SPT — AGM Information 2014

Sep 30, 2014

ScinoPharm Taiwan, Ltd. Shareholders Meeting 2014 Summary of Meeting Agenda

(Translation)

Time ： 9:30AM, Wednesday, 18 June 2014

• Place : ScinoPharm Taiwan, Ltd. Administration Building

• 1F, 1 Nan-Ke 8[th] Road, Southern Taiwan Science Park, Shan-Hua, Tainan.

Matters for ratification

• (1) Business Report and Financial Statements for 2013 (as adopted by the meeting of the Board of Directors)

Explanation:

• a. The parent and consolidated financial statements of 2013 of the Company as adopted by the 21 March 2014 meeting of the Board of Directors and duly certified by LIU Tzu-Meng, Certified Public Accountant, and LIN Tzu-Yu, Certified Public Accountant, from PricewaterhouseCoopers Taiwan were duly submitted in conjunction with the business report to the Auditing Board for inspection. This inspection was completed with the auditor’s reports duly issued.

• b. Please see Appendix 1 and Appendices 3-4 for the Business Report, Auditor’s Reports , parent and consolidated financial statements.

• c. It is proposed that resolution be adopted to ratify the above reports, books, records and financial statements.

Resolution:

• (2)Proposed earnings distribution plan for fiscal year 2013 (as adopted by the meeting of the Board of Directors)

Explanation:

• a. The Company’s earnings distribution for fiscal year 2013 is proposed, in accordance with the Company Act and its Articles of Incorporation, by the Board of Directors as follows:

• b. With TWD1,220,717,231 of cumulative distributable earnings for the period of 2013, the Company proposes to pay a cash dividend of TWD1.2 and a stock dividend of TWD0.4 for each share held.

• c. In the event that, before the distribution record date, the proposed profit distribution is affected by any change in equity, it is proposed that the Board of Directors be authorized to adjust the cash and stock to be distributed to each share based on the number of actual shares outstanding on the

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record date for distribution. It is proposed that the Board of Directors be authorized to determine the necessary action.

• d. Subject to approval of the proposed earnings distribution plan by the shareholders’ meeting, it is proposed that the Board of Directors be authorized to determine the ex-dividend date, dividend distribution date and other relevant matters.

ScinoPharm Taiwan, Ltd.

Earnings Distribution Plan for Fiscal Year Ended 31 December 2013

Item	Amount (TWD)	Amount (TWD)	Amount (TWD)
After-tax net profit earned in 2013 Less: Legal reserve Plus: Actuarial gain presented in retained earnings Distributable profit from this period Plus: Accumulated undistributed earnings from previous period Adjustments in first-time adoption of T-IFRS Minus: Special reserve provided for first-time adoption of T-IFRS Total distributable earnings as of this period Dividends to shareholders (Cash dividend TWD1,200 on each 1,000 shares held) (Stock dividend 40 shares on each 1,000 shares held) Undistributed earnings as of the end of the period			1,273,404,321 (127,340,433) 413,201 1,146,477,089 67,310,855 29,758,967 (22,829,680) 1,220,717,231
			(811,112,640) (270,370,880)
			139,233,711

Notes:

1. Remuneration payable to directors and supervisors for 2013 calculated based on the total distributable earnings of the year is TWD22,929,542 with TWD22,929,664 thereof accounted as the estimated amount payable and the difference of TWD122 will be accounted as the income (loss) in year 2014.

2. Bonus to employees payable for 2013 calculated based on the total distributable earnings of the year is TWD2,292,955 with TWD2,292,966 accounted as the estimated amount payable and the difference of TWD11 will be accounted as the income (loss) in year 2014.

3. In terms of earnings distribution for fiscal year 2013, priority is given to distributing the earnings posted in the given fiscal year while retained earnings from the previous fiscal year is drawn on to make up for any deficiency.

4. The actual amount of cash dividend paid to the shareholder shall be paid up to the rounded number with the fraction (if any) to be accounted as Other Income of the Company. .

5. e. It is proposed that resolution be adopted for the authorization proposed above.

Resolution:

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Matters for discussion and resolution

• (1) Capital increase by issuing new shares on retained earnings (as adopted by the meeting of the Board of Directors)

Explanation:

• a. In consideration of the capital call for the business expansion of the Company, it is proposed that TWD270,370,880 of the undistributed earnings accumulated from the previous period be capitalized to issue 27,037,088 new shares for distributable stock dividend with 40 shares distributed on each 1,000 shares held.

• b. Subject to the Authority’s approval of the above capital increase by issuing new shares, the ex-dividend date and the relevant matters will be determined by the Board of Directors, who are authorized to do so and the new shares will be distributed to the shareholders as proposed according to the shareholding indicated in the shareholder registry as of the ex-dividend date with a relevant notice issued to each shareholder.

• c. The shareholder may by himself/herself seek to pool within five days from the ex-dividend date the fractional dividend share (if any) received. The stock dividend will be distributed in cash pro rata on each fraction of a share held (if any) up to the full TWD dollar. The remaining fractional shares (if any) may be purchased by such particular principal according to the par value as contacted by the Chairman of the Board of Directors authorized to do so.

• d. Subject to approval of the proposed earnings distribution plan by the shareholders’ meeting, if the proposed profit distribution is affected by any change in equity, it is proposed that the Board of Directors be authorized to adjust the cash and stock to be distributed to each share based on the number of actual shares outstanding on the record date for distribution. It is also proposed that the Board of Directors be authorized to determine the necessary action. The shareholder will have in the new shares the same rights and obligations as those in the original shares held.

• e. The Company will have TWD7,029,642,880 in paid-in capital after the above capital increase.

• f. It is proposed that resolution be adopted for the proposed issuance of new shares for capital increase.

Resolution:

• (2) Proposed revisions to the Company’s Articles of Incorporation (as adopted by the meeting of the Board of Directors)

Explanation:

• a. In consideration of the change of the administrative territory of the Southern Taiwan Science Park Administration as a result of its restructuring in line with the relevant government policy, amendment to Article 3 of the Articles of Incorporation of the Company is proposed pursuant to the official request of 20 February 2014, ref. Nan-Shang-Zi No. 1030004180 issued by the

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Southern Taiwan Science Park Administration.

• b. In view of performance indicator No. 35 adopted by the first corporate governance performance evaluation, for the purpose of preventing possible diminution of their impartiality from taking long service term in office at the cost of objective exercise of their powers and duties by the independent directors contrary to the spirit of corporate governance, amendment of Article 24 of the Articles of Incorporation of the Company is proposed to provide that the independent director shall serve in office for a term of not more than nine (9) years.

• c. In consideration of full compliance with the current laws and regulations, amendment to Article 29 of the Articles of Incorporation of the Company is proposed pursuant to Article 3 of the Regulations Governing Procedure for Board of Directors Meetings of Public Companies.

• d. What follows is a juxtaposition of the proposed revisions to the Articles of Incorporation and the current provisions. For the entire original Articles of Incorporation ahead of revision, please see Exhibit 2.

	Exhibit 2.
	Current Provision		Revision Proposed	Remark
	Article 3 The Company having its head office established at theTainan Science-based Industrial Park may, where necessary, set up branch offices and representative offices at home or abroad in accordance with the relevant resolution adopted by the meeting of the Board of Directors subject to the approval of the competent authority.		Article 3 The Company having its head office established at theSouthern Taiwan Science Parkmay, where necessary, set up branch offices and representative offices at home or abroad in accordance with the relevant resolution adopted by the meeting of the Board of Directors subject to the approval of the competent authority.	The revision is proposed on the request of Southern Taiwan Science Parks Administration (STSP Administration) in line with the restructuring of the central competent authority and the change of the area under its control.
	Article 24 The Directors each of the Company will serve an office term of three years and may be re-elected. Subject to the relevant resolution adopted by the meeting of the Board of Directors, liabilities insurance will be procured for the Director elect. Subject to the public offering of the Company, the total shareholding of the Directors and the Supervisors of the Company as a whole shall be in accordance with the Company Act and the regulations prescribed by the competent securities authority. The Company has an Audit Committee formed by all of the independent directors under the Securities And Exchange Act. The establishment, functions, powers and authorities, rules for the meetings and other legal compliance matters of the Audit Committee shall be in accordance with the relevant regulations issued by the competent securities authority.		Article 24 The Directors each of the Company will serve an office term of three years and may be re-elected; but the independent director shall serve in office for a term of not more than nine (9) years. Subject to the relevant resolution adopted by the meeting of the Board of Directors, liabilities insurance will be procured for the Director elect. Subject to the public offering of the Company, the total shareholding of the Directors and the Supervisors of the Company as a whole shall be in accordance with the Company Act and the regulations prescribed by the competent securities authority. The Company has an Audit Committee formed by all of the independent directors under the Securities And Exchange Act. The establishment, functions, powers and authorities, rules for the meetings and other legal compliance matters of the Audit Committee shall be in accordance with the relevant regulations issued by the competent securities authority.	The revision is proposed in view of performance indicator No. 35 adopted by the first corporate governance performance evaluation, for the purpose of preventing possible diminution of their impartiality from taking long service term in office at the cost of objective exercise of their powers and duties by the independent directors contrary to the spirit of corporate governance.

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Current Provision	Revision Proposed	Remark
Article 29 The Directors shall vote to approve or disapprove and exercise their powers and duties with respect to the matters proposed on the agenda at the relevant meeting of the Board of Directors which shall be convened at least onceevery three months. Except as otherwise provided by the Company Act, the resolution with respect to the revision of these Articles of Incorporation as provided in subparagraph (1) below must be adopted by three fourths (3/4) or more of all of the Directors of the Company and with respect to other matters by two thirds (2/3) or more of all of the Directors of the Company: (1)~(20)……(Omitted.)	Article 29 The Directors shall vote to approve or disapprove and exercise their powers and duties with respect to the matters proposed on the agenda at the relevant meeting of the Board of Directors which shall be convened at least onceevery quarter. Except as otherwise provided by the Company Act, the resolution with respect to the revision of these Articles of Incorporation as provided in subparagraph (1) below must be adopted by three fourths (3/4) or more of all of the Directors of the Company and with respect to other matters by two thirds (2/3) or more of all of the Directors of the Company: (1)~(20)……(Omitted.)	The revision is proposed in accordance with Article 3 of the Regulations Governing Procedure for Board of Directors Meetings of Public Companies.
Article 42 These Articles of Incorporation established on 16 October 1997 have been revised as follows:1st revision of 17 March 1998,…(omitted),19th revision of 21 June 2013.	Article 42 These Articles of Incorporation established on 16 October 1997 have been revised as follows:1st revision of 17 March 1998,…(omitted), 19th revision of 21 June 2013, and 20th revision of 2014.	The revision is proposed to bring up to date the history of revision of these Articles.

• e. It is proposed that resolution be adopted for the proposed revision.

Resolution:

• (3) Proposed revisions to the Rules Governing the Procedure for Handling Acquisition and Disposal of Assets (as adopted by the meeting of the Board of Directors)

Explanation:

• a. The Securities and Futures Bureau, Financial Supervisory Commission announced its order of December 30, 2013 (ref. Jin-Guan-Zheng-Fa-Zi No. 1020053073 to revise partial articles of Regulations Governing the Acquisition and Disposal of Assets by Public Companies in line with Taiwan’s adoption of the IFRSs, enhancement of internal control of Acquisition and Disposal of Assets by Public Companies and corporate governance. The Company proposes the following revision to its Rules Governing the Procedure for Handling Acquisition and Disposal of Assets according to the revised regulation.

• b. Please see the proposed revisions to the Rules Governing the Procedure for Handling Acquisition and Disposal of Assets juxtaposed with the current provision as show in Appendix 5.

• c. It is proposed that resolution be adopted for the proposed revision.

Resolution:

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