RH — AGM Information 2018

Jul 12, 2018

REGAL HOLDING CO.,LTD

2018 Annual General Shareholders’ Meeting Minutes

Time: Monday, May 28th, 2018 at 9:00 a.m.

Place: (Building Everlight) 3F., No.197, Sec. 3, Zhongxiao E. Rd., Da’an Dist., Taipei City 106, Taiwan R.O.C.

Total outstanding shares of the Company : 38,160,000 shares

Total shares represented by shareholders and Proxy Present: 30,756,675 shares (561,473shares exercised via electronic transmission) accounted for 80.59% of total shares issued. Attending Directors：Chairman: PHACHARAPON PHAIBOONSUNTORN Director: LAI, JIN-HE (Ausrine Marketing Corp.) Director: LIN, CIOU-YI (Orlog Global Co.,Ltd.) Independent Director: LEE, TSUNG-PEI Independent Director: YEH, KUANG -CHOU Independent Director: GUAN, JYH-LIANG

Sit-in Members ：LU, LI - LY (CPA of KPMG)

LIAO, SHIH-PING (Senior Vice President of SinoPac Securities CHEN, JIN-SYUAN (Attorney of J.S. International Attorneys At Law) K.Sarah (General Manager) K. Iris (Vice President Sale & Marketing) JHANG, YONG-LIANG (Chief Finance Officer) LI, WUN-SYONG (General Manager of TAIWAN BRANCH) Chairperson：PHACHARAPON PHAIBOONSUNTORN Minutes taker：HSU, CHING FANG

1. Call the Meeting to order: As a quorum was present, the Chairperson called the meeting to order.

2. Chairperson Remarks(Omitted)

3. Company Reports

Report (1): 2017 Business Report

Explanation:

1. Please refer to attachment 1 (Page 6-7) for the Company’s 2017 Business Report

2. Please review.

Report (2): Audit Committee’s Review Report

Explanation:

1. Please refer to attachment 2 (Page 8) for the Audit Committee’s Review Report.

2. Please review.

Report (3): To report 2017 Employees Compensation payment and Directors remuneration Explanation:

1. Subject to the Article 14.4 of the Company’s Articles of Incorporation, if the Company has earnings for the year, the Company shall distribute not less

than one percent (1%) of the profit before tax as the employees’ compensation and not higher than three percent (3%) of the profit before tax as the directors’ remuneration.

1. Company’s earnings of 2017 before tax (without deducting the employees’ compensation and the directors’ remuneration) will be distributed at one percent (1%) which is NTD 1,466,909 as employees’ compensation and zero percent (0%) which is NTD 0 as the directors’ remuneration. The compensation will be distributed by cash.

2. Please review.

Report (4): Report for Amendment of the “Board of Directors' Meeting Proceedings” Explanation:

1. It is compliant with the Orders of Taiwan Financial Supervisory Commission Jin-Guan-Zheng No. 10600271125 issued on July 28[th] , 2017. The Company has amended the Company’s “Board of Directors' Meeting Proceedings”. Please refer to the attachment 3 (Page 9-12) for the comparison table.

2. Please review.

Proposals

• 【Proposed by the Board of Directors】

Proposal (1) : Adoption of the 2017 Business Report and Financial Report

Explanation:

1. The Company’s 2017 consolidated financial report was audited by certified public accountant (“CPA”) Mrs. LU, LI - LY and Mrs. KJANG, CHUN-HSIN of KPMG.

2. Please refer to the attachment 1 (Page 6-7) and attachment 4 (Page 13-20) for the business report, CPA audit report and the financial report.

3. Please proceed to ratification.

Voting Results: Shares represented at the time of voting: 30,756,675 shares

Voting Results	Proportion of shareholder voting rights presented duringvote
Votes in favor 28,808,263 shares (electronic votingincluded 529,063 shares)	93.66%
Votes against 2,522 shares (electronic votingincluded 2,522 shares)	0.01%
Abstention votes/No votes 1,945,890 shares (electronic votingincluded 29,888 shares)	6.33%

Resolved, that the above proposal be and hereby was approved as proposed.

• 【Proposed by the Board of Directors】

Proposal (2): Proposal of 2017 profit distribution of the Company

Explanation:

• 1.Subject to the Company Act and the Articles of Incorporation of the Company, the Company plans to distribute the 2017 profits as the following table:

Unit: NTD $

	Unit: NTD $
Items	Amount
Beginning retained earnings plus：special surplus reserve set aside from “reversed equity deduction” (Note1) Beginning retained earnings after adjustment deduction：Actuarial loss on defined benefit plans of 2017 plus：Net profit after tax of 2017 deduction：set aside10% aslegal reserve	21,309,076 12,411,835 33,720,911 (5,586,355) 127,006,854 (12,700,685)
Earnings distributable for 2017 deduction：Dividend to shareholders-cash (about NT $ 3 pershare) (Note2)	142,440,725 114,480,000
Retained earnings at the end	27,960,725
Note 1: The special surplus reserve setting aside subject to the regulations of Taiwan competent authority for securities is due to deduction from shareholder equity (the exchange difference calculated by foreign operation institution) happening on December 31th, 2016. As of December 31th, 2017, the amount of deduction from shareholder equity is NT$ 28,480,721, thus it is needed to set aside special surplus reserve NT$12,411,835 from reversed equity deduction. Note 2: The abovementioned cash dividend per cash is calculated on the basis of the Company’s total outstanding shares 38,160,000 as of February 9th, 2018 (The notification date for the Company to send out the invitation for the ninth time of the third board of director’s meeting ).

Chairman General Manager Accounting Manager

1. After the earning distribution proposal approved by 2018 annual shareholder’s meeting, it is proposed to authorize the chairman of directors to decide the reference date for interest distribution and earnings distribution as well as other related matters. It’s also proposed to authorize the chairman of directors to take care of all the related matters if the Company has some changes in the capital stock which may directly change the numbers of the total outstanding shares thus influence the shareholders’ ratio of distribution per share.

2. Fractional shares with a value less than NT$ 1 during this time’s cash dividend distribution will be accumulated and reported as the Company’s other income.

3. Please proceed to the ratification.

Voting Results: Shares represented at the time of voting: 30,756,675 shares

Voting Results	Proportion of shareholder voting rights presented duringvote
Votes in favor 28,805,262shares (electronic votingincluded 526,062 shares)	93.65%

Votes against 5,522 shares 0.02% (electronic voting included 5,522 shares) Abstention votes/No votes 1,945,891 shares 6.33% (electronic voting included 29,889 shares)

Resolved, that the above proposal be and hereby was approved as proposed.

Discussion

【Proposed by the Board of Directors】

Proposal (1): Revision of Articles of Incorporation

Explanation:

1. It is compliant with the Orders of Taiwan Stock Exchange Corporations’ TaiZhen-Shang-Er-Tz NO. 1061703251. The Company has amended the Articles of Incorporation. Please refer to the attachment 5 (page 21-26) for the comparison table.

2.Please proceed to the discussion.

Voting Results: Shares represented at the time of voting: 30,756,675 shares

Voting Results	Proportion of shareholder voting rights presented duringvote
Votes in favor 28,800,266 shares (electronic votingincluded 521,066 shares)	93,64%
Votes against 9,522 shares (electronic votingincluded 9,522 shares)	0.03%
Abstention votes/No votes 1,946,887 shares (electronic votingincluded 30,885 shares)	6.33%

Resolved, that the above proposal be and hereby was approved as proposed.

1. Motions：None.

2. Adjournment: 9.19 a.m. on Monday, May 28th, 2018

attachment 1

REGAL HOLDING CO., LTD.

2017 Business Report

As the statistics from the international renowned institution Euromonitor, due to the changing of types of consumers, the luxurious jewels retailers have gradually adjusted the sales strategy to offer lower price jewels and luxury goods as the mainstream as well as providing personalize and young products to accompany the new marker demand from younger generation and emerging market. Also, the statistics from Euromonitor shows, the total market value of jewels and luxury goods will constantly grow at 5% of compound annual growth rate (“CAGR”) from 2015 to 2020 and is estimated to reach US$ 387.7 billion in 2020.

The Company’s business revenue of 2017 is NT$ 2,149,774,000 which is very similar to the ， previous year’s. Profit after tax is NT$ 127,007,000 Nt$3.51 per share which is lower than the previous year’s due to the appreciation of U.S dollars that cause the exchange difference when doing the foreign exchange by Thai baht and New Taiwan dollars .

The operation plan of 2018 is as following：

1. Operational Policy：

• (1) To be familiar with the market trend and take the lead as well as developing a variety of feature products.

• (2) To optimize the R&D team and enhance the artifacts design level as well as enhance the added-value of the products.

• (3) To enforce the customize ability to accommodate a variety of customize demand as the strategy to enhance customer adhesion.

2. Business Goal

• (1) Fashionable products: Manufacturing the products that fit the fashion trend.

• (2) New material products: To promote the affordable luxurious jewels products.

• (3) Brand cooperation: Design the exclusive products in accordance with the customers’ brand features.

• (4) Strategic cooperation in marketing: Co-work with the customers with different marketing strategies to enhance the Company’s channel of distribution.

3. R&D

• (1) The Company will enhance the ability of product development to combine art and skills of craftsmanship in order to provide more unique and down-to-earth products as well as to satisfy the one-stop service demand from a variety of customers.

• (2) The Company will reinforce the ability to design more advanced and precision mold to level up the product yield and diversity and accommodate the customer’s need with advanced template equipment.

• (3) Upgrading the automation production equipment and tools for the intermediate and high level to upgrade the process of craftsmanship, shorten the production hours, enhance the product quality and lower the production cost.

• (4) To apply patents for the jewels products and their architecture design to protect the intellectual property right.

• Future development policy

The Company will constantly innovate to maintain the craftsmanship design competence hence to take the lead in the market trend. Besides deepen the products development and design, the Company will also focus on enhancing the products’ added-value and offering the products that fit the demand of customers and consumers. Furthermore, the Company will continue to expand its ODM business. Besides via maintaining the existing business with current customers and enforce the customer relationship with different operation strategies.

The Company’s management team and all the employees will keep on working hard following the principle of “enthusiasm, achievement, responsibility, team work, inspiration” to conquer all the possible challenges in the operation. Also, the Company will constantly strengthen systems, process and production management. Facing the change of future market, the Company will focus on ‐ developing the core technologies of jewelry design and enhance the added value of the products thus making the Company more competitive, strong and profit-earning to being more rewards for the shareholders.

Chairman： General Manager： Accounting Supervisor：

attachment 2

REGAL HOLDING CO., LTD. Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2017 Business Report, Consolidated Financial Report and proposal for allocation of profits. The CPA firm of KPMG was retained to audit the Company’s Consolidated Financial Report and has issued an audit report relating to the Financial Statements. The aforesaid Business Report, Financial Reports and profit allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of the Company. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Law, we hereby submit this report.

To REGAL HOLDING CO., LTD.

Chairman of the Audit Committee: LEE, TSUNG-PEI

February 26[th] , 2018

attachment 3

REGAL HOLDING CO., LTD.

Comparison Table of “Rules of Procedure for Directors’ Meetings”

After Proposed Amendment	Original Articles	Description
第11條 (1)Company shall raise the following matters at the Company’s Board meeting for discussion A - B C. The adoption of or amendments to the internal control system shall be established or amended pursuant to Article 14-1 of the Securities and Exchange Act. and assessment of the effectiveness of the internal control system. D. Pursuant to Article 36-1 of the Taiwan SEA, adopting or amending the procedures for handling important financial and business activities, such as the acquisition or disposition of assets, derivative products transactions, lending of capital, endorsement for third parties, and provision of guarantees. E - H (2)The term "related party" in subparagraph 7 of the	11 (1)The following matters shall be raised at the Company’s Board meeting for discussion A - B C. Internal control system established or amended in accordance with the provisions under Article 14-1 of the Taiwan Securities and Exchange Act D.Establishing or amending, in accordance with the provisions under Article 36-1 of the Taiwan SEA, procedures for handling important financial and business activities such as the acquisition or disposition of assets, derivative products transactions, lending of capital, endorsement for third parties, and provision of guarantees.; E - H (2)The term "related party" in subparagraph 7 of the preceding paragraph means a related party as defined in the Regulations	一、考量證券交易 法第十四條之 五有關審計委 員會職權項目 「內部控制制 度有效性之考 核」亦屬重大 事項，宜提董 事會討論，爰 於第一項第三 款予以增列。 二、為明確獨立董 事職權，並進 一步強化其參 與董事會運 作，爰修正第 五項規定，明 定公司設有獨 立董事者，應 至少一席獨立 董事親自出席 董事會；對於 第一項應經董 事會決議事 項，應有全體 獨立董事出席 董事會，獨立 董事如無法親 自出席，應委 由其他獨立董 事代理出席。

After Proposed Amendment	Original Articles	Description
preceding paragraph means a related party as defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The term "substantial donation to a non-related party" means any donation or a series of donations within a one-year period to a single recipient that, on an individual basis or cumulatively, amount to NT$ 100 million or more, or reach 1 percent of the net operating revenue or 5 percent of the paid-in capital as stated in the audited financial reports for the most recent fiscal year. (3)The term "within a one- year period" means the period between one year prior to the date of this Board meeting and the date of this Board meeting. Amount of the donations already approved by the Board should be excluded. (4) If a company has an independent director or directors, at least one independent director shall attend each meeting in person. In the case of a meeting concerning any	Governing the Preparation of Financial Reports by Securities Issuers. The term "substantial donation to a non-related party" means any donation or a series of donations within a one-year period to a single recipient that, on an individual basis or cumulatively, amount to NT$ 100 million or more, or reach 1 percent of the net operating revenue or 5 percent of the paid-in capital as stated in the audited financial reports for the most recent fiscal year. (3)The term "within a one- year period" means the period between one year prior to the date of this Board meeting and the date of this Board meeting. Amount of the donations already approved by the Board should be excluded. (4)For matters to be resolved at a Board meeting under Article 14-3 of the Taiwan SEA, each independent Director shall attend the meeting in person or appoint another independent Director to attend the meeting on his or her behalf and may not	三、第五項規定屬 「取締規定」， 而非「效力規 定」，違反第五 項規定者，係 涉及證券交易 法第一百七十 八條第一項第 七款行政裁罰 之規定；另董 事會出席人數 如已達法定出 席門檻，則獨 立董事未出席 應與當次董事 會之效力無 關。 四、第二項、第三 項酌作文字調 整。

After Proposed Amendment	Original Articles	Description
matter required to be submitted for a resolution by the board of directors under paragraph 1, each independent director shall attend in person; if an independent director is unable to attend in person, he or she shall appoint another independent director to attend as his or her proxy. If an independent director expresses any objection or reservation about a matter, it shall be recorded in the board meeting minutes. An independent director intending to express an objection or reservation but unable to attend the meeting in person shall, unless there is some legitimate reason to do otherwise, issue a written opinion in advance, which shall be recorded in the meeting minutes.	appoint a proxy who is not an independent Director as his or her proxy. Any objection or reservation that an independent Director may have shall be specified in the minutes of proceedings of the Board meeting. If an Independent Director wishing to express his or her objection or reservation is unable to attend the Board meeting in person, he or she shall provide a written statement providing his view and opinions on the relevant matters for consideration at the Board meeting and his statement shall be included in the minutes of the Board meeting, unless there is some legitimate reason to do otherwise.
17 This Rules of Procedure shall be approved by the audit committee and adopted by the board of directors and reported in the shareholders meeting. Subsequent amendments thereto shall be effected in	17 These Rules of Procedure shall be adopted by the approval of meeting of the board of directors and shall be reported to the shareholders meeting. The board of directors may be authorized to adopt, by

After Proposed Amendment	Original Articles	Description
the same manner.	resolution, any future amendments to these Rules.