Stock Code: 1521

TA YIH INDUSTRIAL CO., LTD

Handbook for 2019 Annual Meeting Shareholders

MEETING TIME : 9:00, 18 June 2019 (Tuesday)

Location: No. 660, Sec. 1, Ximen Rd, Tainan City, Taiwan (R.O.C.) (TaYih Landis Hotel, 5F)

Ι.	Meeting Procedure
	II. Meeting Agenda
	1. Announcement of Start of Meeting
	2. Chairperson Remarks
	3. Company Reports
	4. Proposals
	5. Discussions
	6. Motions
	7. Adjournment
	III. Appendix
	1. 2018 Business Report
	2. Supervisor's Review Report
	3. Independent Auditor's Report
	4. Distribution of 2018 Profit
	5. Comparison Table of Amended Clauses of Procedure for
	Acquisition or Disposal of Assets
	6. Current Shareholding of Directors and Supervisors48
	7. Corporate Charter
	8. Rules of Shareholders Meetings
	9. Procedure for Acquisition or Disposal of Assets60

$\hat{\mathcal{A}}$

$\hat{A}$

Ta Yih Industrial Co., Ltd.

Procedure of General Shareholders Meeting

Announcement of Start of Meeting

$\tilde{\mathbf{G}}$

1. Chairperson Remarks
1. Company Reports
1. Proposals
1. Discussions
1. Motions
1. Adjournment of meeting

Ta Yih Industrial Co., Ltd.

Agenda of General Shareholders Meeting

Time: 9:00, 18 June 2019 (Tuesday)

Location: Tayih Landis Hotel Tainan, 5F (No. 660, Section 1, Ximen Road, Tainan City)

Report on number of shares represented in the meeting. Announcement of start of meeting.

1. Chairperson Remarks
1. Company Reports
(1) 2018 Business report
(2) Supervisors' review of 2018 closing statements
(3) Report on 2018 employee remuneration distribution

4. Proposals

(1) 2018 Business report and financial statements
(2) 2018 Profit distribution
1. Discussions

Amendment to certain clauses of the Procedure for Acquisition or Disposal of Assets of the Company

1. Motions
1. Adjournment

Meeting Agenda

Report on number of shares represented. Announcement of start of meeting. $\mathbf{L}$
II. Chairman's statement
III. Reported Matters

Report No. 1 Subject: 2018 Business report. Remarks: Business report attached (please refer to pages 5-6 of this handbook)

Report No. 2

Subject: Supervisors' review of 2018 closing statements Remarks: Supervisors' review report attached (please refer to page 7 of this handbook)

Report No. 3

Subject: Report on 2018 employee remuneration distribution

Remarks: 1. In accordance with Article 30-1 of the Corporate Charter of the Company, if the Company realizes profit in the current year, no less than 1% shall be provided as employee remuneration, to be distributed in stock or in cash in accordance with board resolution. However, if the Company still has accumulated losses, the amount required to compensate the losses shall first be provided before employee remuneration is provided in accordance with the above percentage. The proposal to distribute employee remuneration shall be reported in the general shareholders meeting.
1. The board of directors of the Company passed a resolution on 15 March 2019 to provide 1% of profit as employee remuneration. The total amount of employee remuneration is NT\$3,745,340 and will be fully paid in cash.
IV. Proposals

Proposal No. 1 (by Board of Directors)

Subject: 2018 business report and financial statements.

Remarks: 1. The 2018 business report and financial statements of the Company have been approved by the board of directors of the Company.
1. These financial statements have been audited and certified by CPAs Liao, Hong-Ru and Li, Chi-Cheng of Deloitte Taiwan. Following completion of the supervisor review, they are submitted for approval (please refer to pages 5-6, pages 8-27 of this handbook).

Resolution:

Proposal No. 2 (by Board of Directors)

Subject: Adoption of the Proposal for Distribution of 2018 Profits.

Remarks: 1. The 2018 profit distribution proposal by the Company has been approved by the board of directors of the Company. Following completion of the supervisor review, it is submitted for approval (please refer to page 28 of this handbook).
1. The board of directors has proposed that, other than the provision of legal reserve NT\$31,920,640, cash dividend of NT\$3.8 per share be distributed. Total amount

of cash dividend distribution is NT\$289,674,000.

1. This cash dividend distribution will be calculated to the minimum unit of one dollar (value after the decimal point ignored). Fractional numbers shall be included as other income of the Company.
1. The board of directors is authorized to further determine the record date and issue date of this cash dividend distribution.

Resolution:

V. Discussions (by Board of Directors)

Subject: Amendment to certain clauses of the Procedure for Acquisition or Disposal of Assets of the Company is submitted for discussion.

Remarks: In accordance with the Regulations Governing the Acquisition or Disposal of Assets by Public Companies published by the Financial Supervisory Commission in November 2018, it is proposed to amend certain clauses of the Procedure for Acquisition or Disposal of Assets of the Company (please refer to page 29 of this handbook).

Resolution:

VI. Motions
VII. Adjournment

Ta Yih Industrial Co., Ltd.

Business Report

$\mathbf{L}$ 2018 Business Report:

$(1)$ Operating Results:

The Company's 2018 full-year net operating income is \$5,703,811,000, representing a decrease of \$493,579,000 from \$6,197,390,000 in 2017. 2018 net profit before tax is \$370,802,000, representing a decrease of \$215,169,000 from \$585,971,000 in 2017.

$(11)$ Comparison of operating income and net profit after tax in 2018 and 2017:

Unit: NT\$1,000

Year	2018	2017	Increase/	Increase/
			Decrease Amount	Decrease %
Net operating income	5,703,811	6,197,390	$-493,579$	$-8.0%$
Net operating profit	277,019	504,164	$-227,145$	$-45.1%$
Net profit before tax	370,802	585,971	$-215,169$	$-36.7%$
Net profit after tax	319,207	499,364	$-180,157$	$-36.1%$
After-tax earnings per share (\$/share)	4.19	6.55	$-2.36$	$-36.0%$

$(III)$ 2018 net profit after tax is \$319,207,000, earnings per share \$4.19, profit margin 5.6%, asset rate of return and shareholder equity rate of return 8.8% and 16.9% respectively.

Summary of 2019 Business Plan: Ш.

$(1)$ Operating Guidelines
1. Active development of overseas business to ensure business growth.
1. Reinforcement of automated production technology to increase production efficiency.
1. Improve quality management and satisfy client requirements.
1. Improve organization and nurture internationalized talents.
1. Protect the environment, employee health and fulfill social responsibilities.
(II) Expected Sales Figures and Basis
1. Expected Sales Figures: Approximately 430,000-440,000 vehicles sold domestically.
1. Basis: In accordance with the vehicle factory plan.
(III) Important sales and marketing policies
1. Expand product market to ensure business growth.
1. Lower mould cost and increase precision. Seek mould orders.
1. Improve lamp simulation technology to increase product competitiveness.
1. Introduce intelligence system to improve production capacity and stabilize quality.
III. Future development strategy of the company:
Increase product added value and seek domestic and export orders from domestic $(1)$ clients to increase turnover.
$(II)$ Combine Fuzhou Koito Tayih Automotive to expand Chinese market. Actively develop overseas markets such as North America. Continue to seek lamp and mould business from Koito group.
(III) Research ADB lamp new technology and new craftsmanship.
(IV) Develop energy saving and carbon reduction and pollution prevention. Implement

green environmental protection concepts to achieve low consumption and low emission targets.

IV. Impact of external competitive environment, legislative environment and overall operating environment:

The vehicle sales market in Taiwan was impacted on annuity revolution, the China-US trade war and lowered global economic growth in 2018. The momentum of domestic consumption weakened. 435,000 new vehicles were sold in the full year, representing a slight decrease from 2017. In an environment where the general market decreases and the market of imported vehicles increases, the Company's domestic turnover represented 49% of total turnover in 2018, representing a decrease of 4% from 2017. In the export market, orders for new model lamps and moulds from the US market increased. Export percentage increased from 47% in 2017 to 51% in 2018. Looking forward to 2019, due to lowered global economic growth rate and continued China-US trade war, the domestic economy will continue to be slow, which may impact the momentum of the vehicle market. However, domestic vehicle plants will launch multiple new models of domestic vehicles, which is expected to bring a buying trend. Total domestic vehicle sale is expected to be maintained at the level of 435,000 of last year. In the US and Japan, in addition to continuous pursuit of subcontracting business from Koito, the company will also continue to develop North American market to get more orders for lamps and moulds of new vehicle models. In addition, the Company will continue all types of cost rationalization activities. We believe that the income and profit of this year will be better than the same period in the last year.

In the future, in addition to implementing and strengthening corporate governance and enterprise social responsibilities, the Company will also reinforce operating management, actively invest in research, development and innovation to build continuous competitive advantages for the Company. It will also continue its philosophy of ethical and sustainable operation. With the support of all shareholders and leadership of the operating team, we will ensure stable growth in the Company's operation in order to take care of all employees and create maximum benefit for the shareholders. We strongly hope that all shareholders can continue to support, encourage and guide us.

We wish all shareholders health and all the best!

Ta Yih Industrial Co., Ltd.

Chairman: WU CHUN-I

Manager: LEE WANG KEN

Accounting Executive: WANG HUNG CHI

Appendix 2.

Supervisors' Review Report

The consolidated financial report and individual financial report of 2018 prepared by the board of directors have been audited by LEE CHI CHEN and LIAO HUNG JU, the CPAs of Deloitte & Touche. We have also reviewed the reports as mentioned above and the business report of 2018 and the statement of earning distribution and believe that the reviewed reports and documents are prepared in accordance with the Company Act and applicable laws. The Supervisors' Report is hereby submitted for approval.

This is hereby submitted to 2019 Annual Meeting of Shareholders of Ta Yih Industrial Co., Ltd.

Ta Yih Industrial Co., Ltd.

Superviros: KONAGAYA HIDEHARU

Superviros : KEN BO WEN

Superviros : LIN CHIEN

Mar. 19, 2019

Appendix 3. INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders Ta Yih Industrial Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Ta Yih Industrial Co., Ltd. (the "Company") and its subsidiaries (collectively referred to as the "Group"), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the "consolidated financial statements").

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

Key audit matter is the matter that, in our professional judgment, was of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. This matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

Key audit matter in the audit of the Group's consolidated financial statements for the year ended December 31, 2018 is as follows:

Sales Revenue from Hub Warehouse

Ta Yih Industrial Co., Ltd. mainly manufactures and sells automobile and locomotive lamps. The Company also sells its products to overseas markets. The sales pattern of overseas markets depends on the sales delivery from hub warehouse. Ta Yih Industrial Co., Ltd. usually relies on the statements or other information from the external custodians of hub warehouse when making important strategic decisions. The inventory change related to the delivery from hub warehouse is used as the basis for recognizing revenue, and the sales revenue is recognized when the customer picks up the goods (transfer of risks and rewards).

The sales revenue generated from the hub warehouse was \$1,003,125 thousand for the year ended December 31, 2018, which accounted for 18% of the total operating revenue. Considering the fact that trading volume of revenue from the hub warehouse is significant to the consolidated financial statements of Ta Yih Industrial Co., Ltd. for the year ended December 31, 2018; therefore, the revenue recognition of the sales from hub warehouse needs to be verified through multiple internal controls and has been identified as a key audit matter.

Our audit procedures performed in respect of the above key audit matter included the following:

1. We sampled and examined the effectiveness of continuous operation of the relevant controls during the fiscal year.
1. We sampled and inventoried the stock of goods in hub warehouse. And then, checked the estimated amounts in accordance with the actual hub warehouse amounts, and compared the results through physical observation.
We confirmed the appropriateness of the hub warehouse revenue by sampling the sales revenue $3.$ from shipment of hub warehouse and checked the corresponding documents, such as export declarations and bills of lading.

Other Matter

We have also audited the standalone financial statements of Ta Yih Industrial Co., Ltd. as of and for the years ended December 31, 2018 and 2017 on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the supervisors, are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an

audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
1. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
1. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
1. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
1. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
1. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine a matter that was of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and is therefore the key audit matter. We describe this matter in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors' report are Hung-Ju Liao and Chi-Chen Li.

Deloitte & Touche Taipei, Taiwan Republic of China

March 15, 2019

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors' report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' report and consolidated financial

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)

		December 31, 2018		December 31, 2017			December 31, 2018			December 31, 2017
ASSETS		Amount	వ్	Amount	ఫి	LIABILITIES AND EQUITY	Amount	%	Amount	℅
Cash (Notes 3, 4 and 6) CURRENT ASSETS	69	114,260		182,479 G9		Contract liabilities-current (Notes 3,4 and 17) CURRENT LIABILITIES	323,019 ₩,		69
Notes receivable (Notes 3, 4 and 7)		6,609		6,975	٠	Notes payable (Note 13)	185,813			235,402	ص
Accounts receivable (Notes 3, 4, 7 and 17)		572,455	2	766,580	ຊ	Notes payable to related parties (Notes 13 and 23)	6,437			15,038
Accounts receivable from related parties (Notes 3, 4, 7,						Accounts payable (Note 13)	484,440	4		661,204	≌
17 and 23)		207,591	o	278,472	œ	Accounts payable to related parties (Notes 13 and 23)	43,089 223,564			59,909	$\frac{2}{3}$
Other receivable (Notes 3, 4 and 7)		4,193		8,734		Other payables (Note 14)				273,818
Other receivables from related parties (Notes 3, 4, 7 and						Other payables to related parties (Notes 14 and 23)	68,737			76,909	2
		48,599		47,236		Current tax liabilities (Notes 4 and 19)	10,575			55,118	$\overline{\mathcal{C}}$
Inventories (Notes 4, 5 and 8)		785,969	23	862,116	$\overline{23}$	Deferred revenue-current (Note 3)				199,085	s
Prepayments (Note 23)		223,668		124,697		Other current liabilities (Note 14)	236			1,015
Other current assets (Notes 4, 12 and 19)		40,616		31,093			1,345,910	$\mathfrak{B}$	1,577,498		$\frac{42}{5}$
Total current assets		2.003.960	58	2.308.382	5	Total current liabilities
						NON-CURRENT LIABILITIES
NON-CURRENT ASSETS						Deferred tax liabilities (Notes 4 and 19)	119,909			113,351
Investments accounted for using the equity method (Notes						Net defined benefit liabilities (Notes 4,5, and 15)	135,020			159,372
4 and 10)		406,241	$\frac{2}{3}$	412,253	Ξ	Other non-current liabilities (Note 14)	2.597			2,437
Property, plant and equipment (Notes 4, 11, 23 and 24)		966,815 35,820		1,010,568	27		257,526			275,160
Deferred tax assets (Notes 4 and 19)		39,205		34,042 22,438		Total non-current liabilities
Other non-current assets (Notes 3, 4 and 12)						Total liabilities	1.603,436	$\frac{6}{5}$	1.852.658		$\frac{3}{2}$
Total non-current assets		1.448.081	$\frac{42}{3}$	,479,301	يع
						EQUITY ATTRIBUTED TO OWNERS OF THE COMPANY (Note 16)
						Ordinary shares	762,300	$\overline{2}$		762,300	$\approx$
						Capital surplus	60,605			60,472
						Retained earnings
						Special reserve Legal reserve	583,285 68,264	Ξ		533,348 68,264	$\overline{z}$
											$\overline{14}$
						Total retained earnings Unappropriated earnings	403,043 054,592	$\overline{5}$ $\overline{5}$		533,247 134,859	$\sqrt{2}$
						Other equity	(28.892)	Э		(22.606)	╕
						Total equity attributable to owners of the Company	1,848,605	워	1,935,025		5
TOTAL		3.452.041	ᅨ	3,787,683 64	흼	TOTAL	3,452,041	힄	3,787,683	힁

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

Accounting Executive: WANG HUNG CHI

Manager: LEE WANG KEN

Chairman: WU CHUN-I

$\ddot{\phantom{0}}$

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2018		2017
	Amount	$\frac{0}{0}$	Amount	$\frac{0}{0}$
OPERATING REVENUE (Notes 4, 17 and 23)	5,703,811 S	100	6,197,390 \$	100
OPERATING COSTS (Notes 8, 18 and 23)	4,872,472	85	5,126,223	83
GROSS PROFIT	831,339	15	1,071,167	17
UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES	(4,565)		(1,276)
REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES	4,213		11,300
REALIZED GROSS PROFIT	830,987	15	1,081,191	17
OPERATING EXPENSES (Notes 7, 18 and 23) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit gain	180,785 171,839 205,809 (4,465)	3 3 4	194,125 176,876 206,026	3 3 3
Total operating expenses	553,968	10	577,027	9
PROFIT FROM OPERATIONS	277,019	5	504,164	8
NON-OPERATING INCOME AND EXPENSES (Notes 4, 18 and 23) Other income Other gains and losses	97,040 (5,626)	1	112,649 (51, 424)	$\overline{2}$ (1)
Share of profits of associates	2,369		20,582
Total non-operating expenses	93,783		81,807	1
PROFIT BEFORE INCOME TAX	370,802	$6 -$	585,971	9
INCOME TAX EXPENSE (Notes 4 and 19)	51,595		86,607
NET PROFIT FOR THE YEAR	319,207	$\overline{5}$	499,364	8
OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans (Note 15) Income tax benefit relating to items that will not be	(8,033)		(17,082)
reclassified subsequently to profit or loss (Notes 4 and 19)	4,955		2,904	(Continued)

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

$\frac{0}{0}$

Chairman: WU CHUN-I

$\hat{\mathcal{A}}$

Manager: LEE WANG KEN

Accounting Executive: WANG HUNG CHI

$\hat{\mathcal{A}}$

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

(Concluded)

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Dividends Per Share)

	Share Capital				Retained Earnings		Other Equity
	Shares	Amount	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earning	Differences on Translating Operations Exchange Foreign	Total Equity
BALANCE AT JANUARY 1, 2017	76,230	762,300 ⊷	60,472 ⊷	483,964 ⊷	68,264 കി	493,841 69	(15, 539) 69	\$1,853,302
Cash dividends distributed by the Company - NTS 5.2 per share Appropriation of the 2016 earnings (Note 16) Legal reserve				49,384		$(49, 384)$ (396,396)		(396, 396)
Net profit for the year ended December 31, 2017						499,364		499,364
Other comprehensive loss for the year ended December 31, 2017, net of income						(14, 178)	(7.067)	(21, 245)
Total comprehensive income (loss) for the year ended December 31, 2017						485,186	(7.067)	478,119
BALANCE AT DECEMBER 31, 2017	76,230	762,300	60,472	533,348	68,264	533,247	(22, 606)	1,935,025
Cash dividends distributed by the Company - NT\$ 5.2 per share Appropriation of the 2017 earnings (Note 16) Legal reserve				49,937		$(49, 937)$ (396,396)		(396, 396)
Unclaimed cash dividends overdue transferred to capital surplus			133					133
Net profit for the year ended December 31, 2018						319,207		319,207
Other comprehensive loss for the year ended December 31, 2018, net of income tax						(3.078)	(6, 286)	(9.364)
Total comprehensive income (loss) for the year ended December 31, 2018						316,129	(6, 286)	309.843
BALANCE AT DECEMBER 31, 2018	76,230	762.300 ⊷	60.605 ⊷	583,285 ⊷	68.264 ⊷	403,043 લ્લ્	(28,892) ⊷	$-1,848,605$ ୴
Manager: LEE WANG KEN Chairman: WU CHUN-I	Accounting Executive: WANG HUNG CHI

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

$\ddot{\phantom{0}}$

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

	2018	2017
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	\$ 370,802	\$ 585,971
Adjustments for:
Depreciation expenses	151,702	172,095
Expected credit loss reversed on trade receivables	(4, 465)
Impairment loss recognized on trade receivables		1,965
Net gain on fair value changes of financial assets at fair value through profit
or loss	(10)
Finance costs	838	1,014
Interest income	(362)	(496)
Share of profits of associates	(2,369)	(20, 582)
Loss on disposal of property, plant and equipment, net	424	329
Loss on disposal of available-for-sale financial assets, net		326
Provision for loss on inventories		713
Unrealized gain on transactions with associates	4,565	1,276
Realized gain on transactions with associates	(4,213)	(11,300)
Net loss (gain) on foreign currency exchange	(7,262)	4,348
Changes in operating assets and liabilities:
Notes receivable	397	(6,506)
Accounts receivable	200,831	41,600
Accounts receivable from related parties	77,953	(22, 690)
Other receivables	4,541	(993)
Other receivables from related parties	(965)	(9, 823)
Inventories	76,147 (98, 971)	(264, 078) 125,614
Prepayments
Other current assets	(710)	(5,377)
Contract liabilities	123,934
Notes payable	(49, 589)	35,622 1,694
Notes payable to related parties	(8,601) (177, 843)	(9,800)
Accounts payable	(18,221)	(11,970)
Accounts payable to related parties Other payables	(50, 254)	(11, 124)
Other payables to related parties	(8,172)	(2, 404)
Deferred revenue		65,219
Other current liabilities	(779)	(699)
Net defined benefit liabilities	(32, 385)	(31, 784)
Other non-current assets	210	229
Cash generated from operations	547,173	628,389
Interest received	362	496
Dividends received		14,716
Interest paid	(838)	(1,014)
Income tax paid	(93, 504)	(61, 338)
Net cash generated from operating activities	453,193	581,249
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through profit or loss	(50,000)
Proceeds from sale of financial assets at fair value through profit or loss	50,010
Purchase of available-for-sale financial assets		(75,000)
Proceeds from sale of available-for-sale financial assets		74,674
		(Continued)

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

	2018	2017
Proceeds from sale of debt investment with no active market Payments for property, plant and equipment	(122, 834)	10,000 (77, 814) 30
Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits	(7,919) 5.613	(5, 428) 7,546
Net cash used in investing activities	(125, 130)	(65,992)
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Refunds of guarantee deposits received Cash dividends Unclaimed cash dividends overdue transferred to capital surplus	718,400 (718, 400) (50) (396, 396) 133	724,136 (724, 136) (396, 396)
Net cash used in financing activities	(396.313)	(396,396)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES	31	(88)
NET INCREASE (DECREASE) IN CASH	(68,219)	118,773
CASH AT THE BEGINNING OF THE YEAR	182,479	63,706
CASH AT THE END OF THE YEAR	114.260	182.479

Chairman: WU CHUN-I

$\bar{z}$

Manager: LEE WANG KEN

Accounting Executive: WANG HUNG CHI

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

(Concluded)

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders Ta Yih Industrial Co., Ltd.

Opinion

We have audited the accompanying standalone financial statements of Ta Yih Industrial Co., Ltd. (the "Company"), which comprise the standalone balance sheets as of December 31, 2018 and 2017, and the standalone statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the standalone financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying standalone financial statements present fairly, in all material respects, the standalone financial position of the Company as of December 31, 2018 and 2017, and its standalone financial performance and its standalone cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the standalone Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

Key audit matter is the matter that, in our professional judgment, was of most significance in our audit of the standalone financial statements for the year ended December 31, 2018. This matter was addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

Key audit matter in the audit of the Company's standalone financial statements for the year ended December 31, 2018 is as follows:

Sales Revenue from Hub Warehouse

The sales revenue generated from the hub warehouse was \$1,003,125 thousand for the year ended December 31, 2018, which accounted for 18% of the total operating revenue. Considering the fact that trading volume of revenue from the hub warehouse is significant to the standalone financial statements of Ta Yih Industrial Co., Ltd. for the year ended December 31, 2018; therefore, the revenue recognition of the sales from hub warehouse needs to be verified through multiple internal controls and has been identified as a key audit matter.

Our audit procedures performed in respect of the above key audit matter included the following:

1. We sampled and examined the effectiveness of continuous operation of the relevant controls during the fiscal year.
1. We sampled and inventoried the stock of goods in hub warehouse. And then, checked the estimated amounts in accordance with the actual hub warehouse amounts, and compared the results through physical observation.
1. We confirmed the appropriateness of the hub warehouse revenue by sampling the sales revenue from shipment of hub warehouse and checked the corresponding documents, such as export declarations and bills of lading.

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

Management is responsible for the preparation and fair presentation of the standalone financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of standalone financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the supervisors, are responsible for overseeing the Company's financial reporting process.

Auditors' Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

1. Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
1. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
1. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
1. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
1. Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
1. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the standalone financial statements. We are responsible for the direction, supervision, and performance of the Company audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine a matter that was of most significance in the audit of the standalone financial statements for the year ended December 31, 2018 and is therefore the key audit matter. We describe this matter in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors' report are Hung-Ju Liao, and Chi-Chen Li.

Deloitte & Touche Taipei, Taiwan Republic of China

$\overline{\phantom{a}}$

March 15, 2019

Notice to Readers

The accompanying standalone financial statements are intended only to present the standalone financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such standalone financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors' report and the accompanying standalone financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' report and standalone financial statements shall prevail.

(English Translation of Financial Statements and Report Originally Issued in Chinese)
Ta Yih Industrial Co., Ltd.

STANDALONE BALANCE SHEETS
DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)

	December 31, 2018			December 31, 2017			December 31, 2018		December 31, 2017
ASSETS	Amount	℅		Amount	℅	LIABILITIES AND EQUITY	Amount	℅	Amount	℅
CURRENT ASSETS						CURRENT LIABILITIES
Cash (Notes 3, 4 and 6)	13,240 69	3	G)	181,453	s	Contract liabilities - current (Notes 3,4 and 16)	323,019 69		5	P
Notes receivable (Notes 3, 4 and 7)	6,609			6,975	$\pmb{\cdot}$	Notes payable (Note 12)	185,813	c	235,402
Accounts receivable (Notes 3, 4, 7 and 16)	572,455	$\overline{1}$		766,580	$\boldsymbol{\Omega}$	Notes payable to related parties (Notes 12 and 22)	6,437		15,038
Accounts receivable from related parties (Notes 3, 4, 7,						Accounts payable (Note 12)	484,440	₫	561,204	122723
16 and 22)	207,591	v		278,472	ᅇ	Accounts payable to related parties (Notes 12 and 22)	43,089		59,909
Other receivable (Notes 3, 4 and 7)	4,193			8,734		Other payables (Note 13)	223,564	Ļ	273,818
Other receivables from related parties (Notes 3, 4, 7 and						Other payables to related parties (Notes 13 and 22)	68,737	N	76,909
$\tilde{z}$	48,599			47,236		Current tax liabilities (Notes 4 and 18)	10,575		55,118
Inventories (Notes 4, 5 and 8)	785,969	23		862,116	$\mathbf{z}$	Deferred revenue - current (Note 3)			99,085
Prepayments (Note 22)	223,668			124,697	r	Other current liabilities (Note 13)	236		1,015
Other current assets (Notes 4, 11 and 18)	40.616			31,093
						Total current liabilities	1.345,910	$\frac{3}{2}$	1.577,498	$\overline{a}$
Total current assets	2,002,940	$\frac{58}{5}$		2,307,356	ତ୍ର
						NON-CURRENT LIABILITIES
NON-CURRENT ASSETS						Deferred tax liabilities (Notes 4 and 18)	119,909		113,351
Investments accounted for using the equity method (Notes						Net defined benefit liabilities (Note 4, 5, and 14)	135,020	4	159,372
$4$ and $9$ )	407,261	5		413,279	$\equiv$	Other non-current liabilities (Note 13)	2.597		2,437
Property, plant and equipment (Notes 4, 10, 22 and 23)	966,815	28		1,010,568	21
Deferred tax assets (Notes 4 and 18)	35,820			34,042		Total non-current liabilities	257,526		275,160
Other non-current assets (Notes 3, 4 and 11)	39,205			22,438
						Total liabilities	1,603,436	$\frac{46}{5}$	1,852,658	$\frac{49}{2}$
Total non-current assets	1,449.101	$\frac{42}{5}$		1,480,327	이
						EQUITY ATTRIBUTED TO OWNERS OF THE COMPANY (Note 15)
						Ordinary shares	762,300	$\approx$	762,300	$\frac{20}{3}$
						Capital surplus	60,605	2	60,472
						Retained earnings
						Legal reserve	583,285	$\overline{1}$	533,348	$\mathbf{r}$
						Special reserve	68,264		68,264
						Unappropriated earnings	403,043	⊐	533,247	킈
						Total retained earnings	054,592	5	1.134.859	$\approx$
						Other equity	(28.892)	Ę	(22,606)	F
						Total equity attributable to owners of the Company	1,848,605	식	1,935,025	$\overline{5}$

TOTAL	3,452,041 여	의		3,787,683	흭	TOTAL	$-3,452,041$	돀	3,787,683 မေ	녧

Manager: LEE WANG KEN Chairman: WU CHUN-I	Accounting Executive: WANG HUNG CHI

The accompanying notes are an integral part of the standalone financial statements.

$\ddot{\phantom{0}}$

$\hat{\boldsymbol{\cdot}$

(English Translation of Financial Statements and Report Originally Issued in Chinese) Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2018		2017
	Amount	$\frac{0}{0}$	Amount	$\frac{6}{6}$
OPERATING REVENUE (Notes 4, 16 and 22)	5,703,811 \$	100	6,197,390 \$	100
OPERATING COSTS (Notes 8,17, and 22)	4,872,472	85	5,126,223	83
GROSS PROFIT	831,339	15	1,071,167	17
UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES	(4, 565)		(1,276)
REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES	4,213		11,300
REALIZED GROSS PROFIT	830,987	15	1,081,191	17
OPERATING EXPENSES (Notes 7, 17 and 22) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit gain	180,785 171,798 205,809 (4, 465)	3 3 4	194,125 176,829 206,026	3 3 3
Total operating expenses	553,927	10	576,980	$\overline{9}$
PROFIT FROM OPERATIONS	277,060	$\overline{5}$	504,211	8
NON-OPERATING INCOME AND EXPENSES (Notes 4, 17 and 22) Other income Other gains and losses Share of profit of subsidiaries and associates	97,036 (5,626) 2,332	1	112,646 (51, 424) 20,538	$\overline{2}$ (1)
Total non-operating expenses	93,742	1	81,760
PROFIT BEFORE INCOME TAX	370,802	6	585,971	9
INCOME TAX EXPENSE (Notes 4 and 18)	51,595		86,607
NET PROFIT FOR THE YEAR	319,207	5	499,364	$\overline{\mathbf{8}}$
OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans (Note 14) Income tax benefit relating to items that will not be reclassified subsequently to profit or loss (Notes 4	(8,033)		(17,082)
and $18)$	4,955		2,904	(Continued)

(English Translation of Financial Statements and Report Originally Issued in Chinese) Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2018		2017
	Amount	$\frac{0}{0}$	Amount	%
Items that may be reclassified subsequently to profit or	(3,078)		(14, 178)
loss: Exchange differences on translating the financial
statements of foreign operations Income tax benefit relating to items that may be reclassified subsequently to profit or loss (Notes 4)	(7,998)		(8, 495)
and $18)$	1,712 (6, 286)		1,428 (7,067)
Other comprehensive loss for the year, net of income tax	(9,364)		(21, 245)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	309,843 \$		478,119
	2018		2017
EARNINGS PER SHARE (New Taiwan dollars, Note 19) Basic Diluted	4.19 4.18		6.55 6.54
Manager: LEE WANG KEN Chairman: WU CHUN-I			Accounting Executive: WANG HUNG CHI

The accompanying notes are an integral part of the standalone financial statements.

$\mathcal{L}$

$\mathcal{A}$

(Concluded)

$\mathcal{L}_{\mathcal{L}}$

(English Translation of Financial Statements and Report Originally Issued in Chinese) Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Dividends Per Share)

		Share Capital			Retained Earnings		Other Equity
	Shares	Amount	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earning	Differences on Translating Operations Exchange Foreign	Total Equity
BALANCE AT JANUARY 1, 2017	76,230	762,300 ⊷	60,472 69	483,964 إون	68,264 ⊷	493,841 ₩	(15, 539) ⊷	\$1,853,302
Cash dividends distributed by the Company - NT\$5.2 per share Appropriation of the 2016 earnings (Note 15) Legal reserve				49,384		$(49,384)$ (396,396)		(396, 396)
Net profit for the year ended December 31, 2017						499,364		499,364
Other comprehensive loss for the year ended December 31, 2017, net of income	$\mathbf{I}$					(14, 178)	(7.067)	(21, 245)
Total comprehensive income loss for the year ended December 31, 2017	' ا					485,186	(7.067)	478.119
BALANCE AT DECEMBER 31, 2017	76,230	762,300	60,472	533,348	68,264	533,247	(22, 606)	1,935,025
Cash dividends distributed by the Company - NT\$ 5.2 per share Appropriation of the 2017 earnings (Note 15) Legal reserve				49,937		$(49, 937)$ (396,396)		(396, 396)
Unclaimed cash dividends overdue transferred to capital surplus			133					133
Net profit for the year ended December 31, 2018						319,207		319,207
Other comprehensive loss for the year ended December 31, 2018, net of income tax	$\overline{\phantom{a}}$					(3.078)	(6.286)	(9,364)
Total comprehensive income loss for the year ended December 31, 2018	'	٠				316,129	(6,286)	309,843
BALANCE AT DECEMBER 31, 2018	76,230	762.300 £۵	60,605 ⊷	583,285 ୫	68,264 69	403,043 ക്	(28, 892) ୫୩	$-1,848,605$ ଖ
Accounting Executive: WANG HUNG CHI Manager: LEE WANG KEN Chairman: WU CHUN-I

The accompanying notes are an integral part of the standalone financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

	2018		2017
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	\$ 370,802	\$	585,971
Adjustments for:
Depreciation expenses	151,702		172,095
Expected credit loss reversed on trade receivables	(4, 465)
Impairment loss recognized on trade receivables			1,965
Net gain on fair value changes of financial assets at fair value
through profit or loss	(10)
Finance costs	838		1,014
Interest income	(358)		(493)
Share of profits of subsidiaries and associates	(2, 332)		(20, 538)
Loss on disposal of property, plant and equipment, net	424		329
Loss on disposal of available-for-sale financial assets, net			326
Provision for loss on inventories			713
Unrealized gain on transactions with associates	4,565		1,276
Realized gain on transactions with associates	(4,213)		(11,300)
Net loss (gain) on foreign currency exchange	(7,262)		4,348
Changes in operating assets and liabilities:
Notes receivable	397		(6,506)
Accounts receivable	200,831		41,600
Accounts receivable from related parties	77,953		(22, 690)
Other receivables	4,541		(993)
Other receivables from related parties	(965)		(9,823)
Inventories	76,147		(264, 078)
Prepayments	(98, 971)		125,614
Other current assets	(710)		(5,377)
Contract liabilities	123,934
Notes payable	(49, 589)		35,622
Notes payable to related parties	(8,601)		1,694
Accounts payable	(177, 843)		(9,800)
Accounts payable to related parties	(18,221)		(11,970)
Other payables	(50, 254)		(11, 124)
Other payables to related parties	(8,172)	$\sim$	(2,404)
Deferred revenue			65,219
Other current liabilities	(779)		(699)
Net defined benefit liabilities	(32, 385)		(31, 784)
Other non-current assets	210		229
Cash generated from operations	547,214		628,436
Interest received	358		493
Dividends received			14,716
Interest paid	(838) (93, 504)		(1,014)
Income tax paid			(61, 338)
Net cash generated from operating activities	453,230		581,293

(Continued)

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

	2018	2017
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through profit or loss	(50,000)
Proceeds from sale of financial assets at fair value through profit or loss	50,010
Purchase of available-for-sale financial assets		(75,000)
Proceeds from sale of available-for-sale financial assets		74,674
Proceeds from sale of debt investment with no active market		10,000
Payments for property, plant and equipment	(122, 834)	(77, 814)
Proceeds from disposal of property, plant and equipment		30
Increase in refundable deposits	(7,919)	(5, 428)
Decrease in refundable deposits	5,613	7,546
Net cash used in investing activities	(125, 130)	(65,992)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	718,400	724,136
Repayments of short-term borrowings	(718,400)	(724, 136)
Refunds of guarantee deposits received	(50)
Cash dividends	(396, 396)	(396, 396)
Unclaimed cash dividends overdue transferred to capital surplus	133
Net cash used in financing activities	(396,313)	(396, 396)
NET INCREASE (DECREASE) IN CASH	(68,213)	118,905
CASH AT THE BEGINNING OF THE YEAR	181,453	62,548
CASH AT THE END OF THE YEAR	113,240	181,453

Chairman: WU CHUN-I

Manager: LEE WANG KEN

Accounting Executive: WANG HUNG CHI

The accompanying notes are an integral part of the standalone financial statements.

(Concluded)

Ta Yih Industrial Co., Ltd.

PROFIT ALLOCATION PROPOSAL

2018

Unit: NTD

Item	Amount
Beginning balance of undistributed earnings	86,915,537
Remeasurements of defined benefit plan recognized in retained earnings	(3,078,478)
Undistributed earnings after adjustment	83,837,059
Add: Net profit after tax for 2018	319,206,404
Less: 10% legal reserve allocated	31,920,640
Distributable earnings	371,122,823

Items distributed:
Shareholders' dividends (Cash) (Note 1)	289,674,000
Ending balance of undistributed earnings	81,448,823

(Note 1) Earnings of 2018 were distributed first.

Chairman: WU CHUN-I

$\mathcal{L}_{\mathcal{A}}$

Manager: LEE WANG KEN Accounting Manager: WANG HUNG CHI

Article	Amended Clause	Existing Clause	Remarks
Article 2	Scope of Assets	Scope of Assets	Article 3 of the
	1.	1.	Regulations
	2. Real property (including land, houses	2. Real property (including land, houses	Governing
	and buildings, investment property,	and buildings, investment property,	Acquisition or
	and construction enterprise	land right-of-use and construction	Disposal of Assets
	inventory) and equipment.	enterprise inventory) and equipment.	by Public
	3. $\cdots$	3.	Companies
	4. $\ddotsc$	4.
	5. Right-of-use assets.
	Claims of financial institutions 6.	5. Claims of financial institutions
	(including receivables, bills	(including receivables, bills purchased
	purchased and discounted, loans,	and discounted, loans, and overdue
	and overdue receivables).	receivables).
	7. Derivatives.	6. Derivatives.
	Assets acquired or disposed of in 8.	7. Assets acquired or disposed of in
	connection with mergers,	connection with mergers, demergers,
	demergers, acquisitions, or transfer	acquisitions, or transfer of shares in
	of shares in accordance with the law	accordance with the law
	Other major assets. 9.	8. Other major assets. Definitions	Article 4 of
Article 3	Definitions	Derivatives: Forward contracts, 1.	Regulations
	Derivatives: Forward contracts, 1. options contracts, futures contracts,	options contracts, futures contracts,	Governing
	leverage contracts, or swap	leverage contracts, or swap	Acquisition or
	contracts, whose value is derived	contracts, whose value is derived	Disposal of Assets
	from a product such as a specific	from a product such as an asset.	by Public
	interest rate, financial tool price,	interest rate, foreign exchange rate,	Companies
	product price, foreign exchange rate,	index or other interest, or hybrid
	price or fee rate index, credit rating	contracts combining the above
	or credit index or other variables.	products. The term "forward
	combinations of the above contracts	contracts" does not include
	or composite contracts or structured	insurance contracts, performance
	contracts integrating derivatives. The	contracts, after-sales service
	term "forward contracts" does not	contracts, long-term leasing
	include insurance contracts,	contracts, or long-term purchase
	performance contracts, after-sales	(sales) contracts.
	service contracts, long-term leasing
	contracts, or long-term purchase
	(sales) contracts.
	Assets acquired or disposed of 2.	2. Assets acquired or disposed of
	through mergers, demergers,	through mergers, demergers,
	acquisitions, or transfer of shares in	acquisitions, or transfer of shares in accordance with the law: Refers to
	accordance with the law: Refers to assets acquired or disposed of	assets acquired or disposed of
	through mergers, demergers, or	through mergers, demergers, or
	acquisitions conducted under the	acquisitions conducted under the
	Business Mergers and Acquisitions	Business Mergers and Acquisitions
	Act, Financial Holding Company Act,	Act, Financial Holding Company Act,
	Financial Institution Merger Act and	Financial Institution Merger Act and
	other acts, or to the transfer of	other acts, or to the transfer of
	shares from another company	shares from another company
	through the issuance of new shares	through the issuance of new shares
	of its own as the consideration	of its own as the consideration

Comparison Table of Amended Clauses of Procedure for Acquisition or Disposal of Assets

Article		Amended Clause		Existing Clause	Remarks
		therefor (hereinafter "Transfer of		therefor (hereinafter "Transfer of
		Shares") under Article 156-3 of the		Shares") under Article 156
		Company Act.		paragraph 6 of the Company Act.
		$3.$	3.	$\ddotsc$
		4.	4.	$\ddotsc$
		5.	5.	$\cdots$
	6.		6.
	7.	Investment professional: Refers to
		financial holding companies, banks,
		insurance companies, bill finance
		companies, trust enterprises,
		securities firms operating proprietary
		trading or underwriting business.
		futures commission merchants
		operating proprietary trading
		business, securities investment trust
		enterprises, securities investment
		consulting enterprises, and fund
		management companies, that are
		lawfully incorporated and are
		regulated by the competent financial
		authorities of the jurisdiction where
		they are located.
	8. .	Securities exchange: "Domestic
		securities exchange" refers to the
		Taiwan Stock Exchange Corporation: "foreign securities exchange" refers
		to any organized securities exchange
		market that is regulated by the
		competent securities authorities of
		the jurisdiction where it is located.
	9.	Over-the-counter venue ("OTC
		venue", "OTC"): "Domestic OTC
		venue" refers to a venue for OTC
		trading provided by a securities firm
		in accordance with the Regulations
		Governing Securities Trading on the
		Taipei Exchange: "foreign OTC
		venue" refers to a venue at a
		financial institution that is regulated
		by the foreign competent authority
		and that is permitted to conduct securities business.
				Limit Amount for Investment in	Article 7 of
Article 4		Limit Amount for Investment in Non-Operating Real Property and the		Non-Operating Real Property and	Regulations
		right-of use asset thereof and Securities		Securities	Governing
		Acquisition of the above asset by the		Acquisition of the above asset by the	Acquisition or
		Company and each of its subsidiaries is		Company and each of its subsidiaries is	Disposal of Assets
		limited by the following:		limited by the following:	by Public
		(1) Total amount of non-operating real		(1) Total amount of non-operating real	Companies
		property and the right-of-use asset		property shall not exceed 15% of the
		thereof shall not exceed 15% of the		net assets.
		net assets.
		$(2)$	$(2)$
		(3) Investment amount in individual		(3) Investment amount in individual
		securities shall not exceed 60% of		securities shall not exceed 50% of
		the net assets.		the net assets.
Article 5		When the Company acquires an appraisal		When the Company acquires an appraisal	Article 5 of
		report or an opinion from an accountant,		report or an opinion from an accountant, attorney, or securities underwriter, such	Regulations Governing
		attorney, or securities underwriter, such

Amended Clause	Existing Clause	Remarks
professional appraiser and its officer, the	professional appraiser and its officer, the	Acquisition or
accountant, attorney, or securities	accountant, attorney, or securities	Disposal of Assets
underwriter shall meet the following	underwriter shall not be a related party	by Public
requirements:	to the transaction counterparty.	Companies
May not have previously received a 1.
final and unappealable sentence to
imprisonment for 1 year or longer
for a violation of the Act, the
Company Act, the Banking Act of The Republic of China, the Insurance Act,
the Financial Holding Company Act,
or the Business Entity Accounting
Act, or for fraud, breach of trust.
embezzlement, forgery of
documents, or occupational crime.
However, this provision does not
apply if 3 years have already passed
since completion of service of the
sentence, since expiration of the
period of a suspended sentence, or
since a pardon was received.
May not be a related party or de 2.
facto related party of any party to the transaction.
If the company is required to obtain $\overline{3}$ .
appraisal reports from two or more
professional appraisers, the different
professional appraisers or appraisal
officers may not be related parties or
de facto related parties of each
other.
When issuing an appraisal report or
opinion, the personnel referred to in the
preceding paragraph shall comply with the following:
1. Prior to accepting a case, they shall
prudently assess their own
professional capabilities, practical
experience, and independence.
2. When examining a case, they shall
appropriately plan and execute
adequate working procedures, in order to produce a conclusion and use the
conclusion as the basis for issuing the
report or opinion. The related working
procedures, data collected, and
conclusion shall be fully and accurately
specified in the case working papers.
3. They shall undertake an item-by-item
evaluation of the comprehensiveness.
accuracy, and reasonableness of the
sources of data used, the parameters, and the information, as the basis for
issuance of the appraisal report or the
opinion.
4. They shall issue a statement attesting
to the professional competence and
independence of the personnel who
prepared the report or opinion, and that they have evaluated and found

Article	Amended Clause	Existing Clause	Remarks
	that the information used is
	reasonable and accurate, and that they
	have complied with applicable laws
	and regulations.
Article 6	Procedure for Real Property_Equipment	Procedure for Real Property or	Article 9 of
	or the right-of-use asset thereof	Equipment	Regulations
	Evaluation Procedure 1.	Evaluation Procedure 1.	Governing
	To acquire or dispose of real (1)	(1) To acquire or dispose of real	Acquisition or
	property, equipment or the	property or equipment of the	Disposal of Assets
	right-of-use assets thereof of the	Company, the applicant unit	by Public
	Company, the applicant unit	shall submit the grounds based	Companies
	shall submit the grounds based	on actual needs or as reported
	on actual needs or as reported	case-by-case by the original user
	case-by-case by the original user	unit. Following price
	unit. Following price	consultation, price comparison,
	consultation, price comparison,	and price negotiation together
	and price negotiation together	with the relevant units, a
	with the relevant units, a	submission shall be made to the
	submission shall be made to the	president for approval. If the
	president for approval. If the	amount exceeds NT\$10 million,
	amount exceeds NT\$20 million,	the transaction shall be
	the transaction shall be	approved by the chairman and shall be submitted to the board
	approved by the chairman and shall be submitted to the board	of directors.
	of directors
	(2) If the acquisition or disposal of	(2) If the acquisition or disposal of
	the asset by the Company is	the asset by the Company is
	subject to approval by the board	subject to approval by the board
	of directors in accordance with	of directors in accordance with
	the procedure that it has	the procedure that it has
	established or other laws, and if	established or other laws, and if
	any director voices any	any director voices any
	objection, with a record or	objection, with a record or
	written statement, the Company	written statement, the Company
	shall also submit the director's	shall also submit the director's
	objection to each supervisor. If	objection to each supervisor. If
	the Company has independent directors in accordance with the	the Company has independent directors in accordance with the
	Securities Exchange Act, when	Securities Exchange Act, when
	the transaction for acquisition or	the transaction for acquisition or
	disposal of the asset is	disposal of the asset is
	submitted to the board of	submitted to the board of
	directors for discussion as	directors for discussion as
	required, the opinions of each	required, the opinions of each
	independent director shall be	independent director shall be
	fully taken into consideration. If	fully taken into consideration. If
	any independent director voices	any independent director voices
	any objection or reservation, it shall be specified in the minutes	any objection or reservation, it shall be specified in the minutes
	of the board meeting.	of the board meeting.
	If an audit committee has been
	established in accordance with
	the Securities Transaction Act,
	transactions of major assets or
	derivatives shall be approved by
	1/2 of all members of the audit
	committee and submitted to the
	board of directors for resolution.
	Paragraphs 3 and 4, Article 16
	apply mutatis mutandis.

Article	Amended Clause	Existing Clause	Remarks
	Procedure 2.	Procedure 2.
	When the Company acquires	When the Company acquires or
	disposes of real property.	disposes of real property or
	equipment or the right-of use assets	equipment, an approval shall be
	thereof, an approval shall be	acquired in accordance with the
	acquired in accordance with the	approval authority under the
	approval authority under the	previous paragraph, followed by
	previous paragraph, followed by	execution by the user department or
	execution by the user department or	the procurement department.
	the procurement department.
	Real Property or Equipment 3.	3. Real Property or Equipment
	Appraisal Report	Appraisal Report
	In acquiring or disposing of real	In acquiring or disposing of real
	property_equipment or the	property or equipment, where the
	right-of-use assets thereof, where	transaction amount reaches 20% of
	the transaction amount reaches 20%	the Company's paid-in capital or
	of the Company's paid-in capital or	NT\$300 million or more, the
	NT\$300 million or more, the	Company, unless transacting with a
	Company, unless transacting with a	government agency, engaging others
	domestic government agency,	to build on its own land, engaging
	engaging others to build on its own	others to build on rented land, or
	land, engaging others to build on	acquiring or disposing of machine
	rented land, or acquiring or	equipment held for business use,
	disposing of equipment or the	shall obtain an appraisal report prior
	right-of-use asset thereof held for	to the date of occurrence of the
	business use, shall obtain an	event from a professional appraiser
	appraisal report prior to the date of	and shall further comply with the
	occurrence of the event from a	following provisions:
	professional appraiser and shall
	further comply with the following
	provisions:
	(1) Where due to special	(1) Where due to special

	circumstances it is necessary to	circumstances it is necessary to
	give a limited price, specified	give a limited price, specified
	price, or special price as a	price, or special price as a
	reference basis for the	reference basis for the
	transaction price, the	transaction price, the
	transaction shall be submitted	transaction shall be submitted
	for approval in advance by the	for approval in advance by the
	board of directors. The same	board of directors. The same
	procedure shall also be followed	procedure shall also be followed
	whenever there is any	whenever there is any change to
	subsequent change to the terms	the terms and conditions of the
	and conditions of the	transaction in the future.
	transaction.
	(2) $\ddotsc$	(2) $\ddots$
	$(3)$	(3)
Article 7	Procedure for Acquisition or Disposal of	Procedure for Acquisition or Disposal of	Article 9 of
	Securities	Securities	Regulations
	Evaluation Procedure 1.	Evaluation Procedure 1.	Governing
	(1) $\ddotsc$	$(1)$	Acquisition or
	(2) If the acquisition or disposal of	(2) If the acquisition or disposal of	Disposal of Assets
	asset by the Company is subject	asset by the Company is subject	by Public
	to approval by the board of	to approval by the board of	Companies
	directors in accordance with the	directors in accordance with the
	procedure that it has established	procedure that it has established
	or other laws, and if any director	or other laws, and if any director
		voices any objection, with a
	voices any objection, with a record or written statement, the	record or written statement, the
	Company shall also submit the	Company shall also submit the

Article	Amended Clause	Existing Clause	Remarks
	director's objection to each	director's objection to each
	supervisor. If the Company has	supervisor. If the Company has
	independent directors in	independent directors in
	accordance with the Securities	accordance with the Securities
	Exchange Act, when the	Exchange Act, when the
	transaction for acquisition or	transaction for acquisition or
	disposal of assets is submitted to	disposal of assets is submitted to
	the board of directors for	the board of directors for
	discussion as required, the	discussion as required, the
	opinions of each independent	opinions of each independent
	director shall be fully taken into	director shall be fully taken into
	consideration. If any	consideration. If any independent director voices any
	independent director voices any objection or reservation, it shall	objection or reservation, it shall
	be specified in the minutes of	be specified in the minutes of
	the board meeting.	the board meeting.
	If an audit committee has been
	established in accordance with
	the Securities Transaction Act,
	transactions of major assets or
	derivatives shall be approved by
	1/2 of all members of the audit
	committee and submitted to the
	board of directors for resolution.
	Paragraphs 3 and 4, Article 16
	apply mutatis mutandis.
	2. $\ddotsc$	2. $\ddotsc$
	3.	3.
Article 8	Procedure for Related Party Transactions	Procedure for Related Party Transactions	Article 14 of
	When the Company acquires or 1.	When the Company acquires or 1. disposes of assets from or to a	Regulations Governing
	disposes of assets, equipment or right-of use assets thereof from or to	related party, in addition to following	Acquisition or
	a related party, in addition to	the procedure for the acquisition of	Disposal of Assets
	following the procedure for the	real property under Article 6, the	by Public
	acquisition of real property under	following procedures regarding	Companies
	Article 6, the following procedures	relevant resolutions and an
	regarding relevant resolutions and an	evaluation of the reasonableness of
	evaluation of the reasonableness of	transaction conditions shall also be
	transaction conditions shall also be	followed. If the transaction amount
	followed. If the transaction amount	exceeds 10% of the Company's total
	exceeds 10% of the Company's total	assets, an appraisal report issued by
	assets, an appraisal report issued by	a professional appraiser or an
	a professional appraiser or an accountant's opinion shall also be	accountant's opinion shall also be acquired in accordance with Article
	acquired in accordance with Article	6.
	6.
	The calculation of the transaction	The calculation of the transaction
	amounts referred to in the preceding	amounts referred to in the preceding
	paragraph shall be made in	paragraph shall be made in
	accordance with Article 9-1.	accordance with Article 9-1.
	When judging whether a transaction	When judging whether a transaction
	counterparty is a related party, in	counterparty is a related party, in
	addition to legal formalities, the	addition to legal formalities, the
	substance of the relationship shall	substance of the relationship shall
	also be considered.	also be considered.
	Evaluation and Procedure 2.	Evaluation and Procedure 2.
	When the Company intends to	When the Company intends to
	acquire or dispose of real property or the right-of-use assets thereof from	acquire or dispose of real property from or to a related party, or when it
	or to a related party, or when it	intends to acquire or dispose of

Article	Amended Clause	Existing Clause	Remarks
	intends to acquire or dispose of	assets other than real property from
	assets other than real property or	or to a related party and the
	the right-of-use assets thereof from	transaction amount reaches 20
	or to a related party and the	percent or more of paid-in capital, 10
	transaction amount reaches 20	percent or more of the company's
	percent or more of paid-in capital, 10	total assets, or NT\$300 million or
	percent or more of the company's	more, except in trading of domestic
	total assets, or NT\$300 million or	government bonds or bonds under
	more, except in trading of domestic	repurchase and resale agreements,
	government bonds or bonds under	or subscription or redemption of
	repurchase and resale agreements,	money market funds issued by domestic securities investment trust
	or subscription or redemption of	enterprises, the company may not
	money market funds issued by
	domestic securities investment trust	proceed to enter into a transaction
	enterprises, the company may not proceed to enter into a transaction	contract or make a payment until the following matters have been
	contract or make a payment until the	approved by the board of directors
	following matters have been	and recognized by the supervisors:
	approved by the board of directors
	and recognized by the supervisors:
	$(1)$	$(1)$
	(2) $\ddotsc$	$(2)$
	(3) With respect to the acquisition	(3) With respect to the acquisition
	of real property or the	of real property from a related
	right-of-use assets thereof from	party, information regarding
	a related party, information	appraisal of the reasonableness
	regarding appraisal of the	of the preliminary transaction
	reasonableness of the	terms in accordance with
	preliminary transaction terms in	subparagraphs (1) and (4), third
	accordance with subparagraphs	paragraph of this Article.
	(1) and (4), third paragraph of
	this Article.
	(4) $\ddotsc$	(4) $\ddotsc$
	(5)	(5)
	(6)	(6)
	(7)	(7)
	The calculation of the transaction	The calculation of the transaction
	amounts referred to in the preceding	amounts referred to in the preceding
	paragraph shall be made in	paragraph shall be made in
	accordance with subparagraph (5),	accordance with subparagraph (5),
	first paragraph, Article 13, and	first paragraph, Article 13, and
	"within the preceding year" as used	"within the preceding year" as used
	herein refers to the year preceding	herein refers to the year preceding
	the date of occurrence of the current transaction. Items that have been	the date of occurrence of the current transaction. Items that have been
	approved by the board of directors	approved by the board of directors
	and recognized by the supervisors	and recognized by the supervisors
	need not be counted toward the	need not be counted toward the
	transaction amount.	transaction amount.
	When the Company engages in	When the Company acquires or
	below transactions with its	disposes of machine equipment for
	subsidiary or between subsidiaries of	business use with its subsidiary, the
	which 100% outstanding shares or	board of directors may, pursuant to
	total capital is held directly or	subparagraph (3), first paragraph,
	indirectly by the Company, the board	Article 7, delegate the board
	of directors may, pursuant to	chairman to decide such matters
	subparagraph (3), first paragraph,	when the transaction is within a
	Article 7, delegate the board	certain amount and have the
	chairman to decide such matters	decisions subsequently submitted to
	when the transaction is within a	and ratified by the next board of

	Amended Clause		Existing Clause
	certain amount and have the		directors meeting.
	decisions subsequently submitted to
	and ratified by the next board of
	directors meeting:
	(1) Acquisition or disposal of
	equipment or right-of-use assets
	thereof held for business use.
	(2) Acquisition or disposal of real
	property right-of-use assets held
	for business use. Where an audit committee has been
	established in accordance with the
	provisions of the Securities
	Transaction Act, the matters for
	which paragraph 1 requires
	recognition by the supervisors shall
	first be approved by more than half
	of all audit committee members and
	then submitted to the board of
	directors for a resolution, and shall be subject to mutatis mutandis
	application of Article 16, paragraphs
	3 and 4.
3.	Evaluation of the Reasonableness of	3.	Evaluation of the Reasonableness of
	Transaction Costs		Transaction Costs
	(1) When the Company acquires		(1) When the Company acquires
	real property or right-of-use		real property from a related
	assets thereof from a related		party, it shall evaluate the
	party, it shall evaluate the reasonableness of the		reasonableness of the transaction costs by the
	transaction costs by the		following means:
	following means:
	i.		i.
	ii.		ii.
	(2) Where land and structures		(2) Where land and structures
	thereupon are combined as a		thereupon are combined as a
	single property purchased or		single property purchased in one
	leased in one transaction, the		transaction, the transaction costs for the land and the
	transaction costs for the land and the structures may be		structures may be separately
	separately appraised in		appraised in accordance with
	accordance with either of the		either of the means listed in the
	means listed in the preceding		preceding paragraph.
	paragraph.
	(3) When the Company acquires		(3) When the Company acquires
	real property or right-or-use		real property from a related
	asset thereof from a related		party and appraises the cost of
	party and appraises the cost of		the real property in accordance
	the real property or right-or-use		with subparagraphs $(1)$ and $(2)$ ,
	asset thereof in accordance with		third paragraph of this Article, it
	subparagraphs (1) and (2), third paragraph of this Article, it shall		shall also engage a CPA to check the appraisal and render a
	also engage a CPA to check the		specific opinion.
	appraisal and render a specific
	opinion.
	(4) When the Company acquires		(4) When the Company acquires
	real property or right-or-use		real property from a related
	asset thereof from a related		party and the results of the
	party and the results of the		Company's appraisal conducted
	Company's appraisal conducted		in accordance with

÷,

Article	Amended Clause	Existing Clause	Remarks
	in accordance with	subparagraphs (1) and (2), third
	subparagraphs (1) and (2), third	paragraph of this Article are
	paragraph of this Article are	uniformly lower than the
	uniformly lower than the	transaction price, the matter
	transaction price, the matter	shall be handled in compliance
	shall be handled in compliance	with subparagraph (5), third
	with subparagraph (5), third	paragraph of this Article.
	paragraph of this Article.	However, where the following
	However, where the following	circumstances exist, objective
	circumstances exist, objective	evidence has been submitted
	evidence has been submitted	and specific opinions on
	and specific opinions on	reasonableness have been
	reasonableness have been	obtained from a professional
	obtained from a professional	real property appraiser and a
	real property appraiser and a	CPA have been obtained, this
	CPA have been obtained, this	restriction shall not apply:
	restriction shall not apply:	i. Where the related party
	i. Where the related party acquired undeveloped	acquired undeveloped land
	land or leased land for	or leased land for
	development, it may	development, it may
	submit proof of	submit proof of compliance
	compliance with one of	with one of the following
	the following conditions:	conditions:
	(i)	(i)
	(ii) Completed	(ii) Completed closings by
	transactions by	unrelated parties
	unrelated parties	within the preceding
	within the preceding	year involving other
	year involving other	floors of the same
	floors of the same	property or
	property or	neighboring or closely valued parcels of land,
	neighboring or closely valued parcels	where the land area
	of land, where the	and transaction terms
	land area and	are similar after
	transaction terms are	calculation of
	similar after	reasonable price
	calculation of	discrepancies in floor
	reasonable price	or area land prices in
	discrepancies in floor	accordance with
	or area land prices in	standard property
	accordance with	market sale practices.
	standard property
	market sale or lease
	practices. $(iii)$	$(iii)$
	ij. Where the Company	ii. Where the Company
	acquiring real property or	acquiring real property
	right-of-use asset thereof	from a related party
	from a related party	provides evidence that the
	provides evidence that the	terms of the closing are
	terms of the transaction	similar to the terms of
	are similar to the terms of	completed transactions
	completed transactions	involving neighboring or
	involving neighboring or	closely valued parcels of
	closely valued parcels of land of a similar size by	land of a similar size by unrelated parties within
	unrelated parties within	the preceding year. In the
	the preceding year. In the	preceding paragraph,

Article	Amended Clause	Existing Clause	Remarks
	preceding paragraph,	'Completed closings
	'Completed transactions	involving neighboring or
	involving neighboring or	closely valued parcels of
	closely valued parcels of	land' in principle refers to
	land' in principle refers to	parcels on the same or an
	parcels on the same or an	adjacent block and within a
	adjacent block and within	distance of no more than
	a distance of no more than	500 meters or parcels close
	500 meters or parcels	in publicly announced
	close in publicly	current value. 'Transactions
	announced current value.	involving similarly sized
	'Transactions involving	parcels' in principle refers
	similarly sized parcels' in	to closings completed by
	principle refers to	unrelated parties for
	transactions completed by	parcels with a land area of
	unrelated parties for	no less than 50 percent of
	parcels with a land area of	the property in the
	no less than 50 percent of	planned transaction.
	the property in the	'Within the preceding year'
	planned transaction.	refers to the year
	'Within the preceding	preceding the date of
	year' refers to the year	occurrence of the
	preceding the date of occurrence of the	acquisition of the real
	acquisition of the real	property.
	property
	(5) Where the Company acquires	(5) Where the Company acquires
	real property or right-of-use	real property from a related
	assets thereof from a related	party and the results of
	party and the results of	appraisals conducted in
	appraisals conducted in	accordance with subparagraphs
	accordance with subparagraphs	(1) and (2), third paragraph of
	(1) and (2), third paragraph of	this Article are uniformly lower
	this Article are uniformly lower	than the transaction price, the
	than the transaction price, the	following steps shall be taken. If
	following steps shall be taken. If	the Company and any of its
	the Company and any of its	subsidiaries that is a publicly
	subsidiaries that is a publicly	listed company evaluated under
	listed company evaluated under	the equity method has provided
	the equity method has provided	a special reserve in accordance
	a special reserve in accordance	with the above, such special
	with the above, such special	reserve shall only be used if a
	reserve shall only be used if a	recognition of loss from the
	recognition of loss from the price drop has been provided for	price drop has been provided for the asset purchased at a high
	the asset purchased or leased at	price, or upon disposal, proper
	a high price, or upon disposal or	compensation or reinstatement
	termination of lease, proper	of the original status of such
	compensation or reinstatement	asset, or if there is other
	of the original status of such	evidence confirming that there
	asset, or if there is other	is no unreasonableness, with the
	evidence confirming that there	approval by the Financial
	is no unreasonableness, with the	Supervisory Commission.
	approval by the Financial
	Supervisory Commission.
	A special reserve shall be set	A special reserve shall be set i.
	aside in accordance with the	aside in accordance with the
	first paragraph, Article 41 of	first paragraph, Article 41 of
	the Act against the	the Act against the
	difference between the real	difference between the real

$\overline{\phantom{a}}$

Article	Amended Clause	Existing Clause	Remarks
	property or right-of-use	property transaction price
	asset thereof transaction	and the appraised cost, and
	price and the appraised	may not be distributed or
	cost, and may not be	used for capital increase or
	distributed or used for	issuance of bonus shares.
	capital increase or issuance	Where a public company
	of bonus shares. Where a public company uses the	uses the equity method to account for its investment in
	equity method to account	another company, then the
	for its investment in another	special reserve called for
	company, then the special	under the first paragraph,
	reserve called for under the	Article 41 of the Act shall be
	first paragraph, Article 41 of	set aside pro rata in a
	the Act shall be set aside	proportion consistent with
	pro rata in a proportion	the share of the public
	consistent with the share of	company's equity stake in
	the public company's equity	the other company.
	stake in the other company.
	Supervisors shall comply ii.	ii. Supervisors shall comply
	with Article 218 of the Company Act. If an audit	with Article 218 of the
	committee has been	Company Act.
	established in accordance
	with the Securities
	Transaction Act, the first
	part of the previous
	subparagraph shall apply
	mutatis mutandis to the
	independent directors
	forming the audit
	committee.
	iii. Actions taken pursuant to	iii. Actions taken pursuant to
	the previous 2 saections	sections i and ii, subparagraph (5), third
	shall be reported to a shareholders meeting, and	paragraph of this Article shall
	the details of the	be reported to a
	transaction shall be	shareholders meeting, and
	disclosed in the annual	the details of the transaction
	report and any investment	shall be disclosed in the
	prospectus.	annual report and any
		investment prospectus.
	(6) Where the Company acquires	(6) Where the Company acquires
	real property or right-of-use	real property from a related
	assets thereof from a related	party and one of the following
	party and one of the following	circumstances exists, the
	circumstances exists, the acquisition shall be conducted in	acquisition shall be conducted in accordance with the preceding
	accordance with the preceding	article, and subparagraphs (1),
	article, and subparagraphs (1),	(2), and (3), third paragraph of
	(2), and (3), third paragraph of	this Article do not apply:
	this Article do not apply:
	The related party or i.	The related party acquired i.
	right-of-use assets thereof	the real property through
	acquired the real property	inheritance or as a gift.
	through inheritance or as a
	gift.
	More than 5 years will have ii.	ii. More than 5 years will have
	elapsed from the time the	elapsed from the time the
	related party signed the contract to obtain the real	related party signed the contract to obtain the real

property to the signing date property or right-of-use for the current transaction. assets thereof to the signing date for the current transaction. iii. iii. $\dddotsc$ Acquisition of real property iv. right-of-use assets for business use between the Company and its subsidiary or among subsidiaries of which 100% outstanding shares or total capital is owned directly or indirectly by the Company. (7) When the Company obtains real (7) When the Company obtains real property thereof from a related property thereof from a related party, it shall also comply with party or right-of-use assets thereof, it shall also comply with subparagraph (5), third paragraph of this Article, if there subparagraph (5), third is other evidence indicating that paragraph of this Article, if there the acquisition was not an arms is other evidence indicating that length transaction. the acquisition was not an arms length transaction. Article 11 of Procedure for Acquisition or Disposal of Procedure for Acquisition or Disposal of Article 9 Regulations Membership or Intangible Assets Intangible Assets or right-of-use assets Governing thereof or membership Evaluation Procedure Acquisition or (1) Evaluation Procedure (1) Disposal of Assets i. To acquire or dispose of a To acquire or dispose of i. by Public membership or intangible assets, intangible assets or right-of-use reference shall be made to the fair Companies assets thereof or membership, reference shall be made to the market price to resolve the transaction terms and transaction fair market price to resolve the prices. If the amount exceeds transaction terms and transaction NT\$10 million, the transaction prices. If the amount exceeds shall be approved by the chairman NT\$10 million, the transaction and shall be submitted to the shall be approved by the chairman and shall be submitted board of directors. to the board of directors. ii. If the acquisition or disposal of ii. If the acquisition or disposal of assets by the Company is subject assets by the Company is subject to approval by the board of to approval by the board of directors in accordance with the directors in accordance with the procedure that it has established procedure that it has established or other laws, and if any director or other laws, and if any director voices any objection, with a voices any objection, with a record or written statement, the record or written statement, the Company shall also submit the Company shall also submit the director's objection to each director's objection to each supervisor. If the Company has supervisor. If the Company has independent directors in independent directors in accordance with the Securities accordance with the Securities Exchange Act, when the Exchange Act, when the transaction for acquisition or transaction for acquisition or disposal of assets is submitted to disposal of assets is submitted to the board of directors for the board of directors for discussion as required, the discussion as required, the opinions of each independent opinions of each independent director shall be fully taken into director shall be fully taken into consideration. If any independent consideration. If any independent director voices any objection or director voices any objection or	Article	Amended Clause	Existing Clause	Remarks

Article	Amended Clause	Existing Clause	Remarks
	reservation, it shall be specified in the minutes of the board meeting. If an audit committee has been established in accordance with the Securities Transaction Act. transactions of major assets or derivatives shall be approved by 1/2 of all members of the audit committee and submitted to the board of directors for resolution. Paragraphs 3 and 4, Article 16 apply mutatis mutandis. (2) Procedure When the Company acquires or disposes of intangible assets or right-of-use assets thereof or membership, an approval shall be acquired in accordance with the approval authority under the previous paragraph, followed by execution by the user department and the Finance Department or the Administration Department. Expert Evaluation Opinion Report for (3) Intangible Assets or right-of-use assets thereof or membership Where the Company acquires or disposes of intangible assets or right-of-use assets thereof or membership and the transaction amount reaches 20 percent or more of paid-in capital or NT\$300 million or more, except in transactions with a domestic government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price. The CPA shall comply with the provisions of	reservation, it shall be specified in the minutes of the board meeting. Procedure (2) When the Company acquires or disposes of a membership or intangible assets, an approval shall be acquired in accordance with the approval authority under the previous paragraph, followed by execution by the user department and the Finance Department or the Administration Department. Expert Evaluation Opinion Report for (3) Membership and Intangible Assets Where the Company acquires or disposes of intangible assets or memberships and the transaction amount reaches 20 percent or more of paid-in capital or NT\$300 million or more, except in transactions with a government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price. The CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.
Article 11	Statement of Auditing Standards No. 20 published by the ARDF. Procedure for Acquisition or Disposal of	Procedure for Acquisition or Disposal of	Articles 4 and 19
	Derivatives Transaction Principles and Guidelines 1. (1) Type of Transactions Derivatives traded by the Company mean forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a product such as a specific interest rate, financial tool price, product price, foreign exchange rate, price or fee rate index_ credit rating or credit index or other variables, combinations of	Derivatives Transaction Principles and Guidelines 1. (1) Type of Transactions Derivatives traded by the Company mean transaction contracts whose value is derived from a product such as an asset. interest rate, foreign exchange rate, index or other interest (such as forward contract, option, futures, interest rate or foreign exchange rate, swap and hybrid contracts combining the above products).	of Regulations Governing Acquisition or Disposal of Assets by Public Companies

$\sim$

Article	Amended Clause	Existing Clause	Remarks
	the above contracts or composite contracts or structured contracts integrating derivatives. The term "forward contracts" does not include insurance contracts, performance contracts. after-sales service contracts, long-term leasing contracts, or long-term_purchase (sales) contracts. $(2)$ $(3)$ (4) $\ddotsc$ $(5)$ 2. Risk Management Measures (1) $\cdots$ (2) $\ddotsc$ (3) $\ddotsc$ (4) (5) Operating Risk Management i. ii. iii. iv. Derivatives trading positions held shall be evaluated at least once per week, however positions for hedge trades required by business shall be evaluated at least twice per month. Evaluation reports shall be delivered to senior management personnel authorized by the board of directors.	$(2)$ (3) (4) (5) $\ddotsc$ 2. Risk Management Measures (1) $\ddotsc$ (2) $\ddotsc$ (3) $\ddotsc$ (4) $\ddotsc$ Operating Risk Management (5) i. ii. iii. iv. Derivatives trading positions held shall be evaluated at least once per week, however positions for hedge trades required by business shall be evaluated at least twice per month. Evaluation reports shall be submitted to senior management personnel authorized by the board of directors.
	(6) $\cdots$ 3. Internal Audit System The internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If any material violation is discovered, all supervisors shall be notified in writing. Where independent directors have been established in accordance with the provisions of the Securities Transaction Act, the notice to the supervisors under the preceding paragraph shall also be sent to the independent directors in writing. If the audit committee has been established in accordance with the provisions of the Securities Transaction Act, the preceding	(6) 3. Internal Audit System The internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If any material violation is discovered, all supervisors shall be notified in writing.

$\bar{z}$

		Amended Clause		Existing Clause
		paragraph aobut supervisors shall
		apply mutatis mutandis to the audit
		committee.
4.		Regular Evaluation	4.	Regular Evaluation
		(1) The board of directors shall		(1) The board of directors shall
		authorize senior management		authorize senior management
		personnel to perform regular		personnel to perform regular
		supervision and evaluation as to		supervision and evaluation as to whether derivatives transactions
		whether derivatives transactions have been carried out duly in		have been carried out duly in
		accordance with the transaction		accordance with the transaction
		procedures formulated by the		procedures established by the
		Company and whether the risks		Company and whether the risks
		undertaken are within the		undertaken are within the
		tolerable scope. If the market		tolerable scope. If the market
		price evaluation report shows		price evaluation report shows
		any anomaly (such as excess of		any anomaly (such as excess of
		loss limit), a report shall be filed		loss limit), a report shall be filed
		with the board of directors		with the board of directors
		immediately and corresponding		immediately and corresponding
		measures shall be undertaken.		measures shall be undertaken.
		(2) All positions of derivatives		(2) All positions of derivatives
		transactions shall be evaluated		transactions shall be evaluated
		at least once every week.		at least once every week. Hedging transactions carried out
		Hedging transactions carried out for business needs shall be		for business needs shall be
		evaluated at least twice every		evaluated at least twice every
		month. The evaluation report		month. The evaluation report
		shall be delivered to the senior		shall be submitted to the senior
		management personnel		management personnel
		authorized by the board of		authorized by the board of
		directors.		directors.
5.		Principles of supervision and	5.	Principles of supervision and
		management by the board of		management by the board of
		directors for derivatives transactions		directors for derivatives transactions
		(1) The board of directors shall		(1) The board of directors shall
		assign senior management to		assign senior management to exercise due care as to the
		exercise due care as to the supervision and control over		supervision and control over
		derivatives transaction risks at		derivatives transaction risks at
		all times, with the following		all times, with the following
		management principles:		management principles:
		i. Periodically evaluate whether		i. Periodically evaluate whether
		the risk management		the risk management
		measures currently employed		measures currently
		are appropriate and are		employed are appropriate
		faithfully conducted in		and are faithfully conducted
		accordance with these		in accordance with these
		Regulations and the		Regulations and the procedures for engaging in
		procedures for engaging in derivatives trading formulated		derivatives trading
		by the Company		established by the Company.
		ii.		ii.
	(2)			(2) $\ddot{\phantom{a}}$
	(3)	The Company shall report to the		(3) The Company shall report to the
		earliest meeting of the board of		earliest meeting of the board of
		directors after it authorizes the		directors after it authorizes the
		relevant personnel to handle		relevant personnel to handle
		derivatives trading in		derivatives trading in
		accordance with the Procedures		accordance with the Procedures

Article		Amended Clause		Existing Clause	Remarks
		for Engaging in Derivatives		for Engaging in Derivatives
		Trading that it formulated.		Trading that it established.
	$(4)$			$(4)$

Article 13		Information Disclosure Procedure		Information Disclosure Procedure	Article 31 of
	1.	Details subject to public filing and	1.	Details subject to public filing and	Regulations
		threshold of public filing		threshold of public filing	Governing
		(1) Acquisition or disposal of real		(1) Acquisition or disposal of real	Acquisition or
		property or right-of-use asset		property from or to a related	Disposal of Assets
		thereof from or to a related		party, or acquisition or disposal	by Public
		party, or acquisition or disposal		of assets other than real	Companies
		of assets other than real		property from or to a related
		property or right-of-use asset		party where the transaction
		thereof from or to a related		amount reaches 20 percent or
		party where the transaction		more of paid-in capital, 10
		amount reaches 20 percent or more of paid-in capital, 10		percent or more of the company's total assets, or
		percent or more of the		NT\$300 million or more,
		company's total assets, or		provided that this shall not
		NT\$300 million or more,		apply to trading of government
		provided that this shall not		bonds or bonds under
		apply to trading of domestic		repurchase and resale
		government bonds or bonds		agreements, or subscription or
		under repurchase and resale		redemption of money market
		agreements, or subscription or		funds issued by domestic
		redemption of money market		securities investment trust
		funds issued by domestic		enterprises.
		securities investment trust
		enterprises		$(2)$
	$(2)$	(3) Losses from derivatives trading		(3) Losses from derivatives trading
		reaching the limits on aggregate		reaching the limits on aggregate
		losses or losses on individual		losses or losses on individual
		contracts set out in the		contracts set out in the
		procedures formulated by the		procedures established by the
		company.		company.
	(4)	Where equipment or		(4) Where the type of asset
		right-of-use asset thereof for		acquired or disposed of is
		business use are acquired or		equipment for business use, and
		disposed of, and furthermore		furthermore the transaction
		the transaction counterparty is		counterparty is not a related
		not a related party, and the		party, and the transaction
		transaction amount meets any		amount meets any of the following criteria:
		of the following criteria: i.		i.
		ii.		ii.
		(5) Acquisition or disposal by a		(5) Acquisition or disposal by a
		public company in the		public company in the
		construction business of real		construction business of real
		property or right-of-use asset		property for construction use,
		thereof for construction use,		and furthermore the transaction
		and furthermore the transaction		counterparty is not a related
		counterparty is not a related		party, and the transaction
		party, and the transaction		amount reaches NT\$500 million.
		amount reaches NT\$500 million;
		if the company has paid-in
		capital of NT\$10 billion or more.
		and it is disposing of real property from a completed
		construction project that it

Amended Clause		Existing Clause
constructed itself, and
furthermore the transaction
counterparty is not a related
party, then the threshold shall
be a transaction amount
reaching NT\$1 billion or more.
(6) Where land is acquired under an		(6) Where land is acquired under an arrangement on engaging others
arrangement on engaging others to build on the company's own		to build on the company's own
land, engaging others to build		land, engaging others to build
on rented land, joint		on rented land, joint
construction and allocation of		construction and allocation of
housing units, joint construction		housing units, joint construction
and allocation of ownership		and allocation of ownership
percentages, or joint		percentages, or joint
construction and separate sale,		construction and separate sale,
and furthermore the transaction		and the amount the company
counterparty is not a related party, and the amount the		expects to invest in the transaction reaches NT\$500
company expects to invest in the		million.
transaction reaches NT\$500
million.
(7) Where an asset transaction is.		(7) Where an asset transaction is
other than any of those referred		other than any of those referred
to in the preceding six		to in the preceding six
subparagraphs, a disposal of		subparagraphs, a disposal of
receivables by a financial		receivables by a financial
institution, or an investment in the mainland China area reaches		institution, or an investment in the mainland China area reaches
20 percent or more of paid-in		20 percent or more of paid-in
capital or NT\$300 million,		capital or NT\$300 million,
provided that this shall not		provided that this shall not
apply to the following		apply to the following
circumstances:		circumstances:
i. Trading of domestic		Trading of government
government bonds.		bonds.
ii. Where it is done by		ii. If done by professional investors, securities trading
professional investors, securities trading on securities		on domestic and overseas
exchanges or OTC markets, or		securities exchanges or OTC
subscription of ordinary		markets, or subscription of
corporate bonds or general		ordinary corporate bonds or
bank debentures without		general bank debentures
equity characteristics		without equity
(excluding subordinated debt)		characteristics that are
that are offered and issued in the primary market, or		offered and issued in the domestic primary market, or
subscription or redemption of		subscription by a securities
securities investment trust		firm of securities as
funds or futures trust funds.		necessitated by its
or subscription by a securities		undertaking business or as
firm of securities as		an advisory recommending
necessitated by its		securities firm for an
undertaking business or as an		emerging stock company, in
advisory recommending securities firm for an		accordance with the rules of the Taipei Exchange.
emerging stock company, in
accordance with the rules of
the Taipei Exchange.
iii. $\cdots$		iii.
	45

Article	Amended Clause	Existing Clause	Remarks
	(8) The amount of transactions	The amount of transactions (8)
	under the previous paragraph	under subparagraph (7) of the
	shall be calculated as follows.	previous paragraph shall be
	"Within the preceding year" as	calculated as follows. "Within
	used in the preceding paragraph	the preceding year" as used in
	refers to the year preceding the	the preceding paragraph refers
	date of occurrence of the	to the year preceding the date
	current transaction. Items duly	of occurrence of the current
	announced in accordance with	transaction. Items duly
	these Regulations need not be	announced in accordance with
	counted toward the transaction	these Regulations need not be
	amount.	counted toward the transaction
	i.	amount. i.
	ii.	ii.
	iii. The cumulative transaction	iii. The cumulative transaction
	amount of acquisitions and	amount of acquisitions and
	disposals (cumulative	disposals (cumulative
	acquisitions and disposals,	acquisitions and disposals,
	respectively) of real	respectively) of real property
	property or right-of-use	within the same
	asset thereof within the	development project within
	same development project	the preceding year.
	within the preceding year.
	iv	iv
	2. $\cdots$	2.
	3.	3.
Article 14	The Company's subsidiaries shall follow	The Company's subsidiaries shall follow	Article 34 of
	the following:	the following:	Regulations
	1. $\ddotsc$	1. $\dddotsc$	Governing
	2. $\ddotsc$	2. $\dddotsc$	Acquisition or
	3.	3. $\ddot{\phantom{a}}$	Disposal of Assets
	Paid-in capital or total assets of the 4.	Paid-in capital or total assets of the 4.	by Public
	Company shall be the standard	Company shall be the standard	Companies
	applicable to a subsidiary in	applicable to a subsidiary in
	determining whether, relative to	determining whether, relative to 20%
	paid-in capital or total assets, it	of paid-in capital or 10% of total
	reaches a threshold requiring public	assets, it reaches a threshold
	announcement and regulatory filing.	requiring public announcement and
		regulatory filing.
Article 16	Implementation and Amendment	Implementation and Amendment	Article 6 of
	Following approval by the board of	Following approval by the board of	Regulations Governing
	directors, the Procedure for Acquisition	directors, the Procedure for Acquisition	Acquisition or
	or Disposal of Assets by the Company	or Disposal of Assets by the Company	Disposal of Assets
	shall be sent to each supervisor and submitted to the shareholders' meeting	shall be sent to each supervisor and submitted to the shareholders' meeting	by Public
	for approval. The same shall be	for approval. The same shall be	Companies
	applicable in case of an amendment. If	applicable in case of an amendment. If
	any director voices any objection, with a	any director voices any objection, with a
	record or written statement, the	record or written statement, the
	Company shall also submit the director's	Company shall also submit the director's
	objection to each supervisor. If the	objection to each supervisor. If the
	Company has independent directors in	Company has independent directors in
	accordance with the Securities Exchange	accordance with the Securities Exchange
	Act, when the transaction for acquisition	Act, when the transaction for acquisition
	or disposal of assets is submitted to the	or disposal of assets is submitted to the
	board of directors for discussion as	board of directors for discussion as
	required, the opinions of each	required, the opinions of each
	independent director shall be fully taken	independent director shall be fully taken

Article	Amended Clause	Existing Clause	Remarks
	into consideration. If any independent	into consideration. If any independent
	director voices any objection or	director voices any objection or
	reservation, it shall be specified in the	reservation, it shall be specified in the
	minutes of the board meeting.	minutes of the board meeting.
	If an audit committee has been
	established in accordance with the
	Securities Transaction Act, establishment
	or amendment of the Procedure for
	Acquisition or Disposal of Assets shall be
	approved by 1/2 of all members of the
	audit committee and submitted to the
	board of directors for resolution.
	If approval of more than half of all audit
	committee members as required in the
	preceding paragraph is not obtained, the
	procedures may be implemented if
	approved by more than two-thirds of all
	directors, and the resolution of the audit
	committee shall be recorded in the
	minutes of the board of directors
	meeting.
	The terms "all audit committee
	members" in the third paragraph and "all
	directors" in the preceding paragraph
	shall be counted as the actual number of
	persons currently holding those
	positions.

Current Shareholding of All Directors and Supervisors

Record date: Apr. 20, 2019
----------------------------	--	--

$\hat{\mathcal{L}}$

		Number of shares held now
Title	Name	Number of shares	Shareholding ratio
Chairman	DING WAN Investment Industrial Co., Ltd. Representative: WU CHUN-I	10,000	0.01%
Vice Chairman	Koito Manufacturing Co., Ltd. Representative: WATANABE MASAMI
Director	Koito Manufacturing Co., Ltd. Representative: IIDA SHIGEYUKI	24,774,750	32.50%
Director	Koito Manufacturing Co., Ltd. Representative: YAMAMOTO HIDETSUGU
Director	WU YU-HSIEN	25,101	0.03%
Director	Yuan Hung Investment Co., Ltd. Representative: Yu Ching Liang	746,000	$0.98\%$
Director	Yuan Hung Investment Co., Ltd. Representative: WU CHENG YUAN
Director	WU WAN I	0	0.00%
Director	ChEN HSIU FON	0	0.00%
Supervisor	Billion Alive Investment Limited Representative: LIN CHIEN	33,000	0.04%
Supervisor	KONAGAYA HIDEHARU	$\Omega$	$0.00\%$
Supervisor	KUO QI MIN Investment Co., Ltd. Representative: KEN BO WEN	1,257,601	1.65%
Minimum number of shares to be held by all directors according to the law		7,623,000	10.00% of total shares
Number of shares held by all directors		25,555,851	33.53% of total shares
Minimum number of shares to be held by all supervisors according to the law		762,300	$1.00\%$ of total shares
Number of shares held by all supervisors		1,290,601	1.69% of total shares
Number of shares held by all directors and supervisors		26,846,452	35.22% of total shares

Appendix 7. Ta Yih Industrial Co., Ltd. Corporate Charter

Chapter 1 General

The Company is organized in accordance with the provisions regarding stock Article 1: limited companies under the Company Act and is named "Ta Yih Industrial Co, Ltd."
The Company operates the following businesses: Article 2:
1. Manufacturing, sale, import and export trading business of vehicles, motorcycles, and hardware parts.
1. Manufacturing, processing, and sales business of airplane parts and vessel parts.
1. Manufacturing, processing, and sales business of transportation machinery and parts.
1. Manufacturing, sales, process, import and export business of lighting machinery, modules, and relevant equipment.
1. Rail vehicles and parts manufacturing business.
1. Rail vehicles and parts wholesale business.
1. Industrial plastics product manufacturing business.
1. Optic instruments manufacturing business.
1. Precision instruments wholesale business.
The Company may provide guarantees for and invest in other companies as Article 2-1: required for its business. The amount of investment may exceed $40\%$ of its paid-in capital.
Article 3: The Company has its headquarters in Tainan City.
The Company makes public announcements through publications in highly Article 4: visible portions of the local daily newspaper circulated in the place where the Company is located and by correspondence.

Chapter 2 Shares

The Company's total capital is Seven Hundred Sixty Two Million Three Article 5: Hundred Thousand NT Dollars, divided into Seventy Six Million Two Hundred Thirty Thousand shares, at NT\$10 per share, which are issued in the full amount.
All of the Company's shares are registered shares, to be affixed with the Article 6: signatures/seals of at least 3 directors, numbered and issued after certification by the competent authority or its approved issuance registration organization in accordance with the law.
There is no obligation to print share certificates for the Company's shares. Article 6-1: However, the Company shall designate a securities custodian organization.
Shareholders shall provide their true names and addresses to the Company. Article 7: Sample seal cards shall be completed and provided to the Company for safekeeping. The loss of any sample seal shall be handled in accordance with the Regulations Governing the Administration of Shareholder Services of

Public Companies.

Upon any share transfer, the transferor and the transferee shall complete a share Article 8: transfer form and submit it together with the share certificate to the Company to seek transfer registration. The transfer may only be used against the Company after it has been registered in the shareholder register.
If any share certificate is lost or damaged, it shall be declared lost and re-issued Article 9: in accordance with the Regulations Governing the Administration of Shareholder Services of Public Companies.
The Company may collect an administrative charge upon re-issuance or Article 10: replacement of new share certificates.
Article 11: Share transfer registration shall be suspended for the period of 60 days before any general shareholders' meeting, 30 days before any special meeting, or 5 days before the record date for the distribution of dividends, bonuses, or other benefits determined by the Company.

Chapter 3 Shareholders' Meetings

Shareholders' meetings are divided into general meetings and special meetings. Article 12: General meetings are held once every year within 6 months from the end of each accounting year. Notice shall be given to each shareholder 30 days in advance. Special meetings are held as required in accordance with the law. Notice shall be given to each shareholder 15 days in advance.
Any shareholder who cannot attend a shareholders' meeting due to any reason Article 13: may issue a proxy, specifying the scope of authorization, to designate a representative to attend the meeting on its behalf.
The chairman shall chair shareholders' meetings. If the chairman is absent, the Article 14: vice chairman shall chair the meeting. If the vice chairman is absent, the chairman shall designate one director to act on his behalf. If there is no such designation, one director shall be appointed from among themselves.
The shareholders of the Company are entitled to one voting right per share Article 15: held.
Article 16: Unless otherwise provided by the Company Act, shareholder resolutions shall be approved by shareholders representing the majority of voting rights represented in a meeting that is attended by shareholders representing the majority of all outstanding shares.
Matters resolved in shareholders' meetings shall be recorded in minutes, which Article 17: shall be affixed with the signature or seal of the chairman and distributed to each shareholder within 20 days after the meeting. The minutes may be distributed through public announcements.

The minutes shall record the year, month, date, location of the meeting, the chairman's name, manner of resolution, main proceedings and the results, and shall be kept permanently during the period of existence of the Company.

Signature sheets for attending shareholders and proxies shall be kept for at least one year, provided that if any shareholder files a lawsuit in accordance with Article 189 of the Company Act, these documents shall be kept until the end of the lawsuit.

Chapter 4 Board of Directors

Article 18: The Company has 9 directors and 2 to 3 supervisors, to be elected by the shareholders' meeting from among persons with legal capacities. Their terms shall be 3 years and the same person may be re-elected upon expiry of the term.

Among the directors under the previous paragraph, there shall be at least 2 independent directors. Independent directors shall be elected through the candidate nomination system in accordance with Article 192-1 of the Company Act. Non-independent directors shall be elected together with the independent directors. The persons who have received the ballots representing the highest number of voting rights shall be elected as non-independent directors and independent directors respectively in accordance with the respective number of seats available.

The professional qualifications, nomination, and election manners and other matters of compliance for independent directors shall be governed by applicable laws such as the Company Act and the Securities Exchange Act.

The total number of shares of the Company to be held by all directors and supervisors shall be established based on the standards under the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies promulgated by the competent securities authority.

Article 19: If the current term of a director or supervisor has expired but a re-election has not been held in time, the duties of the director or supervisor shall be extended until the time when the re-elected director or supervisor starts their term.
The directors constitute the board of directors. One person shall be elected Article 20: from among themselves to serve as the chairman and another person as the vice chairman. The chairman acts as the Company's representative.
In case of the vacancy of a director or supervisor, such vacancy shall be filled Article 21: immediately, provided that the term of the director or supervisor filling the vacancy shall be limited to the remaining period of the original term.
To convene a board meeting, the agenda shall be specified and a notice shall be Article $21-1$ : given to each director and supervisor 7 days in advance. However, a meeting may be held at any time in case of an emergency.

The meeting notice and the agenda under the previous paragraph may be sent in writing, by email, or by fax.

Board meetings are held once every quarter. A special meeting may be held if Article 22: the chairman deems it necessary or upon the request of 4 or more directors. The chairman shall chair the special meetings. If the chairman is on leave or cannot perform their duties due to any reason, the vice chairman shall chair the meeting. If the vice chairman is on leave or cannot perform their duties due to any reason, the chairman shall designate one director to act on their behalf. If there is no such designation, one director shall be appointed from among themselves.
Article 23: Unless otherwise provided under the Company Act or by the Company, board meeting shall be approved by a majority of the directors present in a meeting that is attended by a majority of the directors.

Any director who cannot attend a meeting in person due to any reason may designate another director to act on his/her behalf. Any director participating in a meeting through video conference shall be deemed to have participated in person.

When a director designates another director as his/her representative to attend a board meeting, a proxy shall be issued each time, specifying the scope of authorization in relation to the agenda.

The proxy holder under the previous two paragraphs shall not represent more than one other person.

Article 24: Matters resolved in board meetings shall be recorded in minutes, which shall be affixed with the signature or seal of the chairman and distributed to each director within 20 days after the meeting. The minutes shall record the main proceedings of the meeting and the results. The minutes shall be kept in the Company together with the signature sheets of the attending directors and the proxies.
Article 25: The supervisors may sit in board meetings and state their opinions, but shall not be entitled to voting rights.
The remuneration for all directors, supervisors, and the president shall be Article 26: determined by the board of directors based on the common standards of the industry.

Chapter 5 Managers and Staff

Article 27: The Company may have one president and several vice presidents, assistant managers, and managers. Other than the managers, who shall be hired and dismissed by the board of directors, the hiring and dismissal of such persons shall be subject to the approval by the majority of all directors, provided that the nominations shall be made by the president.
The Company may, through board resolution in accordance with Article 23 of Article 28: the Articles of Association, hire consultants or important staff.
The other staff of the Company shall be hired and dismissed by the president Article 29: and filed with the board of directors for reference.

Chapter 6 Closing

Article 30: The board of directors shall prepare the following statements at the end of each accounting year of the Company. Such statements shall be submitted to the supervisors for an audit 30 days before the general shareholders' meeting and then submitted to the general shareholders' meeting for approval.
1. Business report.
1. Financial statements.
1. Profit distribution or loss compensation proposal.
Article 30-1: If the Company has profit in the current year, at least 1% shall be provided as employee remuneration, to be distributed in stock or in cash through board resolution. However, if the Company has accumulated losses, the amount of compensation shall be reserved before provision of the employee remuneration based on the above ratio.

The employee remuneration distribution proposal shall be reported to the general shareholders' meeting.

Article 31: In consideration of the future funding needs and long-term financial planning for the Company, if there is profit after annual closing, after paying profit-seeking enterprise income tax and compensating losses from the past years, 10% of the balance amount shall be provided as legal reserve and a special reserve shall be provided for the amount of decrease in the shareholders' equity in the current year. The balance, if any, shall be combined with the accumulated non-distributed profit from the last year for the profit distribution proposal to be made by the board of directors, which shall be submitted to the general shareholders' meeting for resolution before distribution. Among the above, the shareholder dividend shall not be less than

50% of the distributable profit of the current year and the cash dividend shall not be less than 50% of the total shareholder dividend.

Chapter 7 Miscellaneous

The organizational charter and bylaws of the Company shall be further Article 32: established.
Any matter that is not fully stipulated in these Articles of Association shall be Article 33: governed by the Company Act and other laws.
These Articles of Association were established on 14 December 1975. Article 34:

The first amendment was made on 19 February 1976.

The second amendment was made on 15 December 1977.

The third amendment was made on 12 May 1979.

The fourth amendment was made on 15 August 1980.

The fifth amendment was made on 25 July 1981.

The sixth amendment was made on 20 July 1982.

The seventh amendment was made on 5 August 1983.

The eighth amendment was made on 29 August 1983.

The ninth amendment was made on 3 December 1983.

The tenth amendment was made on 21 November 1985.

The eleventh amendment was made on 21 April 1986.

The twelfth amendment was made on 15 June 1988 as follows:

Article 2: Business operated: Sale and purchase $\rightarrow$ Sales.
Increase in the amount of capital: One Hundred Fifty-Five Article 5: Million $\rightarrow$ Two Hundred and Twenty Million.
Article 18: Increase number of directors and supervisors: Directors: $5 \rightarrow 7$ , Supervisors: $1 \rightarrow 2$ .
Holding special board meetings: Upon request by 3 or more Article 22: directors $\rightarrow$ Upon request by 4 or more directors.
Add: One managing supervisor, to be elected by the elected Article 25: supervisors from among themselves.

The thirteenth amendment was made on 10 August 1988 as follows:

The chairman shall chair shareholders' meetings. If the Article 14: chairman is absent, added: "The vice chairman shall chair the meeting".
The directors constitute the board of directors. Add: One Article 20: person as vice chairman.
In a board meeting, if the chairman cannot perform their duties, Article 22: add: "The vice chairman shall chair the meeting."
The fourteenth amendment was made on 24 May 1990 as follows:
Increase in the amount of capital: Two Hundred and Twenty Article 5: Million $\rightarrow$ Two Hundred and Forty-Two Million Six Hundred and Sixty Thousand.
The fifteenth amendment was made on 10 December 1990 as follows:
Article 5: Increase in the amount of capital: Two Hundred Forty Two Million Six Hundred and Sixty Thousand $\rightarrow$ Two Hundred and Fifty Million.
Article 30: Two financial statements added for the general shareholders' meeting: 1. Shareholder equity variation table.2. Cash flow statement.
The sixteenth amendment was made on 15 May 1991 as follows:
No. 4 of the business scope: Add operation and investment Article 2: related to the above businesses: (subject to approval by the Investment Review Commission, Ministry of Economic Affairs).
Increase in the amount of capital: Two Hundred and Fifty Article 5: Million $\rightarrow$ Two Hundred and Sixty-Eight Million.
The directors constitute the board of directors, add one person Article 20: as vice chairman.

The seventeenth amendment was made on 8 April 1992 as follows:

Article 2: Add to scope of business: Manufacturing, sales, processing, import and export of lighting machinery, modules and relevant equipment.
Article 2-1: Add Article 2-1: The Company may provide guarantees for and invest in other companies as required for its business. The amount of investment may exceed 40% of its paid-in capital.
Increase in the amount of capital: Two Hundred Sixty-Eight Article 5: Million $\rightarrow$ Two Hundred and Eighty-Nine Million One Hundred and Eighty Thousand.
Article 12: General shareholders' meeting is changed from once every year to "at least once every year".
The eighteenth amendment was made on 13 September 1993 as follows:
Article 22: Board meetings: The board of directors meet once every 3 months $\rightarrow$ The board of directors meet once every 6 months.
... statements submitted to the supervisors for audit 30 days Article 30: before the general shareholders meeting, changed to: ... statements submitted to the supervisors for audit 30 days before the general shareholders meeting, followed by submission to the general shareholders' meeting for approval.
The nineteenth amendment was made on 24 September 1993 as follows:
Article 5: Increase in the amount of capital: Two Hundred Eighty-Nine Million One Hundred and Eighty Thousand $\rightarrow$ Four Hundred and Fifty Million.
Add: ... and president... Article 26:
Add: ... other than the hiring and dismissal Article 27: of managers....Delete: ... hiring and dismissal of managers.

The twentieth amendment was made on 11 November 1993 as follows:

Article 5: Face value per share is changed from \$1,000 per to \$10 per share.
The twenty-first amendment was made on 13 May 1994 as follows:
Increase in the amount of capital: Four Hundred and Fifty Article 5: Million $\rightarrow$ Five Hundred Million.
Increase number of supervisors: 2 supervisors $\rightarrow$ 2 to 3 Article 18: supervisors.

The twenty-second amendment was made on 29 May 1995 as follows:

Increase in the amount of capital: Five Hundred Million $\rightarrow$ Six Article 5: Hundred and Thirty Million.
The twenty-third amendment was made on 6 March 1996 as follows:
Article 26: Add $\rightarrow$ In accordance with common standard of the industry.
The twenty-fourth amendment was made on 4 June 1998 as follows:
Increase in the amount of capital: Six Hundred and Thirty Article 5: Million $\rightarrow$ Six Hundred and Ninety-Three Million.
The twenty-fifth amendment was made on 15 June 1999 as follows:
Increase in the amount of capital: Six Hundred and Article 5: Ninety-Three Million $\rightarrow$ Seven Hundred and Sixty-Two Million Three Hundred Thousand.
Increase number of directors: 7 directors $\rightarrow$ 9 directors. Article 18:
The twenty-sixth amendment was made on 20 June 2000 as follows:
Article 31: Amend dividend policy.
The twenty-seventh amendment was made on 7 June 2001 as follows:
Increase scope of business: Rail vehicle and parts Article 2: manufacturing business, rail vehicle and parts wholesale business, industrial plastics product manufacturing business, optical instrument manufacturing business. precision instrument wholesale business.
Article 6: Amend that all shares of the Company shall be registered shares, to be affixed with the signature/seal of 3 or more directors and issued following certification by the competent authority or its approved issuance registration organization approved in accordance with the law.
Amend that the shareholders shall provide their true names Article 7: and addresses to the Company. Sample seal cards shall be completed and provided to the Company for safekeeping.
Article 9: Amend that the loss of any sample seal shall be handled in Regulations Governing accordance with the the Administration of Shareholder Services of Public Companies.
Amend that the Company may collect an administrative charge Article 10: upon re-issuance or replacement of new share certificates.

The twenty-eighth amendment was made on 28 June 2002 as follows:

Article 6-1: New article.

Amend period of suspension of share transfer registration Article 11: before general shareholders meeting and special meeting.
Article 12: Amend date of general shareholders meeting and special meeting and date of meeting notice.
Article 15: Delete stock discount restriction.
Amend date for distribution of minutes of shareholders' Article 17: meetings, manner of public announcement and retention period.
Add percentage of shares by all directors and supervisors and Article 18: audit standard.

Amend statements to be submitted to the supervisors for audit. Article 30: The twenty-ninth amendment was made on 13 June 2007 as follows:

Change of name of competent securities authority. Article 18:

Article 22: Amendment in accordance with Article 3 of Rules for Meetings of Board of Directors.
Amendment in accordance with Article 9 of Rules for Article 23: Meetings of Board of Directors.
Amendment in accordance with Article 17 of Rules for Article 24: Meetings of Board of Directors.
The thirtieth amendment was made on 14 June 2010 as follows:
Article 6-1: There is no obligation to print share certificates for the shares issued by the Company.
The thirty-first amendment was made on 18 June 2012 as follows:
Tainan City, Taiwan Province $\rightarrow$ Tainan City. Article 3:
Minutes of shareholders' meetings may be distributed in the Article 17: manner of public announcements.
Article 21-1: Add notice for meetings of board of directors may be issued by email or by fax.
Delete 1 managing supervisor for the Company. Article 25:
The thirty-second amendment was made on 13 June 2016 as follows:
Article 18: Amend and add independent directors to be elected under candidate nomination system.
Article 30-1: New article to add provision and issuance of employee remuneration.
Delete provision for employee bonus. Article 31:

Appendix 8. Ta Yih Industrial Co., Ltd. Rules for Shareholders' Meetings

Shareholders' meetings of the Company shall be governed by these Rules. Article 1:
The Company shall put in place a signature sheet for signatures by the attending Article 2: shareholders (or proxy holders). Alternatively, attending shareholders (or proxy holders) may submit their attendance cards in lieu of signatures. The number of shares present shall be calculated based on the signature sheet or the signature cards submitted.
Presence and voting in the shareholders' meetings shall be calculated based on Article 3: shares.
Article 4: Shareholders' meetings of the Company shall be held in the county or city where the headquarters is located or a location that is convenient for holding a shareholders' meeting. The meeting shall start no earlier than 9 a.m. and no later than $3$ p.m.
Article 5: The chairman of the board of directors shall chair shareholders meetings. If the chairman is on leave or cannot perform his/her duties due to any reason, the vice chairman shall chair the meeting. If the vice chairman is also on leave or if he/she cannot exercise his/her duties due to any reason, the chairman shall designate one director to chair the meeting. If no one is designated by the chairman, the directors shall elect one person from among themselves.
The Company may assign designated attorneys, accountants, or relevant persons Article 6: to participate in shareholders' meetings.

The staff of the shareholders' meetings shall wear badges or arm bands.

The Company shall make full audio or video recordings of the shareholders' Article 7: meetings and shall keep such recordings for at least one year.
The chairman shall announce the start of the shareholders' meeting upon Article 8: attendance by shareholders (or proxy holders) representing the majority of all outstanding shares. If the quorum is not met at the meeting time, the chairman may announce an adjournment. There shall be no more than 2 adjournment and the total period of adjournment shall not exceed 1 hour. If the quorum is still not met after two adjournments and if the number of shareholders (or proxy holders) representing 1/3 or more of the total outstanding shares are present, a provisional resolution may be passed by shareholders representing the majority of voting rights. After the provisional resolution is passed, if the number of shares represented by the attending shareholders (or proxy holders) meets the statutory quorum, the chairman may submit the provisional resolution to the meeting for ratification in accordance with Article 175 of the Company Act.
The board of directors shall determine the agenda of the shareholders' meetings. Article 9: Meetings shall proceed in accordance with the scheduled agenda and no change shall be made without a resolution.

Before the agenda scheduled under the previous paragraph (including motions) is completed, the chairman shall not dismiss the meeting unless there is a resolution. Upon dismissal of the meeting by resolution, no shareholder shall further elect a chairman to continue the meeting either in the same place or in a different place.

Article 10: In addition to the proposals listed in the agenda, any amendment or alternative to

the original proposal, or any other proposal made through a motion by any shareholder (or proxy holder) must be seconded by another shareholder (or proxy holder), including any change of agenda or motion to dismiss the meeting.

Article 11: Before an attending shareholder (or proxy holder) speaks, he/she must first complete a speaking note specifying the main points of the speech, the shareholder account number (or attendance card number), and account name. The order of speech shall be determined by the chairman.

If an attending shareholder (or proxy holder) only submits a speaking note but does not speak, he/she shall be deemed to have not spoken. If the speech is inconsistent with the speaking note, the confirmed speech shall prevail.

When an attending shareholder speaks, the other shareholders shall not speak to interfere unless with the consent of the chairman and the speaking shareholder. Any violation shall be stopped by the chairman.

Article 12: Each shareholder (or proxy holder) shall speak no more than twice about the same proposal without the chairman's approval. Each speech shall not exceed 5 minutes.

The chairman shall stop the shareholder's speech when it violates the previous paragraph or goes beyond the scope of the proposal.

Article 13: When a corporation attends a shareholders' meeting through a representative, only one person shall be designated to attend the meeting.

If a corporate shareholder designates 2 or more representatives to attend the meeting, only one person shall be allowed to speak.

Article 14: After an attending shareholder speaks, the chairman may provide an answer or designate a relevant person to provide an answer.
Article 15: When the chairman deems that there has been sufficient discussion to put a proposal to a vote, he/she may announce the closing of discussion and submit the proposal to a vote.
Article 16: When voting takes place on a proposal, the vote supervisors and vote counters shall be designated by the chairman, provided that the vote supervisors shall be shareholders. The voting results shall be reported on site and recorded.
Article 17: During the meeting, the chairman may announce a break.
Article 18: Other than a special resolution provided by the Company Act, proposals shall be approved by the majority of voting rights among attending shareholders. If the chairman makes an inquiry at the time of voting and there is no objection, it shall be deemed approved and shall have the same effect as voting. Other than trust enterprises and shareholder service organizations approved by the securities competent authority, when a person holds a proxy issued by two or more shareholders, the voting rights on behalf of others shall not exceed 3% of the voting rights of all outstanding shares. In case of excess, the voting rights in excess shall be excluded from the calculation.

When a shareholder has an interest in relation to a matter in the meeting, which may result in jeopardy to the Company's interest, such shareholder shall be excluded from the voting and shall not exercise their voting rights on behalf of any other shareholder.

Article 19: When a proposal has an amendment or an alternative, the chairman shall determine the order of voting. If one proposal has been approved, the other proposals shall be deemed denied and there is no need for further voting.
Article 20: The chairman may direct disciplinary staff (or security staff) to help maintain order in the meeting place. In maintaining the order on site, the disciplinary staff

(or security staff) shall wear arm bands showing "disciplinary staff".

Article 21: Any matter that is not stipulated in these Rules shall be governed by the Company Act, the Securities Exchange Act, the Articles of Association of the Company and other applicable laws.
Article 22: These Rules, including any amendment, shall be implemented after approval by the shareholders' meeting.

$\mathcal{L}$

Appendix 9. Ta Yih Industrial Co., Ltd.

Procedure for Acquisition or Disposal of Assets

Legal Basis Article 1:

This Procedure is established in accordance with Article 36-1 of the Securities Exchange Act (hereinafter the "Act") and the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.

Article 2: Scope of Assets

Investments in stocks, government bonds, corporate bonds, financial bonds, $1₁$ securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities.
Real property (including land, houses and buildings, investment property, 2. land right-of-use and construction enterprise inventory) and equipment.
$3₁$ Memberships.
Patents, copyrights, trademarks, franchise rights, and other intangible assets. 4.
Claims of financial institutions (including receivables, bills purchased and $5₁$ discounted, loans, and overdue receivables).
1. Derivatives.
Assets acquired or disposed of in connection with mergers, demergers, $7₁$ acquisitions, or transfer of shares in accordance with the law.
Other major assets. 8.

Article 3: Definitions

Derivatives: Forward contracts, options contracts, futures contracts, 1. leverage contracts, or swap contracts, whose value is derived from a product such as an asset, interest rate, foreign exchange rate, index or other interest, or hybrid contracts combining the above products. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) contracts.
Assets acquired or disposed of through mergers, demergers, acquisitions, or $2.$ transfer of shares in accordance with the law: Refers to assets acquired or disposed of through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to the transfer of shares from another company through the issuance of new shares of its own as the consideration therefor (hereinafter "Transfer of Shares") under Article 156, paragraph 6 of the Company Act.
Related party or subsidiary: As defined in the Regulations Governing the $3.$ Preparation of Financial Reports by Securities Issuers.
Professional appraiser: Refers to a real property appraiser or other person 4. duly authorized by law to engage in the value appraisal of real property or equipment.
Date of occurrence: Refers to the date of contract signing, date of payment, 5. date of consignment trade, date of transfer, dates of boards of directors resolutions, or any other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment in which the approval of the competent authority is required, the earlier of the above date or the date of the receipt of approval by the competent authority shall apply.
Mainland China area investment: Refers to investments in the mainland 6. China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.
Article 4: Limit Amount for Investment in Non-Operating Real Property and Securities Acquisition of the above asset by the Company and each of its subsidiaries is limited by the following:
(1) Total amount of non-operating real property shall not exceed 15% of the net assets.
(2) Total amount of investment in long-term and short-term securities shall not exceed 60% of the net assets.
(3) Investment amount in individual securities shall not exceed 50% of the net assets.
When the Company acquires an appraisal report or an opinion from an Article 5: accountant, attorney, or securities underwriter, such professional appraiser and its officer, the accountant, attorney, or securities underwriter shall not be a related party to the transaction counterparty.
Article 6: Procedure for Real Property or Equipment
Evaluation Procedure $\mathbf{1}$ .
- (1) To acquire or dispose of real property or equipment of the Company, the applicant unit shall submit the grounds based on actual needs or as reported case-by-case by the original user unit. Following price consultation, price comparison, and price negotiation together with the relevant units, a submission shall be made to the president for approval. If the amount exceeds NT\$10 million, the transaction shall be approved by the chairman and shall be submitted to the board of directors.
- (2) If the acquisition or disposal of the asset by the Company is subject to approval by the board of directors in accordance with the procedure that it has established or other laws, and if any director voices any objection, with a record or written statement, the Company shall also submit the director's objection to each supervisor. If the Company has independent directors in accordance with the Securities Exchange Act, when the transaction for acquisition or disposal of the asset is submitted to the board of directors for discussion as required, the opinions of each independent director shall be fully taken into consideration. If any independent director voices any objection or reservation, it shall be specified in the minutes of the board meeting.
Processing Procedure $2.$

When the Company acquires or disposes of real property or equipment, an approval shall be acquired in accordance with the approval authority under the previous paragraph, followed by execution by the user department or the procurement department.

Real Property or Equipment Appraisal Report $\overline{3}$ .

In acquiring or disposing of real property or equipment, where the transaction amount reaches 20% of the Company's paid-in capital or NT\$300 million or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of machine held for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions:

(1) Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors. The same procedure shall also be followed whenever there is any subsequent change to the terms and conditions of the transaction in the future.
(2) Where the transaction amount is NT\$1 billion or more, appraisals from two or more professional appraisers shall be obtained.
Where any one of the following circumstances applies with respect to $(3)$ the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of the Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:
$\mathbf{i}$ . The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.
The discrepancy between the appraisal results of two or more ii. professional appraisers is 10 percent or more of the transaction amount.
(4) No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date, provided that where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.
Where the Company acquires or disposes of assets through court $(5)$ auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.

Procedure for Acquisition or Disposal of Securities Article 7:

Evaluation Procedure 1.
When the Company acquires or disposes of securities, the Finance $(1)$ Department shall submit an evaluation report and the transaction shall only take place after the president's or the chairman's approval. Any

transaction in an amount of NT\$10 million or higher shall be submitted to the board of directors for approval.

If the acquisition or disposal of asset by the Company is subject to $(2)$ approval by the board of directors in accordance with the procedure that it has established or other laws, and if any director voices any objection, with a record or written statement, the Company shall also submit the director's objection to each supervisor. If the Company has independent directors in accordance with the Securities Exchange Act, when the transaction for acquisition or disposal of assets is submitted to the board of directors for discussion as required, the opinions of each independent director shall be fully taken into consideration. If any independent director voices any objection or reservation, it shall be specified in the minutes of the board meeting.
Processing Procedure $\overline{2}$ .

When the Company acquires or disposes of securities, an approval shall be acquired in accordance with the approval authority under the previous paragraph, followed by execution by the Finance Department.

Expert Opinions $3.$
The Company acquiring or disposing of securities shall, prior to the $(1)$ date of occurrence of the event, obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant, for reference in appraising the transaction price, and if the dollar amount of the transaction is 20 percent of the company's paid-in capital or NT\$300 million or more, the company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the Financial Supervisory Commission (FSC).
(2) Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.
Procedure for Related Party Transactions Article 8:
When the Company acquires or disposes of assets from or to a related party, $\mathbf{1}$ . in addition to following the procedure for the acquisition of real property under Article 6, the following procedures regarding relevant resolutions and an evaluation of the reasonableness of transaction conditions shall also be followed. If the transaction amount exceeds 10% of the Company's total assets, an appraisal report issued by a professional appraiser or an accountant's opinion shall also be acquired in accordance with Article 6.

The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 9-1.

When judging whether a transaction counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered.

Evaluation and Procedure $\overline{2}$ .

When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT\$300 million or more, except in trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the board of directors and recognized by the supervisors:

(1) The purpose, necessity, and anticipated benefit of the acquisition or disposal of assets.
(2) The reason for choosing the related party as a transaction counterparty.
(3) With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with subparagraphs (1) and (4), third paragraph of this Article.
(4) The date and price at which the related party originally acquired the real property, the original transaction counterparty, and that transaction counterparty's relationship to the company and the related party.
Monthly cash flow forecasts for the year commencing from the $(5)$ anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization.
(6) An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article.
(7) Restrictive covenants and other important stipulations associated with the transaction.

The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with subparagraph (5), first paragraph, Article 13, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the board of directors and recognized by the supervisors need not be counted toward the transaction amount.

When the Company acquires or disposes of equipment for business use with its subsidiary, the board of directors may, pursuant to subparagraph (3), first paragraph, Article 7, delegate the board chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board of directors meeting.

Evaluation of the Reasonableness of Transaction Costs 3.
(1) When the Company acquires real property from a related party, it shall evaluate the reasonableness of the transaction costs by the following means:
- Based upon the related party's transaction price plus necessary i. interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the company purchases the property, provided it may not be higher than the maximum non-financial industry lending rate announced by the

Ministry of Finance.

ii. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan, provided that the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the transaction counterparties.
(2) Where land and structures thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph.
When the Company acquires real property from a related party and $(3)$ appraises the cost of the real property in accordance with subparagraphs (1) and (2), third paragraph of this Article, it shall also engage a CPA to check the appraisal and render a specific opinion.
When the results of the Company's appraisal conducted in accordance $(4)$ with subparagraphs (1) and (2), third paragraph of this Article are uniformly lower than the transaction price, the matter shall be handled in compliance with subparagraph (5), third paragraph of this Article. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply:
Where the related party acquired undeveloped land or leased land i. for development, it may submit proof of compliance with one of the following conditions:
- Where undeveloped land is appraised in accordance with the $(i)$ means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.
- (ii) Completed closings by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale practices.
- (iii) Lease transactions by unrelated parties within the preceding year involving other floors of the same property, after calculation of reasonable price discrepancies in floor prices in accordance with standard property market leasing practices.
Where the Company acquiring real property from a related party ii. provides evidence that the terms of the closings are similar to the

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

Where the Company acquires real property from a related party and the $(5)$ results of appraisals conducted in accordance with subparagraphs (1) and (2), third paragraph of this Article are uniformly lower than the transaction price, the following steps shall be taken. If the Company and any of its subsidiaries that is a publicly listed company evaluated under the equity method has provided a special reserve in accordance with the above, such special reserve shall only be used if a recognition of loss from the price drop has been provided for the asset purchased at a high price, or upon disposal, proper compensation or reinstatement of the original status of such asset, or if there is other evidence confirming that there is no unreasonableness, with the approval by the Financial Supervisory Commission.
A special reserve shall be set aside in accordance with the first i. paragraph, Article 41 of the Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in another company, then the special reserve called for under the first paragraph, Article 41 of the Act shall be set aside pro rata in a proportion consistent with the share of the public company's equity stake in the other company.
Supervisors shall comply with Article 218 of the Company Act. ii.
Actions taken pursuant to sections i and ii, subparagraph (5), third iii. paragraph of this Article shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.
Where the Company acquires real property from a related party and $(6)$ one of the following circumstances exists, the acquisition shall be conducted in accordance with the preceding article, and subparagraphs $(1)$ , $(2)$ , and $(3)$ , third paragraph of this Article do not apply:
i. The related party acquired the real property through inheritance or as a gift.
More than 5 years will have elapsed from the time the related ii. party signed the contract to obtain the real property to the signing date for the current transaction.
The real property is acquired through signing of a joint iii. development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land.
(7) When the Company obtains real property thereof from a related party, it shall also comply with subparagraph (5), third paragraph of this Article, if there is other evidence indicating that the acquisition was not an arms length transaction.
Article 9: Procedure for Acquisition or Disposal of Membership or Intangible Assets
(1) Evaluation Procedure
- To acquire or dispose of a membership or intangible assets, reference i. shall be made to the fair market price to resolve the transaction terms and transaction prices. If the amount exceeds NT\$10 million, the transaction shall be approved by the chairman and shall be submitted to the board of directors.
- If the acquisition or disposal of assets by the Company is subject to ii. approval by the board of directors in accordance with the procedure that it has established or other laws, and if any director voices any objection, with a record or written statement, the Company shall also submit the director's objection to each supervisor. If the Company has independent directors in accordance with the Securities Exchange Act, when the transaction for acquisition or disposal of assets is submitted to the board of directors for discussion as required, the opinions of each independent director shall be fully taken into consideration. If any independent director voices any objection or reservation, it shall be specified in the minutes of the board meeting.
(2) Processing Procedure

When the Company acquires or disposes of a membership or intangible assets, an approval shall be acquired in accordance with the approval authority under the previous paragraph, followed by execution by the user department and the Finance Department or the Administration Department.

(3) Expert Evaluation Opinion Report for Membership and Intangible Assets

Where the Company acquires or disposes of intangible assets or memberships and the transaction amount reaches 20 percent or more of paid-in capital or NT\$300 million or more, except in transactions with a government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price. The CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

Article 9-1: The calculation of the transaction amounts referred to in Articles 6, 7, and 9 shall be done in accordance with subparagraph (5), first paragraph, Article 13, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.
Article 10: Procedure for Acquisition or Disposal of Claims of Financial Institutions The Company does not engage in transactions for the acquisition or disposal of claims of financial institutions in principle. If it wishes to engage in transactions for the acquisition or disposal of claims of financial institutions, it shall submit such action to the board of directors for approval, followed by establishment of

the evaluation and processing procedure.

Article 11: Procedure for Acquisition or Disposal of Derivatives
Transaction Principles and Guidelines $\mathbf{1}$ .
- (1) Type of Transactions

Derivatives traded by the Company mean transaction contracts whose value is derived from a product such as an asset, interest rate, foreign exchange rate, index or other interest (such as forward contract, option, futures, interest rate or foreign exchange rate, swap and hybrid contracts combining the above products).

(2) Operating (Hedging) Strategy

Derivatives trading engaged in by the Company shall be for hedging purposes. The transaction products shall be chosen to avoid the risks generated from the operation of the Company's business. The currencies held shall be consistent with the those actually required by the Company for import and export transactions. The principle is to balance out the global internal positions of the Company (foreign currency income and expense) in order to lower the Company's overall foreign exchange risk and to save the cost of foreign exchange operations.

(3) Division of Duties
Execution of Transactions: $\mathbf{i}$ .

The trading staff of the Finance Department shall engage in the transactions with the banks in accordance with the authorized amount. Each transaction shall be immediately followed by a transaction form, specifying the details, which shall be signed by the executive. The positions shall be calculated and a copy of the transaction form shall be delivered to the Accounting Department.

Transaction Confirmation and Registration: ii.

The Accounting Department shall verify the transaction based on the copy of the transaction form prepared by the transaction unit, register the details based on the confirmed figures, prepare a statement and deliver it to the transaction unit of the Finance Department.

Audit Department iii.

Responsible for the appropriateness of internal control over derivatives transactions and audit compliance of the transaction department with the procedure. Analyze the transaction cycle, prepare audit reports, and report to the board of directors in case of major deficiencies.

(4) Performance Review
The foreign exchange cost in the Company's accounts and the $\mathbf{i}$ . profit and loss generated from derivatives transactions shall be the basis for performance review.
To fully control and reflect the evaluation risk of transactions, the ii. Company uses monthly evaluations to assess profit and loss.
The Finance Department shall provide the president with an iii. evaluation of the foreign exchange positions, the trend of the foreign exchange markets, and an analysis of the market as a

reference for management and instructions.

(5) Total Contract Amount and Loss Limit
Hedging Transactions: $\mathbf{i}$ .

Cash market transactions only, limited to 2/3 of the net foreign exchange position calculated from export minus import payment, or the import amount in the past 2 months. Daily transaction over 1/5 of such limit amount shall be authorized by the president. Transactions below 1/5 may be authorized by the finance executive.

ii. Investment Transactions:

The Company shall not engage in derivatives trading for investment purpose.

iii. Loss Limit:

Hedging transactions are to avoid risks of all import payments and are not to seek the gain from foreign exchange differences. Thus, there is no need to fix a loss limit.

$\overline{2}$ . Risk Management Measures
(1) Credit Risk Management:

Variations of various factors in the market create the operating risk for derivatives. Market risk shall be managed with the following principles:

$\mathbf{i}$ . Transaction Counterparty: Limited to renowned domestic and overseas financial institutions.
Transaction Products: Limited to products provided by renowned ii. domestic and overseas financial institutions.
Transaction Amount: Outstanding transaction amount with the iii. same transaction counterparty shall not exceed 10% of the total authorized amount, except with the approval by the president.
(2) Market Risk Management:

Focus on public foreign exchange markets provided by the banks. The futures market shall not be considered for the moment.

(3) Liquidity Risk Management:

To ensure market liquidity, choices shall be made for financial products with higher liquidity (closable at any time in the market). The entrusted financial institutions for trading must have sufficient information and the ability to carry out transactions in any market at any time.

(4) Cash Flow Risk Management:

To ensure stability of the Company's working capital, the Company shall only use its own funds as the funding source of derivatives transactions. The amount of operation shall be in consideration of the funding requirements based on cash income and expense forecast for the following 3 months.

(5) Operating Risk Management:
Duly comply with the Company's authorized amount and $\mathbf{i}$ . procedure. Include them into internal audits to avoid procedure risks.
Personnel engaged in derivatives trading may not serve ii.

concurrently in other operations such as confirmation and settlement.

iii. Risk measurement, monitoring, and control personnel shall be assigned to a different department than the personnel in the preceding subparagraph and shall report to the board of directors or senior management personnel with no responsibility for trading or position decision-making.
Derivatives trading positions held shall be evaluated at least once $iv.$ per week, however positions for hedge trades required by business shall be evaluated at least twice per month. Evaluation reports shall be submitted to senior management personnel authorized by the board of directors.
(6) Legal Risk Management:

Documents to be signed with financial institutions must be reviewed by foreign exchange staff and legal staff or a legal consultant before official signature in order to avoid legal risks.

Internal Audit System 3.

The internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If any material violation is discovered, all supervisors shall be notified in writing.

$4.$ Regular Evaluation
The board of directors shall authorize senior management personnel to $(1)$ perform regular supervision and evaluation as to whether derivatives transactions have been carried out duly in accordance with the transaction procedures established by the Company and whether the risks undertaken are within the tolerable scope. If the market price evaluation report shows any anomaly (such as excess of loss limit), a report shall be filed with the board of directors immediately and corresponding measures shall be undertaken.
(2) All positions of derivatives transactions shall be evaluated at least once every week. Hedging transactions carried out for business needs shall be evaluated at least twice every month. The evaluation report shall be submitted to the senior management personnel authorized by the board of directors.
Principles of supervision and management by the board of directors for 5. derivatives transactions
The board of directors shall assign senior management to exercise due $(1)$ care as to the supervision and control over derivatives transaction risks at all times, with the following management principles:
- Periodically evaluate whether the risk management measures i. currently employed are appropriate and are faithfully conducted in accordance with these Regulations and the procedures for engaging in derivatives trading established by the Company.
- When irregular circumstances are found in the course of ii. supervising trading and profit-loss circumstances, appropriate measures shall be adopted and a report immediately made to the board of directors. Where a company has independent directors,

an independent director shall be present at the meeting and express an opinion.

(2) Periodically evaluate whether the derivatives trading performance is consistent with the established operational strategy and whether the risk undertaken is within the company's permitted scope of tolerance.
The Company shall report to the earliest meeting of the board of $(3)$ directors after it authorizes the relevant personnel to handle derivatives trading in accordance with its Procedures for Engaging in Derivatives Trading that it established.
The Company engaging in derivatives trading shall establish a log $(4)$ book in which details of the types and amounts of derivatives trading engaged in, board of directors approval dates, and the matters required to be carefully evaluated under subparagraph (2), fourth paragraph and subparagraphs (1) and (2), fifth paragraph of this Article shall be recorded in detail in the log book.

Article 12: Procedures for Mergers, Demergers, Acquisitions or Share Transfers

Evaluation and Processing Procedure $1₁$
When the Company engages in a merger, demerger, acquisition or $(1)$ share transfer, it is advisable to hire attorneys, accountants, and underwriters to jointly study an estimated time schedule for the legal procedures and to organize a project team to execute the schedule in accordance with the legal procedure. Before a board meeting is held to pass a resolution, accountants, attorneys or securities underwriters shall be hired to provide opinions about the reasonableness of the share conversion ratio, purchase price, or distribution of cash or other properties among the shareholders, for submission to the board of directors for discussion and approval. However, such expert opinions about reasonableness may be waived when the Company merges with a subsidiary of which 100% of the outstanding shares or total capital amount is held by the Company or in the event of a merger among subsidiaries of which 100% of the outstanding shares or total capital amounts are held by the Company.
The Company shall prepare a public report for shareholders detailing $(2)$ important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting and include them along with the expert opinions referred to in Paragraph 1 of the preceding Article when sending a shareholders notification to the shareholders meeting for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply. If the shareholders meeting of any one of the companies participating in a merger, demerger, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the companies participating in the merger, demerger, or acquisition shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.
Other Matters $\overline{2}$ .
A company participating in a merger, demerger, or acquisition $(1)$ i. shall convene a board of directors meeting and shareholders meeting on the day of the transaction to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent.
ii. A company participating in a transfer of shares shall call a board of directors meeting on the day of the transaction, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent.
When participating in a merger, demerger, acquisition, or transfer iii. of another company's shares, a company that is listed on an exchange or has its shares traded on an OTC market shall prepare a full written record of the following information and retain it for 5 years for reference:
- Basic identification data for personnel: Including the $(i)$ occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of another company's shares prior to disclosure of the information.
- (ii) Dates of material events: Including the signing of any letter of intent or memorandum of understanding, the hiring of a financial or legal advisor, the execution of a contract, and the convening of a board of directors meeting.
- (iii) Important documents and minutes: Including merger, demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of the board of directors meetings.
When participating in a merger, demerger, acquisition, or transfer iv. of another company's shares, a company that is listed on an exchange or has its shares traded on an OTC market shall, within 2 days counting inclusively from the date of passage of a resolution by the board of directors, report (in the prescribed format and via the Internet-based information system) the information set out in subsections iii (i) and (ii), section (1), subparagraph 2, first paragraph of this Article to the FSC for recordation.
Where any of the companies participating in a merger, demerger, V. acquisition, or transfer of another company's shares is neither listed on an exchange nor has its shares traded on an OTC market, the company(s) so listed or traded shall sign an agreement with such company whereby the latter is required to abide by the provisions of subsections iii and iv, section (i), subparagraph 2, first paragraph of this Article.
(2) Prior Confidentiality Undertaking: Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company

related to the plan for merger, demerger, acquisition, or transfer of shares.

(3) Principles for establishment and change of share conversion ratio or purchase price: The share conversion ratio or purchase price shall not change in principle, unless the conditions for change have been provided in the contract and have been publicly disclosed. The conditions for change of share conversion ratio or purchase price are as follows:
i. Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities.
ii. An action, such as a disposal of major assets, that affects the company's financial operations.
iii. An event, such as a major disaster or major change in technology, that affects shareholder equity or share price.
iv. An adjustment where any of the companies participating in the merger, demerger, acquisition, or transfer of shares from another company, buys back treasury stock.
v. An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares.
vi. Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.
(4) Details of contracts: In addition to compliance with Article 317-1 of the Company Act and Article 22 of the Enterprise Merger Act, contract for participation in a merger, demerger, acquisition, or of shares shall also record the following:
i. Handling of breach of contract.
ii. Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged.
iii. The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof.
iv. The manner of handling changes in the number of participating entities or companies.
v. Preliminary progress schedule for plan execution, and anticipated completion date.
vi. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.
(5) Change in the number of companies participating in the merger, demerger, acquisition or share transfer: After public disclosure of the information, if any company participating in the merger, demerger, acquisition, or share transfer intends further to carry out a merger, demerger, acquisition, or share transfer with another company, all of the participating companies shall carry out the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or share transfer anew, except that where the number of participating companies is decreased and a participating

company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.

Where any of the companies participating in a merger, demerger, $(6)$ acquisition, or transfer of shares is not a public company, the public company(s) shall sign an agreement with the non-public company whereby the latter is required to abide by the provisions of subparagraph (1), second paragraph of this Article about the date of the board meeting, subparagraph (2) about prior confidentiality undertaking, and subparagraph (5) about the number of companies participating in the merger, demerger, acquisition, or share transfer.
Article 13: Information Disclosure Procedure
Details subject to public filing and threshold of public filing $1₁$
- (1) Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT\$300 million or more, provided that this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.
- (2) Merger, demerger, acquisition, or transfer of shares.
- (3) Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures established by the company.
- $(4)$ Where the type of asset acquired or disposed of is equipment for business use, and furthermore the transaction counterparty is not a related party, and the transaction amount meets any of the following criteria:
- For a public company whose paid-in capital is less than NT\$10 $\mathbf{i}$ . billion, the transaction amount reaches NT\$500 million or more.
- For a public company whose paid-in capital is NT\$10 billion or ii. more, the transaction amount reaches NT\$1 billion or more.
- (5) Acquisition or disposal by a public company in the construction business of real property for construction use, and furthermore the transaction counterparty is not a related party, and the transaction amount reaches NT\$500 million.
- Where land is acquired under an arrangement on engaging others to $(6)$ build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the company expects to invest in the transaction reaches NT\$500 million.
- (7) Where an asset transaction is other than any of those referred to in the preceding six subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT\$300 million, provided that this shall not apply to the following circumstances:
Trading of government bonds. i.
If done by professional investors, securities trading on domestic ii. and overseas securities exchanges or OTC markets, or subscription of ordinary corporate bonds or general bank debentures without equity characteristics that are offered and issued in the domestic primary market, or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange.
Trading of bonds under repurchase and resale agreements, or iii. subscription or redemption of money market funds issued by domestic securities investment trust enterprises.
The amount of transactions under subparagraph (7) of the previous $(8)$ paragraph shall be calculated as follows. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Regulations need not be counted toward the transaction amount.
The amount of any individual transaction. i.
The cumulative transaction amount of acquisitions and disposals ii. of the same type of underlying asset with the same transaction counterparty within the preceding year.
The cumulative transaction amount of acquisitions and disposals iii. (cumulative acquisitions and disposals, respectively) of real property within the same development project within the preceding year.
The cumulative transaction amount of acquisitions and disposals iv. (cumulative acquisitions and disposals, respectively) of the same security within the preceding year.
Deadline for Public Announcement and Reporting $\overline{2}$ .

In acquiring or disposing of assets which includes details subject to public announcement under this Article and if the transaction amount reaches the threshold for public announcement and reporting under this Article, the Company shall publicly announce and report the relevant information within 2 days counting inclusively from the date of occurrence of the event.

Procedure for Public Announcement 3.
The Company shall make public announcements and reports of the $(1)$ relevant information on the website designated by the Financial Supervisory Commission.
(2) The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by the company and any subsidiaries that are not domestic public companies and enter the information in the prescribed format into the information reporting website designated by the FSC by the 10th day of each month.
(3) When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days

counting inclusively from the date of knowing of such error or omission.

The Company acquiring or disposing of assets shall keep all relevant $(4)$ contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company, where they shall be retained for 5 years except where another act provides otherwise.
(5) Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the preceding article, a public report of the relevant information shall be made on the information reporting website designated by the FSC within 2 days counting inclusively from the date of occurrence of the event:
Change, termination, or rescission of a contract signed in regard $\mathbf{i}$ . to the original transaction.
$ii.$ The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract.
iii. Change to the originally publicly announced and reported information.
Article 14: The Company's subsidiaries shall follow the following:
The subsidiaries shall also establish and execute the Procedure for $1_{-}$ Acquisition or Disposal of Assets in accordance with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
In acquiring or disposing of any asset, the subsidiaries shall also comply $2.$ with the regulations of the Company.
If the subsidiary is not a publicly listed company and if any acquisition or $3.$ disposal of asset meets the threshold for public announcement and reporting under Article 13, the parent company shall also make public announcements or reports on behalf of such subsidiary.
Paid-in capital or total assets of the Company shall be the standard $\overline{4}$ . applicable to a subsidiary in determining whether, relative to 20% of paid-in capital or 10% of total assets, it reaches a threshold requiring public announcement and regulatory filing.
Article 14-1: For the calculation of 10 percent of total assets under these Regulations, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.
Article 15: Penalty

If any employee of the Company breaches this procedure in the acquisition or disposal of assets, submissions for evaluation shall be made regularly in accordance with the Personnel Management Regulations and Employee Handbook of the Company, and penalties shall be imposed depending on the level of gravity.

Article 16: Implementation and Amendment Following approval by the board of directors, the Procedure for Acquisition or Disposal of Assets by the Company shall be sent to each supervisor and

submitted to the shareholders' meeting for approval. The same shall be applicable in case of an amendment. If any director voices any objection, with a record or written statement, the Company shall also submit the director's objection to each supervisor. If the Company has independent directors in accordance with the Securities Exchange Act, when the transaction for acquisition or disposal of assets is submitted to the board of directors for discussion as required, the opinions of each independent director shall be fully taken into consideration. If any independent director voices any objection or reservation, it shall be specified in the minutes of the board meeting.

Article 17: Miscellaneous

Any matter that is not fully stipulated in this Procedure shall be governed by applicable law.

AI assistant

TA YIH — AGM Information 2019

51845_rns_2019-07-05_491789c7-6eaf-4a3a-92c9-38c4f8717e2a.pdf

TA YIH INDUSTRIAL CO., LTD

Table of Contents

Procedure of General Shareholders Meeting

Ta Yih Industrial Co., Ltd.

Agenda of General Shareholders Meeting

4. Proposals

Meeting Agenda

Resolution:

Ta Yih Industrial Co., Ltd.

Business Report

$\mathbf{L}$ 2018 Business Report:

Summary of 2019 Business Plan: Ш.

Supervisors' Review Report

Appendix 3.

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matter

Sales Revenue from Hub Warehouse

Other Matter

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

CONSOLIDATED BALANCE SHEETSDECEMBER 31, 2018 AND 2017(In Thousands of New Taiwan Dollars)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matter

Sales Revenue from Hub Warehouse

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

Auditors' Responsibilities for the Audit of the Standalone Financial Statements

Notice to Readers

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

(Concluded)

STANDALONE STATEMENTS OF CHANGES IN EQUITYFOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017(In Thousands of New Taiwan Dollars, Except Dividends Per Share)

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Ta Yih Industrial Co., Ltd.

PROFIT ALLOCATION PROPOSAL

2018

Comparison Table of Amended Clauses of Procedure for Acquisition or Disposal of Assets

Current Shareholding of All Directors and Supervisors

Appendix 7.

Ta Yih Industrial Co., Ltd. Corporate Charter

Chapter 2 Shares

Chapter 3 Shareholders' Meetings

Chapter 4 Board of Directors

Chapter 5 Managers and Staff

Chapter 6 Closing

Chapter 7 Miscellaneous

Appendix 8.

Ta Yih Industrial Co., Ltd. Rules for Shareholders' Meetings

Appendix 9.

Ta Yih Industrial Co., Ltd.

Procedure for Acquisition or Disposal of Assets

Article 2: Scope of Assets

Article 3: Definitions

Procedure for Acquisition or Disposal of Securities Article 7:

Article 12: Procedures for Mergers, Demergers, Acquisitions or Share Transfers

Article 17: Miscellaneous

More from TA YIH

TA YIH AGM Information 2019

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)

STANDALONE STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Dividends Per Share)