Stock Code: 1521

TA YIH INDUSTRIAL CO., LTD

Handbook for 2020 Annual Meeting Shareholders

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Meeting Time: 9:00 12 June 2020 (Friday) Location: No. 660, Sec. 1, Ximen Rd, Tainan City, Taiwan(R.O.C) (Tayih Landis Hotel, 3F)

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I • Meeting Procedure
II • Meeting Agenda
1. Declaring the Meeting Open
2. Speech by Chair
3. Matters Reported
4. Matters Ratified
5. Discussion
6. Election
7. Other Motions
8. Extempore Motions
9. Adjournment
$III \cdot$ Appendix
1. Business Report of 2019
2. Audit Report by Supervisors
3. Auditor's Report and Financial Statements of 201915
4. Statement of Earning Distribution of 2019
5. Amendment to Corporate Charter
6. Amendments to Rules for Shareholders' Meetings43
7. Amendments to the Regulations for the Election of Directors and
Supervisors
8. Amendments to Procedure for Acquisition or Disposal of Assets 46
9. Amendments to Regulations Governing Loaning of Funds52
10. Amendment to Regulations Governing Endorsements and
. Guarantees
11. Shareholdings of All Directors and Supervisors
12. Corporate Charter
13. Rules for Shareholders' Meetings
14. the Regulations for the Election of Directors and Supervisors70
15. Procedure for Acquisition or Disposal of Assets
16. Regulations Governing Loaning of Funds
17. Regulations Governing Endorsements and Guarantees90

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Ta Yih Industrial Co., Ltd.

Procedures for Regular Meeting of Shareholders

1. Declaring the Meeting Open
1. Speech by Chair
1. Matters Reported
1. Matters Ratified
1. Discussion
1. Election
1. Other Motions
1. Extempore Motions
1. Adjournment

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Ta Yih Industrial Co., Ltd.

Agenda for Regular Meeting of Shareholders

Time: 9:00 12 June 2020 (Friday)

Location: Tayih Landis Hotel, 3F (No. 660, Sec. 1, Ximen Rd, Tainan City, Taiwan(Rr.o.c))

The number of shares hold by the shareholders present is reported and the chair declares the meeting open.

1. Speech by Chair
1. Matters Reported
(1) Business report of 2019
(2) Final accounts of 2019 audited by supervisors
(3) Report on the allocation of employees' remuneration of 2019
1. Matters Ratified
(1) Business report and financial statements of 2019
(2) Earning distribution of 2019

5. Discussion

(1) Revising the Company's Corporate Charter
(2) Revising the Company's Rules of Shareholders' Meeting
(3) Revising the Company's Regulations for Election of Directors and Supervisors
(4) Revising the Company's Procedures for Acquisition or Disposal of Assets
(5) Revising the Company's Regulations Governing Loaning of Funds
(6) Revising the Company's Regulations Governing Endorsement and Guarantee

6. Election: Reelecting 9 directors (including 3 independent directors)

Other Motions: Annulling the non-competition restriction provided by Article 209 of the Company Act for directors
Extempore Motions
Adjournment

Agenda

1. The number of shares hold by the shareholders present is reported and the chair declares the meeting open.
1. Speech by Chair
1. Matters Reported
Motion 1
Subject: Business Report of 2019
Explanation: The business report has been attached. (Please refer to pages $10 \sim 13$ of the manual.)

Motion 2

Subject: Final accounts of 2019 audited by supervisors

Explanation: The audit report made by supervisors has been attached. (Please refer to page 14 of the manual.)

Motion 3

Subject: Report on the allocation of employees' remuneration of 2019

Explanation:

1. Subject to Article 30-1 of the Articles of Incorporation, the Company shall set aside no less than 1% of its profit to be the employees' remuneration if there is any profit in the current year, and the remuneration shall be distributed in the form of stocks or cash. However, in case of any accumulated loss of the Company, an amount shall be retained in advance to make up the loss before the employees' remuneration is set aside at the percentage mentioned above. The distribution of employees' remuneration shall be reported at the regular meeting of shareholders.
1. The board of directors of the Company resolved on Mar. 6, 2020 to set aside 1% of the profit to be the employees' remuneration. The total amount of employees' remuneration was NT\$4,528,618 and was fully distributed in cash.
Matters Ratified

(Proposed by the board of directors) Motion 1

Subject: The Company's business report and financial statements of 2019 are submitted for approval.

Explanation:

1. The Company's financial statements and business report of 2019 are approved by the resolution of its board of directors.
1. The aforementioned financial statements have been audited and certified by Lee Chi-Chen and Yang Chao-Chin, CPAs of Deloitte Taiwan, and have been submitted, together with the business report, to and audited by supervisors. Please recognize. (Please refer to pages $10 \sim 13$ and $15 \sim 34$ of the manual.)

Resolution:

(Proposed by the board of directors) Motion 2

Subject: The Company's earning distribution of 2019 is submitted for approval.

Explanation:

1. The Company's earning distribution of 2019 has been approved by the board of directors and audited by supervisors. Please recognize. (Please refer to page 35 of the manual.)
1. In addition to the legal reserve in an amount of NT\$36,045,689 proposed by the board of directors, the cash dividends NT\$4 per share are also distributed. The total amount of distributed cash dividends is NT\$304,920,000.
1. The amount of cash dividends to be distributed this time is sounded down to an integer, and the total of fractional amounts is included into other incomes of the Company.
1. For the distribution of cash dividends, the board of directors is authorized to determine the record date and

the date of cash dividend distribution.

Resolution:

5. Discussion

(Proposed by the board of directors) Motion 1

Subject: A few articles in the Company's Corporate Charter are revised and therefore submitted for further discussion.

Explanation: For being consistent with amendments to laws and reaulations and establishment of the Audit Committee, a few articles in the Company's Corporate Charter are therefore proposed to be revised. (Please refer to pages $36 \sim 42$ of the manual.)

Resolution:

(Proposed by the board of directors) Motion 2

Subject: A few rules in the Company's Rules of Shareholders' Meetings are revised and therefore submitted for further discussion.

Explanation: For being consistent with amendments to laws, a few rules in the Company's Rules of Shareholders' Meetings are therefore proposed to be revised. (Please refer to page 43 of the manual.)

Resolution:

Motion 3 (Proposed by the board of directors)

Subject: A few articles in the Company's Regulations for Election of Directors and Supervisors are revised and therefore submitted for further discussion.

Explanation: For establishment of the Audit Committee, a few articles in the Company's Regulations for Election of Directors and Supervisors are therefore revised, and the Regulations are renamed for Election of Directors. (Please refer to page $44 \sim 45$ of the manual.)

Resolution:

(Proposed by the board of directors) Motion 4

Subject: A few articles in the Company's Procedure for Acquisition or Disposal of Assets are revised and therefore submitted for further discussion.

Explanation: For establishment of the Audit Committee, a few articles in the Company's Procedure for Acquisition or Disposal of Assets are therefore revised. (Please refer to pages $46 \sim 51$ of the manual.)

Resolution:

(Proposed by the board of directors) Motion 5

Subject: A few articles in the Company's Regulations Governing Loaning of Funds are revised and therefore submitted for further discussion.

Explanation: For being consistent with amendments to laws, a few rules in the Company's Regulations Governing Loaning of Funds are therefore revised. (Please refer to pages $52 \sim 55$ of the manual.)

Resolution:

(Proposed by the board of directors) Motion 6

Subject: A few articles in the Company's Regulations Governing Endorsements and Guarantees are revised and therefore submitted for further discussion.
Explanation: For being consistent with amendments to laws, a few rules in the Company's Regulations Governing Endorsements and Guarantees are therefore revised. (Please refer to pages $56 \sim 60$ of the manual.)

Resolution:

Election: (Proposed by the board of directors)

Subject: The proposal of reelecting 6 directors and 3 independent directors is submitted for approval.

Explanation:

1. The term of office of the existing directors and supervisors will expire on June 13, 2020. Directors and supervisors shall be reelected.
1. Subject to Article 18 of the Articles of Incorporation, 9 directors (including 3 independent directors) shall be elected for a 3-year term of office from June 12, 2020 to June 11, 2023. After election, all independent directors will form the qudit committee, which supersedes supervisors.
1. Three independent directors shall be elected pursuant to the candidate nomination system. The board of directors of the Company resolved to accept the nominated candidates on Mar. 6, 2020. The list of independent director candidates is as follows:

	Name of	Education	Work Experience	Shareholding
Nominator	Candidate
Board of	Wu Wan-Yi	Graduated from	Current position:	$\mathsf{O}\xspace$
Directors		Department of Labor and	Director and General Manager
		Human Resources, Chinese	of Jian Bing Co., Ltd.
		Culture University	Work experience:
			General Manager of Jian Bing
			Co., Ltd.
			Director and Vice General
			Manager of Toyota Tsusho
			Corporation (Taiwan)
			Director and Vice General
			Manager of Chen Tai Fong Co.,
			Ltd. Taiwan
Board of	Chen	Master of Laws from	Current position:	$\overline{0}$
Directors	Hsiu-Feng	University of Washington,	Lawyer at Chien Yeh Law
		USA	Offices
		Master of Laws from Tokyo	Associate professor at Chang
		University, Japan	Jung Christian University=
			Member of Administrative
			Appeals Commission, Tainan
			City Government
			Work experience:
			Chairman of Tainan City
			Gender Equality Committee
			Member of Tainan City
			Women's Rights Promotion and
			Development Committee
Board of	Ting	Graduated from	Current position:	$\mathbf 0$
Directors	Tze-Hsiang	Department of Public	Partner CPA at Nan Tai United

	Name of	Education	Work Experience
Nominator	Candidate
		Finance, National Chung	CPA Firm
		Hsing University	Director of CPA Associations
			R.O.C. (Taiwan)
			Work experience:
			Director of Taiwan CPA
			Association

Election Result:

Other Motions: (Proposed by the board of directors)

Subject: Annulling the non-competition restriction provided by Article 209 of the Company Act for directors

Explanation:

1. Subject to Article 209 of the Company Act, a director of the Company shall obtain permission at the shareholders' meeting before serving as a director or manager of another company that has the scope of business similar to the Company.
1. If the directors elected at the regular meeting of shareholders this time are subject to the non-competition restriction provided by Article 209 of the Company Act for directors, the non-competition restriction for the directors and their representatives is annulled.

Resolution:

Extempore Motions
Adjournment

Appendix 1. Business Report of 2019

Ta Yih Industrial Co., Ltd. Business Report

I. Business Report of 2019:

(1) Business Result:

The net operating income of 2019 was NT\$5,390,196 thousand. It was NT\$313,615 thousand less than that of 2018, which was NT\$5,703,811 thousand. The pre-tax income of 2019 was NT\$448,351 thousand. It increased by NT\$77,549 thousand, compared with that of 2018, which was NT\$370,802 thousand.

(2) Comparison table for operating income and pre-tax income of 2019 and 2018:

Unit: NT\$1,000

Year	2019	2018	Amount increasing decreasing	Increase $/$ Decrease %
Net operating income	5,390,196	5,703,811	$(-)$ 313,615	$(-)$ 5.5%
Net operating profit	411,978	277,019	$(+)$ 134,959	$(+)$ 48.7%
Pre-tax income	448,351	370,802	$(+)$ 77,549	$(+)$ 20.9%
Net income after tax	360,457	319,207	$(+)$ 41,250	$(+)$ 12.9%
EPS after tax (NTD/share)	4.73	4.19	$(+)$ 0.54	$(+)$ 12.9%

(3) The net income after tax of 2019 was NT\$360,457 thousand and EPS was NT\$4.73. The profit margin was 6.7%. The return on assets and the return on equity were 10.2% and 19.2% respectively.

II. Overview of Business Plan of 2020

(1) Business strateav
1. Develop business overseas actively to ensure the growth of performance results.
1. Utilize IT technology to establish the intelligent production system.
1. Strengthen cost and quality management to enhance the competiveness of the Company.
1. Cultivate management and technical talents and optimize the product development system.
1. Protect environment and employees' health and perform corporate social responsibility.
(2) Expected Sales Volume and Ground for the Expectation
1. Expected sales volume: About 430 ~ 440 thousand automobiles to be sold domestically
1. Ground: As planned based on the plan of the plant
(3) Important Production and Marketing Policies
1. Expand the market for products to ensure the growth of performance results.
1. Reduct the cost of molds and strive to get orders of Kioto molds from domestic and overseas markets.
3.Strengthen the production management system and enhance production efficiency by improving bottleneck work through automation.
1. Utilize IT technology to improve the current production system and reduce logistics activities.

III. Future Corporate Development Strategies

(1) Enhance added value for products and strive to get orders of
products from domestic customs to increase the sales volume.
(2) Combine Kioto Tayih in Fuzhou to expand the market in China, develop the market in North America and any other overseas markets actively, and strive to get the business of Kioto lights and molds continuously.
(3) Enhance design of high precision molds and technology of machining and processing.
(4)Strengthen the resource and energy management mechanism and develop various waste reduction programs.

IV. Influence of External Competition, Legal Requirements and Overall Business Environment

Looking back on the automobile market in Taiwan in 2019, we sold 440 thousand brand new vehicles, growing by 1% slightly higher than that of 2018. However, the Company's operating revenue from the domestic market was only 48% of its total revenue in 2019, reducing by 1% compared with that in 2018, as imported vehicles had continuously held an increasing market share. As for the export market, the exported products were 52% of the total sales, growing by 1% compared with that of 2018, due to the increase in orders of new model lights and molds from North America.

In 2020, the global economic growth rate is revised downwards as the COVID-19 virus spreads, and the global automobile industry is also impacted. For epidemic prevention, all countries have enhanced their prevention measures. Enterprises have also solidified their cooperation relationship with their upstream and downstream partners during the affected period to coordinate supply chains more flexible so as to spread the risks with respect to production of parts and components. Even though the epidemic still influences the performance of the domestic automobile industry, yet automobile sales will be boosted this year because a lot of new styles of automobiles have been launched on the market and the government policy of subsidizing the purchase of a new car to replace the existing one is going to be ended this year. It is expected that the domestic automobile sales volume will still be 440 thousand, almost the same as that of last year. In America and Japan, we intend to not only strive for domestic and overseas orders from Kioto Group, but also develop the market in North America continuously to get new customers and more orders of new model lights and molds. Moreover, to enhance production efficiency and reduce production cost, the Company will continuously conduct various improvement activities for cost rationalization.

In the coming future, the Company will strengthen corporate governance and business management continuously and invest in research and development consistently to create and maintain competition advantages. With the corporate philosophy of

sincerity and sustainable development, the Company, supported by all of you as shareholders and led by the excellent management team, guarantees its stable growth and consistent fulfillment of corporate social responsibility. We emphasize the interests of all stakeholders and will create reasonable profits and values for shareholders, employees and the society continuously. We hope that all of you as shareholders can support, encourage and direct us as usual.

We with you, ladies and gentlemen, good heath and the best of luck.

Ta Yih Industrial Co., Ltd.

Chairman: Wu Chun-Yi

Manager: Feng Shih-Chung

Accounting Manager: Wang Hung-Chi

Appendix 2. Audit Report by Supervisors

Audit Report by Supervisors

The consolidated financial report and individual financial report of 2019 prepared by the board of directors have been certified by Lee Chi-Chen and Yang Chao-Chin, CPAs of Deloitte Taiwan. We have audited these reports as well as the business report and the statement of earning distribution of 2019, and believe that they are prepared in accordance with the Company Act and applicable laws. Therefore, we hereby submit these documents for approval in accordance with Article 219 of the Company Act.

This is submitted to

Regular Meeting of Shareholders of Ta Yih Industrial Co., Ltd. in 2020

Ta Yih Industrial Co., Ltd.

Supervisor: KONAGAYA HIDEHARU

Supervisor: Ken Po-Wen

Supervisor: Lin Chien

Mar. 13, 2020

Appendix3.

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, 2019 and 2018, 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, 2019 and 2018, 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, 2019. 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, 2019 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 \$1,348,678 thousand for the year ended December 31, 2019, which accounted for 25% 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, 2019; 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 confirmed the existence 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.

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, 2019 and 2018 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.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or 6. 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, 2019 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 Chi-Chen Li, and Chao-Chin Yang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 6, 2020

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 statements shall prevail.

	December 31, 2019		December 31, 2018
ASSETS	Amount	%	Amount	%

CURRENT ASSETS
Cash (Notes 4 and 6)	S 90,914	2	\$ 114,260	3
Notes receivable (Notes 4 and 7)	4,969	$\overline{a}$	6,609
Accounts receivable (Notes 4, 7 and 18)	749,794	21	572,455	17
Accounts receivable from related parties (Notes 4, 7, 18
and $24$ )	104,896	3	207,591	6
Other receivable (Notes 4 and 7)	3,484	$\overline{\phantom{a}}$	4,193	$\sim$
Other receivables from related parties (Notes 4, 7 and 24)	31,578	$\mathbf{1}$	48,599	$\mathbf{1}$
Inventories (Notes 4, 5 and 8)	812,523	22	785,969	23
Prepayments (Note 20 and 24)	361,970	10	223,668	7
Other current assets (Notes 13 and 20)	30,773	1	40,616	⊥

Total current assets	2,190,901	60	2,003,960	$-58$

NON-CURRENT ASSETS
Investments accounted for using the equity method (Notes	393,213	11	406,241	12
4 and 10)	957,283	26	966,815	28
Property, plant and equipment (Notes 4, 11 and 24)	19,186	$\cdot$ 1
Right-of-use assets (Notes 3, 4 and 12)	36,337	$\mathbf{1}$	35,820	-1
Deferred tax assets (Notes 4 and 20)	40,136	$\mathbf{1}$	39,205	$\mathbf{1}$
Other non-current assets (Notes 4 and 13)
Total non-current assets	1,446,155	$-40$	1,448,081	$-42$

TOTAL	3,637,056	100	3,452,041	100


LIABILITIES AND EQUITY

CURRENT LIABILITIES	\$ 313,094	9	S 323,019	9
Contract liabilities - current (Notes 4, 18 and 24)	236,059	6	185,813	6
Notes payable (Note 14)	1,005	$\overline{a}$	6,437	$\overline{\phantom{a}}$
Notes payable to related parties (Notes 14 and 24)	530,730	15	484,440	14
Accounts payable (Note 14)	56,230	$\boldsymbol{2}$	43,089	$\mathbf{1}$
Accounts payable to related parties (Notes 14 and 24)	230,588	6	223,564	7
Other payables (Note 15)	66,526	$\mathbf{2}$	68,737	$\mathbf{2}$
Other payables to related parties (Notes 15 and 24)	49,383	1	10,575	$\blacksquare$
Current tax liabilities (Notes 4 and 20) Lease liabilities - current (Notes 3, 4 and 12)	13,042
Other current liabilities (Note 15)	430		236	$\overline{\phantom{a}}$

Total current liabilities	1,497,087	$-41$	1,345,910	$-39$

NON-CURRENT LIABILITIES
Deferred tax liabilities (Notes 4 and 20)	117,403	4	119,909	3
Lease liabilities - current (Notes 3, 4 and 12)	6,333			$\overline{a}$ 4
Net defined benefit liabilities (Note 4, 5, and 16)	111,888	3	135,020 2,597
Other non-current liabilities (Note 15)	2,728	$\overline{a}$
Total non-current liabilities	238,352	$\overline{1}$	257,526	$\frac{7}{2}$

Total liabilities	1,735,439	48	1,603,436	46

EQUITY ATTRIBUTED TO OWNERS OF THE COMPANY (Note 17)
Ordinary shares	762,300	21	762,300	$\overline{22}$
Capital surplus	60,736	-1	60,605	$\overline{2}$
Retained earnings				17
Legal reserve	615,205	17 $\overline{c}$	583,285	$\overline{2}$
Special reserve	68,264 436,472	12	68,264 403,043	12
Unappropriated earnings	1,119,941	$\overline{31}$	1,054,592	$\overline{31}$
Total retained earnings Other equity	(41,360)	$\Box$ (1)	(28, 892)	(1)

Total equity attributable to owners of the Company	1,901,617	$\frac{-52}{5}$	1,848,605	_54

TOTAL	3,637,056	100	3,452,041	100

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

$\sim$ $\lambda$

$\ddot{\phantom{a}}$

$\alpha$

(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, 2019 AND 2018

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2019		2018
	Amount	$\frac{0}{0}$	Amount	$\frac{0}{0}$
OPERATING REVENUE (Notes 4, 18 and 24)	5,390,196 S	100	5,703,811 \$	100
OPERATING COSTS (Notes 8, 16, 19 and 24)	4,423,289	82	4,872,472	85
GROSS PROFIT	966,907	18	831,339	- 15
UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES	(3,008)		(4, 565)
REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES	3,971		4,213
REALIZED GROSS PROFIT	967,870	18	830,987	15
OPERATING EXPENSES (Notes 7, 16, 19 and 24) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss (gain) Total operating expenses	184,519 170,716 199,992 665 555,892	4 3 4 11	180,785 171,839 205,809 (4, 465) 553,968	3 3 4 10
PROFIT FROM OPERATIONS	411,978	7	277,019	5
NON-OPERATING INCOME AND EXPENSES (Notes 19 and 24) Other income Other gains and losses Share of profit of associates	76,533 (41, 676) 1,516	$\mathbf{2}$ (1)	97,040 (5,626) 2,369	1
Total non-operating expenses	36,373	1	93,783	1
PROFIT BEFORE INCOME TAX	448,351	8	370,802	6
INCOME TAX EXPENSE (Notes 4 and 20)	87,894		51,595
NET PROFIT FOR THE YEAR	360,457	7	319,207	$\overline{5}$
OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 16) Income tax relating to items that will not be	(6, 792)		(8,033)
reclassified subsequently to profit or loss (Notes 4 and $20$ )	1,358		4,955	(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, 2019 AND 2018

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2019		2018
	Amount	%	Amount	$\frac{0}{0}$
Items that may be reclassified subsequently to profit or loss:	(5,434)		(3,078)
Exchange differences on translating the financial statements of foreign operations Income tax relating to items that may be reclassified	(15, 530)	(1)	(7,998)
subsequently to profit or loss (Notes 4 and 20)	3,062 (12, 468)		1,712 (6,286)
Other comprehensive loss for the year, net of income tax	(17,902)	(1)	(9,364)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	342.555		309,843
NET PROFIT ATTRIBUTABLE TO: Owners of the Company	360,457		319,207
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company	342.555		309,843
EARNINGS PER SHARE (New Taiwan dollars, Note 21) Basic Diluted

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

$\bar{\mathcal{A}}$

(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 VEARS ENDED DECEMBER 31,

$\ddot{\phantom{a}}$

	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, 2018	76,230	762,300 မာ	60,472 ↮	533,348 69	68,264 69	533,247 ę۹	(22,606) ₩	1,935,025 s,
Cash dividends distributed by the Company - NT\$5.2 per share Appropriation of the 2017 earnings (Note 17) 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	(28, 892)	1,848,605
Cash dividends distributed by the Company - NT\$ 3.8 per share Appropriation of the 2018 earnings (Note 17) Legal reserve				31,920		$(31,920)$ $(289,674)$		(289, 674)
Unclaimed cash dividends overdue transferred to capital surplus			131					131
Net profit for the year ended December 31, 2019						360,457		360,457
Other comprehensive loss for the year ended December 31, 2019, net of income tax						(5, 434)	(12, 468)	(17,902)
Total comprehensive income loss for the year ended December 31, 2019						355,023	(12, 468)	342,555
BALANCE AT DECEMBER 31, 2019	76,230	262,300 କୋ	60,736 69.	615,205 બ્ત્ર	68,264	436,472 еA	(41,360) ୫ଖ	\$1,901,617

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

$\overline{\phantom{a}}$

(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, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	2019	2018
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	\$ 448,351	\$ 370,802
Adjustments for:
Depreciation expenses	131,369	151,702
Expected credit loss recognized (reversed) on trade receivables	665	(4, 465)
Net gain on fair value changes of financial assets at fair value through profit
or loss	(1)	(10)
Finance costs	1,617	838
Interest income	(420)	(362)
Share of profits of associates	(1, 516)	(2,369)
Loss on disposal of property, plant and equipment, net	157	424
Provision for loss on inventories	2,744
Unrealized gain on transactions with associates	3,008	4,565
Realized gain on transactions with associates	(3,971)	(4,213)
Net loss (gain) on foreign currency exchange	13,825	(7,262)
Gain on disposal of right-of-use assets	(11)
Changes in operating assets and liabilities:
Notes receivable	1,354	397
Accounts receivable	(188, 336)	200,831
Accounts receivable from related parties	97,812	77,953
Other receivables	709	4,541
Other receivables from related parties	16,627	(965) 76,147
Inventories	(29, 298) (138, 302)	(98, 971)
Prepayments		(710)
Other current assets	9,843	123,934
Contract liabilities	(9, 925) 50,246	(49, 589)
Notes payable	(5, 432)	(8,601)
Notes payable to related parties	46,893	(177, 843)
Accounts payable Accounts payable to related parties	14,608	(18,221)
Other payables	7,024	(50, 254)
Other payables to related parties	(2,211)	(8,172)
Other current liabilities	194	(779)
Net defined benefit liabilities	(29, 925)	(32, 385)
Other non-current assets	81	210
Cash generated from operations	437,779	547,173
Interest received	420	362
Interest paid	(1,277)	(838)
Income tax paid	(47, 688)	(93,504)
Net cash generated from operating activities	389,234	453,193
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through profit or loss	(10,000)	(50,000)
Proceeds from sale of financial assets at fair value through profit or loss	10,001	50,010
Payments for property, plant and equipment	(111, 101)	(122, 834)
Increase in refundable deposits	(3,624)	(7,919)
Decrease in refundable deposits	4,502	5,613
Net cash used in investing activities	(110, 222)	(125, 130)
		(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, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	2019	2018

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	836,026	718,400
Repayments of short-term borrowings	(836,026)	(718,400)
Proceeds from guarantee deposits received	80
Refunds of guarantee deposits received	(30)	(50)
Repayment of the principal portion of lease liabilities	(12, 842)
Cash dividends	(289, 674)	(396, 396)
Unclaimed cash dividends overdue transferred to capital surplus	131	133

Net cash used in financing activities	(302, 335)	(396,313)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH
HELD IN FOREIGN CURRENCIES	(23)	31

NET DECREASE IN CASH	(23, 346)	(68,219)

CASH AT THE BEGINNING OF THE YEAR	114,260	182,479

CASH AT THE END OF THE YEAR	90,914	114,260

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

$\mathcal{L}_{\text{max}}$

$\ddot{\phantom{a}}$

(Concluded)

$\overline{\phantom{a}}$

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, 2019 and 2018, 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, 2019 and 2018, 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, 2019. 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, 2019 is as follows:

Sales Revenue from Hub Warehouse

The sales revenue generated from the hub warehouse was \$ 1,348,678 thousand for the year ended December 31, 2019, which accounted for 25% 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, 2019; 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 confirmed the existence 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures $2.$ 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.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, 4. 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, 2019 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 Chi-Chen Li, and Chao-Chin Yang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 6, 2020

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.

	December 31, 2019		December 31, 2018
ASSETS	Amount	%	Amount	%

CURRENT ASSETS
Cash (Notes 4 and 6)	\$ 89,954	2	\$ 113,240	3
Notes receivable (Notes 4 and 7)	4,969	$\tilde{\phantom{a}}$	6,609
Accounts receivable (Notes 4, 7 and 17)	749,794	21	572,455	17
Accounts receivable from related parties (Notes 4, 7, 17	104,896	3	207,591	6
and $23)$ Other receivable (Notes 4 and 7)	3,484	$\overline{a}$	4,193
Other receivables from related parties (Notes 4, 7 and 23)	31,578	1	48,599	$\mathbf{I}$
Inventories (Notes 4, 5 and 8)	812,523	22	785,969	23
Prepayments (Note 19 and 23)	361,970	10	223,668	$\overline{7}$
Other current assets (Notes 12 and 19)	30,773	-1	40,616	$\overline{1}$

Total current assets	2,189,941	60	2,002,940	$-58$
NON-CURRENT ASSETS
Investments accounted for using the equity method (Notes
4 and 9)	394,173	11	407,261	12
Property, plant and equipment (Notes 4, 10 and 23)	957,283	26	966,815	28
Right-of-use assets (Notes 3, 4 and 11)	19,186	$\mathbf{1}$		÷.
Deferred tax assets (Notes 4 and 19)	36,337	1	35,820	$\mathbf{1}$
Other non-current assets (Notes 4 and 12)	40,136	$\mathbf{1}$	39,205	$\bot$
Total non-current assets	1,447,115	$-40$	1,449,101	$-42$
TOTAL	3,637,056	100	3,452,041	100

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Contract liabilities - current (Notes 4, 17 and 23)	\$ 313,094	9	\$ 323,019	9
Notes payable (Note 13)	236,059	6	185,813	6
Notes payable to related parties (Notes 13 and 23)	1,005	ä,	6,437	$\ddot{\phantom{0}}$
Accounts payable (Note 13)	530,730	15	484,440	14
Accounts payable to related parties (Notes 13 and 23)	56,230	2	43,089	$\mathbf{1}$
Other payables (Note 14)	230,588	6	223,564	7
Other payables to related parties (Notes 14 and 23)	66,526	2	68,737	$\boldsymbol{2}$ $\ddot{\phantom{a}}$
Current tax liabilities (Notes 4 and 19)	49,383 13,042	1	10,575
Lease liabilities - current (Notes 3, 4 and 11)	430		236
Other current liabilities (Note 14)
Total current liabilities	1,497,087	$-41$	1,345,910	39
NON-CURRENT LIABILITIES
Deferred tax liabilities (Notes 4 and 19)	117,403	4	119,909	3
Lease liabilities - non-current (Notes 3, 4 and 11)	6,333
Net defined benefit liabilities (Note 4, 5, and 15)	111,888	3	135,020	4
Other non-current liabilities (Note 14)	2,728	$\blacksquare$	2,597

Total non-current liabilities	238,352	$\overline{z}$	257,526	7
Total liabilities	1,735,439	48	1,603,436	$-46$
EQUITY ATTRIBUTED TO OWNERS OF THE COMPANY (Note 16)
Ordinary shares	762,300	21	762,300	22
Capital surplus	60,736	$\mathbf{1}$	60,605	$\overline{2}$
Retained earnings
Legal reserve	615,205	17	583,285	17
Special reserve	68,264 436,472	2	68,264 403,043	$\overline{2}$ 12
Unappropriated earnings Total retained earnings	1,119,941	$\frac{12}{2}$ $\overline{31}$	1,054,592	$\overline{31}$
Other equity	(41,360)	(1)	(28, 892)	$\overline{\mathfrak{a}}$

Total equity attributable to owners of the Company	1,901,617	$\frac{52}{52}$	1,848,605	__54
TOTAL	3,637,056	100	3,452,041	100

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

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Ta Yih Industrial Co., Ltd. STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

$\bar{\mathcal{S}}$

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2019		2018
	Amount	$\%$	Amount	$\frac{0}{0}$
OPERATING REVENUE (Notes 4, 17 and 23)	5,390,196 S.	100	5,703,811 \$	100
OPERATING COSTS (Notes 8, 15, 18 and 23)	4,423,289	82	4,872,472	85
GROSS PROFIT	966,907	18	831,339	-15
UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES	(3,008)		(4, 565)
REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES	3,971		4,213
REALIZED GROSS PROFIT	967,870	18	830,987	15
OPERATING EXPENSES (Notes 7, 15, 18 and 23) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss (gain)	184,519 170,674 199,992 665	4 $\mathfrak{Z}$ 4	180,785 171,798 205,809 (4, 465)	3 3 4
Total operating expenses	555,850	11	553,927	10
PROFIT FROM OPERATIONS	412,020	$\tau$	277,060	5
NON-OPERATING INCOME AND EXPENSES (Notes 18 and 23) Other income Other gains and losses Share of profit of subsidiaries and associates	76,528 (41, 676) 1,479	$\overline{2}$ (1)	97,036 (5,626) 2,332	1
Total non-operating expenses	36,331	-1	93,742
PROFIT BEFORE INCOME TAX	448,351	8	370,802	6
INCOME TAX EXPENSE (Notes 4 and 19)	87,894		51,595
NET PROFIT FOR THE YEAR	360,457	7	319,207	5
OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans (Note 15) Income tax relating to items that will not be	(6, 792)		(8,033)
reclassified subsequently to profit or loss (Notes 4 and 19)	1,358		4,955	(Continued)

$\sim$

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Ta Yih Industrial Co., Ltd. STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2019		2018
	Amount	$\%$	Amount	$\%$
Items that may be reclassified subsequently to profit or loss:	(5, 434)		(3,078)
Exchange differences on translating the financial statements of foreign operations Income tax relating to items that may be reclassified	(15,530)	(1)	(7,998)
subsequently to profit or loss (Notes 4 and 19)	3,062 (12, 468)		1,712 (6, 286)
Other comprehensive loss for the year, net of income tax	(17,902)	(1)	(9,364)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	342,555		309,843
	2019		2018
EARNINGS PER SHARE (New Taiwan dollars, Note 20) Basic Diluted	4.73

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

(Concluded)

$\bar{z}$

(English Translation of Consolidated 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, 2019 AND 2018
(In T

$\frac{1}{2}$

$\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\$

$\frac{1}{2}$

	Share Capital				Retained Earnings		Other Equity
	Shares	Amount	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earnings	Differences on Translating Operations Exchange Foreign	Total Equity
BALANCE AT JANUARY 1, 2018	76,230	762,300 ↔	60,472 69	533,348 69	68,264 ₩	533,247 s,	(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 ă						(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	(28, 892)	1,848,605
Cash dividends distributed by the Company - NT\$ 3.8 per share Appropriation of the 2018 earnings (Note 16) Legal reserve				31,920		$(31,920)$ $(289,674)$		(289, 674)
Unclaimed cash dividends overdue transferred to capital surplus			131					131
Net profit for the year ended December 31, 2019						360,457		360,457
Other comprehensive loss for the year ended December 31, 2019, net of income tax						(5, 434)	(12, 468)	17,902)
Total comprehensive income loss for the year ended December 31, 2019						355,023	(12, 468)	342,555
BALANCE AT DECEMBER 31, 2019	76,230	762.300 ⊶	60,736 ⊷	615,205 ଖୋ	68,264 ଔ	436,472 Θ.	(41,360) ⊷	$2 - 1,901,617$

$\hat{\gamma}$

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

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

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	2019	2018
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	\$ 448,351	\$ 370,802
Adjustments for:
Depreciation expenses	131,369	151,702
Expected credit loss recognized (reversed) on trade receivables	665	(4, 465)
Net gain on fair value changes of financial assets at fair value
through profit or loss	(1)	(10)
Finance costs	1,617	838
Interest income	(415)	(358)
Share of profits of subsidiaries and associates	(1, 479)	(2, 332)
Loss on disposal of property, plant and equipment, net	157	424
Provision for loss on inventories	2,744
Unrealized gain on transactions with associates	3,008	4,565
Realized gain on transactions with associates	(3,971)	(4,213)
Net loss (gain) on foreign currency exchange	13,825	(7,262)
Gain on disposal of right-of-use assets	(11)
Changes in operating assets and liabilities:
Notes receivable	1,354	397
Accounts receivable	(188, 336)	200,831
Accounts receivable from related parties	97,812 709	77,953 4,541
Other receivables Other receivables from related parties	16,627	(965)
Inventories	(29, 298)	76,147
Prepayments	(138, 302)	(98, 971)
Other current assets	9,843	(710)
Contract liabilities	(9,925)	123,934
Notes payable	50,246	(49, 589)
Notes payable to related parties	(5, 432)	(8,601)
Accounts payable	46,893	(177, 843)
Accounts payable to related parties	14,608	(18,221)
Other payables	7,024	(50, 254)
Other payables to related parties	(2,211)	(8,172)
Other current liabilities	194	(779)
Net defined benefit liabilities	(29, 925)	(32, 385)
Other non-current assets	81	210
Cash generated from operations	437,821	547,214
Interest received	415	358
Interest paid	(1,277)	(838)
Income tax paid	(47,688)	(93, 504)
Net cash generated from operating activities	389,271	453,230
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through profit or loss	(10,000)	(50,000) (Continued)

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

Ta Yih Industrial Co., Ltd. STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	2019	2018
Proceeds from sale of financial assets at fair value through profit or
loss	10,001	50,010
Payments for property, plant and equipment	(111, 101)	(122, 834)
Increase in refundable deposits	(3,624)	(7, 919)
Decrease in refundable deposits	4,502	5,613
Net cash used in investing activities	(110, 222)	(125, 130)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	836,026	718,400
Repayments of short-term borrowings	(836, 026)	(718,400)
Proceeds from guarantee deposits received	80
Refunds of guarantee deposits received	(30)	(50)
Repayment of the principal portion of lease liabilities	(12, 842)
Cash dividends	(289, 674)	(396, 396)
Unclaimed cash dividends overdue transferred to capital surplus	131	133
Net cash used in financing activities	(302, 335)	(396,313)
NET DECREASE IN CASH	(23, 286)	(68,213)
CASH AT THE BEGINNING OF THE YEAR	113,240	181,453
CASH AT THE END OF THE YEAR	89,954	113.240

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

$\ddot{\phantom{a}}$

$\bar{\beta}$

(Concluded)

Appendix 4. Statement of Earning Distribution

Ta Yih Industrial Co., Ltd.

Statement of Earning Distribution

2019

Unit: NTD

Item	Amount
Undistributed earnings at the beginning of the year	81,448,823
Remeasurement of defined benefit plans recognized in retained earnings	(5,433,926)
Undistributed earnings after adjustment	76,014,897
Add: Pre-tax income of 2019	360,456,888
Less: 10% legal reserve allocated	36,045,689
Distributable earnings	400,426,096

Distributions:
Dividends to shareholders (cash) (Note 1)	304,920,000
Undistributed earnings at the end of the year	95,506,096

(Note 1) Earnings for 2019 have been preferentially distributed this time.

Chairman: Wu Chun-Yi

Manager: Feng Shih-Chung

Accounting Manager: Wang Hung-Chi

Appendix 5: Amendment to Corporate Charter

$\bar{\mathcal{A}}$

Amendment to Corporate Charter

Article	Before Amendment	After Amendment	Reason(s)for
			Amendment
Article 4	The Company makes public	The Company makes public	In accordance with
	announcements through publications in	announcements in accordance with	Article 28 of the
	highly visible portions of the local daily	Article 28 of the Company Act.	Company Act.
	newspaper circulated in the place
	where the Company is located and by
	correspondence.
Article 6	All of the Company's shares are	All of the Company's shares are	In accordance with
	registered shares, to be affixed with the	registered shares, to be affixed with the	Article 162 of the
	signatures/seals of at least 3 directors,	signatures or seals of the directors	Company Act.
	numbered and issued after certification	representing the Company and issued
	by the competent authority or its	after certification by in accordance with
	approved issuance registration	The shares may also be issued the law.
	organization in accordance with the law.	without share certificates.
Article 18	The Company has 9 directors and 2 to 3	The Company has 9 directors, to be	In accordance with
	supervisors, to be elected by the	elected by the shareholders' meeting	the establishment of
	shareholders' meeting from among	from among persons with legal	audit committee as a
	persons with legal capacities. Their	capacities. Their terms shall be 3 years	replacement of
	terms shall be 3 years and the same	and the same person may be re-elected	supervisors
	person may be re-elected upon expiry	upon expiry of the term.
	of the term.
	Among the directors under the previous	Among the directors under the previous
	paragraph, there shall be at least 2	paragraph, there shall be at least 3
	independent directors. Independent	independent directors.
	directors shall be elected through the	Directors shall be elected through the
	candidate nomination system in	candidate nomination system in
	accordance with Article 192-1 of the	accordance with Article 192-1 of the
	Company Act. Non-independent	Company Act. Non-independent
	directors shall be elected together with	directors shall be elected together with
	the independent directors. The persons	the independent directors. The persons
	who have received the ballots	who have received the votes
	representing the highest number of	representing the highest number of
	voting rights shall be elected as	voting rights shall be elected as
	non-independent directors and	non-independent directors and
	independent directors respectively in	independent directors, respectively, in
	accordance with the respective number	accordance with the respective number
	of seats available.	of seats available.
	The professional qualifications, nomination, and election manners and	The professional qualifications, nomination and election manners and
	other matters of compliance for	other matters of compliance for
	independent directors shall be	independent directors shall be
	governed by applicable laws such as the	governed by the applicable laws such as
	Company Act and the Securities	the Company Act and the Securities
	Exchange Act.	Exchange Act.
	The total number of shares of the	The total number of shares of the
	Company to be held by all directors and	Company to be held by all directors
	supervisors shall be established based	shall be established based on the
	on the standards under the Rules and	standards under the Rules and Review
	Review Procedures for Director and	Procedures for Director and Supervisor
	Supervisor Share Ownership Ratios at	Share Ownership Ratios in Public
	Public Companies promulgated by the	Companies promulgated by the
	competent securities authority.	competent securities authority.
		The Company has an audit committee
		in accordance with Article 14-4 of the
		Securities and Exchange Commission.
		which is composed of all independent
		directors which is responsible for

$\mathcal{O}(\mathbb{R}^d)$ .

Article	Before Amendment	After Amendment	Reason(s)for Amendment
		performing the duties that should be performed by supervisors in accordance with the Company Act, the Securities and Exchange Act and other laws.
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.	If the current term of a director has expired but a re-election has not been held in time, the duties of the director shall be extended until the time when the re-elected director starts their term.	In accordance with the establishment of audit committee as a replacement of supervisors
Article 21	In case of vacancy of director or supervisor seat, the seat shall be filled immediately, provided that the term of the director or supervising filling the seat shall be until the end of the original term.	When there is more than $1/3$ vacancy in board seats, the board of directors shall convene a shareholders meeting to fill the seats in accordance with the law and the term shall be until the end of the original term.	In accordance with the establishment of audit committee as a replacement of supervisors
Article $21 - 1$	To convene a board meeting, the agenda shall be specified and a notice shall be 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.	To convene a board meeting, the agenda shall be specified and a notice shall be given to each director 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.	In accordance with the establishment of audit committee as a replacement of supervisors
Article 25	The supervisors may sit in board meetings and state their opinions, but shall not be entitled to voting rights.	delete	In accordance with the establishment of audit committee as a replacement of supervisors
Article 26	The remuneration for all directors, supervisors, and the president shall be determined by the board of directors based on the common standards of the industry.	The remuneration for all directors and the president shall be determined by the board of directors based on the common standards of the industry.	In accordance with the establishment of audit committee as a replacement of supervisors
Article 30	At the end of each accounting year of the Company, the board of directors shall prepare below statements, submit them to the supervisors for audit 30 days before the general shareholders meeting and then further submit them to the general shareholders meeting for approval 1. Business report. 2. Financial statements. 3. Profit sharing or loss compensation proposal	At the end of each accounting year of the Company, the board of directors shall prepare below statements, submit them to the audit committee for audit and issuance of a report 30 days before the general shareholders meeting and then further submit them to the general shareholders meeting for approval 1. Business report. 2. Financial statements. 3. Profit sharing or loss compensation proposal	In accordance with the establishment of audit committee as a replacement of supervisors
Article 34	These Articles of Association were established on 14 December 1975. 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	These Articles of Association were established on 14 December 1975. 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	1. Add the date of the 33rd revision. 2. In accordance with practical needs, delete the articles and contents of previous revisions

$\sim$ $\sim$

$\mathcal{A}^{\mathcal{A}}$

Before Amendment	After Amendment	Reason(s)for
		Amendment
August 1980.	August 1980.
The fifth amendment was made on 25	The fifth amendment was made on 25
July 1981.	July 1981.
The sixth amendment was made on 20	The sixth amendment was made on 20
July 1982.	July 1982.
The seventh amendment was made on 5	The seventh amendment was made on 5
August 1983.	August 1983.
The eighth amendment was made on 29	The eighth amendment was made on 29
August 1983.	August 1983.
The ninth amendment was made on 3	The ninth amendment was made on 3
December 1983.	December 1983. The tenth amendment was made on 21
The tenth amendment was made on 21 November 1985.	November 1985.
The eleventh amendment was made on 21	The eleventh amendment was made on 21
April 1986.	April 1986.
The twelfth amendment was made on 15	The twelfth amendment was made on 15
June 1988 as follows:	June 1988.
Business operated: Sale and purchase $\rightarrow$
Sales.
Increase in the amount of capital: One
Hundred Fifty-Five Million $\rightarrow$ Two
Hundred and Twenty Million.
Increase number of directors and
supervisors: Directors: $5 \rightarrow 7$ ,
Supervisors: $1 \rightarrow 2$ .
Holding special board meetings: Upon request by 3 or more directors $\rightarrow$ Upon
request by 4 or more directors.
Add: One managing supervisor, to be
elected by the elected supervisors from
among themselves.
The thirteenth amendment was made on	The thirteenth amendment was made on
10 August 1988 as follows: The chairman shall chair shareholders'	10 August 1988.
meetings. If the chairman is absent,
added: "The vice chairman shall chair the
meeting".
The directors constitute the board of
directors. Add: One person as vice chairman.
In a board meeting, if the chairman
cannot perform their duties, add: "The
vice chairman shall chair the meeting."
The fourteenth amendment was made on	The fourteenth amendment was made on
24 May 1990 as follows:	24 May 1990.
Increase in the amount of capital: Two Hundred and Twenty Million $\rightarrow$ Two
Hundred and Forty-Two Million Six
Hundred and Sixty Thousand.
The fifteenth amendment was made on 10	The fifteenth amendment was made on 10
December 1990 as follows:	December 1990.
Increase in the amount of capital: Two
Hundred Forty Two Million Six Hundred and Sixty Thousand $\rightarrow$ Two Hundred and
Fifty Million.
Two financial statements added for the
general shareholders' meeting: 1.
Shareholder equity variation table.2. Cash

$\sim$ $\sim$

$\sim$

$\bar{\beta}$

Article	Before Amendment	After Amendment	Reason(s)for Amendment
	flow statement. The sixteenth amendment was made on 15 May 1991 as follows: No. 4 of the business scope: Add operation and investment related to the above businesses: (subject to approval by	The sixteenth amendment was made on 15 May 1991.
	the Investment Review Commission, Ministry of Economic Affairs). Increase in the amount of capital: Two Hundred and Fifty Million $\rightarrow$ Two Hundred and Sixty-Eight Million. The directors constitute the board of directors, add one person as vice chairman.
	The seventeenth amendment was made on 8 April 1992 as follows: Add to scope of business: Manufacturing, sales, processing, import and export of lighting machinery, modules and relevant	The seventeenth amendment was made on 8 April 1992.
	equipment. 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 Million $\rightarrow$ Two Hundred and Eighty-Nine Million One Hundred and Eighty Thousand.
	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: 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	The eighteenth amendment was made on 13 September 1993.
	supervisors for audit 30 days 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: Increase in the amount of capital: Two	The nineteenth amendment was made on 24 September 1993.
	Hundred Eighty-Nine Million One Hundred and Eighty Thousand $\rightarrow$ Four Hundred and Fifty Million. Add: and president Add: other than the hiring and
	dismissal of managersDelete: hiring and dismissal of managers. The twentieth amendment was made on 11 November 1993 as follows: Face value per share is changed from	The twentieth amendment was made on 11 November 1993.

$\bar{z}$

$\bar{\bar{z}}$

Article	Before Amendment	After Amendment	Reason(s)for Amendment
	$$1,000$ per to $$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 Million $\rightarrow$ Five Hundred Million.	The twenty-first amendment was made on 13 May 1994.
	Increase number of supervisors: 2 supervisors $\rightarrow$ 2 to 3 supervisors. The twenty-second amendment was made on 29 May 1995 as follows: Increase in the amount of capital: Five Hundred Million $\rightarrow$ Six Hundred and	The twenty-second amendment was made on 29 May 1995.
	Thirty Million. The twenty-third amendment was made on 6 March 1996 as follows: Add $\rightarrow$ In accordance with common standard of the industry.	The twenty-third amendment was made on 6 March 1996.
	The twenty-fourth amendment was made on 4 June 1998 as follows: Increase in the amount of capital: Six Hundred and Thirty Million $\rightarrow$ Six	The twenty-fourth amendment was made on 4 June 1998.
	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 Ninety-Three Million $\rightarrow$ Seven Hundred and Sixty-Two Million	The twenty-fifth amendment was made on 15 June 1999.
	Three Hundred Thousand. Increase number of directors: 7 directors $\rightarrow$ 9 directors. The twenty-sixth amendment was made on 20 June 2000 as follows:	The twenty-sixth amendment was made on 20 June 2000.
	Amend dividend policy. The twenty-seventh amendment was made on 7 June 2001 as follows: Increase scope of business: Rail vehicle	The twenty-seventh amendment was made on 7 June 2001.
	and parts manufacturing business, rail vehicle and parts wholesale business, industrial plastics product manufacturing business, optical instrument manufacturing business, precision
	instrument wholesale business. 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 and addresses to the Company. Sample seal cards shall be completed and provided to the Company for safekeeping.
	Amend that the loss of any sample seal shall be handled in accordance with the Regulations Governing the

$\sim$

$\bar{\gamma}$

Article	Before Amendment	After Amendment	Reason(s)for Amendment
	Administration of Shareholder Services
	of Public Companies.
	Amend that the Company may collect an
	administrative charge upon re-issuance or
	replacement of new share certificates.
	The twenty-eighth amendment was made	The twenty-eighth amendment was made
	on 28 June 2002 as follows:	on 28 June 2002.
	New article.
	Amend period of suspension of share
	transfer registration before general
	shareholders meeting and special
	meeting.
	Amend date of general shareholders
	meeting and special meeting and date of
	meeting notice.
	Delete stock discount restriction. Amend date for distribution of minutes of
	shareholders' meetings, manner of public
	announcement and retention period.
	Add percentage of shares by all directors
	and supervisors and audit standard.
	Amend statements to be submitted to the
	supervisors for audit.
	The twenty-ninth amendment was made	The twenty-ninth amendment was made
	on 13 June 2007 as follows:	on 13 June 2007.
	Change of name of competent securities
	authority.
	Amendment in accordance with Article 3
	of Rules for Meetings of Board of Directors.
	Amendment in accordance with Article 9
	of Rules for Meetings of Board of
	Directors.
	Amendment in accordance with Article
	17 of Rules for Meetings of Board of
	Directors.
	The thirtieth amendment was made on 14	The thirtieth amendment was made on 14
	June 2010 as follows: There is no obligation to print share	June 2010.
	certificates for the shares issued by the
	Company.
	The thirty-first amendment was made on	The thirty-first amendment was made on
	18 June 2012 as follows:	18 June 2012.
	Tainan City, Taiwan Province $\rightarrow$ Tainan
	City.
	Minutes of shareholders' meetings may
	be distributed in the manner of public
	announcements.
	Add notice for meetings of board of directors may be issued by email or by
	fax.
	Delete 1 managing supervisor for the
	Company.
	The thirty-second amendment was made	The thirty-second amendment was made
	on 13 June 2016 as follows:	on 13 June 2016.
	Amend and add independent directors to
	be elected under candidate nomination
	system.

$\hat{\mathcal{L}}$

Article	Before Amendment	After Amendment	Reason(s)for Amendment
	New article to add provision and issuance of employee remuneration. Article 31: Delete provision for employee bonus.
		The thirty-third amendment was made on 12 June $2020$ .

$\mathcal{L}$

$\ddot{\phantom{a}}$

$\bar{z}$

Appendix 6: Amendments to Rules for Shareholders' Meetings

$\mathcal{A}$

Article	Before Amendment	After Amendment	$Reason(s)$ for Amendment
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.	delete	cooperate with the amendment of laws

Amendments to Rules for Shareholders' Meetings

Appendix 7: Amendments to the Regulations for the Election of Directors and Supervisors

Article	Before Amendment	After Amendment	Reason(s) for Amendment
Regulations name	Regulations for Election of Directors and Supervisors	Regulations for Election of Directors	In accordance with the establishment of audit committee as a replacement of supervisors
Article 1	These Regulations are established in accordance with the Company Act and the articles of association of the Company. All elections of directors and supervisors of the Company shall be governed by these Regulations.	These Regulations are established in accordance with the Company Act and the articles of association of the Company. All elections of directors of the Company shall be governed by these Regulations.	In accordance with the establishment of audit committee as a replacement of supervisors
Article 2	Directors and supervisors of the Company shall be elected in shareholders' meetings.	Directors of the Company shall be elected in shareholders' meetings.	In accordance with the establishment of audit committee as a replacement of supervisors
Article 3	Directors and supervisors of the Company shall be elected through nominative voting. During the voting, the voters may be identified by their shareholder account numbers in lieu of their names.	Directors of the Company shall be elected through nominative cumulative voting. The voters may be identified by the number of their attendance cards printed on the voting ballots in lieu of their names.	In accordance with the establishment of audit committee as a replacement of supervisors
Article 4	In electing directors and supervisors of the Company, each share is entitled to the number of voting rights that are equivalent to the number of directors and supervisors to be elected. The board of directors shall prepare ballots in the same number of directors and supervisors to be elected and distribute them to each attending shareholder. These ballots may be cast for the same candidate or allocated to multiple candidates.	In electing directors of the Company, each share is entitled to the number of voting rights that are equivalent to the number of directors to be elected. The board of directors shall prepare ballots in the same number of directors to be elected and distribute them to each attending shareholder. These ballots may be cast for the same candidate or allocated to multiple candidates.	In accordance with the establishment of audit committee as a replacement of supervisors
Article 5	Directors and supervisors of the Company shall be elected by a shareholders' meeting from among persons with legal capacities. Subject to the number of seats provided in the articles of association of the Company, those having received the highest number votes as reflected by the ballots shall be elected as independent directors, non-independent directors, or supervisors in the order of sequence. If two or more candidates receive the same number of votes and there are not enough seats for allocation, a random draw shall be conducted among the candidates who have received equal number of votes. If	Directors of the Company shall be elected by a shareholders' meeting from among persons with legal capacities Subject to the number of seats provided in the articles of association of the Company, those having received the highest number of votes as reflected in the ballots shall be elected as independent directors and non-independent directors in the order of sequence. If two or more candidates receive the same number of votes and there are not enough seats for allocation, a random draw shall be conducted among the candidates who have received equal number of votes. If any such candidate is not present, the	In accordance with the establishment of audit committee as a replacement of supervisors

Amendments to the Regulations for the Election of Directors and Supervisors

Article	Before Amendment	After Amendment	$Reason(s)$ for Amendment
	any such candidate is not present, the chairman shall participate in the random draw on his/her behalf. Any person elected as director and supervisor at the same time shall make his/her own decision on whether to serve as director or supervisor. If a person elected as director or supervisor is found and confirmed to have non-compliant personal information or is unfit in accordance with the applicable laws, the vacancy shall be filled by the next person who has received the next higher number of votes.	chairman shall participate in the random draw on his/her behalf. If a person elected as director is found and confirmed to have non-compliant personal information or be unfit in accordance with the applicable laws, the vacancy shall be filled by the next person who has received the next higher number of votes.
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$
Article 13	Election notices shall be distributed to the elected directors and supervisors by the board of directors of the Company.	Election notices shall be distributed to the elected directors by the board of directors of the Company.	In accordance with the establishment of audit committee as a replacement of supervisors

$\ddot{\phantom{a}}$

$\bar{\mathcal{A}}$

Ŷ,

Appendix 8: Amendments to Procedure for Acquisition or Disposal of Assets

Amendments to Procedure for Acquisition or Disposal of Assets

Article	Before Amendment	After Amendment	Reason(s) for Amendment
			In accordance with
Article 6	Procedures for Real Property,	Procedures for Real Property,	the establishment of
	Equipment or Right-of-Use Assets	Equipment or Right-of-Use Assets
	Evaluation Procedure L.	Evaluation Procedure L.	audit committee as a
	$\sim$ omitted $\sim$ (1)	$\sim$ omitted $\sim$ (1)	replacement of
	(II) With respect to the	(II) With respect to the Company's	supervisors
	Company's acquisition or	acquisition or disposal of
	disposal of assets that are	assets that is subject to the
	subject to the approval of the	approval of the board of
	board of directors under its	directors under its procedures
	procedures or other laws or	or other laws or regulations, if
	regulations, if a director	a director expresses dissent
	expresses dissent and it is	and it is contained in the
	contained in the minutes or a	minutes or a written
	written statement, the	statement, the Company shall
	Company shall submit the	submit the director's
	director's dissenting opinion	dissenting opinion to the audit
	to each supervisor. Where	committee. Where the
	the position of independent	position of independent
	director has been created in	director has been created in
	accordance with the Securities	accordance with the Securities
	and Exchange Act, when a	and Exchange Act, when a
	transaction involving the	transaction involving the
	acquisition or disposal of	acquisition or disposal of
	assets is submitted for	assets is submitted for
	discussion by the board of	discussion by the board of
	directors, the board of	directors, the board of
	directors shall take into full	directors shall take into full
	consideration each	consideration each
	independent director's	independent director's
	opinions. If an independent	opinions. If an independent
	director objects to or	director objects to or
	expresses reservations about	expresses reservations about
	any matter, it shall be	any matter, it shall be recorded
	recorded in the minutes of the	in the minutes of the board of
	board of directors meeting.	directors meeting.
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$
Article 7	Procedures for the Acquisition or	Procedure for Acquisition or Disposal of Securities	In accordance with the establishment of
	Disposal of Securities	Evaluation Procedure	audit committee as a
	Evaluation Procedure L $\sim$ omitted $\sim$	I. $\sim$ omitted $\sim$	replacement of
	(1) (II) With respect to the	(1) With respect to the Company's (II)	supervisors
	Company's acquisition or	acquisition or disposal of
	disposal of assets that is	assets that is subject to the
	subject to the approval of the	approval of the board of
	board of directors under its	directors under its procedures
	procedures or other laws or	or other laws or regulations, if
	regulations, if a director	a director expresses dissent
	expresses dissent and it is	and it is contained in the
	contained in the minutes or a	minutes or a written
	written statement, the	statement, the Company shall
	Company shall submit the	submit the director's
	director's dissenting opinion	dissenting opinion to the audit committee. Where the
	to each supervisor. Where the position of independent	position of independent
	director has been created in	director has been created in

$\ddot{\phantom{1}}$

Article	Before Amendment	After Amendment	$Reason(s)$ for Amendment
	accordance with the Securities	accordance with the Securities
	and Exchange Act, when a	and Exchange Act, when a
		transaction involving the
	transaction involving the acquisition or disposal of	acquisition or disposal of
	assets is submitted for	assets is submitted for
	discussion by the board of	discussion by the board of
	directors, the board of	directors, the board of
	directors shall take into full	directors shall take into full
	consideration each	consideration each
	independent director's	independent director's
	opinions. If an independent	opinions. If an independent
	director objects to or	director objects to or
	expresses reservations about	expresses reservations about
	any matter, it shall be	any matter, it shall be recorded
	recorded in the minutes of the	in the minutes of the board of
	board of directors meeting.	directors meeting.
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$
Article 8	Procedures for Related Party	Procedure for Related Party	In accordance with
	Transactions	Transactions	the establishment of
	$\sim$ omitted $\sim$ I.	$\sim$ omitted $\sim$ L	audit committee as a
	Evaluation and Procedure Н.	Evaluation and Procedure Н.	replacement of supervisors
	When the Company intends to	When the Company intends to
	acquire or dispose of real property or right-of-use assets thereof from	acquire or dispose of real property or right-of-use assets thereof from
	or to a related party, or when it	or to a related party, or when it
	intends to acquire or dispose of	intends to acquire or dispose of
	assets other than real property or	assets other than real property or
	right-of-use assets thereof from or	right-of-use assets thereof from or
	to a related party and the	to a related party and the
	transaction amount reaches 20%	transaction amount reaches 20% or
	or more of the Company's paid-in	more of the Company's paid-in
	capital, 10% or more of the	capital, 10% or more of the
	Company's total assets or NT\$300	Company's total assets or NT\$300
	Million or more, except in trading	Million or more, except in trading
	of domestic government bonds or	of domestic government bonds or
	bonds under repurchase and	bonds under repurchase and resale
	resale agreements or subscription	agreements or subscription or
	or redemption of money market	redemption of money market funds
	funds issued by domestic securities investment trust	issued by domestic securities investment trust enterprises, the
	enterprises, the Company may not	Company may not proceed to enter
	proceed to enter into a transaction	into a transaction contract or make
	contract or make a payment until	a payment until the following
	the following matters have been	matters have been approved by the
	approved by the board of directors	audit committee and the board of
	and recognized by the supervisors:	directors:
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$
	The calculation of the transaction	The calculation of the transaction
	amount referred to in the previous	amount referred to in the previous
	paragraph shall be made in accordance with Sub-paragraph	paragraph shall be made in accordance with Subparagraph (V),
	(V), Paragraph I, Article 13 and	Paragraph I, Article 13 and "within
	"within the preceding year" as	the preceding year" as used herein
	used herein refers to the year	refers to the year preceding the
	preceding the date of occurrence	date of occurrence of the current
	of the current transaction. Items	transaction. Items that have been
	that have been approved by the	approved by the audit committee
	board of directors and recognized	and the board of directors in

$\ddot{\phantom{0}}$

Article	Before Amendment	After Amendment	$Reason(s)$ for
			Amendment
	by the supervisors in accordance	accordance with this Procedure
	with this Procedure need not be	need not be counted toward the
	counted toward the transaction	transaction amount. With respect
	amount. With respect to the	to the types of transactions listed
	types of transactions listed below,	below, when to be conducted
	when they are to be conducted	between the company and its
	between the company and its	subsidiaries or between its
	subsidiaries or between its	subsidiaries in which it directly or
	subsidiaries in which it directly or	indirectly holds 100% of the issued
	indirectly holds 100% of the	shares or authorized capital, the
	issued shares or authorized	board of directors may pursuant to
	capital, the board of directors may	Subparagraph (III), Paragraph I,
		Article 7 delete the board chairman
	pursuant to Sub-paragraph (III),
	Paragraph I, Article 7 delete the	to decide such matters when the
	board chairman to decide such	transaction is within a certain
	matters when the transaction is	amount and have the decision
	within a certain amount and have	subsequently submitted to and
	the decision subsequently	ratified by the next board of
	submitted to and ratified by the	directors meeting:
	next board of directors meeting: $\sim$ omitted $\sim$	$\sim$ omitted $\sim$
	III. Appraisal of Reasonableness of	III. Appraisal of Reasonableness of

	Transaction Cost $\sim$ omitted $\sim$	Transaction Cost $\sim$ omitted $\sim$

	$(V) \sim$ omitted $\sim$	(V) ~omitted~
	2. Supervisors shall comply with Article 218 of the	2. Independent director members of the audit
	Company Act. Where an	committee shall comply with
	audit committee has been	Article 218 of the Company
	established in accordance	Act.

	with the Securities and
	Exchange Act, the preceding
	part of this sub-paragraph
	shall apply mutatis mutandis
	to the independent director
	members of the audit
	committee.
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$
Article 9	Procedure for Acquisition or Disposal of	Procedure for Acquisition or Disposal of	In accordance with
	Intangible Assets or right-of-use assets	Intangible Assets or right-of-use assets	the establishment of
	thereof or membership	thereof or membership	audit committee as a
	(1) Evaluation Procedure	(1) Evaluation Procedure	replacement of
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$	supervisors
	$(1-2)$ If the acquisition or disposal of	$(1-2)$ 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 audit
	supervisor. If the Company has	committee. 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

Article	Before Amendment	After Amendment	Reason(s) for Amendment
	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
	reservation, it shall be specified in	reservation, it shall be specified in
	the minutes of the board meeting.	the minutes of the board meeting.
	If an audit committee has been	If an audit committee has been
	established in accordance with the	established in accordance with the
	Securities Transaction Act,	Securities Transaction Act,
	transactions of major assets or	transactions of major assets or
	derivatives shall be approved by	derivatives shall be approved by
	1/2 of all members of the audit	1/2 of all members of the audit
	committee and submitted to the	committee and submitted to the
	board of directors for resolution.	board of directors for resolution.
	Paragraphs 3 and 4, Article 16	Paragraphs 3 and 4, Article 16
	apply mutatis mutandis.	apply mutatis mutandis.
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$ Procedure for Engaging in Derivatives	In accordance with
Article 11	Procedure for Acquisition or Disposal of Derivatives	Trading	the establishment of
	Transaction Principles and I.	Transaction Principles and I.	audit committee as a
	Guidelines	Guidelines	replacement of
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$	supervisors,
	(V) Establishment of Total	(V) Establishment of Total Contract	revision of loss limit
	Contract Amount and Loss Limit	Amount and Loss Limit	and wording
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$	amendments
	3. Establishment of loss limit:	3. Establishment of loss limit:
	The purpose of hedging	The purpose of hedging
	transactions is to avoid the risk	transactions is to avoid the risk of
	of all import payments and not to	all import payments and not to
	seek foreign exchange difference.	seek foreign exchange difference. Loss limit for individual contracts
	Therefore there is no need to establish a loss limit.	shall be 10% of the transaction
		contract amount and the loss limit
		for all contracts shall be 20% of
		the total amount of all transaction
		contracts.
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$
	III. Internal Audit System	III. Internal Audit System
	Internal audit personnel shall	Internal audit personnel shall
	periodically make a determination	periodically make a determination
	of the suitability of internal	of the suitability of internal
	controls on derivatives and conduct a monthly verification of	controls on derivatives and conduct a monthly audit of how faithfully
	how faithfully derivatives trading	derivatives trading by the trading
	by the trading department	department adheres to the
	complies with the procedures for	procedures for engaging in
	engaging in derivatives trading,	derivatives trading and prepare an
	with analysis of the trading cycle,	audit report. If any material
	and prepare an audit report. If	violation is discovered, the audit
	any material violation is	committee shall be notified in
	discovered, the supervisors shall	writing.
	be notified in writing.
	Where independent directors have been appointed in accordance with
	the Securities and Exchange Act.

Article	Before Amendment	After Amendment	$Reason(s)$ for Amendment
	for matters for which notice shall be given to the supervisors under the preceding paragraph, a written notice shall also be given to the independent directors. Where an audit committee has been established in accordance with the Securities and Exchange Act, the provisions of the previous paragraph related to supervisors shall apply mutatis mutandis to the audit committee. $\sim$ omitted $\sim$ V. Supervision and management principles by the board of directors about derivatives trading (I) The board of directors shall designate senior management personnel to pay continuous attention to monitoring and controlling derivatives trading risks. The management principles are as follows: 1. Periodically evaluate the risk management measures currently employed are appropriate and are faithfully conducted in accordance with this Procedure and the Procedure for Engaging in Derivatives Trading formulated by the Company. $\sim$ omitted $\sim$	$\sim$ omitted $\sim$ V. Supervision and management principles by board of directors about derivatives trading (I) The board of directors shall designate senior management personnel to pay continuous attention to monitoring and controlling derivatives trading risk. The management principles are as follows: 1. Periodically evaluate the risk management measures currently employed are appropriate and are faithfully conducted in accordance with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies and the procedures the Procedure for Engaging in Derivatives Trading formulated by the Company. $\sim$ omitted $\sim$
Article 16	Implementation and Amendment Following approval by the board of	Implementation and Amendment Following approval by the board of	In accordance with the establishment of audit committee as a
	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	directors, the Procedure for Acquisition or Disposal of Assets by the Company shall be 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 audit committee. 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	replacement of supervisors

$\ddot{\phantom{0}}$

$\bar{\mathcal{A}}$

Article	Before Amendment	After Amendment	Reason(s) for Amendment
	objection or reservation, it shall be specified in the minutes of the board meeting.	specified in the minutes of the board meeting.
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$

$\hat{\boldsymbol{\beta}}$

$\hat{\beta}$

$\bar{\mathcal{A}}$

$51$

Appendix 9: Amendments to Regulations Governing Loaning of Funds

Amendments to Regulations Governing Loaning of Funds

Article	Before Amendment	After Amendment	Reason(s) for Amendment
Article 2	Purpose These Regulations are established as the basis for the loaning of funds to others in order to seek sound management of its funds and to reduce operating risks.	delete	Matters that should be paid attention to should be abolished according to the listed company's. capital loan and others
Article 4	Total Loan Amount Limit and Individual Loan Amount Limit $\sim$ omitted $\sim$ For the loaning of funds among overseas companies of which 100% voting shares are directly or indirectly held by the Company, the accumulated balance amount of short-term funding shall not exceed 40% of the Company's net value in its latest financial statements	Total Loan Amount Limit and Individual Loan Amount Limit $\sim$ omitted $\sim$ For the loaning of funds among overseas companies of which 100% voting shares are directly or indirectly held by the Company or the loaning of funds to the Company by any overseas company of which 100% voting shares are directly or indirectly held by the Company, the accumulated balance amount of short-term funding shall not exceed 40% of the Company's net value in its latest financial statements	Amendment in accordance with the law
Article 6	Loan Period and Calculation of Interest $\sim$ omitted $\sim$ When loans are granted to an overseas company of which 100% of the voting shares is held directly or indirectly by the Company, the funding period shall not exceed 3 years.	Loan Period and Calculation of Interest $\sim$ omitted $\sim$ When loans are granted to an overseas company of which 100% voting shares is held directly or indirectly by the Company or granted to the Company by any overseas company of which 100% voting shares are directly or indirectly held by the Company, the funding period shall not exceed 3 years	Amendment in accordance with the law
Article 8	Subsequent control procedure for loans granted - overdue debt handling procedures $\sim$ omitted $\sim$ 3. The Borrower shall repay the principal and interest immediately upon maturity of the loan. If the loan cannot be repaid upon maturity and an extension is required, it shall file a prior request for submission to the board of directors for prior approval In case of a breach, the Company may dispose of and claim from the collateral or guarantee provided in accordance with the law.	Subsequent control procedure for loans granted - overdue debt handling procedure $\sim$ omitted $\sim$ 3. The Borrower shall repay the principal and interest immediately upon maturity of the loan. If the loan cannot be repaid upon maturity, the Company may dispose of and claim from the collateral or guarantee provided in accordance with the law.	Amendment in accordance with the law
Article 9	Public Announcement and Reporting Before the 10 ^th day of each month, the amount of loans granted to others by the Company and its subsidiaries in the previous month, together with the monthly turnover, shall be publicly announced by the accounting department. If the balance of the loan reaches any of the following thresholds,	Public Announcement and Reporting Before the 10 ^th day of each month, the balance amount of loans granted to others by the Company and its subsidiaries in the previous month shall be publicly announced by the Company. If the loan by the Company reaches any of the following thresholds, a public filing shall be made within 2	Amendment in accordance with the law

Article	Before Amendment	After Amendment	$Reason(s)$ for Amendment
	a public filing shall be made within 2 days from the date of occurrence of the	days from the date of occurrence of the event
	event $\sim$ omitted $\sim$ If any subsidiary of the Company is not a domestic publicly listed company, any public filing that should be done by such subsidiary under sub-paragraph (3) of the previous paragraph shall be done by the Company. The balance of the loan for the subsidiary under the previous paragraph as a percentage to the net value shall be calculated based on the balance of the loan for such subsidiary as a percentage to the net value of the Company. The "date of occurrence of the event" referred to in these Regulations means the transaction contracting date, payment date, date of board resolution or other date on which the transaction	$\sim$ omitted $\sim$ If any subsidiary of the Company is not a domestic publicly listed company, any public filing that should be done by such subsidiary under subparagraph (3) of the previous paragraph shall be done by the Company The balance of the loan for the subsidiary under the previous paragraph as a percentage to the net value shall be calculated based on the balance of the loan for such subsidiary as a percentage to the net value of the Company. The "date of occurrence of the event" referred to in these Regulations means the contracting date, payment date, date of board resolution or other date on which the counterparty of the loan, and
	counterparty, and the transaction amount are ascertained, whichever is the earliest.	the amount are ascertained, whichever is the earliest.
		"Public filing" refers to input in the information filing website designated by the Financial Supervisory Commission.
Article10	Others 1. When a subsidiary of the Company plans to provide a loan to another person as required for business, the Company shall procure that it establishes a procedure for loaning of funds in accordance with the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies and act according to such procedure established. 2. To reinforce control over the loaning of funds, the audit unit shall audit the above procedure and the execution status thereof at least every quarter and written records shall be made. Upon discovery of any material breach, a written notice shall be given to each supervisor and a notice shall be given to the Financial Supervisory Commission.	Others 1. When a subsidiary of the Company plans to provide a loan to another person as required for business, the Company shall procure that it establishes a procedure for loaning of funds in accordance with the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies and act according to such procedure established. 2. To reinforce control over the loaning of funds, the audit unit shall audit the above procedure and the execution status thereof at least every quarter and written records shall be made. Upon discovery of any material breach, a written notice shall be given to audit committee and a notice shall be given to the Financial Supervisory Commission.	Amendment in accordance with the establishment of audit committee as a replacement of auditors and in accordance with the law
	3. The Company shall evaluate the loaning of funds and provide sufficient provisions for bad debt in accordance with generally accepted accounting principles. Relevant information shall be duly disclosed in the financial report and relevant information shall be	3. The Company shall evaluate the loaning of funds and provide sufficient provisions for bad debt in accordance. Relevant information shall be duly disclosed in the financial report and relevant information shall be provided to the certifying accountant to perform

$\ddot{\phantom{0}}$

Article	Before Amendment	After Amendment	$Reason(s)$ for Amendment
	provided to the certifying accountant to	required audit procedure.
	perform required audit procedure.
	4. When any manager or responsible	4. When any manager or responsible
	person of the Company takes advantage of his/her job duties to	person of the Company takes advantage of his/her job duties to
	engage in the loaning of funds in	engage in the loaning of funds in
	breach of the law, sanctions shall be	breach of the law, sanctions shall be
	imposed on the relevant person in	imposed on the relevant person in
	accordance with the breach.	accordance with the breach.
	5.If the beneficiary of a loan granted no	5.If the beneficiary of a loan granted no
	longer meets the requirements under these Regulations or if the limit amount	longer meets the requirements under these Regulations or if the limit amount
	has been exceeded due to change of	has been exceeded due to change of
	circumstances, a remedy plan shall be	circumstances, a remedy plan shall be
	established. Such remedy plan shall be	established. Such remedy plan shall be
	delivered to each supervisor and	delivered to audit committee and
	remedies shall be completed in	remedies shall be completed in
	accordance with the schedule of the	accordance with the schedule of the
	plan. $\sim$ omitted $\sim$	plan. $\sim$ omitted $\sim$
Article 11	Miscellaneous	Miscellaneous	Amendment in
	Following approval by the board of	Following approval by the board of	accordance with the
	directors, these Regulations shall be	directors, these Regulations shall be	establishment of
	sent to each supervisor and submitted	submitted to the shareholders' meeting	audit committee as a
	to the shareholders' meeting for approval. If any director voices any	for approval. If any director voices any objection, with a record or written	replacement of auditors and in
	objection, with a record or written	statement, the Company shall also	accordance with the
	statement, the Company shall also	submit the director's objection to the	law
	submit the director's objection to each	shareholders' meeting for discussion.
	supervisor and the shareholders'	The same shall be applicable in case of
	meeting for discussion. The same shall be applicable in case of amendment.	amendment.
	If the Company has independent	When these Regulations are submitted
	directors, when the "Regulations	to the board of directors for discussion
	Governing Loaning of Funds" are	in accordance with the previous
	submitted to the board of directors for	paragraph, the opinions of each
	discussion, as required, the opinions of each independent director shall be fully	independent director shall be fully taken into consideration. Any objecting
	taken into consideration and the	opinion or reservation opinion by any
	express concurring or objecting	independent director shall be specified
	opinions and the reasons for the	in the minutes of the board meeting.
	objection shall be included in the
	minutes of the board meeting.	The establishment or amendment of
		these Regulations shall be subject to the
		approval by 1/2 or more of all audit
		committee members and shall be
		submitted to the board of directors for
		resolution.
		If the approval by 1/2 or more of all audit committee members under the
		previous paragraph is not acquired, an
		approval may be granted by 2/3 or
		more of all directors, with a
		specification about the resolution of the
		audit committee in the minutes of the board meeting.
		"All members of the audit committee"

$\ddot{\phantom{0}}$

Article	Before Amendment	After Amendment	Reason(s) for Amendment
		and "all directors" referred to in the previous paragraph mean the current members and directors.

Appendix 10: Amendments to Regulations Governing Endorsements and

Guarantees

$\hat{\boldsymbol{\beta}}$

$\sim$

$\hat{\boldsymbol{\beta}}$

		Amendment to Regulations Governing Endorsements and Guarantees
Article	Before Amendment	After Amendment	Reasons for
			Amendment
Article 4	Decision Making and Authorization	Decision Making and Authorization	Amendment in
	Levels	Levels	accordance with the
	The Company shall only grant an	The Company shall only grant an	law
	endorsement or guarantee after	endorsement or guarantee after
	approval by resolution of the board of	approval by resolution of the board of
	directors. However, if the amount of	directors. However, if the amount of
	the endorsement or guarantee does not	the endorsement or guarantee does not
	exceed NT\$10 million, it may be	exceed NT\$10 million, it may be
	approved by the chairman first,	approved by the chairman first,
	followed by reporting afterwards to the	followed by reporting afterwards to the
	next board meeting for ratification.	next board meeting for ratification.
	The granting of the endorsement or
	guarantee and relevant matters shall be
	submitted to the shareholders' meeting
	for records.
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$
		When the Company grants an
		endorsement or guarantee, it shall take
		into full consideration each independent
		director's opinions. The independent
		directors' express concurring or
		objecting opinions and the reasons for
		objection shall be included in the
		minutes of the board meeting.
Article 7	Amount Limit of Endorsements and	Amount Limit of Endorsements and	Amendment in
	Guarantees	Guarantees	accordance with the
	The total amount of the Company's 1.	The total amount of the Company's 1.	establishment of
	liabilities from endorsements and	endorsements and guarantees shall	audit committee as a
	guarantees shall be limited to 30%	be limited to 30% of its net value	replacement of
	of its net value based on the latest	based on the latest financial	auditors and in
	financial statements. The amount	statements. The amount of	accordance with the
	of endorsement or guarantee	endorsement or guarantee granted	law
	granted to any single enterprise	to any single enterprise shall not
	shall not exceed 10% of the	exceed 10% of the Company's net
	Company's net value based on the	value based on the latest financial
	latest financial statements.	statements.
	The total amount of endorsements	The total amount of endorsements
	and guarantees by the Company	and guarantees by the Company
	and its subsidiaries shall be limited	and its subsidiaries shall be limited
	to 50% of the Company's net value	to 50% of the Company's net value
	based on the latest financial	based on the latest financial
	statements and the amount of	statements and the amount of
	endorsements and guarantees	endorsements and guarantees
	granted to any single enterprise	granted to any single enterprise
	shall not exceed 20% of the	shall not exceed 20% of the
	Company's net value based on the	Company's net value based on the
	latest financial statements.	latest financial statements.
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$
	3. When the Company needs to grant	When the Company needs to grant 3.
	endorsements or guarantees in	endorsements or guarantees in
	excess of the amount limit under	excess of the amount limit under
	these Regulations due to business	these Regulations due to business
	requirements, it shall seek approval	requirements and if the conditions

$\overline{a}$ $\overline{a}$ $\overline{b}$ $\overline{a}$ $\overline{1}$

$\bar{z}$

$\hat{\mathcal{A}}$

$\sim$ $\sim$

Article	Before Amendment	After Amendment	Reasons for Amendment
	from the board of directors and the majority of directors shall provide a joint guarantee to cover the losses that the Company may suffer due to the excess of the amount limit. The Regulations and Procedure Governing Endorsements and Guarantees shall also be amended and submitted to the shareholders' meeting for ratification. If the shareholders' meeting disapproves, a plan shall be established to eliminate the portion of excess within a certain period. If the beneficiary of any 4. endorsement or guarantee granted by the Company no longer meets the requirements under these Regulations, or if the limit amount has been exceeded due to change of circumstances, a remedy plan shall be established Such remedy plan shall be delivered to the supervisors and remedies shall be completed in accordance with the schedule of the plan.	required in these Regulations are satisfied, it shall seek approval from the board of directors and the majority of directors shall provide a joint guarantee to cover the losses that the Company may suffer due to the excess of the amount limit. These Regulations and Procedures Governing Endorsements and Guarantees shall also be amended and submitted to the shareholders' meeting for ratification. If the shareholders' meeting disapproves, a plan shall be established to eliminate the portion of excess within a certain period. During discussion by the board of directors under the previous paragraph, the opinions of each independent director shall be fully taken into consideration and the express concurring or objecting opinions and the reasons for objection shall be included in the minutes of the board meeting. If the beneficiary of any 4. endorsement or guarantee granted by the Company no longer meets the requirements under these Regulations, or if the limit amount has been exceeded due to change of circumstances, a remedy plan shall be established. Such remedy plan shall be delivered to the audit committee and remedies shall be completed in accordance with the schedule of the plan.
Article 8	Threshold, Deadline and Contents of Announcement and Report Before the 10 ^th day of each month, 1. the accounting unit shall make a public filing of the balance amount of endorsements and guarantees granted by the Company and its subsidiaries (that are not domestic publicly listed companies) in the previous month, together with the amount of turnover, with the Financial Supervisory Commission in the prescribed format before the prescribed deadline on a monthly basis through the Internet information system. In addition to monthly public filing 2. of the balance amount of endorsements and guarantees. when the balance amount of	Threshold, Deadline, and Contents of Announcement and Report Before the 10 ^th day of each month, 1. the Company shall make a public filing of the balance amount of endorsements and guarantees granted by the Company and its subsidiaries in the previous month. When endorsements and 2. guarantees reach any one of the below thresholds, a public filing shall be made within 2 days from	Amendment in accordance with the law

$\bar{z}$

Article	Before Amendment	After Amendment	Reasons for Amendment
	endorsements and guarantees	the date of occurrence of the event:
	granted by the Company and its	$\sim$ omitted $\sim$
	subsidiaries (that are not domestic
	publicly listed companies) reaches
	any one of the below thresholds, the
	accounting unit shall make a public
	filing within 2 days from the date of
	occurrence of the event and key in the information on the Market
	Observation System:
	$\sim$ omitted $\sim$
	(3) When the balance amount of	(3) When the balance amount of
	endorsements and guarantees	endorsements and guarantees
	granted by the Company and its	granted by the Company and its
	subsidiaries granted to any	subsidiaries granted to any
	single enterprise reaches	single enterprise reaches NT\$10
	NT\$10 million or more and the	million or more and the total
	total balance amount of their	balance amount of their
	endorsements and guarantees,	endorsements and guarantees,
	long-term investments and	book amount for investments
	loaning of funds reaches 30% or	under equity method and loaning of funds reaches 30% or
	more of the Company's net value in its latest financial	more of the Company's net value
	statements.	in its latest financial statements.
	$\sim$ omitted $\sim$	$\sim$ omitted $\sim$
	"Public filing" means the key-in of 4.	"Public filing" means the key-in of 4.
	information on the information	information on the information
	filing website designated by the	filing website designated by the
	Financial Supervisory Commission	Financial Supervisory Commission.
	Executive Yuan. The "date of occurrence of the event"	The "date of occurrence of the event"
	referred to in these Regulations means	referred to in these Regulations means
	the transaction contracting date,	the contracting date, payment date, date
	payment date, date of board resolution	of board resolution or other date on
	or other date on which the transaction	which the counterparty of endorsement
	counterparty and the transaction	or guarantee and the amount are
	amount are ascertained, whichever date	ascertained, whichever date is the
	is the earliest.	earliest.	Amendment in
Article 9	Others	Others	accordance with the
	1. The status of endorsements and guarantees by the Company and its	Deleted	establishment of
	subsidiaries within each operating		audit committee as a
	year and matters related thereto shall		replacement of
	be submitted to the shareholders'		auditors and in
	meeting in the following year for		accordance with the
	records.		law
	2. Following approval by the board of	1. Following approval by the board of directors, these Regulations shall be
	directors, these Regulations shall be delivered to each supervisor and	submitted to the shareholders'
	submitted to the shareholders'	meeting for approval If any
	meeting for approval If any	director voices any objection, with a
	director voices any objection, with a	record or written statement, the
	record or written statement, the	Company shall also submit it to the
	Company shall also deliver such	shareholders' meeting for discussion. The same shall be applicable in the
	objection to each supervisor and submit it to the shareholders'	event of amendment.
	meeting for discussion. The same	When these Regulations are
	shall be applicable in the event of	submitted to the board of directors

$\overline{\phantom{a}}$

$\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\$

Article	Before Amendment	After Amendment	Reasons for Amendment
	amendment. If the Company already has independent directors, when the "Regulations Governing Endorsements and Guarantees" are submitted to the board of directors for discussion, the opinions of each independent director shall be taken into full consideration and their express opinions for approval or objection and the grounds for objection shall be included in the records of the board meeting.	for discussion, the opinions of each independent director shall be taken into full consideration. If an independent director objects to or expresses reservations about any matter, it shall be specified in the minutes of the board of meeting. The establishment or amendment of these Regulations shall be subject to the approval by 1/2 or more of all audit committee members and shall be submitted to the board of directors for resolution. If the approval by 1/2 or more of all audit committee members under the previous paragraph is not acquired. an approval may be granted by $2/3$ or more of all directors, with a specification about the resolution of the audit committee in the minutes of the board meeting. "All members of the audit committee" and "all directors"
	3. If any manager or processing staff of the Company engages in any act of endorsement or guarantee in breach of the law by taking advantage of his/her job duties, the relevant persons shall be sanctioned in accordance with the event of breach. 4. Internal auditors of the Company shall audit the endorsement and guarantee procedure and the execution status thereof at least every quarter and written records shall be made. Upon discovery of any material breach, a written notice shall be given to each supervisor. 5. The Company shall follow the Financial Accounting Reporting Standards No. 9 and assess or provide for contingent losses from endorsements and guarantees. Information about endorsements and guarantees shall also be duly disclosed in the financial reports. Relevant information shall be provided to the certifying accountant to perform necessary audit procedure. 6. When a subsidiary of the Company	referred to in the previous paragraph means current members and directors. 2. If any manager or processing staff of the Company engages in any act of endorsement or guarantee in breach of the law by taking advantage of his/her job duties, the relevant persons shall be sanctioned in accordance with the event of breach. 3. Internal auditors of the Company shall audit the endorsement and guarantee procedure and the execution status thereof at least every quarter and written records shall be made. Upon discovery of any material breach, a written notice shall be given to the audit committee. 4. The Company shall assess or provide for contingent losses from endorsements and guarantees. Information about endorsements and guarantees shall also be duly disclosed in the financial reports. Relevant information shall be provided to the certifying accountant to perform necessary audit procedure. 5. When a subsidiary of the Company
	plans to provide an endorsement or guarantee for another person, the Company shall ensure that it establishes a procedure for	plans to provide an endorsement or guarantee for another person, the Company shall procure that it establishes a procedure for 59

$\sim 10^{11}$

$\sim 10^{-1}$

Before Amendment	After Amendment	Reasons for
		Amendment
endorsement and guarantee in	endorsement and guarantee in
accordance with the Regulations	accordance with the Regulations
Governing the Loaning of Funds and	Governing Loaning of Funds and
Making of Endorsements/Guarantees	Making of Endorsements/Guarantees
by Public Companies and then act	by Public Companies and act
according to such procedure	according to such procedure
established.	established.
Z.A "subsidiary" and "parent company"	6.A "subsidiary" and "parent company"
referred to in these Regulations shall	referred to in these Regulations shall
be determined in accordance with the	be determined in accordance with the
Regulations Governing the	Regulations Governing the
Preparation of Financial Reports by	Preparation of Financial Reports by
Securities Issuers.	Securities Issuers.
$\sim$ omitted $\sim$	$\sim$ omitted $\sim$

$\frac{1}{2}$

$\hat{\boldsymbol{\beta}}$

$\frac{1}{2}$

$\ddot{\phantom{a}}$

$\hat{\boldsymbol{\pi}}$

Appendix 11. Shareholdings of All Directors and Supervisors

			Record Date: Apr. 14, 2020
			Number of Shares Held
Title	Name $\sim$	Number of Shares	Rate of Shareholding
Chairman	Ding Wan Investment and Industrial Co., Ltd. Representative: Wu Chun-Yi	10,000	0.01%
Vice Chairman	Koito Manufacturing Co., Ltd. Representative: WATANABE MASAMI
Director	Koito Manufacturing Co., Ltd. Representative: YAMAMOTO KAKUYA	24,774,750	32.50%
Director	Koito Manufacturing Co., Ltd. Representative: YAMAMOTO HIDETSUGU
Director	lWu 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-Yi	0	0.00%
Director	Chen Hsiu-Feng	0	0.00%
Supervisor	Yi Heng Investment Co., Ltd. Representative: Lin Chien	33,000	0.04%
	Supervisor KONAGAYA HIDEHARU	$\Omega$	$0.00\%$
Supervisor	Guo Qi Min Investment Co., Ltd. Representative: Ken Po-Wen	1,257,601	1.65%
	Minimum number of shares 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 held by all supervisors according to the law		$1.00\%$ of total shares
	Total number of shares held by all supervisors	1,290,601	1.69% of total shares
	Total number of shares held by all directors and supervisors	26,846,452	35.22% of total shares

Shareholdings of All Directors and Supervisors

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Appendix 12.

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Ta Yih Industrial Co., Ltd. Corporate Charter

Chapter 1 General
The Company is organized in accordance with the provisions regarding stock limited Article 1: companies under the Company Act and is named "Ta Yih Industrial Co, Ltd."
The Company operates the following businesses: Article 2: Manufacturing, sale, import and export trading business of vehicles, motorcycles, and 1. hardware parts. Manufacturing, processing, and sales business of airplane parts and vessel parts. 2. Manufacturing, processing, and sales business of transportation machinery and parts. 3. Manufacturing, sales, process, import and export business of lighting machinery, modules, 4.
and relevant equipment.
5. Rail vehicles and parts manufacturing business.
Rail vehicles and parts wholesale business. 6. Industrial plastics product manufacturing business. 7.
Optic instruments manufacturing business. 8.
9. Precision instruments wholesale business.
The Company may provide guarantees for and invest in other companies as required for its Article 2-1: business. The amount of investment may exceed 40% of its paid-in capital.
The Company has its headquarters in Tainan City. Article 3:
The Company makes public announcements through publications in highly visible portions of Article 4: 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 Hundred Thousand Article 5: 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 signatures/seals of at Article 6: 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. However, the Article 6-1: Company shall designate a securities custodian organization.
Shareholders shall provide their true names and addresses to the Company. Sample seal cards Article 7: 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 transfer form Article 8: 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 in accordance Article 9: with the Regulations Governing the Administration of Shareholder Services of Public Companies.
The Company may collect an administrative charge upon re-issuance or replacement of new Article 10: share certificates.
Share transfer registration shall be suspended for the period of 60 days before any general Article 11: 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. General Article 12: 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

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required in accordance with the law. Notice shall be given to each shareholder 15 days in advance.

Article 13: Any shareholder who cannot attend a shareholders' meeting due to any reason 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 vice chairman Article 14: 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 held. Article 15:
Unless otherwise provided by the Company Act, shareholder resolutions shall be approved by Article 16: 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 shall be affixed Article 17: 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

The Company has 9 directors and 2 to 3 supervisors, to be elected by the shareholders' meeting Article 18: 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 from among Article 20: 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 immediately, Article 21: provided that the term of the director or supervisor filling the vacancy shall be limited to the remaining period of the original term.
Article 21-1: To convene a board meeting, the agenda shall be specified and a notice shall be 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.

Article 22: Board meetings are held once every quarter. A special meeting may be held if 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

Article 23:	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. 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.
Article 26:	The remuneration for all directors, supervisors, and the president shall be 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.
Article 28:	The Company may, through board resolution in accordance with Article 23 of the Articles of Association, hire consultants or important staff.
Article 29:	The other staff of the Company shall be hired and dismissed by the president and filed with the board of directors for reference.
Article 30:	Chapter 6 Closing 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.
	Business report. 1. Financial statements. 2.
	3. 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.

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Chapter 7 Miscellaneous
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Article 32: The organizational charter and bylaws of the Company shall be further established.

Article 33: Any matter that is not fully stipulated in these Articles of Association shall be governed by the Company Act and other laws.

Article 34: These Articles of Association were established on 14 December 1975.

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. Article 5: Increase in the amount of capital: One Hundred Fifty-Five Million $\rightarrow$ Two

Hundred and Twenty Million.

Increase number of directors and supervisors: Directors: $5 \rightarrow 7$ , Article 18: Supervisors: $1 \rightarrow 2$ .
Holding special board meetings: Upon request by 3 or more directors $\rightarrow$ Article 22: Upon request by 4 or more directors.
Article 25: Add: One managing supervisor, to be elected by the elected supervisors from among themselves.

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

Article 14: The chairman shall chair shareholders' meetings. If the chairman is absent, added: "The vice chairman shall chair the meeting".
Article 20: The directors constitute the board of directors. Add: One person as vice chairman.
Article 22: In a board meeting, if the chairman cannot perform their duties, add: "The vice chairman shall chair the meeting."

The fourteenth amendment was made on 24 May 1990 as follows:

Article 5: Increase in the amount of capital: Two Hundred and Twenty Million $\rightarrow$ Two Hundred and Forty-Two Million Six Hundred and Sixty Thousand.

The fifteenth amendment was made on 10 December 1990 as follows:
Increase in the amount of capital: Two Hundred Forty Two Million Six Article 5: 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:
Article 2: No. 4 of the business scope: Add operation and investment related to the above businesses: (subject to approval by the Investment Review Commission, Ministry of Economic Affairs).
Article 5: Increase in the amount of capital: Two Hundred and Fifty Million $\rightarrow$ Two Hundred and Sixty-Eight Million.
Article 20: The directors constitute the board of directors, add one person 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.
Article 5: Increase in the amount of capital: Two Hundred Sixty-Eight 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:

Board meetings: The board of directors meet once every 3 months $\rightarrow$ The Article 22: board of directors meet once every 6 months.

... statements submitted to the supervisors for audit 30 days before the Article 30: 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: ital: Two Hundred Eighty Ning Million One

Article 5:	Increase in the amount of capital: Two Hundred Eighty-Nine Million One
	Hundred and Eighty Thousand $\rightarrow$ Four Hundred and Fifty Million.
Article 26:	Add: and president
Article 27:	Add: other than the hiring and dismissal of managersDelete:
	hiring and dismissal of managers.

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

Face value per share is changed from \$1,000 per to \$10 per share. Article 5:

The twenty-first amendment was made on 13 May 1994 as follows:

Increase in the amount of capital: Four Hundred and Fifty Million $\rightarrow$ Five Article 5: Hundred Million.

Increase number of supervisors: 2 supervisors $\rightarrow$ 2 to 3 supervisors. Article 18:

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

Increase in the amount of capital: Five Hundred Million $\rightarrow$ Six Hundred Article 5: 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 Million $\rightarrow$ Six Article 5: 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 Ninety-Three Million Article 5: $\rightarrow$ 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:
Amend dividend policy. Article 31:

The twenty-seventh amendment was made on 7 June 2001 as follows:

Increase scope of business: Rail vehicle and parts manufacturing business, Article 2: 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 and addresses Article 7: to the Company. Sample seal cards shall be completed and provided to the Company for safekeeping.
Amend that the loss of any sample seal shall be handled in accordance with Article 9: the Regulations Governing the Administration of Shareholder Services of Public Companies.
Amend that the Company may collect an administrative charge upon Article 10: 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.

Article 11: Amend period of suspension of share transfer registration before general shareholders meeting and special meeting.
Amend date of general shareholders meeting and special meeting and date Article 12: of meeting notice.
Article 15: Delete stock discount restriction.
Article 17: Amend date for distribution of minutes of shareholders' meetings, manner

of public announcement and retention period.

Add percentage of shares by all directors and supervisors and audit Article 18: standard.
Article 30: Amend statements to be submitted to the supervisors for audit.

The twenty-ninth amendment was made on 13 June 2007 as follows:

Article 18: Change of name of competent securities authority.
Article 22: Amendment in accordance with Article 3 of Rules for Meetings of Board of Directors.
Article 23: Amendment in accordance with Article 9 of Rules for Meetings of Board of Directors.
Article 24: Amendment in accordance with Article 17 of Rules for Meetings of Board of Directors.

The thirtieth amendment was made on 14 June 2010 as follows:

There is no obligation to print share certificates for the shares issued by the Article 6-1: Company.

The thirty-first amendment was made on 18 June 2012 as follows:

Article 3: Tainan City, Taiwan Province $\rightarrow$ Tainan City.
Minutes of shareholders' meetings may be distributed in the manner of Article 17: public announcements.
Add notice for meetings of board of directors may be issued by email or by Article 21-1: fax.
Article 25: Delete 1 managing supervisor for the Company.
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.

Article 31: Delete provision for employee bonus.

Appendix 13.

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

Article 1: Shareholders' meetings of the Company shall be governed by these Rules.

Article 2: The Company shall put in place a signature sheet for signatures by the attending 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.
Article 3: Presence and voting in the shareholders' meetings shall be calculated based on shares.
Shareholders' meetings of the Company shall be held in the county or city where the headquarters Article 4: 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.
Article 6: The Company may assign designated attorneys, accountants, or relevant persons 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' meetings and shall Article 7: keep such recordings for at least one year.

Article 8: The chairman shall announce the start of the shareholders' meeting upon 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.
Article 9: The board of directors shall determine the agenda of the shareholders' meetings. 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.

When a corporation attends a shareholders' meeting through a representative, only one person Article 13: 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.

After an attending shareholder speaks, the chairman may provide an answer or designate a relevant Article 14: person to provide an answer.
When the chairman deems that there has been sufficient discussion to put a proposal to a vote, Article 15: he/she may announce the closing of discussion and submit the proposal to a vote.
When voting takes place on a proposal, the vote supervisors and vote counters shall be designated Article 16: 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.
The chairman may direct disciplinary staff (or security staff) to help maintain order in the meeting Article 20: place. In maintaining the order on site, the disciplinary staff (or security staff) shall wear arm bands showing "disciplinary staff".
Any matter that is not stipulated in these Rules shall be governed by the Company Act, the Article 21: Securities Exchange Act, the Articles of Association of the Company and other applicable laws.
These Rules, including any amendment, shall be implemented after approval by the shareholders' Article 22: meeting.

Appendix 14.

Ta Yih Industrial Co., Ltd.

Regulations for Election of Directors and Supervisors

Article 1: These Regulations are established in accordance with the Company Act and the articles of association of the Company. All elections of directors and supervisors of the Company shall be governed by these Regulations.
Article 2: Directors and supervisors of the Company shall be elected in shareholders' meetings.
Directors and supervisors of the Company shall be elected through nominative voting. During Article 3: nominative voting, the electors may be identified by their shareholder account numbers in lieu of their names
Article 4: In electing directors and supervisors of the Company, each share is entitled to the number of voting rights that are equivalent to the number of directors and supervisors to be elected. The board of directors shall prepare ballots in the same number of directors and supervisors to be elected and distribute them to each attending shareholder. These ballots may be cast for the same candidate or allocated to multiple candidates.
Article 5: Directors and supervisors of the Company shall be elected by a shareholders' meeting from among persons with legal capacities. Subject to the number of seats provided in the articles of association of the Company, those having received the highest number voting rights represented by the ballots shall be elected as independent directors, non-independent directors, or supervisors in the order of sequence. If two or more candidates receive the same number of votes and there are not enough seats for allocation, a random draw shall be conducted among the candidates who have received equal number of votes. If any such candidate is not present, the chairman shall participate in the random draw on his/her behalf. Any person elected as director and supervisor at the same time shall make his/her own decision whether to serve as director or supervisor. If a person elected as director or supervisor is found and confirmed to have non-compliant personal information or be unfit in accordance with the applicable laws, the vacancy shall be filled by the next person who has received most votes.

Independent directors and non-independent directors shall be elected at the same time, with the number of seats calculated separately for independent directors and non-independent directors. Those who have received the highest number of voting rights represented by ballots shall be elected in the order of sequence.

In preparing the ballots, the board of directors shall number them by shareholder account number Article 6: and the number of votes allocated shall be specified.

Before the election starts, the chairman shall appoint a certain number of vote supervisors and vote Article 7: counters to conduct vote opening.

Article 8: The voting box shall be prepared by the board of directors and shall be open for public inspection by the vote supervisor before voting.

If a candidate is a shareholder, the elector shall specify in the "candidate" column the candidate Article 9: account name and shareholder account name. If the candidate is not a shareholder, the candidate's name and ID number shall be specified. However, if the candidate is a government or corporate shareholder, the candidate account name column on the ballot shall be identified with the name of such government or corporation. Alternatively, the name and representative's name of such government or corporation may be specified. If there are multiple number of representatives, all names of the representatives shall be specified.

Article 10: Any ballot with any of the below events shall be invalid:

(1) Any ballot other than the ballots provided in accordance with these Regulations.
(2) Blank ballot inserted into the voting box.
(3) Illegible or altered ballot.
(4) If the candidate is a shareholder, inconsistent account name or shareholder account number with the shareholders register. If the candidate is not a shareholder, inconsistent name or ID number following verification.
(5) Two or more candidates listed in the same ballot.
(6) Any text included other than the candidate's account name (name) or shareholder account name (ID number) and the number of votes casted.
(7) Failure to complete with the candidate's account name (name) or shareholder account name (ID

number).

Article 11: Deleted.

Article 12: Votes shall be opened on site once it is completed. The results of the votes shall be announced by the chairman on site.

Election notices shall be distributed to the elected directors and supervisors by the board of Article 13: directors of the Company.

Article 14: These Regulations, including any amendment hereto, shall be implemented following the approval by the general shareholders' meeting.

Appendix 15.

Ta Yih Industrial Co., Ltd.

Procedure for Acquisition or Disposal of Assets

Article 1: Legal Basis 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, securities 1. representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities.
$\overline{2}$ . Real property (including land, houses and buildings, investment property, and construction enterprise inventory) and equipment.
1. Memberships.
$\overline{4}$ . Patents, copyrights, trademarks, franchise rights, and other intangible assets.
1. Right-of-use assets.
1. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables).
1. Derivatives.
1. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with the law.
1. Other major assets.

Article 3: Definitions

1. Derivatives: 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 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.
1. Assets acquired or disposed of through mergers, demergers, acquisitions, or 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 156-3 of the Company Act.
1. Related party or subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
1. Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.
1. Date of occurrence: Refers to the date of contract signing, date of payment, 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.
1. Mainland China area investment: Refers to investments in the mainland 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.
1. 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.

1. 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.
1. 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.
Article 4: Limit Amount for Investment in Non-Operating Real Property and the right-of use asset thereof and Securities Acquisition of the above asset by the Company and each of its subsidiaries is limited by the following:
Total amount of non-operating real property and the right-of-use asset thereof shall not $(1)$ exceed 15% of the net assets.
Total amount of investment in long-term and short-term securities shall not exceed 60% of $(2)$ the net assets.
Investment amount in individual securities shall not exceed 60% of the net assets. $(3)$
When the Company acquires an appraisal report or an opinion from an accountant, attorney, or Article 5: securities underwriter, such professional appraiser and its officer, the accountant, attorney, or securities underwriter shall meet the following requirements:
1. May not have previously received a 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.
1. May not be a related party or de facto related party of any party to the transaction.
1. If the company is required to obtain 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.
1. 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.
1. 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.
1. 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 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 or the right-of-use asset thereof

1. Evaluation Procedure
To acquire or dispose of real property, equipment or the right-of-use assets thereof $(1)$ 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\$20 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.

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.

Processing

When the Company acquires disposes of real property, equipment or the right-of use assets thereof, 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.

$3₁$ Real Property or Equipment Appraisal Report

In acquiring or disposing of real property, equipment or the right-of-use assets thereof, 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 domestic government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment or the right-of-use asset thereof 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.
(2) Where the transaction amount is NT\$1 billion or more, appraisals from two or more professional appraisers shall be obtained.
(3) Where any one of the following circumstances applies with respect to 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:
i. The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.
ii. The discrepancy between the appraisal results of two or more 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.
$(5)$ 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.

Article 7: Procedure for Acquisition or Disposal of Securities

Evaluation Procedure $\mathbf{1}$
When the Company acquires or disposes of securities, the Finance Department shall $(1)$ 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.
(2) If the acquisition or disposal of 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 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.

$\overline{2}$ . Processing Procedure

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.

$3₁$ Expert Opinions
(1) The Company acquiring or disposing of securities shall, prior to the 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.
Article 8: Procedure for Related Party Transactions

$\mathbf{1}$ .

When the Company acquires or disposes of assets, equipment or right-of use assets thereof from or to a related party, 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

When the Company intends to acquire or dispose of real property or the right-of-use assets thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property or the right-of-use assets thereof 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 or the right-of-use assets thereof 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 anticipated month of $(5)$ 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.
Restrictive covenants and other important stipulations associated with the $(7)$ 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 engages in below transactions with its subsidiary or between subsidiaries of which 100% outstanding shares or total capital is held directly or indirectly by the Company, 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:

Acquisition or disposal of equipment or right-of-use assets thereof held for business $(1)$ use.
Acquisition or disposal of real property right-of-use assets held for business use. $(2)$

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.

Evaluation of the Reasonableness of Transaction Costs
$(1)$ When the Company acquires real property or right-of-use assets thereof from a related party, it shall evaluate the reasonableness of the transaction costs by the following means:
i. Based upon the related party's transaction price plus necessary 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 or leased 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.

$(3)$ When the Company acquires real property or right-or-use asset thereof from a related party and appraises the cost of the real property or right-or-use asset thereof 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.
(4) When the Company acquires real property or right-or-use asset thereof from a related party and the results of the Company's appraisal conducted in accordance 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 for i. development, it may submit proof of compliance with one of the following conditions:
- $(i)$ Where undeveloped land is appraised in accordance with the 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 transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale or lease 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.
ii. Where the Company acquiring real property or right-of-use asset thereof from a related party provides evidence that the terms of the transaction are similar to the terms of completed transactions 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 transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction. Within the preceding year' refers to the year preceding the date of occurrence of the acquisition of the real property.
(5) Where the Company acquires real property or right-of-use assets thereof from a related party and the 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 or leased at a high price, or upon disposal or termination of lease, 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 paragraph, i.

Article 41 of the Act against the difference between the real property or right-of-use asset thereof 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.

ii. Supervisors shall comply with Article 218 of the Company Act. If an audit committee has been 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 the previous 2 saections shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.
$(6)$ Where the Company acquires real property or right-of-use assets thereof from a related party and 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:
The related party or right-of-use assets thereof acquired the real property i. through inheritance or as a gift.
ii. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property or right-of-use assets thereof to the signing date for the current transaction.
iii. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land.
iv. Acquisition of real property 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 property thereof from a related party or right-of-use assets thereof, 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 Intangible Assets or right-of-use assets thereof or membership
$(1)$ Evaluation Procedure
- i. To acquire or dispose of intangible assets or right-of-use assets thereof or membership, reference 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.
- ii. If the acquisition or disposal of assets 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 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

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.

(3) Expert Evaluation Opinion Report for Intangible Assets or right-of-use assets there of 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 Statement of Auditing Standards No. 20 published by the ARDF.

The calculation of the transaction amounts referred to in Articles 6, 7, and 9 shall be done in Article 9-1: 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.
Procedure for Acquisition or Disposal of Claims of Financial Institutions Article 10: 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

$(1)$ 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 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) 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
i. Execution of Transactions:

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.

ii. Transaction Confirmation and Registration: 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.
iii. Audit Department

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 profit and loss i. generated from derivatives transactions shall be the basis for performance review.
ii. To fully control and reflect the evaluation risk of transactions, the Company uses monthly evaluations to assess profit and loss.
iii. The Finance Department shall provide the president with an 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: 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.

Risk Management Measures

Credit Risk Management: $(1)$

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

i. Transaction Counterparty: Limited to renowned domestic and overseas financial institutions.
ii. Transaction Products: Limited to products provided by renowned domestic and overseas financial institutions.
iii. Transaction Amount: Outstanding transaction amount with the 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:
I. Duly comply with the Company's authorized amount and procedure. Include them into internal audits to avoid procedure risks.
II. Personnel engaged in derivatives trading may not serve 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.
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.

(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

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 paragraph aobut supervisors shall apply mutatis mutandis to the audit committee. Regular Evaluation

$(1)$ The board of directors shall authorize senior management personnel to perform regular supervision and evaluation as to whether derivatives transactions have been carried out duly in accordance with the transaction procedures formulated 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 delivered to the senior management personnel authorized by the board of directors.

Principles of supervision and management by the board of directors for derivatives transactions

The board of directors shall assign senior management to exercise due care as to the $(1)$ supervision and control over derivatives transaction risks at all times, with the following management principles:
i. Periodically evaluate whether the risk management measures currently employed are appropriate and are faithfully conducted in accordance with these Regulations and the procedures for engaging in derivatives trading formulated by the Company.
When irregular circumstances are found in the course of supervising trading ii. 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.
(3) The Company shall report to the earliest meeting of the board of directors after it authorizes the relevant personnel to handle derivatives trading in accordance with the Procedures for Engaging in Derivatives Trading that it formulated.
$(4)$ The Company engaging in derivatives trading shall establish a log 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 $\mathbf{1}$ .
When the Company engages in a merger, demerger, acquisition or share transfer, it is $(1)$ 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 important $(2)$ 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.
$\overline{2}$ . Other Matters
$(1)$ i. A company participating in a merger, demerger, or acquisition 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.
- iii. When participating in a merger, demerger, acquisition, or transfer 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 occupational titles, $(i)$ 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 of another iv. 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, acquisition, $\overline{V}$ . 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.
An increase or decrease in the number of entities or companies participating in $V_{\rm{c}}$ 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.

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.
The amount of treasury stock participating companies are permitted under law iii. 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.
Preliminary progress schedule for plan execution, and anticipated completion v. date.
vi. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.
Change in the number of companies participating in the merger, demerger, $(5)$ 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.
(6) Where any of the companies participating in a merger, demerger, 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 $\mathbf{1}$ .
Acquisition or disposal of real property or right-of-use asset thereof from or to a $(1)$ related party, or acquisition or disposal of assets other than real property or right-of-use asset thereof 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 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.
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 formulated by the company.
(4) Where equipment or right-of-use asset thereof for business use are acquired or disposed of, and furthermore the transaction counterparty is not a related party, and the transaction amount meets any of the following criteria:
- 1. For a public company whose paid-in capital is less than NT\$10 billion, the transaction amount reaches NT\$500 million or more.
- 1. For a public company whose paid-in capital is NT\$10 billion or 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 or right-of-use asset thereof for construction use, and furthermore the transaction counterparty is not a related party, and the transaction 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 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.
Where land is acquired under an arrangement on engaging others to build on the $(6)$ company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and furthermore the transaction counterparty is not a related party, 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:
- $\mathbf{i}$ . Trading of domestic government bonds.
- Where it is done by professional investors, securities trading on securities ii. exchanges or OTC markets, or subscription of ordinary corporate bonds or general bank debentures without equity characteristics (excluding subordinated debt) that are offered and issued in the primary market, or subscription or redemption of securities investment trust funds or futures trust funds, 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.
- iii. Trading of bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.
(8) The amount of transactions under subparagraph (7) of the previous 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.
- Ť. The amount of any individual transaction.
ii. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year.
iii. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of real property or right-of-use asset thereof within the same development project within the preceding year.
The cumulative transaction amount of acquisitions and disposals (cumulative iv. acquisitions and disposals, respectively) of the same security within the preceding year.
$2.$ Deadline for Public Announcement and Reporting 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.
1. Procedure for Public Announcement
(1) The Company shall make public announcements and reports of the 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.
$(4)$ The Company acquiring or disposing of assets shall keep all relevant 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 to the original i. 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.
The Company's subsidiaries shall follow the following: Article 14:
The subsidiaries shall also establish and execute the Procedure for Acquisition or Disposal 1. of Assets in accordance with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
$2.$ In acquiring or disposing of any asset, the subsidiaries shall also comply with the regulations of the Company.
1. If the subsidiary is not a publicly listed company and if any acquisition or 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.
1. Paid-in capital or total assets of the Company shall be the standard applicable to a subsidiary in determining whether, relative to paid-in capital or total assets, it reaches a threshold requiring public announcement and regulatory filing.
For the calculation of 10 percent of total assets under these Regulations, the total assets stated in Article 14-1: 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.

Implementation and Amendment Article 16:

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.

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.

Article 17: Miscellaneous

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

Appendix 16.

Ta Yih Industrial Co., Ltd.

Regulations Governing Loaning of Funds

Article 1: Purpose These Regulations are established as the basis for the loaning of funds to others in order to seek sound management of its funds and to reduce operating risks.

Article 2: Scope of Application This Procedure applies as required for the Company's business without breaching Article 15 of the Company Act and the letter from the Ministry of Economic Affairs Jing-Shang-Zi No. 0900270580 dated 7 January 2002.

Article 3: Target of Loans (hereinafter the "Borrower")

Business dealings among companies or enterprises.

1. When short-term funding is required among companies or enterprises. Short-term means one year.
1. Loaning of funds required as short-term funding is limited to the following:
I. Companies of which 50% or more shares are held by the Company that need short-term funding as required for business.
$\Pi$ . Other companies or enterprises that need short-term funding as required for the purchase of materials or as working capital.
III. Other loaning of funds approved by the board of directors of the Company.

Article 4: Total Loan Amount Limit and Individual Loan Amount Limit

1. Total amount of loans shall not exceed 40% of the Company's net value.
1. For companies or enterprises with business dealings with the Company, total amount of loans shall not exceed 20% of the Company's net value. Individual loan amount shall not exceed the amount of business dealings between the parties. The "amount of business dealing" means the amount of product bought or the amount of product sold between the parties, whichever is higher, provided that the maximum amount shall not exceed 20% of the Company's net value.
1. For companies or enterprises with a need for short-term funding, the total amount of loans and the individual loan amount shall both be kept under 20% of the Company's net value.

For the loaning of funds among overseas companies of which 100% voting shares are directly or indirectly held by the Company, the accumulated balance amount of short-term funding shall not exceed 40% of the Company's net value in its latest financial statements.

Article 5: Loan Procedures

When the Company loans any funds, the Borrower shall first submit the necessary financial and guarantee information and complete a Loaning of Funds Application Form to file an application with the finance unit of the Company.
The finance unit of the Company shall first understand the purpose of the loan and the Borrower's recent business, financial, and credit status and then evaluate the risk of the loan based on the loan amount, manner, period, repayment plan, and value of collateral. The credit verification result and evaluation opinion shall be submitted to the board of directors for resolution before the loan can be granted to the Borrower. No other person shall be authorized to make decisions.

Loaning of funds between the Company and its subsidiaries or among subsidiaries shall be submitted to the board of directors for resolution in accordance with the previous paragraph. The chairman may be authorized to grant approval for loans granted to the same Borrower up to a certain amount determined by board resolution and within one year, including loans released in multiple installments and recycling loans.

The "certain amount" under the previous paragraph shall be consistent with the second paragraph, Article 4. The amount of authorization by the Company or any subsidiary for loans to any single enterprise shall not exceed 10% of the net value of the Company or the subsidiary in its latest financial statements.

1. The opinions of each independent director, their express views of consent or objection and the grounds for objection shall be included in records of board meetings.
1. After the loan amount is approved by the board of directors, the finance unit of the Company shall specify the loan amount, duration, repayment manner, interest, interest payment and collateral in the contract. The contract shall be signed and the identity verification procedure shall be completed with the Borrower. Each party shall hold one copy of the contract. Upon drawdown, the Borrower shall issue an acknowledgement of debt to the finance unit of the Company against payment.
1. When a mortgage is created on the collateral, other than land and securities, fire insurance shall be purchased for the target and the insurance amount shall not be lower than the value of the collateral in principle. The insurance policy shall name the Company as the beneficiary. The mortgage shall only be canceled after the Borrower repays the loan.
1. The name, quantity, location and insurance terms of the target specified in the insurance policy shall be consistent with the conditions of the loan originally approved by the Company.

Article 6: Loan Period and Calculation of Interest Loaning of Funds by the Company to others shall be limited to one year. Interest shall be paid monthly in principle. A notice shall be given to the Borrower for repayment within one week from the agreed interest payment date.

When loans are granted to an overseas company of which 100% voting shares is held directly or indirectly by the Company, the funding period shall not exceed 3 years.

Article 7: Case Records and Custody

The accounting unit shall prepare monthly records of the loaning of funds (Loaning of Funds Register) on a monthly basis, specifying: name of Borrower, amount, date of board resolution, date of loan, estimated date of repayment, balance amount at current month-end, interest collection status and details of collateral. Such register shall be submitted, together with the contract, proof of collateral, proof of claim such as promissory note and relevant information such as insurance policy, shall be submitted to the responsible executive of the finance unit for verification and property custody.

Article 8: Subsequent control procedure for loans granted - overdue debt handling procedure

1. After loans are granted, due care shall be exercised at all times as to the financial, business, and relevant credit status of the Borrower and the guarantor. If collateral is provided, due care shall be exercised as to whether the value of the collateral has changed. In case of a significant change, a report shall be made to the chairman immediately, followed by proper handling in accordance with his/her instructions.
1. When the Borrower repays the loan upon or before maturity, interest payable shall first be calculated. Only when interest is repaid together with the principal shall the promissory note be canceled and returned to the Borrower or the mortgage be canceled.
1. The Borrower shall repay principal and interest immediately upon maturity of the loan. If the loan cannot be repaid upon maturity and an extension is required, it shall file a prior request for submission to the board of directors for prior approval. In case of breach, the Company may dispose of and claim from the collateral or guarantee provided in accordance with the law.

Public Announcement and Reporting Article 9:

Before the $10^th$ day of each month, the amount of loans granted to others by the Company and its subsidiaries in the previous month, together with the monthly turnover, shall be publicly announced. If the balance of the loan reaches any of the following thresholds, a public filing shall be made within 2 days from the date of occurrence of the event:

1. When the balance amount of loans granted by the Company and its subsidiaries exceeds 20% or more of the Company's net value in its latest financial statements.
1. When the balance amount of loans granted by the Company and its subsidiaries to any single enterprise reaches 10% or more of the Company's net value in its latest financial statements.
1. When the amount of new loans granted by the Company or its subsidiaries reaches NT\$10 million or more and reaches 2% or more of the Company's net value in its latest financial statements.

If any subsidiary of the Company is not a domestic publicly listed company, any public filing that should be done by such subsidiary under subparagraph (3) of the previous paragraph shall be done by the Company.

The balance of the loan for the subsidiary under the previous paragraph as a percentage to the net value shall be calculated based on the balance of the loan for such subsidiary as a percentage to the net value of the Company.

The "date of occurrence of the event" referred to in these Regulations means the transaction contracting date, payment date, date of board resolution or other date on which the transaction counterparty, and the transaction amount are ascertained, whichever is the earliest.

Article 10: Others

1. When a subsidiary of the Company plans to provide a loan to another person as required for business, the Company shall procure that it establishes a procedure for loaning of funds in accordance with the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies and act according to such procedure established.
1. To reinforce control over the loaning of funds, the audit unit shall audit the above procedure and the execution status thereof at least every quarter and written records shall be made. Upon discovery of any material breach, a written notice shall be given to each supervisor and a notice shall be given to the Financial Supervisory Commission.
1. The Company shall evaluate the loaning of funds and provide sufficient provisions for bad debt in accordance with generally accepted accounting principles. Relevant information shall be duly disclosed in the financial report and relevant information shall be provided to the certifying accountant to perform required audit procedure.
1. When any manager or responsible person of the Company takes advantage of his/her job duties to engage in the loaning of funds in breach of the law, sanctions shall be imposed on the relevant person in accordance with the breach.
1. If the beneficiary of a loan granted no longer meets the requirements under these Regulations or if the limit amount has been exceeded due to change of circumstances, a remedy plan shall be established. Such remedy plan shall be delivered to each supervisor and remedies shall be completed in accordance with the schedule of the plan.
6.A "subsidiary" and "parent company" referred to in these Regulations shall be determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The financial reports of the Company are prepared in accordance with the International Financial Reporting Standards. "Net value" referred to in these Regulations means shareholders' equity that belongs to the parent company in the balance sheet prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Article 11: Miscellaneous

Following approval by the board of directors, these Regulations shall be sent to each supervisor and submitted to the shareholders' meeting for approval. If any director voices any objection, with a record or written statement, the Company shall also submit the director's objection to each supervisor and submit to the shareholders' meeting for discussion. The same shall be applicable in case of amendment.

If the Company has independent directors, when the Regulations Governing Loaning of Funds are 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.

Appendix 17.

Ta Yih Industrial Co., Ltd.

Regulations Governing Endorsements and Guarantees

Purpose: Article 1:

These Regulations are established as the basis for handling endorsement and guarantee matters in order to protect shareholder interests, seek sound financial management in the granting of endorsements and guarantees by the Company, lower its operation risk, and comply with the principle of stable operation of the Company.

Article 2: Scope:

"Endorsements and guarantees" referred to in these Regulations include:
(1). Endorsements and guarantees for financing:
I .Financing through factoring.
II. Endorsements and guarantees for the purpose of financing other companies.
$III$ . Issuance of notes to a non-financial enterprise as a guarantee for the purpose of financing the Company.
(2). Endorsements and guarantees for tariffs: an endorsement or guarantee for the company itself or another company with respect to customs duty matters.
(3). Other endorsements and guarantees: endorsements or guarantees beyond the scope of the above two subparagraphs.
1. The provision by the Company of any personal property or real property for the creation of a pledge or mortgage as a guarantee for a loan taken out by another company shall also be handled in accordance with these Regulations.

Procedure for Granting Endorsements and Guarantees Article 3:

1. To grant or cancel an endorsement or guarantee, the applicant unit shall complete an application form, specifying the beneficiary of the endorsement or guarantee, the relationship with the Company, the type, reason and amount of the endorsement or guarantee.
1. When the Company grants an endorsement or guarantee, the finance unit shall, in accordance with the application for the beneficiary of the endorsement or guarantee, review item-by-item whether its qualification and amount are consistent with the requirements under these Regulations and whether the threshold for public filing has been reached. Analysis shall also be made as to the operational, financial, and credit status of the beneficiary of the endorsement or guarantee in order to assess the risk of the endorsement or guarantee and to prepare a signature request form. Collateral shall be acquired if necessary. The signature request form shall also specify the relevant details of the endorsement or guarantee, the reasons therefor and the results of risk assessment, which shall be reported to the board of directors for resolution or the chairman for approval before an application for the use of a seal or the issuance of a note may be filed. Relevant approval records shall also be transferred to the accounting unit.
1. The accounting unit shall record the guarantees undertaken in detail in a Register of Endorsements and Guarantees, the name of the beneficiary enterprise for which the endorsement or guarantee is granted, the result of risk assessment, the amount of endorsement or guarantee, the date of endorsement or guarantee, the details of the collateral acquired, guarantee note issued, the conditions and dates for release of endorsement or guarantee liabilities, and the date of approval by the board of directors or the chairman. Verification of accounts and records shall be made with the finance unit regularly and against the inventory of increase and decrease of guarantee notes that have been issued or released.
1. If the beneficiary of the endorsement or guarantee initially met the requirements under these Regulations but no longer meets such requirements afterwards, or if the amount of endorsement or guarantee exceeds the stipulated limit due to the change of calculation basis, the amount of endorsement or guarantee granted for such beneficiary or the portion in excess shall be fully eliminated upon expiry of the period provided by the contract or within a certain period under an established plan, with a report filed with the board of directors.
1. If the beneficiary of the endorsement or guarantee is a subsidiary with net value lower than 1/2 of its paid-in capital, the necessity and reasonableness of the endorsement or guarantee shall be re-assessed and the risk level shall be evaluated.

When the stock of a subsidiary has no face value, or if the face value per share is not NT\$10, for

the paid-in capital in the calculation under subparagraph 5 of the preceding paragraph, the sum of the share capital plus paid-in capital in excess of par shall be substituted.

Article 4: Decision Making and Authorization Levels

The Company shall only grant an endorsement or guarantee after approval by resolution of the board of directors. However, if the amount of the endorsement or guarantee does not exceed NT\$10 million, it may be approved by the chairman first, followed by reporting afterwards to the next board meeting for ratification. The granting of the endorsement or guarantee and relevant matters shall be submitted to the shareholders' meeting for records.

Any subsidiary in which the Company holds, directly or indirectly, 90% or more voting rights shall only grant an endorsement or guarantee in accordance with the second paragraph, Article 6 after submission to the board of directors of the Company for resolution, except endorsements or guarantees granted among companies of which 100% voting rights are held directly or indirectly by the Company.

Article 5:

Procedures for Use and Custody of Corporate Seal

1. The Company shall use the company seal registered with the Ministry of Economic Affairs as the seal for endorsements and guarantees.
1. After an endorsement or guarantee is approved by a board resolution or the chairman, the finance unit shall complete a "Seal Use Application Form". Seal use shall only be requested from the custodian of the company seal after the application form is approved by the responsible finance executive, together with the approved signature request form or records of the board meeting and the document to which the seal is to be affixed, such as the endorsement or guarantee contract or guarantee note. Issuance of guarantee notes shall be governed by the Regulations Governing Notes.
1. In applying the seal, the seal custodian shall verify whether there are relevant records of approval, whether the "Seal Use Application Form" has been approved by the finance executive, and whether the document to which the seal is to be affixed is consistent before applying the seal. After the seal is applied, a signature shall be affixed to the "Seal Use" Application Form".
1. When a guarantee is granted to a foreign company, the guarantee letter issued by the Company shall be signed by the chairman, as authorized by the board of directors.

Beneficiary of Endorsements and Guarantees Article 6:

The Company may provide endorsements and guarantees for the following companies:

Companies with business dealings with the Company.
Companies of which 50% or more voting shares are held directly or indirectly by the Company. 3. Companies that directly or indirectly hold 50% or more voting shares of the Company.

Companies of which 90% or more voting shares are held directly or indirectly by the Company may grant endorsements and guarantees among them and the amount of such endorsements and guarantees shall not exceed 10% of the net value of the Company, except endorsements and guarantees among companies of which 100% voting rights are held directly or indirectly by the Company.

When all investing shareholders of the Company provide endorsements or guarantees for an invested company due to joint investment in proportion to their shareholding ratios, endorsements and guarantees may be granted without the restrictions under the previous two paragraphs. "Investment" under the previous paragraph refers to direct investment by the Company or investment through companies of which 100% voting rights are held by the Company.

Article 7: Amount Limit of Endorsements and Guarantees

The total amount of the Company's liabilities from endorsements and guarantees shall be limited to 30% of its net value based on the latest financial statements. The amount of endorsement or guarantee granted to any single enterprise shall not exceed 10% of the Company's net value based on the latest financial statements. The total amount of endorsements and guarantees by the Company and its subsidiaries shall be limited to 50% of the Company's net value based on the latest financial statements and the amount of endorsements and guarantees granted to any single enterprise shall not exceed 20% of the Company's net value based on the latest financial statements.
The amount of endorsements and guarantees granted to an enterprise due to business dealings

shall not exceed the total amount of product sold and purchased between the parties in the past vear.

1. When the Company needs to grant endorsements or guarantees in excess of the amount limit under these Regulations due to business requirements, it shall acquire approval from the board of directors and the majority of directors shall provide a joint guarantee to cover the losses that the Company may suffer due to the excess of the amount limit. The Regulations and Procedure Governing Endorsements and Guarantees shall also be amended and submitted to the shareholders' meeting for ratification. If the shareholders' meeting disapproves, a plan shall be established to eliminate the portion of excess within a certain period.
1. If the beneficiary of any endorsement or guarantee granted by the Company no longer meets the requirements under these Regulations, or if the limit amount has been exceeded due to change of circumstances, a remedy plan shall be established. Such remedy plan shall be delivered to each supervisor and remedies shall be completed in accordance with the schedule of the plan.

Threshold, Deadline, and Contents of Announcement and Report Article 8:

Before the $10^th$ day of each month, the accounting unit shall make a public filing of the balance amount of endorsements and guarantees granted by the Company and its subsidiaries (that are not domestic publicly listed companies) in the previous month, together with the amount of turnover, with the Financial Supervisory Commission in the prescribed format before the prescribed deadline on a monthly basis through the Internet information system.
In addition to monthly public filing of the balance amount of endorsements and guarantees, when the balance amount of endorsements and guarantees granted by the Company and its subsidiaries (that are not domestic publicly listed companies) reaches any one of the below thresholds, the accounting unit shall make a public filing within 2 days from the date of occurrence of the event and key in the information on the Market Observation System:
(1). When the balance amount of endorsements and guarantees granted by the Company and its subsidiaries exceeds 50% or more of the Company's net value in its latest financial statements.
(2). When the balance amount of endorsements and guarantees granted by the Company and its subsidiaries to any single enterprise reaches 20% or more of the Company's net value in its latest financial statements.
(3). When the balance amount of endorsements and guarantees granted by the Company and its subsidiaries granted to any single enterprise reaches NT\$10 million or more and the total balance amount of their endorsements and guarantees, long-term investments and loaning of funds reaches 30% or more of the Company's net value in its latest financial statements.
(4). When the amount of new endorsements and guarantees granted by the Company or its subsidiaries reaches NT\$30 million or more and reaches 5% or more of the Company's net value in its latest financial statements.
1. If any subsidiary of the Company is not a domestic publicly listed company, any public filing that should be done by such subsidiary under subparagraph (4) of the previous paragraph shall be done by the Company.
1. "Public filing" means the key-in of information on the information filing website designated by the Financial Supervisory Commission.
The "date of occurrence of the event" referred to in these Regulations means the transaction contracting date, payment date, date of board resolution or other date on which the transaction counterparty and the transaction amount are ascertained, whichever date is the earliest.

Article 9: Others

The status of endorsements and guarantees by the Company and its subsidiaries within each operating year and matters related thereto shall be submitted to the shareholders' meeting in the following year for records.
Following approval by the board of directors, these Regulations shall be delivered to each supervisor and submitted to the shareholders' meeting for approval. If any director voices any objection, with a record or written statement, the Company shall also deliver such objection to each supervisor and submit it to the shareholders' meeting for discussion. The same shall be applicable in the event of amendment.

If the Company already has independent directors, when the Regulations Governing Endorsements and Guarantees are submitted to the board of directors for discussion, the opinions of each independent director shall be taken into full consideration and their express opinions for approval or objection and the grounds for objection shall be included in the records of the board meeting.

1. If any manager or processing staff of the Company engages in any act of endorsement or guarantee in breach of the law by taking advantage of his/her job duties, the relevant persons shall be sanctioned in accordance with the event of breach.
1. Internal auditors of the Company shall audit the endorsement and guarantee procedure and the execution status thereof at least every quarter and written records shall be made. Upon discovery of any material breach, a written notice shall be given to each supervisor.
1. The Company shall follow Financial Accounting Reporting Standards No. 9 and assess or provide for contingent losses from endorsements and guarantees. Information about endorsements and guarantees shall also be duly disclosed in the financial reports. Relevant information shall be provided to the certifying accountant to perform necessary audit procedure.
1. When a subsidiary of the Company plans to provide an endorsement or guarantee for another person, the Company shall procure that it establishes a procedure for endorsement and guarantee in accordance with the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies and act according to such procedure established.
7.A "subsidiary" and "parent company" referred to in these Regulations shall be determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The financial reports of the Company are prepared in accordance with the International Financial Reporting Standards. "Net value" referred to in these Regulations means shareholders' equity that belongs to the parent company in the balance sheet prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

AI assistant

TA YIH — AGM Information 2020

51845_rns_2020-06-29_09d7cc84-cccc-48b2-bfbd-a3199297fa3c.pdf

TA YIH INDUSTRIAL CO., LTD

Table of Contents

5. Discussion

6. Election: Reelecting 9 directors (including 3 independent directors)

Agenda

5. Discussion

Appendix 1. Business Report of 2019

I. Business Report of 2019:

II. Overview of Business Plan of 2020

III. Future Corporate Development Strategies

IV. Influence of External Competition, Legal Requirements and Overall Business Environment

Audit Report by Supervisors

Appendix3.

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

(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, 2019 AND 2018

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

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(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, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

(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, 2019 AND 2018 (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

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Ta Yih Industrial Co., Ltd. STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Ta Yih Industrial Co., Ltd. STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Appendix 4. Statement of Earning Distribution

Ta Yih Industrial Co., Ltd.

Statement of Earning Distribution

2019

Unit: NTD

Appendix 5: Amendment to Corporate Charter

Appendix 6: Amendments to Rules for Shareholders' Meetings

Amendments to Rules for Shareholders' Meetings

Appendix 7: Amendments to the Regulations for the Election of Directors and Supervisors

Appendix 8: Amendments to Procedure for Acquisition or Disposal of Assets

Appendix 9: Amendments to Regulations Governing Loaning of Funds

Appendix 10: Amendments to Regulations Governing Endorsements and

Guarantees

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Appendix 11. Shareholdings of All Directors and Supervisors

Appendix 12.

Ta Yih Industrial Co., Ltd. Corporate Charter

Chapter 4 Board of Directors

Appendix 13.

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

Appendix 14.

Ta Yih Industrial Co., Ltd.

Appendix 15.

Ta Yih Industrial Co., Ltd.

Procedure for Acquisition or Disposal of Assets

Article 1: Legal Basis 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

Article 3: Definitions

Article 7: Procedure for Acquisition or Disposal of Securities

Article 11: Procedure for Acquisition or Disposal of Derivatives Transaction Principles and Guidelines

Article 13: Information Disclosure Procedure

Article 15: Penalty

Implementation and Amendment Article 16:

Article 17: Miscellaneous

Appendix 16.

Article 1: Purpose These Regulations are established as the basis for the loaning of funds to others in order to seek sound management of its funds and to reduce operating risks.

TA YIH AGM Information 2020