NPC - AGM Information 2019 | FinancialReports.eu

Meeting Procedure …….…………………………………… Page 1 Meeting Agenda ..………..………………..………………… Page 2 Report Items …..…………………………………………… Page 4 Ratification Items ……………………………………………. Page 14 Discussion Items (I) .…………………………..…………… Page 16 Election Items ……………………………………………… Page 76 Discussion Items (II) ………………………………………… Page 81

NAN YA PLASTICS CORPORATION 2019 ANNUAL SHAREHOLDERS’ MEETING PROCEDURE

Call Meeting to Order
Chairman’s Address
Report Items
Ratification Items
Discussion Items (I)
Election Items
Discussion Items (II)
Extraordinary Motions
Meeting Adjourned

NAN YA PLASTICS CORPORATION 2019 ANNUAL SHAREHOLDERS’ MEETING

AGENDA

Time: 2:00 p.m., Wednesday, June 12, 2019

Venue: 2F, International Ballroom, Sunworld Dynasty Hotel

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

Report Items
(1) 2018 Business Report
(2) Audit Committee’ Review Report on the 2018 Financial Statements
(3) Distribution of 2018 Employees Compensation
(4) Issue of 2018 Domestic Unsecured Ordinary Corporate Bonds
Ratification Items
(1) Please approve the 2018 Business Report and Financial Statements as required by the Company Act.
(2) Please approve the Proposal for Distribution of 2018 Profits as required by the Company Act.
Discussion Items (I)
(1) Amendment to the Procedures for Acquisition and Disposal of Assets of the Company. Please discuss and resolve.
(2) Amendment to the Procedures for Engaging in Derivatives Transactions of the Company. Please discuss and resolve.
(3) Amendment to the Procedures for Loaning Funds to other Parties of the Company. Please discuss and resolve.
(4) Amendment to the Procedures for Providing Endorsements and Guarantees to other Parties of the Company. Please discuss and resolve.

4. Election Items

The Company Directors have their tenure nearly expired. Please elect the Board of Directors to conform to the applicable laws.

Discussion Items (II)
(1) Appropriateness of releasing the newly elected Directors and the

person shareholder which appointed their authorized representatives to be elected as directors, from non-competition restrictions. Please discuss and resolve.

Report Items

About the Company’s business operation condition of 2018, 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 2018 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.)
The company has issued the report on compensation distributed to its employees for 2018.
The pre-tax profit prior to deducting employees compensation distributable for 2018 is NT$57,878,570,814. The company has no accumulated losses. Adopted by the Board Meeting on March 20, 2019, 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$57,878,571 which shall be distributed in cash. The above is hereby reported for record.
Issue of NT$10.5 Billion Domestic Unsecured Ordinary Corporate Bonds in 2018.

To raise long-term funds to build and expand current plant, to replace current plant and equipment, to pay off loans, to fund the working capital, and to invest in domestic or overseas business, the Board of Directors resolved on Mar. 23, 2018 to issue domestic unsecured ordinary corporate bonds of NT$11 Billion in 2018. To consider the market interest rate and the actual need, the Company only issued the bonds of NT$10.5 Billion on Sept. 6, 2018, which was reported to the Board of Directors on Nov. 12, 2018. The rest of unissued bonds of NT$0.5 Billion was not applied for Taipei Exchange.

A summary of the major terms of the aforementioned bonds are as follows:

Tranche	Size (NT$ billion)	Coupon Rate(%,fixed annual rate)	Tenor (Year)	Principal Repayment Year
A	5.25	0.83	5	Half of the principal shall be repaid upon the end of the fourth year and the fifth year, respective from the date of issue.
B	3.05	0.91	7	Half of the principal shall be repaid upon the end of the sixth year and the seventh year, respective from the date of issue.
C	2.20	1.07	10	Half of the principal shall be repaid upon the end of the ninth year and the tenth year, respective from the date of issue.
Coupon Frequency	Annual. Interest shall be paid as simple interest rate.

The above is hereby reported for record.

NAN YA PLASTICS CORPORATION

1.2018 Business Report

In 2018, Nan Ya Plastics Corporation (NPC) recorded a consolidated revenue of NT$333.06 billion, an increase of 8.8% over NT$306.14 billion in 2017, and a consolidated pre-tax income of NT$61.53 billion, which declined 2.0% compared with NT$62.78 billion in 2017.

In the first three quarters of 2018, global economic fundamentals were good, while raw material prices rose, driving the revenue growth of various products. Furthermore, NPC's complete industry chain and active development of high-value and differentiated products have also greatly increased our revenue and profit.

However, due to the China-U.S. trade war beginning the fourth quarter of 2018, global economic growth has declined, while oil prices have fallen by 40% from the high point at the beginning of October to the low point at the end of the year. As market demand froze rapidly, customers sat on the fence, dropping sales orders, our overall performance reflected a sharp downturn in the business environment.

Despite the significant change in the fourth quarter of 2018, NPC still managed to post a revenue at a record high, and achieve the third highest net income and earnings per share in our history, thanks to the foundation laid in the previous three quarters.

As far as NPC's scope of business is concerned, there are four major categories of products: plastic processing, petrochemicals, polyester, and electronic materials.

With regard to plastic processing products, NPC continues to engage in transformation due to increasingly mature processing technology in Mainland China and fierce price competition among local peers. Besides, NPC has incorporated automated monitoring to ensure stable quality during production. At the same time, NPC has accelerated the research and development of new applications, new materials, as well as products that meet the trend of environmental protection and unique specifications, in

order to expand into new niche markets, thereby increasing the proportion of sales and profit of differentiated and high-value products. NPC deploys our production and marketing operations at various plants in Taiwan, Mainland China, the U.S., and Vietnam in a timely manner according to the characteristics of each market, supplemented with the launch of e-commerce and online marketing, to expand into high-end markets such as the U.S. and Japan, as well as emerging markets with high potential, so as to provide customers with satisfactory services. Through various efforts made by NPC, plastic processing products are still able to provide stable profits.

In regards to petrochemical products, in line with vertical integration and division of labor in the Sixth Naphtha Cracking Plant in Mailiao, NPC's products, including ethylene glycol (EG), Bisehnol A (BPA), 1,4-butylene glycol (1,4BG), plasticizers, phthalic anhydride (PA), 2-ethylhexanol (2EH), and epoxy resin (EPOXY), have been vertically integrated with upstream and downstream industries, thereby forming a complete supply chain, which supports the development of downstream industries such as polyester, electronics, and plastic processing, respectively.

In the first three quarters of 2018, prices and volume of petrochemical products increased considerably due to rising international oil prices and market demand. However, oil prices fell sharply starting October. Besides, the China-U.S. trade war and economic slowdown in China led to a decrease in prices of petrochemical products. Yet, NPC continuously promoted the improvement of various process optimizations, and fully comprehended market developments so as to effectively regulate production, sales, and inventory. Besides, NPC also stepped up efforts to expand into sales regions outside Mainland China in order to actively diversify our target market. By adjusting our production and sales strategies, NPC recorded a higher revenue and profit in 2018 than those in 2017.

In terms of polyester products, their prices and volume increased considerably due to significant increase in market demand and rising raw

material costs in 2018, with polyester bottle chips showing the most obvious growth. Among differentiated and high-value products, polyester cotton and silk have achieved better performances. Shortage of passive components among downstream customers led to a considerable increase in demand for polyester release film products, thus demonstrating significant profit growth.

In the future, NPC will actively develop and promote products related to environmental protection, recycling and green energy, and collaborate with well-known brands to expand the application range of polyester products. In addition, NPC will also develop high-value products to segment the market and expand sales territory, while controlling product quality to enhance customers' recognition in order to open up new markets, so that sales will continue to increase, thereby maintaining stable profits.

Regarding electronic materials, various electronic product application devices continued to develop since the fourth quarter of 2016. Rising demand for electronic materials, along with a lag in the expansion of production capacity by manufacturers, has brought about a period of prosperity for this industry. With the gradual resumption of newly expanded production capacity in 2018, tensions in supply and demand began to slow down. In the first half of the year, market demand was stable; however, affected by the China-U.S. trade war in the fourth quarter of 2018, orders and demand for home appliances and other consumer electronics products dropped due to increasing market uncertainty, thus forcing end customers to reduce inventory and response to urgent orders, and make orders conservatively.

In the future, NPC will use our advantage from complete vertical integration involving upstream and downstream industries to accelerate the adjustment of production and sales strategies, as well as transformation in response to market developments. Moreover, NPC will actively launch and promote differentiated products and increase the sales proportion of high-value and highly functional niche products, while striving for full-scale production and sales; flexibly deploying production and sales operations in manufacturing plants located in both Mainland China and Taiwan, thereby driving revenue and profit increase.

Nan Ya Printed Circuit Board Corp., which is reinvested by NPC, has long been focusing on the development and production of circuit boards and IC package substrates. In 2018, it had been committed to product transformation to reduce its reliance on personal computer application products, and had expanded into niche markets such as automobile electronics, network communications and system-in-package, and had been out of the red in the third quarter of 2018. In response to the future development trend of semiconductors, Nan Ya Printed Circuit Board Corp. has actively strengthened its research and development capabilities, while reorganizing the processing procedures and production conditions in the process area, replacing old machines, and incorporating advanced equipment including automated machines, in order to enhance process capability, product yield, and production efficiency, strengthening the operating performance. In the future, the company is expected to strive for more production orders of niche products, and acquire new customers while continuously advancing its production technology, improving yield and reducing costs, so as to improve its operating performance.

Nan Ya Technology Corp., another company reinvested by NPC, is committed to the development, manufacture and sale of dynamic random-access memory (DRAM) products. In 2018, it completed the development and sale of 20nm 8Gb DDR4, 4Gb DDR4 and 2Gb DDR3 etc., and reactivated the development of the server product market. In 2019, it plans to introduce a series of low-power products, with a view to enhancing the diversification of product applications and increasing competitiveness. Due to the healthy environment of the overall DRAM industry in 2018, its operating profit continued to rise, thereby generating profit at record high once more. In the future, DRAM is expected to be an indispensable key component in emerging applications, including 5G, artificial intelligence (AI), electric vehicles, and big data. Hence, Nan Ya Technology Corp. will continue to enhance its capabilities, including process technology, product design, and customer service in response to market demand, so as to provide customers with the best memory solutions.

2.2018 Operating Status

The consolidated operating revenue was NT$333.06 billion in 2018, an increase of NT$26.92 billion, 8.8% over NT$306.14 billion in 2017. Deducted operating costs NT$284.00 billion and selling expenses and administrative expenses NT$19.64 billion the operating income was NT$29.42 billion in 2018 which declined 1.4% compared with NT$29.85 billion in 2017. Added up non-operating income and expenses NT$ 32.11billion the pre-tax income of 2018 was NT$61.53 billion and the pre-tax income margin was 18.5% a decrease of 2.0% over NT$62.78 billion in 2017.

3.2019 Business Outlook

Looking forward to 2019, the biggest uncertainty in the global economy is the evolution of the China-U.S. trade war. Given that every link of the global industry chain is tightly connected, international trade tensions will affect all economies in the world and inhibit economic growth momentum. With such a concern in the general environment, international research institutions have revised the global economic growth rate downward.

The introduction of tax reform in the U.S. has significantly boosted the investments of American and foreign companies, which drove economic growth, improved the employment market, increased consumption and capital expenditures, thereby stimulating the economy of other countries. However, its trade tension with China is set to continue. Coupled with the diminishing effects of tax cuts, it is generally expected that economic growth in the U.S. will slow down compared to last year.

With Mainland China experiencing a slowdown in gross domestic product (GDP) growth quarter by quarter last year, reduction of domestic investments and consumption, its economy is currently demonstrating a downward trend, and its industries are currently in the restructuring stage. Furthermore, with the China-U.S. trade war expanding into technology control and other non-economic aspects, the international community

widely expects that economic growth will slow down further this year.

In summary, the global economy will continue to be affected by multiple factors, including the China-U.S. trade war, cross-strait relations, and oil price fluctuations. In the face of a complex international scenario, maintaining stable growth and profit continues to be NPC's most important goal.

NPC was able to achieve the expected results for four operational directions launched in 2018. These operational directions include: � Actively expand and segment the market to increase capacity utilization rate; � Enhance research and development, and develop high-value and differentiated products to increase profitability; � Implement circular economy, as well as reduce the use of resources and implement reuse of resources to realize cost-effectiveness; � Comprehensively promote process optimization and Industry 4.0, and incorporate AI to enhance product competitiveness

Changes in the global economy will be more and more difficult to predict in the future, and a complex and ever-changing international environment will affect global economic development. In the face of such an adversity and challenge, NPC adheres to our philosophy of inquiring into the root of the matter and aiming at the sovereign good, while continuously making improvements and pursuing rationalization. NPC will continue to drive the four operational directions above, where process optimization and AI will become the most important themes this year. NPC will use AI to develop the best process operation methods and conditions in order to enhance product quality and production efficiency.

Our ongoing capital expenditure plans include not only improvements in process optimization to increase production capacity and efficiency, but also continuous increase in domestic and overseas investment. Among our ongoing investment plans, domestic plans cover investments in high-value copper foil, polyester films, and PP synthetic paper, whereas overseas investment plans mainly involve the expansion of EG factory in the U.S. and copper foil substrate and fiberglass cloth factories in Mainland China. After going into production, it is estimated that these factories can generate

an annual production output of NT$50 billion, which adds new production capacity to NPC, thereby driving continuous performance 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 2018 Business Report, Financial Statements, including Consolidated and Individual 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 the Securities and Exchange Act and 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 20, 2019

Ratification Items Proposal 1

Proposal: For approval of the 2018 Business Report and Financial Statements as required by the Company Act.

Proposed by the Board of Directors

Explanation:

The preparation of the Company’s 2018 Consolidated and Individual Financial Statements were completed and the same were approved by the Board Meeting on March 20, 2019, 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 82 through page 89 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 2018 Profits as required by the Company Act.

Proposed by the Board of Directors

Attachment:

Please refer to page 90 of the Handbook for the Statement of Profits Distribution, which has been reviewed by the Audit Committee members on of Nan Ya Plastics Corporation and approved by the Board of Directors March 20, 2019.

Resolution:

Discussion Items (I) Proposal 1

Proposal: Amendment to the Procedures for Acquisition and Disposal of Assets of the Company. Please discuss and resolve.

Proposed by the Board of Directors

Explanation:

To comply with the requirements provided in the order Jin-Guan-Zheng-Fa-Zi No. 1070341072 dated November 26, 2018 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	Article after Amendment
Article 1:	When acquiring or disposing of the following assets, Formosa Plastics Corporation (hereinafter referred to as the “Company”) and its subsidiaries shall follow the Procedures for Acquisition or Disposal of Assets (hereinafter referred to as the “Procedures”): 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, asset-backed securities, etc. 2. Realproperty (including	Article 1:	When acquiring or disposing of the following assets, Formosa Plastics Corporation (hereinafter referred to as the “Company”) and its subsidiaries shall follow the Procedures for Acquisition or Disposal of Assets (hereinafter referred to as the “Procedures”): 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, asset-backed securities, etc. 2. Realproperty (including

Article	Article before Amendment	Article		Article after Amendment
	land, houses and buildings, investment property, and land use rights) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). 6. Derivatives. 7. Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law. 8. Other major assets.			land, houses and buildings, investment property) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5. Right-of-use assets. 6.Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). 7.Derivatives. 8.Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law. 9.Other major assets.
Article 2:	The limit amount of investments for non-operating real property or securities (the original investment), by the Company and each subsidiary, shall not exceed 60% of the book value of total assets; for an individual securities investment, the limit amount shall not exceed 50% of the foresaid limit amount, i.e. 30% of the book value of total assets.	Article 2:		The limit amount of investments for non-operating real property and right-of-use assetsor securities (the original investment), by the company and each subsidiary, shall not exceed 60% of the book value of total assets; for an individual securities investment, the limit amount shall not exceed 50% of the foresaid limit amount, i.e. 30% of the book value of

Article	Article before Amendment	Article	Article after Amendment
			total assets.
Article 3:	Terms used in these Procedures are defined as follows: 1.Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, swap contracts,and compound contracts combining the above products,whose value is derived from assets,interest rates, foreign exchangerates, indexes or other interests. The term "forward contracts" does not include insurance contracts, performance contracts, post-sale service contracts, long-term leasing contract, and long-term procurement (sales)agreements. 2.Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial HoldingCompanyAct,	Article 3:	Terms used in these Procedures are defined as follows: 1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable;or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term "forward contracts" does not include insurance contracts, performance contracts, post-sales service contracts, long-term leasing contracts, or long-term purchase (sales) contracts. 2. Assets acquired or

Article Article before Amendment Article Article after Amendment Financial Institutions disposed through mergers, Merger Act and other acts, demergers, acquisitions, or to transfer of shares or transfer of shares in from another company accordance with law: through issuance of new Refers to assets acquired shares of its own as the or disposed through consideration therefor mergers, demergers, or (hereinafter "acquisition of acquisitions conducted shares") under Article 156, under the Business paragraph 6 of the Mergers and Acquisitions Company Act. Act, Financial Holding 3. Related party or Company Act, Financial subsidiary: As defined in Institutions Merger Act the Regulations Governing and other acts, or to the Preparation of Financial transfer of shares from Reports by Securities another company through Issuers. issuance of new shares of 4. Professional appraiser: its own as the Refers to a real property consideration therefor appraiser or other person (hereinafter " acquisition duly authorized by law to of shares") under Article engage in the value 156 -3 of the Company Act.

Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.
Related party or subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of Board of Directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier;
Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value

Article	Article before Amendment	Article	Article after Amendment
	provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 6.Mainland China area investment: Refers to investments in the Mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.		appraisal of real property or equipment. 5. Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of Board of Directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 6. Mainland China area investment: Refers to investments in the Mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation

Article	Article before Amendment	Article	Article after Amendment
			in the Mainland Area.
Article 4:	Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions in relation to the assets acquired or disposed, shallnot be a related party of any party to the transaction.	Article 4:	Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions in relation to the assets acquired or disposed, shall meet the following requirements: 1. May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed since completion of
			1.

Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
			2. 3.	service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received. May not be a related party or de facto related party of the Company. If the company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other.
Article 6:	Where an acquisition or disposition of assets of the Company shall be approved by the Board of Directors in accordance with the provisions of 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	Article 6:	Where an acquisition or disposition of assets of the Company shall be approved by the Board of Directors in accordance with the provisions of 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

Article	Article before Amendment	Article		Article after Amendment
	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.			a major 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.
Article 7:	In acquiring or disposing of real propertyorequipment 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 government institution, 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	Article 7:		In acquiring or disposing of real property,equipment, or right-of-use assets thereof where the transaction amount reaches 20 percent of the Company's paid-in capital or NT$300 million or more, the Company, unless transacting with a domestic government institution, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment or right-of-use assets thereof for business use, shall obtain an appraisal report prior to the date of occurrence of the

Article	Article before Amendment	Article	Article after Amendment
	comply with the following provisions: 1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors, andthe same procedure shall be followed for anyfuturechanges to the terms and conditions of the transaction. 2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained. 3.Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certifiedpublic accountant		event from a professional appraiser and shall further comply with the following provisions: 1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors; the same procedure shall alsobe followed for any subsequent change to the terms and conditions of the transaction. 2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained. 3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount,or

Article	Article before Amendment	Article	Article after Amendment
	shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation in Taiwan (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount. (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publiclyannounced		all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation in Taiwan (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: (1)The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount. (2)The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months mayelapse between the

Article	Article before Amendment	Article	Article after Amendment
	current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.		date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.
Article8-1:	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 engage a CPA to render an 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 ARDF.	Article9:	In acquiring or disposing of intangible assetsor right-of-use assets thereof or memberships 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 domestic government institution, shall engage a CPA to render an 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 bythe ARDF.
Article8-2:	The calculation of the transaction amounts referred	Article 10:	The calculation of the transaction amounts referred

Article	Article before Amendment	Article	Article after Amendment
	to in the preceding three articles shall be done in accordance with Article26, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.		to in the preceding three articles shall be done in accordance with Article 28, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.
Article9:	Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.	Article 11:	Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.
Article10:	Where the Company acquires or disposes of assets shall be conducted by the Chairman delegated by the Board of Directors or in accordance with the authorization limits of the Company.	Article 12:	Where the Company acquires or disposes of assets shall be conducted by the Chairman delegated by the Board of Directors or in accordance with the authorization limits of the Company.
Article11:	When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the	Article 13:	When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the

Article	Article before Amendment	Article		Article after Amendment
	reasonableness of the transaction terms is appraised in compliance with the provisions of Chapter 2 and this Chapter, if the transaction amount reaches 10 percent or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of Chapter 2. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article8-1.			reasonableness of the transaction terms is appraised in compliance with the provisions of Chapter 2 and this Chapter, if the transaction amount reaches 10 percent or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of Chapter 2. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article 10.
Article12:	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	Article 14:		When the Company intends to acquire or dispose of real property or right-of-use assets thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property or right-of-use assets thereof 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 tradingof domestic

Article	Article before Amendment	Article	Article after Amendment
	or repurchase of money market funds issued by domestic securities investment trust enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board of Directors: 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 Article13through Article 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 Companyand the related		government bonds or bonds under repurchase and resale agreements, or subscription or repurchase of money market funds issued by domestic securities investment trust enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board of Directors: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a transaction counterparty. 3. With respect to the acquisition of real property or right-of-use assets thereof from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 15through Article 17. 4. The date and price at which the related party originally acquired the real property, the original tradingcounterparty,and

Article Article before Amendment Article Article after Amendment party. that trading counterparty's 5. Monthly cash flow relationship to the forecasts for the year Company and the related commencing from the party. anticipated month of 5. Monthly cash flow signing of the contract, and forecasts for the year evaluation of the necessity commencing from the of the transaction, and anticipated month of reasonableness of the funds signing of the contract, and utilization. evaluation of the necessity 6. An appraisal report from a of the transaction, and professional appraiser or a reasonableness of the funds CPA's opinion obtained in utilization. compliance with the 6. An appraisal report from a preceding article. professional appraiser or a 7. Restrictive covenants and CPA's opinion obtained in other important stipulations compliance with the associated with the preceding article. transaction. 7. Restrictive covenants and The calculation of the other important transaction amounts referred stipulations associated with to in the preceding paragraph the transaction. shall be made in accordance The calculation of the with Article 26, paragraph 2 transaction amounts referred herein, and "within the to in the preceding paragraph preceding year" as used shall be made in accordance herein refers to the year with Article 28 , paragraph 2 preceding the date of herein, and "within the occurrence of the current preceding year" as used herein transaction. Items that have refers to the year preceding been approved by the Board the date of occurrence of the of Directors need not be current transaction. Items that counted toward the have been approved by the transaction amount. Board of Directors need not With respect to the be counted toward the

Article		Article before Amendment	Article		Article after Amendment
		acquisition or disposal of business-use equipment between the Company and its parent or subsidiaries, the Company's Board of Directors may pursuant to Article10delegate the Chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next Board of Directors meeting. When a matter is submitted 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 which paragraph 1 requires submitting 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 maybe			transaction amount. With respect to thetypes of transactions listed below, when to be conducted between the Company and its parent or subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, the Company's Board of Directors may pursuant to Article 12, delegate the Chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next Board of Directors meeting: 1. Acquisition or disposal of equipment or right-of-use assets thereof held for business use. 2. Acquisition or disposal of real property right-of-use assets held for business use. When a matter is submitted for discussion by the Board of Directors pursuant to paragraph 1 of this Article, the independent Directors'

Article	Article before Amendment	Article		Article after Amendment
	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.			opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters which paragraph 1 requires submitting 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.
Article13:	The Company shall evaluate the reasonableness of the transaction costs by the following means if it intends to acquire real property from a related party: 1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be dulyborne	Article 15:		The Company shall evaluate the reasonableness of the transaction costs by the following means if it intends to acquire real property or right-of-use assets thereof from a related party: 1. Based upon the related party's transaction price plus necessary interest on fundingand the costs to

Article	Article before Amendment	Article	Article after Amendment
	by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. Where land and structures		be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. Where land and structures

Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
	thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. When acquiring real property from a related party, the Company shall evaluate and appraise the cost of the real property in accordance with paragraph 1 and paragraph 2 andshall also engage a CPA to review the appraisal and render a specific opinion.		thereupon are combined as a single property purchased or leasedin one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. When acquires real property or right-of-use assets thereof
			from a related party, the Company shall evaluate and appraises the cost of the real property or right-of-use assets thereof in accordance withthe preceding two paragraphs shall also engage a CPA to review the appraisal and render a specific opinion.
Article14:	Where the Company acquires real property from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with Article12, and Article13does not apply: 1. The related party acquired the real property through inheritance or as a gift. 2. More than 5 years have elapsed from the time the related party signed the contract to obtain the real propertyto the signingdate	Article 16:	Where the Company acquires real property or right-of-use assets thereof from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with Article 14, and Article 15 does not apply: 1. The related party acquired the real property or right-of-use assets thereof through inheritance or as a gift. 2. More than 5 years have elapsed from the time the
				through inheritance or as a gift. More than 5 years have elapsed from the time the

Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
	for the current transaction. 3. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land.		3. 4.	related party signed the contract to obtain the real property or right-of-use assets thereof to the signing date for the current transaction. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land. The real property right-of-use assets for business use are acquired
				by the Company with its parent or subsidiaries, or
				by its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital.
Article15:	When the results of the Company's appraisal conducted in accordance with Article13, paragraph 1 and paragraph 2 herein are uniformly lower than the transaction price, the matter shall be handled in compliance with Article16.	Article 17:	When the results of the Company's appraisal conducted in accordance with Article 15, paragraph 1 and paragraph 2 herein are uniformly lower than the transaction price, the matter shall be handled in compliance with Article 18.

Article	Article before Amendment	Article	Article after Amendment
	However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA, this restriction shall not apply: 1.Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: (1) Where undeveloped land is appraised in accordance with the means in the preceding two Articles, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division		However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA, this restriction shall not apply: 1. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: (1)Where undeveloped land is appraised in accordance with the means in the preceding two Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division

Article	Article before Amendment	Article before Amendment	Article before Amendment	Article	Article after Amendment
		(2) (3)	over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower. Completedtransactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices. Completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, where the transaction terms are similar after calculation of		over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower. (2) Transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale or leasing practices. 2. Where the Company acquiring real property, or obtaining real property right-of-use assets through leasing, from a related party provides evidence that the terms of the transaction are similar to the terms of

Article Article before Amendment Article

reasonable price discrepancies among floors in accordance with standard property leasing market practices. 2. Where the Company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

Completed transactions for neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transaction for similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the

Article after Amendment

transactions for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. Transactions for neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transactions for similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property or the right-of-use assets thereof .

Article		Article before Amendment	Article		Article after Amendment
		property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the realproperty.
Article16:		Where the Company acquires real property from a related party and the results of appraisals conducted in accordance withArticle 13 through Article 15are uniformly lower than the transaction price, the following steps shall be taken: 1. A special reserve shall be set aside in accordance with Article 41, paragraph 1 of the 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 or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, paragraph 1 of the Securities and	Article 18:		Where the Company acquires real property or right-of-use assets thereof from a related party and the results of appraisals conducted in accordance with the preceding three Articles are uniformly lower than the transaction price, the following steps shall be taken: 1. A special reserve shall be set aside in accordance with Article 41, paragraph 1 of the Securities and Exchange Act against the difference between the real property or right-of-use assets thereof transaction price and the appraised cost, and such difference may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41,

Article Article before Amendment Article Article after Amendment Exchange Act shall be set paragraph 1 of the aside pro rata in a Securities and Exchange proportion consistent with Act shall be set aside pro the share of public rata in a proportion company's equity stake in consistent with the share of the other company. public company's equity 2. Audit Committee shall stake in the other company. supervise the Company’s 2. Audit Committee shall execution of the aforesaid supervise the Company’s matter. execution of the aforesaid matter.

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.
Actions taken pursuant to the preceding two subparagraphs shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

Where the Company has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it 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

Where the Company has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased or leased at a premium, or they have been disposed of , or the leasing contract has been terminated , or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence

Article	Article before Amendment	Article	Article after Amendment
	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.		confirming that there was nothing unreasonable about the transaction, and the securities competent authority has given its consent. When the Company obtains real property or right-of-use assets thereof from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm’s length transaction.
Article 17:	Any derivatives trading of the Company shall be conducted in accordance with the “Procedures for Engaging in Derivatives Transactions” of the Company, moreover, the Company shall pay strict attention to control the risk management and to audit the Internal Control System of the Company.	Article 19:	Any derivatives trading of the Company shall be conducted in accordance with the “Procedures for Engaging in Derivatives Transactions” of the Company, moreover, the Company shall pay strict attention to control the risk management and to audit the Internal Control System of the Company.
Article18:	Where the Company conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the Board of Directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the	Article 20:	Where the Company conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the Board of Directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the

Article	Article before Amendment	Article	Article after Amendment
	share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit 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.		share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit 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.
Article19:	Where the Company participates in a merger, demerger, or acquisition shall prepare a public report to shareholders detailing important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting, together with the expert opinion referred to in Article18when	Article 21:	Where the Company participates in a merger, demerger, or acquisition shall prepare a public report to shareholders detailing important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting, together with the expert opinion referred to in Article 20 when

Article	Article before Amendment	Article	Article after Amendment
	sending notification of the shareholders meeting, for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply. Where the shareholders meeting of any one of the companies participating in a merger, demerger, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the Company shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.		sending notification of the shareholders meeting, for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply. Where the shareholders meeting of any one of the companies participating in a merger, demerger, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the Company shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.
Article20:	Where the Company participates in a merger, demerger, or acquisition shall convene a Board of Directors meeting and shareholders meeting on the date which the other companies participatingin the merger,	Article 22:	Where the Company participates in a merger, demerger, or acquisition shall convene a Board of Directors meeting and shareholders meeting on the date which the other companiesparticipatingin

Article	Article before Amendment	Article	Article after Amendment
	demerger, or acquisition convene their Board of Directors and shareholders meeting to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the securities competent authority is notified in advance of extraordinary circumstances and grants consent. Where the Company and the other companies participating in a transfer of shares shall call their respective Board of Directors meeting on the same day, unless another act provides otherwise or the securities competent authority is notified in advance of extraordinary circumstances and grants consent. Where the Company participates in a merger, demerger, acquisition, or transfer of shares shall prepare a full written record of the following information and retain the record for 5 years for reference. In addition, the information set out in the subparagraphs 1 and 2 of the following		the merger, demerger, or acquisition convene their Board of Directors and shareholders meeting to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the securities competent authority is notified in advance of extraordinary circumstances and grants consent. Where the Company and the other companies participating in a transfer of shares shall call their respective Board of Directors meeting on the same day, unless another act provides otherwise or the securities competent authority is notified in advance of extraordinary circumstances and grants consent. Where the Company participates in a merger, demerger, acquisition, or transfer of shares shall prepare a full written record of the following information and retain the record for 5 years for reference. In addition, the information set out in the subparagraphs 1 and 2 of the following

Article	Article before Amendment	Article	Article after Amendment
	paragraph shall be reported in the prescribed format and via the Internet-based information system to the securities competent authority for recordation within two days commencing immediately from the date of passage of a resolution by the Board of Directors. 1. Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of shares prior to disclosure of the information. 2. Dates of material events: Including the signing of any letter of intent or memorandum of understanding, the engagement of a financial or legal advisor, the execution of a contract, and the convening of a Board of Directors meeting. 3. Important documents and minutes: Includingmerger,		paragraph shall be reported in the prescribed format and via the Internet-based information system to the securities competent authority for recordation within two days commencing immediately from the date of passage of a resolution by the Board of Directors. 1. Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of shares prior to disclosure of the information. 2. Dates of material events: Including the signing of any letter of intent or memorandum of understanding, the engagement of a financial or legal advisor, the execution of a contract, and the convening of a Board of Directors meeting. 3. Important documents and minutes: Includingmerger,

Article	Article before Amendment	Article	Article after Amendment
	demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of Board of Directors meetings. Where any of the companies participates in a merger, demerger, acquisition, or transfer of shares is neither listed on an exchange nor has its shares traded on an OTC market, the Company shall enter into an agreement with such party and shall comply with the preceding paragraph of this Article.		demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of Board of Directors meetings. Where any of the companies participates in a merger, demerger, acquisition, or transfer of shares is neither listed on an exchange nor has its shares traded on an OTC market, the Company shall enter into an agreement with such party and shall comply with the preceding paragraph of this Article.
Article21:	Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition,or transfer of	Article 23:	Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition,or transfer of

Article	Article before Amendment	Article	Article after Amendment
	shares.		shares.
Article22:	Where the Company participates in a merger, demerger, acquisition, or transfer of shares, the Company shall not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares: 1. Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities. 2. An action, such as a disposal of major assets that affects the Company's financial operations. 3. An event, such as a major disaster or major change in technology that affects shareholder equity or share price. 4. An adjustment where any of the companies	Article 24:	Where the Company participates in a merger, demerger, acquisition, or transfer of shares, the Company shall not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares: 1. Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities. 2. An action, such as a disposal of major assets that affects the company's financial operations. 3. An event, such as a major disaster or major change in technology that affects shareholder equity or share price. 4. An adjustment where any

Article	Article before Amendment	Article	Article after Amendment
	participating in the merger, demerger, acquisition, or transfer of shares buys back treasury stock. 5. An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares. 6. Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.		of the companies participating in the merger, demerger, acquisition, or transfer of shares buys back treasury stock. 5. An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares. 6. Other terms/conditions that the contract stipulates may be altered and that have beenpubliclydisclosed.
Article23:	Article 23: The contract for participation by the Company in a merger, demerger, acquisition, or transfer of shares shall record the rights and obligations of the companies participating in the merger, demerger, acquisition, or transfer of shares, and shall also record the following: 1. Handling of breach of contract. 2. Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or	Article 25:	The contract for participation by the Company in a merger, demerger, acquisition, or transfer of shares shall record the rights and obligations of the companies participating in the merger, demerger, acquisition, or transfer of shares, and shall also record the following: 1. Handling of breach of contract. 2. Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged.

Article	Article before Amendment	Article	Article after Amendment
	that is demerged. 3.The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof. 4. The manner of handling changes in the number of participating entities or companies. 5. Preliminary progress schedule for plan execution, and anticipated completion date. 6. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.		3.The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof. 4. The manner of handling changes in the number of participating entities or companies. 5. Preliminary progress schedule for plan execution, and anticipated completion date. 6. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.
Article24:	After public disclosure of the information, if the Company participates in the merger, demerger, acquisition, or transfer of shares and intends further to carry out a merger, demerger, acquisition, or transfer of shares with another company, all of the participatingcompanies shall	Article 26:	After public disclosure of the information, if the Company participates in the merger, demerger, acquisition, or transfer of shares and intends further to carry out a merger, demerger, acquisition, or transfer of shares with another company, all of the participatingcompanies shall

Article	Article before Amendment	Article	Article after Amendment
	carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or transfer of share ; except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the Board of Directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.		carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or transfer of share ; except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the Board of Directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.
Article25:	Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company in accordance with the provisions of Article20, Article21,and Article24.	Article 27:	Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company in accordance with the provisions of Article 22, Article 23,and Article 26.
Article26:	Article 26: Under any of the following circumstances, where the Company acquires or disposes of assets shall publicly announce and report the relevant information on	Article 28:	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

Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
	the securities competent authority's designated website in the appropriate format as prescribed by regulations within 2 days 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 or redemption of money market funds issued by domestic securities investment trust enterprises. 2. Merger, demerger, acquisition, or transfer of shares. 3. Losses from derivatives tradingreachingthe limits		designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event: 1. Acquisition or disposal of real property or right-of-use assets thereof from or to a related party, or acquisition or disposal of assets other than real property or right-of-use assets thereoffrom 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 domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. 2. Merger, demerger, acquisition, or transfer of shares. 3. Losses from derivatives
				from or to a related party, or acquisition or disposal of assets other than real property or right-of-use assets thereoffrom 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 domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. Merger, demerger, acquisition, or transfer of shares. Losses from derivatives

Article

Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
	on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company. 4. Wherethe type of asset acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party, and the transaction amount is more than 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 is more than NT$500 million. 6.Where an asset transaction other than any of those referred to in the preceding five subparagraphs, a disposal of receivables by a financial institution,or an		4. 5.	trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company. Where equipment/machinery or right-of-use assets thereof
				for business use are acquired or disposed of, and furthermore the trading counterparty is not a related party, and the transaction amount is more than NT$1 billion. 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 furthermore the trading counterparty is not a related party,and the amount the Company expects to invest in the transaction reaches NT$500 million.

Article	Article before Amendment	Article	Article after Amendment
	investment in the mainland China area where the transaction amount reaches 20 percent or more of 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 redemption of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. 3. The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals,respectively)		6. Where an asset transaction other than any of those referred to in the preceding five 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 domestic government bonds. (2) Trading of bonds under repurchase/resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterpartywithin the

Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
	within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. "Within the preceding year" as used in the paragraph 2 refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Procedures need not be counted toward the transaction amount.		preceding year. 3. The cumulative transaction amount of real property or right-of-use assets thereof acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. "Within the preceding year" as used in the paragraph 2 refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Procedures need not be counted toward the transaction amount.	preceding year. The cumulative transaction amount of real property or right-of-use assets thereof
Article27:	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	Article 29:	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

Article	Article before Amendment	Article	Article after Amendment
	within two days counting inclusively from the date when the Company becomes aware of the error or omission.		within two days counting inclusively from the date when the Company becomes aware of the error or omission.
Article28:	Where the Company acquires or disposes of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company headquarters, where they shall be retained for 5 years except where another actprovides otherwise.	Article 30:	Where the Company acquires or disposes of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company headquarters, where they shall be retained for 5 years except where another actprovides otherwise.
Article29:	Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with theArticle 26 through 28, a public report of relevant information shall be made on the information reporting website designated by the securities competent authority within 2 days commencing immediately from the date of occurrence of the event: 1. Change, termination, or rescission of a contract signed in regard to the original transaction.	Article 31:	Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the preceding three Articles, a public report of relevant information shall be made on the information reporting website designated by the securities competent authority within 2 days commencing immediately from the date of occurrence of the event: 1. Change, termination, or rescission of a contract signed in regard to the original transaction.

Article	Article before Amendment	Article	Article after Amendment
	2. The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract. 3. Change to the originally publicly announced and reported information.		2. The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract. 3. Change to the originally publicly announced and reported information.
Article30:	Information required to be publicly announced and reported in accordance with the provisions of Chapter6on acquisitions and disposals of assets by a subsidiary of the Company that is not a public company in Taiwan shall be reported by the Company. The paid-in capital or total assets of the Company shall be the standard for determining whether or not a subsidiary referred to in the preceding paragraph is subject toArticle 26, paragraph 1 requiring a public announcement and regulatory filingin the event the type of transaction specified therein reaches 20 percent of paid-in capital or 10 percent of the total assets.	Article 32:	Information required to be publicly announced and reported in accordance with the provisions of the preceding Chapter on acquisitions and disposals of assets by a subsidiary of the Company that is not a public company in Taiwan shall be reported by the Company. The paid-in capital or total assets of the Company shall be the standard for determining whether or no a subsidiary referred to in the preceding paragraph is subject to the threshold requiring a public announcement and regulatory filing under paragraph 1 of Article 28.

Article31:	The Company’s controlling and monitoring procedures towards the acquisition or disposal of assets byits	Article 33:	The Company’s controlling and monitoring procedures towards the acquisition or disposal of assets byits

Article	Article before Amendment	Article	Article after Amendment
	subsidiaries are as follows: 1. The Company shall urge its subsidiaries to establish and execute their own “Procedures for Acquisition of Disposal of Assets” in accordance with this Procedures. 2. Where any material violation is found by the internal auditors of the subsidiaries, the subsidiaries shall promptly notify the Company in writing of any material violation found. The Company shall know how the subsidiaries deals with the violations, admonish the subsidiary to improve and keep itself informed of the improvementprocess.		subsidiaries are as follows: 1. The Company shall urge its subsidiaries to establish and execute their own “Procedures for Acquisition of Disposal of Assets” in accordance with this Procedures. 2. Where any material violation is found by the internal auditors of the subsidiaries, the subsidiaries shall promptly notify the Company in writing of any material violation found. The Company shall know how the subsidiaries deals with the violations, admonish the subsidiary to improve and keep itself informed of the improvementprocess.
Article32:	Should there be any violation of the procedures when the persons-in-charge of the Company deal with acquisition or disposal of assets, subsequent penalization is subject to the relevant HR policies of the Company.	Article 34:	Should there be any violation of the procedures when the persons-in-charge of the Company deal with acquisition or disposal of assets, subsequent penalization is subject to the relevant HR policies of the Company.
Article 33:	(Article Deleted)
Article34:	For the calculation of 10 percent of total assets under	Article 35:	For the calculation of 10 percent of total assets under

Article		Article before Amendment	Article	Article after Amendment
		this Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.		this Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.
Article35:		Afterthe Proceduresare approved by the Board of Directors, the Procedures shall besubmitted to the Shareholders Meeting for approval before 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 which paragraph 1 requires submitting 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	Article 36:	The Procedures shall be approved by the Board of Directors andsubmitted to the Shareholders Meeting for approval before 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 which paragraph 1 requires submitting 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,theprocedures may

Article	Article before Amendment	Article	Article after Amendment
	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.		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 (I) Proposal 2

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

Proposed by the Board of Directors

Explanation:

To comply with the requirements provided in the order Jin-Guan-Zheng-Fa-Zi No. 1070341072 dated November 26, 2018 by the Financial Supervisory Commission, certain articles of the Procedures for Engaging in Derivatives Transactions of 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		Article after Amendment
Article 1:		The “Procedures for Engaging in Derivatives Transactions” (hereinafter referred to as the “Procedures”) of Nan Ya Plastics Corporation (hereinafter referred to as the “Company”) was established in accordance with Article17 of the “Procedures for Acquisition or Disposal of Assets” of the Company.	Article 1:		The “Procedures for Engaging in Derivatives Transactions” (hereinafter referred to as the “Procedures”) of Nan Ya Plastics Corporation (hereinafter referred to as the “Company”) was established in accordance with Article 19 of the “Procedures for Acquisition or Disposal of Assets” of the Company.
Article 2:		Derivatives referred to herein are defined as forward contracts, options contracts, futures contracts, leverage contracts, swap contracts, and compound contracts combining the above products,whose value is	Article 2:		Derivatives referred to herein are defined as forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specifiedinterest rate, financial instrument price,

Article	Article before Amendment	Article	Article after Amendment
	derived fromassets, interest rates, foreign exchange rates, indexes orother interests.		commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives.
Article 3:	Forward contracts referred to herein do not include insurance contracts, performance contracts, after-sales service contracts, long-term lease contracts, and long-term purchase (sales) agreements.	Article 3:	Forward contracts referred to herein do not include insurance contracts, performance contracts, after-sales service contracts, long-term lease contracts, and long-term purchase (sales)contracts.
Article 14:	The derivatives trading positions of the Company shall be evaluated at least once a week by the in-charge department, and the hedging transactions made for business purposes shall be evaluated at least twice a month. The manager of the in-charge department shall pay attention to the risk control and supervision of derivatives transactions from time to time, and periodically supervise and evaluate theperformance of	Article 14:	The derivatives trading positions of the Company shall be evaluated at least once a week by the in-charge department, and the hedging transactions made for business purposes shall be evaluated at least twice a month. The manager of the in-charge department shall pay attention to the risk control and supervision of derivatives transactions from time to time, and periodically supervise and evaluate theperformance of

Article	Article before Amendment	Article	Article after Amendment
	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 submitted to a high-level manager(s) authorized by the Board of Directorsfor 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 meeting and expressingtheir opinions.		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 submitted to a high-level manager(s) authorized by the Board of Directors. 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 meeting and expressingtheir opinions.

Resolution:

Discussion Items (I) Proposal 3

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

Proposed by the Board of Directors

Explanation:

To comply with the requirements provided in the order Jin-Guan-Zheng-Shen-Zi No. 1080304826 dated March 7, 2019 by the Financial Supervisory Commission, certain articles of the Procedures for Loaning Funds to other Parties of 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		Article after Amendment
	Article 6:		The tenor of the loan shall not be longer than one year in the case the borrower does not have business relationship with the Company but has a short-term necessary financing facility. The interest rates of the loans shall not be lower than the then current lowest lending interest rates announced by the general financial institutions.	Article 6:		The tenor of the loan shall not be longer than one year. The interest rates of the loans shall not be lower than the then current lowest lending interest rates announced by the general financial institutions.
	Article 8:		A loan to the borrower may be extended for a certain period, provided the extension of the loan has been approved by the Board of Directors. The total duration of the loan after the			(Article deleted Deleted)

Article	Article before Amendment	Article	Article after Amendment
	above-mentioned extension shall meet the requirement of Article 6. If the extension of the loan is not approved by the Board of Directors, the borrower shall repay the principal and the accrued interests in full on the due date. If the borrower fails to perform, the Company shall claim the overdue amount via legal proceedings.
Article9:	The Company shall prepare a memorandum book for its fund-loaning activities and truthfully record the following information: borrower, amount, date of approval by the Board of Directors, lending/borrowing date, and matters to be carefully evaluated.	Article 8:	The Company shall prepare a memorandum book for its fund-loaning activities and truthfully record the following information: borrower, amount, date of approval by the Board of Directors, lending/borrowing date, and matters to be carefully evaluated.
Article10:	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	Article 9:	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

Article	Article before Amendment	Article	Article after Amendment
	correct violation(s) upon finding any violation. If any material violation is found, in addition to notifying the Audit Committee promptly in writing, the personnel who violate the Procedures shall be penalized in accordance with the related rules of the Company.		immediately correct violation(s) upon finding any violation. If any material violation is found, in addition to notifying the Audit Committee promptly in writing, the personnel who violate the Procedures shall be penalized in accordance with the related rules of the Company.
Article11:	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 Committee for its approval and then to the Board of Directors for a resolution, and shall complete the rectification according to the timeframe set out in the plan.	Article 10:	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 Committee for its approval and then to the Board of Directors for a resolution, and shall complete the rectification according to the timeframe set out in the plan.
Article12:	Procedures for controlling and managing loans of funds to others bysubsidiaries of	Article 11:	Procedures for controlling and managing loans of funds to others by

Article	Article before Amendment	Article	Article after Amendment
	the Company are as follows: 1. Where a subsidiary of the Company intends to make loans to others, the Company shall instruct it to formulate its own Procedures for Loaning Funds to other Parties in compliance with Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, and it shall comply with the Procedures when loaning funds. 2. The subsidiaries shall compile and submit the schedule, including the details and status of fund-lending as of the end of the previous month to the Company for review by the fifth day of the current month. 3. If any material violation is found by the internal auditors of the subsidiaries, the subsidiaries shall promptly notify the Company in writing of any material violation found.		subsidiaries of the Company are as follows: 1. Where a subsidiary of the Company intends to make loans to others, the Company shall instruct it to formulate its own Procedures for Loaning Funds to other Parties in compliance with Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, and it shall comply with the Procedures when loaning funds. 2. The subsidiaries shall compile and submit the schedule, including the details and status of fund-lending as of the end of the previous month to the Company for review by the fifth day of the current month. 3. If any material violation is found by the internal auditors of the subsidiaries, the subsidiaries shall promptlynotifythe

Article	Article before Amendment	Article	Article after Amendment
	The Company shall know how the subsidiary deals with the violation(s), admonish the subsidiary to improve and keep itself informed of the improvement process.		Company in writing of any material violation found. The Company shall know how the subsidiary deals with the violation(s), admonish the subsidiary to improve and keep itself informed of the improvementprocess.
Article13:	The Company shall announce and report the related information of fund-lending to others in compliance with the following requirements: 1. The Companyshall enter the previous month's loan balances of itselfand its subsidiariesto the information reporting website designated by the securities competent authority by the 10th day of each month. 2.The company whose loans of funds reach one of the following levels shall announce and report such event on the information reporting website designated by the securities competent authority within two days commencing	Article 12:	The Company shall announce and report the related information of fund-lending to others in compliance with the following requirements: 1. The Company and its subsidiaries shall publicly announce and report the information of fund-lending in accordance with the relevant laws, rules and regulations. 2.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. The percentage of the aggregate balance of

Article		Article before Amendment	Article	Article after Amendment
		immediately from the date of occurrence: (1)The aggregate balance of loans to others by the Company and its subsidiaries reaches 20 percent or more of the Company's net worth as stated in its latest financial statement. (2)The balance of loans by the Company and its subsidiaries to a single enterprise reaches 10 percent or more of the Company's net worth as stated in its latest financial statement. (3)The amount of new loans of funds by the Company or its subsidiaries reaches NT$10 million or more, and reaches 2 percent or more of the Company's net worth as stated in its latest financial statement. 3. 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 subsidiaryis required		loans to others over net worth of the subsidiary shall be calculated as the subsidiary’s balance of loans to others to the Company’s net worth. 3.The Company shall evaluate the status of its fund-lending and reserve sufficient allowance for bad debts, and shall adequately disclose relevant information in its financial reports and provide certified public accountants with relevant information for implementation of necessary audit procedures.

Article	Article before Amendment	Article	Article after Amendment
	to announce and report pursuant to subparagraphs of the preceding paragraph. The percentage of the aggregate balance of loans to others over net worth of theabove-mentioned subsidiary shall be calculated as the subsidiary’s balance of loans to others to the Company’s net worth. 4. The Company shall evaluate the status of its fund-lending and reserve sufficient allowance for bad debts, and shall adequately disclose relevant information in its financial reports and provide certified public accountants with relevant information for implementation of necessaryauditprocedures.
Article14:	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	Article 13:	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

Article	Article before Amendment	Article	Article after Amendment
	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 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.		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 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 (I) Proposal 4

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

Proposed by the Board of Directors

Explanation:

To comply with the requirements provided in the order Jin-Guan-Zheng-Shen-Zi No. 1080304826 dated March 7, 2019 by the Financial Supervisory Commission, certain articles of the Procedures for Providing Endorsements and Guarantees to other Parties of 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		Article after Amendment
	Article 10:		The Companyshall enter the previous month's balance of endorsements/guarantees of itselfand its subsidiariesto the information reporting website designated by the securities competent authority by the 10th day of each month.	Article 10:		The Company and its subsidiaries shall publicly announce and report the information of endorsements/guarantees in accordance with the relevant laws, rules and regulations.
	Article 11:		In addition to announcing and reporting the monthly balance of endorsements/guarantees in compliance with Article 10, in the event that the amount of the Company's endorsements/guarantees reaches one of the following levels, the Company shall announce and report such			(Article deleted Deleted)

Article		Article before Amendment	Article	Article after Amendment
		event on the information reporting website designated by the securities competent authority within two days commencing immediately from the date of occurrence: 1. The aggregate amount of endorsements/guarantees by the Company and its subsidiaries reaches 50 percent or more of the Company's net worth as stated in its latest financial statement. 2. The amount of endorsements/guarantees by the Company and its subsidiaries for any single enterprise reaches 20 percent or more of the Company's net worth as stated in its latest financial statement. 3. The amount of endorsements/guarantees by the Company and its subsidiaries for any single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees, long-term investment, and loans to that enterprise
		1. 2. 3.

Article	Article before Amendment	Article before Amendment	Article	Article after Amendment
	4.	reaches 30 percent or more of the Company's net worth as stated in its latest financial statement. The amount of new endorsements/guarantees made by the Company or its subsidiaries reaches NT$30 million or more, and reaches 5 percent or more of the Company's net worth as stated in its latest financial statement.
Article12:	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 reportpursuant to Article 11. The percentage of the balance of endorsements/guarantees over the net worth of the companyunder the preceding paragraphshall be calculated by the ratio of the subsidiary's balance of endorsements/guarantees to the Company's net worth.		Article 11:	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. The percentage of the balance of endorsements/guarantees over the net worth of the company shall be calculated by the ratio of the subsidiary's balance of endorsements/guarantees to the Company's net worth.
Article13:	The Company shall evaluate or record the contingent loss		Article 12:	The Company shall evaluate or record the contingent loss

Article	Article before Amendment	Article	Article after Amendment
	for endorsements/guarantees, and shall adequately disclose information on endorsements/guarantees in its financial reports and provide its certified public accountants with relevant information for implementation of necessary auditing procedures to issue proper audit reports.		for endorsements/guarantees, and shall adequately disclose information on endorsements/guarantees in its financial reports and provide its certified public accountants with relevant information for implementation of necessary auditing procedures to issue proper audit reports.
Article14:	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	Article 13:	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

Article	Article before Amendment	Article	Article after Amendment
	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.		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:

Election Items

Proposal: The Company’s Directors have their tenure nearly expired. Please elect the Board of Directors to conform to the applicable laws. Proposed by the Board of Directors

Explanation:

The Company’s current directors were elected in the Annual Shareholders’ Meeting on June 23, 2016 and have their tenure expired on June 22, 2019. To conform to the applicable Rule, the Company shall elect 15 directors (including 3 independent directors) using the cumulative voting system. The tenure of new session of Directors (including independent directors) shall be three years, starting June 12, 2019 until June 11, 2022.
The election of Directors (including independent directors) shall adopt the candidate nomination system in accordance with Article 192-1 of the Company Act and the Article 16 of the Company's Articles of Incorporation. The Company has examined and approved the qualification of 15 Directors Candidates (including independent directors) in the Board of Directors Meeting on April 1, 2019. The related information of the 12 Director Candidates is shown below:

Name	Education	Major Experience	Shareholding (Share)
Chia Chau, Wu	Bachelor in Business Administration, National Chengchi University	Current Appointment: Chairman of NPC Chairman of Nanya Technology Corp. Chairman of Nan Ya PCB Corp. Experiences: President of NPC	79,030
Wen Yuan, Wong	Master in Industrial Engineering, University of Houston	Current Appointment: President of National Federation of Industries Chairman of FCFC, Chairman of Formosa Taffeta Corp., Chairman of Formosa Advanced Technology Corp. Experiences: President of FCFC	38,206,752

Name	Education	Major Experience	Shareholding (Share)
Wilfred Wang (Representative of Formosa Petrochemical Corporation)	Bachelor in Engineering, University of London	Current Appointment: Chairman of Formosa Plastic Marine Corporation Chairman of Nan Ya Photonics Incorporation Experiences: Chairmanof FPCC	179,214,423
Ruey Yu, Wang	MBA, National Taiwan University	Current Appointment: Chairman of Formosa Biomedical Technology Corporation Chairman of Formosa Technologies Corporation Experiences: Chairman of Nan Ya PCB Corp.	19,052,421
Ming Jen, Tzou	Associate Degree in Department of Chemical Engineering, Provincial Taipei Institute of Technology	Current Appointment: President of NPC Experiences: Executive Vice President of NPC	188,742
Kuei Yung, Wang	Bachelor in Chemistry, University of London	Current Appointment: Senior Vice President of NPC Experiences: Vice President of NPC	11,164,271
Shen Yi, Lee (Representative of Formosa Chemicals & Fibre Corp.)	Ph.D. in Law, Chinese Culture University	Current Appointment: Independent Director of EnTie Commercial Bank Independent Director of WIN Semiconductors Corp. Vice Chairman of Contemporary Taiwan Development Foundation Experiences: Member, Control Yuan, Taiwan Commissioner, Fair Trade	413,327,750

Name	Education	Major Experience	Shareholding (Share)
Fong Chin, Lin	Master in Accounting , National Chengchi University	Current Appointment: Senior Vice President of NPC Experiences: VicePresident ofNPC	25,458
Zo Chun, Jen (Representative of Formosa Plastics Corp.)	Bachelor in Electrical Engineering, Tatung Institute of Technology	Current Appointment: Advisor of NPC Experiences: Senior Vice President of NPC	783,356,866
Sin Yi, Huang	Associate Degree in Department of Chemical Engineering, Ming Chi Institute of Technology	Current Appointment: Senior Vice President of NPC Experiences: Vice President of NPC	806
Cheng Chung , Lee	Bachelor in Chemical Engineering, National Central University	Current Appointment: Senior Vice President of NPC Experiences: Vice President of NPC	0
Ching Cheng , Chang (Representative of Freedom Internation Enterprise Company)	Bachelor in Business Administration, Tunghai University	Current Appointment: Director of Fu Tak Investment Company Experiences: Sales Administrator of Feng Hsin Steel Section Manager of Taiwan SecuritiesCo.,Ltd.	3,287,472

The names of the 3 Inde endent Director Candidates are listed below: p

Name	Education	Major Experience	Shareholding (Share)
Chih Kang, Wang	Ph.D. in Business Administration, Texas A&M University, USA Honorary Doctor of Law, Hanyang University, Korea	Current Appointment: Chairman of CTBC Venture Capital Co., Ltd. Chairman of Taiwan Institute of Economic Research Independent Director of Formosa Sumco Technology Corp. Experiences: Minister of Economic Affairs, Taiwan Chairman of TAITRA, Taiwan Chairman of Fuh Hwa Securities Investment Trust Co.,Ltd.	0
Yi Fu, Lin	Bachelor in Accounting and Statistics, National Chengchi University	Current Appointment: Independent Director of Taishin Financial Holding Co., Ltd Independent Director of Swissray Global Healthcare Holding Ltd. Independent Director of Pan German Universal Motors Ltd. Experiences: Minister of Economic Affairs, Minister without Portfolio of Executive Yuan Ambassador ofWTO	0

Name	Education	Major Experience	Shareholding (Share)
Yun Peng, Chu	Ph.D. in Economics, University of Maryland, USA	Current Appointment: Independent Director of China Petrochemical Development Corp. Independent Director of Taiwan Land Development Co., Ltd. Visiting Professor of Economics, Taipei Medical University Visiting Professor of School of Big Data Management, Soochow University Experiences: Chairman of Taiwan Insurance Guaranty Fund Minister without Portfolio of Executive Yuan Commissioner of Fair Trade Commission Director of Research Center for Humanities and Social Science	1,199

Resolution:

Discussion Items(II) Proposal 1

Proposal: Appropriateness of releasing the newly elected Directors and the juristic person shareholder whose authorized representatives are elected as Directors, from non-competition restrictions. Please discuss and resolve.

Proposed by the Board of Directors

Explanation:

According to Article 209 of the Company Act, any Director conducting business for himself/herself or on another’s behalf, and the scope of which coincides with the Company’s business scope, shall explain at the Shareholders’ Meeting the essential contents of such conduct and obtain approval from shareholders in the Meeting.
Meanwhile, according to Explanation Letter No.89206938 on Article 209 of the Company Act, announced by the Ministry of Economic Affairs dated April 24, 2000, where the juristic person shareholder's authorized representatives are elected as directors according to Article 27-2 of the Company Act, both the juristic person shareholder and the authorized representatives shall be subject to the non-competition restrictions under Article 209 of the Company Act.
If the newly-elected Directors and the juristic person shareholder whose authorized representatives are elected as directors in this Annual Shareholders’ Meeting conduct competitive businesses that are subject to the non-competition restrictions under Article 209 of the Company Act and the interest of the Company is not impaired, it is proposed to release the Directors and juristic person shareholders whose authorized representatives are elected as directors from such non-competition restrictions after having assumed office.
(Proclaim the information of engaging in competitive businesses conducted by the Directors and the juristic person shareholders)

Resolution:

NAN YA PLASTICS CORPORATION

Statement of Profits Distribution

For the year of 2018

Unit：NT$

For the year of 2018	Unit：NT$
Items	Amount
Available for Distribution: Unappropriated retained earnings of previous years  R  etrospective application effects of IFRS9 Net Income of 2018  Reversal of Special Reserve  Change in retained earnings resulting from  Other Comprehensive Income Total Distribution Items: Appropriation of Legal Reserve (10% of the  Net Income) Appropriation of Special Reserve (unrealized  investing profit under equity method) Distribution of dividends and b  onuses in cash ($5.0 per share) Unappropriated retained earnings  Total	10,955,058,470 507,291,650 52,746,021,387 15,150,477 -498,546,998
	63,724,974,986
	5,274,602,139 6,106,007,861 39,654,107,945 12,690,257,041
	63,724,974,986

Explanation
The proposed distribution is $5.0 per share, including dividend  of $2.234 and bonus of $2.766. The total distribution of dividends and bonuses amount to  $39,654,107,945; all of which are from the net income of 2018. Retrospective application effects of IFRS9 are the effects on retained  earnings arising from the adoption of IFRS9 "Financial Instruments". Reversal of Special Reserve is to revert the Special Reserve formerly  appropriated from the asset revaluation increments as the relevant assets are disposed. Change in retained earnings resulting from Other Co  mprehensive Income is the remeasurement of defined benefit obligation.

AI assistant

NPC — AGM Information 2019

51763_rns_2019-06-19_b294e453-dbcc-4cc6-8dcf-cf3556b62b7e.pdf

Table of Contents

NAN YA PLASTICS CORPORATION 2019 ANNUAL SHAREHOLDERS’ MEETING PROCEDURE

NAN YA PLASTICS CORPORATION 2019 ANNUAL SHAREHOLDERS’ MEETING

AGENDA

4. Election Items

Report Items

NAN YA PLASTICS CORPORATION

1.2018 Business Report

2.2018 Operating Status

3.2019 Business Outlook

NAN YA PLASTICS CORPORATION Audit Committee’ Review Report

Ratification Items Proposal 1

Explanation:

Resolution:

Ratification Items Proposal 2

Attachment:

Resolution:

Discussion Items (I) Proposal 1

Explanation:

Article Article before Amendment Article

Article after Amendment

Article

Resolution:

Discussion Items (I) Proposal 2

Explanation:

Resolution:

Discussion Items (I) Proposal 3

Explanation:

Resolution:

Discussion Items (I) Proposal 4

Explanation:

Resolution:

Election Items

Explanation:

Resolution:

Discussion Items(II) Proposal 1

Proposed by the Board of Directors

Explanation:

Resolution:

NAN YA PLASTICS CORPORATION

Statement of Profits Distribution

For the year of 2018

More from NPC

NPC AGM Information 2019