SPT — Annual Report 2015

Jul 19, 2016

Table of Contents

I.	Procedure and gist of agenda……………………………………………….…………….……………….……….	1
II.	Proposals
1.	Matters proposed for discussion and resolution (I)………………………………………………….…….….……	2
2.	Reports…………………….…………………………………………………………………………….……………….….…….	4
3.	Matters Proposed for ratification …………………………………………………………………………………….…….	5
4.	Matters proposed for discussion and resolution (II)……………………….……………………………….…….….	6
5.	Extempore motions………………………………………………………………………………………….…………….…	8
6.	Meeting adjourned………………………………………………………………………………………….……………	8
III.	Appendices
1.	Business Report………	9
2.	Audit Committee's Review Report…	12
3.	Auditors' Report and parent financial statements on 2015……	13
4.	Auditors' Report and consolidated financial statements on 2015	20
5.	Proposed revision of Ethical Corporate Management Best Practice Principles…………………	28
6.	Procedures for Ethical Management and Code of Conduct ……………………………………….…………	41
7.	Proposed revision of the Procedural Rules for Providing Endorsements and Guarantees…	48
8.	Proposed revision of the Procedural Rules for Providing Lending to Other Persons………………	53
IV.	Exhibits
1.	Rules Governing Shareholders' Meetings…………………….………………………………………………	57
2.	Articles of Incorporation……………………………………………………………………………………………….…	65
3.	The Impact of Stock dividend issuance on Business Performance, EPS, and Shareholder

	Return Rate……………………………………………………………….………………………………………………………………	73
4.	Required minimum and actual shareholding data by Directors ….…………………………………….………….74

ScinoPharm Taiwan, Ltd. Shareholders' Meeting 2016

Procedure and gist of Agenda

I. Procedure

Time: 9:30a.m., Monday, 27 June 2016 Place: ScinoPharm Taiwan, Ltd. Administration Building Address: 1F, 1 Nan-Ke 8th Road, Southern Taiwan Science Park, Shan-Hua, Tainan, Taiwan

1. Announcement of meeting in session (following the announcement of shares represented at the meeting)

2. Chairperson's address

3. Matters proposed for discussion and resolution (I)

(1) Proposed revision of the Articles of Incorporation.

4. Reports

• (1) Business Report on 2015.
• (2) Audit Committee's review opinions on 2015 Financial Results.
• (3) Distributable compensation for employees and directors on 2015.
• (4) Proposed revision of Ethical Corporate Management Best Practice Principles and establishment of Procedures for Ethical Management and Code of Conduct.

5. Matters proposed for ratification

• (1) Business Report and Financial Statements for 2015.
• (2) Proposed earnings distribution plan for fiscal year 2015.

6. Matters proposed for discussion and resolution (II)

• (1) Proposed capital increase by issuing new shares on retained earnings.
• (2) Proposed revision of the Procedural Rules for Providing Endorsements and Guarantees and an explanation of the necessity and justification of limiting total amount of endorsement and guarantee to 100% of net value for the Company and its subsidiaries.
• (3) Proposed revision of the Procedural Rules for Providing Lending to Other Persons.
• (4) Proposed release of prohibition on Directors' representatives of the 8th election from participation in competitive business.

7. Extempore motions

8. Meeting adjourned

II. Proposals

1. Matters proposed for discussion and resolution (I)

(1) Proposed revision of the Articles of Incorporation. (as adopted by the meeting of the Board of Directors)

Explanation:

• a. In accordance with Presidential Decree No. 10400058161 (promulgated May 20, 2015) announcing revised Articles 235 and 240 and the newly added paragraph 1 of Article 235 to the Company Act, the revisions have been made to the Company's Articles of Incorporation accordingly.
• b. 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 (at pages 65~72).

Current Provision	Revision Proposed	Remark
(New article)	Article 40	The Company
	Should the Company earn surpluses	has added
	within the current term, at least two	provisions
	percent of surpluses should be set	relating to
	aside for employee compensation, and	employee
	no more than two percent of surpluses	compensation
	should be set aside for director	according to
	compensation. However, if the	Paragraph 1
	Company has accumulated losses,	added to Article
	surpluses should be held in reserve to	235 of the
	make up said loss.	Company Act,
	The surpluses within the current term	and revisions
	of the previous paragraph refer to	made to Article
	pre-tax profits prior to deduction of	235 and 240 of
	employee and director compensation.	said Act under
	Recipients of employee compensation	Presidential
	include employees subordinate to the	Decree No.
	Company that comply with certain	10400058161,
	conditions.	promulgated on
		May 20, 2015.
Article 40	Article 41	Paragraphs 2, 3,
In consideration of the changeable	In consideration of the changeable	4 of Article 235
environment of the Company's	environment of the Company's	in the Company
business, the Board of Director shall	business, the Board of Directors shall	Act, relating to
take into account the Company's	take into account the Company's	employee
future capital expenditures and	future capital expenditures and	bonuses, have
capital calls to determine the	capital calls to determine the	been deleted in
proposed amounts of the reserved	proposed amounts of reserved	accordance with
earnings, the distributable earnings,	earnings, the distributable earnings,	Decree No.
and the cash dividend when drawing	and the cash dividends when drawing	10402413890,
up the proposed earnings distribution	up the proposed earnings distribution	promulgated by
plan. Ten percent (10%) of the	plan. Ten percent (10%) of the	the Ministry of
Company's surplus as of the final	Company's surplus as of the final	Economy on

Current Provision	Revision Proposed	Remark
accounting of the fiscal period net of	accounting of the fiscal period net of	June 11, 2015;
the business income tax payable for	the business income tax payable for	the employee
the period, makeup for the loss	the period, makeup for losses	bonus
accumulated from previous year(s)	accumulated from previous year(s),	appropriation
shall be allocated for legal reserves.	shall be allocated for legal reserves.	statement
The balance (if any) less the duly	The balance (if any), less the duly	should no longer
allocated or transferred amount for	allocated or transferred amount for	include staff
special reserve will be the earnings	special reserves, the sum of said	dividends or
distributable of the period and the	balance combined with the	compensation
sum of said balance combined with	undistributed earnings carried	for directors and
the undistributed earnings carried	forward from the previous period will	supervisors.
forward from the previous period will	be the accumulative earnings	Additionally, in
be the accumulative earnings	distributable for the term, and fifty to	accordance with
distributable for the term, and fifty to	one hundred percent (50%~100%) of	Paragraph 1 of
one hundred percent (50%~100%) of	which sum will be the total amount of	Article 235 of
which sum will be the total amount of	dividend to be distributed to the	the Company
dividend to be distributed to the	shareholders of the Company with	Act, the
shareholders of the Company with	30% or more thereof distributed in	Company has
30% or more thereof distributed in	cash. Subject to the relevant	added staff and
cash. Subject to the relevant	resolution adopted by the	director
resolution adopted by the	shareholders' meeting, the	compensation
shareholders' meeting, the	accumulative earnings distributable	content to
accumulative earnings distributable	will be distributed according to the	Article 40, and
will be distributed according to the	distribution plan proposed by the	relevant articles
distribution plan proposed by the	Board of Directors.	have been
Board of Directors, provided that two percent (2%) thereof shall be paid to		renumbered and revised
the Directors for compensation		accordingly.
payable and not less than zero point
two percent (0.2%) thereof shall be
distributed as employees bonus.
Article 41	Article 42	Article has been
Matters not addressed herein shall be	Matters not addressed herein shall be	assigned a new
in accordance with the Company Act	in accordance with the Company Act	number due to
of the Republic of China (Taiwan) and	of the Republic of China (Taiwan) and	the addition of
the relevant laws and regulations	the relevant laws and regulations	Article 40.
prescribed and announced by the	prescribed and announced by the
competent authority.	competent authority.
Article 42	Article 43	Article has been
These Articles of Incorporation	These Articles of Incorporation	assigned a new
established on 16 October 1997 have	established on 16 October 1997 have	number due to
been revised as follows: 1st revision	been revised as follows: 1st revision	the addition of
of 17 March 1998, 2nd revision of 7	of 17 March 1998, 2nd revision of 7	Article 40;
April 1999, 3rd revision of 21 July	April 1999, 3rd revision of 21 July	revision dates
2000, 4th revision of 3 December	2000, 4th revision of 3 December	have been
2001, 5th revision of 13 June 2002,	2001, 5th revision of 13 June 2002,	added.
6threvision of 13 March 2003, 7th	6threvision of 13 March 2003, 7th
revision of 30 June 2003, 8threvision	revision of 30 June 2003, 8threvision

Current Provision	Revision Proposed	Remark
of 30 June 2003, 9th revision of 14	of 30 June 2003, 9th revision of 14
May 2004, 10th revision of 3 June	May 2004, 10th revision of 3 June
2005, 11th revision of 3 October	2005, 11th revision of 3 October
2005, 12th revision of 15 February	2005, 12th revision of 15 February
2006, 13th revision of 7 June 2006,	2006, 13th revision of 7 June 2006,
14th revision of 18 June 2009, 15th	14th revision of 18 June 2009, 15th
revision of 25 September 2009, 16th	revision of 25 September 2009, 16th
revision of 29 April 2010, 17th	revision of 29 April 2010, 17th
revision of 9 December 2010and 18th	revision of 9 December 2010, 18th
revision of 13 June 2012, 19th	revision of 13 June 2012, 19th
revision of 21 June 2013 and 20th	revision of 21 June 2013, 20th
revision of 18 June 2014.	revision of 18 June 2014 and 21th
	revision of June 27, 2016.

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

Resolution:

2. Reports

(1) Business Report on 2015.

Explanation: Please see pages 9 to 11 of the Agenda for the Business Report (Appendix 1).

(2) Audit Committee's review opinions on 2015 Financial Results.

Explanation: The Audit Committee's review report is attached as Appendix 2 (at page 12).

(3) Distributable compensation for employees and directors on 2015.

Explanation:

• a. The Distributable compensation for employees and directors on 2015 is calculated according to the revised Article 40 of the Company Act: "Should the Company earn surpluses within the current term, at least two percent of surpluses should be set aside for employee compensation, and no more than two percent of surpluses should be set aside for director compensation…".
• b. According to the revised Company Act, the employee compensation for 2015 was 77,010,882 NTD, making up 8.64% of the year's profits; director compensation was 11,542,599 NTD, making up 1.29% of the year's profits; all compensation was distributed in cash form. The aforementioned amounts differed from budgeted amounts by 118 NTD for employee compensation, and by 113,216 for director compensation; these figures have been listed as gain (loss) in year 2016.
• (4) Proposed revision of Ethical Corporate Management Best Practice Principles and establishment of Procedures for Ethical Management and Code of Conduct.

Explanation:

a. In accordance with revisions made to certain articles contained with the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies by Official Correspondence No. 1030022825 (November 7, 2014) issued by the Taiwan Stock Exchange, and to strengthen corporate governance and thoroughly implement ethical management, the Company has revised its Ethical Corporate Management Best Practice Principles to follow recent amendments made to relevant laws and actual operations.

• b. As the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies specifies that companies are required to provide clear and detailed procedures for ethical management implementation, the Company established its Procedures for Ethical Management and Code of Conduct by referencing certain articles in the Sample Template for XXX Co., Ltd. Procedures for Ethical Management and Guidelines for Conduct issued by the Taiwan Stock Exchange under Official Correspondence No. 1040001716 (January 28, 2015) and actual business operations within the Company.
• c. For a comparison of the original and revised articles to the Ethical Corporate Management Best Practice Principles and the complete Procedures for Ethical Management and Code of Conduct, please refer to Appendix 5 (Pages 28~40) and Appendix 6 (Pages 41~47) of this Meeting Handbook.

3. Matters Proposed for ratification

(1) Business Report and Financial Statements for 2015 (as adopted by the meeting of the Board of Directors)

Explanation:

• a. The non-consolidated and consolidated financial statements of 2015 of the Company as adopted by the March 25 2016 meeting of the Board of Directors and duly certified by Tzu-Yu Lin, Certified Public Accountant and Ming-Hsien Lee, Certified Public Accountant from PricewaterhouseCoopers Taiwan were duly submitted in conjunction with the Business Report to the Audit Committee for inspection. This inspection was completed with the Auditors' Reports duly issued.
• b. Please see Appendix 1 (at pages 9) and Appendices 3~4 (at pages 13~27) for the Business Report, Auditors' 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 2015 (as adopted by the meeting of the Board of Directors)

Explanation:

• a. The Company's earnings distribution for fiscal year 2015 is proposed in accordance with the Company Act and its Articles of Incorporation, by the Board of Directors as follows:
• b. With TWD 728,500,793 of cumulative distributable earnings for the period of 2015, the Company proposes to pay a cash dividend of TWD 0.3 and a stock dividend of TWD 0.4 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 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 2015

Item	Amount (TWD)
After-tax net profit earned in 2015	634,965,267
Less: Legal reserve	(63,496,527)
Plus: Actuarial gain(loss) presented in retained earnings	5,661,222
Distributable profit from this period	577,129,962
Plus: Accumulated undistributed earnings from previous period	151,370,831
Total distributable earnings as of this period	728,500,793
Dividends to shareholders
(Cash dividend TWD 300 on each 1,000 shares held)	(219,324,858)
(Stock dividend 40 shares on each 1,000 shares held)	(292,433,150)
Undistributed earnings as of the end of the period	216,742,785

Notes:

• 1. In terms of earnings distribution for fiscal year 2015, 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.
• 1. The actual amount of cash dividend paid to the shareholders shall be paid up to the rounded number with the fraction (if any) to be accounted as Other Income of the Company

Chairperson:Kao-Huei Cheng CEO:Yung-Fa Chen Chief Accountant:Carrie Lin

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

Resolution:

4. Matters Proposed for discussion and resolution (II)

(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 TWD 292,433,150 of the undistributed earnings accumulated from the previous period be capitalized to issue 29,243,315 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 is 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 TWD 7,603,261,750 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 Revision of the Procedural Rules for Providing Endorsements and Guarantees and an explanation of the necessity and justification of limiting total amount of endorsement and guarantee to 100% of net value for the Company and its subsidiaries. (as adopted by the meeting of the Board of Directors)

Explanation:

• a. Amendments made in consideration of the future operational needs of ScinoPharm and its subsidiaries and in accordance with Decree No. 1010029874 (July 6, 2012) issued by the Financial Supervisory Commission, which made amendments to the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies
• b. In consideration of growing operational and capital requirements by mainland subsidiaries, the limits of local laws, and financing needs, the Company seeks to relax the limits on endorsement and guarantee amounts between the Company and its subsidiaries in order to obtain more favorable financing conditions, lower financing costs, successfully obtain working capital, improve efficiency of capital utilization, and to strength overall competitiveness.
• c. Should public companies or their subsidiaries set total endorsement and guarantee amounts at more than 50% of net company value, the amended articles of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies promulgated by the Financial Supervisory Commission on July 6, 2012 requires the following explanation:
• (I) Necessity

The Company actively strives to develop local markets and facilitate future growth for direct or indirect priority subsidiaries or subsidiaries in initial stages of development. In consideration of these policies, the Company plans to gradually transfer USD foreign debts into RMB domestic loans for operational needs; the Company or existing subsidiaries with adequate credit can provide endorsement for the aforementioned priority subsidiaries, allowing them to lower financing costs and enhance competitiveness.

• (II) Justification
• A. As of December 2015, the Company and its subsidiaries have no outstanding endorsement expenditure.
• B. China is currently the second biggest economy in the world, and its 12th Five-Year Plan sets annual growth at 20% for the pharmaceuticals market and there are plans to build high-profile pharmaceutical factories to promote development and raise the Chinese biotech manufacturing industry to international standards; for this reason, the Company considers China an area for priority development and a driver of future growth. Therefore, the Company hopes to use its credit to aid subsidiaries in utilizing local

resources and building channels to the global pharmaceuticals market, thus generating higher investment profits for all shareholders.

• d. For a comparison of the original and revised Procedural Rules for Providing Endorsements and Guarantees, please refer to Appendix 7 (Pages 48~52) of this Meeting Handbook.
• e. It is proposed that resolution be adopted for the proposed revision.

Resolution:

(3) Proposed revision of the Procedural Rules for Providing Lending to Other Persons (as adopted by the meeting of the Board of Directors).

Explanation:

• a. Amendments made in consideration of the future operational needs of ScinoPharm and its subsidiaries and in accordance with Decree No. 1010029874 (July 6, 2012) issued by the Financial Supervisory Commission, which made amendments to the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies
• b. For a comparison of the original and revised Procedural Rules for Providing Lending to Other Persons, please refer to Appendix 8 on Pages 53~56 of this Meeting Handbook.
• c. It is proposed that resolution be adopted for the proposed revision.

Resolution:

(4) Proposed release of prohibition on Directors' representatives of the 8th election from participation in competitive business.

Explanation:

• a. According to Paragraphs 1 and 5 of Article 209 of the Company Act, the Director who intends to do any act or activity which is within the scope of the company's business for himself/herself or for any other person shall present to the shareholders' meeting an explanation of the substantial content of the act or activity contemplated and obtain the approval of the shareholders' meeting for him/her to do the act or activity or the shareholders' meeting may adopt the resolution to account the income the Director has received from the act or activity for the Company's income.
• b. In accordance with Official Correspondence No. 1050001652 issued by the Taiwan Sugar Corporation, the originally appointed Eighth Company Representative Director, Mr. Chin-Jung Yang, has been replaced by Mr. Kuo-His Wang from January 11, 2016. On condition that such acts and duties do not damage Company interests, it is proposed that non-compete restrictions for acts and duties undertaken by the Eighth Company Representative Director, Mr. Kuo-His Wang, for himself or on behalf of another person within the scope of the company's business, shall be lifted in accordance with Article 209 of the Company Act. Details are as shown in the table below.

	Current Position at ScinoPharm
Name	Other Position and Name of Competing Company
Taiwan Sugar Corporation Representative: Kuo-His Wang	Company director at ScinoPharm Taiwan, Ltd. Vice President of Taiwan Sugar Corporation Company director at TaiGen Biopharmaceuticals Holdings Ltd.

Resolution:

5. Extempore motions

6. End of meeting

III. Appendices

Appendix 1

Business Report

Dear Shareholders:

In 2015, we have continued to witness a growing number of external factors that have presented challenges to ScinoPharm. Global mergers and acquisitions have resulted in increased market concentration; stringent regulations and enforcement of increasing quality standards have posed new challenges to new product development; and governments of various countries, faced with increasing pressure from their rising national medical and healthcare expenses, have forced intense price competition between our customers, the generic drug pharmaceutical companies around the world. Despite growing challenges posed by this external environment, ScinoPharm was still able to achieve steady improvements in its business performance and improve its annual profits by over 30%.

Financial Performance

ScinoPharm's consolidated revenues for 2015 were NT\$3.955 billion (US\$120.8 million), a 3% decline compared to our NT\$4.098 billion revenues of the previous year. Consolidated net profits after tax were NT\$635 million (US\$19.4 million), a 31% increase compared to the previous year's NT\$484 million. Earnings per share after tax was NT\$0.87 (US\$0.0266).

At the end of the previous year, our paid-up capital was NT\$7.311 billion; our shareholders' equity was NT\$9.857 billion, making up 81% of total assets, which equaled NT\$12.22 billion (US\$373 million). Long-term debt was 1.92 times fixed assets, and our flow ratio was 2.65. These results indicate that our financial structure continues to be sound.

Constant innovation to establish industrial leadership

In 2015, our overall revenue decreased slightly compared to 2014 primarily as a result of unfavorable sales volumes of our anti-depressant and anti-obesity drugs experienced by our new drug customers. This adversely affected our contract manufacturing revenues and business growth, and resulted in idle capacity. However, ScinoPharm did demonstrate strong profitability improvement as a result of increased sales volumes of higher profit oncology products and tighter cost control, process optimization and enhanced management efficiency. As a result, the company successfully increased its 2015 gross profit to 42%. This was in spite of carrying a high level of inventory of expensive 10-DAB, the upstream raw material for our two main oncology products. ScinoPharm's financial results also reflected the equity swap with Foresee Pharmaceuticals Co. Ltd., the current parent company of our joint venture partner, Foreseeacer. The capital gain derived from this equity swap was about NT\$95 million.

Last year, ScinoPharm continued its market share dominance of its three major products: Irinotecan for colorectal cancer (50% global market share), Paclitaxel for ovarian, lung and breast cancer (supplying one-third of the global market), and Docetaxel for non-small cell lung and breast cancer (market share of 25%). This affirms our position as a global leader in the supply of oncology products. As of the end of last year, we have applied 733 drug master files (DMFs) worldwide, including 55 in the United States. Of the 55 US DMFs, 29 are for oncology products. This is an unparalleled number of total DMFs among the independent global providers of APIs and proof of the company's persistent efforts in oncology products.

Last year, we completed development on 5 new generic drugs. Further, in order to enhance our long-term competitive advantages, the company has successfully developed significant intellectual property patents. Last year, applications for 11 product process or polymorph patents were filed. As of the end of 2015, ScinoPharm has obtained 206 patents worldwide for its 52 inventions. Additionally, 103 invention patents have been filed and are currently under review.

In accordance with our long term business strategy, ScinoPharm keeps pursuing strategic alliances in order to enhance its position as a developer and manufacturer of innovative products with high added value. Fondaparinux, an anti-coagulant product, became ScinoPharm's first self- filed Abbreviated New Drug Application (ANDA) product. The company is one of only a few that can provide all technical aspects of the complicated processes from API to formulation of ANDA products. ScinoPharm is discussing the exclusive marketing rights for this product in the European and US markets with international partners, demonstrating the company's excellent capabilities in the development of specialty generic drugs and capturing increased value via downstream integration.

The construction of a high-potency cytotoxic injectable plant is a key strategic move for ScinoPharm, designed to create added value in our supply chain. To bring focus on markets with greater future prospects, we have decided to develop a peptide product with higher technical barriers designed to trigger a US FDA inspection. Verification of process equipment and instruments for the first production line is scheduled to be completed by next year, after which pilot runs for producing registration batches may begin. In addition to generic drugs developed independently by ScinoPharm, the injectable plant will also provide contract manufacturing services for new drugs targeted on biologics, high-potent new drugs and small volume, complicated and high unit-priced generics.

Globally recognized quality system and the next move in global positioning

ScinoPharm has continued to demonstrate its competitive advantages by consistently providing stable and excellent quality products. Last March, the company's Taiwan manufacturing site passed its fifth US FDA site inspection with 18 products audited. ScinoPharm's Mainland China Changshu site has already successfully completed a cGMP inspection by the US FDA with no resulting 483 comments. Now that the Changshu plant has been inspected and approved by the US FDA, products from this plant can be exported to the United States, allowing increased global visibility for ScinoPharm in both China and the global market.

In the meantime, we are expanding our contract research and manufacturing services business by acquiring projects from many different and varied pharmaceutical developers worldwide in order to create greater business potential. We believe that these efforts will further maximize our long-term success.

To increase capacity utilization at the Changshu Plant, ScinoPharm is focused on multiple operational areas including in-house product development, licensed-in products, technology transfers, and joint development via strategic alliances. Furthermore, ScinoPharm has over ten CRAM (Contract Research and Manufacturing Services) projects ongoing, with most at the clinical trial Phase II and III stages. These, along with the above activities will significantly increase this plant's operational capability and utilization.

As of the end of 2015, the Changshu Plant has received 11 drug production permits. In addition, ScinoPharm has submitted 14 drug licenses to the CFDA. Also on going is progress on the co-development with ScinoPharm's strategic partners of five formulations and one novel drug project, targeting the China market, with market availability scheduled from 2019 to 2022. In addition, ScinoPharm will benefit from last August's national Chinese policy reforms in which they significantly increased costly entry barriers into the Chinese market, with a heavy focus on quality and innovation in new drug product development.

Creating Industrial Value while Fulfilling Social Responsibilities

ScinoPharm has always been dedicated to being a responsible part of the local community where we operate and our efforts have been acknowledged on multiple occasions. Last year, ScinoPharm received the award for excellence in the "Social Welfare Category" of the National Industrial Innovation Award organized by the Ministry of Economic Affairs (MOEA). The company attained the highest rating of A++ for 2 separate occasions on the "Information Disclosure Ranking" system organized by the Taiwan Stock Exchange. Results of the first "Corporate Governance Evaluation" of publicly traded companies also listed ScinoPharm as amongst the top 5% in terms of score and the only listed Biotech Company to win such honors. CommonWealth Magazine also listed ScinoPharm Taiwan as amongst the "Top 100 Corporate Social Responsibility Companies" in the "CSR Corporate Citizenship Award" category. Such accolades demonstrated ScinoPharm's efforts and performance in upholding shareholders' interests, shareholder equity, structure and operations of the board of directors, information transparency, stakeholders' interests, and corporate social responsibility.

Prospect for 2016

ScinoPharm relies on its flexible business capabilities and a corporate culture built upon trust and efficiency. The Company has built a strong reputation of trustworthiness amongst our clients, allowing us to accrue great potential in pharmaceutical developments. While maintaining global advantages for oncology products and expanding contract manufacturing for new drugs, ScinoPharm is also constantly researching and developing new products to broaden our product portfolio and secure our leadership position within this industry.

As ScinoPharm continues to achieve vertical integration to include downstream preparations, we shall also hasten the expansion of our product chain to include high value areas. Strategic alliances will also be utilized to speed up product development or sales in order to improve vertical integration potential of the company's future business model. And ScinoPharm's ability to act as a global supplier will be greatly expanded when the Changshu Plant in Jiangsu becomes fully operational. All of our fellow colleagues have committed themselves to our collective endeavor with the goal of increasing investment returns for all of our shareholders.

Kao-Huei Cheng, Chairman

Appendix 2

Audit Committee's Review Report

The Board of Directors has prepared the Company's 2015 Business Report, parent and consolidated Financial Statements, and proposal for allocation of profits. The CPA firm of PricewaterhouseCoopers Taiwan was retained to audit the Company's Financial Statements and has issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and profit allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of ScinoPharm Taiwan, Ltd. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

ScinoPharm Taiwan, Ltd.

Chairman of the Audit Committee: Wei-Te Ho

March 25, 2016

SCINOPHARM TAIWAN, LTD.
PARENT COMPANY ONLY BALANCE SHEETS
(Expressed in thousands of New Taiwan dollars)

				December 31, 2015			December 31, 2014
	Assets	Notes		AMOUNT	%		AMOUNT	%
	Current assets
1100	Cash and cash equivalents	6(1)	\$	1,981,296	19	\$	1,382,159	14
1150	Notes receivable, net			-	-		27	-
1170	Accounts receivable, net	6(2) and 7		840,479	8		522,964	5
1200	Other receivables			16,235	-		15,181	-
1210	Other receivables - related parties	7		5,268	-		11,071	-
130X	Inventories	5(2) and 6(3)		1,942,181	19		2,247,555	23
1410	Prepayments			143,031	1		132,685	1
11XX	Total current assets			4,928,490	47		4,311,642	43
	Non-current assets
1543	Financial assets carried at cost -	6(4)(24)
	non-current			338,907	3		167,673	2
1550	Investments accounted for under	6(4)(5)(24)
	equity method			1,146,016	11		1,538,831	16
1600	Property, plant and equipment	6(6)(7)(24) and 7		3,718,257	36		3,736,412	37
1780	Intangible assets			12,656	-		7,013	-
1840	Deferred income tax assets	5(2) and 6(22)		238,020	3		198,719	2
1915	Prepayments for equipment	6(6)(24)		17,438	-		9,186	-
1920	Guarantee deposits paid			1,113	-		1,564	-
1980	Other financial assets -	8
	non-current			24,734	-		24,734	-
15XX	Total non-current assets			5,497,141	53		5,684,132	57
1XXX	Total assets		\$	10,425,631	100	\$	9,995,774	100

(Continued)

Liabilities and Equity		Notes	December 31, 2015 AMOUNT %			December 31, 2014 AMOUNT
	Current liabilities						%
2120	Financial liabilities at fair value	6(8)
	through profit or loss - current		\$ 145	-	\$	3,669	-
2150	Notes payable		995	-		1,153	-
2170	Accounts payable		32,639	-		44,268	1
2200	Other payables	6(9)(24) and 7	314,035	3		427,203	4
2230	Current income tax liabilities	6(22)	100,009	1		27,738	-
2310	Advance receipts		31,196	-		37,956	-
21XX	Total current liabilities		479,019	4		541,987	5
	Non-current liabilities
2570	Deferred income tax liabilities	6(22)	3,368	-		3,156	-
2640	Accrued pension liabilities	6(10)	62,854	1		68,704	1
2645	Refundable deposits received		23,397	-		1,656	-
25XX	Total non-current liabilities		89,619	1		73,516	1
2XXX	Total Liabilities		568,638	5		615,503	6
	Equity
	Share capital
3110	Share capital - common stock	6(11)(14)	7,310,829	70		7,029,643	70
3200	Capital surplus	6(12)(13)	1,265,544	12		1,257,277	13
	Retained earnings	6(11)(14)(21)(22)
3310	Legal reserve		396,699	4		348,285	4
3320	Special reserve		22,829	-		22,829	-
3350	Undistributed earnings		791,997	8		621,563	6
3400	Other equity interest	6(14)(15)	69,095	1		100,674	1
3XXX	Total equity		9,856,993	95		9,380,271	94
	Signficant contingent liabilities	9
	and unrecognized contract
	commitments
3X2X	Total liabilities and equity		\$ 10,425,631	100	\$	9,995,774	100

SCINOPHARM TAIWAN, LTD. PARENT COMPANY ONLY BALANCE SHEETS (Expressed in thousands of New Taiwan dollars)

SCINOPHARM TAIWAN, LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

		Year ended December 31
				2015			2014
	Items	Notes		AMOUNT	%		AMOUNT	%
4000	Operating revenue	6(16) and 7	\$	3,897,137	100	\$	4,092,478	100
5000	Operating costs	6(3)(10)(20)(21), 7
		and 9	(	2,231,449) (	57) (		2,428,110) (	59)
5900	Net operating margin			1,665,688	43		1,664,368	41
	Operating expenses	6(10)(20)(21), 7
		and 9
6100	Selling expenses		(	164,464) (	4) (		172,955) (	4)
6200	General and administrative
	expenses		(	346,991) (	9) (		356,189) (	9)
6300	Research and development
	expenses		(	233,502) (	6) (		297,663) (	7)
6000	Total operating expenses		(	744,957) (	19) (		826,807) (	20)
6900	Operating profit			920,731	24		837,561	21
	Non-operating income and
	expenses
7010	Other income	6(17) and 7		56,475	1		65,136	2
7020	Other gains and losses	6(4)(7)(8)(18) and
		12		78,737	2		8,932	-
7050	Finance costs	6(19)	(	28)	-	(	2)	-
7070	Share of profit/(loss) of subsidiaries, associates and joint	6(5)
	ventures accounted for under
	equity method		(	285,806) (	7) (		306,279) (	8)
7000	Total non-operating income
	and expenses		(	150,622) (	4) (		232,213) (	6)
7900	Profit before income tax			770,109	20		605,348	15
7950	Income tax expense	6(22)	(	135,144) (	4) (		121,205) (	3)
8200	Profit for the year		\$	634,965	16	\$	484,143	12
	Other comprehensive income
	Items that may not be reclassified
	subsequently to profit or loss
8311	Other comprehensive income,	6(10)
	before tax, actuarial gains
	(losses) on defined benefit plans		\$	6,821	-	(\$	2,184)	-
8349	Income tax related to	6(22)
	components of other
	comprehensive income that will
	not be reclassified to profit or
	loss Items that may be reclassified		(	1,160)	-		371	-
	subsequently to profit or loss
8361	Other comprehensive income,	6(15)
	before tax, exchange differences
	on translation		(	31,579)	-		56,319	1
8300	Other comprehensive (loss)
	income for the year		(\$	25,918)	-	\$	54,506	1
8500	Total comprehensive income for
	the year		\$	609,047	16	\$	538,649	13
	Basic earnings per share (in
	dollars)
9750	Net income	6(23)	\$		0.87	\$		0.66
	Diluted earnings per share (in
	dollars)
9850	Net income	6(23)	\$		0.87	\$		0.66

SCINOPHARM TAIWAN, LTD. PARENT COMPANY ONLYSTATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

				Capital Reserves
	Notes	Share capital - common stock	Capital surplus	Legal reserve	Special reserve		Retained earnings		Financial statements translation differences of foreign operations		Amount
For the year ended December 31, 2014
Balance at January 1, 2014		\$ 6,759,272	\$ 1,247,796	\$ 220,944	\$ 22,829	\$	1,348,058	\$	44,355	\$	9,643,254
Distribution of 2013 net income (Note):
Legal reserve		-	-	127,341	-	(	127,341 )		-		-
Cash dividends	6(14)	-	-	-	-	(	811,113 )		-	(	811,113 )
Stock dividends	6(11)(14)	270,371	-	-	-	(	270,371 )		-		-
Employee stock option compensation cost	6(12)(13)	-	9,481	-	-		-		-		9,481
Net income for the year ended December 31, 2014		-	-	-	-		484,143		-		484,143
Other comprehensive income for the year ended December 31, 2014	6(15)	-	-	-	-	(	1,813 )		56,319		54,506
Balance at December 31, 2014		\$ 7,029,643	\$ 1,257,277	\$ 348,285	\$ 22,829	\$	621,563	\$	100,674	\$	9,380,271
For the year ended December 31, 2015
Balance at January 1, 2015		\$ 7,029,643	\$ 1,257,277	\$ 348,285	\$ 22,829	\$	621,563	\$	100,674	\$	9,380,271
Distribution of 2014 net income(Note):
Legal reserve		-	-	48,414	-	(	48,414 )		-		-
Cash dividends	6(14)	-	-	-	-	(	140,592 )		-	(	140,592 )
Stock dividends	6(11)(14)	281,186	-	-	-	(	281,186 )		-		-
Employee stock option compensation cost	6(12)(13)	-	8,267	-	-		-		-		8,267
Net income for the year ended December 31, 2015		-	-	-	-		634,965		-		634,965
Other comprehensive income for the year ended December 31, 2015	6(15)	-	-	-	-		5,661	(	31,579 )	(	25,918 )
Balance at December 31, 2015		\$ 7,310,829	\$ 1,265,544	\$ 396,699	\$ 22,829	\$	791,997	\$	69,095	\$	9,856,993

Note: The employees' bonuses were \$2,293 and \$868 and the directors' remuneration were \$22,929 and \$8,678 in 2013 and 2014, respectively, which had been deducted from net income for the year.

SCINOPHARM TAIWAN, LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

				For the years ended December 31,
	Notes		2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax		\$	770,109	\$	605,348
Adjustments
Adjustments to reconcile profit (loss)
Gain/(loss) on valuation of financial assets and liabilities		(	3,524 )		2,531
(Reversal)/provision for doubtful accounts	6(2)	(	43 )		66
Loss on inventory market price decline	6(3)		48,270		53,231
Provision for obsolescence of supplies			9,119		4,113
Share of loss of associates and joint ventures accounted for under equity method	6(5)		285,806		306,279
Gain on disposal of long-term investments	6(4)(18)	(	95,381 )		-
Depreciation	6(6)(20)		395,861		385,861
Loss on disposal of property, plant and equipment	6(18)		503		1,392
Gain on reversal of impairment loss	6(6)(7)(18)	(	4,193 )	(	140 )
Amortizaton	6(20)		4,624		3,715
Employee stock option compensation costs	6(12)(13)		7,844		8,842
Interest income	6(17)	(	11,067 )	(	13,269 )
Interest expense	6(19)		28		2
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable			27		203
Accounts receivable		(	317,472 )		447,205
Other receivables		(	904 )		3,388
Other receivables–related parties			5,803		15,049
Inventories			257,104	(	9,173 )
Prepayment		(	19,465 )		54,297
Changes in operating liabilities
Notes payable		(	158 )		73
Accounts payable		(	11,629 )	(	116,111 )
Accounts payable–related parties			-	(	53,868 )
Other payables			9,343	(	198,725 )
Advance receipts		(	6,760 )	(	36,606 )
Accrued pension liabilities			971		972
Cash inflow generated from operations			1,324,816		1,464,675
Interest received			10,917		13,392
Interest paid		(	28 )	(	2 )
Income tax paid		(	103,122 )	(	287,647 )
Net cash flows from operating activities			1,232,583		1,190,418

(Continued)

SCINOPHARM TAIWAN, LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)
			For the years ended December 31,
	Notes		2015		2014
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in pledged deposits		\$	-	\$	15,485
Acquisition of investments accounted for under the equity method
- subsidiaries			-	(	105,437 )
Cash paid for acquisition of property, plant and equipment	6(24)	(	479,227 )	(	630,241 )
Proceeds from disposal of property, plant and equipment			300		730
Cash paid for acquisition of intangible assets		(	10,267 )	(	2,822 )
Increase in prepayment for equipment		(	25,852 )	(	141,533 )
Decrease in guarantee deposits paid			451		664
Net cash flows used in investing activities		(	514,595 )	(	863,154 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in refundable deposits received			21,741		1,656
Payment of cash dividends	6(14)	(	140,592 )	(	811,113 )
Net cash flows used in financing activities		(	118,851 )	(	809,457 )
Net increase (decrease) in cash and cash equivalents			599,137	(	482,193 )
Cash and cash equivalents at beginning of year	6(1)		1,382,159		1,864,352
Cash and cash equivalents at end of year	6(1)	\$	1,981,296	\$	1,382,159

			December 31, 2015		December 31, 2014
	Assets	Notes	AMOUNT	%	AMOUNT	%
	Current assets
1100	Cash and cash equivalents	6(1)	\$ 2,335,697	19	\$ 1,927,603	17
1150	Notes receivable, net		-	-	27	-
1170	Accounts receivable, net	6(2) and 7	867,231	7	522,990	5
1200	Other receivables		207,955	2	199,174	2
130X	Inventory	5(2) and 6(3)	2,169,208	18	2,449,296	21
1410	Prepayments		168,603	1	150,465	1
1476	Other financial assets - current		284,216	2	-	-
11XX	Total current assets		6,032,910	49	5,249,555	46
	Non-current assets
1543	Financial assets measured at cost -	6(4)(26)
	non-current		338,907	3	167,673	1
1550	Investments accounted for under	6(4)(5)(26)
	equity method		-	-	79,923	1
1600	Property, plant and equipment	6(6)(8)(26) and 7	5,170,714	43	5,065,025	45
1780	Intangible assets		22,918	-	23,554	-
1840	Deferred income tax assets	5(2) and 6(24)	372,644	3	364,381	3
1915	Prepayments for equipment	6(6)(26)	157,961	1	285,167	3
1980	Other financial assets -	8
	non-current		24,734	-	24,734	-
1985	Long-term prepaid rent	6(7)	90,359	1	94,189	1
1990	Other non-current assets		10,448	-	17,619	-
15XX	Total non-current assets		6,188,685	51	6,122,265	54
1XXX	Total assets		\$ 12,221,595	100	\$ 11,371,820	100

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Expressed in thousands of New Taiwan dollars)

(Continued)

		December 31, 2015				December 31, 2014
	Liabilities and Equity	Notes		AMOUNT	%	AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(9)	\$	1,702,306	14	\$ 1,277,476	11
2120	Financial liabilities at fair value	6(10)
	through profit or loss - current			145	-	3,669	-
2150	Notes payable			995	-	1,153	-
2170	Accounts payable			91,060	-	53,813	1
2200	Other payables	6(11)(26) and 7		336,932	3	516,228	5
2230	Current income tax liabilities	6(24)		100,009	1	27,738	-
2310	Advance receipts			43,536	-	37,956	-
21XX	Total current liabilities			2,274,983	18	1,918,033	17
	Non-current liabilities
2570	Deferred income tax liabilities	6(24)		3,368	-	3,156	-
2640	Net defined benefit liabilities	6(12)		62,854	1	68,704	1
2645	Guarantee deposits received			23,397	-	1,656	-
25XX	Total non-current liabilities			89,619	1	73,516	1
2XXX	Total liabilities			2,364,602	19	1,991,549	18
	Equity attributable to owners of
	the parent
	Share capital
3110	Share capital - common stock	6(13)(16)		7,310,829	60	7,029,643	62
3200	Capital surplus	6(14)(15)		1,265,544	10	1,257,277	11
	Retained earnings	6(13)(16)(23)(24)
3310	Legal reserve			396,699	3	348,285	3
3320	Special reserve			22,829	-	22,829	-
3350	Undistributed earnings			791,997	7	621,563	5
3400	Other equity interest	6(17)		69,095	1	100,674	1
3XXX	Total equity			9,856,993	81	9,380,271	82
	Significant contingent liabilities	9
	and unrecognized contract
	commitments

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Expressed in thousands of New Taiwan dollars)

The accompanying notes are an integral part of these consolidated financial statements.

3X2X Total liabilities and equity \$ 12,221,595 100 \$ 11,371,820 100

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

			Year ended December 31
				2015			2014
	Items	Notes		AMOUNT	%		AMOUNT	%
4000	Operating revenue	6(18) and 7	\$	3,955,207	100	\$	4,097,844	100
5000	Operating costs	6(3)(12)(22)(23)
		and 9	(	2,278,553) (	58) (		2,497,278) (	61)
5900	Net operating margin			1,676,654	42		1,600,566	39
	Operating expenses	6(7)(12)(22)(23), 7
		and 9
6100	Selling expenses		(	157,036) (	4) (		177,695) (	4)
6200	General and administrative
	expenses		(	445,701) (	11) (		447,541) (	11)
6300	Research and development expenses		(	324,214) (	8) (		415,888) (	10)
6000	Total operating expenses		(	926,951) (	23) (		1,041,124) (	25)
6900	Operating profit			749,703	19		559,442	14
	Non-operating income and expenses
7010	Other income	6(19)		47,751	1		55,872	1
7020	Other gains and losses	6(4)(6)(8)(10)(20)
		and 12		13,694	-		6,532	-
7050	Finance costs	6(6)(21)(26)	(	9,018)	-	(	4,139)	-
7060	Share of profit/(loss) of	6(5)
	associates and joint ventures
	accounted for under equity
	method			754	-	(	15,498)	-
7000	Total non-operating income
	and expenses			53,181	1		42,767	1
7900	Profit before income tax			802,884	20		602,209	15
7950	Income tax expense	6(24)	(	167,919) (	4) (		118,066) (	3)
8200	Profit for the year		\$	634,965	16	\$	484,143	12
	Other comprehensive income
	Items that may not be reclassified
	subsequently to profit or loss
8311	Actuarial gain (loss) on defined	6(12)
8349	benefit plan Income tax related to	6(24)	\$	6,821	-	(\$	2,184)	-
	components of other
	comprehensive income that will
	not be reclassified to profit or
	loss		(	1,160)	-		371	-
	Items that may be reclassified
	subsequently to profit or loss
8361	Financial statements translation	6(17)
	differences of foreign operations		(	31,579) (	1)		56,319	1
8300	Total other comprehensive (loss) income for the year		(\$	25,918) (	1)	\$	54,506	1
8500	Total comprehensive income for the year		\$	609,047	15	\$	538,649	13
	Profit attributable to:
8610	Owners of the parent		\$	634,965	16	\$	484,143	12
	Comprehensive income
	attributable to:
8710	Owners of the parent		\$	609,047	15	\$	538,649	13
	Basic earnings per share
9750	Net income	6(25)	\$		0.87	\$		0.66
	Diluted earnings per share
9850	Net income	6(25)	\$		0.87	\$		0.66

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Expressed in thousands of New Taiwan dollars)

				Equity attributable to owners of the parent
					Retained Earnings
	Notes	Share capital - common stock	Capital reserves	Legal reserve	Special reserve		Undistributed earnings		Financial statements translation differences of foreign operations		Total equity
For the year ended December 31, 2014
Balance at January 1, 2014		\$ 6,759,272	\$ 1,247,796	\$ 220,944	\$ 22,829	\$	1,348,058	\$	44,355	\$	9,643,254
Distribution of 2013 net income:
Legal reserve		-	-	127,341	-	(	127,341 )		-		-
Cash dividends	6(16)	-	-	-	-	(	811,113 )		-	(	811,113 )
Stock dividends	6(13)(16)	270,371	-	-	-	(	270,371 )		-		-
Employee stock option compensation cost	6(14)(15)	-	9,481	-	-		-		-		9,481
Net income for the year ended December 31, 2014		-	-	-	-		484,143		-		484,143
Other comprehensive income for the year ended December 31, 2014	6(17)	-	-	-	-	(	1,813 )		56,319		54,506
Balance at December 31, 2014		\$ 7,029,643	\$ 1,257,277	\$ 348,285	\$ 22,829	\$	621,563	\$	100,674	\$	9,380,271
For the year ended December 31, 2015
Balance at January 1, 2015		\$ 7,029,643	\$ 1,257,277	\$ 348,285	\$ 22,829	\$	621,563	\$	100,674	\$	9,380,271
Distribution of 2014 net income:
Legal reserve		-	-	48,414	-	(	48,414 )		-		-
Cash dividends	6(16)	-	-	-	-	(	140,592 )		-	(	140,592 )
Stock dividends	6(13)(16)	281,186	-	-	-	(	281,186 )		-		-
Employee stock option compensation cost	6(14)(15)	-	8,267	-	-		-		-		8,267
Net income for the year ended December 31, 2015		-	-	-	-		634,965		-		634,965
Other comprehensive loss for the year ended December 31, 2015	6(17)	-	-	-	-		5,661	(	31,579 )	(	25,918 )
Balance at December 31, 2015		\$ 7,310,829	\$ 1,265,544	\$ 396,699	\$ 22,829	\$	791,997	\$	69,095	\$	9,856,993

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

			For the years ended December 31,
	Notes		2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax		\$	802,884	\$	602,209
Adjustments
Adjustments to reconcile profit (loss)
(Reversal)/provision for doubtful accounts	6(2)	(	43 )		66
Loss on inventory market price decline	6(3)		68,569		71,954
Provision for obsolescence of supplies			7,531		6,887
Share of (profit) loss of associates and joint ventures accounted	6(5)
for under the equity method		(	754 )		15,498
Gain on disposal of investments accounted for under the equity	6(4)(20)
method		(	95,381 )		-
Depreciation	6(6)(22)		471,133		458,019
Loss on disposal of property, plant and equipment	6(20)		843		4,077
Gain on reversal of impairment loss	6(6)(8)(20)	(	4,193 )	(	140 )
Amortization	6(22)		11,386		11,007
Amortization of long-term prepaid rent	6(7)		2,051		2,075
(Gain)/loss on valuation of financial assets and liabilities		(	3,524 )		2,531
Employee stock option compensation cost	6(14)(15)		8,267		9,481
Interest income	6(19)	(	30,689 )	(	32,308 )
Interest expense	6(21)		9,018		4,139
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable			27		203
Accounts receivable		(	344,198 )		447,585
Other receivables		(	8,631 )	(	37,801 )
Inventories			211,519	(	740 )
Prepayments		(	26,074 )		36,411
Changes in operating liabilities
Notes payable		(	158 )		73
Accounts payable			37,247	(	210,624 )
Other payables			2,750	(	206,068 )
Advance receipts			5,580	(	37,856 )
Net defined benefit liabilities			971		972
Cash inflow generated from operations			1,126,131		1,147,650
Interest received			30,539		32,431
Interest paid		(	9,018 )	(	4,139 )
Income tax paid		(	103,122 )	(	287,647 )
Net cash flows from operating activities			1,044,530		888,295

(Continued)

SCINOPHARM TAIWAN, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of New Taiwan dollars)

			For the years ended December 31,
	Notes		2015		2014
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other financial assets-current		( \$	284,216 )	\$	-
Decrease in pledged deposits			-		15,485
Cash paid for acquisition of property, plant and equipment	6(26)	(	631,840 )	(	829,051 )
Interest paid for acquisition of property, plant and equipment	6(6)(21)(26)	(	14,989 )	(	13,191 )
Proceeds from disposal of property, plant and equipment			451		1,426
Cash paid for acquisition of intangible assets		(	11,020 )	(	5,358 )
Increase in prepayment for equipment		(	9,729 )	(	176,131 )
Decrease in other non-current assets			7,171		306
Net cash flows used in investing activities		(	944,172 )	(	1,006,514 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings			424,830		587,691
Increase in guarantee deposits received			21,741		1,656
Payment of cash dividends	6(16)	(	140,592 )	(	811,113 )
Net cash flows from (used in) financing activities			305,979	(	221,766 )
Effect of foreign exchange rate changes on cash and cash equivalents			1,757	(	21,840 )
Net increase (decrease) in cash and cash equivalents			408,094	(	361,825 )
Cash and cash equivalents at beginning of year	6(1)		1,927,603		2,289,428
Cash and cash equivalents at end of year	6(1)	\$	2,335,697	\$	1,927,603

ScinoPharm Taiwan, Ltd. Proposed Revision of the Ethical Corporate Management Best Practice Principles

Current Provision	Revision Proposed	Remark
Article 1 Purpose and Scope To aid the Company with operating in good faith and for sound development of corporate culture, these Principles were enacted to serve as a reference for the establishment of ethical business operations. The scope of these Principles extends to subsidiaries, companies where direct or indirect donations from the Company exceed 50% of total donations received, and other agencies and organizations that are effectively controlled by the Company (hereinafter referred to as "Company agencies and organizations").	Article 1 Purpose and Scope These Principles were enacted to allow the Company to operate in good faith and for sound development of corporate culture, and to establish ethical business operations. The scope of these Principles extends to subsidiaries and other agencies and organizations that are effectively controlled by the Company, which should enact their respective Ethical Corporate Management Best Practice Principles in accordance with the spirit of these Principles.	Wording has been changed to reflect actual business operations
Article 2 Prohibition of Unethical Conduct During the course of engaging in commercial activities, the Company's directors, supervisors, managers, employees, or persons having effective control over the Company ("Effective Controllers") shall not directly or indirectly provide, commit to, request, or accept any improper benefits, or commit any unethical acts that breach ethics, are illegal, or breach fiduciary duty (hereinafter referred to as "Unethical Conduct") for purposes of acquiring or maintaining benefits. The commercial activities referred to in the previous paragraph include all activities conducted with civil servants, political candidates, political parties or members of political parties, and any state-run or privately owned business or institution, and their respective directors, supervisors, managers, employees, effective controllers or other interested parties.	Article 2 Prohibition of Unethical Conduct During the course of engaging in commercial activities, the Company's directors, managers, employees, appointees, or persons having effective control over the Company ("Effective Controllers") shall not directly or indirectly provide, commit to, request, or accept any improper benefits, or commit any unethical acts that breach ethics, are illegal, or breach fiduciary duty (hereinafter referred to as "Unethical Conduct") for purposes of acquiring or maintaining benefits. The commercial activities referred to in the previous paragraph include all activities conducted with civil servants, political candidates, political parties or members of political parties, and any state-run or privately owned business or institution, and their respective directors, supervisors, managers, employees, effective controllers or other interested parties.	1. The Company has established an Audit Committee to replace supervisors, and revisions to this provision have been made accordingly. 2. The Taiwan Stock Exchange has required scope to be fully specified, and therefore "appointees" have been added to the first paragraph of this provision.

Current Provision	Revision Proposed	Remark
Article 6 Prevention Plan	Article 6 Prevention Plan	1. The first
In accordance with the spirit of these	The Ethical Corporate Management	paragraph has
Principles and policies as stated in	Best Practice Principles policies	been revised and
previous provisions, a clear and	enacted by the Company shall clearly	the second
detailed Prevention of Unethical Acts	and in detail specify code of conduct	paragraph has
Plan (hereinafter referred to as	for operating in good faith and lay out	been struck from
"Prevention Plan") was listed in these	a Prevention of Unethical Acts Plan	these Principles
Principles, including operating	(hereinafter referred to as "Prevention	to reflect the
procedures, code of conduct, and	Plan"), including operating	content of Article
training.	procedures, code of conduct, and	7 and the third
The Company Prevention Plan shall be	training.	paragraph of
in accordance with laws and	During the course of establishing the	Article 9.
regulations for the operating location	Prevention Plan, the Company shall	2. The third
of the Company and its agencies and	communicate with its employees,	paragraph of this
organizations.	labor unions, major business	provision has
During the course of establishing the	transaction parties, or other	been revised to
Prevention Plan, the Company shall	stakeholder.	encourage
consult with its employees, labor		communication
unions, or members of other		between the
representative agencies, and also		Company and
communicate with relevant interest		interest groups
groups.		with regard to
		the Prevention
		Plan.
Article 7 Scope of Prevention Plan When establishing the Prevention	Article 7 Scope of Prevention Plan When establishing the Prevention	1. Subparagraph 5 of Paragraph 2
Plan, the Company shall analyze the	Plan, the Company shall analyze the	added in
business activities at higher risk of	business activities at higher risk of	accordance with
involvement in unethical conduct	involvement in unethical conduct	amendments
within their business scope, and	within their business scope, and	made to the
strengthen relevant preventive	strengthen relevant preventive	Trade Secret Acts
measures.	measures.	by the Ministry
The Prevention Plan established by	The Prevention Plan established by	of Economic
the Company shall include at least	the Company shall include at least	Affairs.
preventive measures against the	preventive measures against the	2. Subparagraphs 6
following events:	following events:	and 7 of
1. Offers and acceptance of bribes	1. Offers and acceptance of bribes	Paragraph 2
2. Illegal political donations	2. Illegal political donations	added in
3. Inappropriate charitable donations	3. Inappropriate charitable donations	accordance with
or sponsorships	or sponsorships	international
4. Offers or acceptance of	4. Offers or acceptance of	trends
unreasonable gifts, hospitalities, or	unreasonable gifts, hospitalities, or
other inappropriate benefits	other inappropriate benefits
	5. Misuse of trade secrets and
	infringement of trademark rights,
	patent rights, copyrights, and other
	intellectual property rights
	6. Engagement in unfair competition

Current Provision	Revision Proposed	Remark
	practices 7. Direct or indirect damage caused to the interests and health and safety of consumers or other stakeholders during the course of research and development, procurement, manufacturing, delivery, or sale of products and services
Article 8 Commitments and	Article 8 Commitments and	Wording of
Implementation The Company and its agencies and organizations shall clearly specify its ethical corporate management policies in its Rules and external documents; the Board of Directors and management shall bear the commitment of active implementation, and implement said policies in internal management and external commercial activities.	Implementation The Company shall clearly specify its ethical corporate management policies in its Rules and external documents, and the Board of Directors and management shall bear the commitment of rigorous and thorough implementation, and implement said policies in internal management and commercial activities.	Paragraph 1 has been revised in accordance with Article 6.1.1 of the Business Principles for Countering Bribery
Article 9 Managing Business Activities	Article 9 Managing Business Activities	Paragraph 3 of this
with Integrity The Company shall conduct business activities in a fair and transparent manner. The Company shall consider the legality of its agents, suppliers, clients, or other trading counterparties prior to commercial transactions, as well as previous involvement of the aforementioned parties in unethical conduct, and should avoid dealings with any parties with such previous records. When entering into contracts with other parties, the Company should include in said compliance with ethical management policies and termination or rescindment of the contract at any time in the event that trading counterparties are involved in unethical conduct.	with Integrity The Company shall conduct business activities in a fair and transparent manner in accordance with its Ethical Corporate Management Best Practice Principles. The Company shall consider the legality of its agents, suppliers, clients, or other trading counterparties prior to commercial transactions, as well as the possible involvement of the aforementioned parties in unethical conduct, and shall avoid dealings with any parties so involved. When entering into contracts with its agents, suppliers, clients, or other trading counterparties, the Company shall include in said contract terms requiring compliance with ethical management policies and termination or rescindment of the contract at any time in the event that trading counterparties are involved in unethical conduct.	article has been revised, and Paragraph 2 and the wording of Paragraph 1 in this article have been revised in accordance with the inclusion of the "termination or rescindment of the contract at any time in the event that trading counterparties are involved in unethical conduct" clause in contracts in Paragraph 3.
Article 10 Prohibition of Offers or Acceptance of Bribery	Article 10 Prohibition of Offers or Acceptance of Bribery	1. The Company has established an
During conduction of business	During conduction of business	Audit Committee

Current Provision	Revision Proposed	Remark
transactions, the Company and its directors, supervisors, managers, employees, and effective controllers shall not directly or indirectly offer, commit to, request, or accept inappropriate benefits in any form from clients, agents, contractors, suppliers, public servants, or other stakeholders, including rebates, commissions, facilitation payments or inappropriate benefits offered or accepted through other means. However, the aforementioned limitations do not apply where such activities are permissible by law.	transactions, the Company and its directors, managers, employees, appointees, and effective controllers shall not directly or indirectly offer, commit to, request, or accept inappropriate benefits in any form from clients, agents, contractors, suppliers, public servants, or other stakeholders.	to replace supervisors, and revisions to this article have been made accordingly. 2. The term "appointees" has been added to this article 3. Articles 6 and 7 of these Principles have already covered the establishment and scope of the Prevention Plan and preventive measures; accordingly, the final clause of this article has been struck from
		these Principles.
Article 11 Prohibition of Illegal Political Donations	Article 11 Prohibition of Illegal Political Donations	Wording has been revised in
When directly or indirectly offering	The Company shall offer no political	accordance with
donations to political parties or	donations.	Company policies
organizations or individuals
participating in political activities, the
Company and its directors,
supervisors, managers, employees,
and effective controllers shall comply
with the Political Donations Act and
relevant internal operational
procedures, and shall not make said
donations in exchange for commercial gains or business advantages.
Article 12 Prohibition of	Article 12 Prohibition of	1. The Company has
Inappropriate Charitable Donations or Sponsorships	Inappropriate Charitable Donations or Sponsorships	established an Audit Committee
When making or offering charitable	When making or offering charitable	to replace
donations and sponsorships, the	donations and sponsorships, the	supervisors, and
Company and its directors,	Company and its directors, managers,	revisions to this
supervisors, managers, employees,	employees, appointees, and effective	article have been
and effective controllers shall comply	controllers shall comply with relevant	made
with relevant laws and internal	laws and internal operational	accordingly.
operational procedures, and shall not	procedures, and shall not	2. Wording has been

Current Provision	Revision Proposed	Remark
surreptitiously engage in bribery.	surreptitiously engage in bribery.	revised in
		accordance the
		addition of
		"appointees" to
		Paragraph 1 of
		Article 2.
Article 13 Prohibition of	Article 13 Prohibition of	1. The Company has
Inappropriate Gifts, Hospitalities, and	Inappropriate Gifts, Hospitalities, and	established an
other Inappropriate Benefits	other Inappropriate Benefits	Audit Committee
The Company and its directors,	The Company and its directors,	to replace
supervisors, managers, employees,	managers, employees, appointees and	supervisors, and
and effective controllers shall not	effective controllers shall not directly	revisions to this
directly or indirectly offer or accept	or indirectly offer or accept any	article have been
any inappropriate gifts, hospitalities,	inappropriate gifts, hospitalities, or	made
or other inappropriate benefits used	other inappropriate benefits used to	accordingly.
to establish business relationship or	establish business relationship or	2. Wording has been
influence commercial transactions.	influence commercial transactions.	revised to add "appointees".
(New article)	Article 14 Prohibition of Intellectual	To avoid risk of
	Property Right Infringement	infringement, these
	The Company and its directors,	Principles require
	managers, employees, appointees,	the Company to
	and effective controllers shall comply	observe intellectual
	with relevant laws and regulations,	property rights in
	internal operational procedures, and	accordance with
	contractual provisions relating to intellectual property, and may not use,	Subparagraph 5, Paragraph 2 of
	disclose, dispose, or damage	Article 7 and laws
	intellectual property or otherwise	relating to
	infringe upon intellectual property	intellectual property
	rights without the prior consent of the	rights.
	property rights holder.
(New article)	Article 15 Prohibition of Unfair	This article has been
	Competition Practices	added in accordance
	Company business activities shall	with Subparagraph
	comply with relevant competition laws	6, Paragraph 2 of
	and regulation and the Company shall	Article 7.
	not engage in unfair competition practices.
(New article)	Article 16 Prevention of Products and	This article has been
	Services Damage to Stakeholders	added in accordance
	In the course of research and	with Subparagraph
	development, procurement,	7, Paragraph 2 of
	manufacturing, delivery, or sale of	Article 7.
	products and services, the Company
	and its directors, managers,
	employees, appointees, and effective
	controllers shall observe applicable

Current Provision	Revision Proposed	Remark
	laws and international standards to ensure information transparency regarding the safety of its products and services. The Company shall also establish and publish policies protecting the rights and interests of consumers or other stakeholders, and said policies shall be carried out through business operations to prevent its products and services from directly or indirectly damaging the interests and health and safety of consumers or other stakeholders. In the event that there is sufficient evidence to prove that Company products or services are likely to pose any hazard to the safety and health of consumers or other stakeholders, the Company shall, in principle, immediately recall said products or suspend said services.
Article 14 Organization Structure and Responsibilities The Board of Directors shall exercise due care to prevent the Company from engaging in unethical conduct, review results of preventive measures, and continually make adjustments so as to ensure thorough implementation of ethical management policies. To achieve sound ethical management, the Company shall establish a dedicated unit responsible for establishing and supervising ethical management policies and prevention plans, and said unit shall provide regular reports to the Board of Directors.	Article 17 Organization Structure and Responsibilities Company directors, managers, employees, appointees, and effective controllers shall exercise due care to prevent the Company from engaging in unethical conduct, review results of preventive measures, and continually make adjustments so as to ensure thorough implementation of ethical management policies. To achieve sound ethical management, the Company shall establish under the Board of Directors an ethical management implementation unit responsible for establishing and supervising the implementation of the ethical management policies and prevention plans. The unit shall be in charge of the following matters, and shall report regularly to the Board of Directors: 1. Assist in incorporating ethics and moral values into Company business strategies and adopt appropriate prevention measures against corruption and malfeasance	1. Paragraph 1 has been revised in accordance with Article 2 of these Principles 2. To ensure effective implementation of ethical management policies, Paragraph 2 of this article has been revised; public companies are required to establish dedicated units under the Board of Directors and also set the duties of said unit. 3. Article number has been revised.

Current Provision	Revision Proposed	Remark
	to ensure ethical management in
	compliance with relevant laws
	2. Adopt programs to prevent
	unethical conduct and set out the
	standard operating procedures and
	conduct guidelines of each
	program as related to Company
	operations and business.
	3. Set up check-and-balance
	mechanisms for mutual supervision
	of business activities within the
	business scope which are at a
	higher risk for unethical conduct.
	4. Promote and coordinate awareness
	and educational activities relating
	to ethics policy.
	5. Develop and ensure the operating
	effectiveness of a whistle-blowing
	system
	6. Assist the Board of Directors and
	management in auditing and
	assessing whether prevention
	measures for implementing ethical
	management are operating
	effectively, and prepare reports
	documenting regular assessment of
	compliance with ethical
	management in operating
	procedures.
Article 15 Compliance with Laws	Article 18 Compliance with Laws	1. The Company has
During Business Transactions	During Business Transactions	established an
The Company and its directors,	The Company and its directors,	Audit Committee
supervisors, managers, employees,	managers, employees, appointees,	to replace
and effective controllers shall comply	and effective controllers shall comply	supervisors, and
with laws and regulations and the	with laws and regulations and the	revisions to this
Prevention Plan when conducting	Prevention Plan when conducting	article have been
business.	business.	made
		accordingly.
		2. Wording has been
		revised in
		accordance the
		addition of "appointees" to
		Paragraph 1 of
		Article 2. 3. Article number
		has been revised.

Current Provision	Revision Proposed	Remark
Article 16 Avoidance of Conflicts of	Article 19 Avoidance of Conflicts of	1. The beginning
Interest for Directors, Supervisors,	Interest	section of
and Managers	The Company shall establish policies	Paragraph 1 of
The Company shall establish policies	for preventing conflicts of interest to	this article has
for preventing conflicts of interest and	identify, monitor, and manage risks	been revised in
shall offer appropriate means for	that may result from unethical	accordance with
directors, supervisors, managers, and	conduct, and shall offer appropriate	Article 5.1 of
other stakeholders in attendance at	means for directors, managers, and	Transparency
board meetings to voluntarily explain	other stakeholders in attendance at	International's
whether their interests could	board meetings to voluntarily explain	Business
potentially conflict with those of the	whether their interests could	Principles for
Company.	potentially conflict with those of the	Countering
The directors shall practice rigid self-discipline, and in the event that a	Company. In the event that a board meeting	Bribery 2. The latter section
board meeting proposal concerns the	proposal concerns the personal	of Paragraph 1
interests of any director or entities	interest of Company directors,	and the
represented by said directors, which	managers, and other stakeholders in	beginning section
may potentially prejudice Company	attendance at board meetings or	of Paragraph 2,
interests, said director shall state	entities represented by the	and Paragraph 2
concerns and respond to questions,	aforementioned parties, the relevant	of this article has
but may not participate in discussion	persons shall state the important	been revised in
of or vote on the proposal, shall	aspects of the relationship of interest	consideration of
recuse from discussion or voting	at said board meeting. If said	the fact that
procedures, and may not exercise	participation is likely to prejudice	conflicts of
voting rights as proxy for another	Company interests, the relevant	interest may not
director. The directors shall practice	persons may not participate in	be limited to
rigid self-discipline and shall not	discussion of or vote on the proposal,	directors
support one another in improper	shall recuse from discussion or voting	3. Paragraph 3 of
dealings.	procedures, and may not exercise	this article has
Company directors, supervisors, and	voting rights as proxy for another	been revised to
managers shall not take advantage of	director. The directors shall practice	prevent
their positions or influence within the	self-discipline and shall not support	employees from
Company to obtain inappropriate	one another in improper dealings.	taking advantage
benefits for themselves, their spouses,	Company directors, managers,	of their positions
parents, children or any other	employees, appointees, and effective	or influence
persons.	controllers shall not take advantage of	within the
	their positions or influence within the	Company to
	Company to obtain inappropriate	obtain
	benefits for themselves, their spouses,	inappropriate
	parents, children or any other persons.	benefits for themselves or
		other persons.
		4. Article number
		has been revised.
Article 17 Accounting and Internal	Article 20 Accounting and Internal	1. Word of
Control	Control	Paragraph 2 has
The Company shall establish effective	The Company shall establish effective	been revised
accounting and internal control	accounting and internal control	2. Additional

Current Provision	Revision Proposed	Remark
systems for business activities at	systems for business activities at	content has been
higher risk of involvement in unethical	higher risk of involvement in unethical	added in
conduct; the Company shall not keep	conduct; the Company shall not keep	accordance with
hidden or secret accounts, and shall	hidden or secret accounts, and shall	Article 6.10 of
conduct reviews regularly so as to	conduct reviews regularly so as to	the Business
ensure that the design and	ensure that the design and	Principles for
enforcement of the systems are	enforcement of the systems are	Countering
effective.	effective.	Bribery, such that
The internal audit personnel of the	The internal audit unit of the	the Company
Company shall periodically review	Company shall periodically review	should hire
Company compliance with the	Company compliance with the	outside experts
foregoing systems, prepare audit	foregoing systems, prepare audit	to validate the
reports, and submit said reports to the	reports, and submit said reports to the	prevention of
Board of Directors.	Board of Directors. If necessary, said	unethical
	internal audit unit may engage a	conduct
	certified public accountant or other	3. Article number
	professionals to conduct audits.	has been revised.
Article 18 Operating Procedures and	Article 21 Operating Procedures and	1. The Company has
Code of Conduct	Code of Conduct	established an
The Company shall establish	The Company shall establish	Audit Committee
operational procedures and code of	operational procedures and code of	to replace
conduct in accordance with Article 6	conduct in accordance with Article 6	supervisors, and
to guide directors, supervisors,	to guide directors, managers,	revisions to this
managers, employees, and substantial	employees, and substantial controllers	article have been
controllers on the conduction of	on the conduction of business	made
business transactions. The procedures	transactions. The procedures and code	accordingly.
and code of conduct should at least	of conduct should at least contain the	2. Wording has been
contain the following:	following:	revised to reflect
1. Standards for determining whether	1. Standards for determining whether	Company policies
improper benefits have been	improper benefits have been	and current
offered or accepted.	offered or accepted.	mode of business
2. Procedures for offering legitimate	2. The Company shall not offer	operations
political donations.	political donations.	3. Article number
3. Procedures and standard rates for	3. Procedures for charitable donations	has been revised.
charitable donations or	or sponsorships.
sponsorships.	4. Rules for avoiding work-related
4. Rules for avoiding work-related	conflicts of interests and relevant
conflicts of interests and relevant	reporting and handling procedures
reporting and handling procedures 5. Rules for keeping confidential trade	5. Rules for keeping confidential trade secrets and sensitive business
secrets and sensitive business	information obtained during
information obtained during	business transactions.
business transactions.	6. Regulations and procedures for
6. Regulations and procedures for	dealing with suppliers, clients, and
dealing with suppliers, clients, and	business transaction counterparties
business transaction counterparties	suspected of unethical conduct.
suspected of unethical conduct.	7. Handling procedures for violations
7. Handling procedures for violations	of these Principles.

Current Provision	Revision Proposed	Remark
of these Principles.	8. Disciplinary measures on offenders.
8. Disciplinary measures on offenders.
Article 19 Training and Assessments	Article 22 Training and Assessments	1. Wording has been
The Company shall periodically	The Company shall periodically	revised in
organize training programs for	organize or encourage participation in	accordance with
directors, supervisors, managers,	ethical management training	the term
employees, and effective controllers	programs for directors, managers,	"appointees"
and invite participation from	employees, appointees, and effective	added to
commercial transaction	controllers and invite participation	Paragraph 1 of
counterparties to raise awareness of	from commercial transaction	Article 2
Company resolve in implementing	counterparties to raise awareness of	2. Wording has been
ethical management, related policies, the Prevention Plan, and the	Company resolve in implementing ethical management, related policies,	revised to reflect relevant revisions
consequences of unethical conduct.	the Prevention Plan, and the	and current
The Company shall integrate ethical	consequences of unethical conduct.	mode of business
management policies with employee	The Company shall integrate ethical	operations
performance appraisal systems and	management policies with employee	3. Article number
human resource policies, and establish	performance appraisal systems and	has been revised.
a clear and effective incentive and	human resource policies, and establish
penalty system.	a clear and effective incentive and
	penalty system.
Article 20 Whistle-Blowing and	Article 23 Whistle-Blowing System	1. Wording of
Penalties	The Company shall establish and	Paragraph 1 has
The Company shall provide a	execute a concrete whistle-blowing	been revised to
legitimate channel for whistle-blowing	system. The whistle-blowing system	specify
and ensure confidentiality of	shall at least include the following:	institutionalizatio
whistle-blowers and the content of	1. An independent whistle-blowing	n of
reported cases. The Company shall establish specific	mailbox or hotline that is either internally established and	whistle-blowing procedures
penalties and a whistle-blowing	announced, or provided by an
system for violations of ethical	independent external institution, to	2. Paragraph 1 and 2 of this article
management regulations, and	allow the submission of	have been added
immediately disclose the professional	whistle-blowing reports by	in consideration
title, name, violation date, description	company insiders and outsiders.	of the fact that
of violations, and handling procedures	2. Handled by dedicated personnel or	whistle-blowers
of violators on the Company internal	units appointed to do so. Any tip	may come from
website.	involving a director or senior	within or without
	manager shall be reported to the	the Company
	independent directors or the audit	3. Paragraph 3 of
	committee. Categories of reported	this article has
	misconduct shall be delineated and	been added to
	standard operating procedures for the investigation of each shall be	specifically
	established.	ensure complete
	3. Documentation of case acceptance,	documentation of
	investigation process, investigation	whistle-blowing
	results, and relevant documents.	evidence and processes
	4. Confidentiality of whistle-blower

Current Provision	Revision Proposed	Remark
	identity and the content of reported cases. 5. Measures for protecting whistle-blowers from inappropriate disciplinary actions due to their whistle-blowing actions. 6. Incentive measures for whistle-blowing. In the event that dedicated personnel or units of the Company handling the whistle-blowing system are made aware of material misconduct or likelihood of material impairment, said personnel or units shall immediately prepare a report and notify the independent directors or the audit committee in written form.	4. Paragraph 5 and 6 of this article have been added to protect whistle-blowers and related content 5. Paragraph 1 in the original article has been moved to Paragraph 4 of this revised article 6. Paragraph 2 of this article has been revised in accordance with Article 15 of Regulations Governing Establishment of Internal Control Systems by Public Companies. Paragraph 2 of the original article has been moved to Article 24. 7. Article number has been revised.
(Originally the Paragraph 2 of Article 20)	Article 24 Penalties and Whistle-Blowing System The Company shall establish and announce specific penalties and a whistle-blowing system for violations of ethical management regulations, and immediately disclose the professional title, name, violation date, description of violations, and handling procedures of violators on the Company internal website.	Paragraph 2 of the original Article 20 has been moved to this article and the specific penalties and whistle-blowing system for violations of ethical management regulations is required to be publicity announced.
Article 21 Information Disclosure The Company shall disclose measures taken for ethical management	Article 25 Information Disclosure The Company shall analyze and assess the results of ethical management	1. Ethical management and anti-corruption

Current Provision	Revision Proposed	Remark
implementation, on Company websites, annual reports, and prospectuses.	promotion and disclose measures taken for ethical management implementation, implementation status, quantitative data, and promotion effectiveness on Company websites, annual reports, and prospectuses, and shall also disclose the content of Ethical Corporate Management Best Practice Principles on the Market Observation Post System.	policies shall be disclosed and it is recommended that quantitative indicators are disclosed. 2. This article has been revised to strengthen disclosure of the Ethical Corporate Management Best Practice Principles 3. Article number has been revised.
Article 22 Review and Revision of Ethical Corporate Management Best Practice Principles The Company shall monitor development of local and international regulations concerning ethical management and encourage its directors, supervisors, managers, and employees to propose suggestions; said suggestions shall be used to review and improve upon the Ethical Corporate Management Best Practice Principles, with a view to achieving effective ethical management.	Article 26 Review and Revision of Ethical Management Policies and Measures The Company shall monitor development of local and international regulations concerning ethical management and encourage its directors, managers, and employees to propose suggestions; said suggestions shall be used to review and improve upon established ethical management policies and measures, with a view to achieving thorough implementation of ethical management.	1. Wording has been revised to encourage continuous review of ethical management policies and measures and to keep up with current trends 2. Article number has been revised
Article 23 Scope of Audit Committee Responsibilities In the event that the Company establishes an audit committee, the clauses applying to supervisors under these Principles shall apply to said audit committee.	(This article has been struck from these Principles)	The Company has replaced supervisors with its Audit Committee and this article has been accordingly struck from these Principles
Article 24 Implementation The Ethical Corporate Management Best Practice Principles shall be implemented following approval from the Board of Directors, and shall be delivered to supervisors and reported at shareholder meetings. The same procedure shall be followed for	Article 27 Implementation The Ethical Corporate Management Best Practice Principles shall be implemented following approval from the Board of Directors, and shall be delivered to the Audit Committee and reported at shareholder meetings. The same procedure shall be followed for	1. Paragraph 1 has been revised and Paragraph 2 has been added in consideration of the fact that the Company has established its

Current Provision	Revision Proposed	Remark
revisions of these Principles.	revisions of these Principles.	Audit Committee
	When the Ethical Corporate	and independent
	Management Best Practice Principles	directors.
	are reported and discussed at	2. Article number
	shareholder meetings in accordance	has been revised.
	with the previous paragraph, the
	opinions of Company-appointed
	independent directors shall be taken
	into full consideration by the Board of
	Directors. Should an independent
	director object to or express
	reservations on any matter, the same
	shall be recorded in the minutes of the
	board meeting. Independent directors
	unable to attend board meetings in
	person to express objections or
	reservations shall provide a written
	opinion prior to the board meeting,
	unless there is reason to do otherwise,
	and said opinion shall be specified in
	the minutes of the board of directors
	meeting.
(New article)	Article 28 Issuance and Revisions	This provision has
	These Principles were issued on	been added for
	December 9, 2010, following approval	clarification of
	from the Board of Directors; the first	previous revisions.
	revision was made on March 26, 2012,
	and the second revision was made on
	August 4, 2015,

ScinoPharm Taiwan, Ltd. Procedures for Ethical Management and Code of Conduct

Established on 4 August 2015

Article 1

The Company shall engage in business activities following principles of fairness, honesty, faithfulness, and transparency, to fully implement ethical management policies and actively prevent unethical conduct, these Procedures for Ethical Management and Code of Conduct (hereinafter referred to as "Procedures and Code of Conduct") are established pursuant to the provisions of the Ethical Corporate Management Best Practice Principles for Listed Companies and relevant laws, with a view to providing all Company personnel clear direction for performance of their duties.

The scope of application for these Procedures and Code of Conduct includes Company subsidiaries and other agencies or organizations effectively controlled by the Company; said entities shall adhere to the spirit of these Procedures and Code of Conduct and establish their own Procedures and Code of Conduct.

Article 2

The term "Company personnel" in these Procedures and Code of Conduct refers to any director, manager, employee, appointee, or effective controllers of the Company and its agencies and organizations.

Any offer, commitment, request, or acceptance of inappropriate benefits by any Company personnel through a third party is presumed to be an act committed by Company personnel.

Article 3

Under these Procedures and Code of Conduct, the term "unethical conduct" refers to any Company personnel, directly or indirectly offering, committing to, requesting, or accepting inappropriate benefits or committing a breach of ethics, unlawful act, or breach of fiduciary duty for purposes of acquiring or maintaining benefits, in the course of their duties.

The counterparties of the unethical conduct in the preceding paragraph include public officials, political candidates, political parties or their staffs, and government-owned or private-owned enterprises or institutions and their directors, supervisors, managerial officers, employees, effective controllers, or other interested parties.

Article 4

Under these Procedures and Code of Conduct, the term "benefits" refers to any money, gratuity, gift, commission, position, service, preferential treatment, rebate, facilitating payment, entertainment, dining, or other item of value in any form or name.

Article 5

The Company has appointed a dedicated unit for ethical management promotion under the Board of Directors, responsible for revisions of these Procedures and Code of Conduct, and for organizing and reviewing the execution, interpretation, and advisory services of the same, as well as the monitoring of execution; the unit shall mainly be in charge of the following matters, and shall report regularly to the Board of Directors:

(1). Assist in incorporating ethics and moral values into Company business strategies and

adopt appropriate prevention measures against corruption and wrongdoing to ensure ethical management in compliance with relevant laws

• (2). Adopt programs to prevent unethical conduct and set out the standard operating procedures and conduct guidelines of each program as related to Company operations and business.
• (3). Set up check-and-balance mechanisms for mutual supervision of business activities within the business scope which are at a higher risk for unethical conduct.
• (4). Promote and coordinate awareness and educational activities relating to ethics policy.
• (5). Develop and ensure the operating effectiveness of a whistle-blowing system
• (6). Assist the Board of Directors and management in auditing and assessing whether prevention measures for implementing ethical management are operating effectively, and prepare reports documenting regular assessment of compliance with ethical management in operating procedures.

Article 6

Except under the following circumstances, when offering, accepting, committing to, or requesting, directly or indirectly, any benefits as specified in Article 4, the conduct of Company personnel shall comply with the provisions of the Ethical Corporate Management Best Practice Principles and these Procedures and Code of Conduct, and relevant procedures shall be carried out:

• (1). Where the conduct is undertaken to meet business needs and in accordance with local courtesy, convention, or custom during domestic (or foreign) visits, reception of guests, promotion of business, and communication and coordination.
• (2). Where the conduct has its basis in ordinary social activities in line with accepted social custom, commercial purposes, or developing relationships.
• (3). Invitations to guests or attendance at commercial activities or factory visits in relation to business needs.
• (4). Attendance at folk festivals that are open to and invite the attendance of the general public.
• (5). Other conduct that comply with Company rules.

Article 7

Except under any of the circumstances set forth in the preceding article, when any Company personnel are offered or promised, either directly or indirectly, any benefits as specified in Article 4 by a third party, the matter shall be handled in accordance with the following procedures:

• (1). If there is no relationship of interest between the party offering or promising the benefit and the official work duties of Company personnel, said personnel shall report to their immediate supervisor within 3 days from the acceptance of the benefit, and if necessary notify the auditing department or relevant units
• (2). If a relationship of interest exists between the party offering or promising the benefit and the official work duties of Company personnel, said personnel shall return or refuse the benefit, and shall report to his or her immediate supervisor and notify the auditing department or relevant units.

The aforementioned relationship of interest between the party offering or promising the benefit and the official work duties of Company personnel refers to one of the following circumstance:

• (1). When the two parties have commercial dealings, a relationship of direction and supervision, or subsidies (or rewards) for expenses.
• (2). When a contracting, trading, or other contractual relationship is being sought, is in progress, or has been established.
• (3). Other circumstances in which a decision regarding Company business, or the execution or non-execution of business, will result in a beneficial or adverse impact.

In the event where Paragraph 1 holds true, the direct manager of said Company personnel shall propose that said benefits be returned, accepted on payment, given to the public, donated to charity, or handled in other appropriate manners. The proposal shall be implemented after being reported and approved by the Company President, and shall simultaneously be reported to the auditing department or relevant units.

Article 8

The Company shall neither offer nor commit to any facilitating payment.

Should any Company personnel offer or commit to a facilitating payment under threat or intimidation, said personnel shall submit a report to their direct manager stating the facts and shall notify the auditing department and relevant units, and cooperate with relevant units in investigation and handling of said incident.

In a case involving alleged illegality, the relevant judicial agency shall immediately be notified.

Article 9

The Company shall offer no political donations.

Article 10

Company charitable donations or sponsorships shall be provided in accordance with the following provisions:

• (1). The donation or sponsorship shall be in compliance with the laws and regulations of the country where the Company operates.
• (2). A written record of the decision making process shall be kept.
• (3). A charitable donation shall be given to a valid charitable institution and may not be a disguised form of bribery.
• (4). The returns received as a result of any sponsorship shall be specific and reasonable, and the subject of the sponsorship may not be a counterparty of Company commercial dealings or a party with which any personnel of this Corporation has a relationship of interest.

Article 11

In the event that a board meeting proposal concerns the personal interest of Company directors, managers, and other stakeholders in attendance at board meetings or entities represented by the aforementioned parties, the relevant persons shall state the important aspects of the relationship of interest at said board meeting. If said participation is likely to prejudice Company interests, the relevant persons may not participate in discussion of or vote on the proposal, shall recuse from discussion or voting procedures, and may not exercise voting rights as proxy for another director. The directors shall practice self-discipline and shall not support one another in improper dealings. When executing Company business transactions, should Company personnel discover conflicts of interest with themselves or represented entities, or circumstances where said personnel and their spouses, parents, offspring, or related stakeholders obtain inappropriate benefits, said circumstance shall be reported to the direct manager of said personnel and the auditing department and relevant units, and said direct manager shall provide appropriate direction.

Article 12

The Company-appointed legal unit is responsible for formulating and implementing procedures for managing, preserving, and maintaining the confidentiality of Company trade secrets, trademarks, patents, works and other intellectual properties and shall also conduct periodical reviews on the results of implementation to ensure sustained effectiveness of confidentiality procedures.

All Company personnel shall faithfully follow operational directions pertaining to aforementioned intellectual properties and may not disclose to other parties any Company trade secrets, trademarks, patents, works, and other intellectual properties which they have learned, nor may they inquire about or collect Company trade secrets, trademarks, patents, and other intellectual properties unrelated to their individual duties.

Article 13

The Company shall comply with relevant competition laws during the course of business activities and shall not engage in unfair competition practices.

Article 14

The products and services provided by the Company shall comply with relevant laws and international standards, and the Company shall collect and undertake to understand the same, and organize points of interest for establishment of regulations, causing Company personnel to ensure information transparency and safety during research and development, procurement, manufacturing, delivery, or sale of products and services.

The Company shall also establish and publish on its website policies protecting the rights and interests of consumers or other stakeholders, to prevent its products and services from directly or indirectly damaging the interests and health and safety of consumers or other stakeholders.

Article 15

All Company personnel shall adhere to the provisions of the Securities and Exchange Act, and may not take advantage of undisclosed information they have learned to engage in insider trading. To prevent other parties from engaging in insider trading, Company personnel are also prohibited from divulging undisclosed information to any other parties. Any organization or person outside of the Company involved in any merger, demerger, acquisition and share transfer, major memorandum of understanding, strategic alliance, other business partnership plan, or the signing of a major contract shall be required to sign a non-disclosure agreement where they undertake not to disclose to any other party any trade secret or other material information of the Company acquired as a result of such involvement, and said persons may not use such information without the prior consent of the Company.

Article 16

The Company shall disclose its ethical management policies in its internal rules, annual reports, on its websites, and in other promotional materials, and shall make timely announcements of said parties during events held for outside parties such as product launches and investor press conferences, so as to make its suppliers, customers, and other business-related institutions and personnel fully aware of its principles and rules with respect to ethical management.

Article 17

Prior to developing a commercial relationship with another party, such as an agent, supplier, customer, or other counterparty, the Company shall evaluate the legality and ethical management policies of said party and ascertain whether said party has a record of involvement in unethical conduct, so as to ensure that said party conducts business in a fair and transparent manner and will not request, offer, or take bribes.

In the event that the Company carries out evaluations under the preceding paragraph, the Company may adopt appropriate audit procedures for review of the following matters relating to said counterparty with which the Company may have commercial dealings, so as to gain a comprehensive knowledge of said counterpart's ethical management:

(1). The nationality, location of business operations, organizational structure, and

management policy of said counterpart, and place where it will make payment.

• (2). If said counterpart has established ethical management policies, and the implementation status of the same.
• (3). The long-term business conditions and goodwill of said counterpart.
• (4). Consultation with business partners to obtain their opinion of said counterpart.
• (5). If said counterpart has a record of involvement in unethical conduct such as bribery or illegal political contributions.

Article 18

Any Company personnel engaging in commercial activities shall make a statement to the trading counterparty regarding the Company's ethical management policies and related regulations, and shall specifically refuse to offer, commit to, request, or accept, directly or indirectly, any inappropriate benefit in any form or name.

Article 19

All Company personnel shall avoid business transactions with agents, suppliers, customers, or other counterparties in commercial interactions involved in unethical conduct. In the event that the counterparty of business transactions or cooperating partner is found to have engaged in unethical conduct, Company personnel shall immediately cease dealing with said counterparty and blacklist it for any further business interactions to effectively implement the Company's ethical management policies.

Article 20

Before entering into contract with another party, the Company shall gain thorough understanding of the ethical management status of the other party, and the Company shall include its ethical management policies into the terms and conditions of the contract, stipulating at the least the following:

• (1). When any party to the contract becomes aware that any personnel has violated the terms and conditions pertaining to prohibition of acceptance of commissions, rebates, or other improper benefits, the discovering party shall immediately notify the other party of the violator's identity, the manner in which the offer, commitment, request, or acceptance was made, and the monetary amount or other inappropriate benefit that was offered, promised, requested, or accepted. The discovering party shall also provide the other party with pertinent evidence and cooperate fully with the investigation. Should there be resultant damage to either party, the damaged party may claim damages from the other party, and may also deduct the full amount of damages from the contract amount payable.
• (2). If a party is discovered to be engaged in unethical conduct during its commercial activities, the other party may unconditionally terminate or rescind the contract at any time.
• (3). Specific and reasonable payment terms, including the place and method of payment and the requirement for compliance with related tax laws and regulations, shall be established.

Article 21

As an incentive to insiders and outsiders for informing of unethical or unseemly conduct, the Company will grant monetary rewards depending on the seriousness of the circumstance concerned. Insiders making false report or malicious accusation shall be subject to disciplinary action and be removed from office if the circumstance concerned is material.

The Company shall internally establish and publicly announce on its website and intranet, or provide through an independent external institution, an independent mailbox or hotline for Company insiders and outsiders to submit reports. A whistleblower shall at least provide the following information:

• (1). Whistleblower name and I.D. number, and an address, telephone number and e-mail address where said whistleblower can be reached.
• (2). The name or other information of the informed party that is sufficient to distinguish its identifying features.
• (3). Specific facts available for investigation

Company personnel handling whistle-blowing matters shall represent to keep confidential whistleblower identities and the contents of information given. The Company also undertakes to protect whistleblowers from inappropriate penalties due to their whistle-blowing.

The handling process of the aforementioned circumstances shall at least include the following:

• (1). Any information regarding general personnel shall be reported to department heads and information regarding directors or senior executives shall be reported to independent directors or the Audit Committee
• (2). The department head, independent director or Audit Committee receiving the aforementioned report shall immediately verify relevant evidence, and if necessary seek legal discourse or seek aid from other relevant departments
• (3). If a person being informed on is confirmed to have violated applicable laws and regulations or Company ethical management policies, the Company shall immediately require the violator to cease the conduct and shall make appropriate disposition. If necessary, the Company shall institute legal proceedings and seek damages to safeguard its reputation and its rights and interests.
• (4). Documentation of case acceptance, investigation processes and investigation results shall be retained for five years and may be retained electronically. In the event of a suit related to the whistleblowing case before the retention period expires, the relevant information shall continue to be retained until the conclusion of the litigation.
• (5). If information is confirmed to be true, the Company shall charge relevant units with the task of reviewing the internal control system and relevant procedures and proposing corrective measures to prevent recurrence.
• (6). The designated unit of this Corporation shall, periodically or non-periodically, submit to the Board of Directors reports on whistleblowing cases, actions taken, and subsequent reviews and corrective measures.

Article 22

Should Company personnel discover that another party has engaged in unethical conduct towards the Company, and if such unethical conduct involves alleged illegality, the Company shall report the relevant facts to judicial and prosecutorial authorities; where a public service agency or public official is involved, the Company shall additionally notify governmental anti-corruption agencies.

Article 23

The Company shall organize or encourage its personnel to participate in ethical management training programs to raise awareness of importance of ethical management.

The Company shall integrate ethical management policies with employee performance appraisal systems and human resource policies, and establish a clear and effective incentive and penalty system.

Should any Company personnel seriously violate ethical conduct, the Company shall dismiss or terminate the employment of said personnel in accordance with applicable laws and regulations or Company personnel procedures.

The Company shall disclose on its internal website the professional title and name of the violator, the date of said violation, details of said violation, the actions taken in response, and other such information.

Article 24

The Ethical Corporate Management Best Practice Principles shall be implemented following approval from the Board of Directors, and shall be delivered to the Audit Committee and reported at shareholder meetings. The same procedure shall be followed for revisions of these Principles. When the Ethical Corporate Management Best Practice Principles are reported and discussed at shareholder meetings in accordance with the previous paragraph, the opinions of Company-appointed independent directors shall be taken into full consideration by the Board of Directors. Should an independent director object to or express reservations on any matter, the same shall be recorded in the minutes of the board meeting. Independent directors unable to attend board meetings in person to express objections or reservations shall provide a written opinion prior to the board meeting, unless there is reason to do otherwise, and said opinion shall be specified in the minutes of the board of directors meeting.

Article 25

These Procedures and Code of Conduct were issued on August 4, 2015, following approval from the Board of Directors

ScinoPharm Taiwan, Ltd. Proposed Revision of the Procedural Rules for Providing Endorsements and Guarantees

Current Provision	Revision Proposed	Remark
Article 1 (Purpose) These Rules are established pursuant to the Regulations Governing the Endorsement and Guarantee Made by Public Companies issued by the Financial Supervisory Commission (hereinafter "FSC") for the purpose of strengthening internal management, substantializing information transparency and reducing operational risks of the Company. Except as otherwise provided by other laws or regulations, provision of endorsement or guarantee by the Company shall be in accordance with these Rules.	Article 1 (Purpose) These Procedural Rules are established pursuant to the Regulations Governing the Endorsement and Guarantee Made by Public Companies issued by the Financial Supervisory Commission (hereinafter "FSC") for the purpose of strengthening internal management, substantializing information transparency and reducing operational risks of the Company. Except as otherwise provided by other laws or regulations, provision of endorsement or guarantee by the Company shall be in accordance with these Procedural Rules.	Wording has been slightly revised in accordance with naming changes made to these Procedural Rules
Article 2 (Scope of Endorsements	Article 2 (Scope of Endorsements	Wording has
and Guarantees) 1. (Omitted) 2. Pledges or mortgages created by the Company on its chattel or real estate as security for the loans of another company shall be subject to these Rules.	and Guarantees) 1. (Omitted) 2. Pledges or mortgages created by the Company on its chattel or real estate as security for the loans of another company shall be subject to these Procedural Rules.	been slightly revised in accordance with naming changes made to these Procedural Rules
Article 4 (Limitations on	Article 4 (Limitations on	Revisions have
Endorsement and Guarantee	Endorsement and Guarantee	been made to
Amounts) 1. The total amount of Company endorsements and guarantees shall not exceed forty percent of the Company's net value as set out in its most recent financial statement. 2. The amount of Company endorsements and guarantees for any one enterprise shall not exceed twenty percent of the Company's net value as set out in	Amounts) 1. The total amount of Company endorsements and guarantees shall not exceed the Company's net value as set out in its most recent financial statement. 2.The amount of Company endorsements and guarantees for any one enterprise shall not exceed fifty percent of the Company's net value as set out in its most recent financial	limits on Company and subsidiary total endorsement and guarantee amounts and amounts for any one enterprise in consideration of the operating needs of subsidiaries;
its most recent financial statement. 3. The total amount of external	statement; however, this limitation does not apply to direct or indirect wholly-owned subsidiaries of the	additionally, these limitations do not apply to

Current Provision	Revision Proposed	Remark
endorsements and guarantees by the Company and its subsidiaries as a whole shall not exceed fifty percent of the Company's net value as set out in its most recent financial statement, and the total endorsements and guarantees for any one enterprise shall not exceed thirty percent of the Company's net value as set out in its most recent financial statement. 4. The amount of Company endorsements and guarantees provided for reasons of business dealings shall not exceed the total amount of trading between the two companies over the past year. 5. The total amount of trading between the two companies shall be the higher of either the amount of goods purchased or the amount of goods sold.	Company. 3. The total amount of external endorsements and guarantees by the Company and its subsidiaries as a whole shall not exceed the Company's net value as set out in its most recent financial statement, and the total endorsements and guarantees for any one enterprise shall not exceed fifty percent of the Company's net value as set out in its most recent financial statement; however, this limitation does not apply to direct or indirect wholly-owned subsidiaries of the Company. 4. The amount of Company endorsements and guarantees provided for reasons of business dealings shall not exceed the total amount of trading between the two companies over the past year. 5. The total amount of trading between the two companies shall be the higher of either the amount of goods purchased or the amount of goods sold.	endorsement and guarantee amounts for direct or indirect wholly-owned subsidiaries of the Company.
Article 5 (Decision-Making and	Article 5 (Decision-Making and	1. Limits on
Authorization)	Authorization)	authorized
1. Endorsements and guarantees	1. Endorsements and guarantees	amounts for
made by the Company must be	made by the Company must be	direct or indirect
approved by the Board of Directors; however, if there is	approved by the Board of Directors; however, if there is timely need for	wholly-owned subsidiaries of
timely need for endorsements and	endorsements and guarantees not	the Company
guarantees not exceeding ten	exceeding ten percent of the	have been raised
percent of the Company's net	Company's net value for any one	in consideration
value for any one enterprise, the	enterprise, or for endorsements and	of endorsement
Chairman is granted by the Board	guarantees not exceeding twenty	and guarantee
of Directors the immediate right of	percent of the Company's net value	needs for
approval, and details shall be	that are provided to direct or indirect	subsidiary
subsequently reported at the next Board meeting.	wholly-owned subsidiaries of the Company, the Chairman is granted by	operations.
2. ~ 3. (Omitted)	the Board of Directors the immediate	2. Wording has been revised in
4. Where the Company and its	right of approval, and details shall be	accordance with
subsidiaries as a whole are	subsequently reported at the next	changes made to
required to provide endorsement	Board meeting.	relevant laws and

Current Provision	Revision Proposed	Remark
and guarantee amounts exceeding fifty percent of the Company's net value, the necessity and rationale of said circumstance shall be reported at Shareholders' Meeting.	2. ~ 3. (Omitted) 4. Where the Company and its subsidiaries as a whole have said endorsement and guarantee amounts exceeding fifty percent of the Company's net value, the necessity and rationale of said circumstance shall be reported at shareholder meetings.	regulations.
Article 6 (Endorsement and	Article 6 (Endorsement and	Wording has
Guarantee Execution and Review	Guarantee Execution and Review	been revised
Procedures)	Procedures)	according to
1. Proposals for endorsements and	1. Applications for endorsements and	operation needs
guarantees provided by the	guarantees provided by the	and changes to
Company shall be submitted for	Company shall be submitted for	relevant laws and
approval to the financial	approval to the financial	regulations.
department, and shall state the	department, and shall state the
name of the company endorsements and guarantees are	name of the company endorsements and guarantees are
provided to, the amount of	provided to, the amount of
endorsements and guarantees	endorsements and guarantees
provided, risk assessment results,	provided, risk assessment results,
commitments agreed upon,	commitments agreed upon,
content of collateral, and	content of collateral, and
conditions and dates of	conditions and dates of
endorsement and guarantee termination.	endorsement and guarantee termination.
2. The company receiving	2. The company receiving
endorsements and guarantees	endorsements and guarantees
shall provide to the Company's	shall provide to the Company's
financial department all basic and	financial department all basic and
financial information necessary to	financial information necessary to
facilitate due diligence; after	facilitate due diligence; after
detailed review, the preceding information and assessment	detailed review, the preceding information and assessment
results shall be compiled for final	results shall be compiled for final
approval in accordance with Article	approval in accordance with Article
5.	5.
However, the above procedures for	However, the above procedures for
due diligence do not apply to	due diligence do not apply to
endorsements and guarantees	endorsements and guarantees
provided to direct or indirect 100% Owned subsidiaries of the Company.	provided to direct or indirect One Hundred Percent Owned subsidiaries
3. (Omitted)	of the Company.
4. (Omitted)	3. (Omitted)
	4. (Omitted)

Current Provision	Revision Proposed	Remark
Article 9 (Other matters to be noted) 1. ~ 2. (Omitted) 3. Should circumstances cause amounts or recipients of endorsements and guarantees to become inconsistent with or exceed the limitations set out under the provisions of these Rules, improvement plans should be set and delivered to each supervisor, and improvements should be implemented accordingly. 4. (Omitted)	Article 9 (Other matters to be noted) 1. ~ 2. (Omitted) 3. Should circumstances cause amounts or recipients of endorsements and guarantees to become inconsistent with or exceed the limitations set out under the provisions of these Procedural Rules, improvement plans should be set and delivered to each supervisor, and improvements should be implemented accordingly. 4. (Omitted)	Wording has been slightly revised in accordance with naming changes made to these Procedural Rules
Article 11 (Penalties) In the event that Company personnel and managers handling matters relating to endorsements and guarantees violate the Regulations Governing the Endorsement and Guarantee Made by Public Companies issued by the FSC or provisions set out in these Rules, proper penalties should be imposed depending on the severity of the violation; penalties may include verbal reprimand, written warning, and mandated participation in internal control training courses. If necessary, the immediate personnel or unit in charge should refer to provisions in Company personnel regulations and impose relevant penalties. Said violation should be included in annual appraisals of personal performance, and recurring violators and serious offenders should be reassigned other duties.	Article 11 (Penalties) In the event that Company personnel and managers handling matters relating to endorsements and guarantees violate the Regulations Governing the Endorsement and Guarantee Made by Public Companies issued by the FSC or provisions set out in these Procedural Rules, proper penalties should be imposed depending on the severity of the violation; penalties may include verbal reprimand, written warning, and mandated participation in internal control training courses. If necessary, the immediate personnel or unit in charge should refer to provisions in Company personnel regulations and impose relevant penalties. Said violation should be included in annual appraisals of personal performance, and recurring violators and serious offenders should be reassigned other duties.	wording has been slightly revised in accordance with naming changes made to these Procedural Rules
Article 12 (Miscellaneous) 1. The subsidiary and the parent company referred to under these Rules are determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.	Article 12 (Miscellaneous) 1. The subsidiary and the parent company referred to under these Procedural Rules are determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.	Wording has been slightly revised in accordance with naming changes made to these Procedural Rules

Current Provision	Revision Proposed	Remark
2. The net value referred to under these Rules refers to the equity amount of the parent company as represented in the balance sheet produced in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 3. Making a public disclosure and report under these Rules refers to the process of making a disclosure report online at the website designated by the Financial Supervisory Committee. 4. The date of occurrence of lending provided in these Rules refers to the earliest of the following dates: the contract signing date of the transaction, the payment date, the date of the regulation adopted by the meeting of the Board of Directors or any other date where the transaction counterpart and the transaction value both are identifiable.	2. The net value referred to under these Procedural Rules refers to the equity amount of the parent company as represented in the balance sheet produced in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 3. `Making a public disclosure and report under these Procedural Rules refers to the process of making a disclosure report online at the website designated by the Financial Supervisory Committee. 4. The date of occurrence of lending provided in these Procedural Rules refers to the earliest of the following dates: the contract signing date of the transaction, the payment date, the date of the regulation adopted by the meeting of the Board of Directors or any other date where the transaction counterpart and the transaction
Article 14 Implementation and	value both are identifiable. Article 14 Implementation and	Wording has
revision 1. These Rules should be set in accordance with Company regulations in the event that the Company intends to lend corporate funds to other persons. Following approval from the Board of Directors, these Rules should be delivered to each supervisors and shareholder approval should be garnered. Should the directors express objections in recorded or written statements; the Company should send said objections to each supervisor and raise the issue for discussion during shareholder meetings. The above process also applies to any amendments. 2. ~3. (Omitted)	revision 1. These Procedural Rules should be set in accordance with Company regulations in the event that the Company intends to lend corporate funds to other persons. Following approval from the Board of Directors, these Procedural Rules should be delivered to each supervisors and shareholder approval should be garnered. Should the directors express objections in recorded or written statements; the Company should send said objections to each supervisor and raise the issue for discussion during shareholder meetings. The above process also applies to any amendments. 2. ~3. (Omitted)	been slightly revised in accordance with naming changes made to these Procedural Rules

ScinoPharm Taiwan, Ltd. Proposed Revision of the Procedural Rules for Providing Lending to Other Persons

Current Provision	Revision Proposed	Remark
Article 1 Purpose	Article 1 Purpose	Wording has
These Rules are established pursuant	These Procedural Rules were	been slightly
to the Regulations Governing the	established pursuant to the	revised in
Endorsement and Guarantee Made	Regulations Governing the	accordance with
by Public Companies issued by the	Endorsement and Guarantee Made	naming changes
Financial Supervisory Commission	by Public Companies issued by the	made to these
(hereinafter "FSC") for the purpose of	Financial Supervisory Commission	Procedural Rules
strengthening internal management,	(hereinafter "FSC") for the purpose of
substantializing information	strengthening internal management,
transparency and reducing	substantializing information
operational risks of the Company.	transparency and reducing
Except as otherwise provided by	operational risks of the Company.
other laws and regulations, providing	Except as otherwise provided by
loans to other persons by the	other laws and regulations, providing
Company shall be in accordance with	loans to other persons by the
these Rules.	Company shall be in accordance with
	these Procedural Rules.
Article 2 Eligible borrower	Article 2 Eligible borrowers	Limitations on
1. ~ 3. (Omitted)	1. ~ 3. (Omitted)	lending amounts
4. Subparagraph 2 of paragraph one	4. Subparagraph 2 of Paragraph 1	and periods
above does not apply to the	above does not apply to loans	provided to
Company's lending provided to a	between any direct or indirect	subsidiaries
direct or indirect wholly-owned	wholly-owned foreign companies	should be
foreign company of the Company,	of the Company, such lending is	governed by
which lending, however, must still	provided in accordance with	subsidiary laws;
be provided in accordance with	amount and term limitations set	wording of this
the limitations with respect to	out in relevant procedural rules of	article has been
amount and term provided in	lending subsidiaries.	revised
Article 4 and Article 5 of these		accordingly.
Rules.
Article 4 Limitation of amount	Article 4 Limitation of amount	1. Additions have
1. (Omitted) 2. Individual loans for companies with	1. (Omitted) 2. Individual loans for companies with	been made to Paragraph 2 in
short-term funding needs should	short-term funding needs should	consideration
not exceed twenty percent of	be no more than twenty percent of	of practical
current net value, and total	current net value, and the sum of	needs for
amount of loans should be limited	loans should be limited to no more	short-term
to no more than forty percent of	than forty percent of current net	working
current net value.	value.	capital by
3. The amount of an individual	For Company subsidiaries with	subsidiaries
lending provided by the Company	short-term funding needs for	where the
to a directly or indirectly	operational requirements, where	Company

Current Provision	Revision Proposed	Remark
wholly-owned foreign company	the Company directly or indirectly	directly or
shall account for not more than	holds more than fifty percent of	indirectly
20% of its current net value of the	voting rights, the above short-term	holds more
foreign company and the sum of all	funding limitation of no more than	than fifty
lending provided to the same	twenty percent of current net	percent of
foreign company shall account for	value may be lifted following	voting rights.
not more than 50% of its current	approval from the Board of	2. Loans provided
net value.	Directors.	to any direct
	3. Individual loans and the sum of	or indirect
	loans made to direct or indirect	wholly-owned
	wholly-owned foreign companies	foreign
	of the Company both should not	company of
	exceed forty percent of current net	the Company
	value.	should be
		governed by
		the laws of the
		subsidiaries;
		wording of
		Paragraph 3
		has been
		revised
		accordingly.
Article 9 Other Matters Relating to	Article 9 Other Matters Relating to	Wording has
Loans and Lending to Other Persons	Loans and Lending to Other Persons	been slightly
1. (Omitted)	1. (Omitted)	revised in
2. Should circumstances cause loans	2. Should circumstances cause loans	accordance with
and loan recipients to become	and loan recipients to become	naming changes
inconsistent with or exceed the	inconsistent with or exceed the	made to these
limitations set out by the	limitations set out by the	Procedural Rules
provisions of these Rules,	provisions of these Procedural
improvement plans should be set	Rules, improvement plans should
and delivered to each supervisor,	be set and delivered to each
and improvements should be	supervisor, and improvements
implemented accordingly.	should be implemented
	accordingly.
Article 11 Penalties	Article 11 Penalties	Wording has
In the event that Company personnel	In the event that Company personnel	been slightly
and managers handling matters	and managers handling matters	revised in
relating to endorsements and	relating to Loans and Lending violate	accordance with
guarantees violate the Regulations	the Regulations Governing the	naming changes
Governing the Endorsement and	Endorsement and Guarantee Made	made to these
Guarantee Made by Public	by Public Companies issued by the	Procedural Rules
Companies issued by the FSC or	FSC or provisions set out in these
provisions set out in these Rules,	Procedural Rules, proper penalties
proper penalties should be imposed	should be imposed depending on the
depending on the severity of the	severity of the violation; penalties
violation; penalties may include	may include verbal reprimand,
verbal reprimand, written warning,	written warning, and mandated
and mandated participation in	participation in internal control

Current Provision	Revision Proposed	Remark
internal control training courses. If	training courses. If necessary, the
necessary, the immediate personnel	immediate personnel or unit in
or unit in charge should refer to	charge should refer to provisions in
provisions in Company personnel	Company personnel regulations and
regulations and impose relevant	impose relevant penalties. Said
penalties. Said violation should be	violation should be included in
included in annual appraisals of	annual appraisals of personal
personal performance, and recurring	performance, and recurring violators
violators and serious offenders	and serious offenders should be
should be reassigned other duties.	reassigned other duties.
Article 12 Miscellaneous	Article 12 Miscellaneous	Wording has
1. The subsidiary and the parent	1. The subsidiary and the parent	been slightly
company provided in these Rules	company referred to under these	revised in
shall be determined in accordance	Procedural Rules are determined	accordance with
with the Regulations Governing	in accordance with the Regulations	naming changes
the Preparation of Financial	Governing the Preparation of	made to these
Reports by Securities Issuers.	Financial Reports by Securities	Procedural Rules
2. The net value provided in these	Issuers.
Rules means the equity to the account of the parent company as	2. The net value referred to under these Procedural Rules refers to
represented in the balance sheet	the equity amount of the parent
produced in accordance with the	company as represented in the
Regulations Governing the	balance sheet produced in
Preparation of Financial Reports by	accordance with the Regulations
Securities Issuers.	Governing the Preparation of
3. Making a public disclosure and	Financial Reports by Securities
report under these Rules means	Issuers.
making a disclosure and report	3. Making a public disclosure and
online on the website designated	report under these Procedural
by the Financial Supervisory	Rules refers to the process of
Committee.	making a disclosure report online
4. The date of occurrence of lending	at the website designated by the
provided in these Rules means the	Financial Supervisory Committee.
earliest among the contract signing	4. The date of occurrence of lending
date of the transaction, the	provided in these Procedural Rules
payment date, the date of the	refers to the earliest of the
regulation adopted by the meeting	following dates: the contract
of the Board of Directors or any	signing date of the transaction, the
other date when the transaction	payment date, the date of the
counterpart and the transaction	regulation adopted by the meeting
value both may be identified.	of the Board of Directors or any
	other date where the transaction counterpart and the transaction
	value both are identifiable.
Article 14 Implementation and	Article 14 Implementation and	Wording has
revision	revision	been slightly
1. These Rules should be set in	1. These Procedural Rules should be	revised in
accordance with Company	set in accordance with Company	accordance with
regulations in the event that the	regulations in the event that the	naming changes

Current Provision	Revision Proposed	Remark
Company intends to lend	Company intends to lend	made to these
corporate funds to other persons.	corporate funds to other persons.	Procedural Rules
Following approval from the Board	Following approval from the Board
of Directors, these Rules should be	of Directors, these Procedural
delivered to each supervisors and	Rules should be delivered to each
shareholder approval should be	supervisors and shareholder
garnered. Should the directors	approval should be garnered.
express objections in recorded or	Should the directors express
written statements; the Company	objections in recorded or written
should send said objections to	statements; the Company should
each supervisor and raise the issue	send said objections to each
for discussion during shareholder	supervisor and raise the issue for
meetings. The above process also	discussion during shareholder
applies to any revisions.	meetings. The above process also
2 ~ 3 (Omitted)	applies to any amendments.
	2 ~ 3 (Omitted)

IV. Exhibits

Exhibit 1

ScinoPharm Taiwan, Ltd. Rules Governing Shareholders' Meetings

Adopted by the Shareholders' Meeting of 23 June 2015

Article 1

These Rules are established for the purpose of good governance of the meeting of the shareholders, healthy supervision and strengthened control of the Company.

Article 2

The meeting of the shareholders of the Company shall be in accordance with these Rules except as otherwise provided by laws, regulations or the Articles of Incorporation of the Company.

Article 3

(Deleted.)

Article 4

(Deleted.)

Article 5

Except as otherwise provided by laws or regulations, the meeting of the shareholders of the Company shall be convened by the Board of Directors.

The Company shall produce the electronic files of the notice of shareholders' meeting, the proxy form, and the matters proposed with explanation given for ratification, discussion, proposed election or dismissal of directors by the meeting and have the files uploaded to the M.O.P.S. thirty (30) days ahead of the scheduled meeting date for a general shareholders' meeting and fifteen (15) days ahead for an extraordinary shareholders' meeting. The Company shall produce and upload to the M.O.P.S. the electronic files of the meeting agenda and relevant supplemental materials twenty-one (21) days ahead of the scheduled meeting date for a general shareholders' meeting and fifteen (15) days ahead for an extraordinary shareholders' meeting. The Company shall produce and display paper copies of the meeting agenda with relevant supplemental materials at the premises of the Company as well as the stock affairs agency entrusted by the Company fifteen (15) days prior to the meeting date ready for the shareholders to collect/read at any time, which shall also be distributed at the meeting site.

The (personal) notice and the public notice of the shareholders' meeting both shall manifestly indicate the cause of the meeting and may, subject to the prior consent of the shareholder concerned, be delivered to the shareholder electronically.

Proposed election, removal of a director or supervisor, proposed revision of the Articles of Incorporation, proposed dissolution, merger, division of the Company or any of the matters provided in paragraph one of Article 185 of the Company Act, Article 26-1 or Article 43-6 of the Securities and Exchange Act and/or Article 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers (if any) must be listed in the proposed agenda and cannot be proposed by way of an extempore motion at the meeting.

The shareholder(s) whose total shares held represent one percent (1%) or more of the total issued shares of the Company may make to the Company one and only one motion to be listed in the proposed agenda of the general shareholders' meeting. The Board of Directors may decide not to include the above motion in the agenda if the motion proposed runs into any of the circumstances provided in paragraph four of Article 172-1 of the Company Act.

The Company shall make a public notice to announce the time period (which shall not be less than ten days) and the place where the shareholder shall send his/her motion to be proposed to the general shareholders' meeting, which public notice shall be made prior to the start date of the duration when the transfer of the shares of the Company shall cease for the purpose of the convention of the shareholders' meeting.

The text of the motion proposed by the shareholder shall have not more than 300 words or the motion in its entirety will not be included in the proposed agenda. The movant shareholder(s) shall attend the general shareholders' meeting in person or by proxy and participate in the discussion of the motion he/she has proposed.

The Company will, prior to the scheduled date to issue the notice of the shareholders' meeting, give a notice to the movant shareholder(s) of the result of the handling of his/her motion proposed and list in the proposed agenda to be delivered to the shareholders each every motion proposed in accordance with this Article. The Board of Directors shall explain at the shareholders' meeting the reason(s) why certain motions proposed by the shareholders have not been included in the agenda.

Article 6

The venue of the shareholders' meeting shall be located at the place where the Company is located or where it is appropriate and convenient for the shareholders to attend the meeting. The meeting shall begin no earlier than the hour of 09:00 and no later than the hour of 15:00. The venue and time of the shareholders' meeting shall be determined in consideration of the relevant opinion expressed by the independent director(s), if any, of the Company.

Article 7

The shareholder may designate a proxy to attend the shareholders' meeting in his/her stead by execute the proxy letter form produced by the Company indicating therein the scope of authorization to the proxy.

A shareholder may execute one and only one proxy letter to designate one and only one proxy for the purpose of the shareholders' meeting. The executed proxy letter must be served to the Company five days prior to the meeting date. Where the shareholder has served more than one executed proxy letters to the Company, the earliest served to the Company shall govern except where the shareholder has expressed his/her withdraw of the proxy.

The shareholder who has served his executed proxy letter to the Company may still attend the shareholders' meeting in person or exercise his/her voting right in writing or electronically, provided that he/she gives a written notice to the Company to withdraw the proxy, which written notice must be served to the Company no later than two days before the meeting date or the voting right exercised by his/her designated proxy shall govern.

Article 8

The Company shall indicate in the notice of shareholders' meeting the hour when and the place

where the shareholders shall check-in to attend the meeting and other matters for attention.

The hour when the shareholders may check-in to attend the meeting as provided in the preceding paragraph shall commence no later than thirty (30) minutes before the meeting is called to order. The check-in desk shall bear a conspicuous signboard with suitable personnel to process shareholders check-in.

The shareholder or his/her designated proxy (hereinafter "shareholder") shall present his/her attendance identification, attendance card or other evidence of attendance to be admitted to the meeting. The Company must not without due authorization request the shareholder or authorized proxy to present any additional evidence or document to prove their entitlement to attend the meeting. A proxy solicitor shall present his/her identification document for verification.

The Company shall prepare an attendance book for the shareholder attending the shareholders' meeting to sign in. The shareholder attending the meeting in person may turn in his/her signed attendance card instead of signing in the attendance book.

The Company shall have the agenda, annual report, attendance tag, request form for requesting to take the platform, ballot forms, other meeting materials, and where applicable, the ballot forms to be used to elect directors and/or supervisor delivered to each of the shareholders present at the meeting.

A government or corporate shareholder may be represented at the shareholders' meeting of the Company by one or more representatives. A juristic person acting in proxy at the shareholders meeting of the Company may appoint one and only one individual to act as its representative at the meeting.

Article 9

The shareholders' meeting convened by the Board of Directors shall be presided by the Chairman/Chairwoman of the Board of Directors. If he/she has requested for leave from or for whatever reason is unable to perform his/her powers and duties at the meeting, the Chairman/Chairwoman of the Board of Directors shall appoint a director to act in his/her stead. Absent the above appointment, the directors shall elect one from among themselves to preside at the meeting.

The director or the representative of the corporate director appointed to preside at the shareholders' meeting acting instead of the Chairman / Chairwoman of the Board of Directors provided in the preceding paragraph must have held his/her directorship for a period of six months or more and must be well informed of the financial standing and business of the Company.

The shareholders' meeting convened by the Board of Directors should be presided by the Chairman of the Board of Directors and attended by the majority of the directors and one or more supervisors, and one or more members for each of the function-oriented committees established; and the attendance to the meeting shall be recorded in the minutes of the meeting.

The shareholders' meeting convened by a person other than the Board of Directors authorized to do so shall be presided by that person. Where the shareholders' meeting is convened by two or more persons, they shall elect one from among themselves to preside at the meeting.

The Company may appoint legal counsel(s), certified public accountant(s) or relevant personnel to attend the shareholders' meeting as non-voting delegates.

Article 10

The attendance at the shareholders' meeting shall be counted based on the number of shares represented at the meeting, which number shall be counted by adding up the shares represented by signed attendance book, the signed attendance card and the shares represented by the voting right exercised in writing or electronically.

The chairperson of the meeting shall announce to commence the meeting in due course, which announcement may be postponed twice and only twice and up to not more than an hour in total pending the fulfillment of representation of the majority of the total issued shares of the Company. If the total shares represented at the meeting still account for less than one third (1/3) of the total issued shares of the Company after the chairperson has duly twice postponed commencing the meeting, the chairperson shall announce the call for the meeting unsuccessful.

Where the total shares represented at the meeting not amounting to the quorum attains one third (1/3) or more of the total issued shares of the Company after the commencement of the meeting is duly twice postponed in accordance with the preceding paragraph, tentative resolutions may be adopted by the meeting under paragraph one of Article 175 of the Company Act, which tentative resolutions must be notified to the shareholders each with the notice of a re-scheduled shareholders' meeting to be held within a month.

If the quorum of due representation of the majority of the total issued shares of the Company is fulfilled before the meeting ends, the chairperson shall submit the tentative resolutions adopted (if any) to the meeting for re-voting and adoption by the meeting pursuant to Article 174 of the Company Act.

Article 11

The Company shall take video and sound recording of the whole proceeding of the shareholders' meeting.

The recording provided in the preceding paragraph shall be kept for a term of not less than one year except in case of any shareholder's action initiated under Article 189 of the Company Act where the above recording shall be kept through the action concluded with a final judgment with binding effects.

Article 12

The agenda of the shareholders' meeting convened by the Board of Directors shall be compiled and produced by the Board of Directors. The meeting shall proceed strictly in accordance with the agenda except as otherwise changed by the relevant resolution adopted by the shareholders' meeting.

The preceding paragraph shall apply with necessary and appropriate alteration to the shareholders' meeting convened by the person authorized to do so other than the Board of Directors.

Except as approved by the resolution adopted by the meeting for him/her to do so, the chairperson must not announce to adjourn the meeting before the agenda duly ends (including extempore motions, if any) pursuant to the two preceding paragraphs or the other members of the Board of Directors shall instantly assist the shareholders present at the meeting in re-electing one from among them by the majority votes represented at the meeting to act as the chairperson to continue the meeting.

The chairperson shall accord each of the issues proposed and the revision or extempore motion proposed by the shareholders sufficient time for explanation and discussion and may announce that the discussion be ceased and voting be taken when he/she considers it appropriate to do so.

Article 13

The shareholder who wishes to take the platform at the meeting shall fill out the request form indicating therein the gist of his/her speech and his/her shareholder account number (or attendance tag number) and name. The order for the shareholders to speak at the meeting, who have duly requested to take the platform, shall be determined by the chairperson.

The shareholder who has filled out the request form but does not take the platform shall be deemed not to have spoken. In case of discrepancy between the actual speech and the gist of speech written in the signed request form, the former shall govern.

Except as approved by the chairperson, the shareholder who has duly requested to take the platform on certain issue proposed may speak twice and only twice on that issue for a duration of not more than five (5) minutes each. Notwithstanding, the chairperson may cease the shareholder's speech or announce to cease the discussion and forthwith move on with the rest of the agenda or the relevant procedure if the shareholder has spoken in breach of the relevant rules, outside the scope of the issue at hand or at the cost of the order of the meeting.

Except as approved by both of the chairperson and the shareholder duly taking the platform, no shareholder may interrupt the speech made by the speaker shareholder. The chairperson is authorized to prevent and remove unapproved interruption of the shareholder's speech, if any.

Where a corporate person has appointed two or more representatives to act in its stead at the shareholders' meeting, only one elected by the representatives from among themselves may take the platform on the issue at hand.

The chairperson may personally or designate the relevant personnel to answer the speech made by the shareholder who has duly taken the platform.

Article 14

The shareholder will have one vote on each share held. Notwithstanding, the holder will have no voting right on the shares described in paragraph two of Article 179 of the Company Act.

Article 15

The voting at the shareholders' meeting shall be counted according to the number of shares represented by the votes received.

For the purpose of counting the votes on the resolution adopted by the shareholders' meeting, non-voting shares shall be excluded from the counting of the total issued shares of the Company.

The shareholder whose own interests in the issue at hand conflicts against the interests of the

Company must not vote on the issue nor appoint another shareholder to do so in his/her stead.

The shares represented by the voting rights barred by the preceding paragraph on the issue at hand shall be excluded from the counting of the total shares represented at the meeting for the purpose of voting on that particular issue.

Except for trust enterprises or stock affair institutions authorized by the competent securities authority, a proxy acting at the meeting for two or more shareholders may exercise the voting rights up to the extent and only the extent where the voting rights exercised represent no more than 3% of the total issued voting shares of the Company. Voting exercised by the above proxy in excess of said limitation of voting right will be disregarded.

Article 16

The voting right of the shareholder shall be exercised electronically and may be exercised in writing and the method of exercising the voting right shall be manifestly indicated in the notice of the shareholders' meeting. The shareholder who elects to exercises his/her voting right in writing or electronically will be deemed to have attended the meeting in person, provided that he/she will be deemed to waive his/her voting right with respect to the revision proposed on an issue listed in the agenda or new issues proposed by way of an extempore motion at the meeting; the Company shall accordingly avoid initiating any proposal to change the agenda or any extempore motions.

The shareholder exercising his/her voting right in writing or electronically under the preceding paragraph shall serve the notice of his/her voting to the Company two days before the scheduled meeting date. Where the shareholder has served more than one notice of his/her voting to the Company, the earliest served to the Company shall govern except where the shareholder has expressed to withdraw the notice.

If the shareholder who has exercised his/her voting right in writing or electronically wishes to attend the shareholders' meeting in person, the shareholder shall have the notice of withdrawal of his/her voting served to the Company by the same method as he/she exercised his/her voting right (in writing or electronically) no later than two days before the scheduled meeting date or his/her voting indicated in the notice served to the Company shall govern. Where the shareholder has exercised his/her voting right in writing or electronically has designated a proxy to act in his/her stead at the meeting, the voting exercised by the proxy in his/her stead shall govern.

Article 17

Except as otherwise provided by the Company Act, the resolution of the shareholders' meeting must be adopted by the majority votes represented at the meeting. When a proposal is submitted for voting by the meeting, the chairperson or the relevant personnel appointed by the chairperson shall announce in advance the total amount of votes accountable to be voted on the issue and the number of approval votes, disapproval votes and waivers each shall be published on the M.O.P.S. on the day following the end of the shareholders' meeting.

Where of the same issue is proposed a revision and a replacement, the chairperson shall determine the order of the voting on the three proposals: the original as proposed, the original with the revision proposed and the proposed replacement respectively. Once the resolution is adopted on one of the three proposals, the others shall be deemed denied without voting.

The personnel to supervise the voting and count the ballots voted shall be appointed by the

chairperson, provided that the personnel to supervise the voting must be the shareholder(s) of the Company.

The ballots voted either for adopting a resolution or election shall be openly counted at the meeting and the result of the voting (including the calculation of the ballots) shall be forthwith announced upon completion of the counting of the ballots and recorded in the meeting minutes.

Article 18

The election (if any) of the director(s) and/or supervisor(s) of the Company at the shareholders meeting shall be in accordance with the relevant bylaw of the Company and the result of the election shall be announced at the meeting including the name of each director elect, each supervisor elect and the amount of votes for them each.

The ballots voted on the election provided in the preceding paragraph shall be sealed and signed by the voting-supervising personnel and property kept for a period of at least one year. Notwithstanding, in the event of any shareholder's action initiated under Article 189 of the Company Act, the ballots shall be kept through the action concluded with a final judgment with binding effects.

Article 19

The resolutions adopted by the shareholders' meeting shall be recorded in writing, which meeting minutes shall be signed or sealed by the chairperson and distributed to the shareholders each within twenty (20) days after the meeting. The meeting minutes may be produced and distributed electronically.

The Company may distribute the above meeting minutes to the shareholders by public notice on the M.O.P.S.

The meeting minutes shall accurately indicate the year, month, date, the venue, name of the chairperson, method of adopting resolutions, the gist of the proceeding and the conclusion of the meeting and kept by the Company throughout the existence of the Company.

Article 20

The Company shall calculate and compile a statement on the number of shares to be represented at the meeting by the proxy solicitors and the proxies respectively and have the statement produced manifestly displayed at the meeting in accordance with the required from and substance.

The Company shall have the resolutions adopted by the shareholders' meeting published through the Market Observation Post System within the required time period, which resolutions are by definition important information under the relevant laws and regulations or required by the Taiwan Stock Exchange Corporation (Nonprofit Organization Gre Tai Securities Market).

Article 21

The meeting affairs personnel working at the shareholders' meeting shall each wear a working staff identification badge or arm-band indicating so.

The chairperson may direct the order-maintaining working personnel or the security guards to assist in maintaining the order of the meeting, who shall each wear a badge or arm-band indicating Order-maintaining Personnel.

The chairperson may act to cease the shareholder who speaks out at the meeting by using whatever equipment other than the loud speaker facility the Company has prepared for the meeting.

The chairperson may direct the order-maintaining personnel or the security guard to usher out of or remove from the venue of the meeting the shareholder who acts in violation of the rules for the meeting or interrupts the proceeding of the meeting and refuses to rectify his/her conduct after being advised to do so by the chairperson.

Article 22

The chairperson may announce to recess the meeting in the process of the meeting. In the event of force majeure, the chairperson may decide to temporarily suspend the meeting and, if necessary, announce the time when the meeting shall be resumed.

The shareholders' meeting may adopt the resolution to continue the meeting elsewhere if the venue should become unavailable before the agenda of the meeting (including extempore motions) is duly concluded.

The shareholders' meeting may adopt the resolution under Article 182 of the Company Act to postpone or continue the meeting within five (5) days.

Article 23

Provisions of these Rules applicable to Supervisors shall apply to the Audit Committee of the Company (if any) with necessary and appropriate alterations.

Article 24

These Rules and all subsequent amendments shall come into force on the relevant resolution adopted by the shareholders' meeting.

ScinoPharm Taiwan, Ltd. Articles of Incorporation

Chapter 1 General Provisions

Article 1

The Company is duly organized under the Company Act of the Republic of China (Taiwan) as a company limited by shares and named ScinoPharm Taiwan, Ltd.

Article 2

The business items of the Company are as follows:

• (1) C802041 Manufacture of pharmaceuticals;
• (2) C801990 Manufacture of other chemical materials;
• (3) IG01010 Biotechnological services;
• (4) F601010 Intellectual property rights related services
• (5) F401010 International trade.

<<1. Research, development, production, manufacture and distribution of the following products: (1) generic APIs, (2) protein drugs, (3) oligonucleotide, (4) peptide, (5) injection formulation, (6) small-molecule new drugs.

• 1. Consulting, advisory and technical services relating to the above products.
• 1. International trade in connection with the above products.>>

Article 3

The Company having its head office established at the Southern Taiwan Science 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 4

Subject to the resolution adopted by the meeting of the Board of Directors, the Company may act as guarantor pursuant to the Company's relevant policy in consideration of meeting business needs.

Article 5

The total amount of investments made the Company may account for 40% or more of the paid-in capital of the Company irrespective of the limitation provided in Article 13 of the Company Act, provided that the investments must be in accordance with the relevant resolution adopted by the meeting of the Board of Directors.

Chapter 2 Capital

Article 6

The Company has Ten Billion New Taiwan Dollars (TWD10,000,000,000) in authorized capital divided into one billion shares (1,000,000,000) with a value of Ten New Taiwan Dollars each (TWD10) to be issued in separate batches by the Board of Directors authorized to do so with a total of 7,000,000 shares to be reserved for issuance of stock option certificates.

Article 7

All of the shares of the Company are registered shares each bearing the signature or seal of three or more Directors of the Company and shall be issued upon certification thereof by the competent authority or its authorized registrar. The Company may elect not to produce the share certificate on the shares issued, provided that the Company must complete the registration of the issued shares with the securities central depository institution.

Article 8

All of the shares of the Company are registered shares. The individual shareholder will have his/her personal name and address and the corporate shareholder will have its corporate designation and its legal representative's personal name and address recorded in the Company's shareholders' roster. Joint shareholders of the share (if any) shall elect one among themselves for the purpose of the above recordation in the shareholders' roster.

Article 9

The shareholder or the legal holder of the share certificate lost or destroyed shall make a report to the police upon information of the loss or destruction and fill out the relevant request form to have the loss or destruction of the share certificate registered with the Company. The shareholder or the legal holder shall at the same time file a request with the competent district court to have a relevant public notice made pursuant to the Taiwan Code of Civil Procedure and present the court judgment on the exclusion of rights in the share(s) affected to the stock affairs agency of the Company to request for re-issuance of the share certificate.

Article 10

The stock affairs agency of the Company may collect reasonable procedural charges on each request for re-issuance of share certificate on account of the transfer, division of the share or the loss, damage or destruction of the share certificate.

Article 11

The shareholder shall disclose his/her/its legal name and address of his/her/its domicile to the stock affairs agency of the Company and fill out and deliver the specimen card of his/her/its seal to the Company for record.

Except as otherwise provided by the relevant laws, orders or securities related regulations, the public offering of the shares of the Company shall be in accordance with the Regulations Governing the Administration of Shareholder Services of Public Companies.

Article 12

The shareholder who lost his/her/its seal the specimen of which is imprinted in the seal specimen card kept by the Company for record shall give a written notice to the Company upon information of the loss and issue a request to the stock affairs agency of the Company to have his/her/its new seal registered.

Article 13

Transfer of shares of the Company will cease for a period of thirty (30) days prior to the general shareholders' meeting, fifteen (15) days prior to the extraordinary shareholders' meeting, and five (5) days prior to the start date of distribution of dividend, bonus or other interests in the shares held. Subject to the public offering of the Company, the Company shall cease the transfer of shares of the Company within a period of sixty (60) days prior to the general shareholders' meeting and thirty (30) days prior to an extraordinary shareholders' meeting.

Chapter 3 Shareholders' Meeting

Article 14

The meeting of the shareholders of the Company will be the general shareholders' meeting to be convened by the Board of Directors each year within six (6) months after the end of that fiscal year or an extraordinary shareholders' meeting to be duly convened from time to time when necessary.

Article 15

The meeting of the shareholders of the Company shall be convened in accordance with the Company Act, Securities and Exchange Act, and the relevant laws and regulations according to the public announcement or notice issued by the competent securities authority.

The notice of the meeting of the shareholders of the Company may be issued electronically on the consent of the shareholder.

Article 16

Except as otherwise provided by the Company Act, the shareholders' meeting must be attended by the shareholders whose total shares held represent the majority of the total issued shares of the Company. The resolution of the shareholders' meeting must be adopted by the majority of the votes represented at the meeting.

Article 17

Except those subject to restrictions or in one of events provided in Article 179 of the Company Act, the shareholder of the Company will have one vote on each share held.

The shareholder may cast his/her vote at the shareholders' meeting in writing or electronically in accordance with the Company Act and the laws, regulations established and orders issued by the competent securities authority.

Article 18

The shareholder who for whatever reason is unable to attend the shareholders' meeting in person may designate a proxy to attend and act in his/her stead at the meeting by executing the proxy letter form prepared by the Company specifying the scope of authorization to the proxy. The proxy designated may be a non-shareholder of the Company. Subject to the public offering of the Company, designation of proxies for the purpose of the shareholders' meeting of the Company shall be in accordance with the Regulations Governing Use of Proxy Letters to Attend the Shareholders' Meetings of Public Companies.

Article 19

The meeting of the shareholders of the Company shall be convened by the Board of Directors and presided by the Chairman/Chairwoman of the Board of Directors. If he/she has requested for leave from the meeting or is for whatever reason unable to attend and exercise his/her powers and duties at the meeting to, the Chairman/Chairwoman shall designate a Director to act in his/her stead. Absent the above designation by the Chairman/Chairwoman, the Directors shall elect one from among themselves to act as the chairperson of the meeting. Where the shareholders' meeting is not convened by the Board of Directors, the meeting shall be presided by the person who convened the meeting.

Except as otherwise provided by the Company Act or the relevant laws and regulations, the shareholders' meeting of the Company must be attended by the shareholders (attending the meeting in person or by proxy) whose total shares held represent the majority of the total issued shares of the Company and a resolution must be adopted by the majority of the votes represented at the meeting. A resolution may be deemed adopted when no objection or opposition is expressed by any of the shareholders present at the meeting in response to the chairperson's inquiry for opinion, which resolution shall be as effective and binding as one adopted by voting.

Article 20

The issues presented for discussion and/or resolution at the shareholders' meeting and the resolution adopted by the meeting shall each be recorded in the minutes of the meeting, which meeting minutes must be signed or sealed by the chairperson and a copy of which shall be distributed to the shareholders of the Company each within twenty (20) days after the meeting. The above meeting minutes may be produced and distributed electronically. The minutes of the shareholders' meeting shall be kept by the Company together with the relevant signed attendance book and proxy letters received. The Company may distribute the above minutes of the shareholders' meeting electronically.

Article 21

Subject to the public offering of the Company, the Company may withdraw the public offering on and only on the relevant resolution adopted by the shareholders' meeting other than that adopted by the meeting of the Board of Directors.

Chapter 4 Directors

Article 22

Compensation to the Directors of the Company will be determined by the Board of Directors by reference to the common standards adopted by the trade home and abroad.

Article 23

The Company will have fifteen (15) Directors to be elected by the shareholders' meeting from the shareholders with disposing capacity.

Two or more of the above Directors shall be independent directors, and the total number of independent directors shall account for not less than one fifth (1/5) of the total number of directors.

Directors are to be elected by the shareholders' meeting from among the candidates nominated.

The special qualification, required shareholding, restriction on concurrent positions held, determination of impartiality, method of nomination and method of election of the independent directors and other relevant legally required matters shall be in accordance with the Company Act and the relevant laws and regulations prescribed 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.

Article 25

The Directors shall elect one from among themselves to act as the Chairman/Chairwoman of the Board of Directors of the Company.

Article 26

The Chairman/Chairwoman of the Board of Directors shall externally represent the Company and internally preside the shareholders' meetings and the meetings of the Board of Directors.

Article 27

The meeting of the Board of Director shall be convened by the Chairman/Chairwoman of the Board of Directors except the first meeting of a new Board of Directors that shall be convened by the Director who won the highest vote of all Directors elect. A written notice of the meeting of the Board of Directors shall be issued by facsimile or by email to the Directors each at least seven (7) days prior to the scheduled meeting date, which notice shall explicitly indicate the scheduled date, venue and agenda of the meeting. In the event of urgency, the meeting of the Board of Directors may be convened at any time with or without the above notice being issued.

Article 28

The meeting of the Board of Directors shall be presided by the Chairman/Chairwoman of the Board of Directors. If he/she is for whatever reason unable to preside the meeting, he/she shall designate a Director to act in his/her stead. Absent the above designation, the Directors shall elect one from among themselves to preside the meeting in deputy.

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 once every 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) Revision of these Articles of Incorporation.
• (2) Contract with a proposed value equal to or exceeding the relevant authorized amount (which authorized amount is to be defined by the Board of Directors authorized to do so).
• (3) Major capital expenditure not included in the relevant approved budget with a proposed sum equal to or exceeding the relevant authorized amount (which authorized amount is to be defined by the Board of Directors authorized to do so), which proposed sum cannot be divided into smaller amounts to obtain easy approval and which proposed sum as approved cannot be divided for spending.
• (4) Establishment of company bylaws with respect to the handling of transactions where the

Company is to externally provide guaranty, endorsement, accept to honor, commit, advance payments, provide lending, procure loan, sell account receivables.

• (5) Establishment and removal of branches and offices of the Company.
• (6) Investment in, merge or acquire other businesses.
• (7) Transfer, assignment, sale, lease, pledge, mortgage or otherwise dispose of the entire assets or important assets of the Company.
• (8) Transaction by and between the Company and its affiliate or the shareholder, director of the Company or their relative.
• (9) Approval and revision of agreements proposed on transfer or licensing of technology, know-how or patent right.
• (10) Approval and revision of trademark license agreement with an effective term of one year or more.
• (11) Proposed earnings distribution plan (or loss makeup plan).
• (12) Review and approval of proposed budgetary plan and final accounting.
• (13) Proposed increase or decrease in the capital of the Company.
• (14) Proposed operation plan; proposed factory construction or expansion projects.
• (15) Appointment, re-appointment and dismissal of the certified public accountant, legal counsel of the Company and the lead underwriter and secondary underwriter handling the public listing or over-the-counter trading of the shares of the Company.
• (16) Appointment and dismissal of the general manager of the Company.
• (17) Establishment of the bylaws with respect to the powers and authorization to be exercised by the Chairman of the Board of Directors and the general manager respectively.
• (18) Establishment of bylaws with respect to the hiring, promotion of employees and the salary payment policy.
• (19) Other bylaws with respect to the organization of the Company and the relevant implementation rules.
• (20) Other matters proposed that must be duly submitted to the shareholders' meeting for approval.

Article 30

The Director may issue a written proxy to designate another Director to attend the meeting of the Board of Directors and exercise his/her voting right on all proposed matters at the meeting in his/her stead; provided that a Director may act as the proxy for one and only one of the other Directors.

Article 31

The resolutions adopted by the meeting of the Board of Directors shall be recorded in the minutes of the meeting, which meeting minutes must be signed or sealed by the Chairman of the Board of Directors or the chairperson of the meeting with a copy thereof distributed to the Directors each. The meeting minutes shall be kept by the Company together with the relevant attendance book and written proxies received.

Article 32

The functions, powers and duties exercised by Supervisors under the Company Act, Securities and Exchange Act and other laws and regulations shall apply to the Audit Committee with necessary and appropriate alterations upon the establishment of the Audit Committee.

Article 33

The Company may establish various functional boards or committees under the relevant organization rules to be prescribed by the meeting of the Board of Directors in accordance with the relevant laws and regulations.

Article 34

The Board of Directors may have a number of secretaries or assists to take charge of keeping the minutes of the meetings of the Board of Directors and the shareholders' meetings and all of the important documents, contracts, agreements and instruments of the Company.

Article 35

The Company shall be liable and reimburse for the loss incurred in the course of the Director's performance of his/her functions and duties, which loss is not attributable to the same Director. For the purpose of protecting the Company from the above liability, the Company shall procure liabilities insurance for the Directors each by reference to the coverage commonly adopted by the trade home and abroad.

Chapter 5 Managerial Officers

Article 36

The Company may have a general manager a number of deputy general managers and managers. The general manager and the deputy general manager shall be appointed / dismissed by the meeting of the Board of Directors. The managers each shall be appointed / dismissed by the general manager, which appointment / dismissal shall be reported to the Board of Directors for reference.

Article 37

The general manager acting in accordance with the instruction of the Chairman of the Board of Directors shall take general charge of the day-to-day affairs of the Company and supervise, carry out and manage the operation of the Company.

Article 38

The Company shall be held liable and reimburse for the loss incurred in the course of the general manager's and the deputy general manager's performance of their functions and duties, which loss is not attributable to him/her. For the purpose of protecting the Company from the above liability, the Company shall procure liabilities insurance for the general manager and the deputy general manager each by reference to the coverage commonly adopted by the trade home and abroad.

Chapter 6 Fiscal Reports

Article 39

The Company shall produce and present the following statements and documents after the end of each fiscal year to the meeting of the Board of Directors for adoption and thereafter to the general shareholders' meeting for ratification:

• (1) Business report.
• (2) Financial statements.
• (3) Proposed earnings distribution plan or loss makeup plan.

Article 40

In consideration of the changeable environment of the Company's business, the Board of Director shall take into account the Company's future capital expenditures and capital calls to determine the proposed amounts of the reserved earnings, the distributable earnings, and the cash dividend when drawing up the proposed earnings distribution plan.

Ten percent (10%) of the Company's surplus as of the final accounting of the fiscal period net of the business income tax payable for the period, makeup for the loss accumulated from previous year(s) shall be allocated for legal reserves. The balance (if any) less the duly allocated or transferred amount for special reserve will be the earnings distributable of the period and the sum of said balance combined with the undistributed earnings carried forward from the previous period will be the accumulative earnings distributable, fifty percent to one hundred percent (50%~100%) of which sum will be the total amount of dividend to be distributed to the shareholders of the Company with 30% or more thereof distributed in cash. Subject to the relevant resolution adopted by the shareholders' meeting, the accumulative earnings distributable will be distributed according to the distribution plan proposed by the Board of Directors, provided that two percent (2%) thereof shall be paid to the Directors for compensation payable and not less than zero point two percent (0.2%) thereof shall be distributed as employees bonus.

Chapter 7 Supplemental Provisions

Article 41

Matters not addressed herein shall be in accordance with the Company Act of the Republic of China (Taiwan) and the relevant laws and regulations prescribed and announced by the competent authority.

Article 42

These Articles of Incorporation established on 16 October 1997 have been revised as follows: 1st revision of 17 March 1998, 2nd revision of 7 April 1999, 3rd revision of 21 July 2000, 4th revision of 3 December 2001, 5th revision of 13 June 2002, 6th revision of 13 March 2003, 7th revision of 30 June 2003, 8th revision of 30 June 2003, 9th revision of 14 May 2004, 10th revision of 3 June 2005, 11th revision of 3 October 2005, 12th revision of 15 February 2006, 13th revision of 7 June 2006, 14th revision of 18 June 2009, 15th revision of 25 September 2009, 16th revision of 29 April 2010, 17th revision of 9 December 2010, 18th revision of 13 June 2012, 19th revision of 21 June 2013 , and 20th revision of 18 June 2014.

ScinoPharm Taiwan, Ltd. Kao-Huei Cheng Chairman of the Board of Directors

The Impact of Stock dividend issuance on Business Performance, EPS, and Shareholder Return Rate

Year Item			2016
Actual Capital at Beginning of Term (NTD)		7,310,828,600
	Cash dividends per share (NTD)		0.3
Stock and dividend distribution	to capital (stocks)	Stock dividends for retained earnings transferred	0.04
(Note 1)	Stock dividends for capital surplus transferred to capital (stocks)		-
	Operating profits
	Year over year growth of operating profits
	Net profit after tax
Changes in business	Year over year growth of net profit after tax		Not applicable
performance	Earnings per share		(Note 2)
	Year over year growth of earnings per share
	Average annual ROI (inverse of average annual PE ratio)
	If stock dividends for retained earnings	Pro forma earnings per share
Pro forma earnings per share and PE ratio	transferred to capital were replaced by cash dividends	Pro forma average annual ROI	Not applicable (Note 2)
	If capital surplus was not transferred to capital	Pro forma earnings per share	Not applicable
		Pro forma average annual ROI	(Note 2)
	If capital surplus was not transferred to capital and stock dividends for retained earnings transferred to capital were replaced by cash dividends	Pro forma earnings per share	Not applicable (Note 2)
		Pro forma average annual ROI

Note 1:Pending resolution by 2016 Annual General Shareholders' Meeting.

Note 2:The Company didn't disclose 2016 financial forecasts, therefore the Company is not required to disclose yearly forecast information.

Exhibit 4

Required Minimum and Actual Shareholding data by Directors

• 1. According to Article 26 of the Securities and Exchange Act, the total amount of shares held by the directors of the Company as a whole shall account for no less than 23,394,651 shares.
• 1. According to the Company's shareholders register as of the suspension of transfer of the shares of the Company for this general shareholders' meeting, the shareholding of the directors each is detailed as follows:

Title	Name	Amount of shares held
Chairman of the Board of Directors	Uni-President Enterprises Corp. Representatives: Kao-Huei Cheng	277,337,870
Director	Uni-President Enterprises Corp. Representatives: Chih-Hsien Lo, Tsung-Ming Su , Kun-Shun Tsai, Tsung-Pin Wu, Yung-Fa Chen	277,337,870
Director	National Development Fund, Executive Yuan Representatives: Po-Wu Gean, Ming-Shi Chang	101,274,976
Director	Kao Chyuan Investment Co., Ltd. Representative: Shiow-Ling Kao	13,713,697
Director	President International Development Corp. Representative: Chiou-Ru Shih	26,510,191
Director	Tainan Spinning Co., Ltd. Representative: Chien-Li Yin	21,825,001
Director	Taiwan Sugar Corporation Representative: Kuo-His Wang	30,123,857
Independent Director	Wei-Cheng Tian	94,436
Independent Director	Ih-Jen Su	–
Independent Director	Wei-Te Ho	–
	470,880,028

Notes:

• (1) Article 2 of the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies stipulates that "if a public company has elected two or more independent directors, the share ownership figures calculated at the rates set forth in the preceding paragraph for all directors and supervisors other than the independent directors shall be decreased by 20 percent."
• (2) As the Company has set up an audit committee, provisions with regard to minimum shareholdings required of supervisors are not applicable.