When judging whether a trading counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered. 12.2 Evaluation and implementation procedures If the Company acquires from a related party or disposes any propertyor the right to use such asset,or any asset (other than such property), in which the transaction amount is over twenty percent (20%) of the Company's paid-up capital, or over ten percent (10%) of its total assets, or more than NT$300,000,000, the following data shall be approved by more than two thirds of all members of the audit committee and ratified by the board of directors, and a transactional	Article 12: Procedure for transaction with a related party 12.1 In acquiring or disposing any asset from or with a related party subject to Article 8, 9 and 10, the Company shall ensure that the necessary resolutions are adopted, the reasonableness of the transaction terms is appraised, and other relevant matters are carried out in compliance with the following provisions, including without limitation, in case where the transaction amount is 10% or more of the aggregate assets of the Company, obtaining an appraisal report issued by a professional appraiser or a CPA's opinion, in addition to compliance with the procedures set forth above. When judging whether a trading counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered. 12.2 Evaluation and implementation procedures If the Company acquires from a related party or disposes any property, or any asset (other than such property), in which the transaction amount is over twenty percent (20%) of the Company's paid-up capital, or over ten percent (10%) of its total assets, or more than NT$300,000,000, the following data shall be approved by more than two thirds of all members of the audit committee and ratified by the board of directors, and a transactional contract can be signed and the corresponding	Amendments were made to comply with Article 15 through 18 of Taiwan's "Regulations Governing the Acquisition or Disposal of Assets of Public Companies".

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Amended clauses	Existingclauses	Remarks
contract can be signed and the corresponding payment can be made subsequently, except for trading ofdomesticgovernment bonds, or callable/puttable debentures, or subscription or redemption of money market funds (MMF) issued by a domestic securities investment trust enterprise: 12.2.1 The purpose, necessity and anticipated benefit of the property acquisition or disposal; 12.2.2 The reason for choosing the related party as a trading counterparty; 12.2.3 In respect of acquisition of any propertyor the right to use such assetfrom a related party, information regarding appraisal of the reasonableness of the proposed transaction terms in accordance with Sub-clause 12.3.1 through 12.3.5 of this Article; (Sub-clause 12.2.4 through 12.2.7: omitted) 12.2.8 For thefollowing transactions by and betweena public company and/or its parent company and/or subsidiaries, and/ora subsidiary, 100% of whose outstanding shares or total assets are held by such public company directly or indirectly,the Board may authorize its Chairman as per Article 8 to proceed with certain authorized transaction amount before such transaction is later submitted to the Board for approval at the next meeting immediately following the transaction: 1) Acquisition or disposal of any equipment or the right to use such asset for the business	payment can be made subsequently, except for trading of government bonds, or callable/puttable debentures, or subscription or redemption of money market funds (MMF) issued by a domestic securities investment trust enterprise: 12.2.1 The purpose, necessity and anticipated benefit of the property acquisition or disposal; 12.2.2 The reason for choosing the related party as a trading counterparty; 12.2.3 In respect of acquisition of any property from a related party, information regarding appraisal of the reasonableness of the proposed transaction terms in accordance with Sub- clause 12.3.1 through 12.3.5 of this Article; (Sub-clause 12.2.4 through 12.2.7: omitted) 12.2.8 In acquisition or disposal of any equipment for the business purpose by and between a public company and/or its parent companyor subsidiaries, the Board may authorize its Chairman as per Article 8 to proceed with certain authorized transaction amount before such transaction is later submitted to the Board for approval at the next meeting immediately following the transaction.

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		Amended clauses	Existingclauses	Remarks
purpose; and 2) Acquisition or disposal of the right to use any property for the business purpose. 12.2.9 The transaction amount shall be calculated in accordance with Sub-clause 14.1.8and the period for one year shall commence from the date when the transaction takes place, provided, however, that the calculation should exclude any amount which has already been approved by more than half of all members of the audit committee and has already been submitted to the Board for ratification as per the procedure. 12.3 Rationality assessment of transaction cost 12.3.1 The Company's acquisition of any propertyor the right to use such assetfrom the related party requires the rationality assessment of its transaction cost as describe below: (Paragraph 1 and 2: omitted) 12.3.2 For the combined purchaseor rentalof any land and housing with the same subject matter, the transaction cost shall be assessed respectively regarding such land and housing by any method above. 12.3.3 For the Company's acquisition of any propertyor the right to use such assetfrom the related party, its cost shall be assessed as per Paragraph 1 and 2, Item 3 of this article, and accountants shall also be retained for review and specific opinions. 12.3.4 In case of any one of the following circumstances, the Company's acquisition of any propertyor the right to use such assetfrom the related	2)		12.2.9 The transaction amount shall be calculated in accordance with Sub-clause 14.1.4and the period for one year shall commence from the date when the transaction takes place, provided, however, that the calculation should exclude any amount which has already been approved by more than half of all members of the audit committee and has already been submitted to the Board for ratification as per the procedure. 12.3 Rationality assessment of transaction cost 12.3.1 The Company's acquisition of any property from the interested party requires the rationality assessment of its transaction cost as describe below: (Paragraph 1 and 2: omitted) 12.3.2 For the combined purchase of any land and housing with the same subject matter, the transaction cost shall be assessed respectively regarding such land and housing by any method above. 12.3.3 For the Company's acquisition of any property from the interested party, its cost shall be assessed as per Paragraph 1 and 2, Item 3 of this article, and accountants shall also be retained for review and specific opinions. 12.3.4 In case of any one of the following circumstances, the Company's acquisition of any property from the interested partyshall be subject to the

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		Amended clauses	Existingclauses	Remarks
1) 2) 3) 4) 12.3.5	1) 2) 3) 4)	party shall be subject to the evaluation provisions of Item 1 and 2 of this article as well as relevant evaluation and implementation procedures, and Paragraph 1, 2 or 3, Item 3 of this article, concerning the rationality assessment of transaction cost, shall not apply: The related party has acquired such propertyor the right to use such assetby means of inheritance or gift. The date when the related party acquired such property or the right to use such asset according to the related contract is more than five years earlier than the execution date of this transaction contract. The property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build the property, either on the Company's own land or on rented land. Acquisition of the right to use any properties for the business purpose by and between a public company and/or its parent company and/or subsidiaries, and/or a subsidiary, 100% of whose outstanding shares or total assets are held by such public company directly or indirectly For the Company's acquisition of any property from the related party, if the assessment subject to Paragraph 1 and 2, Item 3 of this article is lower than the transaction value, Paragraph 6, Item 3 of this article shall apply, except, under anyof	evaluation provisions of Item 1 and 2 of this article as well as relevant operating procedures, and Paragraph 1, 2 or 3, Item 3 of this article, concerning the rationality assessment of transaction cost, shall not apply: 1) The related party has acquired such property by means of inheritance or gift. 2) The date when the related party acquired such property according to the related contract is more than five years earlier than the execution date of this transaction contract. 3) The property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build the property, either on the Company's own land or on rented land. 12.3.5 For the Company's acquisition of any property from the related party, if the assessment subject to Paragraph 1 and 2, Item 3 of this article is lower than the transaction value, Paragraph 6, Item 3 of this article shall apply, except, under anyof the following

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Amended clauses			Existingclauses	Remarks
the following circumstances, objective evidence is provided and the opinions are issued by property appraisers and accountants regarding the transaction rationality: 1) If such related party has acquired a parcel of land without any building, or rented a parcel of land for construction, relevant evidence shall be provided to support that at least one of the following conditions is met: i. Where undeveloped land is appraised in accordance with the means in the preceding Article, 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 three 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. ii For thetransactioncases of other floors of the target property or other non-related parties in the adjacent area within one year, the areas are similar and the transaction conditions are also similar through the assessment on the reasonable price differences in floors or areas according to the property businessor lease practices.		1) i. ii. iii.	circumstances, objective evidence is provided and the opinions are issued by property appraisers and accountants regarding the transaction rationality: If such related party has acquired a parcel of land without any building, or rented a parcel of land for construction, relevant evidence shall be provided to support that at least one of the following conditions is met: Where undeveloped land is appraised in accordance with the means in the preceding Article, 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 three 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. For the transaction cases of other floors of the target property or other non-related parties in the adjacent area within one year, the areas are similar and the transaction conditions are also similar through the assessment on the reasonable price differences in floors or areas according to the property business practices. For the leasehold cases of other floors of the target property for other non-related parties within one year, the

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	Amended clauses		Existingclauses	Remarks
2) 12.3.6 1)	It is demonstrated by the Company that the transaction conditions of its property, which is purchased from the related party,or for which the right to use is obtained via a lease,are similar to those of other non-related parties in the adjacent area within one year, and that such property has an area similar tothoseof other non-related parties’ properties. For the aforesaid transactioncases in the adjacent area, they are all located in the same or adjacent block and less than 500 m away from the target transaction property, or their announced current values are similar. For such similar areas, the area in each transactioncase of any other non-related party is not less than fifty percent (50%) of the target transaction property area. “Within one year” refers to one year as of the date when the Company acquires such propertyor obtains the right to use such asset. For the Company's acquisition of any propertyor the right to use such assetfrom the related party, if the assessment subject to Paragraph 1 through 5, Item 3 of this article is lower than the transaction value, the following rules shall apply: The Company shall have the special reserve provided regarding the difference between the transaction value	2) 12.3.6 1)	transaction conditions are similar through the estimation of the reasonable price differences in floors according to the property lease practices. It is demonstrated by the Company that the transaction conditions of its property purchased from the interested party are similar to those of other non-related parties in the adjacent area within one year, and that such property has an area similar tothoseof other non-related parties’ properties. For the aforesaidtransaction cases in the adjacent area, they are all located in the same or adjacent block and less than 500 m away from the target transaction property, or their announced current values are similar. For such similar areas, the area in eachtransaction case of any other non-related party is not less than fifty percent (50%) of the target transaction property area. “Within one year” refers to one year as of the date when the Company acquires such property. For the Company's acquisition of any property from the interested party, if the assessment subject to Paragraph 1 through 5, Item 3 of this article is lower than the transaction value, the following rules shall apply. The Company shall have the special reserve provided regarding the difference between the transaction value

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	Amended clauses	Existingclauses	Remarks
2) 3)	and assessed cost of its propertyor such asset which the Company has the right to usepursuant to Article 41.1 of the "Securities and Exchange Act", and such reserve shall not be used to distribute or turned to increase any stock dividends. If the investor, who has the Company's investment evaluated under the equity method, is a public company, the provision for special reserve shall also be made in the shareholding ratio regarding such provision amount pursuant to Article 41.1 of the "Securities and Exchange Act". The audit committee shall be subject to Article 218 of the "Company Act". The processing scenarios set out in Point 1 and 2 of this subparagraph shall be reported at the general meeting of shareholders. The transaction particulars shall be disclosed in the annual report and the prospectus. In addition, if any special reserve is provided for the Company and the Company's investment upon evaluation under the equity method, the loss from falling price recognized concerning the asset acquiredor rentedat a high price shall be disposed or compensated appropriately, or its tenancy agreement shall be terminated, or such asset shall be reinstated to its original condition; such special reserve can be employed if other evidence supports its rationality and the Financial Supervisory Commission, Executive	and assessed cost of its property pursuant to Article 41.1 of the "Securities and Exchange Act", and such reserve shall not be used to distribute or turned to increase any stock dividends. If the investor, who has the Company's investment evaluated under the equity method, is a public company, the provision for special reserve shall also be made in the shareholding ratio regarding such provision amount pursuant to Article 41.1 of the "Securities and Exchange Act". 2) The audit committee shall be subject to Article 218 of the "Company Act". 3) The processing scenarios set out in Point 1 and 2 of this subparagraph shall be reported at the general meeting of shareholders. The transaction particulars shall be disclosed in the annual report and the prospectus. In addition, if any special reserve is provided for the Company and the Company's investment upon evaluation under the equity method, the loss from falling price recognized concerning the asset acquired at a high price shall be disposed or compensated appropriately, or such asset shall be reinstated to its original condition; such special reserve can be employed if other evidence supports its rationality and the Financial Supervisory Commission, Executive Yuan, approves it.

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Amended clauses	Existingclauses	Remarks
Yuan, approves it. 12.3.7 Where other evidence shows that the Company's acquisition of any property or the right to use such asset from the related party does not comply with any common business practice, Paragraph 6, Item 3 of this article shall apply.	12.3.7 Where other evidence shows that the Company's acquisition of any property from the interested party does not comply with any common business practice, Paragraph 6, Item 3 of this article shall apply.
Article 14: Procedure for information disclosure 14.1 Projects and thresholds for public disclosure 14.1.1 For the acquisition or disposal of any propertyor the right to use such assetfrom the related party, or any asset (other than such property), the transaction value is more than twenty percent (20%) of the Company's paid-up capital, ten percent (10%) of its total assets or NT$300,000,000, except for trading ofdomestic government bonds, or callable/puttable debentures, or subscription or redemption of money market funds (MMF) of a domestic securities investment trust enterprise. 14.1.2 Mergers, spin-off, acquisitions or transfer of shares 14.1.3 The loss arising from any derivatives transaction is up to the upper limit specified in the applicable procedure already formulatedor separate or all agreements. 14.1.4 Acquisition or disposal of any equipmentor the right to use such assetfor the business purpose, and the trading counterparty is a non-related party; the transaction amount meets one of the following provisions:	Article 14: Procedure for information disclosure 14.1 Projects and thresholds for public disclosure 14.1.1 For the acquisition or disposal of any property from the related party, or any asset (other than such real estate), the transaction amount is twenty percent (20%) or more of the Company's paid-up capital, ten percent (10%) of its total assets or more, or over NT$300,000,000, except for trading of government bonds, or callable/puttable debentures, or subscription or redemption of money market funds (MMF) issued by a domestic securities investment trust enterprise. 14.1.2 Mergers, spin-off, acquisitions or transfer of shares 14.1.3 The loss arising from any derivatives transaction is up to the upper limit specified in the applicable procedure already formulated or separate or all agreements. 14.1.4 Any asset acquired or disposed is a kind of equipment for the business purpose, and the counterparty is a non-related party; the transaction amount meets one of the following provisions:	Amendments were made to comply with Article 31 of Taiwan's "Regulations Governing the Acquisition or Disposal of Assets of Public Companies".

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	Amended clauses	Existingclauses	Remarks
1) 2) 14.1.5 14.1.6 14.1.7	Any public company in which the paid-up capital does not reach NT$10,000,000,000 and the transaction amount exceeds NT$500,000,000; or Any public company in which the paid-up capital is NT$10,000,000,000 or more and the transaction amount is NT$1,000,000,000 or more. A public company specialized in building has acquired or disposed any property or the right to use such asset for the building purpose, and the trading counterparty is a non- related party; the transaction amount is more than NT$500,000,000;for the paid-up capital more than NT$10,000,000,000 and the disposal of any property that is independently constructed and completed, if the trading counterparty is a non-related party, the transaction amount shall be over NT$1,000,000,000. If any property is acquired by means of authorized construction on its own or rented land, joint construction and housing allocation, joint construction and profit division, or joint construction and instalment sale,and the counterparty is a non-related party,the Company's expected transaction amount shall be more than NT$500,000,000. Except for the aforesaid six circumstances, the transaction amount of any asset, a creditor's right disposed by a financial institution, or any investment in mainland China is twenty percent (20%) or more of the Company'spaid-	1) Any public company in which the paid-up capital does not reach NT$10,000,000,000 and the transaction amount exceeds NT$500,000,000; or 2) Any public company in which the paid-up capital is NT$10,000,000,000 or more and the transaction amount is NT$1,000,000,000 or more. 14.1.5 A public company specialized in building has acquired or disposed any property for the building purpose, and the trading counterparty is a non- related party; the transaction amount is more than NT$500,000,000. 14.1.6 If any property is acquired by means of authorized construction on its own or rented land, joint construction and housing allocation, joint construction and profit division, or joint construction and instalment sale, the Company's expected transaction amount shall be more than NT$500,000,000. 14.1.7 Except for the aforesaid six circumstances, the transaction amount of any asset, a creditor's right disposed by a financial institution, or any investment in mainland China is twenty percent (20%) or more of the Company'spaid-

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	Amended clauses	Existingclauses	Remarks
1) 2) 3) 14.1.8 1)	up capital or over NT$300,000,000. However, this provision is not applicable to the following circumstances: Trading ofdomestic government bonds; Focusing on investment, trading of securities in a stock exchange, or the business location of a securities dealer, or subscription, funding and issuance of ordinary corporate bonds and general financial bonds(excluding subordinated financial bonds) not related to equity in a primary market;or subscription or redemption of securities investment trust or futures trust funds;or any securities dealer subscribes for the underwriting business purpose, and the business assistant of an emerging company recommends the securities dealer to subscribe any securities, according to the provisions of the Taipei Exchange; and Trading of callable/puttable debentures, or subscription or redemption of money market funds (MMF) issued by a domestic securities investment trust enterprise. The transaction amounts specified inSub-clause 14.1.1 through 14.1.7above shall be calculated on the following basis and the period for one year shall commence from the date when such transaction takes place, provided, however, that the calculation should exclude any amount which has already been announced as stipulated: The amount of each	up capital or over NT$300,000,000. However, this provision is not applicable to the following circumstances: 1) Trading of government bonds; 2) Focusing on investment, trading of securities in an overseas or domestic stock exchange, or the business location of a securities dealer, or subscription, funding and issuance of ordinary corporate bonds and general financial bonds not related to equity in a domestic primary market; or any securities dealer subscribes for the underwriting business purpose, and the business assistant of an emerging company recommends the securities dealer to subscribe any securities, according to the provisions of the Taipei Exchange; and 3) Trading of callable/puttable debentures, or subscription or redemption of money market funds (MMF) issued by a domestic securities investment trust enterprise. 14.1.8 The transaction amounts specified inthree sub-clauses above shall be calculated on the following basis and the period for one year shall commence from the date when such transaction takes place, provided, however, that the calculation should exclude any amount which has already been announced as stipulated: 1) The amount of each

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	Amended clauses	Existingclauses	Remarks
transaction; 2) Aggregate amount of transactions by and between the Company and the same counterparty within one year for acquisition or disposal of subject matters of the same nature; 3) Aggregate amount of propertiesor the right to use such assetsfor the same development plan acquired or disposed within one year (i.e. separate accumulation for acquisitions and disposals); and 4) Aggregate amount of securities of the same nature acquired or disposed within one year (i.e. separate accumulation for acquisitions and disposals). (Subparagraph 2: omitted) 14.3 Procedure for public disclosure (Sub-clause 14.3.1 through 14.3.3: omitted) 14.1.4 For the Company's acquisition or disposal of assets, the related agreements, meeting minutes, memorandum books, appraisal reports, and opinions of accountants, lawyers or securities underwriters shall be maintained in the Company for at least five years, unless otherwise provided by other laws. (Sub-clause 14.1.5: omitted) (Subparagraph 4: omitted)		transaction; 2) Aggregate amount of transactions by and between the Company and the same counterparty within one year for acquisition or disposal of subject matters of the same nature; 3) Aggregate amount of properties for the same development plan acquired or disposed within one year (i.e. separate accumulation for acquisitions and disposals); and 4) Aggregate amount of securities of the same nature acquired or disposed within one year (i.e. separate accumulation for acquisitions and disposals). (Subparagraph 2: omitted) 14.3 Procedure for public disclosure (Sub-clause 14.3.1 through 14.3.3: omitted) 14.1.4 For the Company's acquisition or disposal of assets, the related agreements, meeting minutes, memorandum books, appraisal reports, and opinions of accountants, lawyers or securities underwriters shall be maintained inthe Companyfor at least five years, unless otherwise provided by other laws. (Sub-clause 14.1.5: omitted) (Subparagraph 4: omitted)
Article 15: Any subsidiaries of the Company shall be subject to the following provisions: 15.1 The acquisition or disposal of assets by a subsidiary of the Company shall be subject to the Procedures; 15.2 If a subsidiaryof the Company		Article 15: Any subsidiaries of the Company shall be subject to the following provisions: 15.1 The acquisition or disposal of assets by a subsidiary of the Company shall be subject to the Procedures; 15.2 If a subsidiaryof the Company	Amendments were made to comply with Article 32 through 34 of Taiwan's "Regulations Governing the Acquisition or

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Amended clauses	Existingclauses	Remarks
is not a public company, where a threshold for public disclosure as stipulated under Article 30 of "Taiwan's Regulations Governing the Acquisition or Disposal of Assets of Public Companies" has been met, the parent company shall make the relevant disclosure on behalf of the subsidiary. 15.3 If a subsidiaryis required to perform public disclosure related to the paid-up capital or the aggregate amount of assets subject to Article 14.1, such disclosure should be based on the paid-up capital or the aggregate amount of assets of its parent company/the Company.	is not a public company, where a threshold for public disclosure as stipulated under Article 30 of "Taiwan's Regulations Governing the Acquisition or Disposal of Assets of Public Companies" has been met, the parent company shall make the relevant disclosure on behalf of the subsidiary. 15.3 Ifthe transaction amount of a subsidiary, amounting to"twenty percent (20%) of the Company's paid-up capital or ten percent (10%) of the aggregate amount of its assets", reaches a threshold for public disclosure as stipulated, such disclosure should be based on the paid-up capital or the aggregate amount of assets of its parent company/the Company.	Disposal of Assets of Public Companies".

Resolution:

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Case 3 (proposed by the Board of Directors)

Summary: The proposal for amendment to the Company's “Procedures for Lending of Capital” is presented for discussion.

Note: In response to the related laws and regulations and actual operational needs, the clauses of the original "Procedures for Lending of Capital" shall be amended. The clauses thereof before and after the amendment are presented as follows.

Amended clauses	Existingclauses	Remarks
Article 4: The aggregate amount of loans and the maximum amount permitted to a single borrower The maximum amount and purpose of any loan extended by the Company to each borrower should be subject to the following provisions: (Subparagraph 1 and 2: omitted) The restriction under the preceding paragraph shall not apply to inter- company loans of funds between foreign companies in which the Company holds, directly or indirectly, 100% of the voting shares, orany loans of funds granted to a public company by foreign companies in which the public company holds, directly or indirectly, 100% of the voting shares;provided, however, that the aggregate amount of loans or the maximum amount permitted to a single borrower shall not exceed 150% of the lender's net worth as stated in its latest financial statements audited and attested or reviewed by CPAs; and the term of each loan extended shall not exceed oneyear.	Article 4: The aggregate amount of loans and the maximum amount permitted to a single borrower The maximum amount and purpose of any loan extended by the Company to each borrower should be subject to the following provisions: (Subparagraph 1 and 2: omitted) The restriction under the preceding paragraph shall not apply to inter- company loans of funds between foreign companies in which the Company holds, directly or indirectly, 100% of the voting shares, provided, however, that the aggregate amount of loans or the maximum amount permitted to a single borrower shall not exceed 150% of the lender's net worth as stated in its latest financial statements audited and attested or reviewed by CPAs; and the term of each loan extended shall not exceed one year.	Amendments were made to comply with Article 3 of the "Guidelines for Fund- Lending and Providing Endorsements and Guarantees by Public Companies".
Article 5: Procedures for handling loans of funds (Subparagraph 1 and 2: omitted) 5.3 Scope of delegation	Article 5: Procedures for handling loans of funds (Subparagraph 1 and 2: omitted) 5.3 Scope of delegation	Amendments were made to comply with Article 8 of

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Amended clauses Existing clauses Remarks Any lending of the Company's Any lending of the Company's the funds or short-term financing funds or short-term financing "Guidelines shall be reviewed by its shall be reviewed by its for Fundresponsible department(s), responsible department(s), Lending and submitted to the general manager submitted to the general manager Providing for approval and to the board of for approval and to the board of Endorsements directors for resolution and directors for resolution and and ratification in advance and no ratification in advance and no Guarantees by delegation shall be made to any delegation shall be made to any Public person in this regard. person in this regard. Companies". When fund lending is When fund lending is contemplated between the contemplated between the Company and its Subsidiaries is Company and its Subsidiaries is contemplated by the Company, an contemplated by the Company, an approval from the board of approval from the board of directors shall be obtained as per directors shall be obtained as per the Procedure, and the Chairman the Procedure, and the Chairman shall be authorized to handle the shall be authorized to handle the matter within the specific amount matter within the specific amount of fund lending to the same party of fund lending to the same party approved by the board of directors approved by the board of directors and the lending is authorized in and the lending is authorized in installment or revolver within one installment or revolver within one year. year. "Specific amount" as referred to "Specific amount" as referred to above shall mean that the authorized above shall mean that the authorized amount of loans by the Company or amount of loans by the Company or its subsidiaries to an individual entity its subsidiaries to an individual entity shall not exceed 10% of the Company shall not exceed 10% of the Company or such subsidiary’s net value in the or such subsidiary’s net value in the latest financial statements, except latest financial statements, except loans satisfying Sub-clause 4.2. loans satisfying Sub-clause 4.2. Additionally, independent directors' Additionally, independent directors' opinions shall be taken into full opinions shall be taken into full consideration at the board meeting; consideration at the board meeting; independent directors' opinions independent directors' opinions specifically expressing dissent or specifically expressing assent or their qualified opinions shall be dissent and their reasons for dissent included in the meeting agenda of the shall be included in the minutes of the board of directors. board of directors' meeting. Article 9: Procedure for public Article 9: Procedure for public Amendments disclosure disclosure were made to 9.1 The Company shall announce and 9.1 The Company shall announce and comply with report the previous month's loan report the previous month's loan Article 7 of balances of its head office and its balances of its head office and its the subsidiaries by the 10th day of subsidiaries by the 10th day of "Guidelines each month. each month. for Fund9.2 The Company whose loans of 9.2 The Company whose loans of Lending and

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	Amended clauses	Existingclauses	Remarks
funds reach one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence of the fact: (Sub-clause 9.2.1 through 9.2.3: omitted) 9.4 The term "Date of Occurrence of the Fact" as used in the Procedure refers to the date of contract signing, date of payment, dates of resolutions of the board of directors, or other date that can confirm the entitiesto which the Company may loan fundsand the monetary amount, whichever date is earlier. (Subparagraph 3 through 5: omitted)		funds reach one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence of the fact: (Sub-clause 9.2.1 through 9.2.3: omitted) 9.4 The term "Date of Occurrence of the Fact" as used in the paragraph refers to the date of contract signing, date of payment, dates of resolutions of the board of directors, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier. (Subparagraph 3 through 5: omitted)	Providing Endorsements and Guarantees by Public Companies".

Resolution:

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Case 4 (proposed by the Board of Directors)

Summary: Summary: The proposal for amendment to the "Procedures for Making Endorsements/Guarantees" is presented for discussion.

Note: In response to the related laws and regulations and actual operational needs, the clauses of the original "Procedures for Making Endorsements/Guarantees" shall be amended. The clauses thereof before and after the amendment are presented as follows.

Amended clauses	Existingclauses	Remarks
5. Hierarchy of decision-making authority and delegation thereof When the Company makes any endorsement and/or guarantee, it shall be submitted to the board of directors for approval in advance. A pre- determined limit of any endorsement/guarantee to be made by the Company, or endorsements/guarantees between companies, in which the Company holds, directly or indirectly, 100% of the voting shares, may be delegated to the Chairman by the board of directors to facilitate execution, and such endorsement/guarantee shall be reported to the most coming board of directors' meeting for ratification. The limit shall not exceed the ceiling amount set forth in Article 4 of the Procedures. Where the Company has established the position of independent director, when it makes endorsements/guarantees for others, it shall take into full consideration the opinions of each independent director;independent directors' opinions specifically expressing dissent or their qualified opinions shall be included in the meeting agenda of the board of directors.	5. Hierarchy of decision-making authority and delegation thereof When the Company makes any endorsement and/or guarantee, it shall be submitted to the board of directors for approval in advance. A pre- determined limit of any endorsement/guarantee to be made by the Company, or endorsements/guarantees between companies, in which the Company holds, directly or indirectly, 100% of the voting shares, may be delegated to the Chairman by the board of directors to facilitate execution, and such endorsement/guarantee shall be reported to the most coming board of directors' meeting for ratification. The limit shall not exceed the ceiling amount set forth in Article 4 of the Procedures. Where the Company has established the position of independent director, when it makes endorsements/guarantees for others, it shall take into full consideration the opinions of each independent director;independent directors' opinions specifically expressing assent or dissent and their reasons for dissent shall be included in the minutes of the board of directors' meeting.	Amendments were made to comply with Article 11 of the "Guidelines for Fund- Lending and Providing Endorsements and Guarantees by Public Companies".

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Amended clauses	Existingclauses	Remarks
6. Procedures for handling endorsement/guarantee (Sub-clause 6.1 and 6.2: omitted) 6.3 The Accounting Unit shall assess and recognize on a periodic basis, if any, contingent losses brought about by the endorsement/guarantee, and provide external auditors with necessary information for conducting due auditing and issuing auditing reports, in accordance with theinternational financial reporting standards.	6. Procedures for handling endorsement/guarantee (Sub-clause 6.1 and 6.2: omitted) 6.3 The Accounting Unit shall assess and recognize on a periodic basis, if any, contingent losses brought about by the endorsement/guarantee, and provide external auditors with necessary information for conducting due auditing and issuing auditing reports, in accordance withFinancial Accounting Standard Bulletin No. 9.	Any change and amendment shall be subject to the financial accounting standard.
8. Procedure for public disclosure (Sub-clause 8.1: omitted) 8.2 When the amount of any endorsement or guarantee made by the Company or its subsidiary reaches one of the following levels, it shall be uploaded onto MOPS within two days as of the date of occurrence of the fact: (Sub-clause 8.2.1 and 8.2.2: omitted) 8.2.3 The balance of endorsements / guarantees made by the Company and its subsidiaries for a single enterprise reaches NT$10,000,000 or more and the aggregate amount of all endorsements/guarantees for, thebook valueof investments accounted for using the equity method in, and balance of loans to, such enterprise reaches 30% or more of Company's net worth as stated in its latest financial statement. 8.2.4 The amount of new endorsements or guarantees made by the Company or its subsidiaries reaches NT$30,000,000 or more, and reaches 5% or more of such public company's net worth as stated in its latest financial	8. Procedure for public disclosure (Sub-clause 8.1: omitted) 8.2 When the amount of any endorsement or guarantee made by the Company or its subsidiary reaches one of the following levels, it shall be uploaded onto MOPS within two days as of the date of occurrence of the fact: (Sub-clause 8.2.1 and 8.2.2: omitted) 8.2.3 The balance of endorsements / guarantees made by the Company and its subsidiaries for a single enterprise reaches NT$10,000,000 or more and the aggregate amount of all endorsements/guarantees for, long-term investment in, and balance of loans to, such enterprise reaches 30% or more of Company's net worth as stated in its latest financial statement. 8.2.4 The amount of new endorsements or guarantees made by the Company or its subsidiaries reaches NT$30,000,000 or more, and reaches 5% or more of such public company's net worth as stated in its latest financial	Amendments were made to comply with Article 7 and 25 of the "Guidelines for Fund- Lending and Providing Endorsements and Guarantees by Public Companies".

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Amended clauses	Existingclauses	Remarks
statements. 8.2.5 The term "Date of Occurrence of the Fact" as used in the Procedures refers to the date of contract signing, date of payment, dates of resolutions of the board of directors, or other date that can confirm the entities for which the endorsement/guarantee is made and the monetary amount, whichever date is earlier. (Subparagraph 3 and 4: omitted)	statements. 8.2.5 The term "Date of Occurrence of the Fact" as used in the paragraph refers to the date of contract signing, date of payment, dates of resolutions of the board of directors, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier. (Subparagraph 3 and 4: omitted)

Resolution:

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Case 5 (proposed by the Board of Directors)

Summary: The proposal for amendment to the Company's “Policies and Procedures for Derivatives Trading” is presented for discussion.

Note: In response to the related laws and regulations and actual operational needs, the clauses of the original "Policies and Procedures for Derivatives Trading" shall be amended. The clauses thereof before and after the amendment are presented as follows.

Amended clauses	Existingclauses	Remarks
Article 2: Scope of Application 2.1 The term "Derivatives" referred to herein refers to any forward, option or futures contract, or leverage margin or swap contract with its value derivative froma specific interest rate, financial instrument or commodity price, exchange rate,price or rateindex, credit rating or index, or any other variable, or any combination(s) of such contracts, or any combined contract involving derivatives, or any structured notes, etc.; 2.2 Such forward contract referred to herein excludes any insurance contract, performance agreement, or any after-sales service, long- term lease, purchase/sales contract. 2.3 The Policies and Procedures shall also apply to any bond margin trading.	Article 2: Scope of Application 2.1 The term "Derivatives" referred to herein refer to any forward, option or futures contract, or leverage margin or swap contract with its value derivative from such commodities asassets, interest rateor exchange rate, index orany other interest,as well asany combined contract derivative from a combination of such commodities. 2.2 Such forward contract referred to herein excludes any insurance contract, performance agreement, or any after-sales service, long- term lease, purchase/sales contract. 2.3 The Policies and Procedures shall also apply to any bond margin trading.	Amendments were made to comply with Article 4 of Taiwan's "Regulations Governing the Acquisition or Disposal of Assets of Public Companies".
Article 6: Accounting practices Any derivatives trading shall be subject to theinternational financial reporting standards.In this regard, the information on such derivatives trading shall be disclosed in the periodic financial statements pursuant to theinternational financial reporting standards.	Article 6: Accounting practices Any derivatives trading shall be subject toFinancial Accounting Standard Bulletin No. 34.In this regard, the information on such derivatives trading shall be disclosed in the periodic financial statements pursuant toFinancial Accounting Standard Bulletin No. 36.	Amendments were made to comply with the international financial reporting standards.

Resolution:

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Case 6 (proposed by the Board of Directors)

Summary: The proposal for intending to terminate the previously signed “Noncompetition Agreement” with our subsidiary Jiangsu Longchen Greentech Co., Ltd. is presented for discussion.

Notes: 1. A proposal for signing a "Non-competition Agreement" with our subsidiary Jiangsu Longchen Greentech Co., Ltd. (hereinafter referred to as "Longchen Greentech") was approved at our extraordinary shareholder meeting held on December 29, 2017 to support Longchen Greentech's application for listing on Shanghai Stock Exchange (SSE) in mainland China. However, China's ban on wastes and the trade war between China and the United States led to an imbalance in the structure of raw material costs in Longchen Greentech's supply chain and consequently affected its profitability in 2018. On this background, a proposal for canceling its previous plan of listing on SSE was approved at the extraordinary shareholder meeting held on September 25, 2018 and its previous application for listing was also withdrawn by notifying China Securities Regulatory Commission (CSRC).
We intend to terminate the previously signed “Non-competition Agreement” with Longchen Greentech in response to the withdrawal of its previous application for listing.
The board of directors shall be authorized to execute this proposal upon approval.

Resolution:

[Extemporaneous Motions]

[Adjournment]

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Appendixes

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Articles of Incorporation of Longchen Paper & Packaging Co., Ltd.

Chapter One: General Provisions

Article 1: The Company is incorporated in accordance with the "Company Act", under the name of Longchen Paper & Packaging Co., Ltd.
Article 2: The Company's business activities comprise the following:
2.1 C601020: Paper Manufacturing;
2.2 C601030: Paper Containers Manufacturing;
2.3 C701010: Printing;
2.4 C801110: Fertilizer Manufacturing;
2.5 CB01030: Pollution Controlling Equipment Manufacturing;
2.6 D101050: Steam and Electricity Paragenesis;
2.7 E604010: Machinery Installation Construction;
2.8 J101030: Waste disposal;
2.9 G801010: Warehousing and Storage;
2.10 I103060: Management Consulting Services;
2.11 JE01010: Rental and Leasing Business; and
2.12 ZZ99999: All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Article 2.1: Mutual guarantees shall be externally made between the Company and its affiliates for business needs.
Article 2.2: The Company's total reinvestment amount shall exceed 40% of its paid-up capital.
Article 3: Headquartered in Zhanghua County, Taiwan (ROC), the Company can set up branches, factories and business offices at home and abroad with the resolution of the board of directors, if necessary.
Article 4: The Company's announcements shall be subject to Article 28 of the "Company Act".

Chapter Two: Shares

Article 5: The Company has the authorized share capital of Thirteen Billion New Taiwan Dollars (NT$13,000,000,000), which is divided into 1,300,000,000 units, with NT$10 per share; wherein the board of directors is authorized to issue unissued shares in installments as needed.
Article 6: The Company issues its shares to registered owners only. Share certificates are
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issued with the signatures or authorized seals of at least three directors, subject to certification by the operation of the laws.

The Company is not required to print non-physical stock certificates for its shares. The Company shall communicate with a centralized securities depository enterprise for registration.

Article 7: The Company's shareholders shall provide their real names and residence addresses for recording in the register of shareholders.
Article 8: All share-related affairs of the Company shall proceed according to the “Regulations Governing the Administration of Shareholder Services of Public Companies” promulgated by the competent authority.
Article 9: The shareholders' signatures shall be retained in the Company, so that they can subsequently exercise shareholders' rights accordingly.

Chapter Three: Shareholder Meetings

Article 10: The Company convenes two types of shareholder meeting: the annual general meeting and extraordinary shareholder meetings. Annual general meetings (AGMs) are convened by the board of directors by law once a year within six months after the end of each fiscal year. Extraordinary shareholder meetings may be held by law whenever deemed necessary. The shareholder meeting advice and announcement shall state clearly the agenda to be discussed during the meeting, and can be issued in electronic form if consented by the recipient. Distribution of the shareholder meeting agenda can be made in the form of announcement.
Article 11: If a shareholder is unable to attend the shareholder meeting in person, a proxy can be appointed to attend on behalf of such shareholder by completing the Company's proxy form and by specifying the scope of delegated authority. Unless otherwise regulated in Article 177 of the "Company Act", shareholders shall delegate their proxy attendants in compliance with "Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies."
Article 12: The Company's shareholders are entitled to one vote per share, except for shares that are subject to voting restrictions or situations outlined in Paragraph 2, Article 179 of the "Company Act".
Article 13: Except otherwise regulated by law, a shareholder meeting resolution is passed when more than 50% of all outstanding shares are represented in the meeting, and voted in favor by more than 50% of all voting rights represented at the meeting.
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Chapter Four: Directors

Article 14: The board shall consist of 9 directors elected from persons of adequate capacity during the shareholder meeting, including at least three independent directors, who shall not be less than one-fifth of total director seats. Directors are elected to serve a term of 3 years, which can be renewed if re-elected. Directors' total shareholding shall comply with the rules of the securities authority.
The candidate nomination system shall be adopted during election of directors. Shareholders shall elect directors from the list of candidates thereof in accordance with the "Company Act", the "Securities and Exchange Act", and other related laws and regulations.
Independent and non-independent directors shall be elected at the same shareholder meeting. The number of elected independent and non-independent directors shall be calculated separately.
Article 15: The directors shall organize the board of directors to elect a chairman and a deputy chairman among directors during a board meeting with more than twothirds of directors present, and with the support of more than half of attending directors. The Chairman serves as the Company's representative to the outside world and shall take centralized control over all its businesses.
Article 16: If the Chairman is unable to perform duties due to leave of absence or any reason, delegation shall be performed in accordance with Article 208 of the "Company Act".
Article 16.1: If a director wishes to seek proxy attendance by another director, a separate proxy letter shall be issued for every board meeting, with the extent of delegated authority specified separately for each agenda item. Each proxy attendant may only represent the presence of one absent director.
Article 17: The Company's business policies and other important matters shall be decided by the board of directors, including acquisition and disposal of its important properties and real property.
Article 18: The Company shall assemble an audit committee, which shall consist of all independent directors, in accordance with Article 14.4 of the "Securities and Exchange Act".
The number of committee members, terms of service, responsibilities, rules of procedure, and other matters shall be separately specified in the "Audit Committee Charter" in accordance with the "Regulations Governing the Exercise of Powers by Audit Committees of Public Companies".
Article19: The Company's board meetings shall be convened and communicated to directors seven (7) days in advance with detailed agenda; however, board
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meetings may be convened in case of emergency.

A notice of such board meeting may be communicated to the Company's directors in writing or via facsimile or email.

Article 20: The remunerations of all directors shall be based on individual participation and contribution to the Company's operations. The monthly remuneration of each director shall range between NT$50,000 and NT$150,000. Besides, each director will be separately paid the aforesaid monthly remunerations for 2-6 months as their annual bonuses at the end of each year, regardless of the Company's profits or losses. Specific monthly remuneration ranges of all directors shall be recommended by the Remuneration Committee and submitted to the board of directors for discussion and ratification by law.
The Charter of such Remuneration Committee and its regulations governing the exercise of powers shall be separately formulated by the board of directors in accordance with Article 14.6 of the "Securities and Exchange Act", other laws and regulations, and the provisions issued by the competent authority.
For travel expenses of all directors, each director is entitled to the traveling subsidy equal to NT$5,000 per meeting based on actual attendance as appropriate.

The Company shall cover the "Directors and Officers Liability Insurance" for directors regarding their legitimate liabilities of compensation within their term of office and scope of duties.

Chapter Five: Managers

Article 21: The Company shall have one general manager, whose appointment, removal and remuneration shall be subject to Article 29 of the "Company Act".
The Company shall cover the "Directors and Officers Liability Insurance" for the general manager regarding his/her legitimate liabilities of compensation within his/her term of office and scope of duties.

Chapter Six: Accounting

Article 22: The board of directors is responsible for preparing and submitting the following statements and reports according to the legal procedures at the annual meeting of shareholders for ratification at the end of each fiscal year.
1) Business report;
2) Financial statements; and
3) Earnings appropriation or loss reimbursement proposals
Article 22.1 The Company is required to allocate at least 2% of its annual pre-tax net profits
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(if any) in the form of cash or stock for employees' bonuses as ratified by over half of attending directors and as reported at the shareholders meeting, where more than two thirds of all directors shall be present.

However, in case of previous losses, the reimbursement amount shall be retained, discussed and approved by the board of directors, and then reported at the shareholders meeting.

Article 23: After the final settlement at the end of each year, annual surpluses concluded by the Company are first subject to taxation and reimbursement of previous losses by law, followed by a 10% provision or reversal of special reserve as required by law. Subsequently, if there are some surpluses, they shall be combined with cumulative undistributed earnings and subject to the proposal for the distribution of earnings issued by the board of directors; a request for distribution shall be put forward at the shareholder meeting for distribution.

According to the Company's dividend policy and in consideration of its current and future development plans, investment environment, capital requirements, domestic and overseas competition, and shareholders' interest, at least 20% of its annual distributable earnings shall be distributed as shareholders' dividends and bonuses in the form of cash or stock, among which cash dividends shall amount to at least 50%, and the rest shall be stock dividends. Such proposal shall be implemented upon approval during the shareholder meeting.

Chapter Seven: Supplementary Provisions

Article 24: Any matters not addressed herein shall be governed by the "Company Act" and other related laws and regulations.

Article 25: The Articles of Incorporation was established on January 25, 1978. The 1st amendment was made on April 24, 1978; The 2nd amendment was made on July 6, 1978; The 3rd amendment was made on April 7, 1980; The 4th amendment was made on April 7, 1982; The 5th amendment was made on March 7, 1982; The 6th amendment was made on April 18, 1982; The 7th amendment was made on March 20, 1983; The 8th amendment was made on April 14, 1984; The 9th amendment was made on March 17, 1985; The 10th amendment was made on March 27, 1986; The 11th amendment was made on March 29, 1987; The 12th amendment was made on March 12, 1988;

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The 13th amendment was made on March 2, 1989; The 14th amendment was made on March 18, 1990; The 15th amendment was made on March 27, 1991; The 16th amendment was made on April 15, 1992; The 17th amendment was made on April 2, 1993; The 18th amendment was made on April 22, 1994; The 19th amendment was made on May 18, 1995; The 20th amendment was made on April 22, 1996; The 21st amendment was made on April 26, 1997; The 22nd amendment was made on April 23, 1998; The 23rd amendment was made on May 19, 1999; The 24th amendment was made on May 30, 2000; The 25th amendment was made on April 27, 2001; The 26th amendment was made on May 23, 2002; The 27th amendment was made on May 23, 2003; The 28th amendment was made on May 11, 2004; The 29th amendment was made on May 20, 2005; The 30th amendment was made on June 8, 2007; The 31st amendment was made on August 14, 2009; The 32nd amendment was made on June 9, 2010; The 33rd amendment was made on June 13, 2012; The 34th amendment was made on June 11, 2014; The 35th amendment was made on August 25, 2014; The 36th amendment was made on June 7, 2016; The 37th amendment was made on June 12, 2018.

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Rules of Procedure for Shareholder Meeting of Longchen Paper & Packaging Co., Ltd.

Article 1: The Rules of Procedure are formulated in accordance with the "Corporate Governance Best Practice Principles for TWSE or TPEx Listed Companies" to set up a good shareholder meeting and corporate governance system, assist the board in supervising and managing the Company's operations.
Article 2: The Company's "Rules of Procedure for Shareholder Meeting" shall proceed according to the following rules unless otherwise specified by law or the Articles of Incorporation.
Article 3: Unless otherwise specified by law, shareholder meetings are to be convened by the board of directors.
Before a shareholder meeting is convened, a meeting agenda shall be prepared and communicated to each shareholder thirty (30) days in advance; for each shareholder holding less than 1,000 inscribed shares, the meeting agenda shall be uploaded onto MOPS thirty (30) days in advance. Before an extraordinary shareholder meeting is convened, shareholders shall be informed fifteen (15) days earlier; for each shareholder holding less than 1,000 inscribed shares, the meeting agenda shall be uploaded onto MOPS fifteen (15) days in advance.

The meeting advice and announcement shall state clearly the agenda to be discussed during the meeting, and can be issued in electronic form if consented by the recipient.

Election or dismissal of directors and/or supervisors, amendment of the "Articles of Incorporation", dismissal of the Company, merger, divestment, and any issues listed in Paragraph 1, Article 185 of the "Company Act", Articles 26.1 and 43.6 of the "Securities and Exchange Act" shall be notified in advance as part of the meeting agenda, and cannot be proposed in the form of extemporaneous motion. Each shareholder holding more than 1% of all outstanding shares can put forward one proposal in writing for the Company's shareholder meeting agenda; any proposal exceeding one shall be excluded.

Furthermore, shareholders' proposals, which meet any and all conditions set out in Subparagraph 172.1.4 of the "Company Act", shall not be included by the board of directors in the meeting agenda.

The Company shall announce the acceptance of shareholders' proposals prior to the book closure date during such shareholder meeting, as well as the place and duration (no less than 10 days) of acceptance.

Each proposal shall be limited to three hundred words. Any proposal more than

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three hundred words shall not be included in the meeting agenda. Such shareholder with a proposal shall, in person, or appoint a proxy to, attend the shareholder meeting and participate in discussions thereof.

The shareholder with a proposal shall be informed of the result prior to the date of shareholder meeting advice, which shall include the proposals complying with this article. The board of directors shall give reasons for exclusion of shareholder proposals from the agenda during the shareholder meeting.

Article 4: Shareholders may appoint proxies to attend shareholder meetings on their behalf by completing the Company's proxy form and specifying the scope of delegated authority.
Each shareholder may issue one proxy form and delegate one proxy only. All proxy forms shall be received by the Company at least 5 days before the shareholder meeting. In cases where multiple proxy forms are issued, the one that arrives first shall prevail. However, this excludes situations where the shareholder has issued a proper declaration to withdraw the previous proxy arrangement. Should the shareholder decide to attend shareholder meeting personally or exercise voting rights in writing or using electronic means after a proxy form has been received by the Company, a written notice shall be sent to the Company by no later than two days before the meeting commences to withdraw the proxy arrangement. If the shareholder fails to withdraw proxy arrangement before the due date, the vote of the proxy attendant shall prevail.
Article 5: Shareholder meetings shall be held at locations that are suitable and convenient for shareholders to attend. Meetings shall not commence anytime earlier than 9AM or later than 3PM.
Article 6: Attendance logs shall be signed by attending shareholders or proxies (hereinafter collectively referred to as "Shareholders"); alternatively, attendance cards shall be presented by shareholders in presence.
Shareholders who attend the meeting shall be given a copy of the meeting manual, annual report, attendance pass, opinion slip, agenda ballots and any information relevant to the meeting. Prepare additional ballots if director and/or supervisor election is also being held during the meeting.
Shareholders shall attend shareholder meetings by presenting valid conference pass, attendance card or other document of similar nature. Proxy form acquirers are required to bring identity proof for verification.
Where the shareholder is a government agency or corporate entity, more than one representative may attend shareholder meetings on their behalf. Corporate entities that have been designated as proxy attendants can only appoint one representative to attend shareholder meeting.
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Article 7: If the shareholder meeting is convened by the board of directors, the Chairman shall act as chairperson. If the Chairman is unable to perform duties due to leave of absence or any reason, the Deputy Chairman shall perform duties on behalf of the absent Chairman. Where there is no position of deputy chairman, or such Deputy Chairman is also unable to perform duties due to leave of absence or any reason, the Chairman shall designate an executive director as proxy; if there is no position of executive director, a director shall be designated as proxy. If the Chairman fails to designate a proxy, either the executive director or a director shall be elected on behalf of the Chairman.

For shareholder meetings that are convened by any authorized party other than the board of directors, the convener shall chair the meeting. If there are two or more eligible conveners at the same time, one shall be appointed among themselves to chair the meeting.

The Company may summon its lawyers, certified public accountants, and any relevant personnel to be present at shareholder meetings.

Article 8: The Company's shareholder meeting shall be recorded in both video and audio, and kept for at least one year. However, if a shareholder raises a litigious claim against the Company according to Article 189 of the "Company Act", the aforesaid documents shall be retained until the end of the litigation.
Article 9: Attendance during shareholder meetings shall be calculated based on number of shares held. The number of attending shareholders shall be based on the attendance logs or such card presented by shareholders in presence as well as the number of shareholders who have exercised written or electronic votes.
The chairperson should announce the commencement of meeting as soon as it is due. However, if current attendants represent less than half of the Company's outstanding shares, the chairperson may announce to postpone the meeting up to two times, for a period totaling no more than one hour. If the attending shareholders represent more than one-thirds but less than half of outstanding shares after two postponements, the chairperson shall announce adjournment. If the attending shareholders represent more than one-thirds but less than half of outstanding shares after such two postponements, the attending shareholders may reach a tentative resolution according to Paragraph 1, Article 175 of the "Company Act". This tentative resolution shall then be communicated to every shareholder and another shareholder meeting shall be held within the next month. If the number of shares represented accumulate to more than half of all outstanding shares as the meeting progresses, the chairperson may propose the tentative resolutions for final vote according to Article 174 of the "Company Act".
Article 10: If the shareholder meeting is convened by the board of directors, the board of
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directors will determine the meeting agenda, which cannot be changed unless resolved during the shareholder meeting.

The above rule also applies if the shareholder meeting is convened by any authorized party other than the board of directors.

In the arrangements described above, the chairperson cannot dismiss the meeting while two agenda items (including extemporaneous motions) are sthru in progress. If the chairperson is found to have dismissed the meeting in violation of the conference rules, other board members shall immediately assist the attending shareholders according to the legal procedure in electing a separate chairperson who has the support of more than half of voting rights represented at the meeting; as a result, the meeting may continue.

The chairperson shall provide opportunities for sufficiently explaining and discussing topics and amendments proposed by shareholders or extemporaneous motions. The chairperson may announce to discontinue further discussions if the topic is considered to have been sufficiently discussed to proceed with the vote.

Article 11: Shareholders who wish to speak during the meeting shall first produce an opinion slip detailing the topic and shareholder account number (or conference pass serial number). The order of shareholders' comments shall be determined by the chairperson.

Shareholders who submit an opinion slip without actually speaking are considered to have remained silent. If the shareholder's actual comments differ from those stated in the opinion slip, the actual comments expressed shall be taken into record.

Shareholder cannot speak for more than two times, for 5 minutes each, on the same topic without the consent of the chairperson. The chairperson may restrain shareholders in violation of the above rule or interrupt any comments that are irrelevant to the topics discussed.

While a shareholder is speaking, other shareholders cannot speak simultaneously or interfere in any way unless agreed by the chairperson and the person speaking. Any violators shall be restrained by the chairperson.

Where a corporate shareholder has appointed two or more representatives to attend the shareholder meeting, only one representative may speak for each discussed topic.

After a shareholder has finished speaking, the chairperson may answer the shareholder's queries personally or appoint any relevant personnel to do so.

Article 12: Voting rights in a shareholder meeting are calculated based on the number of shares represented.

Shares that do not carry voting rights are excluded from the calculation of

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outstanding shares when voting for the final resolution.

Shareholders may not vote on decisions that pose a conflicting interest between them and the Company, and neither shall they exercise voting rights on behalf of other shareholders.

The number of shares held by shareholders who are not permitted to vote shall be excluded from the calculation of total voting rights.

With the exception of trust enterprises and certain share administration agencies approved by the competent securities authority, a proxy may not represent more than 3% of total voting rights in aggregate when representing two or more shareholders during the meeting. Voting rights that exceed this threshold shall be excluded from calculation.

Article 13: Shareholders are entitled to one vote per share, except for shares that are subject to voting restrictions or situations outlined in Paragraph 2, Article 179 of the "Company Act".

When a shareholder meeting is held, voting rights can be exercised using the electronic method or in writing. Instructions for exercising voting rights in writing or using the electronic form shall be clearly stated on the shareholder meeting advice. Shareholders who have voted in writing or using the electronic method are considered to have attended shareholder meeting in person. However, they are considered to have waived their rights to participate in any extemporaneous motions or amendments to the original discussions that may arise during the shareholder meeting.

Instructions to exercise written and electronic votes shall be delivered to the Company at least 2 days before the shareholder meeting. In the event of duplicate submissions, the earliest submission shall be taken into record. However, exception is granted if the shareholder issues a proper declaration to withdraw the previous instruction. Shareholders who wish to attend the shareholder meeting in person after exercising their voting rights in writing or using electronic methods are required to withdraw their votes using the same method by which the vote was cast in the first place, and by no later than two days before the day of shareholder meeting. The written/electronic vote shall prevail if not withdrawn before the cutoff time. If the shareholder has exercised written or electronic votes and at the same time delegated a proxy to attend the shareholder meeting, then the voting decision exercised by the proxy shall prevail.

Unless otherwise specified in the "Company Act" or the Articles of Incorporation, a decision is passed with the consent of shareholders representing more than half of total voting interests in the meeting. When voting, the chairperson or delegate thereof shall announce the total number of voting rights represented by attending

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shareholders for every agenda item discussed.

A motion is considered passed if the chairperson receives no objection from any attending directors; in case of any objection, voting by ballot shall be adopted as stated above.

In cases where several amendment or alternative solutions have been proposed at the same time, the chairperson shall determine the order in which the proposals are voted. However, if any solution is passed, all other proposals shall be deemed rejected and no further voting is necessary.

The chairperson will appoint a ballot examiner and a ballot counter; the ballot examiner shall be a shareholder.

Votes are to be counted openly at the shareholder meeting. Results of the vote, including the final tally, shall be announced on-site and recorded in minutes.

Article 14: Shareholder meetings that involve election of directors and/or supervisors shall proceed according to the Company's election policy. Results of the election shall be announced on-site.
All ballots used in the above election shall be sealed, signed and held in proper custody for at least one year. However, if a shareholder raises a litigious claim against the Company according to Article 189 of the "Company Act", the aforesaid documents shall be retained until the end of the litigation.
Article 15: Shareholder meeting resolutions shall be compiled into detailed minutes, and signed or sealed by the chairperson, and disseminated to each shareholder by no later than 20 days after the meeting.
Distribution of the aforesaid detailed minutes can be made in the form of announcement.
Article 16: During the shareholder meeting, the Company shall publish information regarding the number of shares acquired by proxy form acquirers and the number of shares represented by proxies using the prescribed format.
The Company shall disclose on MOPS any shareholder meeting resolutions that constitute material information as defined by law or the rules of Taiwan Stock Exchange Corporation.
Article 17: Organizers of the shareholder meeting shall wear proper identification or arm badges.
The chairperson may appoint picketers or security staff to help maintain order in the meeting. While maintaining order in the meeting, all picketers or security staff shall wear arm badges that identify their role as "Picketer" or proper identification.

The chairperson may stop anyone who attempts to speak using instruments that are not provided by the Company.

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The chairperson may instruct picketers or security staff to remove shareholders who continue to violate the meeting policy despite being warned by the chairperson.

Article 18: The chairperson may put the meeting in recess at appropriate times. In the occurrence of force majeure event, the chairperson may suspend the meeting temporarily and resume at another time.
If the shareholder meeting is unable to conclude all agenda items (including extemporaneous motions) before the venue is due for return, participants may resolve to continue the meeting at an alternative location. Shareholders may also resolve to postpone or resume the meeting within the next 5 days, according to Article 182 of the "Company Act".
Article 19: The chairperson shall be authorized to decide other matters not addressed herein.
Article 20: The above rules shall take effect immediately once approved during shareholder meeting; the same applies to all subsequent revisions.
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Directors' Shareholding of Longchen Paper & Packaging Co., Ltd.

The board shall consist of 9 directors. Directors are elected to serve a term of 3 years, which can be renewed if re-elected.
Minimum shares held by all the directors: 32,000,000 units
Number of shares held by individual and all the directors:

Book closure date for the Company's all outstanding shares of 1,167,685,727 units: April 14, 2019

Occupational title	Name	Date of elected to office	Tenure	Shareholding when elected	Shareholding when elected	Number of shares held as at the book closure date	Number of shares held as at the book closure date
				Number of shares	Proportion of shareholding (`％`)	Number of shares	Proportion of shareholding (`％`)
Chairman	Qian Jiang Investment Co., Ltd. Representative: Cheng,Ying-Pin	June 14, 2017	3 years	61,134,492	5.53	73,474,794	6.29
Director	Qian Jiang Investment Co., Ltd. Representative: Wang,Cho-Chiun	June 14, 2017	3 years	61,134,492	5.53	73,474,794	6.29
Director	Baolong International Co., Ltd. Representative: Chiu,Chao-Chang	June 14, 2017	3 years	196,421,615	17.76	228,588,764	19.57
Director	Long Sheng Investment Co., Ltd. Representative: Hsu,Siao-Po	June 14, 2017	3 years	97,079,103	8.78	103,328,120	8. 84
Director	Long Sheng Investment Co., Ltd. Representative: Guo,Ming-Jian	June 14, 2017	3 years	97,079,103	8.78	103,328,120	8. 84
Director	Yuema International Co., Ltd. Representative: Jiang,Jun-De	June 14, 2017	3 years	14,653,251	1.32	14,906,784	1. 27
Independent Director	Qiu, Xian-Bi	June 14, 2017	3 years	0	0.00	0	0.00
Independent Director	Wu, Zhi-Wei	June 14, 2017	3 years	0	0.00	0	0.00
Independent Director	Wu, Zhi- Fu	June 14, 2017	3 years	0	0.00	0	0.00
Total				369,288,461	33.39	420,298,462	35.99%

Note: The Company has set up the Audit Committee. The rule for the legal number of shares held by supervisors is not applicable.

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AI assistant

Longchen P&P — AGM Information 2019

51936_rns_2019-07-25_c449d9d7-77b7-4260-9eda-446f37a8db3b.pdf

June 12, 2019

Table of Contents

Longchen Paper & Packaging Co., Ltd. 2019 Annual Shareholders’ Meeting Agenda (Translation)

1. Time: June 12th, 2019, 9:00AM.

4. Ratification Items

5. Discussion Items

6. Extemporaneous Motions

7. Adjournment

Report Items

Report One: Business Report of 2018

Longchen Paper & Packaging Co., Ltd.

Business Report of 2018

1. Incomes, expenses, profits and losses

1.1 Incomes:

1.2 Expenses:

1.3 Profits and losses (P/L):

2. Operations

3. Research and development status

Eco packaging:

3. Major production and marketing strategies

(1) Taiwan

(2) Mainland China

Report Two: Audit Committee’s Review Report

Longchen Paper & Packaging Co., Ltd.

Audit Committee’s Review Report

Report Three: 2018 Annual Employee’s Bonus Distribution Report

Report Four: Amendment on the Rules of Share Buyback and

Transferring to Employees

Ratification Items

[Ratification Items]

Case 1 (proposed by the Board of Directors)

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Major transactions with related parties

Government subsidy income

Other matter -Report of other independent accountants

Other matter – Parent company only financial reports

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

BDO Taiwan

Notice to Readers

Longchen Paper & Packaging Co., Ltd. and its subsidiaries Consolidated Balance Sheets

December 31, 2017 and 2018

Longchen Paper & Packaging Co., Ltd. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2018and 2017

Longchen Paper & Packaging Co., Ltd. and its subsidiaries Consolidated Statements of Cash Flows

For the years ended December 31, 2018 and 2017

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matter

Major transactions with related parties

Other matter -Report of other independent accountants

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

Longchen Paper & Packaging Co., Ltd. Balance Sheet

December 31, 2017 and 2018

Longchen Paper & Packaging Co., Ltd. Statements of Comprehensive Income For the years ended December 31, 2018and 2017

Longchen Paper & Packaging Co., Ltd. Statement of Changes in Equity For the years ended December 31, 2018 and 2017 (expressed in thousands New Taiwan dollars)

Longchen Paper & Packaging Co., Ltd. Statements of Cash Flows

Case 2 (proposed by the Board of Directors)

Longchen Paper & Packaging Co., Ltd.

Earnings Distribution Proposal

December 31, 2018

Discussion Items

[Discussion Items]

Case 1 (proposed by the Board of Directors)

Case 2 (proposed by the Board of Directors)

Case 3 (proposed by the Board of Directors)

Case 4 (proposed by the Board of Directors)

Case 5 (proposed by the Board of Directors)

Case 6 (proposed by the Board of Directors)

[Extemporaneous Motions]

[Adjournment]

Appendixes

Longchen P&P AGM Information 2019