Primax - AGM Information 2019 | FinancialReports.eu

PRIMAX ELECTRONICS LTD. Minutes of 2019Annual General Shareholders' Meeting (Translation)

Time: June 18, 2019 (Tuesday) 9 a.m.

Venue: 4F., No. 2, Xuzhou Road, Zhongzheng Dist., Taipei City (NTUH International Convention Center)

Present: A total of 378,763,236 shares (including 314,681,990 shares represented by shareholders exercising voting rights electronically) are held by shareholders attending the shareholders' meeting in person or by a proxy, who represent 84.77% of the total number of the Company's outstanding446,808,824 shares.

Present Directors: Li-Sheng Liang, Tze-Ting Yang, Yung-Tai Pan, Tai-Jau Ku (Independent Director), Chun-Pang Wu (Independent Director)

Chairman: Li-Sheng Liang, the chairman of the Board of Directors

Recorder: Li-Hsueh Lee

A. Meeting called to order:
B. Chairperson Remark: (omitted)

C. Report:

Report No. 1 ： The Company's 2018 Business Report for review, please refer to Schedule 1.
Report No. 2 ： Audit Committee's Review Report on the 2018 Financial Statements for review, please refer to Schedule 2.
Report No. 3 ： Distribution of employees' and directors' compensation in 2018.

Description:

(1)The Board of Directors resolved to distribute NT$ 64,430,000 for employees' compensation and NT$ 32,200,000 for directors' compensation for year 2018.
(2)According to Article 25 of the Company's "Articles of Incorporation", 2% to 10% of the profit before tax (PBT) (i.e. before deducting the sums of employee's compensation and directors' compensation) shall be distributed as compensation for employees and not more than 2% of the PBT shall be distributed as compensation for directors. The Company's PBT for year 2018 was NT$2,111,130,209, the amount before deducting the sums of compensation of directors and employees was NT$2,207,760,209. Hence, the aforementioned compensation of employees and directors are respectively 2.92% and 1.46% of the said NT$2,207,760,209.
(3)In the internal financial statements, the employees' compensation was recorded as NT$64,430,580 and NT$32,219,290 as directors' compensation for year 2018. The discrepancy amount was NT$-8,580 and NT$-19,290 respectively. The discrepancies were the difference between the outcomes of an accounting estimate, which will be handled by principles of accounting change.
1 -

(Proposed by the Board)

D. Adoption

Proposal ： Adoption of the Company's 2018 Business Report and Financial Statements.

Description:

The Company has completed the internal preparation of the 2018 Annual Parent Company Only and Consolidated Financial Statements and has provided the reports to MEI-PIN WU CPA and CHI -LUNG YU CPA of KPMG Taiwan for review and audit. The CPAs have completed the audit. Please refer to Schedule 1and Schedule 3 for the above Financial Statements as well as the Business Report.

Resolved: the proposal was approved after voting.

Voting Results：Shares represented at the time of voting： 377,390,759

(Including votes casted electronically: 314,681,990votes)

Voting Results*	Voting Results*	% of the total represented sharepresent
Votesin favor	307,626,632votes (244,935,864votes)	81.51%
Votesagainst	38,072votes (38,072votes)	0.01%
Votesinvalid	0 votes	0.00%
Votes abstained	69,726,055votes(69,708,054 votes)	18.47%

*including votes casted electronically (number in brackets)

2. (Proposed by the Board)

Proposal ： Adoption of the Company's 2018 distribution of earnings.

Description:

(1) The Company's 2018 net profit after tax is NT$ 1,826,870,779, minus this year's actuarial gain from defined benefit plans NT$473,288, minusdisposal unrealized gain(losses) from financial assets measured at fair value through other comprehensive income carried forward to unappropriated retained earningsNT$1,256,254, minus legal reserve provision NT$ 182,687,078, minus special reserve provision NT$363,283,289, plus beginning retained earnings NT$3,170,769,195, plus effects of retrospective applicationNT$42,572,400, the distributable retained earnings are NT$4,492,512,465. The 2018 distribution of earnings prepared according to the Articles of Incorporation is as follows:

PRIMAX ELECTRONICS LTD. PROFIT ALLOCATION PROPOSAL December 31, 2018

Unit: NT$

December31,2018	Unit: NT$	Unit: NT$
Item	Amount
Beginning retained earnings		3,170,769,195
Less：Effects of retrospective application	42,572,400
Adjusted unallocated earnings, beginning of year		3,213,341,595
Add : Netprofit after tax	1,826,870,779
Less：Actuarial Gain from Defined Benefit Plans	473,288
Less：Disposal unrealized gain(losses) from financial assets measured at fair value through other comprehensive income carried forward to unappropriatedretained earnings	1,256,254
Less：10% Legal Reserve	182,687,078
Less：Special reserveprovision	363,283,289
Distributable retained earnings		4,492,512,465
Distribution Item：
Cash Dividends to Common Share Holders(NT$2.4per share)	1,072,341,178
Unappropriated Retained Earnings		3,420,171,287
Chairman： Li-Sheng Liang General Manager： Li-Sheng Liang Accounting Manager: Shu-chuan Chang

Note: 1. The per share dividends above are based on the 446,808,324 outstanding shares as of March 15, 2019.

For the distribution of cash dividends, all dollar amounts less than NT$ 1 for fractional shares shall be listed as the Company's other income.
The excepted dividend payout ratio for this distribution of profits is 58.25%
(2)For this distribution of profits, the 2018 earnings will be subject to distribution on a priority basis.
(3)The cash dividends total NT$1,072,341,178 and the per share dividends to be distributed are NT$2.4. The dividends will be distributed to the shareholders listed in the shareholders' roster on the ex-dividend date according to their respective shareholding. The above distribution ratio is calculated based on the total 446,808,824 outstanding shares as of March 15, 2019. After the proposal is approved at the regular shareholders' meeting, it is proposed the board of directors shall be authorized to determine the ex-dividend date and relevant matters.
(4)For the distribution of earnings, in the event of satisfaction of the vesting conditions on restrictive stock awards, buyback of the Company's shares, assignment or cancellation of treasury stock which influences the ratio of distributable dividends, it is proposed the shareholders' meeting shall authorize the Board of Directors to make proportionate adjustments to the ratio of distributable dividends based on the number of outstanding shares on the ex-dividend date.
Resolved: the proposal was approved after voting.
Voting Results：Shares represented at the time of voting： 377,390,759 (Including votes casted electronically: 314,681,990votes)

Voting Results*	Voting Results*	% of the total represented sharepresent
Votesin favor	307,626,632votes (244,936,864votes)	81.51%
Votes against	37,072votes (37,072votes)	0.01%
Votesinvalid	0 votes	0.00%
Votes abstained	69,726,055votes(69,708,054 votes)	18.47%

*including votes casted electronically (number in brackets)

E. Discussion

1. (Proposed by the Board)

Proposal ： Resolution of amendments to the Company's "Procedures for Acquisition or Disposal of Assets ".

Description:

(1)It is proposed certain provisions of the Company's " Procedures for Acquisition or Disposal of Assets " shall be amended due to the constitution amendment and the Company's operational requirements.
(2)Refer to Schedule 4 for a comparison of the amendments to the " Procedures for Acquisition or Disposal of Assets ".

Resolved: the proposal was approved after voting.

Voting Results：Shares represented at the time of voting：377,390,759

(Including votes casted electronically: 314,681,990votes)

(Including votes casted electronically: 314,681,990votes)	(Including votes casted electronically: 314,681,990votes)
Voting Results*		% of the total represented sharepresent
Votes in favor	307,574,632 votes(244,883,864 votes)	81.50%
Votes against	39,072 votes(39,072votes)	0.01%
Votes invalid	0 votes	0.00%
Votes abstained	69,777,055 votes(69,759,054 votes)	18.48%

*including votes casted electronically (number in brackets)

(Proposed by the Board)

Proposal ： Resolution of amendment to the Company's "Procedures for Lending Funds to Other Parties ".

Description:

(1)It is proposed certain provisions of the Company's " Procedures for Lending Funds to Other Parties " shall be amended due to the constitution amendment.
(2)Refer to Schedule 5 for a comparison of the amendments to the " Procedures for Lending Funds to Other Parties "

Resolved: the proposal was approved after voting.

Voting Results：Shares represented at the time of voting：377,390,759

(Including votes casted electronically: 314,681,990votes)

(Includingvotes casted electronically: 314,681,990votes)	(Includingvotes casted electronically: 314,681,990votes)
Voting Results*		% of the total represented sharepresent
Votes in favor	307,574,632 votes(244,879,864 votes)	81.49%
Votes against	42,072 votes(42,072votes)	0.01%
Votes invalid	0 votes	0.00%
Votes abstained	69,778,055 votes(69,760,054 votes)	18.48%

*including votes casted electronically (number in brackets)

3.

(Proposed by the Board)

Proposal ： Resolution of amendment to the Company's "Procedures for Endorsements & Guarantees ".

Description:

(1) It is proposed certain provisions of the Company's " Procedures for Endorsements & Guarantees " shall be amended due to the constitution amendment.
(2) Refer to Schedule 6 for a comparison of the amendments to the " Procedures for Endorsements & Guarantees "

Resolved: the proposal was approved after voting.

Voting Results：Shares represented at the time of voting：377,390,759

(Including votes casted electronically: 314,681,990votes)

(Includingvotes casted electronically: 314,681,990votes)	(Includingvotes casted electronically: 314,681,990votes)
Voting Results*		% of the total represented sharepresent
Votes in favor	307,573,632 votes(244,882,864 votes)	81.50%
Votes against	40,072 votes(40,072votes)	0.01%
Votes invalid	0 votes	0.00%
Votes abstained	69,777,055 votes(69,759,054 votes)	18.48%

*including votes casted electronically (number in brackets)

4. (Proposed by the Board)

Proposal ： Resolution of issue of Restricted Employee Stock Award.

Description:

(1)In accordance with Article 267 of the Company Act and Regulations Governing the Offering and Issurance of Sercurities by Securities Issuers published by the Financial Supervisory Commission.
(2)Expected total amounts(shares) of issuance ： 2,000,000 shares.
(3)Expected issue price ： NT$0 per share
4 -

(4)Vesting conditions ：

I. Vesting conditions ：

Divided into three categories: A, B and C and the vesting of each is based on achieving personal performance goals.

(I) Vesting for Category A ：
- i. Each Award shall vest at a rate of thirty percent (30%) at the end of the first twelve months of continuous employment after granting the Award and achievement of personal performance goals and business performance goals in the previous year.
- ii. Each Award shall vest at a rate of thirty percent (30%) at end of two years of continuous employment after granting the Award and achievement of personal performance goals and business performance goals in the previous year.
- iii. Each Award shall vest at a rate of forty percent (40%) at end of three years of continuous employment after granting the Award and achievement of personal performance goals and business performance goals in the previous year.
(II) Vesting for Category B ：
- i. Each Award shall vest at a rate of fifty percent (50%) at the end of the first twelve months of continuous employment after granting the Award and achievement of personal performance goals and business performance goals in the previous year.
- ii. Each Award shall vest at a rate of fifty percent (50%) at end of two years of continuous employment after granting the Award and achievement of personal performance goals and business performance goals in the previous year.
(III) Vesting for Category C ：
- Employees who are continuously employed by the Company for one year after granting of the awards and have accomplished the individual's performance goals and business performance goals established by the Company for the one-year period before the expiry date will be entitled to 100% shares.
(IV) The aforementioned personal performance goals shall mean the accomplishment of individual performance goals in accordance with the Company's "Performance Evaluation and Development Measures", including pre-set goals and special awards.
(V) The aforementioned business performance goals shall mean the Earnings Per Share (EPS) and the Return On Equity (ROE) of the Company for the previous year prior to the scheduled date to vest are not less than NT$3 and 12% respectively.
II. The type of shares: new common shares of the Company.
III. Measures to be taken when employees fail to meet the vesting conditions or in the event of inheritance: In circumstance where the Restricts Stock was not vested due to failure to meet vesting conditions, such shares will be bought back by the Company without charge and will be written off.
(5)Qualification requirements for employees ：
I. Employees who will be eligible to receive Award are limited to full-time employees who have registered with the Company, and will be limited to the ones who are important to the Company's future success and development; whose individual performance are valuable to the Company; or those who are considered as the valuable newhires.
II. Eligible employees and the actual number of shares to be granted will take into account the rank of the employee, performance, overall contribution and other factors, as well as the
5 -

Company's operational requirements and business development strategy. Prior approval of the Compensation Committee shall be obtained for those who are employed as managers.

III. The total number of shares each individual employee may acquire by exercising the Award, plus the total number of employee stock options issued by the Company in accordance with Article 56-1 (1) of Regulations Governing the Offering and Issuance of Securities by Securities Issuers, shall not exceed 0.3% of the total number of issued shares. In addition, the number of shares each individual employee may acquire through the exercise of employee stock options issued by the Company in accordance with Article 56-1 (1) of the said Regulations shall not exceed 1% of the total number of issued shares.
(6)The reason why it is necessary to issue restricted stocks for employees ： For attracting and retaining outstanding professionals, in order to create long-term Company growth and benefits for employees and shareholders.
(7)Calculated expense amount ：
Estimations are made based on NT$60, the Company's highest closing share price for common shares over the 60 trading-day period prior to March 6, 2019. The amount of annual cost sharing for year 2019, 2020, 2021, 2022 and 2023 shall be NT$1,583,333, NT$45,700,000, NT$44,850,000, NT$21,466,667 and NT$6,400,000 respectively, with a total amount of NT$120,000,000.
(8)Dilution of EPS and other factors affecting shareholder’s equity ： Estimations are made based on NT$60, the Company's highest closing share price for common shares over the 60 trading-day period prior to March 6, 2019. The diluted EPS for year 2019, 2020, 2021, 2022 and 2023 shall be NT$0.00, NT$0.10, NT$0.10, NT$0.05 and NT$0.01 respectively.
(9)Restricted rights before employees meet the vesting conditions ：

Restrictions, covenants or outstanding issues in relation to the establishment of this Plan shall be dealt in accordance with the relevant laws and the Company's Procedures.

(10)Other important stipulations ：

The new shares issued by the Company through the exercise of Restrictes Stock shall be dealt in accordance with measures for stock trust.

(11) Any other matters that need to be specified ：
I. The Award shall be issued mainly for Category A. Award for Category B and C will be issued subject to the commitment, and for the below purpose:
- (I) For employment of major talents.
- (II) For the urgent cases (Retain for main technical talents, main manufacturing process talents and high operational impact managers).

The average number of Restricted Employee Stock Award issued for Category B in recent years (Y2016 to Y2017) is 1.2% of the total number of Restricted Employee Stock Award ; Category C is 0%.

II. In circumstance where amendments to the conditions for issuance of Restricts Stock are required by instructions from the competent authorities, the amended of relevant laws and rules, or in response to financial market conditions, the Chairman of the Company is authorized to amend these provisions, which shall become effective upon approval by the Board of Directors.
III. Based on the total number of issued shares (446,875,324 shares) as of March 6, 2019, the 2,000,000 new shares to be issued will account for 0.45% of the total number of issued shares
6 -

Resolved: the proposal was approved after voting.

Voting Results：Shares represented at the time of voting：377,390,759 (Including votes casted electronically: 314,681,990votes)

(Includingvotes casted electronically: 314,681,990votes)	(Includingvotes casted electronically: 314,681,990votes)
Voting Results*		% of the total represented sharepresent
Votes in favor	305,250,334 votes(242,559,566 votes)	80.88%
Votes against	2,363,370 votes(2,363,370votes)	0.62%
Votes invalid	0 votes	0.00%
Votes abstained	69,777,055 votes(69,759,054 votes)	18.48%

*including votes casted electronically (number in brackets)

5.

(Proposed by the Board)

Proposal ： To discuss the Company's subsidiary, Tymphany Acoustic Technology(Huizhou) Co., Ltd., to make an initial public offering and apply for the listing of its common shares (A Shares) on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange.

Description:

(1) The purposes of the IPO and listing of Oversea Stock Market

The Company's subsidiary, Tymphany Acoustic Technology (Huizhou) Co., Ltd. (“TATC”), is planning to apply for the listing of its common shares on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange for rapid expansion of business in China, attraction of local talents, enhancement of market influences and integration of resources. The Company indirectly owns 71.4321% shares of TATC now. If the process of IPO has been successfully completed, it will bring positive effects to the Company’s image and business, and increase the value of the Company’s investment. Therefore, the Company and all shareholders will be benefited.

(2) Assessment of the impact on the Company’s financial and business operations and impact of the proposed changes in the organizational structure and business on the Company.
I. On financial operations
(I) With the injection of new capital, TATC expects to expand and improve its current product development and business competitiveness, enhance its innovation capabilities and expand its business with respect to audio accessories, speakers and its components in China. The expansion and improvement shall enhance the Company’s net profits and stockholders' equity.
(II) The proposed IPO and listing on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange will open an addition channel for the Company to raise capital, make the capital resources more diversified in China, and reduce current capital costs and related financial costs.
(III) The Company will still retain its control over TATC after the proposed IPO and listing on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange is approved. TATC will issue new shares for the proposed IPO and accordingly it does not involve any transfer of the Company's existing shares.
II. On business operations
(I) The proposed IPO and listing on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange will enhance the Company’s image, attract local talents, and increase production capacity, which will assist the Company to develop the corporate group’s business.
(II) After the proposed IPO and listing on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange, with the injection of new capital, TATC will increase its
7 -

competitive ability and expand current market. By increasing the scale of business, research and development capabilities, and market position, TATC will raise the threshold of market and enhance the current advantages, which will bring more profits.

III. The proposed changes in the organizational structure and business on the Company.

There is no sudden adjustment because TATC is applying for an IPO. The organizational structure of TATC will build up a sound shareholders’ meeting, board of directors, and board of supervisors, independent directors and board secretary in accordance with local regulations.

IV. Impact of the proposed changes in the organizational structure and business on the Company.

TATC will build up the organizational structure in accordance with local regulations and its business won’t be changed upon the proposed IPO, so there is no impact on the Company.

(3) Share diversifications and proposed reduction of shareholding

TATC plans to apply for an IPO and listing on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange with the par value of one RMB per share. The total number of new shares proposed to be issued is approximately 10% (tentative) of TATC’s total capital at the time of issuance. It is expected that the shareholding ratio indirectly owned by the Company will be reduced around 7.14%. If the proposed IPO and listing is approved, the Company will request the shareholders’ meeting to authorize the board of directors and other representative designated by it to discuss with lead securities underwriter for making necessary adjustments at their discretion with regard to final issuance volume and offering price based on the local regulations, required capitals, communication with the regulator of the stock exchange, and market conditions.

(4) The use of the capital raised through the proposed IPO and listing

The purpose of the raised capital is majorly for the investment with respect to“ Tymphany Acoustic Technology (Huizhou) Co., Ltd intelligent audio new campus project“ and other permitted areas, including but limited to supplement of working capital.

(5) The offering price

The final IPO price will be determined according to the procedures established by the relevant listing regulations or other methods recognized by the regulator of the relevant stock exchange.

(6) Investors of the new shares to be issued

The potential investors of the new shares to be issued by TATC through the proposed IPO and listing include natural persons having the stock account in the local stock exchange, corporate investors, and other investors qualified by the regulator of the relevant stock exchange. The Company will not participate in subscribing any new share to be issued this time.

(7) Impact on the continuity of the Company’s own listing on the Taiwan Stock Exchange

The Company existing listing in Taiwan will not be affected after the proposed IPO and listing on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange.

(8) Others

I. The application for the proposed IPO and listing has not been filed. Accordingly, there remain uncertainties with regard to when to file such an application and how long the approval process will take.
II. It should be noted that according to the relevant securities laws and requirements of the regulator of the stock exchange in the Mainland China, the directly and indirectly controlling shareholders (including the Company) of TATC are required to avoid engaging in
8 -

businesses that are competing with TATC’s. TATC's direct or indirect shareholders (including the Company) accordingly will have to sign non-compete undertakings in compliance with the aforesaid requirements. Since the Company has a controlling power over TATC, signing a non-compete agreement does not violate the Fair Trade Law of the Republic of China.

III. It should be further noted that according to the relevant securities laws and regulations in the Mainland China, there are other representations and warranties that the directly and indirectly controlling shareholders (including the Company) of TATC need to provide, such as IPO lock-up and Stock price stability commitment, etc. The Company will make such representations and warranties as required and execute relevant documents accordingly.
IV .In order to cooperate with TATC’s application with respect to the listing of its common shares on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange, the Company may request the shareholders’ meeting to authorize the Board of Directors or other representative designated by it to handle all matters, including but not limited to engaging professional firms and determination of issuance terms, timing, volume, target, method, pricing strategy, issue price (including the range between prices and final price), the date of issuance, strategic placement, the usage of raised capital, other commitment letter and confirmation letter, relevant document and other IPO and listing details, etc., with full discretion concerning the proposed IPO and listing according to the progress of IPO and listing, the opinions of the competent authority, the relevant laws and regulations in the Mainland China, market conditions or actual situation.
Resolved: the proposal was approved after voting.

Voting Results：Shares represented at the time of voting：377,390,759

(Including votes casted electronically: 314,681,990votes)

(Includingvotes casted electronically: 314,681,990votes)	(Includingvotes casted electronically: 314,681,990votes)
Voting Results*		% of the total represented sharepresent
Votes in favor	307,434,132 votes(244,743,364 votes)	81.46%
Votes against	179,572 votes(179,572votes)	0.04%
Votes invalid	0 votes	0.00%
Votes abstained	69,777,055 votes(69,759,054 votes)	18.48%

*including votes casted electronically (number in brackets)

F. Election

1. (Proposed by the Board)

Proposal ： Election of independent director.

Description:

(1)According to the Articles of Incorporation, the Board shall consist of from five to nine directors. Due to the resignation of Director Hai-Hung Yang on October 1, 2018, the Board is short of one seat of director.
(2)In order to coordinate with the Company's operational planning and strengthen corporate governance, it is proposed to elect one independent director. Refer to Schedule 7 for the candidate information.
(3)The new elected independent director shall have a term from June 18, 2019 to May 29, 2021.
(4)The election shall be conducted according to the Company's "Rules for Election of Directors".

Election Results: The list of the newly elected director and votes received as follows


Title	Shareholder number or ID number	Name	Votes Received
Independent Director	A221**	Jia-Chyi Wang	297,623,768

F. Other Matters:

1.

(Proposed by the Board)

Proposal ： Resolution of removal of the non-compete restrictions on directors.

Description:

(1)According to Article 209 of the Company Act, a director who conducts business within the business scope of the Company for himself or others shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.
(2)To draw on the expertise and relevant experience of the Company's directors to the benefit of the Company, as certain directors concurrently work for other companies, which may constitute the act restricted under Article 209 of the Company Act, it is proposed for resolution to remove the non- compete restrictions on Director Li-Sheng Liang, Director Yung-Tai Pan, Director Yung-Chung Pan and newly elected director. Refer to Schedule 8 for the details.

Resolved: the proposal was approved after voting.

Voting Results：Shares represented at the time of voting：377,390,759 (Including votes casted electronically: 314,681,990votes)

(Includingvotes casted electronically: 314,681,990votes)	(Includingvotes casted electronically: 314,681,990votes)
Voting Results*		% of the total represented sharepresent
Votes in favor	296,253,981 votes(233,563,213votes)	78.50%
Votes against	54,572votes(54,572votes)	0.01%
Votes invalid	0 votes	0.00%
Votes abstained	81,082,206votes(81,064,205votes)	21.48%

*including votes casted electronically (number in brackets)

G. Extempore Motion: None.

H. The meeting was adjourned at 10:25 a.m.

( The Minutes record the summary of the essential points of the proceedings and the results of the meeting in accordance with Article 183 of Company Act. For more details please refer to the audio and video recording of the meeting.)

10 -

【 Schedule 1 】

Business Report

In 2018, growth of the global economy had weakened. Although new consumer electronics were still being introduced to the market and emerging technologies were being applied on a larger scale, uncertainties associated with the ongoing trade war between USA and China caused demands to weaken on a global scale, which undermined the performance of the global manufacturing industry. For an economy that is highly dependent upon export, Taiwan's electronics manufacturing sector has suffered greatly as a result.

Amidst the challenging environment, PRIMAX has adhered to its existing strategy of stability and directed focus towards maintaining revenue growth and optimizing its product portfolio. With regards to business activities, increasing popularity and evolution of smart speakers in product technology and features have contributed significantly to Tymphany's revenues and profits. As for auto electronics, one of our long-established product lines, PRIMAX received certification from major international auto maker in 2018, beginning shipment of multi-lens automobile camera modules and contributing revenues during the year. This certification and shipment represents PRIMAX's successful entry into the field of intelligent drive. With regards to PC peripherals, the gaming market continued to exhibit growth in 2018, an advantage that PRIMAX has capitalized on by collaborating with top gaming brands to introduce newer products into the market. Today, gaming business continues to drive transformations of the PC peripherals sector, aside from its significant revenue and profit contributions.

In terms of manufacturing technology, PRIMAX remains committed to its highest standard for product quality and yields. Meanwhile, the organization is actively adopting the concept of Industry 4.0 and has initiated a series of transformation and improvements to the manufacturing process as well as R&D capacity to further enhance its competitive advantage, thereby preparing the organization for the next stage of growth.

The following is an overview of the Company's 2018 performance.

I. 2018 Financial Performance

(I) Financial Results

The Company generated NT$64,811,408 thousand of consolidated net revenues worldwide in 2018, representing a 6.7% growth over the NT$60,741,692 thousand in 2017. Consolidated net income totaled NT$1,913,975 thousand in 2018, representing an 11.8% decline compared to the NT$2,168,981 thousand in 2017.

(II) Cash Flow Analysis

ash Flow Analysis
		Unit：NT$thousand
Account	2018	2017	Net change
Net cash inflow (outflow) from operating activities	1,786,951	3,412,165	(1,625,214)
Net cash inflow (outflow) from investing activities	(2,917,352)	(1,452,394)	(1,464,958)
Net cash inflow (outflow) from financing activities	(1,539,774)	(451,649)	(1,088,125)

(III) Profitability Analysis

ProfitabilityAnalysis
Account	2018	2017
Return on Equity (%)	13.69	17.20
OperatingIncome to Paid-inCapital(%)	43.41	49.33
Profit before Tax to Paid-inCapital(%)	52.84	63.85
Net Profit Margin(%)	2.95	3.57
EarningsperShare(Dollars)	4.12	4.67

11 -

(IV) R&D Investments

The Company spent NT$2,664,477 thousand on research and development expenses in 2018 as a means to enhance its R&D capacity and competitive advantage. This investment was spent on the development and design of new products/technologies and improvement of the production process.

II. Business Strategy and Technology Developments

In 2019, PRIMAX will continue focusing its business development efforts in areas that it possesses a technological advantage, and strive to increase the market share of new products while at the same time exploring application and transformation opportunities for existing products. Non-PC peripheral have emerged to become a key revenue and profit contributor to the Company in recent years, for which PRIMAX will aim to increase its share in the ODM market and continuously expand the scope of products manufactured in the coming year. Demands for acoustic products such as smart speakers and wireless headphones are expected to grow in 2019, a trend that the Company plans to take advantage of by collaborating more closely with customers on product design and adoption of new technologies.

Year 2018 marked PRIMAX's successful entry into the field of auto electronics, and the Company plans to build on top of this success in 2019 by growing its shipment of automobile camera modules in terms of volume, quality and market share. In addition, PRIMAX will actively explore new customers and make auto electronics the third pillar of its business operations. Technologies including cloud computing, mobile device, digital home and IoT have gradually matured, therefore the Company will shift its camera module development focus towards the integration of multi-lens, AI and intelligent image processing for broader applications.

In the PC peripheral segment, revenues and profits from gaming products continued to exhibit significant growth in 2018, and is gradually becoming a dominant force that drives the transformation of PC peripheral. Demands in the gaming market should remain active throughout 2019, and the Company's long-established technology and design capacity will enable it to meet new market trends and customers' needs. By actively assisting customers with their product development, we expect to inspire new revenue growth from this particular business segment.

In terms of production management, the Company will be making progressive upgrades to its production capacity in 2019 to realize its vision of intelligent manufacturing and Industry 4.0. Starting with the adoption of automated production process and new information technology for communications, PRIMAX expects to reduce production cost, increase yield and optimize utilization of production capacity.

The global economy should remain susceptible to the impacts of the US-China trade war, geopolitics and protectionism in the coming year, which the Company plans to respond by focusing on Asia as the world's fastest growing market and the dominant supply chain, and adopt a global manufacturing philosophy inspired by Industry 4.0.

Chairman and General Manager: Li-Sheng Liang

Accounting Manager: Shu-chuan Chang

12 -

【 Schedule 2 】

Audit Committee’s Review Report

To: Shareholders' Meeting of Primax Electronics Ltd.

Among the Company's 2018 Business Report, Financial Statements and Proposal for Distribution of Earnings prepared and submitted by the Board of Directors, the Financial Statements have been fully audited by KPMG Taiwan which has issued the audit report.

The Audit committee members have audited the above Business Report, Financial Statements and Proposal for Distribution of Earnings and determined they are in compliance with the Company Act and other applicable laws and regulations and therefore issue this report pursuant to the provisions of Article 219 of the Company Act. I hereby submit this report.

Chairman of the Audit Committee: Tai-Jau Ku

Date: March 28, 2019

13 -

� ��

Independent Auditors’ Report

��

Opinion

��

Basis for Opinion

��

Other Matter

��

Key Audit Matters

��

14 -

��

��

��

15 -

��

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

��

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

��

16 -

��

��
��
��
��
��
��

��

17 -

��

Notes to Readers

��

��

18 -

					December 31, 2017	Amount %		� �	�� �	�� ��	�� �	�� �	�� �	�� �	�	�� �	�	� �	�� ��		�� �	�� �	�� �	�� �	�� �	�� ��		�� ��	�� �	�� �	�� �	�� �	�� ��	�� ��		�� ��	24,128,884 100
					December 31, 2018	Amount %		� �� �	�� �	�� ��	�� �	�� �	�� �	�� �	�	�� �	�	�� �	�� ��		�� �	�� �	�� �	�� �	�� �	�� ��		�� ��	� �	�� �	�� �	�� �	�� ��	�� ��		�� ��	$ 27,685,780 100
(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)	PRIMAX ELECTRONICS LTD.	Balance Sheets	December 31, 2018 and 2017	(Expressed inThousands of New Taiwan Dollars)	December 31, 2018 December 31, 2017	Amount % Amount % Liabilities and Equity	Current liabilities:	� �� � �� �� �� ��	�� � �� � �� ��	�� �� �� �� �� ��	�� � �� � �� ��	�� � �� � �� ��	�� � �� � �� ��	�� � �� � �� ��		�� �� �� �� �� ��		�� ��	� � �� �	�� � � � Non-Current liabilities:	�� ��	�� �� �� �� �� ��	�� � �� � �� ��	�� � �� � �� ��	�� � �� �	�� � �� � Total liabilities	�� � �� � �� ��		�� �� �� �� �� ��	�� ��	�� ��	�� ��	�� ��	�� ��	$ 27,685,780 100 24,128,884 100 Total equity Total liabilities and equity
						Assets	Current assets:	��	��	��	��	��	��	��				Non-current assets:	��	��	��	��	��	��	��	��	��										Total assets
								��	��	��	��	��	��	��					��	��		��	��	��	��	��	��

19 -

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) PRIMAX ELECTRONICS LTD.

Statements of Comprehensive Income

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Share)

2018 Amount % �� Operating revenue (notes 6(t), (u) and 7) �� �� �� Operating costs (notes 6(f), (o), (v), 7 and 12) �� �� Gross profit from operations �� � Operating expenses (notes 6(o), (r), (v), 7 and 12): �� �� �� � �� �� �� � �� �� �� � �� �� �� � Total operating expenses �� � Net operating income �� � Non-operating income and expenses: �� �� �� � �� �� �� � �� �� �� � �� �� �� � Total non-operating income and expenses �� � Profit before income tax �� � �� �� �� � Profit �� � �� Other comprehensive income (loss): �� Items that may not be reclassified subsequently to profit or loss �� �� �� � �� �� �� �� � �� �� �� � � �� � �� Items that may be reclassified subsequently to profit or loss �� �� �� �� �� �� � � �� �� �� � � �� �� �� Other comprehensive income (after tax) �� �� Comprehensive income $ 1,504,297 4 Earnings per share (note 6(s)) �� Basic earnings per share (NT dollars) $ 4.12 �� Diluted earnings per share (NT dollars) $ 4.09	2017 Amount % �� �� �� �� �� � �� � �� � �� � � � �� � �� � �� � �� � �� � �� � �� � �� � �� � �� � �� � � � � � �� � �� � �� �� � � �� �� �� �� 1,606,886 5 4.67
	4.63

2018
Amount
%
��
Operating revenue (notes 6(t), (u) and 7)
��
��
��
Operating costs (notes 6(f), (o), (v), 7 and 12)
��
��
Gross profit from operations
��
�
Operating expenses (notes 6(o), (r), (v), 7 and 12):
��
��
��
�
��
��
��
�
��
��
��
�
��
��
��
�
Total operating expenses
��
�
Net operating income
��
�
Non-operating income and expenses:
��
��
��
�
��
��
��
�
��
��
��
�
��
��
��
�
Total non-operating income and expenses
��
�
Profit before income tax
��
�
��
��
��
�
Profit
��
�
��
Other comprehensive income (loss):
��
Items that may not be reclassified subsequently to profit or loss
��
��
��
�
��
��
��
��
�
��
��
��
�
�
��
�
��
Items that may be reclassified subsequently to profit or loss
��
��
��
��
��
��
�
�
��
��
��
�
�
��
��
��
Other comprehensive income (after tax)
��
��
Comprehensive income
$
1,504,297
4
Earnings per share (note 6(s))
��
Basic earnings per share (NT dollars)
$
4.12
��
Diluted earnings per share (NT dollars)
$
4.09

2017
Amount
%
��
��
��
��
��
�
��
�
��
�
��
�
�
�
��
�
��
�
��
�
��
�
��
�
��
�
��
�
��
�
��
�
��
�
��
�
�
�
�
�
��
�
��
�
��
��
�
�
��
��
��
��
1,606,886
5
4.67

4.63

��

20 -

												��	��	��	��	��		�	��	��	�	��	��	��	��	�	��	�	��	��	��	��		�	�	��	��	��	�	�	�		�	11,625,821
										��	��	��	��	�	�	�		�	�	�	��	��	�	�	�	��	��	�	��	�	�	�		�	�	�	�	��	��	��	�		�	(88,762)
					��	��	��	�� ��	�� ��	�� ��	�� ��	�� ��	� ��	� �	� ��	� ��		� �	� �	� �	� �	� �	� �	� �	� �	� �	� ��	�� ��	�� �	� �	�� �	�� �		� �	� �	� �	�� �	� �	� �	� �	� �		�� �	(102,166) -
(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)	PRIMAX ELECTRONICS LTD.	Statements of Changes in Equity	For the years ended December 31, 2018 and 2017	(Expressed in Thousands of New Taiwan Dollars)				��	�� �� ��	�� ��	�� �� �� ��	�� �� �� �� �� �� ��	Balance on January 1, 2017 � �� �� �� �� �� �� ��	�� � � � � � �� �	�� � � � � � �� ��	�� � � � � � �� ��	��	�� � � � �� � �� �	�� � � � � � �� �	�� � � �� � � �� �	�� �� � �� � � � �	�� � � � � � � �	�� � � �� � � � �	�� � �� � � � � �	�� �� �� �� � � � �	�� �� � �� � � � �	Balance on December 31, 2017 �� �� �� �� �� �� ��	�� � � � � � �� �	�� �� �� �� �� �� �� ��	�� � � � � � �� �	�� � � � � � �� ��	�� � � � � � �� ��	��	�� � � � �� � �� �	�� � � � � �� �� �	�� � � � � � �� �	�� � � �� � � � �	�� � � � � � � �	�� �� � �� � � � �	�� �� � �� � � � �	�� �� �� �� � � � �	��	�� � � � � � �� �	Balance on December 31, 2018 $ 4,474,523 - 1,377,077 1,187,783 299,065 5,038,483 (560,182)

21 -

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

PRIMAX ELECTRONICS LTD.

Statements of Cash Flows

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities:
Profit before tax
Adjustments:
Adjustments to reconcile profit (loss):
��
��
��
��
��
��
��
��
��
��
��
Total adjustments to reconcile profit (loss)
Changes in operating assets and liabilities:
��
��
��
��
��
Changes in operating assets
��
��
��
��
��
��
Changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
��
��
��
��
Net cash flows from operating activities
Cash flows from (used in) investing activities:
��
��
��
��
��
��
��
��
��
��
��
��
��
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
��
��
��
��
��
��
Net cash flows used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

2018
2017
�
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
�
��
�
��
��
�
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
�
��
�
��
�
�
��
�
��
�
��
��
�
��
��
��
��
��
��
��
�
��
��
��
��
��
��
��
�
��
��
��
��
��
��
�
��
��
��
��
��
��
��
��
��
$
2,239,009
3,979,290

��

22 -

Independent Auditors’ Report

��

Opinion

��

Basis for Opinion

��

Other Matter

��

23 -

Key Audit Matters

��

��

��

24 -

��

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

��

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

��

25 -

��

��
��
��
��
��
��

��

26 -

��

Notes to Readers

��

27 -

					December 31, 2017	Amount %		�� �	�� �	�� ��	� �	�� ��	�� �	�� �	�	�� �	�	� �	�� ��		�� �	�� �	�� �	�� �	�� ��		�� ��	�� �	�� �	�� �	�� �	�� ��	�� ��	�� �	�� ��	37,775,143 100
					December 31, 2018	Amount %		� �� �	�� �	�� ��	�� �	�� �	�� �	�� �	�	�� �	�	�� �	�� ��		�� �	�� �	�� �	�� �	�� ��		�� ��	� �	�� �	�� �	�� �	�� ��	�� ��	�� �	�� ��	$ 43,161,501 100
(English Translation of Consolidated Financial Statements Originally Issued in Chinese)	PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES	Consolidated Balance Sheets	December 31, 2018 and 2017	(Expressed in Thousands of New Taiwan Dollars)	December 31, 2018 December 31, 2017	Amount % Amount % Liabilities and Equity	Current liabilities:	� �� �� �� �� �� ��	�� � �� � �� ��	�� �� �� �� �� ��	�� � �� � �� ��	�� � �� � �� ��	�� �� �� �� �� ��	�� � �� � �� ��		�� �� �� �� �� ��		�� ��	� � � �	� � �� � Non-Current liabilities:	�� ��	�� � � � �� ��	�� �� �� �� �� ��	�� � �� �	�� �� �� � Total liabilities	�� � �� � Equity attributable to owners of parent:	�� � �� � �� ��	�� � �� � �� ��	�� �� �� �� �� ��	�� ��	�� ��	�� ��	�� ��	�� Non-controlling interests��	Total equity	$ 43,161,501 100 37,775,143 100 Total liabilities and equity
						Assets	Current assets:	��	��	��	��	��	��	��				Non-current assets:	��	��	��	��	��	��	��	��	��	��								Total assets
								��	��	��	��	��	��	��					��	��	��		��	��	��	��	��	��

28 -

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)

2018 Amount % �� Operating revenue (notes 6(v), 6 (w) and 7) �� �� �� Operating costs (notes 6(g), (q), (x), 7 and 12) �� �� Gross profit from operation �� �� Operating expenses (notes 6(q), (t), (x) and 12): �� �� �� � �� �� �� � �� �� �� � �� �� �� � Total operating expenses �� � Net operating income �� � Non-operating income and expenses: �� �� �� � �� �� �� � �� �� �� � �� �� �� � Total non-operating income and expenses �� � Profit before income tax �� � �� Less: income tax expenses (note 6(r)) �� � Profit �� � �� Other comprehensive income (loss): �� Items that may not be reclassified subsequently to profit or loss� �� �� �� � �� �� �� �� � �� �� �� � � �� � �� Items that may be reclassified subsequently to profit or loss: �� �� �� � �� �� � � �� �� �� � � �� � �� Other comprehensive loss after tax �� � Comprehensive income $ 1,586,656 3 Profit attributable to: �� �� � �� � �� �� �� � $ 1,913,975 3 Comprehensive income attributable to: �� �� � �� � �� �� �� � $ 1,586,656 3 Earnings per share (note 6(u)) �� Basic earnings per share (NT dollars) $ 4.12 �� Diluted earnings per share (NT dollars) $ 4.09	2017 Amount % �� �� �� �� �� �� �� � �� � �� � � � �� � �� � �� � �� � � � �� � �� � �� � �� � �� � �� � � � � � �� � �� � �� �� � � �� �� �� �� 1,723,071 3 �� � �� � 2,168,981 4 �� � �� � 1,723,071 3 4.67
	4.63

2018
Amount
%
��
Operating revenue (notes 6(v), 6 (w) and 7)
��
��
��
Operating costs (notes 6(g), (q), (x), 7 and 12)
��
��
Gross profit from operation
��
��
Operating expenses (notes 6(q), (t), (x) and 12):
��
��
��
�
��
��
��
�
��
��
��
�
��
��
��
�
Total operating expenses
��
�
Net operating income
��
�
Non-operating income and expenses:
��
��
��
�
��
��
��
�
��
��
��
�
��
��
��
�
Total non-operating income and expenses
��
�
Profit before income tax
��
�
��
Less: income tax expenses (note 6(r))
��
�
Profit
��
�
��
Other comprehensive income (loss):
��
Items that may not be reclassified subsequently to profit or loss�
��
��
��
�
��
��
��
��
�
��
��
��
�
�
��
�
��
Items that may be reclassified subsequently to profit or loss:
��
��
��
�
��
��
�
�
��
��
��
�
�
��
�
��
Other comprehensive loss after tax
��
�
Comprehensive income
$
1,586,656
3
Profit attributable to:
��
��
�
��
�
��
��
��
�
$
1,913,975
3
Comprehensive income attributable to:
��
��
�
��
�
��
��
��
�
$
1,586,656
3
Earnings per share (note 6(u))
��
Basic earnings per share (NT dollars)
$
4.12
��
Diluted earnings per share (NT dollars)
$
4.09

2017
Amount
%
��
��
��
��
��
��
��
�
��
�
��
�
�
�
��
�
��
�
��
�
��
�
�
�
��
�
��
�
��
�
��
�
��
�
��
�
�
�
�
�
��
�
��
�
��
��
�
�
��
��
��
��
1,723,071
3
��
�
��
�
2,168,981
4
��
�
��
�
1,723,071
3
4.67

4.63

��

29 -

													Total	equity	��	��	��	��		�	��	��	��	�	��	�	��	��	��	��	�	��	��	��	��		�	�	��	��	��	�	�	�	�		��	14,970,118
												Non-	controlling	interests	��	��	��	��		�	�	�	�	�	��	�	�	�	��	��	�	��	��	��	��		�	�	�	��	�	�	�	�	�		��	3,344,297
											Total equity	attributable	to owners of	parent	��	��	��	��		�	��	��	��	�	��	�	��	��	�	��	�	��	��	��	��		�	�	��	��	��	�	�	�	�		�	11,625,821
												Unearned	employee	compensation	��	�	�	�		�	�	�	��	��	�	��	�	�	�	��	�	��	�	�	�		�	�	�	�	��	��	��	�	�		�	(88,762)
(English Translation of Consolidated Financial Statements Originally Issued in Chinese)	PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES	Consolidated Statements of Changes in Equity	For the years ended December 31, 2018 and 2017	(Expressed in Thousands of New Taiwan Dollars)	Equity attributable to owners of parent	Other equity interest	Unrealized	gains (losses)	from financial	Exchange assets at Unrealized	Share capital Retained earnings differences on fair value gains (losses)	Capital Unappropriated translation through other on available-	Ordinary collected in Capital Legal Special retained of financial comprehensive for-sale	shares advance surplus reserve reserve earnings statements income financial assets	�� �� �� �� �� �� �� � ��	� � � � � �� � � �	� � � � � �� �� � ��	� � � � � �� �� � ��		� � � �� � �� � � �	� � � � � �� � � �	� � �� � � �� � � �	� � � � � � � � �	�� � �� � � � � � �	� � �� � � � � � �	�� � �� � � � � � �	� �� � � � � � � �	�� �� �� � � � � � �	� � � � � � � � �	�� �� �� �� �� �� �� � ��	� � � � � �� � �� ��	�� �� �� �� �� �� �� �� �	� � � � � �� � � �	� � � � � �� �� �� �	� � � � � �� �� �� �		� � � �� � �� � � �	� � � � �� �� � � �	� � � � � �� � � �	� � �� � � � � �� �	� � � � � � � � �	�� � �� � � � � � �	�� � �� � � � � � �	�� �� �� � � � � � �	� � � � � �� � �� �		� � � � � � � � �	4,474,523 - 1,377,077 1,187,783 299,065 5,038,483 (560,182) (102,166) -
															�																																	$
															Balance at January 1, 2017	��	��	��	��	��	��	��	��	��	��	��	��	��	��	Balance at December 31, 2017	��	��	��	��		��	��	��	��	��	��	��	��	��	��	��	��	Balance at December 31, 2018

30 -

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities:
Profit before tax
Adjustments:
Adjustments to reconcile profit (loss):
��
��
��
��
��
��
��
��
��
��
Total adjustments to reconcile profit (loss)
Changes in operating assets and liabilities:
��
��
��
��
��
��
��
Changes in operating assets
��
��
��
��
��
��
��
��
Changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
��
��
��
��
Net cash flows from operating activities
Cash flows from (used in) investing activities:
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
Net cash flows used in investing activities
Cash flows from (used in) financing activities:
��
��
��
��
��
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

2018
2017
�
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
�
��
��
�
��
��
�
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
�
��
��
��
��
��
�
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
��
�
��
�
��
�
�
��
�
��
�
��
�
��
��
�
��
�
��
��
��
��
��
��
��
��
��
��
��
��
��
�
��
�
�
��
��
��
��
��
��
��
��
��
��
��
�
��
��
��
��
��
��
��
��
��
$
4,990,458
7,821,011

��

31 -

【 Schedule 4 】

PRIMAX ELECTRONICS LTD.

Comparison of Amendments to the Procedures for Acquisition or Disposal of Assets

Amended Content	Current Content	Reason for Amendment and Explanation
II. Applicability of “Assets”: …… v. Derivatives: Refers to Forward contracts, options contracts, futures contracts, leverage contracts, swap contracts, and compound contracts combining the above products, whose valueis 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 variables; 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, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales)contracts . vi. Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with the law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or the transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter referred to as "transfer of shares") under Article 156-3 of the Company Act. vii. Right-of-use assets. viii. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). ix. Other majorassets.	II. Applicability of “Assets”: …… v. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, swap contracts, and compound contracts combining the above products, whose value is derived fromassets, interest rates, foreign exchange rates , indexes, or otherinterests. The term “forwards”as previously stated does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) agreements . vi. Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with the law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or the transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter referred to as "transfer of shares") under Article156, paragraph 8 of the Company Act. vii. Other major assets.	Per amended ROC regulations.
III. Evaluation Procedures: Upon the acquisition or disposal of negotiable securities or the trading of derivatives, the finance department shall first analyze the interests and evaluate possiblerisks; uponthe acquisitionor	III. Evaluation Procedures: Upon the acquisition or disposal of negotiable securities or the trading of derivatives, the finance department shall first analyze the interests and evaluate possiblerisks; uponthe acquisitionor	Per amended ROC regulations.

32 -

Amended Content

disposal of real property, equipment and right-of-use asset, capital expenditure plans shall be drafted by respective departments in advance, providing feasibility assessment on the purpose of the acquisition or the disposal and the expected effects; upon related party transactions, evaluation on the reasonableness of terms and conditions of the transaction shall be carried out in accordance with Segment 3 of Section 2 of this standard operation procedure; upon the trading of derivatives, the status on futures market transactions, interest rates and foreign exchange rates shall be taken into account for consideration; upon mergers, demergers, acquisition or transfer of shares, the nature of the business, net value per share, value of asset, techniques and profitability, capacity and future growth potential, etc. shall be taken into account for consideration.

IV. The establishment of the procedures shall be executed after the approval of the shareholders upon approval and submission by the board of directors. Regarding the amendment of procedures, after the procedures have been approved of by over half of all members of the Audit Committee, they shall be submitted to the board of directors and reported to the shareholders’ meeting for approval. If approval of more than half of all Audit Committee members as aforementioned is not obtained, the procedures may be implemented if they are approved of by more than two-thirds of all directors, and the resolution of the Audit Committee shall be recorded in the board of directors meeting minutes. The aforementioned Audit Committee members and board of directions apply to those in office. If any director objects to or expresses reservations about the operating procedures, the dissenting opinion should be taken into full consideration, and it shall be recorded in the minutes of the board of directors meeting.

VI. Evaluation Procedures on Acquisition or Disposal of Assets, Equipment or Right-of-Use Assets In acquiring or disposing of real property,

Reason for Amendment and Explanation

Current Content

disposal of real property and equipment, capital expenditure plans shall be drafted by respective departments in advance, providing feasibility assessment on the purpose of the acquisition or the disposal and the expected effects; upon related party transactions, evaluation on the reasonableness of terms and conditions of the transaction shall be carried out in accordance with Segment 3 of Section 2 of this standard operation procedure; upon the trading of derivatives, the status on futures market transactions, interest rates and foreign exchange rates shall be taken into account for consideration; upon mergers, demergers, acquisition or transfer of shares, the nature of the business, net value per share, value of asset, techniques and profitability, capacity and future growth potential, etc. shall be taken into account for consideration. IV. After the procedures have been approved through its of by over half of all members of the Audit regulations has Committee, they shall be submitted to the revised the board of directors and reported to the policy and this shareholders’ meeting for approval; the article per same applies when the procedures are amended ROC amended. If any director expresses dissent regulations. and it is contained in the minutes or a written statement, the company shall submit the director's dissenting opinion to the Audit Committee. They shall take into full consideration each independent director's opinions and if an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. If approval of more than half of all Audit Committee members as aforementioned is not obtained, the procedures may be implemented if they are approved of by more than two-thirds of all directors, and the resolution of the Audit Committee shall be recorded in the board of directors meeting minutes.

VI. Assets Evaluation Procedures Per amended In acquiring or disposing of real property ROC or equipment where the transaction regulations. amount reaches 20 percent of the

33 -

	Current Content	Reason for Amendment and Explanation
equipmentor right-of-use assets 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 adomestic government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business useor its right-of-use assets , shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: i. 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, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction. ……	company's paid-in capital or NT$300 million or more, the company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: i. 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, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction. ……
IIX. Where the company acquires or disposes of intangible assetsor its right-of-use assets, or memberships and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with adomestic government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the certified public accountant shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. ……	IIX. Where the company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the certified public accountant shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. ……	Per amended ROC regulations.
X. Aside from professional appraisal and opinions from certified public accountants and field experts, for the calculation of the price of the acquired or disposed asset and the basis for reference, the following procedures shall apply to the specific situations accordingly: …… iv. For acquired or disposed real property, equipmentor right-of-use assets ,the current value, assessed value, actual selling price or book value of neighboringrealproperty, and vendors’	X. Aside from professional appraisal and opinions from certified public accountants and field experts, for the calculation of the price of the acquired or disposed asset and the basis for reference, the following procedures shall apply to the specific situations accordingly: …… iv. For acquired or disposed real property and equipment, the current value, assessed value, actual selling price or book value of neighboring real property, and vendors’price quotes	Per amended ROC regulations.

34 -

Amended Content	Current Content	Reason for Amendment and Explanation
price quotes shall be taken into account for consideration. If real property is purchased from a related party, the calculation of the price should follow the regulations stated in segment 3 of section 2 of the standard operating procedures to assess the reasonableness of the transaction price. ……	shall be taken into account for consideration. If real property is purchased from a related party, the calculation of the price should follow the regulations stated in segment 3 of section 2 of the standard operating procedures to assess the reasonableness of the transaction price. ……
XII. Investment Amounts and Limits The company and subsidiaries may invest on assets for the uses of business operations and also real property, equipment, its right-of use assets and securities for uses other than business operations, the amounts and limits are as stated below: i.For non-business use operations, t he aggregated amount of initially invested real property, equipment, its right-of-use assets, and marketable securities of financial assets classified as fair value through profit and loss, shall not exceed 20 percent of the shareholders’ equity according to the most recent fiscal financial statement. Initially invested amount ofa single company on marketable securities categorized as a financial asset classified as fair value through profit and loss shall not exceed 5 percent of the shareholders’ equity aforementioned. Initially invested amount of the purchase of money market funds shall not exceed 50 percent of shareholders' equity as aforementioned. This policy also applies to the company’s subsidiaries. If a subsidiary's invested amount exceeds the limit, it can be excluded from this policy following the company's board of directors' approval and subsequent ratification of the approval. ii. The aggregated amount of initially invested securities by the company shall not exceed 150 percent of the shareholders’ equity according to the most recent fiscal financial statement certified by the public accountant. However, the initially invested amount of joint venture for a single companyon a financial asset not classified as fair value through profit and loss, islimited to 80	XII. Investment Amounts and Limits The company and subsidiaries may invest on assets for the uses of business operations and also real property and securities for uses other than business operations, the amounts and limits are as stated below. i. The aggregated amount of initially invested real property andshort-term securities for uses other than business operations shall not exceed 20 percent of the shareholders’ equity according to the most recent fiscal financial statement. Initially invested amount of short-term investments for a single company shall not exceed 5 percent of the shareholders’ equity aforementioned. Initially invested amount of the purchase of money market funds shall not exceed 50 percent of shareholders' equity as aforementioned. This policy also applies to the company’s subsidiaries. If a subsidiary's invested amount exceeds the limit, it can be excluded from this policy following the company's board of directors' approval and subsequent ratification of the approval. ii. The aggregated amount of initially invested securities by the company shall not exceed 150 percent of the shareholders’ equity according to the most recent fiscal financial statement certified by the public accountant. However, the initially invested amount oflong-term joint venture for a single company is limited to 80 percent of the shareholders’ equity aforementioned.	Per amended ROC regulations and in line with wording of IFRS 9.

35 -

Amended Content	Amended Content	Current Content	Reason for Amendment and Explanation
percent of the shareholders’ equity aforementioned. “Regulations Governing the Preparation of Financial Reports by Securities Issuers” shall apply to related parties and subsidiaries.
XIV.	Appraisal Procedures When the company intends to acquire or dispose of real propertyor its right-of-use assets from or to a related party, or when it intends to acquire or dispose of assets other than real propertyor its right-of-use assets 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 domestic 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 submitted to the Audit Committee with approval from over half of all committee members, followed by approval from the board of directors: …… iii. With respect to the acquisition of real propertyor right-of-use assets from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with articles XV and XVI. …… With respect to thetypes of transactions listed below, when to be conducted between a 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 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	XIV. Appraisal Procedures When the company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription or 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 submitted to the Audit Committee with approval from over half of all committee members, followed by approval from the board of directors: …… iii. 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 articles XV and XVI. …… With respect to theacquisition or disposal of business-use equipment between the company and related parties, the company's board of directors may 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. When a matter is submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors	Per amended ROC regulations with the addition of appraisal procedure details. Having taken into consideration company business development plans, procurement planning and equipment rentals needs, and the comparably low risks of the transfer or leasing of property or assets between the company and its 100 percent owned parent or subsidiaries, or between its subsidiaries.

36 -

	Amended Content	Current Content	Reason for Amendment and Explanation
	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 the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. Article I of this procedure shall be recognized by the Audit Committee, and it shall first be approved by more than half of all Audit Committee members and then submitted to the board of directors for a resolution. If approval by more than half of all Audit Committee members is not acquired, it shall be approved of by more than two-thirds of the board of directors, and the resolution of the Audit Committee shall be recorded in the board of directors meeting minutes.	shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.
XV.	Evaluation of the Reasonableness of the Transaction Costs: When the company acquires real property or right-of-use assets from a related party, it shall evaluate the reasonableness of the transaction costs by the following means along with the review and opinions of a certified public accountant, provided that the real propertyor right-of-use assets was not acquired via inheritance or as a gift, or that more than 5 years will have elapsed from the time the related party signed the contract to obtain the real propertyor right-of-use assets to the signing date for the current transaction, or the real property was 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,or 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	XV. Evaluation of the Reasonableness of the Transaction Costs: When the company acquires real property from a related party, it shall evaluate the reasonableness of the transaction costs by the following means along with the review and opinions of a certified public accountant, provided that the real property was not acquired via inheritance or as a gift, or that more than 5 years will have elapsed from the time the related party signed the contract to obtain the real property to the signing date for the current transaction, or the real property was 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, where article XIV shall apply. …… iii. Where land and structures thereupon are combined as a single property purchased in one transaction, the transactioncostsfortheland and the	Per amended ROC regulations.

37 -

	Amended Content	Current Content	Reason for Amendment and Explanation
	shares or authorized capital, where article XIV shall apply. …… iii. Where land and structures thereupon are combined as a single property purchasedor rented 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 two preceding paragraphs.	structures may be separately appraised in accordance with either of the means listed in the two preceding paragraphs.
XVI. When the results of the company's appraisal conducted in accordance with the preceding article are uniformly lower than the transaction price, the matter shall be handled in compliance with article XVII. 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 certified public accountant have been obtained, this restriction shall not apply: i. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: …… 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 marketpurchase or rental practices. ii. Where the company acquiring real propertyor renting real property right-of-use assets from a related party provides evidence that the terms of the transaction are similar to theterms of 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 inprinciplerefers to parcels		XVI. When the results of the company's appraisal conducted in accordance with the preceding article are uniformly lower than the transaction price, the matter shall be handled in compliance with article XVII. 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 certified public accountant have been obtained, this restriction shall not apply: i. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: …… 2.Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices. 3. 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 reasonable price discrepancies among floors in accordance with standard property leasing market practices. ii. Where the company acquiring real property from a related party provides	Per amended ROC regulations.

38 -

Reason for Amendment and Explanation

Amended Content

Current Content

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 oror right-of-use assets.-of-use assets.of-use assets.-use assets.use assets.

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 property in the planned transaction; neighboring or closely valued parcels within the preceding year refers to the of land in the preceding paragraph in year preceding the date of occurrence of principle refers to parcels on the same the acquisition of the real property oror or an adjacent block and within a right-of-use assets.-of-use assets.of-use assets.-use assets.use assets. 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 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. XVII. Where the company acquires real property XVII. Where the company acquires real Per amended or right-of-use assets from a related party property from a related party and the ROC and the results of appraisals conducted in results of appraisals conducted in regulations. accordance with article XV and XVI are accordance with article XV and XVI are uniformly lower than the transaction uniformly lower than the transaction price, the following steps shall be taken: price, the following steps shall be taken: i. A special reserve shall be set aside in i. A special reserve shall be set aside in accordance with article 41, paragraph 1 accordance with article 41, paragraph of the Securities and Exchange Act 1 of the Securities and Exchange Act against the difference between the real against the difference between the property or right-of-use assets real property transaction price and the transaction price and the appraised cost, appraised cost, and may not be and may not be distributed or used for distributed or used for capital increase capital increase or issuance of bonus or issuance of bonus shares. Where shares. Where the company uses the the company uses the equity method equity method to account for its to account for its investment in investment in another company that is a another company that is a public public company, then the special company, then the special reserve reserve called for under article 41, called for under article 41, paragraph paragraph 1 of the Securities and 1 of the Securities and Exchange Act Exchange Act shall be set aside pro rata shall be set aside pro rata in a in a proportion consistent with the share proportion consistent with the share of public company's equity stake in the of public company's equity stake in other company. The special reserve as the other company. The special stated in the preceding paragraph may reserve as stated in the preceding not be utilized until the company has paragraph may not be utilized until recognized a loss on decline in market the company has recognized a loss on value of the assets it purchased or rented decline in market value of the assets it

39 -

			Current Content	Reason for Amendment and Explanation
	at a premium, or they have been disposed of,or the leasing contract has been terminated, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent. ii. All members of the Audit Committee shall comply with Article 218 of the Company Act. iii .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. iv. When obtaining real property or right-of-use assets thereof from a related party, it shall also comply with subparagraph 1 and subparagraph 2 if there is other evidence indicating that the acquisition was not an arms length transaction.	ii.	purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent. ii. 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.

XIIX. Trading Principles and Strategies i. Types of derivatives: Forward contracts, options contracts, interest and exchange swaps, future contracts, leverage contracts and compound contracts combining the above products, or hybrid contracts or structured products containing embedded derivatives. Any other products must be approved of for trading by the board of directors. ……			XIIX. Trading Principles and Strategies i. Types of derivatives: Forward contracts, options contracts, interest and exchange swaps, future contracts, and compound contracts combining the above products. Any other products must be approved of for trading by the board of directors. ……	Per amended ROC regulations.
XX. Internal Audit System: The company's internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If any material violation is discovered, the senior management personnel appointed by the chairman and the board of directors shall be immediately reported to and the Audit Committee shallbenotifiedinwriting.			XX. Internal Audit System: The company's internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If any material violation is discovered, the senior management personnel appointed by the chairman and the board of directors shall be immediately reported to and the Audit Committee shallbenotifiedin	Per amended ROC regulations.

40 -

	Amended Content	Current Content	Reason for Amendment and Explanation
	Where independent directors have been appointed in accordance with the provisions of the Act, for matters for which notice shall be given to the Audit Committee under the preceding paragraph, written notice shall also be given to the independent directors.	writing.
XXIX. Announce and Report Procedures: i.Under any of the following circumstances, upon acquiring or disposing of assets the company shall publicly announce and report the relevant information on the governing body'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 propertyor right-of-use assets from or to a related party, or acquisition or disposal of assets other than real propertyor right-of-use assets 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 ofdomestic government bonds or bonds under repurchase and resale agreements, or subscription or repurchase of money market funds issued by domestic securities investment trust enterprises .….. 4. Where the type of asset acquired or disposed is equipment/machinery for business useor right-of-use assets ,the trading counterparty is not a related party, and the transaction amount is less than NT$500 million. 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 furthermore the		XXIX. Announce and Report Procedures: i. Under any of the following circumstances, upon acquiring or disposing of assets the company shall publicly announce and report the relevant information on the governing body'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 repurchase of money market funds issued by domestic securities investment trust enterprises. …… 4. Where the type of asset acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party, and the transaction amount is less than NT$500 million. 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 constructionand separate sale, and	Per amended ROC regulations.

41 -

	Amended Content	Current Content	Reason for Amendment and Explanation
transaction counterparty is not a related party, and the amount the company expects to invest in the transaction is less than NT$500 million. 6. Where an asset transaction other than any of those referred to in the preceding 5 subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China region reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading ofdomestic government bonds. (2) Trading of bonds under repurchase/resale agreements, or subscription or redemption of domestic money market funds. ii. 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 propertyor right-of-use asset acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year. ……		the amount the company expects to invest in the transaction is less than NT$500 million. 6. Where an asset transaction other than any of those referred to in the preceding 5 subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China region reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading of government bonds. (2) Trading of bonds under repurchase/resale agreements, or subscription or redemption of domestic money market funds. ii. 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) within the same development project within the preceding year. ……
XXXI. Control of Acquisition or Disposal of Assets by Subsidiaries …… iii. The company shall announce and report on behalf of any subsidiary thereof that is not a public company if its acquired or disposed assets reach the standards of announce and report as stated in article IXXX prior to the occurrence of the fact, and the company shall announce and report pursuant to regulations at the designated website. The paid-in capital ortotalassets ofthe subsidiary shallbe		XXXI. Control of Acquisition or Disposal of Assets by Subsidiaries …… iii. The company shall announce and report on behalf of any subsidiary thereof that is not a public company if its acquired or disposed assets reach the standards of announce and report as stated in article IXXX prior to the occurrence of the fact, and the company shall announce and report pursuant to regulations at the designated website.The paid-in	Per amended ROC regulations.

42 -

Amended Content		Current Content	Reason for Amendment and Explanation
the standard for determining whether or not the subsidiary is subject to regulations requiring a public announcement and regulatory filing in the event the type of transaction specified therein of the total assets.		capital or total assets of the subsidiary shall be the standard for determining whether or not the subsidiary is subject to regulations requiring a public announcement and regulatory filing in the event the type of transaction specified therein reaches 20 percent of paid-in capital or 10 percent ofthe totalassets.
XXXIII. Regarding appraisal reports obtained for the company or opinions from public lawyers, or accountants, or securities underwriters, said appraiser, lawyer, accountant, or securities underwrite must not be related to the parties involved in the transactionand shall comply with article V of the previsions of public enterprises acquiring or disposing of assets.	XXXIII. Regarding appraisal reports obtained for the company or opinions from public lawyers, or accountants, or securities underwriters, said appraiser, lawyer, accountant, or securities underwrite must not be related to the parties involved in the transaction .		Per amended ROC regulations.
XXXIV. This corporate document was created on 200811/7. …… Seventh-time amendments were made on 2019/06/18.	XXXIV. This corporate document was created on 200811/7. …… Sixth-time amendments were made on 2018/5/30.		The addition of the date of the most recent amendments.

43 -

【 Schedule 5 】

PRIMAX ELECTRONICS LTD.

Comparison of Amendments to the Procedures for Lending Funds to Other Parties

Amended Content	Current Content	Reason for Amendment and Explanation
Article 2: Under Article 15 of the Company Act, the company shall not loan funds to any of its shareholders or any other person except under the following circumstances: i. Where an inter-company or inter-firm business transaction calls for a loan agreement. ii. Where an inter-company or inter-firm short-term financing facility is necessary, provided that such financing amount shall not exceed 40 percent of the lender’s net worth. The term “short-term” as used in the preceding paragraph refers to one year, or where the company’s operating cycle exceeds one year, one operating cycle. The term “financing amount” as used in sub-paragraph 2 of the first paragraph refers to the cumulative balance of the company’s short-term financing. The restriction in the sub-paragraph of the first paragraph shall not apply to inter-company loans of funds between foreign companies in which the company directly or indirectly holds 100 percent of the voting shares, or from foreign companies that directly or indirectly hold 100 percent of the voting shares on the company .However, article 4 and 6 of the operational procedures concerning the setting of the amount limits and the durations of loans shall still apply. If the owner of the company violates the regulation stated in article 1, he or she shall be held liable along with the party making the loan; if the company is subject to any damages, said owner shall also be held liable for the damages.	Article 2: Under Article 15 of the Company Act, the company shall not loan funds to any of its shareholders or any other person except under the following circumstances: i. Where an inter-company or inter-firm business transaction calls for a loan agreement. ii. Where an inter-company or inter-firm short-term financing facility is necessary, provided that such financing amount shall not exceed 40 percent of the lender’s net worth. The term “short-term” as used in the preceding paragraph refers to one year, or where the company’s operating cycle exceeds one year, one operating cycle. The term “financing amount” as used in sub-paragraph 2 of the first paragraph refers to the cumulative balance of the company’s short-term financing. The restriction in the sub-paragraph of the first paragraph shall not apply to inter-company loans of funds between foreign companies in which the company directly or indirectly holds 100 percent of the voting shares. However, article 4 and 6 of the operational procedures concerning the setting of the amount limits and the durations of loans shall still apply.	Per amended ROC regulations.
Article 4: Ceilings on the Aggregated Amount Made in Loaned Funds and for Individual Loans The amount of loaned funds the company is permitted to make for others must not exceed 40 percent of the net worth of the company according to its fiscal financial statement most recentlyratified or reviewed by the accountant.	Article 4: Ceilings on the Aggregated Amount Made in Loaned Funds and for Individual Loans The amount of loaned funds the company is permitted to make for others must not exceed 40 percent of the net worth of the company according to its fiscal financial statement most recentlyratified or reviewed by the accountant.	1. Addition of amount ceilings per amended ROC regulations. 2. As stated in ROC

44 -

Amended Content	Current Content	Reason for Amendment and Explanation
The ceilings on the amounts made for each borrower and the uses for the loaned fund are as stated below: i. The amount of loans for any single entity due to business needs shall not exceed the company’s purchase amount or sales amount, whichever the higher the amount, of the most recent year’s or the present fiscal year’s until the time of the loan taking place. ii. The amount of individual short term financial loans must not exceed 20 percent of the net worth of the public company according to its fiscal financial statement most recently ratified or reviewed by the accountant. The aggregated amount of loaned funds for others between foreign companies in which the company directly and indirectly holds 100 percent of the voting shares shall not exceed 60 percent of the net worth of the company according to its most recent fiscal financial statement. Regarding loans from a foreign company that directly or indirectly hold 100 percent of the voting shares on the company, the amount of the loan must not exceed 100 percent of the company’s net worth as stated in the most recent fiscal financial statement.	The ceilings on the amounts made for each borrower and the uses for the loaned fund are as stated below: i. The amount of loans for any single entity due to business needs shall not exceed the company’s purchase amount or sales amount, whichever the higher the amount, of the most recent year’s or the present fiscal year’s until the time of the loan taking place. ii. The amount of individual short term financial loans must not exceed 20 percent of the net worth of the public company according to its fiscal financial statement most recently ratified or reviewed by the accountant. The aggregated amount of loaned funds for others between foreign companies in which the company directly and indirectly holds 100 percent of the voting shares shall not exceed 60 percent of the net worth of the company according to its most recent fiscal financial statement.	regulations, the lending of funds from foreign subsidiaries that directly or indirectly hold 100 percent of the voting shares on the company is similar to the lending of funds between company departments, with comparably low risks involved, thus the revision of the limit of the loan to 100 percent of net worth per the company’s most recent fiscal financial statement.
Article 5: Procedures for the Loaning of Funds i. Detailed Procedures 1. When processing the loaning of funds or short-term financial items, the company shall carefully evaluate if requirements are met under the governing body’s “Regulations governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” and regulations on the loaning of funds for others set by the company. The accounting department shall review the application and report to the Audit Committee for approval from over half of its members, and then submitted to the board of directors for board resolution. If approval from over	Article 5: Procedures for the Loaning of Funds i. Detailed Procedures 1. When processing the loaning of funds or short-term financial items, the company shall carefully evaluate if requirements are met under the governing body’s “Regulations governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” and regulations on the loaning of funds for others set by the company. The accounting department shall review the application and report to the board of directors for board resolution. 2. The loaning of funds between the company and subsidiaries or within the subsidiaries shall be made after board	Per regulations stated in article VI of the Audit Committee Charter, the lending of funds of significant amounts and its related matters is listed as one of the dutiful functions and powers of the Audit Committee, thus the

45 -

		Current Content	Reason for Amendment and Explanation
half of the Audit Committee members as aforementioned is not acquired, the procedures may only be implemented if they are approved of by more than two-thirds of all directors, and the resolution of the Audit Committee shall be recorded in the board of directors meeting minutes. The aforementioned Audit Committee members and board of directions apply to those in office. If any director objects to or expresses reservations about the loan and its related matters, the dissenting opinion should be taken into full consideration, and it shall be recorded in the minutes of the board of directors meeting. 2. The loaning of funds between the company and subsidiaries or within the subsidiaries shall be made after board resolution according to the rules stated in the preceding paragraph. The board of directors may authorize the chairman to allocate loans in batches or conduct revolving credit for a single borrower with a fixed amount and within one year’s timeframe. The fixed amount previously stated must comply with Article 2 and with the approval from the Audit Committee and the board of directors. The amount of the loaned fund from the company or subsidiaries to any single entity shall not exceed 10 percent of the company’s net worth as stated in the most recent fiscal financial statement. 3. The finance department shall prepare a memorandum book for its fund-loaning activities. After being granted approval of the memorandum book by its board of directors, the following information must be truthfully recorded: borrower, amount, date of approval by the board of directors, lending/borrowing date, and matters to be carefully evaluated according to the company’s operational procedures. 4. The company’s internal auditors shall audit all fund loaning operations and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify the Audit Committee in writing of any materialviolation found.	3.	resolution according to the rules stated in the preceding paragraph. The board of directors may authorize the chairman to allocate loans in batches or conduct revolving credit for a single borrower with a fixed amount and within one year’s timeframe. The fixed amount previously stated must comply with Article 2 and with the approval from the board of directors. The amount of the loaned fund from the company or subsidiaries to any single entity shall not exceed 10 percent of the company’s net worth as stated in the most recent fiscal financial statement. Where the company has established the position of independent director, it shall take into full consideration the opinions of each independent director; independent directors’opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors’meeting. The finance department shall prepare a memorandum book for its fund-loaning activities. After being granted approval of the memorandum book by its board of directors, the following information must be truthfully recorded: borrower, amount, date of approval by the board of directors, lending/borrowing date, and matters to be carefully evaluated according to the company’s operational procedures. The company’s internal auditors shall audit all fund loaning operations and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify the Audit Committee in writing of any material violation found. The finance department shall create, track and control a detailed list for the company’s occurred or cancelled loaned funds by the month, and apply for announcing and reporting. The accounting department shall evaluate and record any uncollectable bad debts no less frequently than quarterly, adequately disclose information on loaned funds in the financial reports, and provide certified public accountants with relevant information.	revision in the procedures and the revision on paragraph numbering in article 5.
	4.
	5.
	6.

46 -

Amended Content	Current Content	Reason for Amendment and Explanation
5. The finance department shall create, track and control a detailed list for the company’s occurred or cancelled loaned funds by the month, and apply for announcing and reporting. The accounting department shall evaluate and record any uncollectable bad debts no less frequently than quarterly, adequately disclose information on loaned funds in the financial reports, and provide certified public accountants with relevant information. 6. If, as a result of a change in circumstances, an entity for which a loan is made does not meet the requirements of regulations or the loan balance exceeds the limit, the company’s finance department shall adopt rectification plans, submit the rectification plans to the Audit Committee, and complete the rectification according to the timeframe set out in the plan. ii. Review Procedures 1. When processing the loaning of funds for others from the company, the company or proprietorship that is the borrower of the fund shall submit relevant financial information and statement of the uses of the loaned fund in advance in written form. 2. When the company approves of the application, the claims department shall investigate and evaluate the necessity of and reasonableness of extending loans to others, the direct or indirect business relationship between the company and the borrower, the financial condition of the borrower, repayment capacity, credit status, profitability, the uses of the loaned fund, the impact of the loaned fund and the sum towards the company’s operational risks, financial condition, and shareholders’ equity, and submit a written report tothe Audit Committee and the board of directors for evaluation and resolution. 3. When processing the loaning of funds or short-term financial items, a bill of guarantee of the equivalent amount shall be obtained and chattel mortgage or real estate mortgage shall be set up if necessary.The company shallalso	7. If, as a result of a change in circumstances, an entity for which a loan is made does not meet the requirements of regulations or the loan balance exceeds the limit, the company’s finance department shall adopt rectification plans, submit the rectification plans to the Audit Committee, and complete the rectification according to the timeframe set out in the plan. ii. Review Procedures 1. When processing the loaning of funds for others from the company, the company or proprietorship that is the borrower of the fund shall submit relevant financial information and statement of the uses of the loaned fund in advance in written form. 2. When the company approves of the application, the claims department shall investigate and evaluate the necessity of and reasonableness of extending loans to others, the direct or indirect business relationship between the company and the borrower, the financial condition of the borrower, repayment capacity, credit status, profitability, the uses of the loaned fund, the impact of the loaned fund and the sum towards the company’s operational risks, financial condition, and shareholders’ equity, and submit a written report to the board of directors for evaluation and board resolution. 3. When processing the loaning of funds or short-term financial items, a bill of guarantee of the equivalent amount shall be obtained and chattel mortgage or real estate mortgage shall be set up if necessary. The company shall also evaluate the value of the security no less frequently than quarterly to ensure it is equivalent to the loaned fund and balance, possibly requesting for additional security from the entity when it is deemed necessary.

47 -

Amended Content	Current Content	Reason for Amendment and Explanation
evaluate the value of the security no less frequently than quarterly to ensure it is equivalent to the loaned fund and balance, possibly requesting for additional security from the entity when it is deemed necessary.
Article 6: Financing Deadline and Interest Calculation All funds financed from the company for others are limited to one year. The interests of loans and funds shall not be lower than the company’s average interest rates for short-term loans for financial institutions. The rates shall be calculated monthly. Adjustments may be made towards exceptions with approval from the board of directors. Financing deadlines between foreign companies in which the company directly and indirectly holds 100 percent of the voting shares shall not exceed two years.Financing deadlines from foreign companies in which the company directly or indirectly holds 100 percent of the voting shares on the company shall not exceed two years.	Article 6: Financing Deadline and Interest Calculation All funds financed from the company for others are limited to one year. The interests of loans and funds shall not be lower than the company’s average interest rates for short-term loans for financial institutions. The rates shall be calculated monthly. Adjustments may be made towards exceptions with approval from the board of directors. Financing deadlines between foreign companies in which the company directly and indirectly holds 100 percent of the voting shares shall not exceed two years.	1. Revision of deadlines of loaned funds per amended ROC regulations. 2. Deadline set as two years considering the comparably low risk involved for loans from foreign subsidiaries in which the company holds 100 percent of the voting shares.
Article 8: Announce and Report Procedures These regulations shall be enforced from the date of promulgation. i. The finance department shall announce and report the previous month’s loan balances of its head office and subsidiaries by the tenth day of each month in accordance with the regulated timeframe. ii. The finance department of the company whose loans of funds reach one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence and it shall also announce and report loans and balances every month: 1. The aggregate balance of loans for others by the company and subsidiaries reaches 20 percent or more of the company’s net worth as stated in its latest fiscal financial statement. 2. The aggregated balance of loans by the company and subsidiaries to a single enterprisereaches10 percent or more of	Article 8: Announce and Report Procedures These regulations shall be enforced from the date of promulgation. i. The finance department shall announce and report the previous month’s loan balances of its head office and subsidiaries by the tenth day of each month in accordance with the regulated timeframe. ii. The finance department of the company whose loans of funds reach one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence and it shall also announce and report loans and balances every month: 1. The aggregate balance of loans for others by the company and subsidiaries reaches 20 percent or more of the company’s net worth as stated in its latest fiscal financial statement. 2. The aggregated balance of loans by the company and subsidiaries to a single enterprisereaches10 percent or more of	Per amended ROC regulations.

48 -

	Amended Content	Current Content	Reason for Amendment and Explanation
iii.	the company’s net worth as stated in its latest fiscal financial statement. 3. The amount of new loans made 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 fiscal financial statement. The company shall announce and report on behalf of any subsidiary thereof that is not a public company if there are items to announce and report as stated in the third sub-paragraph of the previous paragraph. If its balance of loans reaches the standards of announce and report as stated in Article 8-2, the company shall, prior to the occurrence of the fact, announce and report pursuant to regulations at the designated website. The term “occurrence of the fact” as used in the operational procedures refers to the contract dayupon signing of contract ,or the payment date, or the date designated by the board of directors, or the date of confirmed loan, counterpartyand amount, whichever the earlier date prevails.	the company’s net worth as stated in its latest fiscal financial statement. 3. The amount of new loans made 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 fiscal financial statement. iii. The company shall announce and report on behalf of any subsidiary thereof that is not a public company if there are items to announce and report as stated in the third sub-paragraph of the previous paragraph. If its balance of loans reaches the standards of announce and report as stated in Article 8-2, the company shall, prior to the occurrence of the fact, announce and report pursuant to regulations at the designated website. The term “occurrence of the fact” as used in the operational procedures refers to the contract dayfor the transaction ,or the payment date, or the date designated by the board of directors, or the date of confirmed counterparty ortransaction amount, whichever the earlier date prevails.
Article 9: Control Procedures for the Loaning of Funds of the Subsidiary i. If the subsidiary of the company is to loan funds to others, operational procedures must be in place and in accordance with “Procedures for Lending Funds to Other Parties”. This also applies to amendments of said operational procedures. ……		Article 9: Control Procedures for the Loaning of Funds of the Subsidiary i. If the subsidiary of the company is to loan funds to others, operational procedures must be in place and in accordance with “Procedures for Lending Funds to Other Parties”, with approval from the board of directors and shareholders, and submitted to the Audit Committee .This also applies to amendments of said operational procedures. ……	Details on the procedures of the lending of funds to others and the amendments of the procedures for company subsidiaries can be found in their respective regulations.
Article 11: The Procedures for Lending Funds to Other Partiesshall be approved by the board of directors and reported to the shareholders’ meeting for approval prior to implementation. The amendment of the procedures shall be approved of by over half of the members of the Audit Committee, submitted to the board of directors for resolution, and then reported to the board of shareholders for final ratification prior to implementation. If approval from over half of the members of the Audit Committee is not obtained, it shall be approved of by over		Article 11: The Procedures for Lending Funds to Other Parties are approved by the board of directors, having been submitted to the Audit Committee, and reported to the shareholders’ meeting for approval prior to implementation.If any director expresses objection and is recorded or stated in written form, the company shall pass on the objection to the Audit Committee and report this to the shareholders’meeting for discussion. This also applies to the amendments of said operational procedures. (Note: When the company has established the position of	Per amended ROC regulations.

49 -

Amended Content		Current Content	Reason for Amendment and Explanation
two-thirds of the board of directors, and the resolution of the Audit Committee shall be recorded in the minutes of the board of directors’ meeting. The aforementioned Audit Committee members and board of directions apply to those in office. If any director objects to or expresses reservations about the amendment of said operational procedures, the dissenting opinion should be taken into full consideration, and it shall be recorded in the minutes of the board of directors meeting.		independent director, it shall take into full consideration the opinions of each independent director; independent directors’opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors’meeting.)
Article 12: This corporate document was created on 2008/11/7. …… Fifth-time amendments were made on 2019/6/18.		Article 12: This corporate document was created on 2008/11/7. …… Fourth-time amendments were made on 2015/6/29.	Most recent amendment date added to content.

50 -

【 Schedule 6 】

PRIMAX ELECTRONICS LTD.

Comparison of Amendments to the

Procedures for Endorsements & Guarantees

	Amended Content	Current Content	Reason for Amendment and Explanation
	V. Procedures for Making Endorsements / Guarantees …….. i. During the process of endorsements/guarantees applications, the finance department shall carefully evaluate the company’s qualifications and amounts to ensure that it fully complies with the company’s operational procedures and that all is in accordance with the announcing and reporting procedures. The company may loan funds to others only after the evaluation results have been submitted to the chairmanfor approval, followed by obtaining the approval of over half of the member of the Audit Committee, and then submitted and resolved upon by the board of directors. If approval from over half of the members of the Audit Committee is not obtained, it shall be approved of by over two-thirds of the board of directors, and the resolution of the Audit Committee shall be recorded in the minutes of the board of directors meeting. The aforementioned Audit Committee members and board of directions apply to those in office. If any director objects to or expresses reservations about the endorsements/guarantees and related matters, the dissenting opinion should be taken into full consideration, and it shall be recorded in the minutes of the board of directors meeting. If the amount of the fund is in accordance with regulated amounts, the chairman shall proceed with authorization according to the other company’s credit status and financial condition, followed by subsequent ratification by the board of directors. ii. Before making any endorsements/guarantees, a subsidiary in which the company directly or indirectly holds 90 percent or more of the voting shares shall submit the proposed endorsement/guarantee tothe Audit Committee and the company’s board of directors for a resolution, provided that this restrictionshall not apply to endorsements/	V. Procedures for Making Endorsements / Guarantees …… i. During the process of endorsements/guarantees applications, the finance department shall carefully evaluate the company’s qualifications and amounts to ensure that it fully complies with the company’s operational procedures and that all is in accordance with the announcing and reporting procedures. The company may loan funds to others only after the evaluation results have been submitted to the chairmanand are resolved upon by the board of directors. If the amount of the fund is in accordance with regulated amounts, the chairman shall proceed with authorization according to the other company’s credit status and financial condition, followed by subsequent ratification by the board of directors. ii. Before making any endorsements/guarantees, a subsidiary in which the company directly or indirectly holds 90 percent or more of the voting shares shall submit the proposed endorsement/guarantee to the company’s board of directors for a resolution, provided that this restriction shall not apply to endorsements/guarantees made between companies in which the company directly or indirectly holds 100 percent of the voting shares. ……	Per regulations stated in article VI of the Audit Committee Charter, major endorsements and guarantees are listed as one of the dutiful functions and powers of the Audit Committee, thus the revision in the procedures.

51 -

Amended Content	Current Content	Reason for Amendment and Explanation
guarantees made between companies in which the company directly or indirectly holds 100 percent of the voting shares. …….
VII. Control Procedures for Endorsements/Guarantees of the Subsidiary i. If the subsidiary of the company is to make endorsements/guarantees to others, operational procedures must be in place and in accordance with said “Procedures for Endorsements & Guarantees”. This also applies to amendments of said operational procedures. ……	VII. Control Procedures for Endorsements/Guarantees of the Subsidiary i. If the subsidiary of the company is to make endorsements/guarantees to others, operational procedures must be in place and in accordance with saidoperational procedures, with approval from the board of directors and shareholders, submitted to the audit committee. This also applies to amendments of said operational procedures . ……	Details on the procedures of endorsements and guarantees and the amendments of the procedures for company subsidiaries can be found in their respective regulations.
VIII. Hierarchy of Decision-Making Authority and Delegation i. Upon an endorsement/guarantee being made by the company, authorization shall be made in accordance with V. Procedures for making endorsements/ guarantees of operating procedures. To be in accordance with the limitation period, as stated in IV. If the aggregate amount of endorsement/guarantees that is set as the ceiling for the company and its subsidiaries as a whole shall not exceed 50 percent or more of the endorsement/guarantee limit and also the limit set out towards any single entity, the board of directors shall authorize the chairman to grant approval followed by subsequent ratification by the board of directors. ……	VIII. Hierarchy of Decision-Making Authority and Delegation i. Upon an endorsement/guarantee being made by the company, authorization shall be made in accordance with V. Procedures for making endorsements/ guarantees of operating proceduresand with the approval of the board of directors .To be in accordance with the limitation period, as stated in IV. If the aggregate amount of endorsement/guarantees that is set as the ceiling for the company and its subsidiaries as a whole shall not exceed 50 percent or more of the endorsement/guarantee limit and also the limit set out towards any single entity, the board of directors shall authorize the chairman to grant approval followed by subsequent ratification by the board of directors.Where the company has established the position of independent director, it shall take into full consideration the opinions of each independent director; independent directors’opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors’ meeting. ...…	Removed from this article as the content can be found in article V above.

52 -

Amended Content	Current Content	Reason for Amendment and Explanation
X. Announce and Report Procedures These regulations shall be enforced from the date of promulgation. i. The finance department shall announce and report the previous month’s loan balances of its head office and subsidiaries by the tenth day of each month in accordance with the regulated timeframe. ii. The finance department of the company whose loans of funds reach one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence: 1. The aggregate balance of endorsements/guarantees to others by the company and subsidiaries reaches 50 percent or more of the company’s net worth as stated in its latest fiscal financial statement. 2. The aggregate balance of endorsements/guarantees by the company and subsidiaries to a single enterprise reaches 20 percent or more of the company’s net worth as stated in its latest fiscal financial statement. 3. The aggregate balance of endorsements/guarantees by the company and subsidiaries to a single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees for,invested book amount per the equity method in, and balance of loans to, such enterprise reaches 30 percent or more of the company’s net worth as stated in its latest fiscal financial statement. 4. The amount of new endorsements/guarantees made by the company or 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. iii. The company shall announce and report on behalf of any subsidiary thereof that is not a public company if its balance of endorsements/guarantees reaches the standards of announce and report as stated in the operational procedures prior to the occurrence of the fact, and the company shallannounce andreport	X. Announce and Report Procedures These regulations shall be enforced from the date of promulgation. i. The finance department shall announce and report the previous month’s loan balances of its head office and subsidiaries by the tenth day of each month in accordance with the regulated timeframe. ii. The finance department of the company whose loans of funds reach one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence: 1. The aggregate balance of endorsements/guarantees to others by the company and subsidiaries reaches 50 percent or more of the company’s net worth as stated in its latest fiscal financial statement. 2. The aggregate balance of endorsements/guarantees by the company and subsidiaries to a single enterprise reaches 20 percent or more of the company’s net worth as stated in its latest fiscal financial statement. 3. The aggregate balance of endorsements/guarantees by the company and subsidiaries to a single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees for, investment of a long-term nature in, and balance of loans to, such enterprise reaches 30 percent or more of the company’s net worth as stated in its latest fiscal financial statement. 4. The amount of new endorsements/guarantees made by the company or 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. iii. The company shall announce and report on behalf of any subsidiary thereof that is not a public company if its balance of endorsements/guarantees reaches the standards of announce and report as stated in the operational procedures prior to the occurrence of the fact, and the company shallannounce andreport	Per amended ROC regulations.

53 -

		Amended Content		Current Content	Reason for Amendment and Explanation
		pursuant to regulations at the designated website. The term “occurrence of the fact” as used in the operational procedures refers to the contract dayupon date of signature, or the payment date, or the date designated by the board of directors, or the date of confirmed counterparty or amountof the endorsement/guarantee ,whichever the earlier date prevails.		pursuant to regulations at the designated website. The term “occurrence of the fact” as used in the operational procedures refers to the contract dayfor the transaction ,or the payment date, or the date designated by the board of directors, or the date of confirmed counterparty ortransaction amount, whichever the earlier date prevails.
XII.	Supplemental Items The Procedures for Endorsements & Guarantees areresolved by the board of directors and submitted for approved of by the shareholders. The modifications of the operational procedures shall be approved of by over half of the members of the Audit Committee, submitted to the board of directors for resolution and reported to the shareholders’for subsequent approval prior to implementation. If approval from over half of the members of the Audit Committee as aforementioned is not obtained, it shall be approved of by over two-thirds of the board of directions, and the resolution of the Audit Committee shall be recorded in the minutes of the board of directors meeting. The aforementioned Audit Committee members and board of directions apply to those in office. If any director objects to or expresses reservations towards the amendment of said operational procedures, the dissenting opinion should be taken into full consideration, and it shall be recorded in the minutes of the board of directors meeting.		XII.	Supplemental Items The Procedures for Endorsements & Guarantees areapproved by the board of directors, having been submitted to the Audit Committee and reported to the hareholders’meeting for approval prior to implementation. If any director expresses objection and is recorded or stated in written form, the company shall pass on the objection to the Audit Committee and report this to the shareholders’meeting for discussion. This also applies to the modifications of the operational procedures. When the company has established the position of independent director, it shall take into full consideration the opinions of each independent director; independent directors’opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors’meeting.	Per amended ROC regulations.
XIII. This corporate document was created on 2008/11/7. …… Sixth-time amendments were made on 2019/06/18.			XIII. This corporate document was created on 2008/11/7. …… Fifth-timeAmendment weremade on 2015/6/29.		Adding update to amendment date.

54 -

Shares	0	Professional knowledge and skills	Law
			Accounting and Financial	V
Current Position	Zenith Consulting Company limited / Mnaging Partner and Director CITIC Capital Investment Holdings Limited / Bsiness partner ALT International Co., Ltd. / Independent Director
			Information Technology
			Risk Management	V
			Operating and Management	V
Experience	Ping An Insurance(Group)Company of China, Ltd. / Tutor Egon Zehnder International / Global Senior Partner& Consumer Electronics BU,GM PRIMAX Electronics Ltd. / Corporate development Director (Term of employment: from Mar. 4, 2002 to Oct. 22, 2004) McKinsey& Company(HK/Shanghai) / Consultant P&G, TAIWAN / Project Manager		Leadship and Policy decision	V
		Professional Experience	Management	V
			Financial
			Marketing	V
			Research and Development
			Industry	V
		Basic composition	Term of Independent director	Less than 3 years
Education	Master of management, Northwestern University, JL Kellogg School
			Age	45~50
			Nationality	Republic of China
Name of Candidates	Jia-Chyi Wang
			Gender	Female
			Name	Jia-Chyi Wang
Title	Independent Director
			Title	Independent Director

55 -

【 Schedule 8 】

Proposal of removal of the non-competition restrictions on Directors

Title	Name	Current Position in the other companies
Director	Li-Sheng Liang	ALT International Co., Ltd. Director
Director	Yung-Tai Pan	Tymphany Acoustic Technology (Huizhou) Co., Ltd. Director ALT International Co., Ltd. Director
Director	Yung-Chung Pan	ALT International Co., Ltd. Director
Independent Director	Jia-Chyi Wang	ALT International Co., Ltd. Independent Director

56 -

AI assistant

Primax — AGM Information 2019

52436_rns_2019-07-04_3ef69dd1-463d-41da-897e-bd47aed8b65c.pdf

PRIMAX ELECTRONICS LTD. Minutes of 2019Annual General Shareholders' Meeting (Translation)

C. Report:

Description:

D. Adoption

Description:

2. (Proposed by the Board)

Description:

E. Discussion

Description:

3.

(4)Vesting conditions ：

5.

(8) Others

F. Election

1.

(Proposed by the Board)

Description:

F. Other Matters:

1.

Description:

G. Extempore Motion: None.

H. The meeting was adjourned at 10:25 a.m.

Business Report

I. 2018 Financial Performance

(I) Financial Results

(II) Cash Flow Analysis

(III) Profitability Analysis

(IV) R&D Investments

II. Business Strategy and Technology Developments

Audit Committee’s Review Report

Independent Auditors’ Report

Opinion

Basis for Opinion

Other Matter

Key Audit Matters

���������������������������

��������������������������������

������������������������������������������

��������������������������������

������������������������������������������

�����������������������������������������������

��������������������������������

������������������������������������������

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

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Notes to Readers

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) PRIMAX ELECTRONICS LTD.

Statements of Comprehensive Income

For the years ended December 31, 2018 and 2017

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

PRIMAX ELECTRONICS LTD.

Statements of Cash Flows

For the years ended December 31, 2018 and 2017

Independent Auditors’ Report

�����������������������������������������������������

Opinion

Basis for Opinion

Other Matter

Key Audit Matters

���������������������������

��������������������������������

������������������������������������������

������������������������������������������

��������������������������������������������

��������������������������������

������������������������������������������

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

����

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2018 and 2017

Primax AGM Information 2019

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��