NPC - AGM Information 2017 | FinancialReports.eu

NAN YA PLASTICS CORPORATION

2017 ANNUAL SHAREHOLDERS’ MEETING

MEETING HANDBOOK

(Summary)

(This English translation is prepared in accordance with the Chinese version and is for reference purposes only. If there are any inconsistency between the Chinese original and this translation, the Chinese version shall prevail.)

JUNE 20, 2017

Meeting Procedure …….……………………………………	Page 2
Meeting Agenda ..………..………………..…………………	Page 3
Report Items …..……………………………………………	Page 4
Ratification Items …………………………………………….	Page 17
Discussion Items ……………………………………………	Page 19
Appendices …………………………………………………	Page 69

NAN YA PLASTICS CORPORATION 2017 ANNUAL SHAREHOLDERS’ MEETING PROCEDURE

Call Meeting to Order
Chairman’s Address
Report Items
Ratification Items
Discussion Items
Extraordinary Motions
Meeting Adjourned

NAN YA PLASTICS CORPORATION 2017 ANNUAL SHAREHOLDERS’ MEETING AGENDA

Time: 2:00 p.m., Tuesday, June 20, 2017

Venue: 2F, International Ballroom, Sunworld Dynasty Hotel, Taipei

  - (No. 100 Dun Hua North Road, Taipei, Taiwan)

Report Items
(1) 2016 Business Report
(2) Audit Committee’ Review Report on the 2016 Financial Statements
(3) Distribution of 2016 Employees Compensation
(4) The Issuance of 2016 Unsecured Straight Corporate Bond
(5) Amendment of the Company’s “Code of Ethical Conduct for Directors and Managers”
Ratification Items
(1) Please approve the 2016 Business Report and Financial Statements as required by the Company Act.
(2) Please approve the Proposal for Distribution of 2016 Profits as required by the Company Act.
Discussion Items
(1) Amendment to the Rules of Procedure for Shareholders’ Meeting of the company submitted for discussion
(2) Amendment to the Procedures for Acquisition and Disposal of Assets of the Company submitted for discussion and resolution.
(3) Amendment to the Procedures for Engaging in Derivatives Transactions of the Company submitted for discussion and resolution.
(4) Amendment to the Procedures for Loaning Funds to other Parties of the Company submitted for discussion and resolution.
(5) Amendment to the Procedures for Providing Endorsements and Guarantees to other Parties of the Company submitted for discussion and resolution.

Report Items

About the Company’s results of operation for fiscal year 2016, please refer to Business Report for further details (on page 6 of the Handbook.) which is hereby reported for record.
The Company’s Audit Committee members reviewed the 2016 Business Report and Financial Statements and issued their Review Report according to the applicable laws. Please refer to Audit Committee’s Review Report (on page 13 of the Handbook.)
Distribution of 2016 Employees Compensation
The pre-tax profit prior to deducting employees compensation distributable for 2016 is NT$51,566,797,960. The company has no accumulated losses. Adopted by the Board Meeting on March 24, 2017, 0.1% of the profit is allocated as employees’ compensation in accordance with Article 25 of the Articles of Incorporation. The total allocated amount is NT$51,566,798, which shall be distributed in cash. The above is hereby reported for record.
The Issuance of 2016 Unsecured Straight Corporate Bond
(1)To raise funds to pay off loans, the Board of Directors resolved on Mar. 24, 2016 to issue unsecured ordinary bonds of NT$5,000,000,000 in 2016. The company successfully issued the bonds on Aug. 16, 2016 to satisfy its capital needs.
(2)The coupon rate of the aforementioned bonds issued is the fixed annual rate of 0.68%. The period of issue is five years. Interest shall be paid as simple interest rate every year. Half of the principal shall be repaid upon the end of the fourth year and the fifth year, respective from the date of issue. The above is hereby reported for record.
Amendment of the Company’s “Code of Ethical Conduct for Directors and Managers”

To comply with the regulations of the competent authority in charge

of securities affairs, the Company has established Audit Committee in lieu of Supervisor. The Board of Directors approved the amendment of the “Code of Ethical Conduct for Directors and Managers” of the Company on June 23, 2016. Please refer to page 15 through page 17 of the Handbook for the amended “Code of Ethical Conduct for Directors and Managers.”

NAN YA PLASTICS CORPORATION

1.2016 Business Report

The consolidated operating revenue of the company in 2016 was US$ 8,529 million, a decrease of 8.2% from US$9,287 million in 2015. The consolidated profit before taxes was US$1,668 million, an increase of 23.4% from US$1,352 million in the previous year.

In 2016, the growth of global trade and the capital market slowed down. International economic institutions continuously decreased the global economic outlook. Even the better U.S.’s economic growth was not as strong as expected. Mainland China has actively carried out the structural reform of its supply side but was slow to reduce excess capacity and the economic growth continued to slow down, thus imposing a significant impact on not only Asia’s economy but also the world’s economy.

Facing such a harsh external economic environment, our company has been striving to expand both domestic and foreign markets, increase sales volume and capacity utilization, commit to whole production and be sold out, develop differentiated and high-value products and improve the percentage of those products, all of which have significantly contributed to a growth in profits in plastic processing products and electronic materials. Despite the effective market expansion of petrochemicals, falling oil prices and the decreased intention to buy in the first three quarters of 2016 resulted in profit reduction compared to the same periods in 2015. Nevertheless, increased investment return from Formosa Petrochemical Corporation and the disposal of Inotera Memories, Inc. shares ultimately allowed our company to gain 23.4% more profit before taxes than last year.

Our company mainly has four kinds of products: plastic processing products, petrochemicals, electronic materials, and polyesters.

With regard to plastic processing products, most three-stage plastic processing companies in Taiwan have moved their manufacturing plants to mainland China and Southeast Asia and purchase cheaper raw materials from local suppliers, which has significantly decreased the demand for domestic two-stage plastic processing products. In addition to shifting part of our traditional product lines to subsidiary companies overseas to supply our clients with required materials, our parent company in Taiwan has continued to actively implement overall industrial transformation, such as accelerating the development of featured products with “new functions, new materials, and eco-friendliness”, expanding new niche markets, and increasing the sales proportions of differentiated and high-value products. By adjusting the production and marketing combination in Taiwan, mainland China, and the U.S. in accordance with overall market characteristics, we aim to bring the advantages of transnational business into full play and accelerate e-commerce and network marketing, as well as expand the emerging markets with demand potential. Thanks to a variety of efforts, we gained a more profit growth than in the previous year.

Regarding petrochemical products, in response to the vertical integration of the sixth naphtha cracker plant in Mailiao District, our petrochemical products, including EG, BPA, 1,4BG, DEHP, PA, 2EH, and EPOXY, were manufactured to support development in such downstream industries as the polyester, electronics, and plastic processing industries. By vertically integrating upstream and downstream products, we formed a complete supply chain. In the first three quarters of 2016, due to low global oil prices, the prices of petrochemical products also remained low. Due to the decreased demand, high prices of ethylene, and partially reduced production, EG generated decreasing profits. However, in the fourth quarter, EG showed increasing profits due to the rising utilization

rate of the polyester industry and the increasing demand for antifreeze, but the overall annual profits still declined. BPA and DEHP were met with operational difficulties, such as excessive supply in mainland China and high prices of raw materials. However, sales performance has begun improving since the company started promoting market expansion. Although petrochemical products are intrinsically vulnerable to increasing prices of raw materials, our company continues to be devoted to making improvements through optimizing processes, fully grasping market conditions, effectively adjusting production, sales and inventory, expanding markets in regions besides mainland China, and diversifying market risks to strive for the best operating performance.

With regard to polyester products, both sales of international brands being not as expected and adjustments in inventory have contributed to fierce competition in polyester market this year. Fortunately, stable sales of differentiated and high-value products made from polyester staple fiber and filament have contributed to getting profits this year. Our PET chips and industrial film production experienced overcapacity and decreasing prices, which resulted in great challenges on our business operations. Facing such negative external factors, our company has been proactively developing differentiated, functional, and eco-friendly products and segmenting the market and expanding the sales fields through extensive applications of polyester filament and film. In addition, by cooperating with other brand names, we aim to create more business opportunities and increase sales to maintain the stable profit.

Regarding electronic materials, due to changes in end use, the demand for traditional personal computers and laptops has declined significantly, while the sales volume of mobile communication devices like smartphones and tablets has also slowed down. Cloud servers and automotive electronics are the only products that have shown stable growth this year. However, as new energy policies, like electric cars, have been promoted in mainland China, Europe, and the U.S., a significant demand has been

placed on upstream lithium battery copper foil and related materials, leading to the supply and demand tensions in the copper foil industry in the second half of the year and further increasing the demand and prices of the overall industry. Our company has adjusted our production and sales strategies over time through vertical integration and transformation, adapted to respond to market trends to promote high density Interconnection CCL(HDI), high layer count CCL(HLC), automotive electronics CCL, ultrathin glass fiber cloth, high frequency copper foil, and thick copper foil to increase the sales proportion of high-value and highly functional niche products. We strive to bring overall production capacity into full play and adjust production and sales operations in manufacturing plants on both sides of the strait, we have committed to improving our operating revenue and profits in the future.

Nan Ya Printed Circuit Board Corporation, in which we have invested, has continuously developed and manufactured a variety of products like high-end PCB and IC substrates. In 2016, operations were not as good as expected because the operating performance did not meet its target. Nan Ya Printed Circuit Board Corporation is actively reviewing and improving its capability for R&D and equipment manufacturing, material costs, and employee performance in order to enhance its operating constitution. To continuously meet clients’ requirements, Nan Ya Printed Circuit Board Corporation has introduced advanced SiP board production techniques and has developed various products designed for new uses like communication networks and automotive electronics. In the future, the company expects to strive for more orders for niche products, expand its new client base, and strictly control costs in order to enhance its overall business competitiveness.

Nanya Technology Corporation, another company in which we have invested, is dedicated to developing, manufacturing, and selling DRAM (dynamic random-access memory). To reduce operational risks and follow market trends, Nanya Technology Corporation has focused on

manufacturing consumer and mobile niche DRAM products in mainland China and Asia-Pacific markets. In 2016, Nanya Technology Corporation continued to improve its 30 nanometer technology production effectiveness to increase output. Nanya Technology Corporation is also introducing 20 nanometer manufacturing process technologies to further reduce product costs and increase competitiveness. With a stable DRAM industrial environment, Nanya Technology Corporation can maintain certain profits, in addition to the sale of Inotera Memories, Inc. shares, to contribute to a lot of investment returns for our company,.

In addition to selling Inotera Memories, Inc. shares to Micron Technology, Inc., Nanya Technology Corporation also participated in subscribing to Micron Technology, Inc. unlisted shares and became a shareholder of Micron Technology, Inc. Furthermore, Nanya Technology Corporation also obtained the option of its 10 nanometer technology and products to be licensed. With years of stable partnership, Nanya Technology Corporation will form a new strategic alliance with Micron Technology, Inc. through this transaction, resulting in a win-win situation and having a positive impact on both technology and industry communication.

2.2017 Business Outlook

Looking toward 2017, complicated and uncertain factors have impeded global economic recovery, including the significant overturn and change in political and economic policies after the election of Trump as president of the U.S. If such policies are put into practice, they will certainly have an impact on global economic growth.

Mainland China will be undergoing industrial structural transformation and upgrade for a long time as mainland China moves from an investment-oriented country to a consumption-oriented country. However, negative factors that affect the economy, such as low demands and overcapacity, continue to remain, causing the economic growth to slow

down year by year. Mainland China has continuously promoted localization in its industry chains, which has resulted in severe threats and increasing export restrictions on Taiwan, which relies heavily on mainland Chinese markets. Furthermore, stagnant progresses in ECFA negotiation and the participation in regional economic integration agreements have left Taiwan out of the global value chain, causing long-term economic growth to become stagnant or decline. Both the government and industries must make extra efforts to avoid the adverse trend of the economic downturn.

Global economic changes have grown more unpredictable. An unstable global environment and uncertain risks can severely impact economic development. Faced with adversity and these challenges, our company will persist the belief that “the truth shall be sought from facts” and that “where there is a will, there is a way” in the pursuit of constant improvement and management rationalization. We aim to recycle resources and create the greatest economic benefits by promoting process optimization, increasing production performance, and developing circular economic activities through reduction and reuse. With the efforts made by the production, sales, and technology departments, we continue to reinforce R&D, expand niche product sales, and raise the sale proportions of differentiated and high-value products. By making Taiwan the center of our business operations, we have applied rich experience in diversification and vertical integration, adjusted resources from domestic and foreign companies in which we have invested in order to locate the best combination of production and sales, increase our overall competitiveness, and achieve more returns for our shareholders.

In our ongoing capital expenditure programs, in addition to increasing capacity and effectiveness by improvements in process optimization, in Taiwan, we have increased the number of production equipment for high-value pepa synthetic paper as well as started the study on an expansion plan for a new copper foil plant. In mainland China, high value-added plastic leather production equipment has been set up for volume production in Nantong. In the US, new EG plants are now under

expansion. Among those newly increased factories, the new copper foil factory is aimed for product differentiation by making copper foil for use in the power and energy storage applications to make a more complete product lineup. The EG plants in Texas is designed to utilize locally available cheap resources such as natural gas as part of the largest expansion plan in recent years. The new plant is scheduled to go into production in three years, which is expected to contribute new operation momentum to our company and increase our business growth.

Chairman: Chia Chau, Wu President: Ming Jen, Tzou In-charge Accountant: Li Ta, Pai

NAN YA PLASTICS CORPORATION Audit Committee’ Review Report

The Board of Directors has prepared the Company’s 2016 Business Report, Financial Statements and Proposal for Profits Distribution. The CPA firm of KPMG was retained to audit Nan Ya Plastics Corporation’s Financial Statements and has issued an audit report relating to Financial Statements. The Business Report, Financial Statements, and Proposal for Profits Distribution have been reviewed and determined to be correct and accurate

by the Audit Committee members of Nan Ya Plastics Corporation. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report. Please be advised accordingly.

Nan Ya Plastics Corporation

Chairman of the Audit Committee: Chih-Kang, Wang

March 24, 2017

Nan Ya Plastics Corporation Code of Ethical Conduct for Directors and Managers

Amended by Board of Directors on June 23, 2016

Chapter 1 General Principles

Article 1: The Code of Ethical Conduct (the “Code”) of Nan Ya Plastics Corporation (the “Company”) is established to stipulate rules for Directors and managers (including President, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Chief Financial Officer, Chief Accounting Officer, and other persons authorized to manage affairs and sign documents on behalf of the Company) to abide by in terms of ethical conduct when engaging in business activities within the scope of their authority, to prevent unethical conduct or any conduct that may damage the interest of the Company and its shareholders.

Chapter 2 Content of the Code

Article 2: Directors and managers shall conduct corporate affairs on the basis of integrity, faithfulness, compliance with laws, fairness and righteousness and with an ethical, self-disciplined attitude.
Article 3: Directors and managers shall avoid any conflicts of interest arising when their personal interest intervenes, or is likely to intervene in the overall interest of the Company, including but not limited to unable to perform their duties in an objective and efficient manner, or taking advantage of their position in the Company to obtain improper benefits for either themselves or their spouse, parents, children, or relatives within the second degree of kinship. To prevent conflicts of interest, any matters pertaining to lending funds, providing guarantees, and major asset transactions between the Company and the above-mentioned persons or their affiliated enterprise thereof shall be submitted to the Board of Directors for its approval in advance. The corresponding purchase (or sale) of goods shall be dealt with the best interest of the Company.
Article 4: When the Company has an opportunity for profit, the Directors and managers have the responsibility to conserve

the reasonable and lawful benefits that can be obtained by the Company.

The Directors and managers shall not obtain personal gain by using the Company property or information or taking advantage of their positions. Unless otherwise stipulated in the Company Act or Articles of Incorporation, they shall not engage in activities that compete with the business of the Company.

Article 5: The Directors and managers shall be bound by the obligation to maintain the confidentiality of any information regarding the Company itself or its suppliers and customers, except when authorized or required by law to disclose such information. Confidential information includes any
undisclosed information that, if exploited by a competitor or disclosed, could result in damage to the Company or the suppliers and customers.
Article 6: The Directors and managers shall treat all suppliers and customers, competitors, and employees fairly, and may not obtain improper benefits through manipulation, nondisclosure, or misuse of the information learned by virtue of their positions, or through misrepresentation of important matters, or through other unfair trading practices.
Article 7: The Directors and managers shall have the responsibility to safeguard the Company’s assets, to use the assets for official business purpose properly, and to avoid any impact on the Company’s profitability resulting from theft, negligence in care or waste of the assets.
Article 8: The Directors and managers shall comply with applicable laws and the Company’s regulations.
Article 9: When a director or manager is found by employee to have committed a violation of a law, regulation or the Code, the employee shall report to the Audit Committee, their direct managers, president office personnel, chief internal auditor, or other appropriate personnel with sufficient evidence. Once the misconduct is confirmed, the Company will reward the above-mentioned employee in accordance with the Company's rules for employment management.
The Company shall handle the above-mentioned report properly and confidentially. The Company also shall use its best efforts to ensure the safety of the conscientious reporter

and protect him/her from all kinds of reprisals.

Article 10: Where a director or manager is verified to have violated the Code, in addition to being subject to punishment under the Company's rules for employment management, the Company shall report the violation to the Board of Directors. The person involved in the violation shall be liable for civil, criminal or administrative responsibilities required by law and the Company shall disclose the violation on the Market Observation Post System (“MOPS”) immediately, including: the date of the violation, description of the violation, the provisions of the Code violated, and the disciplinary actions taken.

Chapter 3 Procedures for Exemption

Article 11: Where a Director or manager is to be exempted from the Code due to special circumstances, such exemption shall be approved by an majority vote at a meeting of the Board of Directors attended by over two-third of the Directors in person or through representation. The Company shall immediately disclose on the MOPS, including: date of exemption granted by the Board of Directors, any opposing or qualified opinion expressed by the independent directors, and the period of, reasons for, and the provisions of the Code behind the application of the exemption for shareholders to evaluate the appropriateness and to safeguard the interests of the Company.

Chapter 4 Method of Information Disclosure

Article 12: The Company shall disclose the Code on the Company’s website, annual reports, prospectuses, and the MOPS. Any amendment is subject to the same procedure.

Chapter 5 Additional Provision

Article 13: The Code shall be implemented after approval by the Board of Directors and shall be reported to a shareholders meeting. Any amendment is subject to the same procedure.

Ratification Items Proposal 1

Proposal: For approval of the 2016 Business Report and Financial Statements as required by the Company Act.

Proposed by the Board of Directors

Explanation:

The preparation of the Company’s 2016 Consolidated and Individual Financial Statements were completed and the same were approved by the Board Meeting on March 24, 2017 ,and audited by independent auditors, Ms. Hsin-Yi, Kuo and Mr. Chi-Lung, Yu, of KPMG. The aforesaid Financial Statements together with the Business Report were reviewed by the Audit Committee, which the Audit Committee’ Review Report is presented.
For the aforementioned Business Report, please refer to page 6 through page 12 of the Meeting Handbook. As for the Financial Statements, please refer to page 60 through page 67 of the Handbook. Please approve the Business Report and the Financial Statements.

Resolution:

Ratification Items Proposal 2

Proposal: For Approval of the Proposal for Distribution of 2016 Profits as required by the Company Act.

Proposed by the Board of Directors

Attachment:

Please refer to page 68 of the Handbook for the Statement of Profits Distribution, which has been reviewed by the Audit Committee members of Nan Ya Plastics Corporation and approved by the Board of Directors.

Resolution:

Discussion Items Proposal 1

Proposal: Amendment to the Rules of Procedure for Shareholders’ Meeting of the company submitted for discussion.

Proposed by the Board of Directors

Explanation:

To comply with the regulations of the competent authority in charge of securities affairs, the Company has established Audit Committee in lieu of Supervisor. As such, the Company’s “Rules of Procedure for Shareholders’ Meeting of the Company” shall be amended accordingly. The corresponding comparison table for the articles before and after the amendment is attached. Please discuss and resolve.

Article		Article before Amendment	Article after Amendment
Article 3		(Above Omitted) To convene a shareholders’ meeting, the Company shall prepare a meeting handbook. The Company shall prepare electronic versions of a shareholders’ meeting notice and proxy forms, and causes of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directorsor supervisors, and upload them to the MOPS no later than 30 days prior to the scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the scheduled Special Shareholders’	(Above Omitted) To convene a shareholders’ meeting, the Company shall prepare a meeting handbook. The Company shall prepare electronic versions of a shareholders’ meeting notice and proxy forms, and causes of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors, and upload them to the MOPS no later than 30 days prior to the scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the scheduled Special Shareholders’ Meetingdate.

	Meeting date. The Company shall prepare electronic versions of a shareholders’ meeting handbook and supplemental meeting materials and upload them to the MOPS no later than 21 days prior to the scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the scheduled Special Shareholders’ Meeting date. In addition, the Company shall also have prepared a shareholders’ meeting handbook and supplemental meeting materials and made them available for review by shareholders at any time no later than 15 days prior to the scheduled Shareholders’ Meeting date. The Meeting Agenda and supplemental materials shall also be displayed at the Company and at the professional shareholder services agent engaged by the Company as well as being distributed on-site at the meeting place. The reasons for convening a shareholders’ meetingshall	The Company shall prepare electronic versions of a shareholders’ meeting handbook and supplemental meeting materials and upload them to the MOPS no later than 21 days prior to the scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the scheduled Special Shareholders’ Meeting date. In addition, the Company shall also have prepared a shareholders’ meeting handbook and supplemental meeting materials and made them available for review by shareholders at any time no later than 15 days prior to the scheduled Shareholders’ Meeting date. The Meeting Agenda and supplemental materials shall also be displayed the Company and at the professional shareholder services agent engaged by the Company as well as being distributed on-site at the meeting place. The reasons for convening a shareholders’ meeting shall be specified in the meeting

	be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form. Election or dismissal of directorsor supervisors, amendments to the Articles of Incorporation, the dissolution, merger, or demerger of the corporation, or any matter under paragraph 1 of Article 185 of the Company Act or Articles 26-1 and 43-6 of the Securities and Exchange Act, Articles 56-1 and 60-2 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out in the causes in the notice to convene the shareholders’ meeting. None of the above matters may be raised by an extraordinary motion. (Below Omitted)	notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form. Election or dismissal of directors, amendments to the Articles of Incorporation, the dissolution, merger, or demerger of the corporation, or any matter under paragraph 1 of Article 185 of the Company Act or Articles 26-1 and 43-6 of the Securities and Exchange Act, Articles 56-1 and 60-2 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out in the causes in the notice to convene the shareholders’ meeting. None of the above matters may be raised by an extraordinary motion. (Below Omitted)
Article 6	(Above Omitted) The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card,speaker's slips,voting	(Above 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. (Below Omitted)	slips, and other meeting materials. Where there is an election of directors, pre-printed ballots shall also be furnished. (Below Omitted)
Article 7		(Above omitted) It is advisable that shareholders’ meetings convened by the Board of Directors be chaired by the Chairman, that a majority of the Directorsand at least one supervisorattend in person, and that at least one member of each functional committee attend as representative. Attendance details should be recorded in the Shareholders Meeting minutes. If a shareholders’ meeting is convened by a party having the convening right but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves. (Below omitted)	(Above omitted) It is advisable that shareholders’ meetings convened by the Board of Directors be chaired by the Chairman, that a majority of the Directors attend in person, and that at least one member of each functional committee attend as representative. Attendance details should be recorded in the Shareholders Meeting minutes. If a shareholders’ meeting is convened by a party having the convening right but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves. (Below omitted)
Article 14		The election of directorsor supervisorsat a shareholders’	The election of directors at a shareholders’ meetingshall

	meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directorsand supervisorsand the numbers of votes with which they were elected. (Below Omitted)	be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected. (Below Omitted)

Resolution:

Discussion Items Proposal 2

Proposal: Amendment to the Procedures for Acquisition and Disposal of Assets of the Company submitted for discussion and resolution.

Proposed by the Board of Directors

Explanation:

To comply with the regulations of the competent authority in charge of securities affairs, the Company has established Audit Committee in lieu of Supervisor, and to comply with the requirements provided in the order Jin-Guan-Zheng-Fa-Zi No. 1060001296 dated February 9, 2017 by the Financial Supervisory Commission, certain articles of the Procedures for Acquisition and Disposal of Assets provided by the company have been amended. The comparison table for articles before and after amendment is hereby attached. Please determine whether the amendments are reasonable.

Article		Article before Amendment	Article after Amendment
Article 6		Where an acquisition or disposition of assets of the Company shall be approved by the Board of Directors according to the Procedures or other relevant laws,if any director expresses dissent and such dissent is recorded in the meeting minutes or made by a written statement, the Company shall submit the dissenting opinions to each supervisor. Where the Company has established the position of independent director,the independent directors' opinions specifically	Where an acquisition or disposition of assets of the Company shall be approved by the Board of Directors according to the Procedures or other relevant laws, the independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. A major asset transaction or a derivatives transaction shall be approved by more than half of all audit committee

		expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. Where an audit committee has been established, amajor asset transaction or a derivatives transaction shall be approved by more than half of all audit committee members and submitted to the Board of Directors for a resolution. If approval of more than half of all audit committee members is not obtained, the procedures may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.	members and submitted to the Board of Directors for a resolution. If approval of more than half of all audit committee members is not obtained, the procedures may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.
Article 7		In acquiring or disposing of real property ormechanical equipment where the transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, the Company, unless transacting with agovernmentagency,	In acquiring or disposing of real property or equipment where the transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, the Company, unless transacting with a governmentinstitution, engagingothers to build on its

	engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: (Below Omitted)		own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: (Below Omitted)
Article 8-1	(Added)		In acquiring or disposing of membership cards or intangible assets where the transaction amount reaches 20 percent or more of the company's paid-in capital or NT$300 million or more, the Company, unless transacting with a government institution, shall obtain a CPA’s opinion on the reasonableness of the transaction price prior to the date of occurrence of the event. The CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation.
Article 8-2	The calculation of the transaction amounts referred		The calculation of the transaction amounts referred

		to in the precedingtwo articles shall be done in accordance with paragraph 2 of Article 26, herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.		to in the precedingthree articles shall be done in accordance with paragraph 2 of Article 26, herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.
Article 12		When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemptionof domestic moneymarket funds,the		When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription or repurchaseof money market fundsissued by domestic
				funds

	Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board of Directorsand recognized by the supervisors: 1.The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2.The reason for choosing the related party as a trading counterparty. 3.With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 13 through 15. 4.The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the Company and the related party. 5.Monthlycash flow forecasts		securities investment trust enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board of Directors : 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a trading counterparty. 3. With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 13 through 15. 4. The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the Company and the related party. 5. Monthlycash flow

	for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization. 6.An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article. 7.Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with paragraph 2 of Article 26 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the Board of Directorsand recognized by the Supervisors need not be counted toward the transaction amount. With respect to the acquisition or disposal of business-use	forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization. 6. An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article. 7. Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with paragraph 2 of Article 26 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the Board of Directors need not be counted toward the transaction amount. With respect to the

	equipment between the Company and its parent or subsidiaries, the Company's Board of Directors may pursuant to Article 10 delegate the Chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently proposed to and ratified by the next Board of Directors meeting. Where the position of independent director has been established, when a matter is proposed for discussion by the Board of Directors pursuant to paragraph 1 of this Article, the independent Directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. Where an audit committee has been established, the matters for which paragraph 1 requiresapproved by the Supervisorsshall first be approved by more than half of all audit committee members		acquisition or disposal of business-use equipment between the Company and its parent or subsidiaries, the Company's Board of Directors may pursuant to Article 10 delegate the Chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently proposed to and ratified by the next Board of Directors meeting. When a matter is proposed for discussion by the Board of Directors pursuant to paragraph 1 of this Article, the independent Directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters for which paragraph 1 requires submitted to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval bymore than half of

		and submitted to the Board of Directors for a resolution. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.	all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.
Article 16		Where the Company acquires real property from a related party and the results of appraisals conducted in accordance with Article 13 through 15 are uniformly lower than the transaction price, the following steps shall be taken: 1. A special earnings reserve shall be set aside in accordance with paragraph 1 of Article 41 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and such difference may not be distributed or used for	Where the Company acquires real property from a related party and the results of appraisals conducted in accordance with Article 13 through 15 are uniformly lower than the transaction price, the following steps shall be taken: 1. A special earnings reserve shall be set aside in accordance with paragraph 1 of Article 41 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and such difference may not be distributed or used for

	capital increase by issuance of new shares. Where the Company uses the equity method to account for its investment in another company, then the special earnings reserve called for under paragraph 1 of Article 41 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company. 2. Supervisorsshall supervise the Company’s execution of in accordance with the Article 218 of the Company Act. 3. Actions taken pursuant to subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company having set aside a special earnings reserve under the preceding paragraph maynot utilize the	capital increase by issuance of new shares. Where the Company uses the equity method to account for its investment in another company, then the special earnings reserve called for under paragraph 1 of Article 41 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company. 2. Audit Committeeshall supervise the Company’s executionof the aforesaid matter. 3. Actions taken pursuant to subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company having set aside a special earnings reserve under the preceding paragraph may not utilize the special earnings reserve until

	special earnings reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the securities competent authority has given its consent. When the Company obtains real property from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm’s length transaction.	it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the securities competent authority has given its consent. When the Company obtains real property from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm’s length transaction.
Article 18	The Company that conducts a merger, demerger, acquisition, or assignment of shares shall, prior to convening the Board of Directors to resolve on the matter, engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisitionprice,or	The Company that conducts a merger, demerger, acquisition, or assignment of shares shall, prior to convening the Board of Directors to resolve on the matter, engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisitionprice,or

	distribution of cash or other property to shareholders, and propose the opinion to the Board of Directors for deliberation and approval.		distribution of cash or other property to shareholders, and propose the opinion to the Board of Directors for deliberation and approval. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by the company of a subsidiary in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital.
Article 26	Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the securities competent authority's designated website in the appropriate format as prescribed by regulations within 2 days commencing		Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the securities competent authority's designated website in the appropriate format as prescribed by regulations within 2 days

	immediately from the date of occurrence of the event: 1. Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription orredemptionof domestic money market funds. 2.Merger, demerger, acquisition, or assignment of shares. 3.Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company. 4.Where an asset transaction other than any of those referred to in the	commencing immediately from the date of occurrence of the event: 1.Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription orrepurchaseof money market fundsissued by domestic securities investment trust enterprises. 2.Merger, demerger, acquisition, or assignment of shares. 3.Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company. 4.Where the type of asset

	precedingthree subparagraphs, a disposal of receivables by a financial institution, or an investment in the Mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading of government bonds. (2) Trading of bonds under repurchase/resale agreements, or subscription or redemptionof domestic money market funds. (3)Where the type of asset acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party and the transaction amount islessthan NT$500 million. (4) Where land is acquired under an arrangement on engaging others to build on the company's own land, joint construction and allocation of housingunits,	acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party,and the transaction amount ismorethan NT$1 billion. 5.Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction ismorethan NT$500 million. 6. An asset transaction other than any of those referred to in the preceding fivesubparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area where the transaction amount reaches 20percent or more of

	joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the company expects to invest in the transaction isless than NT$500 million. (Below Omitted)		paid-in capital or NT$300 million or more, provided this shall not apply to the following circumstances: (1)Trading of government bonds. (2)Trading of bonds under repurchase/resale agreements or the subscription or repurchaseof money market fundsissued by domestic securities investment trust enterprises. (Below Omitted)
Article 27	When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety.		When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days from the date when is the Company becomes aware of the error or omission.
Article 33	If there is an audit committee established by the Company, the provision of Article 6, Article 12 and Article 34 of		(Deleted)

		this Procedures regarding the Supervisor shall apply mutatis mutandis to the audit committee; in addition, subparagraph 2 of paragraph 1 of Article16 of this Procedures shall apply mutatis mutandis to the Independent Directors of the audit committee.
Article 35		After the Procedures are approved by the Board of Directors, the Procedures shall be submitted toeach supervisor andthe Shareholders Meeting for approval before its implementation. Any amendment is subject to the same procedure. Where any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinions to each supervisor. Where the Company has established the position of independent director, the independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the		After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to the Shareholders Meeting for approval before its implementation. Any amendment is subject to the same procedure.The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters for which paragraph 1 requires submitted to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the

	minutes of the Board of Directors meeting. Where an audit committee has been established, the adoption or amendment of this Proceduresshall be approved by more than half of all audit committee membersand submitted to the Board of Directors for a resolution.If approval of more than half of all audit committee members is not obtained, the procedures may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.	approval by more than half of all audit committee members is not obtained, the procedures may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Resolution:

Discussion Items Proposal 3

Proposal: Amendment to the Procedures for Engaging in Derivatives Transactions of the Company submitted for discussion and resolution.

Proposed by the Board of Directors

Explanation:

To comply with the regulations of the competent authority in charge of securities affairs and in response to the Company has established Audit Committee in lieu of Supervisor, the Company’s “Procedures for Engaging in Derivatives Transactions of the Company” shall be amended accordingly. The corresponding comparison table for the articles before and after the amendment is attached. Please discuss and resolve.

resolve.
Article	Article before Amendment		Article after Amendment
Article 5	The total contract amount of derivatives transactions of the Company shall not exceed 50% of the Company’s net worth, and the maximum loss limit is 10% of the contract amount for all contracts in aggregate or for any individual contract. The content of individual derivatives contract shall be approved by high-level manager(s), who is authorized by the Board of Directors.		The total contract amount of derivatives transactions of the Company shall not exceed 50% of the Company’s net worth, and the maximum loss limit is 10% of the contract amount for all contracts in aggregate or for any individual contract. The content of individual derivatives contract shall be approved by high-level manager(s), who is authorized by the Board of Directors. Major derivatives transactions of the Company requires approved by more than half of all audit

			committee members and submitted to the Board of Directors for a resolution. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.
Article 9	When the Company’s subsidiaries are not domestic public companies and are participating in derivatives transactions, the Company shall follow the requirements of Article 8.		When the Company’s subsidiaries are not domestic public companies and are participating in derivatives transactions, the Company shall follow the requirements of Article 8hereof to report and make public announcements on behalf of its subsidiaries.
Article 18	The derivatives trading positions of the Company shall be evaluated at least once a week by the in-charge department, but the hedging transactions made for business purposes shall be evaluated at least twice a month. The manager of the in-charge		The derivatives trading positions of the Company shall be evaluated at least once a week by the in-charge department, but the hedging transactions made for business purposes shall be evaluated at least twice a month. The manager of the

	department shall pay attention to the risk control and monitoring of derivatives transactions from time to time, and periodically supervise and evaluate the derivatives transactions to check whether they are conducted in accordance with the related procedures formulated by the Company hereof and whether the attendant risk of these transactions is within the capability of the Company. The foresaid evaluation reports shall be given to a high-level manager(s) authorized by the Board of Directors for review. If there is any abnormal situation highlighted in the market evaluation reports (e.g. the holding position has reached the maximum loss limit), the Company shall immediately take necessary measures to deal with the situation and report to the Board of Directors.Where the Company has established the positions of independent director, there shall be independent directors attending the Board of Directors meeting	in-charge department shall pay attention to the risk control and monitoring of derivatives transactions from time to time, and periodically supervise and evaluate the derivatives transactions to check whether they are conducted in accordance with the related procedures formulated by the Company hereof and whether the attendant risk of these transactions is within the capability of the Company. The foresaid evaluation reports shall be given to a high-level manager(s) authorized by the Board of Directors for review. If there is any abnormal situation highlighted in the market evaluation reports (e.g. the holding position has reached the maximum loss limit), the Company shall immediately take necessary measures to deal with the situation and report to the Board of Directors. There shall be independent directors attending the Board of Directors meetingand

	and expressingtheir opinions.		expressingtheir opinions.
Article 19	The Company shall establish a log book to record all its derivatives transaction information, including types and amounts of derivatives transactions, and matters to be evaluated cautiously in accordance with Article 18 hereof. The Company's internal audit personnel shall be in charge of periodically assessing the appropriateness of the internal control regarding the derivatives transactions, and take the responsibility of auditing the trading department's compliance with the Procedures, analyzing the transaction cycle, preparing the monthly auditing report and submitting the auditing report to the high-level management personnel authorized by the Board of Directors. If any material violation is discovered, all supervisors shall be notified in writing and the Company should, depending on the status of such material violation, penalize the relevantpersonnel in		The Company shall establish a log book to record all its derivatives transaction information, including types and amounts of derivatives transactions, and matters to be evaluated cautiously in accordance with Article 18 hereof. The Company's internal audit personnel shall be in charge of periodically assessing the appropriateness of the internal control regarding the derivatives transactions, and take the responsibility of auditing the trading department's compliance with the Procedures, analyzing the transaction cycle, preparing the monthly auditing report and submitting the auditing report to the high-level management personnel authorized by the Board of Directors. If any material violation is discovered, the Audit Committeeshall be notified in writing and the Company should, depending on the status of such material violation, penalize the

		accordance with the Human Resources Management Policies.		relevant personnel in accordance with the Human Resources Management Policies.
Article 21		After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to each supervisor andthe Shareholders Meeting for approval before its implementation. Any amendment is subject to the same procedure.Where any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinions to each supervisor. Where the Company has established the position of independent director, the independent directors' opinions specifically expressingassent ordissent and their reasons for dissent shall be included in the minutes of the Board of Directors meeting.		After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to the Shareholders Meeting for approval before its implementation. Any amendment is subject to the same procedure. The independent directors' opinions specifically expressing dissentor reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters for which paragraph 1 requires submitted to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all

Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Resolution:

Discussion Items Proposal 4

Proposal: Amendment to the Procedures for Loaning Funds to other Parties of the Company submitted for discussion and resolution.

Proposed by the Board of Directors

Explanation:

To comply with the regulations of the competent authority in charge of securities affairs and in response to the Company has established Audit Committee in lieu of Supervisor, the Company’s “Procedures for Loaning Funds to other Parties of the Company” shall be amended accordingly. The corresponding comparison table for the articles before and after the amendment is attached. Please discuss and resolve.

Article	Article before Amendment	Article after Amendment
Article 3	When making loans to the company/firm having business relationship with the Company, the Company shall comply withparagraph2 of Article 4 hereof. As to loaning funds to a company/firm, which has no business relationship with the Company, for short term financing needs, the borrower shall be: 1. Affiliates of the Company which a short-term financing facility is necessary to meet their business needs. 2. Companies/firms other than affiliates of the Company which need short term financing for materials purchase,workingcapital,	When making loans to the company/firm having business relationship with the Company, the Company shall comply withsubparagraph2 of Article 4 hereof. As to loaning funds to a company/firm, which has no business relationship with the Company, for short term financing needs, the borrower shall be: 1. Affiliates of the Company which a short-term financing facility is necessary to meet their business needs. 2. Companies/firms other than affiliates of the Companywhich need short

	or general business needs.		term financing for materials purchase, working capital, or general business needs.
Article 5	Before the Company makes loans to a funds borrower, the Company shall do an investigation and assessment of the following aspects: the purposes of the borrowing, the terms of the security for the borrowing, and the impact on the Company’s operational risks, financial conditions and shareholders’ rights and interests. The limit or maximum amount of lending, tenor and interest calculation terms shall be determined based on these findings, and then submitted to the Board of Directors for approval.		Before the Company makes loans to a funds borrower, the Company shall do an investigation and assessment of the following aspects: the purposes of the borrowing, the terms of the security for the borrowing, and the impact on the Company’s operational risks, financial conditions and shareholders’ rights and interests. The limit or maximum amount of lending, tenor and interest calculation terms shall be determined based on these findings, and then submitted to the Board of Directors for approval. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. When the Company making major loans to others, it requires approved by more than half of all audit

			committee members and submitted to the Board of Directors for a resolution. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.
Article 10	The Company's internal auditors shall audit the Procedures for Loaning Funds to other Parties and the implementation thereof no less frequently than quarterly and prepare written records accordingly. During the auditing, the internal auditor shall immediately correct violation(s) upon finding any violation. If any material violation is found, in addition to notifyingall the Supervisors promptly in writing, the personnel who violate the Procedures shall be penalized in accordance with the related rules of the Company.		The Company's internal auditors shall audit the Procedures for Loaning Funds to other Parties and the implementation thereof no less frequently than quarterly and prepare written records accordingly. During the auditing, the internal auditor shall immediately correct violation(s) upon finding any violation. If any material violation is found, in addition to notifyingthe Audit Committeepromptly in writing, the personnel who violate the Procedures shall be penalized in accordance with the related rules of the

				Company.
Article 11		If, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the requirements of the Procedures or the loan balance exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to the Board of Directorsfor its approval and then toall the supervisors, and shall complete the rectification according to the timeframe set out in the plan.		If, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the requirements of the Procedures or the loan balance exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to the Audit Committeefor its approval and then tothe Board of Directors for a resolution, and shall complete the rectification according to the timeframe set out in the plan.
Article 14		After the Procedures are approved by the Board of Directors, the Procedures shall be submitted toeach supervisor andthe Shareholders Meeting for approval before its implementation. Any amendment is subject to the same procedures.Where any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the		After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to the Shareholders Meeting for approval before its implementation. Any amendment is subject to the same procedures. The independent directors' opinions specifically expressing dissentor reservations about any matter shall be included in the

		dissenting opinions to each supervisor and for discussion by the Shareholders'Meeting. Where the Company has established the position of independent director, the independent directors' opinions specifically expressingassent ordissentand their reasons for dissentshall be included in the minutes of the Board of Directors' meeting.		minutes of the Board of Directors meeting. The matters for which paragraph 1 requires submitted to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Resolution:

Discussion Items Proposal 5

Proposal: Amendment to the Procedures for Providing Endorsements and Guarantees to other Parties of the Company submitted for discussion and resolution.

Proposed by the Board of Directors

Explanation:

To comply with the regulations of the competent authority in charge of securities affairs and in response to the Company has established Audit Committee in lieu of Supervisor, the Company’s “Procedures for Providing Endorsements and Guarantees to other Parties of the Company” shall be amended accordingly. The corresponding comparison table for the articles before and after the amendment is attached. Please discuss and resolve.

attached.	Please discuss and resolve.
Article	Article before Amendment	Article after Amendment
Article 3	The Company may make endorsements/guarantees for the following companies： 1. A company with which it does business. 2. A company in which the Company directly and indirectly holds more than 50 percent of the voting shares. 3. A company that directly and indirectly holds more than 50 percent of the voting shares in the Company. 4. Companies in which the parent company holds, directly or indirectly, 90%	The Company may make endorsements/guarantees for the following companies： 1. A company with which it does business. 2. A company in which the Company directly and indirectly holds more than 50 percent of the voting shares. 3. A company that directly and indirectly holds more than 50 percent of the voting shares in the Company. 4.Where the Company fulfills its contractual obligations by providing

	5.	or more of the voting shares, and the amount of endorsements/guarantees may not exceed 10% of the net worth of the parent company, provided that this restriction shall not apply to endorsements/guarantees made between companies in which the parent company holds, directly or indirectly, 100% of the voting shares. Where the Company fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project. Where all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages. Capital contribution referred to in the paragraph shall mean capital		mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project. 5.Where all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages. Capital contribution referred to in the paragraph shall mean capital contribution directly by the Company, or through a subsidiary in which the Company holds 100% of the voting shares. Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares may make endorsements/guarantees for each other, and the amount of endorsements/guarantees may not exceed 10% of the net worth of the Company, provided that this restriction shall not apply to
	6.

	contribution directly by the Company, or through a subsidiary in which the Company holds 100% of the votingshares.		endorsements/guarantees made between companies in which the Company holds, directly or indirectly, 100% of the voting shares.
Article 4	The ceiling on the total outstanding amount of making endorsements or guarantees of the Company or the Company and its subsidiaries: 1. The aggregate amount of making endorsements or guarantees shall not exceed 1.3 times of the net value of the Company. 2. For any one endorsee or guarantee, the amount shall not exceed 50% of the aggregate amount above. 3. The total outstanding amount of endorsement to each of the companies, which has a business relationship with the Company, shall not exceed the total transaction amount between the two parties. The foresaid “total transaction amount” shall be the total purchasing or selling amount or contract price,whichever is highest,		The ceiling on the total outstanding amount of making endorsements or guarantees of the Company or the Company and its subsidiaries: 1. The aggregate amount of making endorsements or guarantees shall not exceed 1.3 times of the net value of the Company. 2. For any one endorsee or guarantee, the amount shall not exceed 50% of the aggregate amount above. 3. The total outstanding amount of endorsement to each of the companies, which has a business relationship with the Company, shall not exceed the total transaction amount between the two parties. The foresaid “total transaction amount” shall be the total purchasing or selling amount or contract price,whichever is highest,

	provided that the highest amount shall in no event exceed the amount set forth in the preceding item. Where the Company needs to exceed the limits set out in the Procedures to satisfy its business needs, it shall obtain approval from the Board of Directors and half or more of the directors shall act as joint guarantors for any loss that may be caused to the Company by the excess endorsement or guarantee. It shall also amend the Procedures accordingly and submit the same to the Shareholders Meeting for ratification. If the shareholders meeting does not give consent, the Company shall adopt a plan to discharge the amount in excess within a given time limit. Where the amount of making endorsements or guarantees exceeds the limits because of the change of the calculation bases or endorsees or guarantees later become unqualified under Article 3, the Company shall discharge		provided that the highest amount shall in no event exceed the amount set forth in the preceding item. Where the Company needs to exceed the limits set out in the Procedures to satisfy its business needs, it shall obtain approval from the Board of Directors and half or more of the directors shall act as joint guarantors for any loss that may be caused to the Company by the excess endorsement or guarantee. It shall also amend the Procedures accordingly and submit the same to the Shareholders Meeting for ratification. If the shareholders meeting does not give consent, the Company shall adopt a plan to discharge the amount in excess within a given time limit. Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the requirements of the Procedures, or the amount of endorsement/guarantee

		the amount exceeding the limits or the endorsements or guarantees amount on the date the agreement term expires or within a designated period pursuant to an internal plan. The above timeframe shall be reported to the Board of Directors for its approval and then to the supervisors of the Company for their review.		exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to the Audit Committee and to the Board of Directors for a resolution, and shall complete the rectification according to the timeframe set out in the plan.
Article 5		Any endorsement/guarantee provided by the Company shall be approved in advance by the Board of Directors, provided that the Board of Directors can authorize the chairman to approve, in advance, any endorsement or guarantee within a certain amount without the approval of the Board of Directors. After that, the chairman needs to submit the results for ratification by the Board of Directors. When the Company provide endorsements or guarantees to the other companiesin which the same parent company directly or indirectly holds more than ninety percent (90%)of their total		Any endorsement/guarantee provided by the Company shall be approved in advance by the Board of Directors, provided that the Board of Directors can authorize the chairman to approve, in advance, any endorsement or guarantee within a certain amount without the approval of the Board of Directors. After that, the chairman needs to submit the results for ratification by the Board of Directors. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting.

	outstanding shares with voting rightsin accordance with Paragraph 4 of Article 3, the prior approval from the Board of Directors of the parentcompany shall be required; provided that this restriction does not apply to companies in which the Company’s parent company directly or indirectly hold one hundred percent (100%) of their total outstanding shares with voting rights.		Major endorsement/guarantee provided by the Company requires approved by more than half of all audit committee members and submitted to the Board of Directors for a resolution. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting. Before making any endorsement/guarantee pursuant to Article 3, paragraph 2, a subsidiary in which the Company holds, directly or indirectly, 90% or more of the voting shares shall submit the proposed endorsement/guarantee to the Company’s Board of Directors for a resolution, provided that this restriction shallnot apply to endorsements/guarantees made betweencompanies in

				which the Companyholds, directly or indirectly, one hundred percent (100%) of their total outstanding shares with votingrights.
Article 8		The Company's internal auditors shall audit the execution of the endorsement/guarantee operation thereof no less frequently than quarterly and prepare written records accordingly. The internal auditor, during the auditing, shall immediately correct violation(s) upon finding of any violation. If any material violation is found, in addition to notifyingall the supervisorspromptly in writing, the personnel who violate the Procedures shall be penalized in accordance with the employee management rules of the Company.		The Company's internal auditors shall audit the execution of the endorsement/guarantee operation thereof no less frequently than quarterly and prepare written records accordingly. The internal auditor, during the auditing, shall immediately correct violation(s) upon finding of any violation. If any material violation is found, in addition to notifyingthe Audit Committeepromptly in writing, the personnel who violate the Procedures shall be penalized in accordance with the employee management rules of the Company.
Article 12		The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and		The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and

		report pursuant to the paragraphsof Article 11. The percentage of the balance of endorsements/guarantees over the net worth of the Company under the preceding paragraph shall be calculated by the ratio of the subsidiary's balance of endorsements/guarantees to the Company's net worth.		report pursuant to the subparagraphsof Article 11. The percentage of the balance of endorsements/guarantees over the net worth of the Company under the preceding paragraph shall be calculated by the ratio of the subsidiary's balance of endorsements/guarantees to the Company's net worth.
Article 14		After the Procedures are approved by the Board of Directors, the same shall be submittedto each supervisor andfor approval by the shareholders meeting before its implementation. Any amendment is subject to the same procedures. Where there any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinions to each supervisor and to the shareholders meeting for discussion. Where the Company has established the position of independent director, the independent directors' opinions specifically		After the Procedures are approved by the Board of Directors, the same shall be submitted for approval by the shareholders meeting before its implementation. Any amendment is subject to the same procedures. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters for which paragraph 1 requires submitted to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the

	expressingassent ordissent and the reasons for dissent shall be included in the minutes of the Board of Directors meeting.		approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Resolution:

Explanation	1. The proposed dividend is $4.5 in cash per share, including normal dividend of $2.152 and extra dividend of $2.348. 2. The total dividends amount to $35,688,697,151; all of which are from net income of 2016. 3. The cash dividend distribution will be rounded to the nearest dollar for each individual shareholder. 4. Change in retained earnings resulting from Other Comprehensive Income is the remeasurement of defined benefit obligation. 5. Reversal of Special reserve is to revert the Special reserve formerly appropriated from the asset revaluation increments as the relevant assets are disposed.
Amount	4,884,026,706 6,670,914,042 35,688,697,151 10,801,511,761	58,045,149,660
Items	Distribution Items: (1) Appropriation of Legal reserve (10% of the Net Income) (2) Appropriation of Special reserve (unrealized investing profit under equity method) (3) Normal and Extra Dividends in cash ($4.5 per share) (4) Unappropriated retained earnings	Total
Amount	10,281,613,978 48,840,267,056 -1,077,288,464 557,090	58,045,149,660
Items	Available for Distribution: (1) Unappropriated retained earnings of previous years (2) Net Income of 2016 (3) Change in retained earnings resulting from Other Comprehensive Income (4) Reversal of Special reserve	Total

Information regarding the Proposed Employees and Directors’ Compensation to Adopted by the Board of Directors of the Company:

Compensation to Adopted by the Board of Directors of the Company:	Compensation to Adopted by the Board of Directors of the Company:

1. Amounts of employees’ cash compensation, stock compensation, and Directors’ compensation:
Employees Cash Compensation	NT$51,566,798
Employees Stock Compensation	NT$0
Directors Compensation	NT$0
2. Share amount of the employees’ stock compensation and the percentage of the share amount to that of all stock dividend:
Share amount of employees’ stock compensation	0 share
percentage of the share amount to that of all stock dividend	0%

The above-listed amount of employees’ cash compensation is consistent with the proposed amount adopted by the Board of Directors of the Company.

Effect upon Business Performance and Earnings Per Share of the Company by the Stock Dividend Distribution Proposed at the 2017 Annual Shareholders’ Meeting:

Not applicable since the Company does not propose the stock dividend distribution at the 2017 Annual Shareholders’ Meeting and does not required to prepare financial forecast information.

Nan Ya Plastics Corporation

Shareholdings of Directors

Title	Name	Shareholding (share)
Chairman	Chia Chau,Wu	79,030
ManagingDirector	Wen Yuan,Wong	66,206,752
Managing Director	Wilfred Wang Representative of Formosa Petrochemical Corporation	179,214,423
ManagingDirector	RueyYu,Wang	19,052,421
Managing Director (Independent Director)	Chih Kang, Wang	0
Independent Director	Yi Fu,Lin	0
Independent Director	Yun Peng,Chu	1,199
Director	MingJen,Tzou	188,742
Director	Kuei Yung,Wang	11,164,271
Director	Chin Jen, Wu Representative of Formosa Plastics Corporation	783,356,865
Director	Shen Yi, Lee Representative of Formosa Chemicals & Fibre Corporation	413,327,750
Director	FongChin,Lin	25,458
Director	Zo Chun,Jen	303,377
Director	Sin Yi,Huang	806
Director	Ching Cheng , Chang Representative of Freedom Internation Enterprise Company	3,287,472

Note: According to Article 26 of the Securities and Exchange Act, the minimum of the Directors are shareholdings Company’s
126,893,146 shares. As of April 22, 2017, the actual shareholdings of the Company’s Directors are 1,476,208,566 shares.

AI assistant

NPC — AGM Information 2017

51763_rns_2017-06-28_a45cd61c-8c33-412b-bca5-1aefe14b7281.pdf

NAN YA PLASTICS CORPORATION

2017 ANNUAL SHAREHOLDERS’ MEETING

MEETING HANDBOOK

Table of Contents

NAN YA PLASTICS CORPORATION 2017 ANNUAL SHAREHOLDERS’ MEETING PROCEDURE

NAN YA PLASTICS CORPORATION 2017 ANNUAL SHAREHOLDERS’ MEETING AGENDA

Report Items

NAN YA PLASTICS CORPORATION

1.2016 Business Report

2.2017 Business Outlook

NAN YA PLASTICS CORPORATION Audit Committee’ Review Report

Nan Ya Plastics Corporation Code of Ethical Conduct for Directors and Managers

Chapter 1 General Principles

Chapter 2 Content of the Code

Chapter 3 Procedures for Exemption

Chapter 4 Method of Information Disclosure

Chapter 5 Additional Provision

Ratification Items Proposal 1

Explanation:

Resolution:

Ratification Items Proposal 2

Attachment:

Resolution:

Discussion Items Proposal 1

Explanation:

Resolution:

Discussion Items Proposal 2

Explanation:

Resolution:

Discussion Items Proposal 3

Explanation:

Resolution:

Discussion Items Proposal 4

Explanation:

Resolution:

Discussion Items Proposal 5

Explanation:

Resolution:

Information regarding the Proposed Employees and Directors’ Compensation to Adopted by the Board of Directors of the Company:

Effect upon Business Performance and Earnings Per Share of the Company by the Stock Dividend Distribution Proposed at the 2017 Annual Shareholders’ Meeting:

Nan Ya Plastics Corporation

Shareholdings of Directors

More from NPC

NPC AGM Information 2017