TGI — AGM Information 2016

Jun 23, 2016

TAIWAN GLASS IND. CORP. 2016 Annual Meeting of Shareholders

Table of Content			Page
1. Meeting Procedure
2. Meeting Agenda
Approval Items (I)
1. Amendment to the Articles of Incorporation			4
Report Items
1. 2015 Business Report			6
2. 2015 Audit Committee’s Review Report and		Independent Auditors’
Report			11
3. 2015 Directors and Employee’s Remuneration Distribution Report			16
4. 2015 Cash Capital Increase Improved Business Plan Implementation			17
Report
Acknowledgement Items
1. 2015 Annual Final Accounting Report			20
Approval Items (II)
2. 2015 Earning Distribution			29
3. Amendment to the Operational Procedure for		Loaning of Company Funds	30
Motions			31
3. Appendix
1. Number of Shares for All Directors			32
2. Earnings Distribution Approved by the Board		of Directors	33
3. The Impact of Stock dividend Issuance on Business Performance and EPS			34
4. Articles of Incorporation of Taiwan Glass Industry Corporation			35

TAIWAN GLASS IND. CORP.

Procedure for 2016 Annual Meeting of Shareholders

1. Call the Meeting to Order

2. Chairman’s Address

3. Approval Items (I)

4. Report Items

5. Acknowledgement Items

6. Approval Items (II)

7. Motions

8. Adjournment

TAIWAN GLASS IND. CORP.

Agenda for 2016 Annual Meeting of Shareholders

Time: 09:00 a.m. on Friday, June 17, 2016

Location: 1F., No.207, Sec. 2, Tiding Blvd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)

Call the Meeting to Order

Chairman’s Address

Approval Items (I)

1. Amendment to the Articles of Incorporation

Report Items

1. 2015 Business Operation

2. 2015 Audit Committee’s Review Report and Independent Auditors’ Report

3. 2015 Directors and Employee’s Remuneration Distribution Report

4. 2015 Cash Capital Increase Improved Business Plan Implementation Report

Acknowledgement Items

1. 2015 Annual Financial Accounting Report

Approval Items (II)

1. 2015 Earnings Distribution

2. Amendment to the Operational Procedure for Loaning of Company Funds

Motions

Adjournment

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Rules of Procedure for Shareholders’ Meeting

June 17, 2016

1. Attendance: Attending shareholders shall present attendance cards with represented shares clearly marked. Shareholders should be issued an official attendance card by the Company, and present original documents to attend the shareholders’ meeting.

2. Call the meeting to order: The chairperson shall call the meeting to order at the time scheduled for the meeting. In the event that the meeting is attended by shareholders representing less than half of the total issued shares, the chairperson may announce a postponement of the meeting, however, there may not be more than two postponements in total and the total time accumulated in the postponement(s) shall not exceed one hour.

3. Agenda : In the event that the shareholder meeting is convened by the Board of Directors, the agenda shall be worked out by the Board of Directors. The shareholder meeting shall be duly convened based on the arranged agenda, which shall not be changed unless duly resolved by the shareholder meeting. In the event that the shareholder meeting is convened by a convener beyond the Board of Directors, the provision set forth under the preceding paragraph may apply, mutatis mutandis. The chairperson shall not announce adjournment of the meeting until the agenda in the two preceding paragraphs is completed (including occasional (extemporaneous) motions) unless duly resolved in the meeting.

4. Speaking: An attending shareholder shall issue and submit a floor note before speaking at the shareholder meeting. The floor note shall expressly describe the subject of his or her opinions, his or her shareholder account number (or the code of the participation certificate), and his or her name so that the chairperson may fix the order of speaking. On the same issue, each shareholder shall not take the floor more than twice and a shareholder shall not speak more than five minutes for each round unless agreed upon by the chairperson. In the event that a juristic (corporate) person is entrusted to participate in a shareholder meeting, that juristic (corporate) person may appoint only one representative to participate in the meeting. In the event that a juristic (corporate) person shareholder appoints two or more representatives to participate in a shareholder meeting, only one representative may speak for the same issue.

5. A shareholder who has submitted a floor note but does not speak is deemed to have not taken the floor. In the event that the actual contents of the shareholder’s statement are found inconsistent with the entries of the floor note, the shareholder’s spoken statement shall prevail.

6. While an attending shareholder is taking the floor, other shareholder(s) shall not interrupt or interfere with the current floor unless agreed upon by the chairperson and the speaking shareholder. The chairperson shall stop an offender.

7. After a shareholder speaks on the floor, the chairperson may answer either by himself or herself or through a designee.

8. Discussion: Any issue not for the motion shall not be discussed or vote. Chairperson may declare for stopping discussion in appropriate time. Chairperson may declare for stopping discussion to vote when necessary. In order to keep the order of the meeting place and smooth procedure, chairperson may stop discussion of the issue which is discussed enough after consulting other shareholders.

9. Vote: Unless otherwise provided for in law and company’s articles of incorporation, decisions at the shareholder meeting shall be resolved by a majority vote of the shareholders attending the meeting. An issue is deemed to have been duly resolved after the chairperson enquires from all participants but no objection is heard. The validity of the decision so resolved is

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equally valid as a decision duly resolved through the balloting process. One vote right for one share. The recording procedure of issues of shareholder meetings shall be processing publicly in shareholder meetings. In the event that an amendment or a substitute comes out of the same issue, the chairperson shall fix the order of balloting in consolidation with the original issue. When one among them is duly resolved, other issue(s) is (are) deemed to have been vetoed and no voting process is required. The ballot inspector(s) and ballot recorder(s) of issues in shareholder meeting shall be appointed by the chairperson, and the ballot inspector(s) shall be selected from the shareholders.

1. Order of Meeting Place: The rectification (or security) personnel shall wear the “rectification officer” arm-band. The chairperson may instruct the rectification (or security) personnel to help maintain order of the meeting. All present shareholders are obliged to comply with the instruction of chairperson and the rectification (or security) personnel. In the event that a shareholder violates the order of meeting place, chairperson or the rectification (or security) personnel has to take action to stop him or her and ask him or her to leave.

2. Implement: Any matters insufficiently provided for herein shall be subject to the Company Law, Securities Exchange Act, and other laws and regulations concerned. These Rules and any amendments hereof shall be put into enforcement after being resolved at the shareholder meeting.

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Approval Item 1. （ Proposed by the Board of Directors ） Amendment to the Articles of Incorporate

1.1. In order to comply with the revision of Company Law of Article 235-1 and amendment of 235 and 240, and to meet the requirement of working capital, the Articles of Incorporation shall be amended.

1.2. The amended Articles are as follows.

Resolution:

Chart of Amendment of Incorporation Article

TGI Board of Directors June 17, 2016

	TGIBoard of D	irectorsJune 17, 2016
Before	After	Remarks
Article 6 The total capital of the Company amounts to NT$26 billion, which is represented by 2.6 billion shares of NT$10 par value per share. The shares are to be issued in several times authorized by the Board of Directors, and total amounts to NT$ 23,780,608,000, which is represented by 2378060800 shares are to be issued first.	Article 6 The total capital of the Company amounts toNT$30 billion,which is represented by3 billionshares of NT$10 par value per share. The share are to be issued in several times authorized by the Board of Directors.	Increase of Capital in 2015 is NT$1.3 billion, and the paid-up Capital is NT$25,080,608,000. Therefore the amount of Capital is to be set as 30 billion.
Article 26 If there is any profit upon the annual final accounting of the Company, the profit shall cover the loss in previous years and set aside a legal capital reserve at 10% of the profits leftover, and set aside 1.5% as bonus to directors and 1.5% as bonus to employees; then profits of the Company may be distributed by way of stock dividend after setting aside special capital reserve and conserving part of profits. The Company maintains the stability of the dividend policy in principle. Only the industry environment is changing in current, the value of the corporate life cycle grow steady though, for the profit distribution, based on sound financial planning in order to develop sustainably, and consider the company's future capital expenditure budget and funding needs, and to measure the necessity to cope of funding to determine the amount of profits retained or the amount of distribution and the amount of distribution of shareholder dividends or bonuses in cash dividends. However, the ratio for cash dividend shall not exceed 20% of total distribution.	Article 26 If there is any profit of annual revenue, the Company shall distribute one point five percent (1.5%) of net profit to the employees	1. To decrease the impact of without adopting bonuses to reward employee, the quota or rated remuneration shall be made for prompting employee’s morale. 2. The Profit refers to the profit before the earnings minus the remuneration for employee and directors and supervisor. It shall be distributed once.
	as remuneration, and less than one point five percent (1.5%) of net profit to the directors as remuneration. If there is any accumulated deficit, the amount of restitution shall be remained first.

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Article 26-1 If there is any profit after annual accounting, it shall be distributed with the following order.

Article 26-1 1. In response to the If there is any profit after annual international trend for accounting, it shall be distributed expenditure of employee with the following order. bonus and Article 64 of 1. To restitute deficits. Business Entity Accounting Act, the earnings distribution 2. To distribute ten percent (10%) of is the right of shareholders. net profits to a legal reserve. if To correspond to Business the legal reserve has reached the Entity Accounting Act, the amount of Capital, it is no dividends and bonuses are limitation. limited to be distributed to 3. To distribute special reserve. shareholders. 4. After distribution of Item 1~3 2. According to the Official above mentioned, If there is any Letter No. 1040012787 of net profit remaining, the Board of SFB of FSC, the conditions, Directors shall prepare a amount and category of distribution proposal and submit dividends distribution are to the shareholders’ meeting for required to be explained resolution. specifically. For sound financial planning, appropriate dividend strategies shall be made according to the annual actual operating situation, Capital budget of next annual, and the necessary of supporting capital by profits for sustainable operation and development . After deducted Item 1 to 3 above from Income, the dividends and bonuses above mentioned shall not be lower than 50% of the earnings. Only when the dividends and bonuses is lower than 1% of capital, it can be resolved to transfer all of them to retained earnings and not to be distributed. The rate of distributing cash dividends shall not be lower than 20% of total dividends. Article 30 Article 30 The fifty-fifth Amendment. The present Articles of IncorporationThese Articles of Incorporation were was adopted on August 25, 1964. drawn up on August 25, 1964. (The rest omitted) (The rest omitted) The fifty-fourth Amendment was on The fifty-fifth Amendment on June June 9, 2015. 17, 2016.

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Report Item 1. 2015 Business Report

Report of Business

June 17, 2016

Production Report:

Type	Territory	Contents	Yearly Output 1,000 MT
Flat Glass	Taiwan	 1 production lines of flat glass in Taichung Factory  1 production lines of flat glass in Lukang Factory  1 production lines of electronic ultra-thin glass in Taichung Factory  Subtotal 3production lines of flatglass	347 (+2.4%)
	China	 11 production lines of flat glass in Kunshan, Chengdu, Tianjin, Dongguan, Qingdao, Donghai, Xianyang and Fongyang Factories  1 production line of Photovoltaic glass in Fujian Factory  Subtotal 12production lines of flatglass	2,893 (-1.7%)
Fiberglass Fabeic & Fiberglass Reinforced	Taiwan	 1 production line of fiber glass and 1 production line of fabric glass in Taoyuan Factory and Lukang Factory  Subtotal 2production lines	72 (+15.9%)
	China	 3 production lines of fabric glass in Kunshan Factory  1 production lines of fabric glass in Chengdu Factory  Subtotal 4production lines	55 (+84.1%)
Container, Tableware Kitchenware	Taiwan	 8 production lines of container, tableware and kitchenware glass in Hsinchu Factory	134 (-11.1%)
Autoglass	Taiwan	 Production line of automotive glass in Taichung Factory	14 (+10.3%)
	China	 Production line of automotive glass in Yancheng Factory	10 (+82.3%)
Total		-	3,525 (-0.5%)

Sales Report:

Sales Report:
Type	Territory	Sales Volume		Sales Amount
		Thousand MT	Compared with 2014	NT$ Million	Compared with 2014
Flat Glass	Taiwan	344	(-4.6%)	4,996	(-3.4%)
	China	3,037	(-0.9%)	24,656	(-1.4%)
	Subtotal	3,381	(-1.3%)	29,652	(-1.7%)
				= US$ 936mil	Percentage of group’s turnover 68.4%
Fiberglass Fabeic & Fiberglass Reinforced	Taiwan	69	(-18.1%)	4,633	(-16.5%)
	China	53	(+33.8%)	4,291	(+22.5%)
	Subtotal	122	(-1.4%)	8,924	(-1.4%)
				= US$ 282mil	Percentage of group’s turnover 20.6%

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Container, Tableware and Kitchenware	Taiwan	141	(-4.5%)	3,306	(-1.8%)
				= US$ 104mil	Percentage of group’s turnover 7.6%
Autoglass	Taiwan	14	(+9.3%)	977	(+4.2%)
	China	9	(+103.4%)	493	(+115.2%)
	Subtotal	23	(+34.2%)	1,470	(+26.1%)
				= US$ 46mil	Percentage of group’s turnover 3.4%
Total		3,667	(-1.24%)	43,352	(-0.9%)
				= US$ 1,368mil	Domestic 83 % Export 17%
Merge Reversal		-	-	(2,066)
Total after offset		-	-	41,286	(-0.7%)
				= US$1,303mil

Financial Report:

1. Under the environment of excess capacity and imbalanced demand for real estate in China, Sales Volume, Sales Amount and Gross Profit, compared with 2014, had slightly decreased. Otherwise, due to the exceeded 6% devaluation of the exchange from RMB to USD in the second half 2015, and TGI’s subsidiaries in China had great loans, so that the consolidated exchange loss increased substantially, and the loss before tax, compared with 2014, had increased significantly.

2. Operating Revenue of 2015 is NT$ 41,286,161,000 (compared to 2014: -0.7%), Operating Income is NT$ (-3,017,817,000) (+20.9%), Net Income before Tax is NT$ (-4,907,909,000) (+2,849.8%) ， Net Income after Tax is NT$ (-5,225,450,000) (+1,513.8%), Income after Tax Attributable to Shareholders of the Parent is NT$ (-4,687,597,000) (-3,158.6%), EPS NT$(-1.97).

Status of Budget implement: Unit: NT$ thousand

Title	2015 Budget (*)	2015 Amount	Proportion
Operating Revenue	43,000,000	41,286,161	96.0 %
Net Income before Tax	(3,268,000)	(4,907,909)	-
Income after Tax Attributable to Shareholders of the Parent	(3,019,000)	(4,687,597)	-

*Note: it refers to inner budget with unpublished financial projections

Analysis of Profitability:

Title	2015	2014
Return on Total Assets (ROA)	(4.50)%	0.29%
Return on shareholder’s Equity (ROE)	(10.47)%	(0.63)%

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Ratio of Operating Income to Paid-in Capital	(12.03)%	(10.50)%
Ratio of Income before Tax to Paid-in Capital	(19.57)%	(0.70)%
Profit margin	(12.66)%	(0.78)%
EPS(adjusted retroactive)	NT$ (1.97)	NT$ 0.06

2016 Annual Business Plan Outline:

Strategy of Business Running:

The key factors of TGI’s stable growth are global macro-vision, broad-mindedness, and innovative production technologies. TGI has continued to accumulate the top technologies of glass production since establishment, and has continually promoted the popularity and use of high value-added energy-saving glass products to increase profitability, maintaining steady growth to provide good returns to shareholders as well as employees, and fulfilling corporate social responsibility by emphasizing the importance of environmental protection and energy saving.

Brief of Technology and R&D:

In response to the vast opportunities of the touch panel market, TG has built a production line making 0.33mm to 1.3mm electronic grade ultra-thin glass for use in touch panel/cover glass. TGI has applied for and received subsidies for “New product development plan Led by Science and Technology R&D Project of Ministry of Economic Affairs” from the Industrial Development Bureau in 2014.

The popularization of smart phones, tablets, cloud computing and Internet of Things (IoT) brings the rapid combination of electronic products and film, television, and wireless transmission. The demand for high-speed and high-frequency network is increase steadily, so TGI invested in a production line of low dielectric constant fiberglass fabric for applications in upstream material of high-speed and high-frequency substrate. In 2015, TGI applied for and received subsidies for the “Development Plan of Low Dielectric Constant Fiberglass Fabric for Material of High-speed and High-frequency Substrate” from the Industrial Development Bureau.

For the global trend of energy-saving and environment protection, TGI started to implement the R&D of vacuum glass and has built a new production line for the new product. In 2012, TGI applied for and received subsidies for the “Development Plans of Low Energy Consumption Vacuum Glass and Continuous Process Technology” from the Industrial Development Bureau.

In order to increase the value of solar photovoltaic cover glass products, TGI started the R&D of Anti-Reflection coating and has built production lines. In 2011 TGI passed the high tech preview program subsidy case “Glass manufacturing technology development of application on solar cell with high penetration, light self-cleaning, and thermal insulation” of

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NSC. Meanwhile TGI has invested in Solar Photovoltaic cover glass, solar mirror glass, Double Low-E glass, and actively develops more high-performance Low-E coated glass products in response to the issues of global environmental protection and energy saving & carbon reduction.

Prospects of Operating:

Continuing with the sluggish situation of global economic growth in 2015, the economic situation of the first half of 2016 is still weak. Particularly, the advantage of manufacturing cost in China has lessened because of rising costs, and at the meantime, import and export of Taiwan and most global countries have decreased, showing that it is still difficult for the global economy to grow significantly in 2016.

In regard to TGI’s performance in 2015, it has mainly benefited from the decline of energy price in the second half of the year. Nevertheless, due to the complicated economic circumstance of China, the subsidiaries in different regions have various situations and cannot be generalized. We make a brief report by product lines as follows.

In flat glass, both production and marketing of the TF-2 and TF-4 flat glass production lines in TGI’s Taichung Factory are running smoothly. The new TF-5 ultra-thin production line for 0.33mm and 0.7mm ultra-thin touch screens has reached mass production scale, however improvements can still be made to the yield and cost reduction to win over orders. Under the environment of excess capacity, and imbalanced demand for uneven real estate, the growth of market for flat glass industry in China is limited. Even though we has strategies to eliminate outdated production lines and optimize industrial structure, this problem cannot be improved in short term. There are still other manufacturers that use coal or other polluted fuels to make flat glass, causing pressure to our sales and profits. The capacities at TJG and QFG have been partially converted to supply automotive glass to boosting operation performance. TGI hopes to make high-quality products and perfect service to provide high value added energy-saving glass and diversity productions for clients.

In fiberglass, TGI’s Lukang Factory continues to develop ultra-thin fiberglass fabric to stay in step with the development of higher level mobile devices for the next generation. TGI’s Taoyuan Factory invests in new R&D items of higher strength, higher abrasion resistance and higher density technical standards to develop the market of high-tech products. Furthermore, TGI’s TCD Factory has started production successfully. In general, TGI’s high-quality fiberglass fabric and fiberglass yarn are well received by internationally renowned manufactures to use on high-end digital mobile products.

In container glass, TGI continues to develop high value added products to increase profits. The high quality of container products has been well received by American clients, and the orders have been expanding stably. The heat-resistant baby feeding bottles are well received by Japanese, American, Chinese and Taiwanese manufacturers of brand name of

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infant products, and our products have entered the international market already. The containers with various handles and doublewall glass which are made of α -33 heatresistant glass are artistic, practical, and high value added. They continue to win orders from famous domestic and international brands. Meanwhile, the products lay a foundation for TGI’s private brand development.

The soda ash product of Shihlien Chemical Industrial Jiangsu Co., Ltd. (SCJ), which started production in November of 2014, has reached the goal of full production capacity in 2015. There will be profits generated starting this year. The second phase biotech salt products and alkaline drinking water has started to be developed according to the planning. The profits of SCJ are expected to be enhanced from 2017 after operation of all products have been implemented successfully.

To meet working capital needs and reduce debt, TGI is planning to increase capital to strengthen its financial structure.

Looking to the future, TGI will keep focusing on the core business of glass production, curtail operation cost, refine research and development, and improve manufacturing processes. Building on the existing foundation, TGI will continue to innovate, increase profits, keep carrying out corporate social responsibility, and welcome challenges of the future.

Important Sales Policy:

1. Innovative Technology

2. Excellent Quality

3. Cost Down

4. Reasonable Price

5. Product Development

6. Services Improvement

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Report Item 2.

2015 Audit Committee’s Review Report and Independent Auditors’ Report

2015 annual final accounting report has been reviewed by Audit Committee. The audit committee’s review report and independent auditors’ report are as follows.

Audit Committee’s Review Report

The 2015 financial report, compiled by the board of directors, had been examined by CPA with issuing auditor’s reports. Furthermore, the operation report and profit distribution report had been examined by our Audit Committee without any irregularities. According to Company Law, Article 219, this report is hereby submitted to 2016 Annual Meeting of Shareholders for perusal.

Convener of Audit Committee: Lin, Fong-Cheng March 28, 2016

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Report Items 3.

2015 Directors and Employee’s Remuneration Distribution Report

Due to the loss of 2015 and according to Articles of Incorporation, Article 26, TGI did not distribute remuneration to directors and employee.

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Report Item 4. 2015 Cash Capital Increase Improved Business Plan Implement Report

The report of implement statement of 2015 cash capital increase strengthening operation plan is as follows.

1. 2015 consolidated operation statement of TGI is as follows.

			Unit: NT$thousand	Unit: NT$thousand
Item	2015 Examined Amount	2015 Expected Amount	Variation of Amount	Comparison of Achievement% Actual/Planned
Operating Revenue	$41,286,161	$43,072,253	$(1,786,092)	95.9
OperationCost	(39,036,140)	(40,596,882)	1,560,742	96.2
Operation GrossProfit	2,250,021	2,475,371	(225,350)	90.9
Operation Expenses	(5,250,580)	(5,308,292)	57,712	98.9
Net Amount of Other revenues and gains and expenses and losses	(17,258)	-	(17,258)	-
Operation Loss	(3,017,817)	(2,832,921)	(184,896)	106.5
Non-operating Income and Expenses	(1,890,092)	(432,673)	(1,457,419)	436.8
Loss before Tax	(4,907,909)	(3,265,594)	(1,642,315)	150.3
Income Tax Expenses	(317,541)	(38,871)	(278,670)	816.9
Net Loss of this Term for BusinessUnit	$(5,225,450)	$(3,304,465)	$(1,920,985)	158.1

Note: If there is any variation over 20% and NT$10 million between actual and planned achievement, it should explain the reason of variation.

Explanation:

• 1) 2015 TGI’s consolidated operation income is NT$ 41,286,161 thousand which is 95.9% of 2015 expected amount. The consolidated operation loss is NT$(3,017,817) thousand which is 106.5% of 2015 expected amount. The variation is less than 20% so the consolidated operation income and loss of 2015 is under original expectation.

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The variation of departments between actual and expected amount is as follows:

			Unit: NT$ thousand	Unit: NT$ thousand
Item	2015 Examined Amount	2015 Expected Amount	Variation of Amount	Comparison of Achievement% Actual/Planned
FlatGlass	$29,180,394	$29,871,010	$(690,616)	97.7
Glass Fiber	8,675,302	9,524,708	(849,406)	91.1
Glass Container & Glassware	3,404,675	3,618,118	(213,443)	94.1
Other	25,790	58,417	(32,627)	44.1
Total	$41,286,161	$43,072,253	$(1,786,092)	95.9

• 2) In 2015, TGI’s actual consolidated non-operating income and expenses is NT$(1,890,092) thousand. It was NT$(1,457,419) thousand than original expected NT$(432,673) thousand because of the exceeded 6% devaluation of the exchange from RMB to USD in the second half 2015. Otherwise, TGI’s subsidiaries in China had great loans so that the consolidated exchange loss arrived NT$1,204,011 thousand.

• 3) The income tax is NT$ 317,541 thousand which is exceeded NT$278,670 thousand than original expected NT$38,871 thousand because of the transfer from the deferred assets of income tax and earnings of income tax in former years of TGI’s invested companies in China to income tax expenses in this year so that the income tax increased with NT$278,670 thousand.

In summary, TGI’s consolidated operating statement of 2015 is still under original expected income and loss except the increased consolidated non-operating expenses and deferred income tax caused by the devaluation of RMB.

1. The variation of departments between two periods:

				Unit: NT$thousand	Unit: NT$thousand
Item	2015 Examined Amount	2015 Expected Amount	Variation of Amount	Comparison of Achievement% Actual/Planned	Item
FlatGlass	$29,180,394	70.7	$29,243,306	70.4	99.8
Glass Fiber	8,675,302	21.0	8,863,945	21.3	97.9
Glass Container & Glassware	3,404,675	8.2	3,459,806	8.3	98.4
Other	25,790	0.1	2,963	-	870.4
Total	$41,286,161	100.0	$41,570,020	100.0	99.3

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TGI’s consolidated operating revenue of 2015 is slightly decreased with NT$ 283,859 thousand. The main reason is the overcapacity of flat glass in China in 2015. The fierce competition in the market led to a decrease in flat glass sales volume and average sales price. Furthermore, the glass fiber product is high-tech and high-priced thin fabric in 2015, so its sales volume decreased and led to the decrease of its sales price. However, it is a product with high gross profit; therefore, its gross profit of overall sales is increased.

To sum up, although this consolidated operating revenue is slightly decreased with fierce competition in the market of China, TGI will still keep moving toward refinements in our quality and technology with an aim to curtail operation cost for high profit.

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Acknowledgement Item 2015 Annual Final Accounting Report

（ Motion from TGI Board of Directors ）

Business Report please refers to Report Item 1. The Consolidated and Parent Company Only Income Statements, Balance Sheet, Statement of Changes in Equity and Cash Flow Statement are as follows.

Resolution:

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Approval Item 2. 2015 Earnings Distribution

（ Motion from TGI Board of Directors ）

Explanation: The Earnings Distribution List is as follows. Resolution:

TGI Board of Directors June 17, 2016

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----- Start of picture text -----

TGI 2015 Earnings Distribution List Unit: NT$
Amount
Item
Subtotal Total
Unappropriated retained earnings at beginning 5,445,452,106
Add: Consolidated Income and Loss (the actuarial
income and loss after determining welfare plan (2015)) (462,646,006)
2015 Net Loss after Tax (4,687,596,293) (5,150,242,299)
Allowance Items:
Legal Reserve 10% 0
Reversal of Legal Reserve before 1997 (see Note 3) 5,150,242,299 5,150,242,299
Subtotal of 2015 Distributable Net Profit 5,445,452,106
Dividends Distribution 2,508,060,800 shares
NT$ 0/@ share
Bonus of Shareholders – Stock NT$ 0/@ share 0
–Cash NT$ 0/@ share 0 0
Unappropriated retained earnings 5,445,452,106
Note:
1. Remuneration of Directors ＝ NT$ 0
＝
Remuneration of Employee NT$ 0
Dividends of Shareholders ＝ NT$ 0
2. According to TGI amended Corporation Article, due to the loss of 2015 and for planning
Capital budget of next year, TGI did not distribute dividends and bonus to shareholders.
3. To strengthen financial structure, TGI intend to make reversal of the legal reserve of
general purpose to abate 2015 loss with NT$5,150,242,299.
----- End of picture text -----

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Discussion Item 3. （ Motion from TGI Board of Directors ） Amendment to Operational Procedure for Loan of Company Funds

3.1. In order to meet the requirements of business development and to give consideration to shareholders’ right, TGI amended parts of Article of Operational Procedure for Loan of Company Funds.

3.2. The amended Articles are as follows. Resolution:

Chart of Amendment of Operational Procedure for Loan of Company Funds

TGI Board of Directors June 17, 2016

	Before		After	Remarks
	Article 3 Limited Amount of Loan: (The rest omitted) The amount of inter-company loans granted between the foreign subsidiaries, directly or indirectly, whose 100% voting shares are hold by the Companyshall not exceed the 40% of the net value of the subsidiaries, which is shown on the most recent financial statements. Eachindividual loan shall not exceed 30% of the business net value of the Subsidiaries,which is shown on the most recent financial statements.		Article 3 Limited Amount of Loan: (The rest omitted) There is no limitation to the amount of inter-company loans granted for financial needbetween the foreign subsidiaries, directly or indirectly, whose 100% voting shares are hold by the Company.Only the limited amount and period of loan shall be stated in its operating procedure for Loan.	Amended to meet the requirements of business development and to give consideration to shareholders’ right. The 11th amendment.
	Article 14 The present Operational Procedure was adopted on March 17, 1989. (The rest omitted) The 10thAmendment was on June 9, 2015.		Article 14 The present Operational Procedure was adopted on March 17, 1989. (The rest omitted) The 11thAmendment was on March 28, 2016.

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Motions:

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Appendix I: Number of Shares for All Directors up to the date of Book closure

							June 17, 2016	June 17, 2016
Title	Corporate Representative	Appointment Date	Term	Shares of Appointment Date		Shares of the date of Book closure
				Shares	Rate %	Shares		Rate %
Chairman	Lin, P. F.	Jun. 9, 2015 to Jun. 8, 2018	3 years	16,868,795	0.71%	16,868,795		0.67%
Directors	Lin,P. S.			12,779,177	0.54%	13,345,010		0.53%
	Lin,P. C.			3,901,412	0.16%	4,072,020		0.16%
	Yun San Corp. Chang, P. S.			146,339	0.01%	152,738		0.01%
	Lin, H. T.			8,783,860	0.37%	9,167,978		0.37%
	Lim Ken Seng Kah Kih Corp. Hsu, L. L.			114,302,799	4.81%	116,802,799		4.66%
	Tai Hong Investment Corp. Su,Y. T.			363,601,432	15.29%	372,601,432		14.86%
	Tai Hong Investment Corp. Lin, C. H.
	Tai Hong Investment Corp. Lin, C. Y.
	Tai Chien Investment Corp. Lin, C. M.			215,828,896	9.08%	220,828,896		8.80%
	Ho Ho Investment Corp. Chen, C. C.			317,941,562	13.37%	324,941,562		12.96%
	Ho Ho Investment Corp. Lin, B. T.
Independent Directors	Lin, F. C.			0	0%	0		0%
	Chen,C. C.			0	0%	0		0%
	Hwang, T. Y.			0	0%	0		0%
Total Shares Number of 15 Directors				1,054,154,272	44.33%	1,078,781,230		43.01%

Note: 1. Total Issued Shares:

1. Legal Shares of Directors:

2,508,060,800 shares (100.0%) 75,241,824 shares (3.0%)

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Appendix II: Earning Distribution Approved by the Board of Directors

There is no earnings distribution of 2015.

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Appendix III:

The Impact of Stock dividend Issuance on Business Performance and EPS

TGI 2015 Financial Forecast is still not necessary to be disclosed up to the date of Shareholder Meeting.

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Appendix IV: Articles of Incorporation of Taiwan Glass Industry Corporation

Amended on June 9, 2015

Chapter I. General Provisions

Article 1: The Company is named Taiwan Glass Industry Corporation and is incorporated under the provisions on joint stock company limited set forth in the Republic of China (ROC) Company Law.

• Article 2: The business scope of the Company is as follows:

• Mining, processing, and sale of glass materials.

• Manufacturing and sale of flat glass.

• Manufacturing and sale of rolled glass.

• Manufacturing and sale of wire glass.

• Processing and sale of reflective glass.

• Processing and sale of tempered and laminated glass.

• Processing and sale of mirror glass.

• Processing and sale of laminated glass.

• Processing and sale of insulating glass.

• Processing and sale of table and edge grinding glass.

• Manufacturing and sale of glass containers.

• Manufacturing, processing and sale of tableware glass.

• Manufacturing, processing and sale of heat strengthened glass.

• Manufacturing, processing and sale of fiberglass yarn and fabric.

• Output of machinery and technology of glass manufacturing.

• Import and export business related to glass raw materials and machinery.

• Contracting business related to glass installation engineering.

• ZZ99999 -- besides permitted business, the Company isallowed to operate business that is not prohibited by anylaws.

Article 2-1:

The Company may provide endorsement and guarantee and act as a guarantor.

Article 3: The Company’s overseas investment is not subject to the limitation stipulated in Article 13 of R.O.C Company Law.

Article 4: The Company is located in Taipei City and sets its factory in Hsinchu City, Taichung City, Taoyuan City and Changhua County, and sets its sand quarry and sand washing factory in Miaoli County, and may form either domestic or foreign branches if necessary.

Article 5: (Delete)

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Chapter II. Shares

• Article 6: The total capital of the Company amounts to NT$26 billion, which is represented by 2.6 billion shares of NT$10 par value per share. The shares are to be issued in several times authorized by the Board of Directors, and total amounts to NT$ 23,780,608,000, which is represented by 2,378,060,800 shares are to be issued first.

• Article 7: For the share certificates of the Company to be issued, they must each bear the name of the owner, must be signed by not less than three directors, and must be duly certified in accordance with relevant regulations. The registered shares of the Company under previous way may be without printing certificates, but shall register in centralized securities depository enterpriseagency.

• Article 8: The shareholders shall inform the Company about their true names and addresses, and submit their signature cards to the Company for recordation. All claims for dividends and bonuses, exercising of shareholders rights or contacts in writing with the Company shall be authenticated by the said seals.

• Article 9: All transfer of stocks, pledge of rights, loss, succession, gift, loss of seal, amendment of seal, and similar stock transaction conducted by shareholders of the Company shall follow the “Guidelines for Stock Operations for Public Companies” unless specified otherwise by law and securities regulations.

• Article 10:

(Delete)

• Article 11: Stock transfer registrations shall be suspended sixty days preceding each regular shareholders’ meeting, thirty days preceding a temporary shareholders’ meeting, or five days preceding the base day for distribution to shareholders of dividends, bonuses, or other privileges as determined by the Company.

Chapter III. Shareholders’ Meetings

Article 12: The regular meeting is to be called once every year and summoned by the Board of Directors in the Company within six months of the close of each fiscal year. If necessary, a temporary meeting may be summoned in accordance with the laws.

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• Article 13: The chairman of the Board of Directors in the Company shall be the chairperson of a shareholders' meeting. In case that the chairman of the Board asks for leave or fails to perform his duty due to certain reason, the chairperson may designate one of the directors to represent him; in the event he has not designated any representative, the directors shall elect one from among themselves to represent him.

• Article 14: Shareholders shall have one vote for each share they hold. The Company owns shares held by law, but no voting rights. When a shareholder is unable to attend a shareholders’ meeting, he/she may delegate a proxy to attend it on behalf of him by completing a power-ofattorney, specifying the scope of authorization.

• Article 15: The meeting of the shareholders may be held if attended by more than one-half of total shareholders. Unless otherwise provided by law, resolutions of shareholders’ meeting require the presence of shareholders who represent more than one-half of the totals issued shares of the Company and shall be adopted by a majority vote of the shareholders present.

Chapter IV. Directors

• Article 16: The Company shall have fifteen directors, including three independent directors to be elected by the shareholders’ meeting from among shareholders with disposing capacity.

• However, the total ratio of the name-bearing shares held by all directors shall not be less than five percentage of paid-in capital of the Company. Directors shall be elected by adopting candidates’ nomination system, the nomination of directors and related announcement shall comply with the relevant regulations of the law

• The shareholders who held more than one percent of the total number of issued shares could summit the nomination of the candidates and necessary documents comply with relevant regulations in writing during the public announcement of the Company, and the number of the director nomination shall not exceed the number of directors to be elected; likewise, the number of candidates nominated by the Board of Directors shall not exceed the number of directors to be elected.

• Article 17: The term of office for directors shall be three years, and all directors shall be eligible for re-election.

• Article 18: The chairman shall be elected among the directors and on behalf of the Company presided over all the business.

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• Article 19: The Board of Directors shall be established at least quarterly and convened by the chairman of the Board of Directors. The convened notice of the Board of Directors shall be in the written notice, fax, or e- mail. When a director is unable to attend the meeting of the Board of Directors, he may appoint another director to attend on his behalf of the meeting of the Board of Directors. The chairman shall have the right to execute documents in accordance with the resolutions of the Board of Directors when the Board is not in session. Except as provided in Article 185 of the Company Law, other matters related to the sale, setting, creation of mortgage, and cancellation of real estates shall be decided by the Board of Directors.

• Article 20: In compliance with laws and regulations, the Company shall establish an Audit Committee, which shall consist of all independent directors.

• Article 21:

• Article 22:

• (Delete)

• (Delete)

• Article 23: The Board of Directors is authorized to prescribe remuneration to chairman and directors according to the extent of their contribution and participation to the Company.

Chapter V. Managers

Article24: The Company shall have one president and several vice presidents according to the organization and the need of business of the Company. The appointment, dismissal and remuneration of president and vice presidents shall be authorized by the Board of Directors.

Chapter VI. Final accounts of revenue and earnings distribution

• Article 25: At the end of a fiscal year, the Board of Directors shall prepare and deliver the following statements and reports to Audit Committee for auditing purposes and submit to the general shareholders meeting for recognition.

• The business report.

• The financial statements.

• Motions relating to the earnings distribution or appropriation to cover loss.

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• Article 26: If there is any profit upon the annual final accounting of the Company, the profit shall cover the loss in previous years and set aside a legal capital reserve at 10% of the profits left over, and set aside 1.5% as bonus to directors and 1.5% as bonus to employees; then profits of the Company may be distributed by way of stock dividend after setting aside special capital reserve and conserving part of profits. The Company maintains the stability of the dividend policy in principle. Only the industry environment is changing in current, the value of the corporate life cycle grow steady though, for the earnings distribution, based on sound financial planning in order to develop sustainably, and consider the company's future capital expenditure budget and funding needs, and to measure the necessity to cope of funding to determine the amount of profits retained or the amount of distribution and the amount of distribution of shareholder dividends or bonuses in cash dividends. However, the ratio for cash dividend shall not exceed 20% of total distribution.

• Article 27: Until the accumulated legal capital reserve has equaled the total share of capital, may stop appropriating by the resolution in the shareholders’ meeting.

Chapter VII. Appendix

• Article 28: The internal organization of the Company and the detailed procedures of business operation were adopted separately.

• Article 28-1: The rules of shareholders’ meeting in the Company comply with regulations of Financial Supervisory Commission, Executive Yuan, R.O.C.

• Article 29: In regard to all matters not provided for in these Articles of Incorporation, the Company Law of the Republic of China shall govern.

Article 30: The present Articles of Incorporation was adopted on August 25, 1964. The first Amendment was on August 25, 1966. The second Amendment was on October 29, 1966. The third Amendment was on September 16, 1967. The fourth Amendment was on February 29, 1968. The fifth Amendment was on July 5, 1968. The sixth Amendment was on April 5, 1969. The seventh Amendment was on April 14, 1970. The eighth Amendment was on May 8, 1971. The ninth Amendment was on March 31, 1973. The tenth Amendment was on April 27, 1974. The eleventh Amendment was on February 1, 1975. The twelfth Amendment was on April 30, 1975. The thirteenth Amendment was on April 21, 1976. The fourteenth Amendment was on March 31, 1977. The fifth Amendment was on March 18, 1978. The sixteenth Amendment was on March 28, 1979. The seventeenth Amendment was on March 1, 1980.

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The eighteenth Amendment was on August 15, 1980. The nineteenth Amendment was on March 28, 1981. The twentieth Amendment was on March 27, 1982. The twenty-first Amendment was on March 19, 1983. The twenty-second Amendment was on March 17, 1984. The twenty-third Amendment was on March 28, 1985. The twenty-fourth Amendment was on September 7, 1985. The twenty-fifth Amendment was on March 21, 1986. The twenty-sixth Amendment was on March 14, 1987. The twenty-seventh Amendment was on July 6, 1987. The twenty-eighth Amendment was on March 19, 1988. The twenty-ninth Amendment was on March 18, 1989. The thirtieth Amendment was on March 17, 1990. The thirty-first Amendment was on March 12, 1991. The thirty-second Amendment was on March 25, 1992. The thirty-third Amendment was on March 26, 1993. The thirty-fourth Amendment was on April 1, 1994. The thirty-fifth Amendment was on March 31, 1995. The thirty-sixth Amendment was on March 28, 1996. The thirty-seventh Amendment was on March 28, 1997. The thirty-eighth Amendment was on May 8, 1998. The thirty-ninth Amendment was on April 28, 2000. The fortieth Amendment was on March 30, 2001. The forty-first Amendment was on May 31, 2002. The forty-second Amendment was on May 28, 2003. The forty-third Amendment was on May 13, 2004. The forty-fourth Amendment was on April 29, 2005. The forty-fifth Amendment was on June 9, 2006. The forty-sixth Amendment was on June 8, 2007 The forty-seventh Amendment was on June 11, 2008. The forty-eighth Amendment was on June 10, 2009. The forty-ninth Amendment was on May 26, 2010 The fiftieth Amendment was on May 25, 2011. The fifty-first Amendment was on June 5, 2012. The fifty-second Amendment was on June 10, 2013. The fifty-third Amendment was on June 9, 2014.

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