WALSIN - AGM Information 2019 | FinancialReports.eu

Stock code: 1605

Walsin Lihwa Corporation

2019 Annual Shareholders' Meeting Handbook

Date: Friday, May 24, 2019 Time: 9:00 am Place: Multi-Purpose Auditorium (1F., No.15, Ln. 168, Xingshan Rd., Neihu Dist., Taipei City)

Walsin Lihwa Corporation 2019 Annual Shareholders' Meeting Handbook

Meeting Procedure and Agenda ........................................................................ 1 Matters to be Reported 1. General Manager's Report ........................................................................... 2 2. Audit Committee's Review Report ............................................................. 2 3. The Distribution Report of Compensation of the Employees and Directors for the Year 2018. ....................................................................................... 2 4. Other items to be reported ........................................................................... 2 Matters to be Ratified and Discussed 1. Ratification of the Company's 2018 business report, balance sheet, consolidated income statement, statement of changes in equity and statement of cash flows. .............................................................................. 4 2. Ratification of the Company's 2018 profit distribution plan. ..................... 4 3. Review and approval of the amendments to the Procedures for the Acquisition and Disposal of Assets of the Company. ................................ 8 4. Review and approval of the amendments to the Procedures for Financial Derivatives Transactions of the Company. ................................................. 8 5. Review and approval of the amendments to the Procedures for Lending Funds to Other Parties and the Procedures for Endorsement and Guarantee of the Company. .......................................................................................... 8 6. Review and approval of the amendments to the Company's Rules for Election of Directors ................................................................................... 9 7. Release of the directors of the Company from non-compete restrictions set forth in Article 209 of the Company Act. ................................................... 9 Ad-Hoc Motions .............................................................................................. 10 Appendix 1. 2018 Business Report ................................................................................ 12 2. Final Account Statements of 2018 ............................................................ 15

Independent Auditors' Report ................................................................... 28 4. Audit Report from the Audit Committee .................................................. 36 5. The Distribution Report of Compensation of the Employees and Directors for the Year 2018 ...................................................................................... 37 6. Investments in Mainland China ................................................................ 38 7. Corporate Governance Best Practice Principles ....................................... 42 8. Implementation Status of Repurchase of the Company's Shares .............. 62 9. Directors shareholdings stated in the shareholder register for the 2019 Annual Shareholders' Meeting .................................................................. 63 10. Comparison Table of Amended Articles of Procedures for Acquisition and Disposal of Assets ..................................................................................... 64 11. Comparison Table of Amended Articles of Procedures for Financial Derivatives Transactions ........................................................................... 77 12. Comparison Table of Amended Articles of Procedures for Lending Funds to Other Parties .......................................................................................... 88 13. Comparison Table of Amended Articles of Procedures for Endorsement and Guarantee ............................................................................................ 90 14. Comparison Table of Amended Articles of Procedures for Election of Directors .................................................................................................... 91 15. Explanations of involvement of directors or their related persons in the field of the Company's business ................................................................ 93 Regulations 1. Articles of Association .............................................................................. 95 2. Rules and Procedures of Shareholders' Meetings ................................... 102

Walsin Lihwa Corporation

Meeting Procedure and Agenda of the 2019 Annual Shareholders' Meeting

Time: 9:00 am, Friday, May 24, 2019

Place: Multi-Purpose Auditorium (1F., No.15, Ln. 168, Xingshan Rd., Neihu Dist., Taipei City)

1. The Meeting Called to Order

2. Chairman's Address

3. Matters to be Reported:

(1) General Manager's Report (The 2018 Business Report and Final Account Statements)
(2) Audit Committee's Review Report
(3) The Distribution Report of Compensation of the Employees and Directors for the Year 2018
(4) Other items to be reported

4. Matters to be Ratified and Discussed `：`

(1) Ratification of the 2018 Business Report and Final Account Statements.
(2) Ratification of the 2018 Profit Distribution Plan.
(3) Discussion of the amendment to the Procedures for the Acquisition and Disposal of Assets of the Company.
(4) Discussion of the amendment to the Procedures for Financial Derivatives Transactions of the Company.
(5) Discussion of the amendment to the Procedures for Lending Funds to Other Parties and the Procedures for Endorsement and Guarantee of the Company.
(6) Discussion of the amendment to the Procedures for Election of Directors of the Company.
(7) Discussion of the proposal for the release of Directors' NonCompetition Obligations.

5. Ad-Hoc motions

6. Adjournment

Matters to be Reported

I. General Manager's Report

Please review and approve the Company's 2018 business report and final account statement.

For the business report, balance sheet, consolidated income statement, statement of changes in equity and statement of cash flows, please see pp. 8-21 of the Appendix to the Handbook for details.

II. Audit Committee's Review Report
Please review and approve the Audit Committee examination of the Company's 2018 final account statement (please see p. 28 of the Appendix to the Handbook).
III. The Distribution Report of Compensation of the Employees and Directors for the Year 2018.

Please refer to p. 29 of the Appendix to the Handbook for the status of the distribution of compensation to employees and directors.

IV. Other items to be reported
(1) Report on the Company's investments in mainland China as of March 31, 2019. Please see pp. 30 to 31 of the Appendix to the Handbook for details.
(2) Report on the revision of the Company's Corporate Governance Best Practice Principles:
- The Company's Corporate Governance Best Practice Principles have been amended by a resolution adopted in a board of directors meeting dated April 9, 2019. Please see pp. 32-43 of the Appendix to the Handbook for the full content of the amended version.
(3) Report on the status of repurchase of the Company's shares:
- The shares repurchased by the Company for the 21[th] time has been scheduled to be written off for capital reduction on August 6, 2018. Please see p. 44 of the Appendix to the Handbook for details.
(4) Report on the shareholdings of directors in the Company as follows: a) According to Article 26 of the Securities and Exchange Act and the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies, the minimum shareholding of the all of the Company's directors shall be 3% of
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its issued and outstanding shares; provided, however, this does not apply to the supervisors of the Company because the Company has an Audit Committee.

The Company has 4 independent directors. The shareholding ratio of all of the directors (excluding the independent directors) is reduced to 80% of the above minimum shareholding ratio.

b) For the shareholdings of individuals and total directors recorded in the shareholder register prior to the book closure date for the 2019 Annual Shareholders' Meeting, please see p. 45 of the Appendix to the Handbook.
c) The shareholdings of all of the Company's directors have all met the requirement for the statutory shareholding ratio.
(5) Report on the process and status of nomination of shareholders' proposals:
During the period from March 8[th] , 2019 to March, 18[th] 2019, none of the shareholders submitted any written proposal to the Company during the period of nomination according to Article 172-1 of Company Act.
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Matters to be Ratified and Discussed

Proposal 1 Proposed by the board of directors

Subject: Ratification of the Company's 2018 business report, balance sheet, consolidated income statement, statement of changes in equity and statement of cash flows.

Explanations:

Please see pp. 12-37 of the Appendix to the Handbook for the business report, balance sheet, consolidated income statement, statement of changes in equity and the statement of cash flows.
The aforesaid financial statements have been approved at the Company's 11[th] board meeting of the 18[th ] term, and audited as well as certified by the CPA. They were submitted along with the business report to the Audit Committee, which then audited the same.

Resolution:

Proposal 2 Proposed by the board of directors

Subject: Ratification of the Company's 2018 profit distribution plan. Explanations:

Please see the attachment for the 2018 profit distribution plan.
This proposal was approved at the Company's 11[th] board meeting of the 18[th] term and submitted to the Audit Committee, which has audited the same.
Upon the approval of the Annual Shareholders' Meeting, it is proposed that the Chairman be authorized to otherwise determine the distribution record date and distribution date. In the event that the Company buys back shares, thereby affecting the number of outstanding shares and then causing the proposed profit distribution per share to change, it is proposed that the Chairman be authorized to adjust the same based on the number of actual shares outstanding on the ex-dividend date.
The distribution of the cash dividends shall be rounded down to
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the nearest New Taiwan Dollar. The aggregate of the remaining cash will be credited to Other Revenue by the Company.

Resolution:

Walsin Lihwa Corporation Profit Distribution Proposal for 2018

Unit: NTD

		Unit: NTD
Summary		Amount

Beginning of Period Retained Earnings Amount Affected Due to Application of IFRS Retroactively Adjusted Retained Earnings—Unappropriated Add: Retained Earnings Adjusted Due to Adoption of Equity Method in Investments Less: Remeasurements of Defined Benefit Plans Recognized in Retained Earnings Less: Cumulative Gains or Losses Directly Transferred to Retained Earnings by Disposal of Investments in Equity Instruments Measured at Fair Value through Other Comprehensive Income Adjusted Retained Earnings Add: Net Income Minus: Legal Reserve Minus: Special Reserve (Note 1) Distributable Earnings Distribution Cash Dividend to Shareholders (NT$1.2 per Share)	11,756,780,719 (1,175,678,072) (1,330,887,777)	9,258,575,169 4,657,644,208
		13,916,219,377 97,100,312 (22,227,457) (252,951,017)
		13,738,141,215 9,250,214,870
		22,988,356,085 (3,991,200,310)
End of Period Retained Earnings		18,997,155,775

Note 1: According to the letter from the Financial Supervisory Commission dated April 6, 2012 (Ref. Jin-Guan-Zheng-Fa-Zi-1010012865), the Company shall not distribute the amount which is set aside as the

special reserve among the sum of the profit/loss for the current period and the undistributed earnings from the last period and is equivalent to the net amount of other deductions in the reported shareholders' equity occurring in the current year, in accordance with Article 41 of the Securities and Exchange Act; provided, however, if the special reserve has been set aside pursuant to the said letter, the difference between the amount having been set aside and the net amount of other deductions in the reported shareholders' equity shall be further set aside as the special reserve.

Note 2: The Company's issued and outstanding common stock totaled 3,326,000,258 shares as of February 22, 2019.
Note 3: According to the rules specified in the letter from the Ministry of Finance dated August 5, 1999 (Ref. No.: Tai-Cai-Shui-881933217), the year of this distribution of earnings is year 2018.

Responsible Person: Chiao, Yu-Lon (Seal) Manager: Cheng, Hui-Ming (Seal) Accounting Chief: Wu, Chin-Sheng (Seal)

Proposal 3 Proposed by the board of directors

Subject: Review and approval of the amendments to the Procedures for the Acquisition and Disposal of Assets of the Company.

Explanation ： 1. It is proposed that the relevant provisions of above Procedures be amended in accordance with the amendments to certain provisions of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
Please see pp. 64-76 of the Appendix to this Handbook for the Comparison Table of the Amended Articles of the Procedures for the Acquisition and Disposal of Assets of the Company.

Resolution:

Proposal 4 Proposed by the board of directors

Subject: Review and approval of the amendments to the Procedures for Financial Derivatives Transactions of the Company.
Explanation ： 1. It is proposed that certain provisions of the above Procedures be amended in accordance with the amendments to certain provisions of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies, and to meet the Company's operational needs.
Please see pp. 77-87 of the Appendix to this Handbook for the Comparison Table of the Amended Articles of the Procedures for Financial Derivatives Transactions of the Company.

Resolution:

Proposal 5 Proposed by the board of directors

Subject: Review and approval of the amendments to the Procedures for Lending Funds to Other Parties and the Procedures for Endorsement and Guarantee of the Company.

Explanations:

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It is conducted in accordance with Article 8, Chapter 2 of the Company's Procedures for Lending Funds to Other Parties and Article 11, Chapter 2 of the Company's Procedures for Endorsement and Guarantee.
It is proposed that certain provisions of the above Procedures be amended in accordance with amendments to the applicable laws or regulations published by the competent authority.
Please refer to pp. 88-90 of the Appendix to the Handbook for the Comparison Table of Amended Articles of the Procedures for Lending Funds to Other Parties and of the Procedures for Endorsement and Guarantee of the Company.

Resolution:

Proposal 6 Proposed by the board of directors

Subject: Review and approval of the amendments to the Company's Rules for Election of Directors

Explanations:

It is conducted in accordance with Article 192-1 of the Company Act.
It is proposed that certain part of Article 2 of the Company's Rules for Election of Directors be amended in cooperation with the simplification of the procedures for director nomination and deletion of the board of directors' right to review documents set forth in the Company Act to protect the shareholder's right to nominate.
Please refer to p. 60 of the Appendix to the Handbook for the Comparison Table of Amended Articles of the Company's Rules for Election of Directors.

Resolution:

Proposal 7 Proposed by the board of directors

Subject: Release of the directors of the Company from non-compete restrictions set forth in Article 209 of the Company Act.

It is conducted in accordance with Paragraph 1, Article 209 of the
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Company Act, which provides that “a director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the shareholders meeting the essential contents of such an act and secure its approval”.

For the addition to the same business items as the Company for the companies that are within the same/similar business as/to the Company where the Company's directors serve as directors, please see p. 91 of the Appendix to the Handbook.
It is proposed that the shareholders' meeting approve the release of the directors from non-compete restrictions on engaging in any business within the Company's business scope under Paragraph 1, Article 209 of the Company Act, as well as approve the abstention from exercise of the disgorgement rights against the directors mentioned above as of the date of serving as directors of other companies engaging in competing business.

Resolution:

Ad-Hoc Motions

Adjournment

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Appendix

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Walsin Lihwa Corporation

2018 Business Report

1. Preamble

The Company's overall profitability hit a record high thanks to the recovery of global economy in 2018. Profitability of the Wire and Cable Business Unit (" BU ") rose, benefiting from the increased demand for infrastructure and plant construction in Taiwan; the Real Estate BU recognized the revenue from the sale of office buildings and residential products; and the electronics industry's boom in the first half of the year increased the Company's investment gains. However, international raw material prices became more volatile and the imbalance between the supply and demand in the stainless steel market intensified in the fourth quarter, due to the heightened global trade protectionism, including not only the China-US trade war but also the defensive investigation launched by the European Union, thus affecting profitability performance the Stainless Steel Business in fourth quarter.

Looking forward to 2019, not only the overall international economic situation will continue to be affected by the China-US trade war and the imbalance between the supply and demand in the stainless steel market, but also the uncertainty over US interest rates, the stagnation of China's economic development and the limited growth of Taiwan's market will cause the Company's manufacturing businesses to face more serious challenges. In the face of the challenges and opportunities arising from the continuous innovation of technology and the changes in business models brought about by the Internet of Things, the Company will continue to expand its investments in technology applications to accelerate the accumulation of know-how in the manufacturing BUs, shorten the time it takes to respond to customer demand and enhance customer service value and other core competencies, with a view to transforming the Company into a manufacturing-services-driven company and maintaining the Company's continued growth dynamics.

2. Explanation for Financial Result

Unit: NT$ million

	2018	2017	Amount of

			Increase
			(Decrease)

Operating Revenue	190,915	167,793	23,122
Gross Profit	15,935	12,005	3,930
Operating Expenses	4,909	4,109	800

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Income from Operations	11,026	7,896	3,130
Non-Operating Income and Expenses	5,645	1,498	4,147

Profit Before Tax	16,671	9,394	7,277

Net Income After
	11,757	6,560	5,197
Taxes

(1) Operating Revenue
In 2018, the sales volume of stainless steel has increased to 840,000 tons, which was a 7% year-on-year increase; the sales volume of copper materials and wire/cables stayed roughly the same as previous years. The revenue of commercial real estate sold was 8 billion in 2018. However, due to a 6% and a 26% year-on-year increase in copper and nickel prices respectively, the overall operating revenue rose about 23.1 billion year on year.
(2) Gross Profit

In 2018, the gross profit has increased by 3.9 billion year on year, mainly because the Real Estate BU has recognized revenues from the housing handovers in Lot A and Lot B (Phase I) and Lot D (Phase II).

(3) Operating Expenses

The rise in the 2018 operating expenses can be attributable to the increase in the personnel expenses (including employee compensation and bonuses) due to the Company's record-high overall profitability, as well as to the increase in investments in technology-application-related talents and expenses arising from the rise in sales of properties by the Real Estate BU.

(4) Non-Operating Income and Expenses

The 2018 non-operating income and expenses rose substantially year on year, which mainly benefited from Walsin Technology Corporation's record-high profitability in 2018 and stable gains from other reinvestments.

3. Operating Overview and Prospects of the Business Units

(1) Wire and Cable

The Copper Material Department adopts a steady strategy, with capacity utilization almost to 100%. However, due to the China-US trade war and the fierce competition in the Chinese market, the Company will continue

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to improve its product quality in order to maintain the competitive edge over its competitors to remain its market share.

Main products manufactured by the Power Cable Department has entered a mature and stable stage in Taiwan's construction market; as a result, the Company has been actively expanded into solar energy, wind power and other green energy industry as well as port machine industry, and takes every opportunity to promote the relevant industrial cables in global markets, in order to expand the market presence.

(2) Stainless Steel

The Stainless Steel Department continues to enhance manufacturing capacity and product quality through capital expenditure, while responding to customer needs and increasing the proportion of highvalue products by developing new types of steel and expanding product sizes, with the goal of reducing the impact of Chinese competitors subsidized by increased export tax rebates. In addition, it will continue to carry out green-manufacturing-related investments such as environmental protection and energy conservation.

(3) Real Estate
The construction of Lot D of Walsin Centro located in Nanjing has completed, and the housing handover and the recognition of the profit in connection with the first and second phase of the project are also completed. The third phase is estimated to complete its sales by 2019.

Lot A and Lot B of Walsin Centro located in Nanjing adopt the phased development sales model. The housing handover and the recognition of the profit in connection with the first phase have been completed in 2018. The buildings Nos. 1 and 6 of the second phase, office buildings annexed to a shopping mall, are under construction and are expected to be completed by the end of 2020.

The Walsin shopping mall on Lot A and Lot B located in Nanjing has the total area of 170,000 square meters, featuring "Healthy Life, Parents and Children Entertainment and Aesthetic Experience" as the three core elements, in order to create a life aesthetic community and an art sharing and cultural space. The shopping mall is expected to be opened by mid2019.

Responsible person: Chiao, Yu-Lon (Seal) Manager: Cheng, Hui-Ming (Seal) Chief Accountant: Wu, Chin-Sheng (Seal)

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WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Derivative financial assets for hedging - current (Notes 4 and 8) Financial assets at amortized cost - current (Notes 4 and 9) Contract assets - current (Notes 4 and 13) Debt investments with no active market - current (Notes 4 and 10) Notes receivable (Notes 4 and 11) Trade receivables (Notes 4 and 11) Finance lease receivables (Note 12) Other receivables Prepayments for leases (Note 21) Inventories (Notes 4 and 13) Other financial assets (Note 6) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 14) Available-for-sale financial assets - non-current (Notes 4 and 15) Financial assets measured at cost - non-current (Notes 4 and 16) Investments accounted for using equity method (Notes 4 and 18) Property, plant and equipment (Notes 4 and 18) Investment properties (Notes 4 and 19) Other intangible assets Deferred tax assets - non-current (Notes 4 and 27) Refundable deposits Long-term finance lease receivables (Note 12) Long-term prepayments for leases (Note 21) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 22) Financial liabilities at fair value through profit or loss - current (Notes 4 and 7) Contract liabilities - current (Notes 4 and 13) Notes payable Trade payables Current tax liabilities (Notes 4 and 27) Other payables Advance receipts on real estate (Note 13) Current portion of long-term borrowings (Note 22) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 22) Deferred tax liabilities - non-current (Notes 4 and 27) Net defined benefit liabilities (Notes 4 and 23) Other non-current liabilities (Note 29) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF WLC (Note 24) Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unrealized gain (loss) on financial assets at fair value through other comprehensive income Unrealized gain on available-for-sale financial assets Cash flow hedges Total other equity Treasury shares (Notes 4 and 24) Total equity attributable to owners of WLC NON-CONTROLLING INTERESTS Total equity TOTAL		2018 Amount % $ 9,406,154 7 95,426 - 15,630 - 1,489,831 1 2,589,864 2 - - 3,844,819 3 11,729,199 9 52,489 - 1,212,252 1 59,811 - 26,048,519 20 114,255 - 2,068,664 1 58,726,913 44 3,991,218 3 - - - - 30,555,851 23 25,083,436 19 10,241,647 8 164,451 - 1,657,511 1 187,053 - 830,991 1 1,119,004 1 96,035 - 73,927,197 56 $ 132,654,110 100 $ 10,024,097 8 - - 19,899 - 409,879 - 8,643,816 7 4,389,952 3 3,513,168 3 - - 4,564,196 3 581,963 - 32,146,970 24 19,993,411 15 182,494 - 645,403 1 421,489 - 21,242,797 16 53,389,767 40 33,260,002 25 15,966,420 12 3,937,554 3 2,712,250 2 25,494,923 19 32,144,727 24 (3,567,540) (3) (474,446) - - - (1,151) - (4,043,137) (3) - - 77,328,012 58 1,936,331 2 79,264,343 60 $ 132,654,110 100		2017
				Amount % $ 10,952,691 9 129,615 - 7,430 - - - - - 1,459,958 1 5,712,204 4 9,090,763 7 50,758 - 488,554 - 62,230 - 32,297,139 25 1,401,866 1 1,999,226 2 63,652,434 49 - - 3,702,495 3 2,509,320 2 25,210,753 19 20,984,890 16 10,406,246 8 169,726 - 1,222,430 1 186,507 - 883,480 1 1,161,364 1 161,100 - 66,598,311 51 $ 130,250,745 100 $ 6,815,772 5 27,710 - - - 446,655 - 9,243,642 7 3,147,811 3 3,635,500 3 10,323,447 8 171,438 - 806,194 1 34,618,169 27 21,950,366 17 168,512 - 868,311 1 365,131 - 23,352,320 18 57,970,489 45 33,660,002 26 15,854,392 12 3,281,556 3 2,712,250 2 13,240,574 10 19,234,380 15 (2,944,758) (3) - - 5,042,894 4 (7,529) - 2,090,607 1 (315,918) - 70,523,463 54 1,756,793 1 72,280,256 55 $ 130,250,745 100

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

(With Deloitte & Touche auditors' report dated February 22, 2019)

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WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

OPERATING REVENUE (Notes 4 and 25) OPERATING COSTS (Notes 4 and 13) GROSS PROFIT REALIZED GROSS PROFIT OPERATING EXPENSES Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income Dividend income Other income (Loss) gain on disposal of property, plant and equipment Foreign exchange gain (loss), net Loss on valuation of financial assets and liabilities Impairment loss (Note 26) Other expenses Interest expense Gain (loss) on disposal of investments (Note 26) Share of gain of associates under equity method Total non-operating income and expenses PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS INCOME TAX EXPENSE (Notes 4 and 27) NET INCOME FOR THE YEAR OTHER COMPREHENSIVE LOSS (INCOME)		2018 Amount % $ 190,915,137 100 (174,979,772) (92) 15,935,365 8 15,935,365 8 2,144,126 1 2,634,343 1 130,687 - 4,909,156 2 11,026,209 6 355,283 - 177,925 - 367,344 - (11,616) - 271,081 - 85,216 - (78,547) - (239,432) - (684,163) - 355,668 - 5,046,006 3 5,644,765 3 16,670,974 9 (4,711,687) (3) 11,959,287 6		2017
				Amount % $ 167,792,585 100 (155,787,754) (93) 12,004,831 7 12,004,831 7 1,722,346 1 2,314,407 1 72,433 - 4,109,186 2 7,895,645 5 331,982 - 167,634 - 63,647 - 60,284 - (17,907) - (23,734) - (67) - (326,459) - (512,995) - (260,608) - 2,017,026 1 1,498,803 1 9,394,448 6 (2,700,435) (2) 6,694,013 4

(Continued)

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WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

Items that may not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized loss on financial assets at fair value through other comprehensive income Share of the other comprehensive gain of associates accounted for using the equity method Items that will be reclassified subsequently to profit or loss: Exchange loss on translation of foreign operations Unrealized gain on available-for-sale financial assets Cash flow hedges gain Share of other comprehensive income of associates under equity method Other comprehensive (loss) income for the year TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET INCOME ATTRIBUTABLE TO: Owners of WLC Non-controlling interests COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of WLC Non-controlling interests EARNINGS PER SHARE (Notes 4 and 28) Basic Diluted		2018 Amount % 4,052 - (1,243,074) - (1,286,630) (1) (572,415) - - - 6,378 - (51,083) - (3,142,772) (1) $ 8,816,515 5 $ 11,756,781 6 202,506 - $ 11,959,287 6 $ 8,612,785 5 203,730 - $ 8,816,515 5 $ 3.53 $ 3.53		2017
				Amount % (150,736) - - - - - (757,920) - 724,447 - 6,142 - 2,964,786 2 2,786,719 2 $ 9,480,732 6 $ 6,559,984 4 134,029 - $ 6,694,013 4 $ 9,362,394 6 118,338 - $ 9,480,732 6 $ 1.97 $ 1.97

				$
				$
				$
		$		$
		$		$

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

(With Deloitte & Touche auditors' report dated February 22, 2019)

(Concluded)

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WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

	Equity A	ttributable to Owners of W	LC
Share Capital Capital Surplus $ 33,960,002 $ 15,701,403 - - - - - (495 ) - 146,381 - - - - - - (300,000 ) 7,108 - (5 ) - - 33,660,002 15,854,392 - - - - 33,660,002 15,854,392 - - - - - 615 - 27,333 - - - - - - - - (400,000 ) 84,082 - (2 ) - - $ 33,260,002 $ 15,966,420	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 2,824,743 $ 2,712,250 $ 9,674,226 456,813 - (456,813 ) - - (2,328,200 ) - - (22,554 ) - - - - - 6,559,984 - - (186,069) - - 6,373,915 - - - - - - - - - 3,281,556 2,712,250 13,240,574 - - 4,651,666 - - 5,978 3,281,556 2,712,250 17,898,218 655,998 - (655,998 ) - - (3,326,000 ) - - - - - 97,100 - - (252,951 ) - - 11,756,781 - - (22,227) - - 11,734,554 - - - - - - - - - $ 3,937,554 $ 2,712,250 $ 25,494,923		Other Equity	ash Flow Hedges Treasury Shares $ (13,671 ) $ (608,810 ) - - - - - - - - - - 6,142 - 6,142 - - 292,892 - - - - (7,529 ) (315,918 ) - - - - (7,529 ) (315,918 ) - - - - - - - - - - - - 6,378 - 6,378 - - 315,918 - - - - $ (1,151) $ -
		Exchange Differences on U Translating Foreign Operations A $ (2,110,122 ) - - - - - (834,636) (834,636) - - - (2,944,758 ) - - (2,944,758 ) - - - - - - (622,782) (622,782) - - - $ (3,567,540)	nrealized Gain (Loss) on Unrealized Gain (Loss) on Financial Assets at Fair Value through Other vailable-for-sale Financial Assets Comprehensive Income C $ 1,225,921 $ - - - - - - - - - - - 3,816,973 - 3,816,973 - - - - - - - 5,042,894 - (5,042,894 ) 1,875,068 - - - 1,875,068 - - - - - - - (97,100 ) - 252,951 - - - (2,505,365) - (2,505,365) - - - - - - $ - $ (474,446)

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

(With Deloitte & Touche auditors' report dated February 22, 2019)

18 -

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized (reversed) on trade receivables Net loss on fair value change of financial assets and liabilities designated as at fair value through profit or loss Interest expense Interest income Dividend income Compensation cost of employees share options Share of gain of associates under equity method Loss (gain) on disposal of property, plant and equipment Loss on the disposal of intangible assets Gain (loss) on disposal of investments Impairment loss recognized on property, plant and equipment Gain on foreign currency exchange Changes in operating assets and liabilities Increase in financial assets held for trading Decrease in financial assets mandatorily classified as at fair value through profit or loss Decrease in contract assets Decrease (increase) in notes receivable Increase in trade receivables (Increase) decrease in other receivables Decrease (increase) in inventories Increase in other current assets Decrease in other financial assets Decrease (increase) in other operating assets Decrease in notes payable Decrease (increase) in trade payables Decrease (increase) in other payables Decrease (increase) in advance real estate receipts Decrease (increase) in net defined benefit liabilities Decrease in other current liabilities Increase in other operating liabilities Cash generated from operations Interest paid Interest received Dividends received from associates Income tax paid Net cash generated from operating activities	2018 $ 16,670,974 1,734,995 32,973 9,907 (85,216) 684,163 (355,283) (177,925) 5,397 (5,046,006) 11,616 185 (355,668) 78,547 (275) - 153,306 6,823 1,867,385 (2,648,343) (134,272) 3,651,933 (271,739) 1,287,611 33,265 (36,776) (599,826) (321,214) (10,143,723) (222,908) (440,148) 65,675 5,455,433 (612,840) 295,805 1,514,347 (3,633,464) 3,019,281	2017 $ 9,394,448 1,762,164 29,784 (18,634) 23,734 512,995 (331,982) (167,634) 1,469 (2,017,026) (60,283) - 260,608 67 (7,224) (379,141) - - (690,388) (345,803) 36,028 (5,172,451) (565,733) 863,273 (2,322) (35,651) 1,506,865 676,359 3,398,960 51,093 (180,750) 112,235 8,655,060 (520,161) 223,588 798,326 (1,458,894) 7,697,919 (Continued)

19 -

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from the disposal of financial assets at fair value through other comprehensive income Share buybacks due to capital reduction from financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets held for trading Proceeds from disposal of available-for-sale financial assets Debt investments with no active market Purchase of financial assets measured at cost Proceeds from disposal of financial assets measured at cost Proceeds from capital return of investments in financial assets measured at cost Derivative instruments not held for trading Purchase of associates under equity method Proceeds from capital return of investments in associates under equity method Proceeds from disposal of non-current assets held for sale Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Purchase of intangible assets (Increase) in other receivables Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Increase in long-term borrowings Decrease in long-term borrowings Dividends paid to owners of WLC Changes in non-controlling interests Other financing activities Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	2018 (750) 73,158 915 - - 3,072 - - - - (592,586) - - (5,795,665) 10,593 (1,435) (1,926) (365,101) (6,669,725) 3,217,299 6,000,000 (3,564,196) (3,325,743) (29,522) (2) 2,297,836 (193,929) (1,546,537)	2017 - - - 371,002 48,769 54,228 (692,576) 546 15,958 2,133 (1,595,460) 58,927 399,812 (2,367,653) 124,291 (3,461) (422) - (3,583,906) 2,668,879 6,500,000 (6,694,035) (2,328,020) (193,745) (5) (46,926) (847,980) 3,219,107 (Continued)

20 -

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

2018 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 10,952,691 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 9,406,154 The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors' report dated February 22, 2019)	2017 7,733,584 $ 10,952,691 (Concluded)

21 -

WALSIN LIHWA CORPORATION

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

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Contract assets - current Notes receivable (Notes 4 and 8) Trade receivables (Notes 4 and 8) Trade receivables from related parties (Notes 4, 8 and 27) Other receivables Inventories (Notes 4 and 9) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 10) Available-for-sale financial assets - non-current (Notes 4 and 11) Financial assets measured at cost - non-current (Notes 4 and 12) Investments accounted for using equity method (Notes 4 and 13) Property, plant and equipment (Notes 4 and 14) Investment properties (Notes 4 and 15) Deferred tax assets - non-current (Notes 4 and 22) Refundable deposits Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 16) Financial liabilities at fair value through profit or loss - current (Notes 4 and 7) Derivative financial liabilities hedging - current (Notes 4 and 17) Trade payables Current tax liabilities (Notes 4 and 22) Other payables (Note 27) Current portion of long-term borrowings (Note 16) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 16) Deferred tax liabilities - non-current (Notes 4 and 22) Net defined benefit liabilities (Notes 4 and 18) Other non-current liabilities (Note 24) Total non-current liabilities Total liabilities EQUITY (Note 19) Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unrealized gain (loss) on financial assets at fair value through other comprehensive income Unrealized gain on available-for-sale financial assets Cash flow hedges Total other equity Treasury shares (Notes 4 and 19) Total equity TOTAL		2018 Amount % $ 949,956 1 142,111 - 44,338 - 56,624 - 2,696,765 3 361,083 - 536,860 - 11,285,237 11 736,932 1 16,809,906 16 3,305,238 3 - - - - 73,754,195 70 16,432,206 16 8,551,796 8 394,000 - 58,292 - 1 - 102,495,728 97 $ 119,305,634 113 $ 8,095,612 7 4,079 - 3,244 - 3,845,788 3 478,299 - 4,466,854 4 4,500,000 4 167,762 - 21,561,638 18 19,500,000 16 131,132 - 584,078 1 200,774 - 20,415,984 17 41,977,622 35 33,260,002 28 15,966,420 13 3,937,554 3 2,712,250 2 25,494,923 22 32,144,727 27 (3,567,540) (3) (474,446) - - - (1,151) - (4,043,137) (3) - - 77,328,012 65 $ 119,305,634 100		2017
				Amount % $ 2,192,403 2 - - - - 27,353 - 2,585,153 2 481,485 1 328,742 - 9,174,197 9 399,270 - 15,188,603 14 - - 3,702,495 4 1,810,187 2 61,595,898 58 14,356,176 14 8,603,604 8 319,919 - 58,764 - 1 - 90,447,044 86 $ 105,635,647 100 $ 4,083,492 4 68,780 - 13,964 - 4,146,066 4 351,234 - 3,658,528 4 - - 175,626 - 12,497,690 12 21,500,000 20 131,132 - 805,033 1 178,329 - 22,614,494 21 35,112,184 33 33,660,002 32 15,854,392 15 3,281,556 3 2,712,250 3 13,240,574 12 19,234,380 18 (2,944,758) (3) - - 5,042,894 5 (7,529) - 2,090,607 2 (315,918) - 70,523,463 67 $ 105,635,647 100

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

(With Deloitte & Touche auditors' report dated February 22, 2019)

22 -

WALSIN LIHWA CORPORATION

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

OPERATING REVENUE (Notes 4 and 20) OPERATING COSTS (Note 9) (UNREALIZED) REALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES GROSS PROFIT OPERATING EXPENSES Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income Dividend income Other income Gain on disposal of property, plant and equipment Gain (Loss) on disposal of investments (Note 21) Foreign exchange gain, net Gain (Loss) on valuation of financial assets and liabilities Impairment loss (Note 21) Other expenses Interest expense Share of gain of subsidiaries and associates under equity method Total non-operating income and expenses PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS INCOME TAX EXPENSE (Notes 4 and 22) NET INCOME FOR THE YEAR		2018 Amount % $ 85,099,970 100 (81,254,264) (96) (5,456) - 3,840,250 4 808,264 1 777,885 1 131,591 - 1,717,740 2 2,122,510 2 6,135 - 177,873 - 121,897 - 4,212 - 488,267 1 251,457 - 206,812 - (4,636) - (60,040) - (479,707) - 9,411,252 11 10,123,522 12 12,246,032 14 (489,251) - 11,756,781 14		2017
				Amount % $ 76,123,074 100 (70,808,645) (93) 3,635 - 5,318,064 7 707,416 1 710,297 1 63,816 - 1,481,529 2 3,836,535 5 6,764 - 167,584 - 41,282 - 1,380 - (369,204) - 35,426 - (86,508) - - - (75,913) - (434,314) (1) 4,004,420 5 3,290,917 4 7,127,452 9 (567,468) (1) 6,559,984 8 (Continued)

23 -

WALSIN LIHWA CORPORATION

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

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Notes 4 and 18) Unrealized loss on financial assets at fair value through other comprehensive income Share of the other comprehensive gain of associates accounted for using the equity method Items that may be reclassified subsequently to profit or loss: Exchange loss on translation of foreign operations Unrealized gain on available-for-sale financial assets Cash flow hedges gain Share of other comprehensive income of subsidiaries and associates under equity method Other comprehensive (loss) income for the year TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 22) Basic Diluted		2018 Amount % (372) - (719,216) (1) (1,808,004) (2) (571,733) (1) - - 6,378 - (51,049) - (3,143,996) (4) $ 8,612,785 10 $ 3.53 $ 3.53		2017
				Amount % (150,736) - - - - - (742,010) (1) 724,447 1 6,142 - 2,964,567 4 2,802,410 4 $ 9,362,394 12 $ 1.97 $ 1.97

		$		$

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

(With Deloitte & Touche auditors' report dated February 22, 2019) (Concluded)

24 -

WALSIN LIHWA CORPORATION

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

BALANCE AT JANUARY 1, 2017 Appropriation of 2016 earnings (Note 19) Legal reserve Cash dividends Excess of the consideration received over the carrying amount of the subsidiaries' net assets disposed of Change in capital surplus and retained earnings from investments in subsidiaries and associates under equity method Net profit for the year ended December 31, 2017 Other comprehensive loss for the year ended December 31, 2017, net of income tax Total comprehensive income (loss) for the year ended December 31, 2017 Cancelation of treasury shares Others BALANCE, DECEMBER 31, 2017 Effect of retrospective application of IFRS 9 (Note 3) Effect of retrospective application of IFRS 15 BALANCE AT JANUARY 1, 2018, AS RESTATED Appropriation of 2017 earnings (Note 19) Legal reserve Cash dividends Excess of the consideration received over the carrying amount of the subsidiaries' net assets disposed of Change in capital surplus from investments in subsidiaries and associates under equity method Disposals of investments in equity instruments designated as at fair value through other comprehensive income (Note 10) Net profit for the year ended December 31, 2018 Other comprehensive income (loss) for the year ended December 31, 2018, net of income tax Total comprehensive income (loss) for the year ended December 31, 2018 Cancelation of treasury shares Others BALANCE, DECEMBER 31, 2018	Share Capital Capital Surplus $ 33,960,002 $ 15,701,403 - - - - - (495 ) - 146,381 - - - - - - (300,000 ) 7,108 - (5) 33,660,002 15,854,392 - - - - 33,660,002 15,854,392 - - - - - 615 - 27,333 - - - - - - - - (400,000 ) 84,082 - (2) $ 33,260,002 $ 15,966,420		Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 2,824,743 $ 2,712,250 $ 9,674,226 456,813 - (456,813 ) - - (2,328,200 ) - - (22,554 ) - - - - - 6,559,984 - - (186,069) - - 6,373,915 - - - - - - 3,281,556 2,712,250 13,240,574 - - 4,651,666 - - 5,978 3,281,556 2,712,250 17,898,218 655,998 - (655,998 ) - - (3,326,000 ) - - - - - 97,100 - - (252,951 ) - - 11,756,781 - - (22,227) - - 11,734,554 - - - - - - $ 3,937,554 $ 2,712,250 $ 25,494,923	Other Equity Exchange Differences on Unrealized Gain (Loss) on Unrealized Gain (Loss) on Financial Assets at Fair Value through Other Translating Foreign Operations Available-for- sale Financial Assets Comprehensive Income Cash Flow Hedges Treasury Shares $ (2,110,122 ) $ 1,225,921 $ - $ (13,671 ) $ (608,810 ) - - - - - - - - - - - - - - - - - - - - - - - - - (834,636) 3,816,973 - 6,142 - (834,636) 3,816,973 - 6,142 - - - - - 292,892 - - - - - (2,944,758 ) 5,042,894 - (7,529 ) (315,918 ) - (5,042,894 ) 1,875,068 - - - - - - - (2,944,758 ) - 1,875,068 (7,529 ) (315,918 ) - - - - - - - - - - - - - - - - - (97,100 ) - - - - 252,951 - - - - - - - (622,782) - (2,505,365) 6,378 - (622,782) - (2,505,365) 6,378 - - - - - 315,918 - - - - - $ (3,567,540) $ - $ (474,446) $ (1,151) $ -	Total Equity $ 63,365,942 - (2,328,200 ) (23,049 ) 146,381 6,559,984 2,802,410 9,362,394 - (5) 70,523,463 1,483,840 5,978 72,013,281 - (3,326,000 ) 615 27,333 - 11,756,781 (3,143,996) 8,612,785 - (2) $ 77,328,012

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

(With Deloitte & Touche auditors' report dated February 22, 2019)

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WALSIN LIHWA CORPORATION

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

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expenses Amortization expenses Reversed on trade receivables Net loss on fair value change of financial assets and liabilities designated as at fair value through profit or loss Interest expense Interest income Dividend income Share of gain of subsidiaries and associates under equity method Gain on disposal of property, plant and equipment (Gain) loss on disposal of investments Impairment loss recognized on non-financial assets Unrealized (realized) gain on the transaction with associates Net (gain) loss on foreign currency exchange Changes in operating assets and liabilities Increase in financial assets held for trading Decrease in financial assets mandatorily classified as at fair value through profit or loss Increase in contract assets (Increase) decrease in notes receivable Decrease (increase) in trade receivables Decrease in other receivables Increase in inventories Increase in other current assets (Increase) decrease in other operating assets (Increase) decrease in trade payables Increase in other payables Decrease in net defined benefit liabilities Decrease in other current liabilities Increase in other operating liabilities Cash generated from operations Interest paid Interest received Dividends received Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES	2018 $ 12,246,032 1,072,926 5,000 - (206,812) 479,707 (6,135) (177,873) (9,411,252) (4,212) (488,267) 4,636 5,456 (2,457) - 192,333 (34,789) (29,271) 8,790 10,060 (2,120,589) (337,662) (5,000) (300,278) 594,110 (221,327) (13,321) 24,581 1,284,386 (478,391) 7,136 1,570,303 (436,268) 1,947,166	2017 $ 7,127,452 1,026,334 2,380 (799) 86,508 434,314 (6,764) (167,584) (4,004,420) (1,380) 369,204 - (3,635) 14,131 (479,073) - - 357 (664,334) 24,763 (1,094,218) (99,754) 93 971,394 341,426 (111,865) (71,522) 8,485 3,701,493 (446,622) 6,317 949,548 (504,278) 3,706,458

(Continued)

WALSIN LIHWA CORPORATION

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

Purchase of financial assets at fair value through other comprehensive income Proceeds from the disposal of financial assets at fair value through other comprehensive income Share buybacks due to capital reduction from financial assets at fair value through other comprehensive income Purchase of financial assets measured at cost Proceeds from disposal of financial assets measured at cost Proceeds from capital return and liquidation return of investments in associates under equity method Proceeds from capital return of investments in financial assets measured at cost Derivative instruments not held for trading Purchase of associates under equity method Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in refundable deposits Proceeds from sale of available-for-sale financial assets Other investing activities Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Increase in long-term borrowings Decrease in long-term borrowings Increase in other payables to related parties Dividends paid Other financing activities Net cash generated from financing activities NET INCREASE (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2018 (750) 73,158 915 - - - - - (3,135,019) (3,031,545) 8,796 472 - (504,706) (6,588,679) 4,010,239 6,000,000 (3,500,000) 214,572 (3,325,743) (2) 3,399,066 (1,242,447) 2,192,403 $ 949,956	2017 - - - (692,576) 546 343,301 15,944 1,701 (1,595,460) (1,492,691) 1,441 4,143 48,769 (422,369) (3,787,251) 1,572,064 6,500,000 (6,630,000) 1,784,112 (2,328,020) (5) 898,151 817,358 1,375,045 $ 2,192,403

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

(With Deloitte & Touche auditors' report dated February 22, 2019)

(Concluded)

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders Walsin Lihwa Corporation

Opinion

We have audited the accompanying consolidated financial statements of Walsin Lihwa Corporation and its subsidiaries (the “Group”), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements as of and for the year ended December 31, 2018. These matters were 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 these matters.

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The following are the key audit matters of the consolidated financial statements of the Group as of and for the year ended December 31, 2018:

Sales Revenue Recognition

The sales revenue of the Group's stainless steel business unit had grown significantly in 2018. The business unit's main products include stainless steel bars and stainless steel cold-and-hot rolled coils. Aside from Taiwan, there are many customers in China, America, Southeast Asia and Europe and the sales terms vary for different types of customers. Thus, we consider the reality of export sales revenue of stainless steel business unit as key audit matter. Refer to Notes 4 and 25 to the consolidated financial statements for related accounting policies and disclosure information of revenue recognition.

We performed the following audit procedures in respect of the above key audit matter:
We verified and tested the internal control process of the export sales of stainless steel business unit.
We sampled and inspected the transactions of export sales revenue of stainless steel business unit to confirm its existence.

Inventory Valuation

As of December 31, 2018, the manufacturing and trading inventory of the Group amounted to NT$18,292,552 thousand, which constituted 14% of the Group's consolidated total assets, as of December 31, 2018. Refer to Notes 4, 5 and 13 for related accounting policies of inventory and inventory valuation.

The inventory of the Group is stated at the lower of cost or net realizable value. The valuation of the net realizable value required significant judgment and estimation. In addition, the market price of copper and nickel fluctuated frequently, which significantly affects the valuation of wire, cable and specialty steel inventory. As a result, inventory valuation is regarded as a key audit matter.

Our audit procedures in response to inventory valuation consist of obtaining inventory valuation sheets prepared by management, selecting samples of estimated selling prices and tracing them to recent sales records to assess the rationale of the net realizable value determined by management. Moreover, by attending the year-end inventory count, we assess the condition of the inventory to verify the completeness of obsolete goods.

Other Matter

The financial statements of certain subsidiaries included in the consolidated financial statements as of and for the years ended December 31, 2018 and 2017 were audited by other auditors. Our opinion, insofar as it relates to such subsidiaries, is based solely on the reports of other auditors. The total assets of such subsidiaries amounted to NT$7,959,485 thousand and NT$7,667,995 thousand, which constituted 6.00% and 5.89% of the Group's consolidated total assets, as of December 31, 2018 and 2017, respectively, and the total net operating revenue of such subsidiaries amounted to NT$11,999,669 thousand and NT$9,443,554 thousand, which constituted 6.29% and 5.63% of the Group's consolidated total net operating revenue, for the years ended December 31, 2018 and 2017, respectively.

We have also audited the parent company only financial statements of Walsin Lihwa Corporation as of and for the years ended December 31, 2018 and 2017 on which we have issued an unmodified opinion.

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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 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, 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 Audit Committee) 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:

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.
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.
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, 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
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events or conditions may cause the Group to cease to continue as a going concern.

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 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 those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters 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 Kenny Hong and Ming-Yu Chiu.

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Deloitte & Touche Taipei, Taiwan Republic of China February 22, 2019

Notice to Readers

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

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

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INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders Walsin Lihwa Corporation

Opinion

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

In our opinion, based on our audits and the reports of other auditors (as set out in the Other Matter section of our report), the accompany financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and its financial performance and its 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 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 Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements as of and for the year ended December 31, 2018. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The following are key audit matters of the financial statements of the Company as of and for the year ended December 31, 2018:

Sales Revenue Recognition

The sales revenue of stainless steel business unit had grown significantly in 2018. The business unit's main products include stainless steel bars and stainless steel cold-and-hot rolled coils. Aside from Taiwan, there are many customers in China, America, Southeast Asia and Europe and the sales are terms vary for different customers. Thus, we consider the reality of export sales revenue of stainless steel business unit as key audit matter. Refer to Note 4 and 20 for related accounting policies of revenue recognition and disclosure information of the revenue recognition. We performed the following audit procedures in respect of the above key audit matter:

We verified and tested the internal control process of the export sales of stainless steel business unit.
We sampled and inspected the transactions of export sales revenue of stainless steel business unit to confirm its existence.

Inventory Valuation

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As of December 31, 2018, the inventory of the Company amounted to NT$11,285,237 thousand which constituted 9.46% of the total assets, and the amount is material. Refer to Notes 4, 5 and 9 for related accounting policies of inventory and inventory valuation.

The inventory of the Company is stated at the lower of cost or net realizable value. The valuation of the net realizable value required significant judgment and estimation. In addition, the market price of copper and nickel fluctuated frequently, which significantly affects the valuation of wire, cable and specialty steel inventory. As a result, inventory valuation is regarded as key audit matter.

Our audit procedures in response to inventory valuation consisted of obtaining inventory valuation sheets prepared by management, selecting samples of estimated selling prices and tracing them to recent sales records to assess the rationale of the net realizable value determined by management. Moreover, by attending year-end inventory count, we assess the condition of the inventory to verify the completeness of obsolete goods.

Other Matter

The financial statements of certain equity-method investees included in the financial statements as of and for the years ended December 31, 2018 and 2017 were audited by other auditors. Our opinion, insofar as it relates to such investments, is based solely on the reports of other auditors. The investments in such investees amounted to NT$3,443,078 thousand and NT$2,878,841 thousand, which constituted 2.89% and 2.73% of the total assets as of December 31, 2018 and 2017, respectively, and the investment gains amounted to NT$502,129 thousand and NT$502,051 thousand for the years ended December 31, 2018 and 2017, respectively.

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

Management is responsible for the preparation and fair presentation of the 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 financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the 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 audit committee) are responsible for overseeing the Company's financial reporting process.

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Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

Identify and assess the risks of material misstatement of the 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 that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
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, 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 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.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the 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 business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters 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 GuoTian Hong and Ming-Yu Chiu.

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Deloitte & Touche Taipei, Taiwan Republic of China

February 22, 2019

Notice to Readers

The accompanying financial statements are intended only to present the 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 financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors' report and the accompanying 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 financial statements shall prevail.

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Audit Report from the Audit Committee

The Board of Directors has prepared and submitted the Company's 2018 business report, financial statements (including consolidated financial statements) and the profit distribution proposal, among which the financial statements (including consolidated financial statements) had been audited by Guo-Tian Hong and Ming-Yu Chiu, CPAs of Deloitte & Touche, who also provided an auditor's report. The above business report, financial statements (including consolidated financial statements) and the profit distribution proposal have been verified by the Audit Committee to be without any discrepancies. This report is prepared in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act. Please review and approve the same.

Walsin Lihwa Corporation

The convener of the Audit Committee ： Hsueh, Ming-Ling

February 22, 2019

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The Distribution Report of Compensation of the Employees and Directors for the Year 2018

The distribution report of compensation of the employees and directors for the year 2018 is as follows:

This is conducted in compliance with Article 235-1 of the Company Act and the letter from MOEA dated June 11, 2015 (Ref. No.: Jin-Shang-Zi10402413890) and the letter from MOEA dated October 15, 2015 (Ref. No.: Jin-Shang-Zi-10402427800).
According to Article 25-1 of the Articles of Incorporation of the Company, if it has any profit after the closing of its annual book, the Company shall distribute no less than one percent as employee compensation and no more than one percent as director compensation.
For 2018, the audited profit of the Company is NT$ 12,434,032,000 (i.e., the gross profit before tax and excluding employees and directors compensation).
The Company intends to distribute NT$ 125,000,000 of employees compensation and NT$ 63,000,000 of directors compensation in cash for the year 2018.
The above employees and directors compensation has been adopted by a majority vote at the board of directors' meeting dated February 22, 2019 (i.e., the 11[th ] meeting of the Board of Directors of the 18[th ] term) attended by more than two-third of the directors. The Company has distributed the above compensation accordingly.
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Walsin Lihwa Corporation Investments in Mainland China

Walsin Lihwa Corporation Investments in Mainland China	Walsin Lihwa Corporation Investments in Mainland China	Walsin Lihwa Corporation Investments in Mainland China	Walsin Lihwa Corporation Investments in Mainland China
As of March 31, 2019
Company Name	Investment Amount (inUSD)	Shareholding Ratio	Major Products Produced/Sold
Jiangying Walsin Steel Cable Co., Ltd. (Note 1)	15 million	75%	Steel cables
Shanghai Walsin Lihwa Power Wire & Cable Co.,Ltd.(Note 2)	14.956 million	95.71%	Power wires and cables
Hangzhou Walsin Power Cable & Wire Co,Ltd.(Note 3)	80.56 million	38.93%	Power wires and cables
Walsin(China)Investment Co.,Ltd.	78.6 million	100%	Investment
Changshu Walsin SpecialtySteel Co.,Ltd.	97 million	100%	Specialtysteel tubes
Shanghai BaiheWalsin Lihwa Specialty Steel Products Co. Ltd(Note 4)	17 million	100%	Stainless steel materials
Dongguan Walsin Wire & Cable Ltd. (Note 5)	26 million	100%	Bare copper cables and wires
Jiangyin Walsin Specialty Alloy Materials Co., Ltd. (Note 6)	49 million	100%	Cold rolled stainless steel, flat rolled products, nickel alloys, galvanized alloys and steel strand wires
NanjingWalsin Metal Co. Ltd.(Note 7)	62.609million	79.51%	Copper alloys
Xi'an Walsin Metal Product Co. Ltd. (Note 8)	10 million	100%	Research and development, production and sales of medium-thickness specialty steelplates
Yan Tai Walsin Stainless Steel Co., Ltd. (Note 9)	255.065 million	100%	Research and development, production, sales, wholesales related to various steels of new-type alloy materials, carbon steel, alloy steel and steel products; Recycling of waste and old substances and whole sale of relatedproducts
Walsin Lihwa (Changzhou) Investment Co.,Ltd.	49 million	100%	Trading and investment
Changzhou China Steel Precision Materials Co., Ltd.	13.08 million	30`％`	Products related to Ti, nickel alloys, specialty alloy mould steel, colored alloy forged materials
Xi'an Walsin United Technology Co., Ltd.	99.958 million	100%	Optoelectronic and electronic materials and components
Nanjing Walsin Expo. Exhibition Ltd.	0.265 million	60%	Exhibition and conference organizingservices
Nanjing Taiwan Trade Mart Management Co., Ltd.	1 million	100%	Business, asset management and consultation of various kinds of advertising.

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Xi'an Lv Jing Technology Co., Ltd. (Notes 8 and 10)	20 million	100%	Solar wafers, battery cellsand modules
Shanxi TianhongSilicon Industrial Corp.	RMB 228 million	19%	Polysilicon
Xi'an Walsin Opto-electronic Limited (Note 8)	0.15 million	100%	LED, micro projectors and solar cell assembly pieces
Jiangsu Taiwan Trade Mart Development Co., Ltd.	RMB 2 million	20%	Development, operating and management of Nanjing Taiwan Trade Martprojects
Shanxi Optoelectronics Technology Co., Ltd.	RMB 19 million	19%	LED assembly
Walsin (Nanjing) Construction Limited	50 million	99.60%	Construction, rental and sale of buildings and industrial factories,etc.
Nanjing Walsin Property Management Co., Ltd.	RMB 1 million	99.60%	Property Management, Consulting for Property Management and rental of house,etc.
Walsin Nanjing Culture and Arts Co., Ltd.	RMB 0.9 million	99.60%	Organization of cultural and artistic exchange activities, performances, cultural and artistic brokerage agent
Walsin Nanjing Commercial Management Co., Ltd.	RMB 4.2 million	99.60%	Business management, food sales, catering services and other daily necessities and otherproducts sales

Note 1 Including the USD4.5 million invested through Walsin (China) Investment Co., Ltd..
Note 2 Including the USD7.35 million invested through Walsin (China) Investment Co., Ltd..
Note 3 Including the USD2.8 million invested through Walsin (China) Investment Co., Ltd. (hereinafter referred to as “Walsin CIC”). The original investment amount in Hangzhou Walsin Power & Wire Co., Ltd. (hereinafter referred to as “Hangzhou Walsin”) by the Company was USD41.21 million (shareholding ratio: 89.78%) through Walsin CIC. In mid-2015, the Company sold 44.89% of the shares of Hangzhou Walsin through Walsin CIC in the amount of RMB95.36 million (approximately USD15.57 million). At the end of 2015, the Company re-invested USD4.8 million in Hangzhou Walsin through Walsin CIC with the income received from the previous sale. In mid-2016, the Company invested USD53 million in Hangzhou Walsin through a BVI holding company, ACE RESULT GLOBAL LIMITED (“ACEL”), and later on sold 9.707% shares of Hangzhou Walsin through ACEL in the amount of RMB61.44 million (approximately USD9.28 million). At the end of 2016, the Company re-invested USD 6.4 million in Hangzhou Walsin through ACEL, with the income received from the 2016 sale. After the aforementioned various transactions, the Company's indirect shareholding ratio is 38.93%, and the actual investment amount went down to USD80.56 million. However, since the income received from the sales was not remitted to
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Taiwan, the investment in China has not been deducted. The investment amount approved for Hangzhou Walsin and registered with the Investment Commission, Ministry of Economic Affairs (hereinafter referred to as “MOEA, IC”) as a result remains USD94.21 million. In mid- 2017, the Company increased its equity interest in Nanjing Walsin by 1.25% (refer to Note 7) through Walsin CIC, which originally disposed Hangzhou Walsin's equity stake of US$1,851,268. After this transaction, the Company's record of investment amount of Hangzhou Walsin in MOEA, IC was reduced to USD92.36 million.

Note 4 Including the USD 4.8 million invested through Walsin (China) Investment Co., Ltd. In the year of 2017, Shanghai Baihe Walsin Lihua Special Steel Products Co., Ltd. (hereinafter abbreviated as “Shanghai Baihe”) made a capital reduction to make up for the loss of USD22 million. After the capital reduction, the registered capital of the company was reduced to USD17 million. However, the amount of capital reduction had not been remitted back to Taiwan, so it failed to offset the amount of investment in the mainland China, and the amount of investment for Shanghai Baihe investment recorded in the Investment Commission, Ministry of Economic Affairs still maintained USD 39 million.
Note 5 Including the USD 26 million invested through Walsin (China) Investment Co., Ltd..
Note 6 Including the USD 4.5 million invested through Walsin (China) Investment Co., Ltd..
Note 7 The original investment in Nanjing Walsin Metal Co. Ltd. (hereafter referred to as “Nanjing Walsin”) was USD60.758 million, with an indirect shareholding ratio of 78.26%, through Walsin (China) Investment Co., Ltd. and a BVI holding company, Renowned International Ltd. (shareholding ratio: 83.97%). In the year of 2017, the Company purchased 1.25% shares of Nanjing Walsin owned by Nanjing Suyi Industry Co. Ltd. through Walsin (China) Investment Co. The final transaction was RMB12.72 million (equivalent to USD1,851,268). After this transaction, the Company's indirect ownership of Nanjing Walsin's equity was increased to 79.51%, and the investment amount was reported and accumulated as USD62,909,000.
Note 8 The Company has proceeded with the merger of Xi'an Walsin Precious Metal Product CO., LTD., Xi'an Lv Jing Technology Co., Ltd., and Xi'an Walsin Electronics Co., Ltd.. The merged company is Xi'an Walsin Precious Metal Product CO., LTD. The merger is still in progress.
Note 9: The Company holds a 100% shareholding in Yan Tai Walsin Stainless Steel Co., Ltd. through its holding company incorporated in the BVI, Concord Industries Ltd. (hereafter referred to as “Concord”), and its wholly-owned Jiangyin Walsin Specialty Alloy Materials Co., Ltd. (hereafter referred to as “Jiangyin Alloy”); up to the present, Concord and Jiangyin Alloy holds 54.4% and 45.6% of the shares in Yan Tai Walsin Stainless Steel Co., Ltd. respectively.
Note 10: The Company indirectly acquired the company by obtaining 100% of the equity of Lead Hero Limited, the investor of the company, with USD1, followed by
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completing the company's capital increase of USD20 million in the third quarter of 2011.

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Walsin Lihwa Corporation

Corporate Governance Best Practice Principles

Chapter 1 General Principles

Article 1 The Corporate Governance Best Practice Principles of Walsin Lihwa (hereafter referred to as “the Company”) developed pursuant to the Corporate Governance Best Practice Principles for Taiwan Stock Exchange Corporation (hereafter referred to as “TWSE”) and Taipei Exchange (hereafter referred to as “TPEx”) Listed Companies is intended to assist the Company in establishing a sound corporate governance system to have its effective corporate governance framework implemented.
Article 2 The Company's corporate governance system is established in compliance with relevant laws and regulations as well as the following principles:
Protect the rights and interests of shareholders.
Strengthen the powers of the board of directors and each functional committee.
Respect the rights and interests of stakeholders.
Enhance information transparency.
Article 3 The Company shall follow the Regulations Governing Establishment of Internal Control Systems by Public Companies and take into consideration the overall operational activities of itself and its subsidiaries to design and fully implement its internal control system, and shall conduct continuing reviews of the system, in order to ensure the continued effectiveness of its design and implementation in light of changes in the Company's internal and external environment.

The Company shall perform full self-assessments of its internal control system. Its board of directors and management shall review the results of the selfassessments by each department at least annually and the reports of the internal audit department on a quarterly basis. The Audit Committee shall also attend to and supervise these matters. The Company is advised to establish channels and mechanisms of communication between its Audit Committee and the chief internal auditor. The Audit Committee shall periodically hold discussions with internal auditors about reviews of internal control system deficiencies. A record of the discussions shall be kept, and the discussions shall be followed up to have improvements implemented and a report submitted to the board of directors.

The management of the Company shall pay special attention to the internal audit department and its personnel, fully empower them and urge them to conduct audits effectively, to evaluate problems of the internal control system and assess the efficiency of its operations to ensure that the system can operate effectively on an on-going basis, and to assist the board of directors and the management to perform their duties effectively so as to ensure a sound corporate governance

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system.

The appointment and dismissal, evaluation and review and compensation of the Company's internal auditor shall be submitted by the chief auditor to the chairman of the board for approval.

Article 3-1 The Company may have an adequate number of corporate governance personnel with appropriate qualifications and appoint a chief corporate governance officer as the highest-ranking officer in charge of the Company's corporate-governancerelated matters according to the Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers (hereafter referred to as “Directions”). The qualification, appointment and dismissal and requirement of continuing education hours for/of the corporate governance officer shall be in compliance with these Directions.

The corporate governance affairs mentioned in the preceding paragraph shall include at least the following items:

Handling matters relating to board meetings and shareholders' meetings according to laws.
Preparing minutes of board meetings and shareholders' meetings.
Assisting in the onboarding and continuing education of directors.
Furnishing information required for business execution by directors of the board.
Assisting directors with legal compliance.
Other matters set out in the Articles of Incorporation of the Company or contracts.

Chapter 2

Protection of Shareholders' Rights and Interests

Section 1

Encouraging Shareholders to Participate in Corporate Governance

Article 4 The Company's corporate governance system shall protect shareholders' rights and interests and treat all shareholders equitably.

The corporate governance system established by the Company shall be able to ensure shareholders' rights of being fully informed of, participating in, and making decisions over important matters of the Company.

Article 5 The Company shall convene shareholders' meetings in accordance with the Company Act and relevant laws and regulations, provide comprehensive rules for such meetings, and faithfully implement resolutions adopted by shareholders' meetings in accordance with the rules for the meetings.

Resolutions adopted by shareholders' meetings of the Company shall comply with

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relevant laws and regulations as well as the Articles of Incorporation of the Company.

Article 6 The board of directors of the Company shall properly arrange the agenda items and procedures for shareholders' meetings and formulate the principles and procedures for shareholder nominations of directors and submissions of shareholder proposals. The board shall also properly handle the proposals duly submitted by shareholders. Arrangements shall be made to hold shareholders' meetings at a convenient location, with sufficient time allowed and sufficient numbers of suitable personnel assigned to handle attendance registrations. No arbitrary requirements shall be imposed on shareholders to provide additional evidentiary documents beyond those showing eligibility to attend. Shareholders shall be granted reasonable time to deliberate each proposal and an appropriate opportunity to make statements.

For a shareholders' meeting called by the board of directors, it is advisable that the chairman of the board chair the meeting, a majority of the directors (including at least one independent director) and the convener of the Audit Committee attend in person, and at least one member of other functional committees attend as representative. Attendance details should be recorded in the shareholders' meeting minutes.

Article 7 The Company shall encourage its shareholders to actively participate in corporate governance and ensure shareholders' meetings can proceed on a legal, effective and secure basis. The Company shall also seek all ways and means, including fully exploiting technologies for information disclosure and casting votes, to upload notices, agendas and supplementary information of shareholders' meetings in both Chinese and English concurrently to enhance shareholders' attendance rates at shareholders' meetings and ensure their exercise of rights at such meetings in accordance with laws.

Shareholders may select either electronic voting or voting in person at a shareholders' meeting held by the Company to avoid raising extraordinary motions and amendments to original proposals and may adopt the candidate nomination system for the election of directors for the current year (if any) in accordance with the Articles of Incorporation.

The Company is advised to arrange for its shareholders to vote on each separate proposal in the shareholders' meeting agenda, and following conclusion of the meeting, to enter the voting results the same day, namely the numbers of votes cast for and against and the number of abstentions, on the Market Observation Post System (MOPS)

Article 8 The Company, in accordance with the Company Act and other applicable laws and regulations, shall record in the shareholders' meeting minutes the date and place of the meeting, the name of the chairman, the method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting. With respect to the election of directors, the meeting minutes shall record the method of voting adopted therefore and the total number of votes for the elected directors.

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The shareholders' meeting minutes shall be properly and perpetually kept by the Company during its legal existence and should be sufficiently disclosed on the Company's website.

Article 9 The chairman of the shareholders' meetings shall be fully familiar and comply with the rules governing the proceedings of the shareholders' meetings established by the Company. The chairman shall ensure the proper progress of the proceedings of the meetings and may not adjourn the meetings at will.

In order to protect the interests of most shareholders, if the chairman declares the adjournment of the meeting in a manner in violation of rules governing the proceedings of the shareholders' meetings, it is advisable for the members of the board of directors other than the chairman of the shareholders' meeting to promptly assist the attending shareholders at the shareholders' meeting in electing a new chairman of the shareholders' meeting to continue the proceedings of the meeting, by a resolution to be adopted by a majority of the votes represented by the shareholders attending the said meeting in accordance with the legal procedures.

Article 10 The Company shall place high importance on the shareholder right to know and shall faithfully comply with applicable regulations regarding information disclosure to provide shareholders with regular and timely information on company financial conditions and operations, insider shareholdings, and corporate governance status through the MOPS or the website established by the Company.

To treat all shareholders equally, it is advisable that the Company concurrently disclose the information under the preceding paragraph in English.

To protect its shareholders' rights and interests and ensure their equal treatment, the Company shall adopt internal rules prohibiting Company insiders from trading securities using information not disclosed to the market.

Article 11 The shareholders shall be entitled to profit distributions by the Company. To ensure the investment interests of shareholders, the shareholders' meeting may, pursuant to Article 184 of the Company Act, examine the statements and books prepared and submitted by the board of directors and the reports submitted by the Audit Committee, and may decide profit distributions and deficit off-setting plans by resolution. To proceed with the above examination, the shareholders' meeting may appoint an inspector.

The shareholders may, pursuant to Article 245 of the Company Act, apply with the court to select an inspector in examining the accounting records, assets, particulars and specific transaction documents and records of the Company.

The board of directors, Audit Committee, and managers of the Company shall fully cooperate in the examination conducted by the inspector in the aforesaid two paragraphs without any circumvention, obstruction or rejection.

Article 12 In entering into material financial and business transactions such as acquisition or disposal of assets, lending funds, and making endorsements or providing
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guarantees, the Company shall proceed in accordance with the applicable laws and/or regulations and establish operating procedures in relation to these material financial and business transactions which shall be reported to and approved by the shareholders' meeting so as to protect the interests of the shareholders.

When the Company is involved in a merger, acquisition or public tender offer, in addition to proceeding in accordance with the applicable laws and/or regulations, it shall not only pay attention to the fairness, rationality, etc. of the plan and transaction of the merger, acquisition or public tender offer, but information disclosure and the soundness of the Company's financial structure thereafter.

The relevant personnel of the Company handling the matters in the preceding paragraph shall pay attention to the occurrence of any conflicts of interest and the need for recusal.

Article 13 To protect the interests of the shareholders, it is advisable that the Company designate personnel exclusively dedicated to handling shareholder proposals, inquiries, and disputes.

The Company shall properly deal with any legal action duly instituted by shareholders in which it is claimed that shareholder rights and interests were damaged by a resolution adopted at a shareholders' meeting or a board of directors meeting in violation of applicable laws, regulations, or the Company's Articles of Incorporation, or that such damage was caused by a breach of applicable laws, regulations or the Company's Articles of Incorporation by any directors or managers in performing their duties.

It is advisable that the Company appropriately handles the matters referred to in the preceding two paragraphs and keeps relevant written records for future reference incorporate the procedures in its internal control system for management purposes.

Section 2

Establishing a Mechanism for Interaction with Shareholders

Article 13-1 The board of directors of the Company is responsible for establishing a mechanism for interaction with the shareholders to enhance mutual understanding of the development of company's objectives.
Article 13-2 In addition to communicating with the shareholders through the shareholders' meetings and encouraging the shareholders to participate in such meetings, the board of directors of the Company together with the managers and the independent directors shall engage with the shareholders in an efficient manner to ascertain the shareholders' views and concerns, and expound the Company policies explicitly, in order to gain the shareholders' support.

Section 3

Corporate Governance Relationships between the Company and Its Affiliated Enterprises

Article 14 The Company shall clearly identify the objectives and the division of authority and responsibility between itself and its affiliated enterprises, i.e., the subsidiaries
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over which the Company has actual control or the subsidiaries in which the Company directly and indirectly holds more than fifty-percent of the voting shares, with respect to management of personnel, assets, and financial matters, and shall properly carry out risk assessments and establish appropriate firewalls.

Article 15 Any manager of the Company concurrently assuming any other position shall comply with applicable laws and regulations.

A director who engages in any transaction for himself or herself or on behalf of another person that is within the scope of the Company's operations shall explain the major content of such actions to the shareholders' meeting and obtain its consent.

Article 16 The Company shall establish sound objectives and systems for management of finance, operations, and accounting in accordance with applicable laws and regulations. It shall further, together with its affiliated enterprises, properly conduct an overall risk assessment of major banks they deal with and customers and suppliers and implement the necessary control mechanisms to reduce credit risk.
Article 17 When the Company and its affiliated enterprises enter into inter-company business transactions, a written agreement governing the relevant financial and business operations between them shall be made in accordance with the principle of fair dealing and reasonableness. Price and payment terms shall be definitively stipulated when contracts are signed, and non-arm's length transactions shall be prohibited.

All transactions or contracts made by and between the Company and its related parties and shareholders shall follow the principles set forth in the preceding paragraph, and improper channeling of profits is strictly prohibited.

Article 18 A corporate shareholder having controlling power over the Company shall comply with the following provisions:
The corporate shareholder shall bear a duty of good faith to other shareholders and shall not directly or indirectly cause the Company to conduct any business which is contrary to normal business practice or not profitable.
The corporate shareholder's representative shall follow the rules implemented by the Company with respect to the exercise of rights and participation of resolution, so that at a shareholders' meeting, the representative shall exercise his/her voting right in good faith and for the best interest of all shareholders and shall exercise the fiduciary duty and duty of care of a director.
The corporate shareholder shall comply with relevant laws, regulations and the Articles of Incorporation of the Company in nominating directors and shall not act beyond the authority granted by the shareholders' meeting or board meeting.
The corporate shareholder shall not improperly intervene in corporate policy making or obstruct corporate management activities.
The corporate shareholder shall not restrict or impede the management or
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production of the Company by methods of unfair competition such as monopolizing corporate procurement or foreclosing sales channels.

The representative that is designated when a corporate shareholder has been elected as a director shall meet the Company's requirements for professional qualifications. Arbitrary replacement of the corporate shareholder's representative is inappropriate.
Article 19 The Company shall retain at all times a register of major shareholders who own a relatively high percentage of shares and have controlling power, and of the persons with ultimate control over those major shareholders.

The Company shall periodically disclose important information about its shareholders holding more than 10 percent of the outstanding shares of the Company relating to the pledge, increase or decrease of share ownership, or other matters that may possibly trigger a change in the ownership of their shares.

The major shareholder indicated in the first paragraph refers to those who own 5 percent or more of the outstanding shares of the Company or the shareholding stake thereof is on the top 10 list, but the Company may set up a lower shareholding threshold according to the actual shareholding stake that may control the Company.

Chapter 3

Enhancing the Functions of the Board of Directors

Section 1

Structure of the Board of Directors

Article 20 The board of directors of the Company shall direct company strategies, supervise the management, and be responsible to the Company and the shareholders. The Company's various procedures and arrangements of its corporate governance system shall ensure that, in exercising its authority, the board of directors complies with laws, regulations, its Articles of Incorporation, and the resolutions of its shareholders' meetings.

The structure of the Company's board of directors shall be determined by choosing an appropriate number of board members, not fewer than five, in consideration of the Company's business scale, the shareholdings of its major shareholders, and practical operational needs.

The composition of the board of directors shall be determined by taking diversity into consideration. It is advisable that directors concurrently serving as company managers not exceed one-third of the total number of the board members, and that an appropriate policy on diversity based on the Company's business operations, operating dynamics, and development needs be formulated and include, without being limited to, the following two general standards:

Basic requirements and values: Gender, age, nationality, and culture.
Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing and technology), professional skills,
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and industry experience.

All members of the board shall have the knowledge, skills, and experience necessary to perform their duties. To achieve the ideal goal of corporate governance, the board of directors shall possess the following abilities:

Ability to make operational judgments.
Ability to perform accounting and financial analysis.
Ability to conduct management administration.
Ability to conduct crisis management.
Knowledge of the industry.
An international market perspective.
Leadership.
Ability to make policy decisions.
Article 21 The Company establishes a fair, just, and open procedure for the election of directors, encourages shareholder participation, and adopts the cumulative voting mechanism to fully reflect shareholders' views, according to the principles for the protection of shareholder rights and interests and equitable treatment of shareholders.

Unless the competent authority otherwise grants an approval, a spousal relationship or a familial relationship within the second degree of kinship may not exist among more than half of the directors of the Company.

When the number of directors falls below five due to the discharge of a director for any reason, the Company shall hold a by-election for director at the following shareholders' meeting. When the number of directors falls short by one-third of the total number prescribed by the Articles of Incorporation, the Company shall convene a special shareholders' meeting within 60 days of the occurrence of that fact for a by-election for director(s).

The aggregate shareholding percentage of all directors of the Company shall comply with the laws and regulations. Restrictions on the share transfer of each director and the creation, release, or changes of any pledges over the shares held by each director shall be subject to the relevant laws and regulations, and the relevant information shall be fully disclosed.

Article 22 The Company specifies in its Articles of Incorporation that it adopts the candidate nomination system for elections of directors, carefully reviews the qualifications of a nominated candidate and the existence of any other matters set forth in Article 30 of the Company Act, and acts in accordance with Article 192-1 of the Company Act.

Article 23 Clear distinctions shall be drawn between the responsibilities and duties of the

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chairman of the board of the Company and those of its general manager.

It is inappropriate for the chairman to concurrently act as the general manager or any person with an equivalent position (i.e., the top-ranking manager). If the chairman concurrently acts as the general manager or any person with an equivalent position (i.e., the top-ranking manager) or if the chairman and general manager are spouses or relatives within one degree of kinship, it is advisable that the number of independent directors be increased and there be a majority of the members of the board of directors who are not employees or managers..

The Company shall clearly define the responsibilities and duties of its functional committees.

Section 2 Independent Director System

Article 24 The Company shall, in accordance with its Articles of Incorporation, appoint at least three independent directors comprising at least one-fifth of the total directors. Independent directors shall possess professional knowledge and there shall be restrictions on their shareholdings. Applicable laws and regulations shall be complied with when an independent director concurrently assumes other positions. Independent directors shall also maintain independence within the scope of their directorial duties and may not have any direct or indirect interest in the Company.

If the Company and its group enterprises and organizations, and another company and its group enterprises and organizations nominate for each other any director, supervisor or manager as a candidate for an independent director of the other, the Company shall, at the time it receives the nominations for independent directors, disclose the fact and explain the suitability of the candidate for independent director. If the candidate is elected as an independent director, the Company shall disclose the number of votes cast in favor of the elected independent director.

The "group enterprises and organizations" in the preceding paragraph comprise the subsidiaries of the TWSE/TPEx listed company, any foundation to which the TWSE/TPEx listed company's cumulative direct or indirect contribution of funds exceeds fifty percent of its endowment, and other institutions or juristic persons that are effectively controlled by the company.

Change of status between independent directors and non-independent directors during their term of office is prohibited.

The professional qualifications, restrictions on both shareholding and concurrent positions held, determination of independence, method of nomination and other requirements with regard to the independent directors shall be set forth in accordance with the Securities and Exchange Act, the Regulations Governing Appointment of Independent Directors and Compliance Matter for Public Companies, and the rules and regulations of the TWSE or TPEx Securities Market.

Article 25 The Company shall submit the matters that should be submitted to the board of

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directors to the board of directors for approval by resolution as provided in the Securities and Exchange Act, the Articles of Incorporation and Article 35 hereof. When an independent director has a dissenting opinion or qualified opinion, it shall be noted in the minutes of the directors meeting.

Article 26 The Company shall stipulate the scope of duties of the independent directors and empower them with manpower and physical support related to the exercise of their power. The Company or other board members shall not obstruct, reject or circumvent the performance of duties by the independent directors.

The Company shall stipulate the remuneration of the directors according to applicable laws and regulations. The remuneration of the directors shall fully reflect the personal performance and the long-term management performance of the company and shall also take the overall operational risks of the Company into consideration. Different but reasonable remuneration from that of other directors may be set forth for the independent directors.

Section 3 Functional Committees

Article 27 For the purpose of developing supervisory functions and strengthening management mechanisms, the board of directors of the Company, in consideration of the Company's scale, type of operations, and number of its board members, may set up functional committees for auditing, nomination, compensation and remuneration, strategic growth or any other functions, set up sustainable development, corporate social responsibility, business integrity or other committees on the basis of corporate social responsibility and sustainable operation, and expressly provide for the committee mentioned above in the Articles of Incorporation.

Functional committees shall be responsible to the board of directors and submit their proposals to the board of directors for approval.

Functional committees shall adopt an organizational charter to be approved by the board of directors. The organizational charter shall contain the numbers, terms of office, and powers of committee members, as well as the meeting rules and resources to be provided by the Company for exercise of power by the committee.

Article 28 The Company's Audit Committee shall be composed of the entire number of independent directors and shall not be fewer than three persons, one of whom shall be the convener, and at least one of them shall have accounting or financial expertise.

The exercise of power by the Audit Committee and its independent directors as well as related matters shall be set forth in accordance with the Securities and Exchange Act, the Regulations Governing the Exercise of Powers by Audit Committees of Public Companies, and the rules and regulations of the TWSE or TPEx.

Article 28-1 The Company has its Compensation Committee. It is advisable that the majority of its members be independent directors. The professional
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qualifications for its members, the exercise of their powers of office, the adoption of the organizational charter, and related matters shall be handled pursuant to the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter.

Article 28-2 The Company is advised to establish and announce channels for internal and external whistleblowers and have whistleblower protection mechanisms in place. The unit that handles whistleblowers' reporting shall be independent, provide encrypted protection for the files furnished by whistleblowers, and appropriately restrict access to such files. It shall also formulate internal procedures and incorporate those procedures into the Company's internal control system for management purposes.
Article 29 To improve the quality of its financial reports, the Company shall establish the position of deputy to its principal accounting officer.

To enhance the professional abilities of the deputy accounting officer of the preceding paragraph, the deputy's continuing education shall proceed following the schedule of the principal accounting officer.

Accounting personnel handling the preparation of financial reports shall also participate in relevant professional development courses for 6 hours or more each year. Those courses may be company internal training activities or may be professional courses offered by professional development institutions for principal accounting officers.

The Company shall select as its external auditor a professional, responsible, and independent attesting CPA, who shall perform regular reviews of the financial conditions and internal control measures of the Company. Regarding any irregularity or deficiency discovered and disclosed in a timely manner by the auditor during the review, and concrete measures for improvement or prevention suggested by the auditor, the Company shall faithfully implement improvement actions by establishing channels and mechanisms of communication between the Audit Committee, and the attesting CPA while incorporating procedures for that purpose into the Company's internal control system for management purposes.

The Company shall evaluate the independence and suitability of the CPA engaged by the Company regularly, and no less frequently than once annually. If the Company engages the same CPA without replacement for 7 years consecutively, or if the CPA is subject to disciplinary action or other circumstances prejudicial to the CPA's independence, the Company shall evaluate the necessity of replacing the CPA and submit its conclusion to the board of directors.

Article 30 It is advisable that the Company engage a professional and competent legal counsel to provide adequate legal consultation services to the Company, or to assist the board of directors and the management to improve their knowledge of the law, for the purposes of preventing any infraction of laws or regulations by the Company or its staff and ensuring that corporate governance matters proceed pursuant to the relevant legal framework and the prescribed procedures.
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When, as a result of performing their lawful duties, the board of directors or the management is involved in litigation or a dispute with shareholders, the Company shall retain a legal counsel to provide assistance as circumstances require.

The Audit Committee or an independent director of the Audit Committee may retain the service of legal counsel, CPA, or other professionals on behalf of the Company to conduct a necessary audit or provide consultation on matters in relation to the exercise of their power, at the expense of the Company.

Section 4 Rules for the Proceedings and Decision-Making Procedures of Board Meetings

Article 31 The board of directors of the Company shall meet at least once every quarter or convene at any time in case of emergency. To convene a board meeting, a meeting notice which specifies the purposes of the meeting shall be sent to each director no later than 7 days before the scheduled date. Sufficient meeting materials shall also be prepared and enclosed in the meeting notice. If the meeting materials are deemed inadequate, a director may ask the unit in charge to provide more information or request a postponement of the meeting with the consent of the board of directors.

The Company shall have its rules of procedure for board of directors meetings (hereafter referred to as "the Company's Rules of Procedure for Board of Directors Meetings"), which shall follow the Regulations Governing Procedure for Board of Directors Meetings of Public Companies with regard to the content of deliberations, procedures, matters to be recorded in the meeting minutes, public announcements, and other matters for compliance.

Article 32 Company directors shall exercise a high degree of self-discipline. If a director or a juristic person represented by the director is an interested party with respect to any proposal for a board meeting, the director shall state the important aspects of the interested party relationship at the meeting. When the relationship is likely to prejudice the interests of the Company, the director may not participate in discussion or voting on that proposal and shall enter recusal during the discussion and voting. The director also may not act as another director's proxy to exercise voting rights on that matter.

Matters requiring the voluntary recusal of a director shall be clearly set forth in the Company's Rules of Procedure for Board of Directors Meetings.

Article 33 When a board meeting is convened to consider any matter submitted to it pursuant to Article 14-3 of the Securities and Exchange Act, an independent director of the company shall attend the board meeting in person and may not be represented by a non-independent director via proxy. When an independent director has a dissenting or qualified opinion, it shall be noted in the minutes of the board of directors meeting; if the independent director cannot attend the board meeting in person to voice his or her dissenting or qualified opinion, he or she should provide a written opinion before the board meeting unless there are justifiable reasons for failure to do so, and the opinion shall be noted in the minutes of the board of directors meeting.
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In any of the following circumstances, decisions made by the board of directors shall be noted in the meeting minutes, and in addition, publicly announced and filed on the MOPS two hours before the beginning of trading hours on the first business day after the date of the board meeting:

An independent director has a dissenting or qualified opinion which is on record or stated in a written statement.
The matter was not approved by the Audit Committee but had the consent of more than two-thirds of all directors.

During a board meeting, managers from relevant departments who are not directors may, in view of the meeting agenda, sit in at the meetings, make reports on the current business conditions of the Company and respond to inquiries raised by the directors. Where necessary, a CPA, legal counsel, or other professionals may be invited to sit in at the meetings to assist the directors in understanding the conditions of the Company for adopting an appropriate resolution, provided that they shall leave the meeting when deliberation or voting takes place.

Article 34 Staff personnel of the Company attending board meetings shall collect and correctly record the meeting minutes in detail, as well as a summary, the method of resolution, and voting results of all the proposals submitted to the board meeting in accordance with relevant regulations.

The minutes of the board of directors meetings shall be signed by the chairman and secretary of the meeting and sent to each director within 20 days after the meeting. The director attendance records shall be made part of the meeting minutes, treated as important corporate records, and kept safe permanently during the life of the Company.

Meeting minutes may be produced, distributed, and preserved by electronic means.

The Company shall record in audio or video format the entire proceedings of a board of directors meeting and preserve the recordings for at least 5 years, in electronic form or otherwise.

If before the end of the preservation period referred to in the preceding paragraph a lawsuit arises with respect to a resolution of a board of directors meeting, the relevant audio or video recordings shall be preserved for a further period, in which case the preceding paragraph does not apply.

Where a board of directors meeting is held via teleconference or video conference, the audio or video recordings of the meeting form a part of the meeting minutes and shall be preserved permanently.

When a resolution of the board of directors violates laws, regulations, the Company's Articles of Incorporation, or resolutions adopted in the shareholders' meeting, and thus causes an injury to the Company, dissenting directors whose dissent can be proven by minutes or written statements will not be liable for damages.

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Article 35 The Company shall submit the following matters to its board of directors for discussion:
Convention of shareholders' meetings and implementation of meeting resolutions
Review and approval of the Articles of Incorporation, important by-laws and rules as well as important contracts
Business plan determination
Closing report and business report compilation and review
Annual and semi-annual financial reports, with the exception of semi-annual financial reports which, under relevant laws and regulations, need not be CPA audited and attested.
Adoption or amendment to an internal control system pursuant to Article 14-1 of the Securities and Exchange Act and evaluation of effectiveness of an internal control system.
Adoption or amendment, pursuant to Article 36-1 of the Securities and Exchange Act, to the handling procedures for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, and endorsements or guarantees for others.
The offering, issuance, or private placement of any equity-type securities.
The appointment, dismissal, performance assessment and the standard of remuneration of the managers.
The structure and system of director's remuneration.
The appointment or dismissal of a financial, accounting, or internal audit officer.
A donation to a related party or a major donation to a non-related party, provided that a public-interest donation of disaster relief for a major natural disaster may be submitted to the next board meeting for retroactive recognition. The preceding donation to a related party or a major donation to a non-related party shall be made pursuant to Article 7 of the Company's Rules of Procedure for Board of Directors Meetings.
Any acquisition and disposal of any important asset that shall require approval by the board of directors
Any decision on the establishment and closure of any branch company, representative office, business premises, and branch plant or other relevant changes
Any matter required by Article 14-3 of the Securities and Exchange Act or
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any other law, regulation, Articles of Incorporation or bylaw to be approved by resolution at a shareholders' meeting or to be submitted to a meeting of the board of directors, or any such significant matter as may be prescribed by the competent authority.

Except for matters that must be submitted to the board of directors for discussion under the preceding paragraph, when the board of directors is in recess, it may delegate the exercise of its power to others in accordance with law, regulations, or the Company's Articles of Incorporation. However, the level of delegation or the content or matters to be delegated shall be clearly specified, and general authorization is not permitted.

Article 36 The Company shall ask the appropriate corporate department or personnel to execute matters pursuant to board of directors' resolutions in a manner consistent with the planned schedule and objectives. It shall also follow up on those matters and faithfully review their implementation.

The board of directors shall remain informed of the progress of implementation and receive reports in subsequent meetings to ensure the actual implementation of the board's management decisions.

Section 5

Fiduciary Duty, Duty of Care and Responsibility of Directors

Article 37 Members of the board of directors shall faithfully conduct corporate affairs and perform the duty of care of a good administrator. In conducting the affairs of the Company, they shall exercise their powers with a high level of self-discipline and prudence. Unless matters are otherwise reserved by law for approval in shareholders' meetings or in the Company's Articles of Incorporation, they shall ensure that all matters are handled according to the resolutions of board of directors.

The Company, with its rules and procedures for board of directors performance assessments, conducts annually scheduled performance assessments of the board of directors, functional committees, and individual directors through selfassessment, peer-to-peer assessments, engaging outside professional institutions, or in any other appropriate manner. The performance assessment of the board of directors (functional committees) may include the following aspects, and that appropriate assessment indicators may be developed in consideration of the company's needs:

Its participation in the Company's operations.
Improvement in the quality of its decision-making.
Its composition and structure.
The election of the directors and their continuing professional education.
Internal control.

The performance assessments of board members (self-assessments or peer-to-peer

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assessments) may include the following aspects, with appropriate adjustments made on the basis of the Company's needs:

Their grasp of the Company's goals and missions.
Their recognition of directors' duties.
Their degree of participation in the Company's operations.
Their management of internal relationships and communication.
Their professionalism and continuing professional education.
Internal control.

The performance assessments of a functional committee may include the following aspects, with appropriate adjustments made on the basis of the Company's needs:

Its participation in the Company's operations.
Its recognition of its duties as the functional committee.
Improvement in the quality of its decision-making.
Its composition and election of members.
Internal control.

The Company is advised to submit the results of performance assessments to the board of directors and use them as reference in determining compensation, nomination and renewal of term of office of each director.

Article 37-1 It is advisable for the Company to establish a succession plan for the management. The development and implementation of such a plan shall be periodically evaluated by the board of directors to ensure its sustainable operation.
Article 38 If a resolution of the board of directors violates law, regulations or the Company's Articles of Incorporation, at the request of shareholders holding shares continuously for a year or an independent director to discontinue the implementation of the resolution, members of the board shall take appropriate measures or discontinue the implementation of such resolution as soon as possible.

Upon discovering any likelihood that the Company might suffer material injury, members of the board of directors shall proceed in accordance with what is prescribed in the foregoing paragraph and immediately report to an independent director member of the Audit Committee

Article 39 The Company, in accordance with its Article of Incorporation, is required to apply for liability insurance for its board of directors with respect to liabilities
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resulting from exercising their duties during their terms of occupancy to reduce and diversify the risk of material harm to the Company and shareholders arising from the wrongdoings or negligence of a director.

The Company is required to report the insured amount, coverage, premium rate, and other major contents of the liability insurance it has applied for or renewed for its board of directors, at the next board meeting.

Article 40 Members of the board of directors are advised to participate in training courses on finance, risk management, business, commerce, accounting, or law offered by institutions designated in the Rules Governing Implementation of Continuing Education for Directors and Supervisors of TWSE/TPEx Listed Companies, which cover subjects relating to corporate governance upon becoming directors and throughout their terms of occupancy. They shall also ensure that company employees at all levels will enhance their professionalism and knowledge of the law.

Chapter 4 Respecting Stakeholders' Rights

Article 41 The Company shall maintain channels of communication with its banks, other creditors, employees, consumers, suppliers, community, or other stakeholders of the Company, respect and safeguard their legal rights and interests, and designate a stakeholders section on its website.

When any of a stakeholder's legal rights or interests is harmed, the Company shall handle the matter in a proper manner and in good faith.

Article 42 The Company shall provide sufficient information to banks and its other creditors to facilitate their evaluation of the operational and financial conditions of the Company and its decision-making process. When any of their legal rights or interest is harmed, the Company shall respond with a responsible attitude and assist creditors in obtaining compensation through proper means.
Article 43 The Company shall establish channels of communication with employees and encourage employees to communicate directly with the management or directors to reflect employees' opinions about the management, financial conditions, and material decisions of the Company concerning employee welfare.
Article 44 In developing its normal business and maximizing the shareholders' interest, the Company shall pay attention to consumers' interests, environmental protection of the community, and public interest issues, and shall give serious regard to the Company's social responsibility.

Chapter 5

Improving Information Transparency

Section 1

Enhancing Information Disclosure

Article 45 Disclosure of information is a major responsibility of the Company. The Company shall perform its obligations faithfully in accordance with the relevant
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laws and the related TWSE and TPEx rules.

The Company is advised to publish and report its annual financial report within two months after the end of a fiscal year, and to publish and report its financial reports for the first, second and third quarters as well as its operating status for each month before the specified deadline.

The Company shall establish an Internet-based reporting system for public information, appoint personnel responsible for gathering and disclosing the Company's information, and establish a spokesperson system to ensure the proper and timely disclosure of information about the policies that might affect the decisions of shareholders and stakeholders.

Article 46 To enhance the accuracy and timeliness of the material information disclosed, the Company shall appoint a spokesperson and acting spokesperson(s) who understand thoroughly the Company's financial and business conditions and who are capable of coordinating among departments for gathering relevant information and representing the Company in making statements independently. The Company shall appoint one or more who shall represent the Company when the spokesperson cannot perform his/her duties in making statements independently, provided that the order of authority of such acting spokespersons is established to avoid any confusion.

To implement the spokesperson system, the Company shall unify the process of making external statements. It shall require the management and employees to maintain the confidentiality of financial and operational secrets and prohibit their disclosure of any such information at will.

The Company shall disclose the relevant information immediately whenever there is any change to the position of a spokesperson or acting spokesperson.

Article 47 To keep shareholders and stakeholders fully informed, the Company shall utilize the convenience of the Internet and set up a website containing the information regarding the Company's finances, operations, and corporate governance. It is also advisable for the Company to furnish the financial, corporate governance, and other relevant information in English.

To avoid misleading information, the aforesaid website shall be maintained by specified personnel, and the recorded information shall be accurate, detailed and timely updated.

Article 48 The Company shall hold any institutional investor briefing in compliance with the regulations of the TWSE and shall keep an audio or video record of the briefing. The financial and business information disclosed at the briefing shall be announced on the Market Observation Post System (MOPS) and provided for inquiry through the Company's website or through other channels in accordance with the TWSE rules.

Section 2

Disclosure of Information on Corporate Governance

Article 49 The Company shall disclose and update from time to time the following

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information regarding corporate governance in the fiscal year in accordance with laws and regulations and TWSE rules:

Corporate governance framework and rules.
Ownership structure and the rights and interests of shareholders, (including specific and explicit dividend policy).
Structure, professionalism and independence of the board of directors.
Responsibility of the board of directors and managers.
Composition, duties and independence of the Audit Committee.
Composition, duties and operation of the Compensation Committee and other functional committees.
The compensation paid to the directors, general manager and vice general manager in the last two fiscal years, the analysis of the percentage of total compensation to net profit after tax in the parent company only financial reports or individual financial reports, the policy, standard and package of compensation payment, the procedure for determination of compensation and the connection with the operation performance and future risk. Under special individual circumstances, compensation of individual directors shall be disclosed.
The progress of training of directors.
The rights, relationships, avenues for complaint, concerns, and appropriate response mechanism regarding stakeholders.
Details of the events subject to information disclosure required by laws and regulations.
The enforcement of corporate governance, differences between the corporate governance principles implemented by the Company and these principles, and the reason for the differences.
Other information regarding corporate governance.

The Company is advised, according to the actual performance of its corporate governance system, to disclose the plans and measures to improve its corporate governance.

Chapter 6 Supplementary Provisions

Article 50 The Company shall at all time monitor domestic and international developments in corporate governance as a basis for review and improvement of the Company's own corporate governance mechanisms to enhance corporate governance effectiveness.
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Article 51 The enactment of, and amendment to, the Principles shall be approved by the board of directors and reported to the shareholders' meeting of the Company.
Article 52 Enacted on August 1, 2014, these Principles were amended on January 19, 2018 for the first time and on April 9, 2010 for the second time and became effective after approval by the board of directors.
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Walsin Lihwa Corporation

Implementation Status of Repurchase of the Company's Shares

		Shares	Shares

No.		21st
Date & Session of Board of Directors' Resolution		June 17, 2015 8thMeeting of 17thBoard of Directors
Purpose of Repurchase		Transfer shares to employees
Period of Repurchase		June 18, 2015 to August 17, 2015
Actual Period of Repurchase		June 18, 2015 to June 29, 2015
Repurchase Price Range		NTD 7-10 per share
Type of Shares Repurchased		Common shares
Quantity of Shares Repurchased		Projected Repurchase Quantity	Actual Repurchase Quantity
		40,000,000 shares	40,000,000 shares
Average repurchase price per share		NTD 7.9
Reasons for Incomplete Repurchase		Not applicable (the entire shares were repurchased)
Implementation Status	Approval by Competent Authority Date and Reference No.	July 8, 2015 Jin-Guan-Zheng-Qi-Zi 1040026231
	Shares Transferred to Employees or Canceled	40,000,000 shares
	Shares Not Yet Canceled or Transferred	0 shares
	Date of Transfer to Employees or Cancellation	August 6, 2018 (cancellation date)

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Walsin Lihwa Corporation

Directors shareholdings stated in the shareholder register for the 2019 Annual Shareholders' Meeting

March 26, 2019 Title Name Shares held % of issued shares Chairman Yu-Lon Chiao 45,961,773 shares 1.38% Vice Chairman Patricia Chiao 91,969,006 shares 2.77% Director Yu-ChengChiao 39,508,661 shares 1.19% Director Yu-HengChiao 57,792,197 shares 1.74% Director Hui-MingCheng 1,000,000 shares 0.03% Director Wei-Shin Ma 244,033 shares 0.01% Director Chin Xin Investment Co., Ltd. Representative: Tung-Y Chan 210,011,000 shares 6.31% Independent Director Chen, Steve Ruey-Long 0 shares 0.00% Independent Director Ming-Ling Hsueh 0 shares 0.00% Independent Director King-Ling Du 0 shares 0.00% Independent Director Shiang-Chung Chen 0 shares 0.00% Shares held by all directors 446,486,670 shares 13.42%	March 26, 2019 Title Name Shares held % of issued shares Chairman Yu-Lon Chiao 45,961,773 shares 1.38% Vice Chairman Patricia Chiao 91,969,006 shares 2.77% Director Yu-ChengChiao 39,508,661 shares 1.19% Director Yu-HengChiao 57,792,197 shares 1.74% Director Hui-MingCheng 1,000,000 shares 0.03% Director Wei-Shin Ma 244,033 shares 0.01% Director Chin Xin Investment Co., Ltd. Representative: Tung-Y Chan 210,011,000 shares 6.31% Independent Director Chen, Steve Ruey-Long 0 shares 0.00% Independent Director Ming-Ling Hsueh 0 shares 0.00% Independent Director King-Ling Du 0 shares 0.00% Independent Director Shiang-Chung Chen 0 shares 0.00% Shares held by all directors 446,486,670 shares 13.42%	March 26, 2019 Title Name Shares held % of issued shares Chairman Yu-Lon Chiao 45,961,773 shares 1.38% Vice Chairman Patricia Chiao 91,969,006 shares 2.77% Director Yu-ChengChiao 39,508,661 shares 1.19% Director Yu-HengChiao 57,792,197 shares 1.74% Director Hui-MingCheng 1,000,000 shares 0.03% Director Wei-Shin Ma 244,033 shares 0.01% Director Chin Xin Investment Co., Ltd. Representative: Tung-Y Chan 210,011,000 shares 6.31% Independent Director Chen, Steve Ruey-Long 0 shares 0.00% Independent Director Ming-Ling Hsueh 0 shares 0.00% Independent Director King-Ling Du 0 shares 0.00% Independent Director Shiang-Chung Chen 0 shares 0.00% Shares held by all directors 446,486,670 shares 13.42%	March 26, 2019 Title Name Shares held % of issued shares Chairman Yu-Lon Chiao 45,961,773 shares 1.38% Vice Chairman Patricia Chiao 91,969,006 shares 2.77% Director Yu-ChengChiao 39,508,661 shares 1.19% Director Yu-HengChiao 57,792,197 shares 1.74% Director Hui-MingCheng 1,000,000 shares 0.03% Director Wei-Shin Ma 244,033 shares 0.01% Director Chin Xin Investment Co., Ltd. Representative: Tung-Y Chan 210,011,000 shares 6.31% Independent Director Chen, Steve Ruey-Long 0 shares 0.00% Independent Director Ming-Ling Hsueh 0 shares 0.00% Independent Director King-Ling Du 0 shares 0.00% Independent Director Shiang-Chung Chen 0 shares 0.00% Shares held by all directors 446,486,670 shares 13.42%
Title	Name	Shares held	% of issued shares
Chairman	Yu-Lon Chiao	45,961,773 shares	1.38%
Vice Chairman	Patricia Chiao	91,969,006 shares	2.77%
Director	Yu-ChengChiao	39,508,661 shares	1.19%
Director	Yu-HengChiao	57,792,197 shares	1.74%
Director	Hui-MingCheng	1,000,000 shares	0.03%
Director	Wei-Shin Ma	244,033 shares	0.01%
Director	Chin Xin Investment Co., Ltd. Representative: Tung-Y Chan	210,011,000 shares	6.31%
Independent Director	Chen, Steve Ruey-Long	0 shares	0.00%
Independent Director	Ming-Ling Hsueh	0 shares	0.00%
Independent Director	King-Ling Du	0 shares	0.00%
Independent Director	Shiang-Chung Chen	0 shares	0.00%
Shares held by all directors		446,486,670 shares	13.42%

Note: As of the book closure date for the 2019 Annual Shareholders' Meeting, the Company had issued 3,326,000,258 shares of common stock.

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Walsin Lihwa Corporation Comparison Table of Amended Articles of Procedures for Ac uisition and Dis osal of Assets q p

Amended Articles	Amended Articles	Current Articles	Description
Article 3 Scope of Application 1. (Omitted) 2. Assets to which these Regulations apply: (1) Investments in stocks, government bonds, corporate bonds, bank debentures, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset- backed securities; (2) Real estate (including land, houses and buildings, investment property and stock inventory for the construction industry) and equipment; (3) Memberships; (4) Patents, copyrights, trademarks, franchise rights and other intangible assets; (5) Right-of-use assets; (6)Derivatives; (7)Assets acquired or disposed of through mergers, spin-offs, acquisitions or transfers of shares in accordance with law; and (8) Other major assets.		Article 3 Scope of Application 1. (Omitted) 2. Assets to which these Regulations apply: (1) Investments in stocks, government bonds, corporate bonds, bank debentures, securities representing interest in a fund, depository receipts, call (put) warrants, beneficiary securities and asset-back securities; (2) Real estate (including land, houses and buildings, investment property,right to use landand stock inventory for the construction industry) and equipment; (3) Memberships; (4) Patents, copyrights, trademarks, franchise rights and other intangible assets; (5) Derivatives; (6) Assets acquired or disposed of through mergers, spin-offs, acquisitions or transfers of shares in accordance with law; and (7)Other major assets.	1. Paragraph 2 hereof is amended to conform to the amendments to these Regulations (to conform to the provisions of IFRS16 Leases, Subparagraph 5 is newly added to expand the scope of right-of-use assets and the current Paragraph 2 regarding the right to use land is moved to Paragraph 5). 2. The current Paragraphs 5 to 7 are moved to Paragraphs 6 to 8.
	Article 4 Definition 1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived fromspecified interest rates, financial instrument prices, commodity prices, foreign exchange rates, indexes of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid	Article 4 Definition 1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, swap contracts, and compound contracts combining the above products, whose value is derived from assets, interest rates, foreign exchange rates, indexes or other interests. The term "forward contracts" do not include insurance contracts, performance contracts,after-sales	1. To conform to the amendments to these Regulations, Paragraph 1 is amended and to conform to the definitions in IFRS 9 Financial Instruments, the scope of derivatives is specified. 2. In response to the amendments to the

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Amended Articles Current Articles Description contracts or structured products service contracts, long-term Company Act, the containing embedded leasing contracts, or long-term numeral of the article derivatives. The term "forward The term "forward of the Company Act purchase (sales) agreements. contracts" does not include cited in Paragraph 2 is 2.Assets acquired or disposed insurance contracts, changed from through mergers, spin-offs, performance contracts, afterParagraph 8 of Article acquisitions or transfers of shares sales service contracts, long156 to Article 156-3. term leasing contracts, or longpursuant to law: Refers to assets 3. The definitions of acquired or disposed through term purchase (sales) contracts. related parties and Assets acquired or disposed mergers, spin-offs, acquisitions subsidiaries are through mergers, spin-offs, conducted under the Business amended to conform acquisitions, or transfers of Mergers and Acquisitions Act, the to these Regulations. shares pursuant to law: Refers to Financial Holding Company Act, 4. The current assets acquired or disposed the Financial Institutions Merger Subparagraphs 5 to 8 through mergers, spin-offs, or are moved to Act and other acts, or to transfer of acquisitions conducted under the Subparagraphs 4 to 7. shares from another company Business Mergers and through issuance of new shares of Acquisitions Act, Financial its own as the consideration Holding Company Act, therefor (hereinafter "transfer of Financial Institutions Merger Act and other acts, or to transfer shares") under Paragraph 8 of of shares from another company Article 156 of the Company Act. through issuance of new shares 3. Related parties: As defined in of its own as the consideration Regulations Governing the therefor (hereinafter "transfer of Preparation of Financial Reports shares") under Article 156-3 of 3 of of by Securities Issuers Article 18. the Company Act. When determining whether Related party and subsidiary: As transaction counterparty is a defined in the Regulations related party, the Company shall Governing the Preparation of take into consideration of the Financial Reports by Securities Issuers. substance of the relationship with rofessional appraiser: Refers to the transaction party in addition to a real property appraiser or legal formalities. other person duly authorized by 4. Subsidiaries: As defined in law to engage in the value International Financial Reporting appraisal of real property or Standards No. 27. equipment. 5. Professional appraiser: Refers to a ate of occurrence: Refers to real property appraiser or other the date of contract signing, date person duly authorized by law to of payment, date of engage in the value appraisal of consignment trade, date of transfer, dates of boards of real property or equipment. directors resolutions, or other 6. Date of occurrence: Refers to the date that can confirm the date of contract signing, date of counterparty and monetary payment, date of consignment amount of the transaction, trade, date of transfer, dates of whichever date is earlier; boards of directors resolutions, or provided, for investment for other date that can confirm the

derivatives. The term "forward The term "forward contracts" does not include insurance contracts, performance contracts, aftersales service contracts, longterm leasing contracts, or longterm purchase (sales) contracts.
1. Assets acquired or disposed through mergers, spin-offs, acquisitions, or transfers of shares pursuant to law: Refers to assets acquired or disposed through mergers, spin-offs, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institutions Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of shares") under Article 156-3 of 3 of of the Company Act.
1. Related party and 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 other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier; provided, for investment for
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Amended Articles	Current Articles	Description
which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 6. 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. 7. Implementation unit: Refers to the business unit that carries out the affairs of the Company according to the nature of its businesses.	counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 7. Mainland 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. 8. Implementation unit: Refers to the business unit that carries out the affairs of the Company according to the nature of its businesses.
Article 6 Procedures for Acquisition or Disposal of Assets 1. (Omitted) 2.Acquisition or disposal of short term securities: (1) For securities guarantee principal and generate fixed income within a year, the Accounting Department shall provide evaluation report. Acquisition or disposal of this type of securities in the amount of not exceeding NT$ 500,000,000 in a single day shall be approved by the head of financial department; for NT$ 500,000,000 and above but not exceeding 1,500,000,000, shall be approved by the General Manager; for NT$	Article 6 Procedures for Acquisition or Disposal of Assets 1. (Omitted) 2. (Deleted) 3.Acquisition or disposal of short term securities: (1) For securities guarantee principal and generate fixed income within a year, the Accounting Department shall provide evaluation report. Acquisition or disposal of this type of securities in the amount of not exceeding NT$ 500,000,000 in a single day shall be approved by the head of financial department; for NT$ 500,000,000 and above but not exceeding 1,500,000,000, shall be approved by the General	1. The current Subparagraphs 3 to 8 are moved to Subparagraph 2 to 7. 2. The reason for amendment is the same as that specified in Explanation 1 of Article 3.

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Amended Articles	Current Articles	Description
1,500,000,000 and above, shall be approved by the Chairman. (2) Other securities which are not included in preceding sub- paragraph shall be approved by the Audit Committee and Board of Directors in advance. 3.The acquisition and disposal of derivatives shall be conducted in accordance with the Procedures for Financial Derivatives Transactions of the Company. 4.Acquisition or disposal of real estateor its right-of-use assetsin the amount not exceeding NT$ 300,000,000 shall be carried out in the discretion of the Chairman. Where such a transaction involves an amount that is NT$ 300,000,000 and above, it may be carried out only upon the approval by the Audit Committee and the Board of Directors. 5.Acquisition or disposal of equipmentor its right-of-use assets in the amount not exceeding NT$ 300,000,000 shall be carried out in the discretion of the Chairman. Where such a transaction involves an amount that is NT$ 300,000,000 and above, it may be carried out only upon the approval by the Audit Committee and Board of Directors. 6.Acquisition or disposal of membership, intangible assetsor the right-of-use assets thereofand other major assets in an amount exceeding NT$ 300,000,000 shall, upon appraisal by the implementation unit, be carried out in the discretion of the Chairman.	Manager; for NT$ 1,500,000,000 and above, shall be approved by the Chairman. (2) Other securities which are not included in preceding sub- paragraph shall be approved by the Audit Committee and Board of Directors in advance. 4. The acquisition and disposal of derivatives shall be conducted in accordance with the Procedures for Financial Derivatives Transactions of the Company. 5. Acquisition or disposal of real estate in the amount not exceeding NT$ 300,000,000 shall be carried out in the discretion of the Chairman. Where such a transaction involves an amount that is NT$ 300,000,000 and above, it may be carried out only upon the approval by the Audit Committee and the Board of Directors. 6. Acquisition or disposal of equipment in the amount not exceeding NT$ 300,000,000 shall be carried out in the discretion of the Chairman. Where such a transaction involves an amount that is NT$ 300,000,000 and above, it may be carried out only upon the approval by the Audit Committee and Board of Directors. 7. Acquisition or disposal of membership, intangible assets and other major assets in an amount not exceeding NT$ 300,000,000 shall, upon appraisal by the implementation unit, be carried out in the discretion of the Chairman. Where such a transaction involves

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Amended Articles	Current Articles	Description
Where such a transaction involves an amount that is NT$ 300,000,000 and above, it may be carried out only upon the approval by the Audit Committee and the Board of Directors. 7.Procedures for related-party transactions shall be in accordance with Article 10 herein.	an amount that is NT$ 300,000,000 and above, it may be carried out only upon the approval by the Audit Committee and the Board of Directors. 8. Procedures for related-party transactions shall be in accordance with Article 10 herein.
Article 9 Engagement of Independent Expert for Objective and Fair Report 1. (Omitted) 2. Where the acquisition or disposal of membership or intangible assetsor the right-of-use assets thereof by the Company amounts to 20% of the Company's paid-up capital or exceeds NT$ 300,000,000, then except in the cases of transactions with domesticgovernment agencies, the Company shall before the date of such acquisition or disposal engage CPA to express an opinion on the reasonableness of the transaction price, and the said CPA shall carry out the work in accordance with Article 20 of the Auditing Standards announced by the Accounting Research and Development Foundation. 3. Where the acquisition or disposal of real estate or equipmentor the right-of-use assets thereof,except in the cases of transactions with domesticgovernment agencies, commissioned construction on its own land, lease of land for commissioned construction, or acquisition or disposal of equipment for the Company's operationsor the right-of-use assets thereof,amounts to 20% of the Company'spaid-upcapital or	Article 9 Engagement of Independent Expert for Objective and Fair Report 1. (Omitted) 2. Where the acquisition or disposal of membership or intangible assets by the Company amounts to 20% of the Company's paid-up capital or exceeds NT$ 300,000,000, then except in the cases of transactions with government agencies, the Company shall before the date of such acquisition or disposal engage CPA to express an opinion on the reasonableness of the transaction price, and the said CPA shall carry out the work in accordance with Article 20 of the Auditing Standards announced by the Accounting Research and Development Foundation. 3. Where the acquisition or disposal of real estate or equipment, except in the cases of transactions with government agencies, commissioned construction on its own land, lease of land for commissioned construction, or acquisition or disposal of equipment for the Company's operations, amounts to 20% of the Company's paid-up capital or exceeds NT$ 300,000,000, the Company shall obtain an appraisal	1. To conform to the amendments to these Regulations (guidelines for public companies engaging such experts as professional appraisers and their officers, CPA, attorneys, and securities underwriters are incorporated into these Procedures, and the passive qualification of relevant experts are specified herein.) 2. To conform to the amendments to these Regulations (the evaluation of the appraisal reports or opinions issued by relevant experts and audits and representations are specified in these Procedures) 3. The relevant regulations and price negotiation mechanism in transactions with foreign government agencies are less clear; therefore, “government agencies” here shall only be limited to domestic ones and thus

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Amended Articles

Current Articles

report issued by professional appraisers before the date of such transaction, and carry out such transaction in accordance with Article 9 of these Regulations.

exceeds NT$ 300,000,000, the Company shall obtain an appraisal report issued by professional appraisers before the date of such transaction, and carry out such transaction in accordance with Article 9 of these Regulations.

The calculation of the transaction amounts referred to in the preceding three articles shall be done in accordance with Paragraph 2, Article 30 hereof, 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.
The calculation of the transaction amounts referred to in the preceding three articles shall be done in accordance with Paragraph 2, Article 31 hereof, 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.
(Omitted)
Professional appraisers and their officers, CPA, attorneys, and securities underwriters that provide the Company with appraisal reports, CPA's opinions, attorney's opinions, or underwriter's opinions shall not be a related party of any party to the transaction.
(Omitted)
Professional appraisers and their officers, CPA, attorneys, and securities underwriters that provide the Company with appraisal reports, CPA's opinions, attorney's opinions, or underwriter's opinions shall meet the following requirements: (1) May not have previously received a final and unappeasable sentence to imprisonment for 1 year or longer for a violation of these Regulations, the Company Act, the Banking Act, 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

Description the waiver does not apply to foreign government agencies.

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		Amended Articles	Current Articles	Description
	(2) (3) When
	(1) (2) (3)

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(4)	report or the opinion. 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 10 Related-Party Transactions 1. (Omitted) 2. When the Company intends to acquire or dispose of real propertyor right-of-use assets thereoffrom or to a related party, or when it intends to acquire or dispose of assets other than real propertyor right-of-use assets thereoffrom 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$ 300,000,000 or more, except in trading of domesticgovernment bonds, 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 majority of the Audit Committee members and resolved by the Board of Directors: (1) The purpose, necessity and anticipated benefit of the		Article 10 Related-Party Transactions 1. (Omitted) 2. When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300,000,000 or more, except in trading of government bonds, 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 majority of the Audit Committee members and resolved by the Board of Directors: (1) The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.	1. To conform to the amendments to these Regulations (considering that the creditworthiness of the Taiwanese central and local government bonds are clear and easy to search for, such bond may be exempted from being submitted to the board of directors for approval and to the supervisors for acknowledgement. Here, “government bonds” is specified to be limited to “domestic government bonds” because the creditworthiness of foreign governments is varied; therefore, the waiver does not apply to foreign government agencies. In addition, to conform to the provisions of IFRS 16 Lease,the right-of-use

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		Amended Articles	Current Articles	Description
	acquisition or disposal of assets. (2) The reason for choosing the related party as counterparty. (3) With respect to the acquisition of real propertyor right-of- use assets thereoffrom a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article16 and Article17 of these Regulations. (4) The date and price at which the related party originally acquired the real property, the original counterparty, and that counterparty's relationship to the Company and the related party. (5) Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization. (6) An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article. (7) Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transaction amounts referred toin the preceding paragraphshall be made in accordance with		(2) The reason for choosing the related party as counterparty. (3) With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 15 and Article 16 of these Regulations. (4) The date and price at which the related party originally acquired the real property, the original counterparty, and that counterparty's relationship to the Company and the related party. (5) Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization. (6) An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article. (7) Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transaction amounts shall be made in accordance with Paragraph 2, Article 30 of these Regulations,	assets are incorporated into this Article.) 2. To revise the wording. 3. To meet practical needs for management, authorization is given within the extent permitted by these Regulations. 4. Considering that due to the overall business planning, collectively leasing real property and then subletting the same is possible, and as the said transactions involve lower risk of irregular transactions, Subparagraph 4 of Paragraph 3 hereof is newly added.

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Amended Articles

Current Articles Description 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 Audit Committee members and resolved by the board of directors in accordance with these Procedures may not be calculated into the transaction amount.

Paragraph 2, Article 31 of these Regulations, 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 Audit Committee members and resolved by the Board of Directors in accordance with these Procedures may not be calculated into the transaction amount.

For the acquisition or disposal of the real property right-of-use assets for business use by and among the Company and its subsidiaries, or by and among its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, the Board of Directors authorizes the Chairman to act in his discretion for any transaction not exceeding NT$ 300,000,000, before subsequently submitting to the Audit Committee and the Board of Directors for retroactive recognition.

For acquisition or disposal of operational equipment by and between the Company and its subsidiaries, the Board of Directors authorizes the Chairman to act in his discretion for any transaction not exceeding NT$ 300,000,000, before subsequently submitting to the Audit Committee and the Board of Directors for retroactive recognition.

The Company, when acquiring real property from a related party, shall evaluate the reasonableness of the transaction costs in accordance with Articles 16 and 17 of these Regulations, and engage a CPA to check the appraisal and render a specific opinion, except in any of the following cases:
The Company, when acquiring real property from a related party, shall evaluate the reasonableness of the transaction costs in accordance with Articles 15 and 16 of these Regulations, and engage a CPA to check the appraisal and render a specific opinion, except in any of the following cases: (1) The related party acquired the real property through inheritance or as a gift.

(2) More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property to the signing date

(1) The related party acquired the real property or right-ofuse assets thereof through inheritance or as a gift.
(2) More than 5 years will have elapsed from the time the related party signed the contract to obtain the real
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		Amended Articles	Current Articles	Description
4.	(3) (4)		for the current transaction. (3) 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. 4. Where the Company acquires real property from a related party and the results of appraisals conducted in accordance the rules are uniformly lower than the transaction price, the following steps shall be taken: (1) A special reserve shall be set aside in accordance with the Procedures against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where an investor, as a public company, values its investments in the Company

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	investor, as a public company, values its investments in the Company under the equity method, it shall set aside a special reserve in an amount equivalent to the above set- aside amount in proportion to its shareholding in the Company (2) Independent Directors of the Audit Committee shall comply with the provisions of Article 218 of the Company Act. (3) Actions taken pursuant to Subparagraph 1 and Subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company, having set aside a special reserve under the preceding paragraph, may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased orleasedat a premium, or they have been disposed of,or the lease contract has been terminated,or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the Financial Supervisory Commission has given its consent. When the Company obtains real	under the equity method, it shall set aside a special reserve in an amount equivalent to the above set- aside amount in proportion to its shareholding in the Company (2) Independent Directors of the Audit Committee shall comply with the provisions of Article 218 of the Company Act. (3) Actions taken pursuant to Subparagraph 1 and Subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company, having set aside a special reserve under the preceding paragraph, may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the Financial Supervisory Commission has given its consent. When the Company obtains real propertyfrom a relatedparty,it

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	propertyor right-of-use assets thereoffrom a related party, it shall also comply with the preceding paragraphs if there is other evidence indicating that the acquisition was not an arm's length transaction.	shall also comply with the preceding paragraphs if there is other evidence indicating that the acquisition was not an arm's length transaction.
Article 13 Acquisition or Disposal of Assets by Subsidiaries 1. (Omitted) 2. (Omitted) 3. Subsidiaries of public companies that meet the announcement and reporting standardsset forthin Paragraph 2, Article 13, the announcement and reporting to be conducted by them shall be conducted by the Company.		Article 13 Acquisition or Disposal of Assets by Subsidiaries 1. (Omitted) 2. (Omitted) 3. Subsidiaries of public companies that meet the announcement and reporting standardsprovided for in Paragraph 2, Article 13, the announcement and reporting to be conducted by them shall be conducted by the Company.	Revision of the wording.

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Walsin Lihwa Corporation Comparison Table of Amended Articles of Procedures for Financial Derivatives Transactions

Amended Article	Current Articles	Description
Chapter 1 Objective Article 3 Definition 3.1 Derivatives referred to herein ~~mean any trading contracts with~~ ~~worth derived from assets,~~ ~~interest rates, foreign exchange~~ ~~rates, indexes or other interests~~ ~~(such as forward contracts,~~ ~~options, futures, and swaps. The~~ ~~Company does not engage in~~ ~~the trading of any hybrid~~ ~~contracts consisting of the~~ ~~aforementioned products.~~ shall have the meaning of “derivatives”defined in the Company's Procedures for Acquisition and Disposal of Assets. ~~3.2. Forward contracts referred to~~ ~~herein do not include insurance~~ ~~contracts, fulfillment contracts,~~ ~~after-sale service contracts, long-~~ ~~term lease contracts and long-~~ ~~term purchase (sale) contracts.~~ ~~3.3~~ 3.2.Actual Needs ~~3.3.13~~.2.1Foreign exchange trading: Open interest value≦ Foreign currency assets or liability positions at the beginning of an accounting period + the projected amount for the next three months 3.2.2 Interest rate trading: Open interest value≦Exposure of the hedged items	Chapter 1 Objective Article 3 Definition 3.1 Derivatives referred to herein mean any trading contracts with worth derived from assets, interest rates, foreign exchange rates, indexes or other interests (such as forward contracts, options, futures, and swaps. The Company does not engage in the trading of any hybrid contracts consisting of the aforementioned products. 3.2 Forward contracts referred to herein do not include insurance contracts, fulfillment contracts, after-sale service contracts, long- term lease contracts and long-term purchase (sale) contracts. 3.3 Actual Needs 3.3.1 Foreign exchange trading: Open interest value≦ Foreign currency assets or liability positions at the beginning of an accounting period + the projected amount for the next three months 3.3.2 Non-iron metals: Open interest position≦Inventories at the beginning of an accounting period + the projected amount for the next three months 4. Responsible departments	1. The format and the numerals are adjusted. 2. Amended to conform to the definition of “derivatives” provided for in Article 4 of the newly amended “Regulations Governing the Acquisition and Disposal of Assets by Public Companies”. These Procedures are amended to directly cite the definition of “derivatives” specified in the “Company's Procedures for Acquisition and Disposal of Assets“. In addition, a sentence (i.e., “the Company does not engage in the trading of any hybrid contracts consisting of the aforementioned products”) is deleted in cooperation with the practical procedures. 3. According to actual needs: Hedging transactions shall

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~~3.3.2~~ 3.2.3~~Non-iron metals M~~aterials: Open interest position≦ Inventories at the beginning of an accounting period + the projected amount for the next three months ~~4. Responsible departments~~			include interest rate transactions, in response to interest rate risks facing the Company. In addition, the amount of interest hedging transactions shall not exceed those of their hedged items. 4. Since “non-iron metal” has a narrower meaning, various kinds of materials used by the Company in its manufacturing processes are not included in the above meaning. Therefore, “non-iron metal” is replaced by “materials” to better cover the risks of prices of materials.
Chapter 2 Contents 1. Responsible departments 1.1Finance~~DivisionD~~epartment: ~~Hedges~~ ~~against~~Routine management ofthe exchange rate and interest rate risks associated with NTD and foreign currency depositsand relevant transactions,short-term investments, account receivables, prepayments, fixed assets held in foreign currencies, long-term investments~~(foreign~~ ~~exchange risks associated with~~ ~~net General Principles Contents~~ ~~Major~~ ~~Internal~~ ~~Policies~~ ~~of~~ ~~Walsin Lihwa investment in the~~ ~~Company's foreign operations)~~, NTD and foreign currency		Chapter 2 Contents 1. Responsible departments Finance Division 1. Hedges against the exchange rate and interest rate risks associated with foreign currency deposits, short-term investments, account receivables, prepayments, fixed assets held in foreign currencies, long-term investments (foreign exchange risks associated with net General Principles Contents Major Internal Policies of Walsin Lihwa investment in the Company's foreign operations), foreign currency borrowings, and account payables generated by the Company's operating or investment activities.	1. The numerals are adjusted. 2. The titles of the responsible departments are changed to the broader term “Department”, to adjust to future organizational changes. 3. The wordings are amended to correspond to the diversity of the current financial businesses. 4. The relevant risk management

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borrowings, and account payables generated by the Company's operating or investment activities;the Fund Management Department shall be responsible for, among others, the settlement of foreign exchange and interest rate hedging transactions. ~~2. Hedges against the interest rate~~ ~~risks associated with Taiwan~~ ~~Dollar deposits and borrowings~~ ~~generated by the Company's~~ ~~operating or investment activities;~~ ~~3.Moreover, the Risk Management~~ ~~Department is responsible for~~ ~~hedge trading implementation~~ ~~while the Fund Management~~ ~~Department is responsible for~~ ~~settlements.~~ 1.2 Foreign and Interest Rate Risk Management Department: Responsible for the planning and execution of foreign exchange (including foreign exchange risks of a net Investment in a foreign operation) and interest rate hedging transactions. 1.3~~Metals DivisionK~~ey Materials Risk Management Department: ~~Hedges~~Hedging and non-hedging trading against the risks of~~the~~ ~~copper and nickel positions held~~ ~~by the Company~~material prices resulting from~~non-iron metal~~ ~~procurement and engages in non-~~ ~~hedge trading, too~~business activity. 1.4Accounting ~~Division~~			2. Hedges against the interest rate risks associated with Taiwan Dollar deposits and borrowings generated by the Company's operating or investment activities. 3.Moreover, the Risk Management Department is responsible for hedge trading implementation while the Fund Management Department is responsible for settlements. Metals Division: Hedges against the risks of the copper and nickel positions held by the Company resulting from non-iron metal procurement and engages in non- hedge trading, too AccountingDivision: Responsible	departments should be responsible for the planning and execution of foreign exchange and interest rate hedging trading, to adjust to future organizational changes. 5. Since “non-iron metal” has a narrower meaning, various kinds of materials used by the Company in its manufacturing processes are not included in the above meaning. Therefore, “non-iron metal” is replaced by “materials” to better cover the risks of prices of materials more than just copper and nickel. 6. The titles of the responsible departments are changed to the broader term “Department”, to adjust to future organizational changes.

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	Current Articles	Description
Department:Responsible for transaction confirmation, accounting adjustment, bookkeeping, and evaluation of unrealized gains or losses based on the positions of derivatives held by the Company on a regular basis. 1.5Auditing~~OfficeD~~epartment: Responsible for audit of transactions and outstanding positions based on the reports prepared by the Accounting ~~DivisionD~~epartmentand evaluation of compliance with these Procedures on a regular basis.	for transaction confirmation, accounting adjustment, bookkeeping, and evaluation of unrealized gains or losses based on the positions of derivatives held by the Company on a regular basis. Auditing Office: Responsible for audit of transactions and outstanding positions based on the reports prepared by the Accounting Division and evaluation of compliance with these Procedures on a regular basis.
2.Functions and management principles ~~2-1.2~~.1Strategy 2.1.1The Company shall primarily select the derivatives that are able to hedge against its operating risks. Derivatives trading shall be categorized as hedging (for non-trading purposes) and non- hedging trading (for trading purposes): Hedging: Transactions conductedwith relevant hedging instrumentsto hedge risks associated with prices of current or future holdings; Non-hedging: Transactions conducted for non-hedging purposes.	2. Functions and management principles 2-1. Strategy The Company shall primarily select the derivatives that are able to hedge against its operating risks. Derivatives trading shall be categorized as hedging (for non- trading purposes) and non-hedging (for trading purposes): Hedging: Transactions conducted to hedge risks associated with prices of current or future holdings; Non-hedging: Transactions conducted for non-hedging purposes.	1. The numerals are adjusted. 2. According to actual needs: When hedging materials risks, there would be no hedging instrument directly available for certain items, or the hedge can be achieved through highly- relevant hedging instruments.
~~2-2.2~~.2Performance evaluation 2.2.1Non-hedging transactions shall be reviewed on a regular basis based on profit-making goals or stop-loss limits that are predetermined in accordance with the value of	2-2. Performance evaluation Non-hedging transactions shall be reviewed on a regular basis based on profit-making goals or stop-loss limits that are predetermined in accordance with the value of positions held.	1. The numerals are adjusted. 2. The titles of the responsible departments are changed to the broader term

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	Amended Article	Current Articles	Description
2.2.2	positions held. The Accounting~~Division~~ Departmentshall prepare reports on a regular basis to inform the senior management of the net gain or loss in the current accounting period.	The Accounting Division shall prepare reports on a regular basis to inform the senior management of the net gain or loss in the current accounting period.	“Department”, to adjust to future organizational changes.
~~2-3.2~~.3Limits on total transaction amount 2.3.1Hedging positions: (1)Foreign exchangeand interest ratetrading: Conducted pursuant to the authorization provided to ~~Finance DivisionF~~oreign Exchange and Interest Rate Risk Management Department. (2)~~Non-iron metalsM~~aterials: Based on actual needs decided by~~Metals Division~~ Key Materials Risk Management Department. 2.3.2Non-hedging positions: (1)Foreign exchangeand interest ratetrading: Prohibited. (2)~~Non-iron metalsM~~aterials: ~~(1)~~Copper: No more than 80,000 tons;~~(2)~~Nickel: No more than 6,000 tons;~~(3)~~ Other metals: Subject to written approval by the chairman of the board with trading amount limits to be established.		2-3.Limits on total transaction amount Hedging positions: Foreign exchange trading: Conducted pursuant to the authorization provided to Finance Division. Non-iron metals: Based on actual needs decided by Metals Division Non-hedging positions: Foreign exchange trading: Prohibited Non-iron metals: (1) Copper: No more than 80,000 tons (2) Nickel: No more than 6,000 tons (3) Other metals: Subject to written approval by the chairman of the board with trading amount limits to be established	1. The numerals are adjusted. 2. According to actual needs: Hedging transactions shall include interest rate transactions, in response to the interest rate risks facing the Company. 3. The titles of the responsible departments are changed to the broader term “Department”, to adjust to future organizational changes. 4. Since “non-iron metal” has a narrower meaning, various kinds of materials used by the Company in its manufacturing processes are not included in the above meaning. Therefore, “non-iron metal” is replaced by “materials.” 5. The wordings are amended.
~~2-4.2~~.4Stop-loss limits: Stop-loss limits on hedging transactions maynot be required if		2-4. Stop-loss limits Stop-loss limits for hedging transactions maynot be required if	1. The numerals are adjusted. 2. Since “non-iron

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Amended Article	Current Articles	Description
such transactions are made for price- fixing purposes for Company's operation; provided, however, that the management shall keep updated on any loss on the valuation of such transactions on a regular basis. When the loss of a contract amounts to 60% of the contract value or the total loss of all contracts reaches 30%, the chairman of the board shall be informed in order to decide whether liquidation is required. Stop-loss limits on non-hedging transaction shall be set and the limit on~~non-iron metal ~~materialstrading shall be 10%per contract.	such transactions are made for price- fixing purposes for Company's operation; provided, however, that the management shall keep updated on any loss on the valuation of such transactions on a regular basis. When the loss of a contract amounts to 60% of the contract value or the total loss of all contracts reaches 30%, the chairman of the board shall be informed in order to decide whether liquidation is required. Stop-loss limits on non-hedging transactions shall be set and the limit on non-iron metal trading shall be 10%per contract.	metal” has a narrower meaning, various kinds of materials used by the Company in its manufacturing processes are not included in the above meaning. Therefore, “non-iron metal” is replaced by “materials.”
3. Implementation procedures ~~1. ~~3.1Prior to trading of any derivatives, risks shall be evaluated and trading shall be approved by authorized hierarchies of the Company. After trading of any derivatives, the board of directors shall be informed. ~~2. ~~3.~~2Finance Division and Metals~~ ~~DivisionR~~isk Management Departmentsshall abide by the authorized limits as provided in 3.3when engaging in derivative trading, and written approval by the chairman of board shall be required for other categories of hedge trading. ~~3. ~~3.3Total value of accumulated open interests to be approved by authorized hierarchies of the Company: Foreign exchangeand interest rate trading (in million USD) Level Hedging Contracts Non- Hedging Contracts	3. Implementation procedures 1. Prior to trading of any derivatives, risks shall be evaluated and trading shall be approved by authorized hierarchies of the Company. After trading of any derivatives, the board of directors shall be informed. 2. Finance Division and Metals Division shall abide by the authorized limits as provided in 3. when engaging in derivative trading, and written approval by the chairman of board shall be required for other categories of hedge trading. 3. Total value of accumulated open interests to be approved by authorized hierarchies of the Company: Foreign exchange trading (in million USD) Level Hedging Contracts Non- Hedging Contracts	1. The numerals are adjusted. 2. The titles of the responsible departments are changed to the broader term “Department”, to adjust to future organizational changes. 3. The average monthly net exposure of materials procurement in foreign currencies net of exports has exceeded USD 100 million, which is over six times the USD 50 million limit established in 2002 under which the Finance Division Head mayhandle

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Amended Article	Amended Article	Amended Article	Current Articles	Current Articles	Current Articles	Description
~~Finance~~ ~~Division~~ Risk Manageme nt Departmen t Head	~~50A~~uthori zed by the	0	Finance Division Head	50	0	hedging transactions. Therefore, it is proposed that the Chairman may otherwise approve the authorized amount, depending on the level and actual needs. 4. Since “non-iron metal” has a narrower meaning, various kinds of materials used by the Company in its manufacturing processes are not included in the above meaning. Therefore, “non-iron metal” is replaced by “materials.”
	Chairman Based on
			Chairman of the board	Conducted according to actual needs	0
	actual needs

			Non-iron metals
Level	Hedging Contracts	Non- Hedging Contracts
General Manager	Authorize d by the	0
	Chairman Based on
	actual needs
Chairman	Conducted according to actual needs	0
			Level	Hedging Contracts	Non- Hedging Contracts
~~on-ron m~~
Level	Hedging Contracts	Non- Hedging Contracts
			Metals Division Head	Conducted according to actual needs	Copper: 80,000 tons Nickel: 6,000 tons
~~Metals~~ ~~Division~~ Key Materials Departmen tHead	Conducted according to actual needs	Copper: 80,000 Nickel: 6,000

~~4.3~~.4Disclosure: The Company shall announce and report to relevant authorities the total value of contracts not offset, net gains or losses based on market value, value of margins paid, and total value of contracts offset or transacted resulting from derivatives trading as of the end of the previous month along with monthly business results at the Company and its subsidiaries.			4. Disclosure: The Company shall announce and report to relevant authorities the total value of contracts not offset, net gains or losses based on market value, value of margins paid, and total value of contracts offset or transacted resulting from derivatives trading as of the end of the previous month along with monthly business results at the Companyand its subsidiaries.			1. The numeral is adjusted.
4. Requirements			4. Requirements			1. The numerals are

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Amended Article	Current Articles	Description
~~4-1.4~~.1Accounting and disclosure ~~1. ~~4.1.1Accounting for derivatives trading shall abide by relevant financial accounting standards. ~~2. ~~4.1.2The balance sheet or its appendices shall disclose the following in accordance with types of derivatives of which the Company engages in trading and the objectives of the Company to hold and/or issue derivatives: (1) Par value or contract value. (2) Characteristics of derivatives as well as their terms and conditions. (3)Non-derivatives shall be separately disclosed in accordance with the Financial Accounting Standards. ~~3. ~~4.1.3The gain, loss, or fee income from derivatives trading or related expenses shall be respectively recognized. Hedge trading shall first be entered into the deferred account and then amortized over the duration of the hedge assets or liabilities hedged. Non-hedging trading shall be recognized in the current accounting period. To hedge foreign exchange risks associated with net investment in the Company's foreign operations, exchange rate differences shall be included in the translation adjustment account as an adjustment to shareholders' equity.	4.1 Accounting and disclosure 1. Accounting for derivatives trading shall abide by relevant financial accounting standards. 2. The balance sheet or its appendices shall disclose the following in accordance with types of derivatives of which the Company engages in trading and the objectives of the Company to hold and/or issue derivatives: (1) Par value or contract value (2) Characteristics of derivatives as well as their terms and conditions Non-derivatives shall be separately disclosed in accordance with the Financial Accounting Standards. 3. The gain, loss, or fee income from derivatives trading or related expenses shall be respectively recognized. Hedge trading shall first be entered into the deferred account and then amortized over the duration of the hedge assets or liabilities hedged. Non-hedging trading shall be recognized in the current accounting period. To hedge foreign exchange risks associated with net investment in the Company's foreign operations, exchange rate differences shall be included in the translation adjustment account as an adjustment to shareholders' equity.	adjusted.
~~4-2.~~ 4.2 Risk Management Measures and Internal control system ~~1. Risk management~~ ~~1.1~~4.2.1Credit risk management: The Company shall only trade with the banks andprofessional	4-2. Internal control system 1. Risk management 1.1 Credit risk management: The Company shall only trade with the banks and professional brokers that it usually deals with in order to prevent default risks.	1. The numerals and format are amended and the wordings are revised. 2. The titles of the responsible departments are

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Amended Article

Current Articles

brokers that it usually deals with 1.2 Market risk management: The in order to prevent default risks. Company shall pay close attention 4.2.2 Market risk management: Market risk management: to the adverse market price levels The Company shall pay close or fluctuations that may cause attention to the adverse market financial risks to the Company. price levels or fluctuations that 1.3 Liquidity risk management: The may cause financial risks to the Company shall: Company. (1) select the products that can be 4.2.3 Liquidity risk Liquidity risk easily liquidated based on management: The Company their past values while the shall: risks associated with the (1) select the products that can positions held shall be easily be easily liquidated based on offset; and
~~1.2~~ 4.2.2 Market risk management: Market risk management: The Company shall pay close attention to the adverse market price levels or fluctuations that may cause financial risks to the Company.
~~1.3~~ 4.2.3 Liquidity risk Liquidity risk management: The Company shall:
(1) select the products that can be easily liquidated based on their past values while the risks associated with the positions held shall be easily offset; and
their past values while the (2) factor in the default risks on risks associated with the settlement days and/or related positions held shall be easily to margin calls. offset; and 1.4 Operational risk management:
(2) factor in the default risks on Trading shall strictly abide by the settlement days and/or limits of authorization and related to margin calls. relevant procedures in order to
~~1.4~~ 4.2.4 Operational risk avoid the risks incurred by human management: Trading shall errors, procedural inadequacy, and strictly abide by the limits of insufficient control. authorization and relevant 1.5 Legal risk management: All the procedures in order to avoid the contracts and documents related risks incurred by human errors, to derivatives trading shall be procedural inadequacy, and reviewed by Legal Office prior to insufficient control. signing in order to ensure the
~~1.5~~ 4.2.5 Legal risk management: Legal risk management: interests of the Company will not All the contracts and documents be compromised and avoid legal
related to derivatives trading shall risks.

~~1.5~~ 4.2.5 Legal risk management: Legal risk management: interests of the Company will not All the contracts and documents be compromised and avoid legal related to derivatives trading shall risks. be reviewed by Legal Office prior to signing in order to ensure the 2. Internal control interests of the Company will not (1) Those who responsible for be compromised and avoid legal derivatives trading, confirmation risks. of derivatives transactions, and ~~2.~~ 4.2.6 Internal control settlements of such transactions (1) Those who responsible for shall not be the same persons. derivatives trading, (2) Review, accounting adjustment, confirmation of derivatives and valuation of derivatives transactions, and settlements of trading shall be conducted by the such transactions shall not be Accounting Division. the same persons. (3) The Accounting Division shall (2) Review, accounting establish a log book on the adjustment, and valuation of derivatives trading in which the derivatives trading shall be Company engages and

Description changed to the broader term “Department”, to adjust to future organizational changes.

New content is newly added in response to the amendments to Article 22 of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies”.
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		Amended Article	Current Articles	Description
~~3. ~~ ~~4. ~~	conducted by the Accounting ~~Division~~Department. (3) The Accounting~~Division~~ Departmentshall establish a log book on the derivatives trading in which the Company engages and consequently submit the log book to the board of directors. The log book shall be established in accordance with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies. ~~4~~.2.7Periodic evaluation (1) The Accounting~~Division~~ Departmentshall appraise outstanding positions of derivatives based on market values or fair values and prepare appraisal reports. Hedge positions shall be appraised at least twice monthly, while Non-hedging positions shall be appraised once weekly. Appraisal reports shall be submitted to the executive designated by the board of directors. (2) The aforementioned executive designated by the board of directors shall immediately address any irregularities shown in appraisal reports and report such irregularities to the board of directors. (3) The executive designated by the board of directors shall be the President of the Company. ~~4~~.2.8Internal audit (1) Internal auditors of the Company shall evaluate the adequacy of internal control of derivative tradingon a regular		consequently submit the log book to the board of directors. The log book shall be established in accordance with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies. 3. Periodic evaluation (1) The Accounting Division shall appraise outstanding positions of derivatives based on market values or fair values and prepare appraisal reports. Hedge positions shall be appraised at least twice monthly, while Non-hedging positions shall be appraised once weekly. Appraisal reports shall be submitted to the executive designated by the board of directors. (2) The aforementioned executive designated by the board of directors shall immediately address any irregularities shown in appraisal reports and report such irregularities to the board of directors. (3) The executive designated by the board of directors shall be the President of the Company. 4. Internal audit (1) Internal auditors of the Company shall evaluate the adequacy of internal control of derivative tradingon a regular basis,

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		Amended Article	Current Articles	Description
~~5. ~~	(2) (3)		monthly inspect the compliance with the Procedures, and analyze the trading cycle for audit report development. (2) Internal auditors of the Company shall submit the aforementioned audit report and the status of annual audit implementation to the Securities and Futures Commission (SFC) by the end of February of next year, and shall also report if irregularities have been addressed to the SFC no later than the end of May of next year. 5. Others (1) Authorized personnel of different levels responsible for derivatives trading shall strictly abide by these Procedures as well as other relevant rules and regulations. (2) The Procedures are established by Finance Division and shall be passed by an audit committee as well as the board of directors and submitted to the shareholders' meeting for approval. Any amendment to the Procedures shall also follow the aforementioned process.
	(1) (2)

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Walsin Lihwa Corporation Comparison Table of Amended Articles of Procedures for Lending Funds to Other Parties

Amended Article	Current Articles	Description
Article 2 Total amount of loans and limits 1. (Omitted) 2. The limit on the total/individual amount of loans extended between foreign companies in which the Company holds directly or indirectly 100% of the voting sharesor between the Company and any of those foreign companies(including one-time drawdown and revolving drawdown), shall be 40 % of the Company's net worth.	Article 2 Total amount of loans and limits 1. (Omitted) 2 The limit on the total/individual amount of loans extended between foreign companies in which the Company holds directly or indirectly 100% of the voting shares (including one-time drawdown and revolving drawdown), shall be 40 % of the Company's net worth.	To conform to the “Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies” established by the competent authority.
Article 3 Loan term and interest calculation 1. The loan term shall be generally one year. In the event that the Company's operating cycle exceeds one year, it shall be adjusted based on the operating cycle. For loans extended between any foreign companies in which the Company holds directly or indirectly 100% of the voting shares orbetween the Company and any of those foreign companies, the term is not limited to one year but shall not exceed 5years.	Article 3 Loan term and interest calculation 1. The loan term shall be generally one year. In the event that the Company's operating cycle exceeds one year, it shall be adjusted based on the operating cycle. For loans extended between any foreign companies in which the Company holds directly or indirectly 100% of the voting shares, the term is not limited to one year but shall not exceed 5 years.	To conform to the “Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies” established by the competent authority.

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2. (Omitted)	2、(Omitted)
Article 6 Control and management 1～4(Omitted) 5. Should the prescribed loan balance limits are exceeded due to any unexpected change, the Finance ~~DivisionD~~epartment shall propose an improvement plan,submit the same to the Audit Committee and complete amelioration on schedule.	Article 6 Control and management 1～4(Omitted) 5. Should the prescribed loan balance limits are exceeded due to any unexpected change, the Finance Division shall propose an improvement plan and complete amelioration on schedule.	To conform to the “Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies” established by the competent authority.

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Walsin Lihwa Corporation Comparison Table of Amended Articles of Procedures for Endorsement and Guarantee

Amended Article	Current Articles	Description
Article 7 Disclosure 1. If the party for whom the Company makes the guarantee later becomes unqualified under Paragraph 2, Article 3 hereof, or the endorsement/guarantee amount exceeds the limit under these Procedures due to changes in the calculation basis, the Company shall propose an improvement plan with regard to the endorsement/guarantee amount for or the excessive portion thereof for such party, submit the same to the Audit Committeeand complete the same on schedule. The above plan shall be reported to the board of directors. 2.～6.(Omitted)	Article 7 Disclosure 1. If the party for whom the Company makes the guarantee later becomes unqualified under Paragraph 2, Article 3 hereof, or the endorsement/guarantee amount exceeds the limit under these Procedures due to changes in the calculation basis, the Company shall propose an improvement plan with regard to the endorsement/guarantee amount for or the excessive portion thereof for such party, and complete the same on schedule. The above plan shall be reported to the board of directors. 2.～6.(Omitted)	To conform to the “Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies” established by the competent authority.

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Walsin Lihwa Corporation Comparison Table of Amended Articles of Procedures for Election of Directors

Amended Article	Current Articles	Description
Article 2 The Company's directors shall be elected by means of open, cumulative voting. Each share is entitled to voting rights equivalent to the number of directors to be elected, and the number of votes may be used to elect one candidate or be allocated among several candidates, and the candidates receiving more votes shall be elected as directors. Voters' names are represented by their shareholder attendance card numbers printed on the ballots. The election of the Company shall adopt the candidate nomination system provided for in Article 192-1 of the Company Act. The ways of accepting nominations and announcement shall be conducted in accordance with the Company Act, the Securities and Exchange Act and other relevant laws and regulations. The election of independent directors and non-independent directors shall be held together, and the number of independent directors and non-independent directors elected shall be	Article 2 The Company's directors shall be elected by means of open, cumulative voting. Each share is entitled to have votes equivalent to the number of directors to be elected, and the number of votes may be used to elect one candidate or be allocated among several candidates, and the candidates receiving more votes shall be elected as directors. Voters' names are represented by their shareholder attendance card numbers printed on the ballots. ~~Pursuant to the articles of~~ ~~incorporation of the Company, the~~ ~~examination of candidates of~~ ~~directors should includes~~ ~~education, working experiences~~ ~~and whether there is any~~ ~~conditions as listed under Article~~ ~~30 of the Company Act. The result~~ ~~of examination shall be provided~~ ~~to shareholders for reference of the~~ ~~election.~~ The election of independent directors and non-independent directors shall be held together, and the number of independent directors and non-independent	To conform to the amendments to the Company Act

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calculated separately. More than a half of the seats of directors shall not be relatives as of spouse or under second-degrees relatives; in the situation of more than half of the elected candidates are spouses or second-degree relatives of any directors, those with less votes shall be regarded as invalid election, and other candidates obtaining higher votes shall be elected.	directors elected shall be calculated separately. More than a half of the seats of directors shall not be relatives as of spouse or under second-degrees relatives; in the situation of more than half of the elected candidates are spouses or second-degree relatives of any directors, those with less votes shall be regarded as invalid election, and other candidates obtaining higher votes shall be elected.

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Walsin Lihwa Corporation

Explanations of involvement of directors or their related persons in the field of the Company's business

(1) Independent Director: Mr. Ming-Ling Hsueh


Names of other companies		Business items same or similar to the
	Title
where he served		Company's


Lite-On Technology Corporation	Independent Director	E601010 Electric Appliance Construction

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Regulations

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Walsin Lihwa Corporation

Articles of Association

The 48 amendment was adopted by the Shareholders' meeting on May 25, 2018

Chapter I General provisions

Article 1:

The name of the company is Walsin Lihwa Corporation which is incorporated pursuant to the

Company Act.

Article 2:

The following is the business scope of the company:

H701010 Residential and Commercial Building development, Rental and sales Business
E601010 Power Equipment Installation and Maintenance Business
3..ZZ99999 Except the permitted business, the company may engage in other businesses not prohibited or restricted by laws and regulations

Article 2-1:

The Company may act as a guarantor for another person in accordance with the law and relevant requirements.

Article 2-2:

The total amount of the Company’s investments in other companies is not subject to the restriction of 40% of the Company’s paid-up capital.

Article 3:

The Company is incorporated in Taipei City. The Company may establish branch office, representative’s office, business unit or subsidiary plant in the Republic of China or foreign countries if necessary.

Article 4: deleted

Chapter II Shares

Article 5:

The Company’s total capital is Sixty Five Billion New Taiwan Dollars (NT$65,000,000,000) which is divided into 6,500,000,000 shares with a face value of Ten New Taiwan Dollars (NT$10) per share. The afore-mentioned shares shall be issued in installments, and the unissued shares shall be issued according to resolutions adopted by the board of directors as it deems necessary.

Share subscription warrants, corporate bonds with warrants or preferred shares with warrants may be issued within the amount of Eight Billion New Taiwan Dollars (NT$8,000,000,000) of the preceding capital with the total of 800,000,000 shares and each share at a face value of Ten New

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Taiwan dollars (NT$10). These shares may be issued in installments.

Where the Company is entitled to buy back its own shares according to the law, the board of directors is authorized to undertake such share buyback pursuant to the law.

Article 6:

The Company’s shares are registered share certificates which have been affixed with signatures or seals of more than three directors, coded in serial numbers and certified according to the law before they are issued.

The Company may be exempted from printing share certificates if such shares have been registered with a securities depository enterprise.

Article 7:

Shares which are transferred, lost or destroyed shall be handled in accordance with the Company

Act and the relevant regulatory requirements.

Chapter III Shareholders' Meeting

Article 8:

The Company’s regular meeting of shareholders shall be held once every year within six months from the expiration of the fiscal year. Special meeting of shareholders may be held according to the law if necessary.

Article 9:

The convening of regular and special meetings of shareholders shall be governed by the Company Act and the meeting proceedings shall be governed by the Company’s rules and

procedures governing Shareholders’ meetings.

Article 10:

Unless otherwise provided for by law, the voting right of the Company’s shareholders is based on one-share-one-vote.

Article 11:

Unless otherwise provided for by law, a resolution of a shareholders' meeting shall be adopted by a majority vote of the shareholders who are present at the meeting and represent more than half of the total number of issued shares.

Article 12:

Shareholders may appoint proxies to attend Shareholders’ meetings pursuant to the Company Act and the “Rules Governing the Use of Proxies for Attendance at Shareholders’ meetings of Public Companies” promulgated by the competent authority by submitting proxy form printed and distributed by the Company and specifying the scope of authority therein.

Article 13:

Where a Shareholders’ meeting is convened by the board of directors, the chairperson of the board

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of directors shall chair the meeting. In the event that the chairperson is on leave or absent or cannot exercise his or her power and authority for any reason, the vice chairperson shall act on behalf of the chairperson. If the vice chairperson is also on leave or absent or cannot exercise his or her power and authority for any reason, a director shall be appointed to act on the chairperson’s behalf pursuant to the Company Act.

Where a Shareholders’ meeting is convened by a person who has convening right other than the board of directors, such person shall chair the meeting. In the event that there are more than two persons having the convening right, the chairperson of the meeting shall be elected from among themselves.

Chapter IV Directors, audit committee and managers

Article 14:

The Company shall have 9 to 11 directors including, at least, 3 independent directors. The Board of Director is authorized to determine the number of directors. Directors shall be elected by adopting candidates nomination system as specified in Article 192-1 of the Company Act; the shareholder may elect the directors among the list of candidates.

The nomination of directors and related announcement or other relevant matters shall comply with the relevant laws and regulations of Company Act, Securities and Exchange Act, and etc.

The election of directors shall be subject to the Rules for Election of Directors of the Company. Unless otherwise provided with by any other law or regulation, the independent and nonindependent directors shall be elected at the same time but on separate ballots.

The total registered shares owned by the directors of a Company shall not be less than the percentage of total issued shares specified in the regulations provided by the competent authorities. In compliance with Article 14-4 of the Securities and Exchange Act, the Company shall establish an audit committee in replacement of the supervisors, which shall consist of all independent directors. The audit committee or the members of the audit committee shall be responsible for the responsibilities of supervisors specified under the Company Act, the Security and Exchange Act and other relevant regulations. The duties, rules of meeting, and other matters shall be in accordance with the relevant rules of the competent securities authority.

Article 15:

The term of office of directors shall not exceed three years but they are eligible for re-election.

Article 16:

The Board of Directors shall consist the directors of the Company and shall have the rights listed below:

Convention of the shareholders meeting minutes and execution of the resolutions hereof.
Determination of the operation plan.
Review and enforcement of the major rules such as the Company’s organizational rules and
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major agreements.

Review of and approval on the procurement or disposition of the major assets in accordance with the laws, regulations or the internal rules of the Company.
Approval on the hiring, dismissal, performance appraisal or remuneration standards of managers, and financial, accounting, internal audit or other major supervisors.
Decision on the establishment, abolition or change of a branch, office, business premise or plant.
Editing and review of the budget billing, business report, and the annual financial report.
Enforcement or amendment of the internal control system.
Enforcement or amendment to the handling procedures for financial or operational actions of material significance, such as to the procedures regarding acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, and endorsements or guarantees for others.
The offering, issuance, or private placement of any equity-type securities.
Review of and approval on a donation to a related party or a major donation to a non-related party, provided that a public-interest donation of disaster relief for a major natural disaster may be submitted to the next Board of Directors meeting for retroactive recognition.
Decision-making of other material matters.

Article 17:

The board of directors shall elect a chairperson and a vice chairperson from among themselves by a majority vote at a meeting attended by over two-thirds of the directors.

Article 18:

The chairperson shall externally represent the Company and take charge of important matters.

Article 19:

The chairperson shall convene board of directors meetings.

The notice of convening a board meeting may be served on directors by means of written document, electronic mail or facsimile.

Unless otherwise provided for by law, a resolution of the board of directors shall be adopted by a majority of the directors present at a meeting attended by a majority of the directors.

A director may appoint another director to attend a board meeting on his or her behalf.

Nonetheless, a director may accept the appointment to act as the proxy of one other director only.

Article 20: deleted

Article 21:

The directors shall be entitled to be compensated with the respective remunerations despite of gains or losses of the Company. The amount of remuneration is authorized to be determined by the Board of Directors based on the evaluation of the remuneration committee evaluating the degree of

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participation and value of contributions of the directors as well as referring to the typical pay levels adopted by peer companies.

Article 21-1:

After obtaining the consent of the Board of Directors, the Company may bear the compensation liabilities incurred by its directors from performing their duties as well as refer to the typical insured value adopted by the domestic or global companies to purchase the directors and officers liability insurance during the respective tenure of its directors and supervisors.

Article 22:

The Company may establish committees, CEO, President, Vice President, or other mangers for the needs of operation or management of the Company by adopting the resolution of the Board of Directors meeting. The Company may designate 1 or more persons acting as the aforementioned mangers for each function. The hiring, dismissal and remuneration of the above personnel shall be determined by a majority in a meeting attended by a majority of the directors. The titles and duties of the above personnel are authorized to be determined by the Board of Directors or by the Chairperson of the directors upon the authorization of the Board.

Article 23: deleted

Article 24: deleted

Chapter V Accounting

Article 25:

The Company’s fiscal year shall commence on January 1 and terminate on December 31 and settlement of accounts shall be undertaken at the end of the year.

Article 25-1

Company may distribute no less than 1% of profit of the current year as employees’ compensation and to distribute no maximum 1% of profit of the current year as compensation of directors. The resolution of actual amount of foresaid compensation shall be adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting. However, company’s accumulated losses shall have been covered.

Employees’ compensation shall be distributed in the form of shares or in cash; qualification requirements of employees including the employees of subsidiaries of the company meeting certain specific requirements which shall be defined by board of directors.

Article 26:

The Company’s board of directors shall prepare the statements and records for account settlement which shall be forwarded to audit committee or certified public accountants authorized by audit committee for auditing at least 30 days prior to the date of the regular Shareholders’ meeting. Such supervisors or certified public accountants shall produce and submit the reports to the Shareholders’

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meeting for ratification.

Article 27: deleted

Article 28:

After the Company has offset its accumulated losses from previous years and paid all tax due, the Company shall set aside 10% of its net profits as legal reserve, except when the legal reserve equals to the total authorized capital of the Company. If the remainder of the preceding paragraph plus the surplus retained earnings of previous year, the Company shall set aside the special reserve as stipulated by the law or the competent authority. The distribution of the balance of profits shall be determined by a resolution adopted by the Shareholders’ meeting, such as to reserve all or part of the remaining profits, to pay out the remaining profits as dividends or to distribute the remaining all or partial profits.

Article 28-1:

The Company has diverse product lines which are at different stages of product life cycle. In order to facilitate the Company’s sustainable development, the share dividend policy of the Company is governed by the Company Act and the Company’s Articles of Incorporation with reference to factors like the Company’s capital and financial structures, profit-making ability, types of share dividends generated from investments, the Company’s future development and the industrial environment. The Company shall reserve no lesser than 40% of the balance amount as shareholder’s profit after offsetting its loss and tax payment in the previous year, capital reserve and special reserve. The profits shall be distributed in cash or in form of shares; cash dividends shall not be lesser than 70% of the total dividends.

Chapter VI Supplement provisions

Article 29:

The Company's regulations and enforcement rules shall be prescribed separately.

Article 30:

Any matter which is not prescribed in these Articles of Incorporation shall be governed by the Company Act and other relevant laws and regulations.

Article 31:

These Articles of Incorporation were established on August 1, 1966. The first amendment was made on March 5, 1967; the 2th amendment was made on December 30, 1967; the 3th amendment was made on June 26, 1969; the 4th amendment was made on June 1, 1970; the 5th amendment was made on June 15, 1971; the 6th amendment was made on December 30, 1971; the 7th amendment was made on June 24, 1972; the 8th amendment was made on May 6, 1973; the 9th amendment was made on November 1, 1973; the 10th amendment was made on April 18, 1974; the 11th amendment was made on April 22, 1975; the 12th amendment was made on April 14, 1976; the 13th

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amendment was made on April 19, 1977; the 14th amendment was made on May 12, 1978; the 15th amendment was made on May 8, 1979; the 16th amendment was made on April 7, 1980; the 17th amendment was made on April 10, 1981; the 18th amendment was made on April 20, 1982; the 19th amendment was made on April 16, 1983; the 20th amendment was made on April 18, 1984; the 21th amendment was made on May 6, 1985; the 22th amendment was made on April 25, 1986; the 23th amendment was made on December 1, 1986; the 24th amendment was made on May 2, 1987; the 25th amendment was made on April 26, 1988; the 26th amendment was made on April 18, 1990; the 27th amendment was made on April 12, 1991; the 28th amendment was made on March 27, 1992; the 29th amendment was made on June 2, 1993; the 30th amendment was made on May 23, 1994; the 31th amendment was made on May 9, 1995; the 32th amendment was made on May 23, 1996; the 33th amendment was made on May 24, 1997; the 34th amendment was made on May 25, 1999; the 35th amendment was made on May 9, 2000; the 36th amendment was made on May 23, 2001; the 37th amendment was made on June 10, 2002; the 38th amendment was made on May 31, 2005; the 39th amendment was made on June 9, 2006; the 40th amendment was made on June 30, 2008; the 41th amendment was made on June 19, 2009; the 42th amendment was made on June 4, 2010; the 43th amendment was made on June 17, 2011; the 44th amendment was made on June 12, 2012; the 45th amendments were made on May 27, 2015 (Except for the amendment to Article 14 comes into effect from 2017; the rest parts of the Articles were in operation after shareholders meeting resolution is made); the 46th amendment were made on May 25 2016; except for the amendment to Article 14 which shall take into effect in 2017, the rest parts of the Articles shall take into effect upon resolution of the shareholders meeting; the 47th amendment were made on May 26, 2017; the 48th amendment were made on May 25, 2018. The same procedure shall apply to any future amendment.

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Walsin Lihwa Corporation Rules and Procedures of Shareholders' Meetings

The amendment was adopted by the regular Shareholders' meeting on May 26, 2017

Article 1

Unless otherwise provided for by law, the Company’s Shareholders’ meetings shall be governed by these rules and procedures.

Article 2

Unless otherwise provided by law or regulation, the Company's shareholders meetings shall be convened by the Board of Directors.

Election or discharge of directors , amendments to the Articles of Incorporation, the dissolution, merger, or spin-off of the Company, or any matter prescribed in Article 185, paragraph 1 of the Company Act or Articles 26-1 and 43-6 of the Securities and Exchange Act shall be set out in the notice of the reasons for convening the shareholders meeting. None of the above matters may be raised by an extraordinary motion.

A shareholder holding 1 percent or more of the total number of issued and outstanding shares may submit to the Company a written proposal for discussion for a regular shareholders meeting. Such proposal, receipt and review shall be handled pursuant to the Company Act and the relevant applicable laws and regulations. The Company shall inform shareholders for the result of aforesaid issues by the date of convening and to list such proposal on the shareholders meeting notice. The reasons for unlisted proposals should be explained in the general shareholder meeting. The shareholder who proposes such proposal shall attend the general shareholders meeting in person or to appoint an agent to attend it, and join the discussion.

The convention of the regular shareholders meeting shall be notified to each shareholder 30 days before the date of meeting or 15 days before the date of an extraordinary shareholders meeting. For the shareholders holding less than 1000 shares, the Company may publicly announce the convention of the regular shareholders meeting by uploading the information to the Market Observation Post System (MOPS) 30 days before the date of meeting or 15 days before the date of an extraordinary shareholders meeting.

The reasons for convening the meeting shall be specified in the notice or announcement. Upon the consent of a receiving party, such information may be given in digital form.

The production and announcement of the agenda handbook of the Company’s shareholders meeting shall be in compliance with the Regulations Governing Content and Compliance Requirement for Shareholders’ Meeting Agenda Handbooks of Public Companies.

Article 3

For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by the Company and stating the scope of the proxy's authorization.

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A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders meeting, and shall deliver the proxy form to the Company 5 days prior to the date of the shareholders meeting. When duplicate proxy forms are delivered, the one received earliest shall prevail unless a declaration is made to cancel the previous proxy appointment.

After a proxy form has been delivered to the Company, if the shareholder intends to attend the meeting in person or to exercise voting rights in writing or electronically, a written notice of proxy cancellation shall be submitted to the Company 2 days prior to the meeting date. If the cancellation notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.

Article 4

A shareholder referred to in the Regulations, except for the Article 2 and Article 3 hereof specifying the shareholder itself, shall mean either the shareholder itself or the proxy designated by the shareholder to attend the meeting.

Article 5

The venue for a shareholders meeting shall be the premises of the Company or a place easily accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m.

Article 6

The Company shall specify in its shareholders meeting notices the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

The time during which shareholder attendance registrations will be accepted prescribed in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and sufficient number of suitable personnel shall be assigned to handle the registrations.

Shareholders shall attend shareholder’s meetings based on attendance cards, sign-in cards, or other certificates of attendance. Solicitors soliciting proxy forms shall also bring identification documents for verification.

The Company shall furnish attending shareholders with the meeting agenda handbook, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors , pre-printed ballots shall also be furnished.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

Shares hold by proxy solicitation and shares handled by appointees shall be calculated and a clearly declared through a statistic chart according to regulated format on the date and venue of general shareholders meetings.

Article 7

If a shareholders meeting is convened by the Board of Directors, the meeting shall be chaired by the chairperson of the Board. When the chairperson of the Board is on leave or for any reason unable to perform his/her duties, the vice chairperson shall act in place of the

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chairperson; if there is no vice chairperson or the vice chairperson also is on leave or for any reason unable perform his/her duties, the chairperson shall appoint one of the managing directors to act as chair, or, if there are no managing directors, one of the directors shall be appointed to act as chair. Where the chairperson does not make such a designation, the managing directors or the directors shall elect from among themselves one person to serve as chair.

When a managing director or a director serves as chair pursuant to the preceding paragraph, the managing director or director shall be one who has held that position for six months or more and who understands the financial and business conditions of the Company. The same shall be applied for a representative of a juristic person director that serves as chair.

If a shareholders meeting is convened by a party with power to convene but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall elect a chair from among themselves.

The Company may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders meeting in a non-voting capacity.

Article 8

The Company, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures. The shareholders shall not conduct audio or video recording without obtaining an approval from the Chairperson. Chairperson may stop the shareholders violating the above.

The recorded materials of the preceding paragraph shall be retained for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

Article 9

Attendance at shareholders’ meetings shall be calculated based on numbers of shares. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in plus the number of shares whose voting rights are exercised by correspondence or electronically.

The chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued and outstanding shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued and outstanding shares, the chair shall declare the meeting adjourned.

If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued and outstanding shares, a tentative resolution may be adopted pursuant to Paragraph 1, Article 175 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders meeting shall be convened within 1 month.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued and outstanding shares, the chair may resubmit the tentative

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resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.

Article 10

If a shareholders meeting is convened by the Board of Directors, the meeting agenda shall be set by the Board of Directors. The meeting shall proceed in the order set by the agenda and may not be changed without a resolution of the shareholders meeting.

Preceding paragraph also applies shareholders’ meetings convened by a party with the power to convene that is not the Board of Directors.

The chair shall not declare the meeting adjourned prior to the completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders meeting. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the Board of Directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call for a vote.

Article 11

Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair.

A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the content contained in the speaker's slip, the spoken content shall prevail.

The speech addressed or the vote casted by a proxy representing a shareholder shall be deemed as the speech or vote of the shareholder despite of any restriction on the authorization or other method made by the shareholder whether the Company knows or not.

Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and each of the speech may not exceed 5minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.

When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chair shall stop any violation.

When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one of the representatives so appointed may speak on the same proposal.

After an attending shareholder has spoken, the chair may respond himself/herself or direct relevant personnel to respond.

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Article 12

Voting at a shareholders meeting shall be calculated based the number of shares.

With respect to resolutions of shareholders’ meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued and outstanding shares.

When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of the Company, that shareholder may not vote on that item, and may not exercise voting rights as proxy for any other shareholder.

The number of shares for which voting rights may not be exercised pursuant to the preceding paragraph shall not be calculated as part of the voting rights represented by attending shareholders.

With the exception of a trust enterprise or a shareholder services agent approved by the competent securities authority, when one person is concurrently appointed as proxy by two or more shareholders, the voting rights represented by that proxy may not exceed 3 percent of the voting rights represented by the total number of issued and outstanding shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.

Article 13

A shareholder is entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Paragraph 2, Article 179 of the Company Act.

When the Company holds a shareholders meeting, it may allow the shareholders to exercise voting rights in writing or via electronic means. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights in writing or via electronic means shall be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting.

Shareholders’ exercising voting right in writing or via electronic means shall be proceed in accordance with the Company Act, the Regulations Governing the Administration of Shareholder Services of Public Companies and the relevant applicable laws and regulations.

Except as otherwise provided in the Company Act and in the Articles of Incorporation, the passage of a proposal requires an affirmative vote of a majority of the voting rights represented by the attending shareholders. Vote counting for shareholders meeting proposals or elections shall be conducted openly within the venue of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, including voting to approve, objection or waive shall be announced on-site at the meeting, and a record made of the vote at Market Observation Post System.

When there is an amendment or an alternative to a proposal, the chair shall present the

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amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be made.

Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company.

Article 14

The election of directors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article 15

Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy of the minutes shall be distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form.

The Company may distribute the meeting minutes of the preceding paragraph by means of a public announcement made on the MOPS.

The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the duration of the existence of the Company.

Article 16

Staffs handling administrative affairs of a shareholders meeting shall wear identification cards or arm bands.

The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."

At the place of a shareholders meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by the Company, the chair may prevent the shareholder from so doing.

When a shareholder violates the rules of procedure and defies the chair's correction, obstructing the proceedings and refusing to heed calls to stop, the chair may direct the proctors or security personnel to escort the shareholder from the meeting.

Article 17

When a meeting is in progress, the chair may announce a recess based on time considerations.

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If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

If the meeting venue is no longer available before the conclusion of the meeting and not all of the items (including extraordinary motions) on themeeting agenda have been addressed, the shareholders meeting may adopt a resolution to resume the meeting at another venue.

A resolution may be adopted at a shareholders meeting to defer or resume the meeting within 5 days in accordance with Article 182 of the Company Act.

Article 18

Any matter not prescribed in the Rules shall be handled in accordance with the Company Act, the relevant laws and regulations and the Article of Incorporation.

Article 19

These rules and procedures shall take effect upon being ratified by a resolution adopted by the Shareholders' meeting and the same shall apply to all amendments thereto.

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AI assistant

WALSIN — AGM Information 2019

51877_rns_2019-06-12_1a756cd6-2f5c-48ca-9b6f-16baad2a9e82.pdf

Walsin Lihwa Corporation

2019 Annual Shareholders' Meeting Handbook

Walsin Lihwa Corporation 2019 Annual Shareholders' Meeting Handbook

Table of contents

Walsin Lihwa Corporation

Meeting Procedure and Agenda of the 2019 Annual Shareholders' Meeting

1. The Meeting Called to Order

2. Chairman's Address

3. Matters to be Reported:

4. Matters to be Ratified and Discussed ：

5. Ad-Hoc motions

6. Adjournment

Matters to be Reported

Matters to be Ratified and Discussed

Proposal 1 Proposed by the board of directors

Proposal 2 Proposed by the board of directors

Walsin Lihwa Corporation Profit Distribution Proposal for 2018

Proposal 3 Proposed by the board of directors

Proposal 4 Proposed by the board of directors

Proposal 5 Proposed by the board of directors

Proposal 6 Proposed by the board of directors

Proposal 7 Proposed by the board of directors

Adjournment

Appendix

Walsin Lihwa Corporation

2018 Business Report

1. Preamble

2. Explanation for Financial Result

3. Operating Overview and Prospects of the Business Units

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

WALSIN LIHWA CORPORATION

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

WALSIN LIHWA CORPORATION

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

WALSIN LIHWA CORPORATION

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

WALSIN LIHWA CORPORATION

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

WALSIN LIHWA CORPORATION

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

WALSIN LIHWA CORPORATION

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

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Sales Revenue Recognition

Inventory Valuation

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

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Sales Revenue Recognition

Inventory Valuation

Other Matter

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

Auditors' Responsibilities for the Audit of the Financial Statements

Notice to Readers

Audit Report from the Audit Committee

The Distribution Report of Compensation of the Employees and Directors for the Year 2018

WALSIN AGM Information 2019

4. Matters to be Ratified and Discussed `：`