Stock Code: 1909

Longchen Paper & Packaging Co., Ltd.

2020 Annual Shareholders’ Meeting Meeting Agenda (Translation)

June 2, 2020 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. 2019 Annual Business Overview ........................................................................................ 4 2. Audit Committee’s Review Report of 2019 ....................................................................... 8 3. 2019 Annual Employee’s Bonus Distribution Report ........................................................ 9 4. 2019 Cash Dividends Distribution Report ........................................................................ 10 5. Amendment of “Ethical Corporate Management Best Practice Principles” .................... 11 6. Establish “Procedures for Ethical Management and Guidelines” .................................... 17 Ratification Items 1. 2019 Business Report and Financial Statements .............................................................. 28 2. 2019 Disposition of Net Earnings ..................................................................................... 44 Discussion Items Amendment of “Rules of Procedure for Shareholders Meeting” ......................................... 47 Election Item Election of the 15th Directors (the independent director included) ..................................... 53 Other Item Release of the prohibition on newly-elected directors and their corporate representatives from participation in competitive business. ................................ 56 Extemporaneous motions ...................................................................................................... 56 Appendixes 1. Articles of Incorporation ................................................................................................... 58 2. Rules of Procedure for Shareholder Meeting ................................................................... 64 3. Rules for Election of Directors ......................................................................................... 70 4. Directors' Shareholding .................................................................................................... 72

Longchen Paper & Packaging Co., Ltd. 2020 Annual Shareholders’ Meeting Agenda (Translation)

Time: Tuesday, June 2[th] , 2020, 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. 2019 Annual Business Overview.
ii. Audit Committee’s Review Report of 2019.

iii. 2019 Annual Employee’s Bonus Distribution Report.

iv 2019 Cash Dividends Distribution Report.

v. Amendment of “Ethical Corporate Management Best Practice Principles”.

vi Establish “Procedures for Ethical Management and Guidelines”.

Ratification Items
I. 2019 Business Report and Financial Statements.
II. 2019 Disposition of Net Earnings.
Discussion Items

Amendment of “Rules of Procedure for Shareholders Meeting”.

Election Item

Election of the 15th Directors (the independent director included).

Other Item

Release of the prohibition on newly-elected directors and their corporate representatives from participation in competitive business.

Extemporaneous Motions
Adjournment
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Report Items

Report One: Business Report of 2019

Longchen Paper & Packaging Co., Ltd. Business Report of 2019

The Company's revenue in 2019 was NT$ 47,715.121 million, with a decrease by 8.8% compared with that in 2018, and the operating profit was reduced by NT$878.071 million. In 2019, the profit before income tex was NT$372.571 million and the profit for the period was NT$502.392 million; the profit for the period charged to the parent company was NT$533.773 million, and the net earnings per share after tax was NT$0.45. The Company's operation performance in 2019 is stated below:

I. Business Report of 2019

Incomes, expenses, profits and losses
1.1 Incomes:
- (1) In 2019, the net revenue was NT$47,715.121 million, with a decrease by 8.8% compared with NT$52,313.603 million in 2018.
- (2) In 2019, the non-operating income was NT$508.803 million, including NT$128.291 million, as gains and losses of affiliates and joint ventures recognized under the equity method, NT$41.923 million as interest income, NT$4.999 million as dividend income, NT$187.889 million as government subsidy income, NT$20.332 million as sublease gains at right-of-use asset, NT$35.080 million as financial asset gains at fair value through profit and loss, NT$32.577 million as gains on reversal of impairment loss at properties, plants and equipment and NT$57.712 million as other income.
1.2 Expenses:
- (1) In 2019, the operating cost was NT$41,163.583 million, with a decrease by 8.7% compared with NT$45,066.481 million in 2018. The operating expense in 2019 was NT$4,769.016 million, with an increase by 4% compared with NT$4,586.529 million in 2018.
- (2) In 2019, the non-business expenditure was NT$1,918.808 million, including NT$1,695.831 million as financial cost, NT$73.273 million as net foreign exchange loss, NT$110.469 million as loss on the disposal of properties, plants and equipment, and NT$39.235 million as other expenses.
1.3 Profits and losses (P/L):

The profit for the period in 2019 was NT$502.392 million, with a decrease by NT$409.143 million compared with NT$911.535 million in 2018.

The profit for the period charged to the parent company in 2019 was NT$533.773 million, with a decrease by NT$400.921 million compared with NT$934.694 million in 2018.

2. Operations

Comparison of Business Performance between 2018 and 2019

Unit: NT$1,000

Item	Year 2019	Year 2018	Difference in amount	Variation (%)
Revenue	47,715,121	523,313,603	(4,598,482)	(8.8)
Operating costs	41,163,583	45,066,481	(3,902,898)	(8.7)
Operating margin	6,551,538	7,247,122	(695,584)	(9.6)
Operating expenses	4,769,016	4,586,529	182,487	4.0
Operating profit	1,782,522	2,660,593	(878,071)	(33.0)
Non-operating income/expenses	(1,410,005)	(1,142,091)	(267,914)	(23.5)
Profit before income tex	372,517	1,518,502	(1,145,985)	(75.4)
Profit for the period	502,392	911,535	(409,143)	(44.9)
Net income attributable to owners of the parent	533,773	934,694	(400,921)	(42.9)

3. Research and development status

The R&D expense in 2019 was NT$1,340 million, with a decrease by 43 million, compared with NT$1,383 million in 2018, and R&D expenses had an increase by 0.17% compared with revenue share. The Company has attached much importance to the coexistence and co-prosperity of enterprises and the environment, and is always dedicated to further improving the five advanced environment friendly techniques below with to the goal of having sustainable operations and core competitiveness, based on efficient resource utilization: utilization of regenerated fiber, energy-efficient production, water-saving production, treatment of air and water pollution and disposal of wastes, and space utilization. We are committed 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 structure of materials, advance the transformation and upgrade of products, and improve energy conservation and emission reduction solutions.
(2) Commence the Erlin Paper Mill Construction and Machine Upgrade Project as scheduled to increase the market share.
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Eco packaging:

(1) Develop high-end eco packaging products and satisfy customers' needs with high quality carton products and the solution of complete product packaging.
(2) Complete the commission of the Wuhan Plant in Hubei as planning schedule to increase the market share.
(3) Decommission and renew obsolete equipment of carton plants and carry out automatic and intelligent upgrading to improve the company’s competitiveness.
Estimated sales volume and basis
(1) Estimated sales volume

The subsidiary in mainland China is affected by the COVID-19 pandemic, but the group estimated that containerboard sales volume in 2020 will remain the same as the sales volume in 2019. With the effect of waste prohibition in mainland China and the COVID-19 pandemic, waste paper materials in short supply in mainland China will increase thereby containerboard production cost and product price. The estimated business income in 2020 will increase slightly, compared with the business income in 2019.

(2) Basis of estimated sales volume

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

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) in 2020, and support Taiwanese entrepreneurs in their local investments that will increase the demands in the product packaging market. Furthermore, we will carry out the Erlin Paper Mill Construction and Machine Upgrade Project, decommission and renew obsolete equipment of carton plants and carry out automatic and intelligent upgrading in the field of eco packaging to increase the market share.

(2) Mainland China

Further reinforce our business in East China and energetically explore the local market in Central China. Based on target customers’ needs, continuously introduce the portfolio of niche products. Steady and expand purchase channels of waste paper materials to ensure that the production cost is more competitive. Continue further research, development and innovation and promote product optimization and upgrading. Offer premium customized services to increase the market share in the field of containerboard and obtain optimal returns.

As a model enterprise, Longchen Paper & Packaging Co., Ltd. implements the concept of a "Circular Economy" in the long term and concentrates on low carbon papermaking and eco packaging. The Company adopts the business model of efficient resource utilization, participates in and promotes the further growth of a circular economy. Guided by this concept, the Company pursues zero waste and system balance, and establishes a production system with resource recovery and regeneration. This is also the Company’s business mission that we persistently strive for. The Company accomplished the "Salmon Return to Taiwan" investment plan totaling NT$4.3 billion in 2015, established a good foundation for its long-term development and competitive edge in Taiwan. In 2020, the Company 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, the Company’s market share will increase in the Asian containerboard market, and create more interests for the 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 prepared the business report, financial statements and the net earnings disposition proposal of 2019; 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: Chiu, Shean-Bii

March 13, 2020

Report Three: 2019 Annual Employee’s Bonus Distribution Report

I. The Company's profit before income tax in 2019 was NT$391,992,871. At least two percent (2%) of its profit before income tax shall be allocated in cash as employees' bonuses as per Article 22.1 of the Articles of Incorporation, i.e. NT$7,999,855.
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: 2019 Cash Dividends Distribution Report

I. Net income of the Company in 2019 was NT$533,772,707, the amount of outstanding stocks was 1,217,685,727, basic earnings per share was NT$0.45. After approved by the board of director’s resolution, cash dividend per share of common stocks was NT$0.3, and the amount was NT$365,305,718.
II. The Company drew up the baseline date of dividend payout on July 8th, 2020. In response to the baseline date and the shareholding ratio recorded in the register of shareholders, the Company distributes to the nearest dollar, with less than NT$1 unconditionally rounded down, the odd amount of less than NT$1 shall be included as other revenue; hereafter as share repurchase or treasury stock transfer and cancelation, cash increase, they affect the amount of outstanding stocks, and cause to change payout ratio for shareholders, the chairman will be authorized to amend the related matters of the payout ratio.
III. This report is hereby presented for mutual supervision.
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Report Five: Amendment of “Ethical Corporate Management Best Practice Principles”

I. In response to the latest laws and regulations and actual operational needs, the original “Ethical Corporate Management Best Practice Principles" shall be amended. The clauses thereof before and after the amendment are presented as follows.

Amended clauses	Existing clauses	Remarks
Article 3 (Benefits) "Benefits" in these Principles means any valuable things, including money, endowments, commissions, positions, services, preferential treatment or rebates of any type or in any name. Benefits received or given occasionally in accordance with accepted social customs and that do not adversely affect specific rights and obligations shall be excluded.	Article 3 (Benefits) "Benefits" in these Principlesand Guidelinesmeans any valuable things, including money, endowments, commissions, positions, services, preferential treatment or rebates of any type or in any name. Benefits received or given occasionally in accordance with accepted social customs and that do not adversely affect specific rights and obligations shall be excluded.	Amendments were made to comply with practices.
Article 5(Policies) The Company shall abide by the operational philosophies of honesty, transparency and responsibility, base policies on the principle of good faith and obtain approval from the board of directors,and establish good corporate governance and risk control and management mechanism so as to create an operational environment for sustainable development.	Article 5(Policies) The Company shall abide by the operational philosophies of honesty, transparency and responsibility, base policies on the principle of good faith, and establish good corporate governance and risk control and management mechanism so as to create an operational environment for sustainable development.	Amendments were made to comply with the regulations of Taiwan Stock Exchange.
Article 6(Prevention programs) The Company shall in their own ethical management policyclearlyand thoroughlyprescribethe specific ethical management practicesandthe programs to forestall unethical conduct ("prevention programs"), including operational procedures, guidelines, and training. When establishing the prevention programs, the Company shall comply with relevant laws and regulations of	Article 6(Guidelines) The Company shall in their own ethical management policy and conduct the preceding clause,prescribe Procedures for Ethical Management andGuidelines (“Guidelines”). When establishing the prevention programs, the Company shall comply with relevant laws and regulations of	Amendments were made to comply with practices.

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Amended clauses	Existing clauses	Remarks
the territory where the companies and their business group are operating. In the course of developing the prevention programs, the Company is advised to negotiate with staff, labor unions members, important trading counterparties, or other stakeholders.	the territory where the companies and their business group are operating. In the course of developing the prevention programs, the Company is advised to negotiate with staff, labor unions members, important trading counterparties, or other stakeholders.
Article 7(Scope ofPrevention Programs) TheCompany shallestablish a risk assessment mechanism against unethical conduct,analyzeand assess on a regular basis business activity within their business scope which are at a higher risk of being involved in unethical conduct, and establish prevention programs accordingly and review their adequacy and effectiveness on a regular basis. The prevention programs shall at least include preventive measures against the following: (The following is omitted.)	Article 7(Scope ofGuidelines) When prescribing“Guidelines”, the Company shall analyze on a regular basis business activity within their business scope which are at a higher risk of being involved in unethical conduct, and establish prevention programs accordingly and review their adequacy and effectiveness on a regular basis. The prevention programs shall at least include preventive measures against the following: (The following is omitted.)	Amendments were made to comply with the regulations of Taiwan Stock Exchange.
Article 8(Commitment and execution) The Company shall request their directors and senior management to issue a statement of compliance with the ethical management policy and require in the terms of employment that employees comply with such policy. The Company and their respective business group shall clearly specify in their rules and external documents and on the company website the ethical corporate management policies and the commitment by the board of directors and senior management on rigorous and thorough implementation of such policies, and shall carry out the policies in internal management and in commercial activities.	Article 8(Commitment and execution) The Company and their respective business group shall clearly specify in their rules and external documents and on the company website the ethical corporate management policies and the commitment by the board of directors and senior management on rigorous and thorough implementation of such policies, and shall carry out the policies in internal management and in commercial activities.	Amendments were made to comply with the regulations of Taiwan Stock Exchange.

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Amended clauses	Existing clauses	Remarks
The Company shall compile documented information on the ethical management policy, statement, commitment and implementation mentioned in the first and second paragraphs and retain said information properly.
Article 17(Organization and responsibilities) (First paragraph is omitted) To achieve sound ethical corporate management, Human ResourceUnitis responsible for establishing and supervising the implementation of the ethical corporate management policies andprevention programs.The dedicated unit shall be in charge of the following matters, and shall report to the board of directors on a regular basis (at least once a year): 1. Assisting in incorporating ethics and moral values into the company's business strategy and adopting appropriate prevention measures against corruption and malfeasance to ensure ethical management in compliance with the requirements of laws and regulations. 2. Analyzing and assessing on a regular basis the risk of involvement in unethical conduct within the business scope, adopting accordingly programs to prevent unethical conduct, and setting out in each program the standard operating procedures and conduct guidelines with respect to the company's operations and business. (The following is omitted)	Article 17(Organization and responsibilities) (First paragraph is omitted) To achieve sound ethical corporate management, Human Resource Departmentis responsible for establishing and supervising the implementation of the ethical corporate management policies andGuidelines. The dedicated unit shall be in charge of the following matters, and shall report to the board of directors on a regular basis (at least once a year): 1. Assisting in incorporating ethics and moral values into the company's business strategy and adopting appropriate prevention measures against corruption and malfeasance to ensure ethical management in compliance with the requirements of laws and regulations. 2. Adoptingaccordingly programs to prevent unethical conduct, and setting out in each program the standard operating procedures and conduct guidelines with respect to the company's operations and business. (The following is omitted)	Amendments were made to comply with the regulations of Taiwan Stock Exchange.
Article 18(Compliances of business execution) The Company and their directors,	Article 18(Compliances of business execution) The Company and their directors,	Amendments were made to comply with

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Amended clauses	Existing clauses	Remarks
supervisors, managers, employees, mandataries, and substantial controllers shall comply with laws and regulations and theprevention programswhen conducting business.	supervisors, managers, employees, mandataries, and substantial controllers shall comply with laws and regulations andguidelineswhen conducting business.	practices.
Article 20(Accounting and internal control) (First paragraph is omitted) The internal audit unit of the Company shall, based on theresults of assessment of the risk of involvement in unethical conduct, devise relevant audit plans, including auditees, audit scope, audit items, audit frequency, etc., and examine accordingly the compliance with the prevention programs.The internal audit unit may engage a certified public accountant to carry out the audit, and may engage professionals to assist if necessary. The results of examination in the preceding paragraph shall be reported to senior management and the ethical management dedicated unit and put down in writing in the form of an audit report to be submitted to the board of directors.	Article 20(Accounting and internal control) (First paragraph is omitted) The internal audit unit of the Company shall, basedon the on a regular basis, examines the preceding clause, and put down in writing in the form of an audit report to be submitted to the board of directors.The internal audit unit may engage a certified public accountant to carry out the audit, and may engage professionals to assist if necessary.	Amendments were made to comply with the regulations of Taiwan Stock Exchange.
Article 21(Operating procedures and Guidelines) The Company shall establish operational procedures andguidelines in accordance with Article 6 hereof to guide directors, managers, employees, and substantial controllers onhowto conduct business. The content should at leastcontain the following matters: 1. Standards for determining whether improper benefits have beenoffered or accepted. (The following is omitted.)	Article 21(Operating procedures and Guidelines) The Company shall establish guidelines in accordance with Article 6 hereof to guide directors, managers, employees, and substantial controllers onthe procedures and guidelinesto conduct business. The content should contain the following matters: 1. Benefitsoffered or acceptedshall comply to social etiquette and custom, which is an accidental event without specific obligations and rights. (The following is omitted.)	Amendments were made to comply with practices.

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Amended clauses	Existing clauses	Remarks
Article 22(Education and training awareness and assessment) (First paragraph is omitted) The Company shall periodically organize training and awareness programs for directors, supervisors, managers, employees, mandataries, and substantial controllersand invite the companies'commercial transaction counterpartiesso they understand the companies' resolve to implement ethical corporate management, the related policies,prevention programs and the consequences of committing unethical conduct. (The following is omitted.)	Article 22(Education and training awareness and assessment) (First paragraph is omitted) The Company shall periodically organize training and awareness programs for directors, supervisors, managers, employees, mandataries, and substantial controllers,so they understand the companies' resolve to implement ethical corporate management, the related policies, guidelinesand the consequences of committing unethical conduct. (The following is omitted.)	Amendments were made to comply with practices.
Article 23(Whistleblower system) (The first, second item of first paragraph is omitted) 3. Follow-up measures to be adopted depending on the severity of the circumstances after investigations of cases reported are completed. Where necessary, a case shall be reported to the competent authority or referred to the judicial authority. 4. Documentation of case acceptance, investigation processes, investigation results, and relevant documents. 5. Confidentiality of the identity of whistle-blowers and the content of reported cases, and an undertaking regarding anonymous reporting. 6. Measures for protecting whistle- blowers from inappropriate disciplinary actions due to their whistle-blowing. 7. Whistle-blowing incentive measures. When material misconduct or likelihood of material impairment to	Article 23(Whistleblower system) (The first, second item of first paragraph is omitted) 3. Documentation of case acceptance, investigation processes, investigation results, and relevant documents. 4. Confidentiality of the identity of whistle-blowers and the content of reported cases, and an undertaking regarding anonymous reporting. 5. Measures for protecting whistle- blowers from inappropriate disciplinary actions due to their whistle-blowing. 6. Whistle-blowing incentive measures. (The following is omitted.)	Amendments were made to comply with the regulations of Taiwan Stock Exchange.

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Amended clauses	Existing clauses	Remarks
the Company comes to their awareness upon investigation, the dedicated personnel or unit handling the whistle- blowing system shall immediately prepare a report and notify the independent directors or supervisors in written form. (The following is omitted.)
Article 27(Enforcement) The ethical corporate management best practice principles of the shall be implemented after the board of directors grants the approval, and shall be reported at a shareholders' meeting. The same procedure shall be followed when the principles have been amended. Whenthe Company submits its ethical corporate management best practice principles to the board of directors for discussion pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. Any objections or reservations of any independent director shall be recorded in the minutes of the board of directors meeting. An independent director that cannot attend the board meeting in person to express objections or reservations shall provide a written opinion before the board meeting, unless there is some legitimate reason to do otherwise, and the opinion shall be specified in the minutes of the board of directors meeting. These principles were established on November 12th, 2014. First amendment was made on March 13th, 2020.	Article 27(Enforcement) The ethical corporate management best practice principles of the shall be implemented after the board of directors grants the approval, and shall besent to the supervisors andreported at a shareholders' meeting. The same procedure shall be followed when the principles have been amended. The Company established independent directors, in response to the preceding regulation,the Company submits its ethical corporate management best practice principles to the board of directors for discussion pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. Any objections or reservations of any independent director shall be recorded in the minutes of the board of directors meeting. An independent director that cannot attend the board meeting in person to express objections or reservations shall provide a written opinion before the board meeting, unless there is some legitimate reason to do otherwise, and the opinion shall be specified in the minutes of the board of directors meeting.	Amendments and amended dates were made to comply with practices.

II. This report is hereby presented for mutual supervision.

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Report Six: Establish “Procedures for Ethical Management and Guidelines”

I. “Procedures for Ethical Management and Guidelines” by passed in the 13th meeting of 14th term of board of directors, March 13, 2020. The record is presented on P.18-26.
II. The company provides for This report is hereby presented for mutual supervision.
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Procedures for Ethical Management and Guidelines of Longchen Paper & Packaging Co., Ltd.

Article 1: (Purpose of adoption and scope of application)

The company engages in commercial activities following the principles of fairness, honesty, faithfulness, and transparency, and order to fully implement a policy of ethical management and actively prevent unethical conduct, these Procedures for Ethical Management and Guidelines for Conduct (hereinafter, “Procedures and Guidelines") are adopted pursuant to the provisions of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies and the applicable laws and regulations of the places where this Corporation and its business groups and organizations operate, with a view to providing all personnel of the company with clear directions for the performance of their duties. The scope of application of these Procedures and Guidelines includes the subsidiaries of the company, any incorporated foundation in which this Corporation's accumulated contributions, direct or indirect, exceed 50 percent of the total funds of the foundation, and other group enterprises and organizations, such as institutions or juristic persons, substantially controlled by the company.

Article 2: (Applicable subjects)

For the purposes of these Procedures and Guidelines, the term "personnel of the company" refers to any director, supervisor, managerial officer, employee, mandatary or person having substantial control. Any provision, promise, request, or acceptance of improper benefits by any personnel of the company through a third party will be presumed to be an act by the personnel of the company.

Article 3: (Unethical conduct)

For the purposes of these Procedures and Guidelines, "unethical conduct" means that any personnel of the company, in the course of their duties, directly or indirectly provides, promises, requests, or accepts improper benefits or commits a breach of ethics, unlawful act, or breach of fiduciary duty for purposes of acquiring or maintaining benefits. The counter parties of the unethical conduct under the preceding paragraph include public officials, political candidates, political parties or their staffs, and government-owned or private-owned enterprises or institutions and their directors, supervisors, managerial officers, employees, persons having substantial control, or other interested parties.

Article 4: (Types of benefits)

For the purposes of these Procedures and Guidelines, the term "benefits" means any money, gratuity, gift, commission, position, service, preferential treatment, rebate, facilitating payment, entertainment, dining, or any other item of value in whatever form or name.

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Article 5: (Responsible unit and duty)

The company shall designate the Human Resource Unit as the solely responsible unit (hereinafter, "responsible unit") under the board of directors and in charge of the amendment, implementation, interpretation, and advisory services with respect to these Procedures and Guidelines, the recording and filing of reports, and the monitoring of implementation. The responsible unit shall be in charge of the following matters and also submit regular reports to the board of directors (at least once a year):

I. Assisting in incorporating ethics and moral values into the company's business strategy and adopting appropriate prevention measures against corruption and malfeasance to ensure ethical management in compliance with the requirements of laws and regulations.
II. Adopting programs to prevent unethical conduct and setting out in each program the standard operating procedures and conduct guidelines with respect to the company's operations and business.
III. Planning the internal organization, structure, and allocation of responsibilities and setting up check-and-balance mechanisms for mutual supervision of the business activities within the business scope which are possibly at a higher risk for unethical conduct.
IV. Promoting and coordinating awareness and educational activities with respect to ethics policy.
V. Developing a whistle-blowing system and ensuring its operating effectiveness.
VI. Assisting the board of directors and management in auditing and assessing whether the prevention measures taken for the purpose of implementing ethical management are effectively operating, and preparing reports on the regular assessment of compliance with ethical management in operating procedures.
VII. Documenting and reserving appropriately these Procedures and Guidelines and documented information related with regulatory compliance statement, keep promises and the situation of carry out.

Article 6: (Prohibition against providing or accepting improper benefits)

Except under one of the following circumstances, when providing, accepting, promising, or requesting, directly or indirectly, any benefits as specified in Article 4, the conduct of the given personnel of the company shall comply with the provisions of the Ethical Corporate Management Best Practice Principles and these Procedures and Guidelines, and the relevant procedures shall have been carried out:

I. The conduct is undertaken to meet business needs and is in accordance with local courtesy, convention, or custom during domestic (or foreign) visits, reception of guests, promotion of business, and communication and coordination.
II. The conduct has its basis in ordinary social activities that are attended or others are invited to hold in line with accepted social custom, commercial purposes, or developing relationships.
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III. Invitations to guests or attendance at commercial activities or factory visits in relation to business needs, when the method of fee payment, number of participants, class of accommodations, and the time period for the event or visit have been specified in advance.
IV. Attendance at folk festivals that are open to and invite the attendance of the general public.
V. Rewards, emergency assistance, condolence payments, or honorariums from the management.
VI. Other conduct that complies with social custom and the rules of the company.
Article 7: (Procedures for handling the acceptance of improper benefits)
Except under any of the circumstances set forth in the preceding article, when any personnel of the company are provided with or are promised, either directly or indirectly, any benefits as specified in Article 4 by a third party, If a relationship of interest does exist between the party providing or offering the benefit and the official duties of this Corporation's personnel, the personnel shall return or refuse the benefit, and shall report to his or her immediate supervisor and notify the responsible unit. When the benefit cannot be returned; the personnel shall refer the matter to the responsible unit for handling. The responsible unit of the company shall make a proposal, based on the nature and value of the benefit under paragraph 1, that it be returned, accepted on payment, given to the public, donated to charity, or handled in another appropriate manner. The proposal shall be implemented after being reported and approved.
Article 8: (Prohibition of and handling procedure for facilitating payments)

The company shall neither provide nor promise any facilitating payment. If any personnel of the company provide or promises a facilitating payment under threat or intimidation, they shall submit a report to their immediate supervisor stating the facts and shall notify the responsible unit. Upon receipt of the report under the preceding paragraph, the responsible unit shall take immediate action and undertake a review of relevant matters in order to minimize the risk of recurrence. In a case involving alleged illegality, the responsible unit shall also immediately report to the relevant judicial agency.

Article 9: (Procedures for handling political contributions)
Political contributions by the company shall be made in accordance with the following provisions, reported to the supervisor in charge for approval, and a notification given to the responsible unit, and when the amount of a contribution is NT$2 million or more of the year given to the same object, it shall be made only after being reported to and approved by the board of directors:
I. It shall be ascertained that the political contribution is in compliance with the laws and regulations governing political contributions in the country in which the recipient is located, including the maximum amount and the form in which a contribution may be made.
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II. A written record of the decision-making process shall be kept.
III. Account entries shall be made for all political contributions in accordance with applicable laws and regulations and relevant procedures for accounting treatment.
IV. In making political contributions, commercial dealings, applications for permits, or carrying out other matters involving the interests of the company with the related government agencies shall be avoided.

Article 10: (Procedures for handling charitable donations or sponsorships)

Charitable donations or sponsorships by the company shall be provided in accordance with the following provisions and reported to the supervisor in charge for approval, and a notification shall be given to the responsible unit. When the amount is NT$100 million or more of the year given to the same object, the donation or sponsorship shall be provided only after it has been submitted for adoption by the board of directors:

I. It shall be ascertained that the donation or sponsorship is in compliance with the laws and regulations of the country where the company is doing business.
II. A written record of the decision making process shall be kept.
III. A charitable donation shall be given to a valid charitable institution and may not be a disguised form of bribery.
IV. The returns received as a result of any sponsorship shall be specific and reasonable, and the subject of the sponsorship may not be a counter party of the company's commercial dealings or a party with which any personnel of the company has a relationship of interest.
V. After a charitable donation or sponsorship has been given, it shall be ascertained that the destination to which the money flows is consistent with the purpose of the contribution.

Article 11: (Recusal)

When a Company director , supervisor, officer or other stakeholder attending or present at a board meeting, or the juristic person represented thereby, has a stake in a proposal at the meeting, that director, supervisor, officer or stakeholder shall state the important aspects of the stake in the meeting and, where there is a likelihood that the interests of the company would be prejudiced, may not participate in the discussion or vote on that proposal, shall recuse himself or herself from any discussion and voting, and may not exercise voting rights as proxy on behalf of another director. The directors shall exercise discipline among themselves, and may not support each other in an inappropriate manner. If in the course of conducting company business, any personnel of the company discovers that a potential conflict of interest exists involving themselves or the juristic person that they represent, or that they or their spouse, parents, children, or a person with whom they have a relationship of interest is likely to obtain improper benefits, the personnel shall report the relevant matters to both his or her immediate supervisor and the

21 -

responsible unit, and the immediate supervisor shall provide the personnel with proper instructions. No personnel of the company may use company resources on commercial activities other than those of the company, nor may any personnel's job performance be affected by his or her involvement in the commercial activities other than those of the company.

Article 12: (Special unit in charge of confidentiality regime and its responsibilities)

The company shall set up a special unit charged with formulating and implementing procedures for managing, preserving, and maintaining the confidentiality of the company's trade secrets, trademarks, patents, works and other intellectual properties and it shall also conduct periodical reviews on the results of implementation to ensure the sustained effectiveness of the confidentiality procedures. All personnel of the company shall faithfully follow the operational directions pertaining to intellectual properties as mentioned in the preceding paragraph and may not disclose to any other party any trade secrets, trademarks, patents, works, and other intellectual properties of the company of which they have learned, nor may they inquire about or collect any trade secrets, trademarks, patents, and other intellectual properties of the company unrelated to their individual duties.

Article 13: (Prohibition against disclosure of confidential information)

The company shall follow the Fair Trade Act and applicable competition laws and regulations when engaging in business activities, and shall not be involved in any conduct of unfair competition.

Article 14: (Prohibition against insider trading)

The company shall collect and understand the applicable laws and regulations and international standards governing its products and services which it shall observe and gather and publish all guidelines to cause personnel of the company to ensure the transparency of information about, and safety of, the products and services in the course of their research and development, procurement, manufacture, provision, or sale of products and services. The company shall adopt and publish on its website a policy on the protection of the rights and interests of consumers or other stakeholders to prevent its products and services from directly or indirectly damaging the rights and interests, health, and safety of consumers or other stakeholders. Where there are media reports, or sufficient facts to determine, that the company's products or services are likely to pose any hazard to the safety and health of consumers or other stakeholders, the company shall, recall those products or suspend the services as soon as possible, verify the facts and present a review and improvement plan. The responsible unit of the company shall report the event as in the preceding paragraph, actions taken, and subsequent reviews and corrective measures taken to the board of directors.

Article 15: (Non-disclosure agreement)

All Company personnel shall adhere to the provisions of the Securities and Exchange Act, and may not take advantage of undisclosed information of which they have learned to engage in insider trading. Personnel are also prohibited from

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divulging undisclosed information to any other party, in order to prevent other party from using such information to engage in insider trading. Any organization or person outside of the company that is involved in any merger, demerger, acquisition and share transfer, major memorandum of understanding, strategic alliance, other business partnership plan, or the signing of a major contract by the company shall be required to sign a non-disclosure agreement in which they undertake not to disclose to any other party any trade secret or other material information of the company acquired as a result, and that they may not use such information without the prior consent of the company.

Article 16: (Announcement of policy of ethical management to outside parties)

The company shall disclose its policy of ethical management in its internal rules, annual reports, on the company's websites, and in other promotional materials, and shall make timely announcements of the policy in events held for outside parties such as product launches and investor press conferences, in order to make its suppliers, customers, and other business-related institutions and personnel fully aware of its principles and rules with respect to ethical management.

Article 17: (Ethical management evaluation prior to development of commercial relationships) Before developing a commercial relationship with another party, such as an agent, supplier, customer, or other counterparty in commercial dealings, this Corporation shall evaluate the legality and ethical management policy of the party and ascertain whether the party has a record of involvement in unethical conduct, in order to ensure that the party conducts business in a fair and transparent manner and will not request, offer, or take bribes. When the company carries out the evaluation under the preceding paragraph, it may adopt appropriate audit procedures for a review of the counter party with which it will have commercial dealings with respect to the following matters, in order to gain a comprehensive knowledge of its ethical management:
I. The enterprise's nationality, location of business operations, organizational structure, and management policy, and place where it will make payment.
II. Whether the enterprise has adopted an ethical management policy, and the status of its implementation.
III. Whether enterprise's business operations are located in a country with a high risk of corruption.
IV. Whether the business operated by the enterprise is in an industry with a high risk of bribery.
V. The long-term business condition and degree of goodwill of the enterprise.
VI. Consultation with the enterprise's business partners on their opinion of the enterprise.
VII. Whether the enterprise has a record of involvement in unethical conduct such as bribery or illegal political contributions.
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Article 18: (Statement of ethical management policy to counterparties in commercial dealings)

Any personnel of the company, when engaging in commercial activities, shall make a statement to the trading counterparty about the company's ethical management policy and related rules, and shall clearly refuse to provide, promise, request, or accept, directly or indirectly, any improper benefit in whatever form or name.
Article 19: (Avoidance of commercial dealings with unethical operators)
All personnel of the company shall avoid business transactions with an agent, supplier, customer, or other counterparty in commercial interactions that is involved in unethical conduct. When the counterparty or partner in cooperation is found to have engaged in unethical conduct, the personnel shall immediately cease dealing with the counterparty and blacklist it for any further business interaction in order to effectively implement the company's ethical management policy.
Article 20: (Stipulation of terms of ethical management in contracts)
Before entering into a contract with another party, the company shall gain a thorough knowledge of the status of the other party's ethical management, and shall make observance of the ethical management policy of this Corporation part of the terms and conditions of the contract, stipulating at the least the following matters:
I. When a party to the contract becomes aware that any personnel has violated the terms and conditions pertaining to prohibition of acceptance of commissions, rebates, or other improper benefits, the party shall immediately notify the other party of the violator's identity, the manner in which the provision, promise, request, or acceptance was made, and the monetary amount or other improper benefit that was provided, promised, requested, or accepted. The party shall also provide the other party with pertinent evidence and cooperate fully with the investigation. If there has been resultant damage to either party, the party may claim from the other party the contract price as damages, and may also deduct the full amount of the damages from the contract price payable.
II. Where a party is discovered to be engaged in unethical conduct in its commercial activities, the other party may terminate or rescind the contract unconditionally at any time.
III. Specific and reasonable payment terms, including the place and method of payment and the requirement for compliance with related tax laws and regulations.

Article 21: (Handling of unethical conduct by personnel of the company)

As an incentive to insiders and outsiders for informing of unethical or unseemly conduct, this Corporation will grant a reward depending the seriousness of the circumstance concerned. Insiders having made a false report or malicious accusation shall be subject to disciplinary action and be removed from office if the circumstance concerned is material. The company shall internally establish and publicly announce on its website to provide an independent mailbox (Personnel consideration mail address: [email protected]; Suppliers and other

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outsiders’ consideration mail address: [email protected]) for Company insiders and outsiders to submit reports. A whistleblower shall at least furnish the following information:

I. The whistleblower’s name and I.D. number, and an address, telephone number and e-mail address where it can be reached
II. The informed party's name or other information sufficient to distinguish its identifying features.
III. Specific facts available for investigation.

Company personnel handling whistle-blowing matters shall represent in writing they will keep the whistleblowers’ identity and contents of information confidential. The company also undertakes to protect the whistleblowers from improper treatment due to their whistle-blowing. The responsible unit of the company shall observe the following procedure:

I. An information shall be reported to the department head if involving the rank and file and to an independent director or supervisor if involving a director or a senior executive.
II. The responsible unit of the company and the department head or personnel being reported to in the preceding subparagraph shall immediately verify the facts and, where necessary, with the assistance of the legal compliance or other related department.
III. If a person being informed of is confirmed to have indeed violated the applicable laws and regulations or the company's policy and regulations of ethical management, the company shall immediately require the violator to cease the conduct and shall make an appropriate disposition. When necessary, the company will institute legal proceedings and seek damages to safeguard its reputation and its rights and interests.
IV. Documentation of case acceptance, investigation processes and investigation results shall be retained for five years and may be retained electronically. In the event of a suit in respect of the whistleblowing case before the retention period expires, the relevant information shall continue to be retained until the conclusion of the litigation.
V. With respect to a confirmed information, the company shall charge relevant units with the task of reviewing the internal control system and relevant procedures and proposing corrective measures to prevent recurrence.
VI. The responsible unit of the company shall submit to the board of directors a report on the whistleblowing case, actions taken, and subsequent reviews and corrective measures.

Article 22: (Actions upon event of unethical conduct by others towards the company)

If any personnel of the company discover that another party has engaged in unethical conduct towards this Corporation, and such unethical conduct involves alleged illegality, the company shall report the relevant facts to the judicial and prosecutorial
25 -

authorities; where a public service agency or public official is involved, the company shall additionally notify the governmental anti-corruption agency.

Article 23: (Establishment of a system for rewards, penalties, and complaints, and related disciplinary measures)

The responsible unit of the company shall organize one time of awareness sessions each year and arrange for the chairperson, general manager, or senior management to communicate the importance of ethics to its directors, employees, and mandatories. The company shall link ethical management to employee performance evaluations and human resources policy, and establish clear and effective systems for rewards, penalties, and complaints. If any personnel of the company seriously violate ethical conduct, the company shall dismiss the personnel from his or her position or terminate his or her employment in accordance with applicable laws and regulations or the personnel policy and procedures of the company. The company shall disclose on its intranet information the name and title of the violator, the date and details of the violation, and the actions taken in response.

Article 24: (Enforcement)

These Procedures and Guidelines, and any amendments hereto, shall be implemented after adoption by resolution of the board of directors, and shall be delivered to each supervisor and reported to the shareholders meeting. When these Procedures and Guidelines are submitted to the board of directors for discussion, each independent director’s opinions shall be taken into full consideration, and their objections and reservations expressed shall be recorded in the minutes of the board of directors meeting. An independent director that is unable to attend a board meeting in person to express objection or reservation shall provide a written opinion before the board meeting unless there is a legitimate reason to do otherwise, and the opinion shall be recorded in the minutes of the board of directors meeting.

This “Procedures for Ethical Management and Guidelines” was established on March 13th, 2020.

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Ratification Items

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[Ratification Items]

Case 1(proposed by the Board of Directors)

Summary: Business Report and Financial Statements of 2019 are hereby presented for ratification.

Note: The Company's business report, separate and consolidated financial statements in 2019 have been prepared. (See Page 4-7 and 29-43.)

Resolution:

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INDEPENDENT AUDITORS’ REPORT

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

Opinion

We have audited the accompanying consolidated financial statements of Longchen Paper & Packaging Co., Ltd and its subsidiaries ( the “Group”). which comprise the consolidated balance sheets as of December 31, 2019 and 2018, 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, based on our audits and the reports of other auditors (please refer to the "Other matterMaking Reference to the Audits of Component Auditors section of our report) the accompanying consolidated financial statements present fairly,in all material respects,the consolidatef financial position of the Group as at December 31, 2019 and 2018, 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 (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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.

Key audit matters for the the Group’s consolidated financial statements for the year ended December 31, 2019 are stated as follows:

Major transactions with related parties

The Group strive 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 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 accompanying the consolidated financial statements.

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

Understand and verify the design and execution effectiveness of the internal control system for the administration of transactions with related parties;
Understand and evaluate the rationality of assumptions and methods adopted by the management to eliminate estimated unrealized gross profit of companies of different nature;
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 elimination of transactions with related parties, and assess whether any calculation formula used are correct; and
Perform analytical review procedures. In consideration of the previous actual operating results and 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 2019, the non-operating incomes of the Group from government subsidies were about NT$ 187,889 thousand, constituting 37.39% of the consolidated net income in 2019. Accordingly, such government subsidy income was considered as a key andit issue. The information on government subsidies is provided in Footnotes 4(20) and 6(26) of the consolidated financial statements.

Generally, we have 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;
Perform random inspection and verification on agreements for government subsidies, and confirm that: 1) whether or not to 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 principle. Analyze and challenge the management's assessment conditions to verify the rationality of income recognition.

Other matter - Making Reference to the Audits of Component Auditors

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 audited by other auditors rather than us. Thus, the amounts listed in the financial statements of such subsidiaries included in our audit opinions towards the consolidated financial statements above were based on the audit reports issued by other auditors. For Long Chen Paper (China) Holdings Co., Ltd. and its subsidiaries: 1) the total assets as at December 31, 2019 and 2018 were respectively NT$51,660,894 thousand and NT$56,028,683 thousand, constituting 74.29% and 78.24% of the consolidated total assets; and 2) the net revenue for 2019 and 2018 was respectively NT$39,089,877 thousand and NT$42,963,139 thousand, constituting 81.92% and 82.13% of the consolidated net revenue.

Other matter –Parent company only financial reports

We have also audited the parent company only financial statements of Longchen Paper & Packaging Co., Ltd. as of and for the years ended December 31, 2019 and 2018 which we have issued an unqualified opinion.

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

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

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

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, 2019 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 13, 2020

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

Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31, 2019 and 2018

(Expressed in thousands of New Taiwan Dollars)

Code	Assets	December 31,2019	December 31,2019	December 31,2018 Code Amount % $2,169,611 3.03 2100 2,872 - 2110 5,946,626 8.30 2130 6,514,646 9.10 2150 147,846 0.21 2170 335,477 0.47 2200 11,304 0.02 2230 4,147,409 5.79 2280 3,019,190 4.22 2300 103,058 0.14 2322 22,398,039 31.28 2365 21xx 169,167 0.23 2530 3,607,386 5.04 2540 42,091,709 58.78 2570 - - 2580 7,618 0.01 2600 83,504 0.12 2640 507,020 0.71 2645 2,747,381 3.83 25xx 49,213,785 68.72 2xxx 3100 3110 3200 3300 3310 3320 3350 3400 3410 3420 31xx 36xx 3xxx $71,611,824 100.00	Liabilities and Equity	December 31,2019 Amount % $10,259,335 14.75 1,148,552 1.65 137,536 0.20 90 - 3,605,900 5.19 3,452,135 4.96 151,930 0.22 57,880 0.08 12,275 0.02 9,214,312 13.25 14,818 0.02 28,054,763 40.34 2,500,000 3.59 16,040,760 23.07 382,003 0.55 94,957 0.14 322,999 0.46 54,277 0.08 32,205 0.05 19,427,201 27.94 47,481,964 68.28 12,176,857 17.51 3,684,266 5.30 1,629,967 2.34 626,639 0.90 4,756,823 6.84 (1,549,054) (2.23) 386,837 0.56 21,712,335 31.22 348,186 0.50 22,060,521 31.72 $69,542,485 100.00	December 31,2018	December 31,2018
		Amount $2,354,915 46,872 4,370,279 5,837,107 110,540 266,021 51,427 3,048,660 2,745,582 60,692 18,892,095 144,620 3,737,580 42,679,361 1,609,869 7,508 63,178 631,669 1,776,605 50,650,390 $69,542,485	%	Amount		Amount $10,259,335 1,148,552 137,536 90 3,605,900 3,452,135 151,930 57,880 12,275 9,214,312 14,818 28,054,763 2,500,000 16,040,760 382,003 94,957 322,999 54,277 32,205 19,427,201 47,481,964 12,176,857 3,684,266 1,629,967 626,639 4,756,823 (1,549,054) 386,837 21,712,335 348,186 22,060,521 $69,542,485	Amount $11,432,165 1,299,431 174,607 4,788 3,995,657 3,095,273 551,690 - 13,599 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	%
1100 1110 1150 1170 1180 1200 1220 130x 1410 1470 11xx 1510 1550 1600 1755 1760 1780 1840 1900 15xx	Current assets Cash and cash equivalents Financial assets at fair value through profit or loss Notes Receivable , net Accounts receivable, net Accounts receivable from related parties, net Other receivables Current income tax assets Inventories Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss - non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Intangible assets Deferred Income tax assets Other non-current assets Total non-current assets Total assets		3.39 0.07 6.28 8.39 0.16 0.39 0.07 4.38 3.95 0.09	$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	Current liabilities Short-term loans Short-term notes and bills payable Contract liabilities - current Notes payable Accounts payable Other payables Current income tax liabilities Lease liabilities－current 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 Lease liabilities - non-current Other non-current liabilities Net defined benefit liabilities - non-current Guarantee deposits Total non-current liabilities Total liabilities Equity attr ibutable to owners of the parent Capital stock Common stock Capitalsurplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity interest Exchange differences on translation of foreign operations Unrealized gain (loss) on FVTOCI Total equity attributable to owners of the parent company Non-controlling interesteests Total equity Total liabilities and equity			15.97 1.82 0.24 0.01 5.58 4.32 0.77 - 0.02 14.33 0.02
			27.17	22,398,039
			0.21 5.37 61.38 2.31 0.01 0.09 0.91 2.55	169,167 3,607,386 42,091,709 - 7,618 83,504 507,020 2,747,381				43.08
								3.49 20.88 1.19 - 0.42 0.08 0.07
								26.13
			72.83	49,213,785				69.21
			100.00	$71,611,824				16.30 4.91 2.15 0.88 6.77 (1.42) 0.43
								30.02 0.77
								30.79
								100.00

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

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan Dollars, Except for earnings per share)

2019		2018
Amount	% 100.00 (86.27) 13.73 13.73 (4.43) (2.79) (2.81) 0.04 (9.99) 3.74 0.65 (0.33) (3.55) 0.27 (2.96) 0.78 0.27 1.05 0.01 0.25 - (1.41) (0.02) 0.28 (0.89) 0.16 1.12 (0.07) 1.05 0.27 (0.11) 0.16	Amount $52,313,603 (45,066,481) 7,247,122 7,247,122 (1,994,089) (1,211,497) (1,383,544) 2,601 (4,856,529) 2,660,593 490,327 (339,379) (1,642,459) 349,420 (1,142,091) 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	%
$47,715,121 (41,163,583)			100.00 (86.15)
6,551,538			13.85
6,551,538			13.85
(2,112,512) (1,333,305) (1,340,845) 17,646			(3.81) (2.32) (2.64) -
(4,769,016)			(8.77)
1,782,522			5.08
312,785 (155,250) (1,695,831) 128,291			0.94 (0.65) (3.14) 0.67
(1,410,005)			(2.18)
372,517 129,875			2.90 (1.16)
502,392			1.74
2,618 124,302 (524) (670,994) (10,509) 132,504			(0.01) (10.85) 0.01 (0.73) - 0.19
(422,603)			(11.39)
$79,789			(9.65)
$533,773 (31,381)			1.78 (0.04)
$502,392			1.74
$130,005 (50,216)			(9.58) (0.07)
$79,789			(9.65)
$0.45
$0.45

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

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

Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan Dollars)

			Equityattributable to owners of theparent	Equityattributable to owners of theparent	Equityattributable to owners of theparent	Equityattributable to owners of theparent		Non-controlling interests	Total Equity
Common stock $11,336,857 - 11,336,857 - - - - - 340,000 - - $11,676,857 $11,676,857 - - - - - - 500,000 - - - - - $12,176,857	Capital surplus $3,300,065 - 3,300,065 - - - - - 210,800 2,090 - $3,512,955 $3,512,955 - - (270) - - - 155,000 14,583 444 - 1,554 - $3,684,266		Retained earnings	Unappropriated earnings $6,292,097 - 6,292,097 (388,282) (1,983,950) 934,694 (2,790) 931,904 - - 20 $4,851,789 $4,851,789 (93,469) (583,843) - 533,773 2,094 535,867 - - - - - 46,479 $4,756,823	Other equityitems		Unrealized gains (losses) on available for sale financial assets $5,523,538 (5,523,538) - - - - - - - - - $- $- - - - - - - - - - - - - $-
		Legal reserve $1,148,216 - 1,148,216 388,282 - - - - - - - $1,536,498 $1,536,498 93,469 - - - - - - - - - - - $1,629,967	Special reserve		Exchange differences on translation of foreign operations $(747,066) - (747,066) - - - (271,974) (271,974) - - - $(1,019,040) $(1,019,040) - - - - (530,014) (530,014) - - - - - - $(1,549,054)	Unrealized gain (losses) from financial assets measured at fair value through other comprechtnsive income $- 5,978,814 5,978,814 - - - (5,669,634) (5,669,634) - - (16) $309,164 $309,164 - - - - 124,152 124,152 - - - - - (46,479) $386,837
			$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
			$626,639 - - - - -					$552,958 - (21,130) - (31,381) (18,835)	$22,047,820 - (604,973) (270) 502,392 (422,603)
			-					(50,216)	79,789
			- - - - - -					- (199) (4) (133,223) - -	655,000 14,384 440 (133,223) 1,554 -
			$626,639					$348,186	$22,060,521

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

35 -

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

Longchen Paper & Packaging Co., Ltd. and subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan Dollars)

Item	2019	2018
Cash flow from operating activities: Profit before income tax for the period Adjustments for: The profit or loss items which did not affecct cash flows: Depreciation expense (including investment property) Amortization expense Excepted credit recovery gains Net (gains) losses on financial assets and liabilities at fair value through profit and loss Interest expense Interest income Dividend income Compensation cost arising from share-based payments Share of profit of subsidiaries and associates accounted for unding the equity method (Gain) losses on disposal of property, plant and equipment Property, plant and equipment reclassified as expenses Reversal of impairment loss of property, plant and equipment Gain from lease modification Other item - donation expense Subtotal Change in operating assest and liabilities: Change in operating assests Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in accounts receivable from related parties Decrease (increase) in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Total net change in operating assets Change in operating liabilities Increase (decrease) in contract liabilities - current Increase (decrease) in notes payable Increase (decrease) in accounts payable Increase (decrease) in other payables Increase (decrease) in other current liabilities Increase (decrease) in refund liability - current Increase (decrease) in net defined benefit liability - non-current Total net change in operating liabilities Total net change in operating assets and liabilities Total adjustments Cash generated from operating activities Interests received Dividends received Interests paid Income tax paid Net cash provided by operating activities Cash flow from investing activities: Disposal (acquisition) of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Disposal of property, plant and equipment Disposal (acquisition) of intangible assets Decrease (increase) in other non-current assets - prepayments for equipment Increase/decrease in other non-current assets - long-term prepaid rent Decrease (increase) in other non-current assets - refundable deposits Decrease (increase) in other non-current assets - others Net cash used in investing activities Cash flow from financing activities: Increase (decrease) in short-term loans Increase (decrease) in short-term notes and bills payable Issuance of corporate bonds Payments of long-term loans Repayments of long-term loans Payment of lease liabilities Increase (decrease) in guarantee deposits received Repayment of the principal portion of lease liabilities Cash dividends paid Increase cash capital Cash received from investment of non-controlling interest Change in non-controlling interests Net cash provided by (used in) financing activities Effect of changes in exchange rate on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year	$372,517 2,389,996 23,061 (17,646) (35,080) 1,623,084 (41,923) (4,999) 1,554 (128,291) 110,469 82,092 (32,577) (70) 84,551	$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 - -
	4,054,221	3,548,245
	1,576,347 715,102 37,306 66,997 1,092,071 283,307 42,366	3,165,459 (5,158) 504,822 16,747 (466,870) (553,762) 36,186
	3,813,496	2,697,424
	(37,071) (4,698) (389,757) 242,574 (1,525) (1,469) (3,246)	(45,296) 4,698 (968,804) (291,011) (4,714) (12,000) (3,318)
	(195,192)	(1,320,445)
	3,618,304	1,376,979
	7,672,525	4,925,224
	8,045,042 44,645 32,054 (1,583,281) (770,256)	6,443,726 25,185 36,618 (1,559,284) (714,560)
	5,768,204	4,231,685
	14,112 (4,034,724) 67,755 (94) (902,006) - (943) 30,711	(37,947) (6,525,438) 52,994 (34,682) (375,506) (16,744) (20,340) (35,732)
	(4,825,189)	(6,993,395)
	(1,172,830) (150,879) - 8,675,928 (8,639,835) (58,277) (17,332) 20,932 (583,843) 655,000 (21,130) (152,261)	(1,125,826) 350,384 2,500,000 5,893,801 (3,663,332) - 24,170 41,242 (1,983,950) 550,800 (123) (16,292)
	(1,444,527)	2,570,874
	686,816	353,838
	185,304 2,169,611	163,002 2,006,609
	$2,354,915	$2,169,611

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

36 -

INDEPENDENT AUDITORS’ REPORT

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

Opinion

We have audited the accompanying parent company only financial statements of Longchen Paper & Packaging Co., Ltd(the “Company”). which comprise the parent company only balance sheets as of December 31, 2019 and 2018, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the "Other matterMaking Reference to the Audits of Component Auditors section of our report), the accompanying parent company only financial statements present farly, in all material respects, the accompanying parent company only financial position of the Company as of December 31, 2019 and 2018, and its parent company only financial performance and its parent company only 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 parent Company Only 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 Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters

Key audit matters for the Compay’s parent company only financial statements for the year ended December 31, 2019 are stated 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 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 parent company only 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 system for the administration of transactions with related parties;
Understand and evaluate the rationality of assumptions and methods adopted by the management to eliminate estimated unrealized gross profit of companies of different nature;
Perform inspection and verification on the quantity and amount of such transactions with related parties not put into production yet;
37 -
Reassess whether it is appropriate to eliminate unrealized gain or loss regarding investments accounted for using the equity method; and
Perform analytical review procedures. In consideration of the previous actual operating results and the influence of the production capacity expansion this year, assess whether the financial information by departments is consistent with the expectation.

Other matter - Making Reference to the Audits of Component Auditors

Among the invested companies listed in the separate financial statements above, the financial statements of invested companies were audited by other auditors rather than us. Thus, the amounts listed in the financial statements of such invested companies included in our audit opinions towards the separate financial statements above were based on the audit report issued by other auditors. The investment in such invested companies accounted for using the equity method as at December 31, 2019 and 2018 was respectively NT$ (hereinafter inclusive) 17,088,709 thousand and NT$18,853,209 thousand, constituting 49.68% and 53.15% of the separate total assets. For 2019 and 2018: 1) the gains and losses of related subsidiaries, and recognized under the equity method were respectively NT$(1,179,717) thousand and NT$($503,741) thousand, constituting (300.95%) and (39.46%) of the separate pre-tax net profit margin; and 2) other comprehensive losses of subsidiaries recognized under the equity method were respectively NT$(653,019) thousand and NT$(380,204) thousand, constituting (161.73%) and (6.40%) of other separate net comprehensive 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 parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
38 -
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 parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company 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 parent company financial statements for the year ended December 31, 2019 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 13, 2020

Notice to Readers

The accompanying parent company only financial statements are intended only to present the parent company only 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.

39 -

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

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY BALANCE SHEET December 31, 2019 and 2018

(Expressed in thousands of New Taiwan Dollars)

Code	Assets	December 31,2019 Amount % $1,188,345 3.44 376 - 279,639 0.81 861,011 2.50 110,540 0.32 119,392 0.35 - - 49,943 0.15 631,271 1.84 160,361 0.47 60,537 0.18 3,461,415 10.06 144,620 0.42 20,769,787 60.39 8,210,701 23.87 93,549 0.27 7,508 0.02 469,160 1.36 1,240,343 3.61 30,935,668 89.94 $34,397,083 100.00	December 31,2018 Code Amount % $62,175 0.18 2100 292 - 2110 433,051 1.22 2150 975,945 2.75 2170 147,846 0.42 2180 118,725 0.33 2200 1,611,994 4.56 2230 92 - 2280 614,895 1.73 2300 250,038 0.70 2322 8,783 0.02 2365 4,223,836 11.91 21xx 2530 169,167 0.48 2540 2570 22,436,357 63.25 2580 7,973,939 22.48 2600 - - 2640 7,618 0.02 25xx 338,538 0.95 2xxx 324,308 0.91 31,249,927 88.09 3100 3110 3200 3300 3310 3320 3350 3400 3410 3420 3xxx $35,473,763 100.00	Liabilities and Equity	December 31,2019 Amount % $700,000 2.04 1,148,552 3.34 89 - 607,330 1.77 38,551 0.11 645,040 1.88 120,246 0.35 36,008 0.10 5,025 0.01 1,175,000 3.42 14,818 0.04 4,490,659 13.06 2,500,000 7.27 5,152,000 14.98 373,805 1.09 60,038 0.17 53,969 0.15 54,277 0.16 8,194,089 23.82 12,684,748 36.88 12,176,857 35.40 3,684,266 10.71 1,629,967 4.74 626,639 1.82 4,756,823 13.83 (1,549,054) (4.50) 386,837 1.12 21,712,335 63.12 $34,397,083 100.00	December 31,2018	December 31,2018
		Amount $1,188,345 376 279,639 861,011 110,540 119,392 - 49,943 631,271 160,361 60,537 3,461,415 144,620 20,769,787 8,210,701 93,549 7,508 469,160 1,240,343 30,935,668 $34,397,083	Amount		Amount $700,000 1,148,552 89 607,330 38,551 645,040 120,246 36,008 5,025 1,175,000 14,818 4,490,659 2,500,000 5,152,000 373,805 60,038 53,969 54,277 8,194,089 12,684,748 12,176,857 3,684,266 1,629,967 626,639 4,756,823 (1,549,054) 386,837 21,712,335 $34,397,083	Amount	%
1100 1110 1150 1170 1180 1200 1210 1220 130x 1410 1470 11xx 1510 1550 1600 1755 1760 1840 1900 15xx	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, net Other receivables Other receivables from related parties Current income tax assets Inventories Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss - non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred Income tax assets Other non-current assets Total non-current assets Total assets		$62,175 292 433,051 975,945 147,846 118,725 1,611,994 92 614,895 250,038 8,783	Current liabilities Short-term loans Short-term notes and bills payable Notes payable Accounts payable Accounts payable from related parties Other payables Current income tax liabilities Lease liabilities - current 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 Lease liabilities - non-current Other non-current liabilities Net defined benefit liabilities - non-current Total non-current liabilities Total liabilities Equity Capital stock Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity interest Exchange differences on translation of foreign operations Unrealized gain (loss) on FVTOCI Total equity Total liabilities and equity		$1,780,000 1,299,431 89 750,129 - 515,239 372,863 - 5,929 1,050,000 16,287	5.02 3.66 - 2.11 - 1.45 1.05 - 0.02 2.96 0.05
			4,223,836			5,789,967	16.32
			169,167 22,436,357 7,973,939 - 7,618 338,538 324,308			2,500,000 4,740,000 834,824 53,969 60,141	7.05 13.37 2.35 0.15 0.17
						8,188,934	23.09
						13,978,901	39.41
						11,676,857 3,512,955 1,536,498 626,639 4,851,789 (1,019,040) 309,164	32.92 9.90 4.33 1.77 13.67 (2.87) 0.87
			31,249,927
			$35,473,763
						21,494,862	60.59
						$35,473,763	100.00

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

40 -

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

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan Dollars, Except for earnings per share)

2019		2018
Amount $9,732,951 (7,073,170) 2,659,781 (22,695) 55,651 2,692,737 (520,680) (561,156) (15,422) (1,097,258) 1,595,479 47,673 (85,427) (167,698) (998,034) (1,203,486) 391,993 141,780 533,773 2,618 124,152 (524) (655,212) (7,306) 132,504 (403,768) $130,005 $0.45 $0.45	%	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) (48) 101,746 (5,944,398) $(5,009,704) $0.82 $0.82	%
	100.00 (72.67)		100.00 (75.45)
	27.33 (0.23) 0.57		24.55 (0.54) -
	27.67		24.01
	(5.35) (5.77) (0.16)		(4.72) (4.05) (0.14)
	(11.28)		(8.91)
	16.39		15.10
	0.49 (0.88) (1.72) (10.25)		0.39 (0.25) (1.45) (1.38)
	(12.36)		(2.69)
	4.03 1.46		12.41 (3.32)
	5.49		9.09
	0.03 1.28 (0.01) (6.73) (0.08) 1.36		(0.07) (55.12) 0.05 (3.63) - 0.98
	(4.15)		(57.79)
	1.34		(48.70)

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

41 -

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

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan Dollars)

Commonstock $11,336,857 -		Retained earnings		Otherequityitems	Total Equity
	Legal reserve $1,148,216 - 1,148,216 388,282 - - - - - - - $1,536,498 $1,536,498 93,469 - - - - - - - - - - $1,629,967	Special reserve $626,639 - 626,639 - - - - - - - - $626,639 $626,639 - - - - - - - - - - - $626,639	Exchange differences on translation of foreign operations $(747,066) - (747,066) - - - (271,974) (271,974) - - - $(1,019,040) $(1,019,040) - - - - (530,014) (530,014) - - - - - $(1,549,054)	Unrealized gain(losses) from financial assets measured at fair value through other comprechtnsive income $- 5,978,814 5,978,814 - - - (5,669,634) (5,669,634) - - (16) $309,164 $309,164 - - - - 124,152 124,152 - - - - (46,479) $386,837
					$27,480,346 455,276
11,336,857 - - - - - 340,000 - - $11,676,857 $11,676,857 - - - - - - 500,000 - - - - $12,176,857					$27,935,622 - (1,983,950) 934,694 (5,944,398)
					(5,009,704)
					550,800 2,090 4
					$21,494,862
					$21,494,862 - (583,843) (270) 533,773 (403,768)
					(130,005)
					655,000 14,583 444 1,554 -
					$21,712,335

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

42 -

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

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan Dollars)

Item Cash flow from operating activities: Profit before income tax for the period Adjustments for: The profit or loss items which did not affecct cash flows: Depreciation expense (including investment property) Amortization expense Excepted credit recovery gains Net (gains) losses on financial assets and liabilities at fair value through profit and loss Interest expense Interest income Dividend income Compensation cost arising from share-based payments Share of profit of subsidiaries and associates accounted for using the equity method (Gain) losses on disposal of property, plant and equipment Reversal of impairment loss of property, plant and equipment Property, plant and equipment reclassified to expenses Unrealized (gain) loss on sale Realized (gain) loss on sale Other item - donation expense Subtotal Change in operating assest and liabilities: Change in operating assests Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in accounts receivable from related parties Decrease (increase) in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Total net change in operating assets Change in operating liabilities Increase (decrease) in accounts payable Increase (decrease) in accounts payable from related parties Increase (decrease) in other payables Increase (decrease) in refund liability - current Increase (decrease) in other current liabilities Increase (decrease) in net defined benefit liability - non-current Total net change in operating liabilities Total net change in operating assets and liabilities Total adjustments Cash generated from operating activities Interests received Dividends received Interests paid Income tax paid Net cash provided by operating activities Cash flow from investing activities: Decrease (increase) in other receivables from related parties’ Disposal (acquisition) of financial assets at fair value through profit or loss Acquisition of Investments accounted for using equity method Disposal of Investments accounted for using equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Decrease (increase) in other non-current assets - prepayments for equipment Decrease (increase) in other non-current assets - refundable deposits Decrease (increase) in other non-current assets - others Net cash used in investing activities Cash flow from financing activities: Increase (decrease) in short-term loans Increase (decrease) in short-term notes and bills payable Issuance of corporate bonds Payments of long-term loans Repayments of long-term loans Repayment of the principal portion of lease liabilities Cash dividends paid Increase cash capital Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year	2019	2018
	$391,993 456,548 5,106 (119) 20,903 143,392 (28,565) (4,999) 1,554 998,034 42,742 (23,000) 82,093 22,695 (55,651) 84,551 1,745,284 153,412 115,053 37,306 (667) (16,376) 149,136 (51,754) 386,110 (142,799) 38,551 122,386 (1,469) (904) (3,246) 12,519 398,629 2,143,913 2,535,906 30,639 1,227,523 (135,976) (620,349) 3,037,743 1,609,920 3,560 (1,211,080) 81,887 (492,170) 4,525 (1,249,018) 2,442 (5,184) (1,255,118) (1,080,000) (150,879) - 2,367,000 (1,830,000) (33,733) (583,843) 655,000 (656,455) 1,126,170 62,175 $1,188,345	$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
		(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

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

43 -

Case 2(proposed by the Board of Directors)

Summary: 2019 Earnings Distribution Proposal is hereby presented for ratification.

Note: 1. The Company's statement of surplus allocation has been prepared, the details are presented as follows.
This case was approved by Audit Committee and the board of directors, is hereby presented for ratification.

Resolution:

44 -

Longchen Paper & Packaging Co., Ltd. Earnings Distribution Proposal 2019

Earnings Distribution Proposal 2019	Earnings Distribution Proposal 2019
Unit: NT$
I. Distributable Items	Amount
Accumulated undistributed earnings in the beginning of 2019	4,174,476,452
Net income of 2019	533,772,707
Other comprehensive income	48,573,458
Less: 2019 Interim earning distribution	0
2019 Earnings available for distribution	4,756,822,617
II. List legal reserve
1. 2019 Interim legal reserve provision	0
2. 2019 Legal reserve provision	58,234,617
III. Distribution
1. 2019 Interim cash dividends to common shareholders (common stock per share)	0
2. 2019 Cash dividends to common shareholders (NT$0.3 cash dividend per share)	365,305,718
Total	423,540,335
Ending accumulated undistributed earnings	4,333,282,282

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

45 -

Discussion Items

46 -

[Discussion Items]

Case 1(proposed by the Board of Directors)

Summary: The amendment to the Company's "Rules of Procedure for Shareholders Meeting" is presented for discussion.

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

Amended clauses	Existing clauses	Remarks
Article 3 Unless otherwise provided by law or regulation, the Company's shareholders meetings shall be convened by the board of directors. (Second and third paragraphs are omitted.) Election or dismissal of directors, amendments to the articles of incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares,the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1 hereof shall be itemized in the causes or subjects to be described and the essential contents shall be explained in the notice to convene a meeting of shareholders, and shall not be brought up as extemporary motions; the essential contents may be posted on the website designated by the competent authority in charge of securities affairs or the company, and such website shall be indicated in the above notice. Extraordinarymotion.	Article 3 Unless otherwise provided by law or regulation, the Company's shareholders meetings shall be convened by the board of directors. (Second and third paragraphs are omitted.) Election or dismissal of directorsor supervisors,amendments to the articles of incorporation, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1of the Company Act, Articles 26-1 and 43-6 of the Securities and Exchange Act. Issuers shall be set out in the notice of the reasons for convening the shareholders meeting. None of the above matters may be raised by an extraordinarymotion.	Amendments were made to comply with practice, Article 172, 172-1, and Trade No. 10702417500 on August 6th, 2018.

47 -

Amended clauses	Existing clauses	Remarks
The reason of holding shareholder meeting shall specify shareholder’s election, and the date of assumption. After the election of shareholder meeting, the same meeting shall not amend the date of assumption by extemporaneous motions or other methods. A shareholder holding 1 percent or more of the total number of issued shares may submit tothis Corporation a written proposal for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda. In addition, when the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda. However, shareholder proposed for urging a company to promote public interests or fulfill its social responsibilities may still be included in the list of proposals to be discussed at a regular meeting of shareholders by the board of directors. Prior to the book closure date before a regular shareholders meeting is held,this Corporationshall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposalsin written or means of electronic transmissionmay not be less than 10 days. (The following is omitted.)	A shareholder holding 1 percent or more of the total number of issued shares may submit tothe Companya written proposal for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda. In addition, when the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda. Prior to the book closure date before a regular shareholders meeting is held, they Companyshall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days. (The following is omitted.)

48 -

Amended clauses	Existing clauses	Remarks
Article 6 (First paragraph is omitted.) The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors, pre-printed ballots shall also be furnished. (The following is omitted.)	Article 6 (First paragraph is omitted.) The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directorsor supervisors, pre-printed ballots shall also be furnished. (The following is omitted.)	Amendments were made to comply with practice.
Article 10 If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors, related cases shall be decided by a vote.The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting. (Second and third paragraphs are omitted.) The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call for a vote, and arrange a proper time of a vote.	Article 10 If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors.The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting. (Second and third paragraphs are omitted.) The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call for a vote.	Amendments were made to comply with the regulations of electronic voting.
Article 13 (First paragraph is omitted.) Whenthis Corporationholds a shareholders meeting, it may allow the shareholders to exercise voting rights by electronic meansand correspondence. When voting rights are exercised by correspondence or	Article 13 (First paragraph is omitted.) Whenthe Companyholds a shareholders meeting, it may allow the shareholders to exercise voting rights bycorrespondence or electronic means. When voting rights are exercised by correspondence or	Amendments were made to comply with the regulations of electronic voting.

49 -

Amended clauses	Existing clauses	Remarks
electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting. (The following is omitted.)	electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting. (The following is omitted.)
Article 14 The election of directors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by this Corporation, and the voting results shall be announced on- site immediately. (The following is omitted.)	Article 14 The election of directorsor supervisorsat a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by this Corporation, and the voting results shall be announced on-site immediately. (The following is omitted.)	Amendments were made to comply with practice.
Article 15 Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The Company may distribute the meeting minutes of the preceding paragraph by means of a public announcement. The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the	Article 15 Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The Company may distribute the meeting minutes of the preceding paragraph by means of a public announcement.	Amendments were made to comply with related regulations of Taiwan Stock Exchange.

50 -

Amended clauses	Existing clauses	Remarks
duration of the existence of the Company.
Article 20 (First paragraph is omitted.) These rules were amended on June 2nd, 2020.	Article 20 (First paragraph is omitted.)	Add the date of amendments.

Resolution:

51 -

Election Item

52 -

[Election Items]

Case 1(proposed by the Board of Directors)

Summary: The proposal for 15th election of directors (including independent directors)

Note: 1. 14th directors’ term of office will be terminated on June 13th, 2020. In response to the regulations, the directors shall be reelected. The Company shall elect nine directors (including three independent directors) in accordance with articles of incorporation.
After the board of shareholders terminated, newly-elected directors (including independent directors) shall assume immediately, the term of office is three years from June 2nd, 2020 to June 1st, 2023.
Elections of directors shall be conducted in accordance with the candidate nomination system. The candidate list of directors (including independent directors) and related information approved by the Board of Directors are represented as follows:

No.	Nominee title	Names of Nominees	Education	Work experience	Current position	Number of shares (Unit: share)
1	Director	Qian Jiang Investment Co., Ltd. Representative: Cheng, Ying-Pin	Master Business Administration, National Taiwan University	Chairman of Longchen Paper & Packaging Co., Ltd.	1. Chairman of Longchen Paper & Packaging Co., Ltd. 2. Supervisor, Chinese National Federation of Industries	90,559,731
2	Director	Qian Jiang	Master of Law	Director of the	Vice chairman, CTBC	90,559, 731
		Investment Co., Ltd.	Graduate School of	Police Department	Anti-Drug Educational
		Representative:	Criminology,	of the Ministry of	Foundation
		Wang, Cho-Chiun	National Taipei	the Interior
			University
3	Director	Long Sheng	Doctor of Business	Vice dean, College	1. Independent director	108,329,706
		Investment Co., Ltd.	Administration,	of Management,	of E.SUN Financial
		Representative:	University of Illinois at	National Taiwan	Holding Co., Ltd.
		Lee, Ji-Ren	Urbana-Champaign	University	2. Independent director
					of Delta
					Electronics,Inc
					3. Independent director
					of Acer Incorporated
					4. Adjunct Professor,
					EMBA of National
					Taiwan University
4	Director	Long Sheng	MBA, Baruch College,	1. Vice chairman of	Chairman of Cathay	108,329,706
		Investment Co., Ltd.	City University of New	Blackstone Group	United Bank
		Representative:	York	Associates
		Guo, Ming-Jian		Limited
				2. General manager
				of HongKong &
				Taiwan,
				J.P.Morgan Chase
				Bank

53 -

No.	Nominee title	Names of Nominees	Education	Work experience	Current position	Number of shares (Unit: share)
5	Director	Baolong	Master of Business	1. General manager	1. Chairman of Chi Tei	236,444,363
		International Co.,	Administration,	of Standard	Investment Co., Ltd.
		Ltd.	California State	Chartered Bank	2. Independent director
		Representative:	University	(Taiwan) Limited	of Preferred Bank,
		Wu, Chih-Wei		2. Executive	CA, USA
				chairman of	3. Director of Taiwan
				Standard	Farm Industry Co.,
				Chartered Bank	Ltd.
				(Taiwan) Limited	4. Independent director
				3. Chief executive	of Cathay Real Estate
				officer of Credit	Development Co.,
				Suisse Group	Ltd.
				(Taiwan)
6	Director	Yuema International	College of Business,	1. Chairman of	1. Legal representative	15,417,427
		Co., Ltd.	University of the	ISTRA	of CTBC Bank Co.,
		Representative:	Witwatersrand, South	Corporation	Ltd.
		Chiang, Chun-Te	Africa	2. Director of China	2. Director of TJ ABC
				Petrochemical
				Development
				Corporation
7	Independent	Chiu, Shean-Bii	Master of Business	Chair of Finance,	1. Professor of Finance,	0
	Director		Administration, Doctor	National Taiwan	National Taiwan
			of Finance, University	University	University
			of Washington		2. Independent director
					of ECOVE
					Environment
					Corporation
					3. Independent director
					& Convener of Audit
					Committee,
					Longchen Paper &
					PackagingCo.,Ltd.,
8	Independent	Li, Tsun-Siou	Master of Business	Chair of Finance,	Adjunct professor of	0
	Director		Administration &	National Taiwan	EMBA, National
			Economics , Doctor of	University	Taiwan University
			Finance, University of
			California
9	Independent	Wu, Chie-Fuh	1. Doctor of	General manager of	1. Convener of	0
	Director		Administration,	Taoyuan	Remuneration
			Shanghai University	International Airport	Committee,
			of Finance and	Services Co., Ltd.	Longchen Paper &
			Economics		Packaging Co., Ltd.
			2. Master of Business		2. Adjunct professor,
			Administration,		Department of
			National Taiwan		International
			University		Business, Chung
					Yuan Christian
					University

Result of election:

54 -

Other Item

55 -

[Other Items]

Case 1(proposed by the Board of Directors)

Summary: Discussion of the release of the prohibition on newly-elected directors and their corporate representatives from participation in competitive business.
Note: 1. In response to Company Act, Paragraph One, Article 29 hereof, the directors shall present the important content of their behaviors to the board of shareholders and gain the admission for them or other people’s behaviors of the company business domaine.
In consideration of the company’s business needs, present to the board of shareholders for resolution and admission of the company’s new directors to take over the positions of similar to the company’s business domaine and other related companies. In respond to Company Act, Article 29 hereof, release the prohibition in competitive business.
The company hereby presented to release the content of the prohibition on directors and their corporate representatives from participation in competitive business, the details are presented as follows.

Title	Name				Position/CompanyName	Position/CompanyName	Position/CompanyName	Position/CompanyName
Legal Person as Director／ Representative	Qian Jiang Investment Co., Ltd.／ Cheng, Ying-Pin	Jiangsu Longchen Greentech Co.,Ltd./ Director	Wuxi Longchen Greentech Co.,Ltd./ Director	Pinghu Longchen Greentech Co.,Ltd./ Director	SuZhou Longchen Paper & Packaging Co., Ltd./ Director	Shanghai Minhang Longchen Co., Ltd./ Director	Zhejiang Xiasha Longchen Packaging Co., Ltd./ Director	Hubei Longchen Greentech Co., Ltd./ Director	Xiantao Longchen Greentech Co., Ltd./ Director	Wuhan Longchen Greentech Co., Ltd./ Director	Jingzhou Longchen Greentech Co., Ltd./ Director	Hunan Longchen Packaging Co., Ltd./ Director
Legal Person as Director	Baolong International Co.,Ltd.	Conduct is within the scope of the company's business.

Resolution:

[Extemporaneous Motions]

[Adjournment]

56 -

Appendixes

57 -

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., same as English name of the company.
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 Fifteen Billion New Taiwan Dollars (NT$15,000,000,000), which is divided into 1,500,000,000 units to issue common or preferred shares, 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 issued with the signatures or authorized seals of at least three directors, subject to certification by the operation of the laws.
58 -

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 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 according to the "Company Act”.
In issuing new shares, subscribing new shares shall be made by 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 according to the "Company Act”.
Issuance of new restricted shares for subscription by 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 according to the "Company Act”.
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".
59 -

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.

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 two-thirds 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".
Article 19: The Company's board meetings shall be convened and communicated to directors seven (7) days in advance with detailed agenda; however, board meetings may be convened in case of emergency.
60 -

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
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.
Article 22.1: The Company is required to allocate at least 2% of its annual profit before income tax (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.
61 -

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 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; 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;
62 -

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; The 38th amendment was made on June 12, 2019.

63 -

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 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.

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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.

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

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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 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.

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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 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".
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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 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.

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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.

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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Rules for Election of Directors of Longchen Paper & Packaging Co., Ltd.

(Amended and approved by Extraordinary Shareholders Meeting on August 25, 2014)

Elections of the Company’s directors shall be conducted in accordance with these rules.
The cumulative voting method shall be used for election of the Company’s directors. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates.
The number of directors will be as specified in the Company's Articles of Incorporation, independent and non-independent directors shall be elected at the same time, but in separately calculated numbers. Those receiving ballots (including electronic voting) representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.
Before the election begins, the chair shall appoint a number of persons to perform the respective duties of vote monitoring and counting personnel. The monitoring personnel shall have the status of shareholder.
The board of directors or the Company shall prepare and separate ballots for directors in numbers corresponding to shareholder account number, attendance card number or his/her voting rights. If shareholders exercise their rights by electronic means, the ballots shall not be prepared and separated.6. A voter must enter the candidate's account name and shareholder account number in the "candidate" column of the ballot; for a non-shareholder, the voter shall enter the candidate’s identity card number instead of shareholder account number. When the candidate is a governmental organization or juristic-person shareholder, the name of the governmental organization or juristic-person shareholder shall be entered in the column for the candidate's account name in the ballot paper, or both the name of the governmental organization or juristic-person shareholder and the name of its representative may be entered.
A ballot is invalid under any of the following circumstances:
i. The ballot was not prepared by these rules.
ii. A blank ballot is placed in the ballot box.
iii. The writing is unclear and indecipherable.
iv. The candidate whose name is entered in the ballot is a shareholder, but the candidate's account name and shareholder account number do not conform with those given in the shareholder register.
v. Other words or marks are entered in addition to the candidate's account name or shareholder account number or identity card number.
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vi. In the "candidate" column of the ballot, the name of the candidate entered in the ballot is identical to that of another shareholder, but no shareholder account number or identity card number is provided in the ballot to identify such individual.
vii. Two and more candidates are filled in the same ballot.
The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation and the list of shall be announced by the chair on the site.
The board of directors of the Company shall issue notifications to the persons elected as directors.
Unspecified items in these rules shall be conducted in accordance with Company Act, the Company's articles of incorporation and law and regulation.
These rules, and any amendments hereto, shall be implemented after approval by a shareholders meeting.
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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:

2. Minimum shares held by all the directors: 32,000,000 units 3. Number of shares held by individual and all the directors:	2. Minimum shares held by all the directors: 32,000,000 units 3. Number of shares held by individual and all the directors:	2. Minimum shares held by all the directors: 32,000,000 units 3. Number of shares held by individual and all the directors:	2. Minimum shares held by all the directors: 32,000,000 units 3. Number of shares held by individual and all the directors:
Book closure date for the Company's all outstanding shares of 1,217,685,727				Book closure date: April 4, 2020
Occupational title	Name	Date of elected to office	Tenure	Shareholding when elected		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	90,559,731	7.43
Director	Qian Jiang Investment Co., Ltd. Representative: Wang,Cho-Chiun	June 14, 2017	3 years	61,134,492	5.53	90,559,731	7.43
Director	Baolong International Co., Ltd. Representative: Chiu,Chao-Chang	June 14, 2017	3 years	196,421,615	17.76	236, 444,363	19.41
Director	Long Sheng Investment Co., Ltd. Representative: Hsu,Hsiao-Po	June 14, 2017	3 years	97,079,103	8.78	108,329,706	8. 89
Director	Long Sheng Investment Co., Ltd. Representative: Guo,Ming-Jian	June 14, 2017	3 years	97,079,103	8.78	108,329,706	8. 89
Director	Yuema International Co., Ltd. Representative: Chiang,chun-Te	June 14, 2017	3 years	14,653,251	1.32	15,417,427	1. 26
Independent Director	Chiu, Shean-Bii	June 14, 2017	3 years	0	0.00	0	0.00
Independent Director	Wu, Chih-Wei	June 14, 2017	3 years	0	0.00	0	0.00
Independent Director	Wu, Chie-Fuh	June 14, 2017	3 years	0	0.00	0	0.00
	Total			369,288,461	33.39	450,751,227	37.02%

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 2020

51936_rns_2020-06-12_51fbc105-94f7-4595-ad72-0c71063f7caf.pdf

Longchen Paper & Packaging Co., Ltd.

2020 Annual Shareholders’ Meeting Meeting Agenda (Translation)

Table of Contents

Longchen Paper & Packaging Co., Ltd. 2020 Annual Shareholders’ Meeting Agenda (Translation)

Report Items

Report One: Business Report of 2019

Longchen Paper & Packaging Co., Ltd. Business Report of 2019

I. Business Report of 2019

2. Operations

3. Research and development status

II. Business policies and major production and marketing strategies

Report Two: Audit Committee’s Review Report

Longchen Paper & Packaging Co., Ltd. Audit Committee’s Review Report

Report Three: 2019 Annual Employee’s Bonus Distribution Report

Report Four: 2019 Cash Dividends Distribution Report

Report Five: Amendment of “Ethical Corporate Management Best Practice Principles”

Report Six: Establish “Procedures for Ethical Management and Guidelines”

Procedures for Ethical Management and Guidelines of Longchen Paper & Packaging Co., Ltd.

Article 11: (Recusal)

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 - Making Reference to the Audits of Component Auditors

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

Notice to Readers

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

Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31, 2019 and 2018

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2019 and 2018

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

Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2019 and 2018

Longchen Paper & Packaging Co., Ltd. and subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2019 and 2018

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Major transactions with related parties

Other matter - Making Reference to the Audits of Component Auditors

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

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

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY BALANCE SHEET December 31, 2019 and 2018

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2019 and 2018

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

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2019 and 2018

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

For the years ended December 31, 2019 and 2018

Case 2(proposed by the Board of Directors)

Longchen Paper & Packaging Co., Ltd. Earnings Distribution Proposal 2019

Discussion Items

[Discussion Items]

Case 1(proposed by the Board of Directors)

Election Item

[Election Items]

Case 1(proposed by the Board of Directors)

Other Item

Longchen P&P AGM Information 2020