WALSIN - AGM Information 2020 | FinancialReports.eu

Stock code: 1605

Walsin Lihwa Corporation

2020 Annual Shareholders' Meeting Handbook

Date: Friday, May 29, 2020 Time: 9:00 am Place: Multi-Purpose Auditorium (1F., No.15, Ln. 168, Xingshan Rd., Neihu Dist., Taipei City)

Walsin Lihwa Corporation 2020 Annual Shareholders' Meeting Handbook

Meeting Procedure and Agenda .................................................................... 1 Matters to Be Reported ................................................................................. 2 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 2019. .................................................................................. 2 4. Other Matters to Be Reported ................................................................. 2 Matters to Be Ratified, Discussed and Elected 1. Ratification of the Company's 2019 business report, balance sheet, consolidated income statement, statement of changes in equity and statement of cash flows. .......................................................................... 5 2. Ratification of the Company's 2019 profit distribution plan. ................. 5 3. Review and approval of the amendments to the Articles of Incorporation of the Company. ............................................................... 8 4. Review and approval of the amendments to the Procedures for Financial Derivatives Transactions of the Company. ............................. 9 5. Review and approval of the amendments to the Rules and Procedures of Shareholders’ Meetings of the Company. ............................................... 9 6. Election of the Company's Directors of 19[th] term. ................................ 10 7. Release of the directors of the Company from non-compete restrictions set forth in Article 209 of the Company Act......................................... 11 Ad-Hoc Motions .......................................................................................... 11 Appendix 1. 2019 Business Report ............................................................................ 13 2. CONSOLIDATED BALANCE SHEETS ............................................ 16 3. INDEPENDENT AUDITORS' REPORT ............................................ 28

Audit Report from the Audit Committee .............................................. 36 5. The Distribution Report of Compensation of the Employees and Directors for 2019 ................................................................................. 37 6. Investments in Mainland China ............................................................ 38 7. Board of Directors Meeting Regulations ............................................... 43 8. Ethical Corporate Management Best Practice Principles ..................... 51 9. Corporate Social Responsibility Practice Principles ............................ 60 10. Corporate Governance Best Practice Principles ................................... 69 11. Procedures for Ethical Management and Guidelines for Conduct ......... 89 12. Directors shareholdings stated in the shareholder register for the 2020 Annual Shareholders' Meeting ............................................................ 100 13. Comparison Table of Amended Articles of Articles of Incorporation 101 14. Comparison Table of Amended Articles of Procedures for Financial Derivatives Transactions ..................................................................... 105 15. Comparison Table of Amended Articles of Rules and Procedures of Shareholders’ Meetings ....................................................................... 109 16. List of Candidate for Directors and Independent Directors ................ 113 17. Explanations of involvement of directors or their related persons in the field of the Company's business .......................................................... 121 Regulations 1. Articles of Association ........................................................................ 125 2. Rules and Procedures of Shareholders' Meetings ............................... 132 3. Methods of Election of Directors of the Board Walsin Lihwa ............. 139

Walsin Lihwa Corporation

Meeting Procedure and Agenda of the 2020 Annual Shareholders' Meeting

Time: 9:00 am, Friday, May 29, 2020

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 2019 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 2019
(4) Other items to be reported

4. Matters to Be Ratified, Discussed and Elected:

(1) Ratification of the 2019 Business Report and Final Account Statements.
(2) Ratification of the 2019 Earnings Distribution Proposal.
(3) Discussion of the amendments to the Articles of Incorporation of the Company.
(4) Discussion of the amendments to the Procedures for Financial Derivatives Transactions of the Company.
(5) Discussion of the amendments to the Rules and Procedures of Shareholders’ Meetings of the Company.
(6) Election of the Company's Directors of the 19[th] term.
(7) Discussion of the proposal for the release of new 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 2019 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. 13-27 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 2019 final account statement (please see p. 36 of the Appendix to the Handbook).

III. The Distribution Report of Compensation of the Employees and Directors for 2019.

Please refer to p. 37 of the Appendix to the Handbook for the status of the distribution of compensation to employees and directors for 2019.

IV. Other Matters to Be Reported
(1) Report on the Company's investments in mainland China as of March 31, 2020. Please see pp. 38 to 42 of the Appendix to the Handbook for details.
(2) Report on the amendments to the Company's Board of Directors Meeting Regulations:

The Company's Board of Directors Meeting Regulations have been amended by a resolution adopted in a board of directors meeting dated February 27, 2020. Please see pp. 43- 50 of the Appendix to the Handbook for the full content of the amended version.

(3)Report on the amendments to the Company's regulations regarding corporate governance:

The Company's Ethical Corporate Management Best Practice Principles have been amended by a resolution adopted in a board of directors meeting dated August 2, 2019; its Corporate Social Responsibility Practice Principles, Corporate Governance Best Practice Principles and Procedures for Ethical Management and

Guidelines for Conduct have been amended by a resolution adopted in a board of directors meeting dated April 10, 2020. Please see pp. 51 - 99 of the Appendix to the Handbook for the full content of the amended version.

(4) Report on the status of repurchase of the Company's shares:
On April 10, 2020, the Board of Directors resolved to implement the twenty-fourth plan to buy back shares and repurchase 40 million shares of the Company in the centralized exchange market from April 13, 2020 to June 12, 2020 at prices ranging from NT$10.5 to NT$16.5 per share, in order to enhance the rights and interests of the Company's shareholders; however, the repurchase may continue if the share price falls below the lower limit of the repurchase price range. The repurchase of shares has been completed on April 23, 2020, at an average price of NTD 12.95 per share.
(5) 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 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 2020 Annual Shareholders' Meeting, please see p. 100 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.
(6) Report on the status of shareholders' proposals and nomination for the 2020 Annual Shareholders' Meeting:

During the period from March 13, 2020 to March, 23, 2020, none of the shareholders submitted any written proposal or nomination to the

Company during the period of nomination according to Article 172-1 and Article 192-1 of Company Act.

Matters to Be Ratified, Discussed and Elected

Proposal 1

Proposed by the Board of Directors

Subject: Ratification of the Company's 2019 business report, balance sheet, consolidated income statement, statement of changes in equity and statement of cash flows.

Explanations:

Please see pp. 13- 27 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 19[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 for audit, which then has audited the same.

Resolution:

Proposal 2

Proposed by the Board of Directors

Subject: Ratification of the Company's 2019 profit distribution plan. Explanations:

Please see below for the 2019 Earnings Distribution Proposal.
This proposal was approved at the Company's 19[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
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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 the nearest New Taiwan Dollar. The aggregate of the remaining cash will be credited to Other Revenue by the Company.

Resolution:

Unit: NTD

Walsin Lihwa Corporation Earnings Distribution Proposal for 2019

Earnings Distribution	Proposal for2019 Unit: NTD	Proposal for2019 Unit: NTD
Summary	Amount

Beginning of Period Retained Earnings Add: Reversal of Special Reserve Appropriated by Law 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 Distributable Earnings Distribution Cash Dividend to Shareholders (NT$0.5 per Share)	3,149,678,860 (314,967,886)	18,997,155,775 932,729,021 55,134,035 (54,879,461) (123,949,703)
		19,806,189,667 2,834,710,974
		22,640,900,641 (1,663,000,129)
End of Period Retained Earnings		20,977,900,512

Note 1: The Company's issued and outstanding common stock totaled 3,326,000,258 shares as of February 27, 2020.

Note 2: 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 2019.

Responsible Person: Chiao, Yu-Lon (Seal) Manager: Fred Pan (Seal)

Accounting Chief: Wu, Chin-Sheng (Seal)

Proposal 3

Proposed by the Board of Directors

Subject: Review and approval of the amendments to the Articles of Incorporation of the Company.

Explanations:

According to Article 177-1 of the Company Act, it is specified that the shareholders may exercise their voting rights by electronic means.
According to Articles 167-1, 167-2, 235-1 and 267 of the Company Act, it is specified that employees who are entitled to the treasury stock transferred, the employee warrants issued, subscription for new shares issued, and the restricted stock awards issued by the Company include the employees of parents or subsidiaries of the Company meeting certain specific requirements.
According to Article 14-5 of the Securities and Exchange Act, the final account statements of the Company shall be signed or sealed by the Chairman, a manager officer and the Accounting Officer before being sent to the Audit Committee and the Board of Directors.
Certain language in the article relating to the Director compensation has been amended in line with the corporate governance evaluation indicators.
In summary, Articles 5, 11, 21, 25-1, 26, 28 and 31 of the Articles of Incorporation of the Company are hereby amended, and the Comparison Table of the Amended Articles of the Articles of Incorporation is set out on pp. 101 to 104 of the Appendix to the Handbook.

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 response to the Company's operational changes, and to meet its operational and managerial needs.
Please see pp. 105- 108 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 Rules and Procedures of Shareholders’ Meetings of the Company.

Explanations:

It is proposed that certain provisions of Articles 2, 10 and 15 of the above Rules and Procedures be amended in accordance with the amendments to the Company Act, and to meet practical operational needs.
Please refer to pp. 109- 112 of the Appendix to the Handbook for the Comparison Table of Amended Articles of the Rules and Procedures of Shareholders’ Meetings of the Company.

Resolution:

Proposal 6

Proposed by the Board of Directors

Subject: Election of the Company's Directors of 19[th] term. Explanations:

It is conducted in accordance with Article 14 of the Company's Articles of Incorporation.
The Company's Directors of 18[th] term were elected at the Annual General Meeting of Shareholders dated May 26, 2017 and their terms have expired. It is proposed that the 2020 Annual General Shareholders' Meeting hold an election of the Company's Directors of 19[th] term in accordance with Article 14 of the Company's Articles of Incorporation, and the proposed number of Directors should be 11, including 4 Independent Directors.
The new Directors should be appointed for a term of three years commencing on the date of election (i.e., 29 May 2020) and ending on 28 May 2023.
Please refer to pp. 113- 120 of the Appendix to the Handbook for relevant information.

Election:

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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 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 Company's newly-elected directors who serve as directors or managerial officers in companies operating the same/similar businesses as/to the Company, please see p. 121- 123 of the Appendix to the Handbook.
It is proposed that the shareholders' meeting approve the release of the newly-elected 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 or managerial officers of other companies engaging in competing business.

Resolution:

Ad-Hoc Motions

Adjournment

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Appendix

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Walsin Lihwa Corporation

2019 Business Report

1. Preamble

Regarding the overall global economy in 2019, due to the trade war between China and the United States and the massive supply of stainless steel products made from nickel pig iron, product prices deviated from global raw material prices, thereby affecting the profitability of the Company's manufacturing businesses and its invested businesses. Except that renewable energy related businesses, including Taiwan’s renewable energy industrial cables and the US-based solar energy business invested by the Company, Borrego Solar Systems Inc., have grown in profitability, the overall profitability in 2019 was underperformed by that in 2018. However, the Company actively adjusted its product mix in 2019 by selling its Nanjing copper bar business in the first half of 2019, expanding its sales of industrial cables in Taiwan, developing new steel grades and establishing a new rolling mill in Yantai to increase the number of stainless steel products for industrial applications, while proactively seeking opportunities to invest in upstream raw materials.

In 2020, the global economy is expected to rebound from its trough as the trade disputes between China and the United States has temporarily eased off and the Federal Reserve is likely to cut interest rates, but the global economic recovery has slowed down due to the recent outbreak of the novel coronavirus (COVID-19). The Company's manufacturing businesses still have to face long-term operational challenges such as volatile raw material prices and stringent environmental and renewable energy regulations. On the one hand, the Company continues to invest in technology applications in order to gradually transform itself into a manufacturing service provider in line with the expansion of the market for industrial application products; on the other hand, the Company has grasped the opportunity to increase its strategic investment in upstream raw materials by investing in the construction of nickel pig iron plant and power plant in Indonesia at the beginning of this year, with a view to maintaining its continued growth momentum.

2. Explanation for Financial Result

Unit: NT$ million

			Amount of
	2019	2018
			Increase
			(Decrease)

Operating Revenue	134,804	190,915	(56,111)

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Gross Profit	9,391	15,935	(6,544)
Operating Expenses	5,331	4,909	422
Income from Operations	4,059	11,026	(6,967)
Non-Operating Income and Expenses	681	5,645	(4,964)
	4,740	16,671	(11,931)
Profit Before Tax


Net Income After	3,150	11,757	(8,607)
Taxes

(1) Operating Revenue

The Company's revenue dropped by NT$37.7 billion in 2019 year-onyear due to the sale of shareholding in Nanjing Walsin Metal Co., Ltd.; the revenue of the Real Estate Business for the residential and office projects decreased by NT$12.4 billion in 2019 year-on-year owing to recognition of only parking lot sales; and for the Stainless Steel Business, its sales reduced by 60,000 metric tons and therefore its revenue dropped by NT$6.4 billion year-on-year.

(2) Gross Profit

In 2018, the gross profit has increased by NT$6.5 billion year-on-year, mainly because the Real Estate Business has recognized gross profits from the housing project on Lot D (Phase II) and two office buildings.

(3) Operating Expenses

The rise in the 2019 operating expenses was mainly attributable to the opening and operation of the mall for the Real Estate Business and to the increased expenses arising from Borrego Solar Systems Inc. operational growth.

(4) Non-Operating Income and Expenses

Non-operating income and expenses decreased by NT$5 billion in 2019 compared to 2018, mainly due to the reduction in the investment income affected by the slowdown in demand facing Walsin Technology Corporation and Winbond Electronics Corporation. The gain on the sale of the Nanjing Copper Bar Business and the lease of idle real estate was also offset by the provision of impairment loss on investments and the loss on hedging of raw materials for stainless steel products.

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3. Operating Overview and Prospects of the Business Units

(1) Wire and Cable

The Copper Wire BU adopts a steady strategy. The Company will continue to improve its product quality to remain its market share.

The current markets facing and products manufactured by the Insulated Wire & Cable BU have generated stable income for the Company. The Company has been actively expanded its sales of products relating to renewable energy (such as solar energy and wind power) and port machines, while promoting the relevant cable products in global markets, in order to expand its market presence.

(2) Stainless Steel

The Stainless Steel BU continues to face challenges brought about by changes in the industrial value chains by enhancing product quality through capital expenditure, while maintaining product profitability by developing new steel grades, expanding product sizes, and increasing the proportion of high-value products. In addition, in order to increase the stability of raw materials supply and make strategic investments in upstream raw materials, the Company has invested in the construction of a nickel pig iron plant and a supporting power plant in Indonesia.

(3) Real Estate

The Walsin shopping mall has been successfully opened in the middle of 2019 and is now growing steadily in terms of volume of customers and business. The mall was affected by COVID-19 earlier this year and the short closure of the mall will affect its first quarter business performance. However, it is expected that after the epidemic is stabilized, the operation of the shopping mall will enable its stable growth in business results, increase in foot traffic and improvement in the brand level.

The sale of Phase III of Lot D of Walsin Centro located in Nanjing will be completed after receipt of the sales permit issued by the Nanjing City Government.

Lot A and Lot B of Walsin Centro located in Nanjing adopt the phased development sales model. Building No. 6 is expected to be offered for leasing in the third quarter of 2020. Building No. 1 is now under construction and is expected to be completed by the end of 2021.

Responsible person: Chiao, Yu-Lon (Seal) Manager: Fred Pan (Seal)

Chief Accountant: Wu, Chin-Sheng (Seal)

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WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018

(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) Financial assets at amortized cost - current (Notes 4 and 9) Derivative financial assets for hedging - current (Notes 4 and 8) Contract assets - current (Notes 4 and 13) Notes receivable (Notes 4 and 11) Trade receivables (Notes 4 and 11) Lease receivables (Notes 4 and 11) Finance lease receivables (Notes 4 and 12) Other receivables (Note 29) Prepayments for leases (Note 20) 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) Investments accounted for using equity method (Notes 4 and 16) Property, plant and equipment (Notes 4 and 17) Right-of-use assets (Notes 4 and 18) Investment properties (Notes 4 and 19) Other intangible assets Deferred tax assets - non-current (Notes 4 and 26) Refundable deposits Long-term lease receivables (Notes 4 and 13) Long-term finance lease receivables (Notes 4 and 12) Long-term prepayments for leases (Note 20) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 21) Financial liabilities at fair value through profit or loss - current (Notes 4 and 7) Derivative financial liabilities for hedging - current (Notes 4 and 8) Contract liabilities - current (Note 4) Notes payable Trade payables Current tax liabilities (Notes 4 and 26) Other payables Lease liabilities - current (Notes 4 and 18) Current portion of long-term borrowings (Note 21) Other current liabilities (Note 29) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 21) Deferred tax liabilities - non-current (Notes 4 and 26) Lease liabilities - non-current (Notes 4 and 18) Net defined benefit liabilities (Notes 4 and 22) Other non-current liabilities (Note 29) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF WLC (Note 23) Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unrealized loss on financial assets at fair value through other comprehensive income Cash flow hedges Total other equity Total equity attributable to owners of WLC NON-CONTROLLING INTERESTS Total equity TOTAL		2019 Amount % $ 11,753,006 9 69,795 - 1,470,571 1 - - 4,014,672 3 3,576,333 3 7,637,759 6 - - 54,278 - 8,076,664 6 - - 22,019,088 16 317,733 - 1,799,895 1 60,789,794 45 5,323,365 4 29,012,467 21 27,845,109 20 1,363,823 1 10,032,989 7 168,134 - 2,048,176 1 183,291 - - - 776,713 1 - - 522,541 - 77,276,608 55 $ 138,066,402 100 $ 12,457,481 9 6,026 - 14,346 - 518 - 342,409 - 6,967,817 5 4,587,562 3 4,901,323 4 76,467 - 6,564,196 5 4,825,408 3 40,743,553 29 16,929,215 12 179,314 - 225,505 - 536,614 - 886,087 1 18,756,735 13 59,500,288 42 33,260,002 24 16,055,238 12 5,113,232 4 4,043,138 3 22,023,141 16 31,179,511 23 (5,546,359) (4) 2,435,949 2 - - (3,110,410) (2) 77,384,341 57 1,181,773 1 78,566,114 58 $ 138,066,402 100		2018
				Amount % $ 9,406,154 7 95,426 - 1,489,831 1 15,630 - 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

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

(With Deloitte & Touche auditors’ report dated February 27, 2020)

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WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4 and 24) OPERATING COSTS (Notes 4 and 13) 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) loss on disposal of property, plant and equipment Gain on disposal of investment property (Note 32) Loss (gain) on valuation of financial assets and liabilities Impairment loss (Notes 4 and 25) Other expenses Foreign exchange gain (loss), net Interest expense Gain on disposal of investments (Note 25) 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 26) NET INCOME FOR THE YEAR		2019 Amount % $ 134,804,405 100 (125,413,839) (93) 9,390,566 7 2,076,993 2 3,111,371 2 142,728 - 5,331,092 4 4,059,474 3 268,338 - 136,772 - 195,467 - 854,514 1 246,877 - (106,368) - (1,680,575) (1) (338,237) - 112,757 - (559,596) - 822,882 - 727,962 - 680,793 - 4,740,267 3 (956,943) (1) 3,783,324 2		2018
				Amount % $ 190,915,137 100 (174,979,772) (92) 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) - - - 85,216 - (78,547) - (239,432) - 271,081 - (684,163) - 355,668 - 5,046,006 3 5,644,765 3 16,670,974 9 (4,711,687) (3) 11,959,287 6

(Continued)

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WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE LOSS (INCOME) Items that may not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain (loss) on financial assets at fair value through other comprehensive income Share of the other comprehensive loss 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 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 (Note 27) Basic Diluted		2019 Amount % (22,278) - 1,185,769 1 1,747,483 1 2,910,974 2 (1,766,406) (1) 1,151 - (230,099) - (1,995,354) (1) 915,620 1 $ 4,698,944 3 $ 3,149,679 2 633,645 - $ 3,783,324 2 $ 4,082,661 3 616,283 - $ 4,698,944 3 $ 0.95 $ 0.95		2018
				Amount % 4,052 - (1,243,074) - (1,286,630) (1) (2,525,652) (1) (572,415) - 6,378 - (51,083) - (617,120) - (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

		$
		$
		$
		$		$
		$		$

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

(With Deloitte & Touche auditors’ report dated February 27, 2020)

(Concluded)

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WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	Equity A	ttributable to Owners of W	LC
Share Capital Capital Surplus $ 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 - - - - - - - (615 ) - 89,443 - - - - - - - (10 ) - - $ 33,260,002 $ 16,055,238	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 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 1,175,678 - (1,175,678 ) - 1,330,888 (1,330,888 ) - - (3,991,200 ) - - (123,950 ) - - 55,134 - - 3,149,679 - - (54,879) - - 3,094,800 - - - - - - $ 5,113,232 $ 4,043,138 $ 22,023,141		Other Equity	ash Flow Hedges Treasury Shares $ (7,529 ) $ (315,918 ) - - - - (7,529 ) (315,918 ) - - - - - - - - - - - - 6,378 - 6,378 - - 315,918 - - - - (1,151 ) - - - - - - - - - - - - - 1,151 - 1,151 - - - - - $ - $ -
		Exchange Differences on U Translating Foreign Operations A $ (2,944,758 ) - - (2,944,758 ) - - - - - - (622,782) (622,782) - - - (3,567,540 ) - - - - - - (1,978,819) (1,978,819) - - $ (5,546,359)	nrealized Gain (Loss) on Unrealized Gain (Loss) on Financial Assets at Fair Value through Other vailable-for-sale Financial Assets Comprehensive Income C $ 5,042,894 $ - (5,042,894 ) 1,875,068 - - - 1,875,068 - - - - - - - (97,100 ) - 252,951 - - - (2,505,365) - (2,505,365) - - - - - - - (474,446 ) - - - - - - - - - (55,134 ) - - - 2,965,529 - 2,965,529 - - - - $ - $ 2,435,949

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

(With Deloitte & Touche auditors’ report dated February 27, 2020)

19 -

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit (reversed) loss recognized on trade receivables Net loss (gain) 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 Gain (loss) on disposal of property, plant and equipment Gain on the disposal of investmnet property Loss on the disposal of intangible assets Gain on disposal of other assets Gain on disposal of investments Impairment loss recognized on property, plant and equipment Loss (gain) on foreign currency exchange Changes in operating assets and liabilities (Increase) decrease in contract assets (Increase) decrease in notes receivable (Decrease) increase in trade receivables Increase in other receivables Decrease in inventories (Decrease) increase in other current assets (Increase) decrease in other financial assets Decrease in other operating assets (Decrease) increase in financial liabilities held for trading Decrease in notes payable Decrease in trade payables Increase in contract liabilities (Increase) decrease in other payables Decrease in advance real estate receipts 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 from associates Income tax paid Net cash generated from operating activities	2019 $ 4,740,267 2,163,455 11,223 (15,124) 106,368 559,596 (268,338) (136,772) 14,145 (727,962) (854,514) (246,877) - (17) (822,882) 1,680,575 23,887 (1,424,808) (575,022) 3,452,476 (229,770) 1,820,757 130,079 (203,478) 23,252 (1,109,374) (67,470) (1,540,007) 518 855,977 - (108,789) (234,597) 466,206 7,482,980 (561,991) 193,009 2,569,560 (1,056,367) 8,627,191	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) 6,823 1,867,385 (2,648,343) (134,272) 3,651,933 (271,739) 1,287,611 33,265 153,306 (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 (Continued)

20 -

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (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 Acquisition of financial assets at amortized cost Disposal of financial assets at amortized cost Disposal of financial assets for hedging Purchase of associates under equity method Net cash flow from acquisition of subsidiaries Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Purchase of intangible assets Acquisition of investment property Proceeds from disposal of investment properties 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 Repayment of the principal portion of lease liabilities Dividends paid to owners of WLC Changes in non-controlling interests Other financing activities Net cash (used in) generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) 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	2019 (169,868) - - (6,167) - 1,151 (280,064) 3,237,032 (5,280,057) 182,590 (1,212) (3,948) (1,211) 250,420 (273,335) (2,344,669) 2,564,195 10,500,000 (11,564,196) (74,619) (3,991,018) (299,831) (10) (2,865,479) (1,070,191) 2,346,852 9,406,154 $ 11,753,006	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) 10,952,691 $ 9,406,154

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

(With Deloitte & Touche auditors’ report dated February 27, 2020)

(Concluded)

21 -

WALSIN LIHWA CORPORATION

BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (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 4 and 8) Notes receivable from unrelated parties (Notes 4, 9 and 27) Trade receivables from unrelated parties (Notes 4 and 9) Trade receivables from related parties (Notes 4, 9 and 27) Other receivables (Note 27) Inventories (Notes 4 and 10) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 11) Investments accounted for using equity method (Notes 4 and 12) Property, plant and equipment (Notes 4 and 13) Right-of-use assets (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 8) Derivative financial liabilities hedging - current (Notes 4 and 17) Trade payables to unrelated parties Current tax liabilities (Notes 4 and 22) Other payables to unrelated parties Other payables to related parties (Note 27) Lease liabilities - current (Notes 4 and 14) Current portion of long-term borrowings (Note 16) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 15) Deferred tax liabilities - non-current (Notes 4 and 22) Lease liabilities - non-current (Notes 4 and 14) 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 Cash flow hedges Total other equity Total equity TOTAL		2019 Amount % $ 1,284,354 1 52,589 - 331,195 - 52,753 - 1,590,771 1 1,014,422 1 2,555,588 2 9,359,888 8 373,906 - 16,615,466 13 5,047,457 4 71,708,531 60 17,621,858 15 44,086 - 8,417,355 7 863,000 1 59,779 - 1 - 103,762,067 87 $ 120,377,533 100 $ 9,350,000 8 - - 55,402 - 2,499,976 2 278,669 - 2,056,203 2 4,809,068 4 19,218 - 6,500,000 6 131,813 - 25,700,349 22 16,500,000 14 131,132 - 25,265 - 462,196 - 174,250 - 17,292,843 14 42,993,192 36 33,260,002 28 16,055,238 13 5,113,232 4 4,043,138 3 22,023,141 19 31,179,511 26 (5,546,359) (5) 2,435,949 2 - - (3,110,410) (3) 77,384,341 64 $ 120,377,533 100		2018
				Amount % $ 949,956 1 142,111 - 44,338 - 56,624 - 2,696,765 2 361,083 - 536,860 - 11,285,237 10 736,932 1 16,809,906 14 3,305,238 3 73,754,195 62 16,432,206 14 - - 8,551,796 7 394,000 - 58,292 - 1 - 102,495,728 86 $ 119,305,634 100 $ 8,095,612 7 4,079 - 3,244 - 3,845,788 3 478,299 - 2,466,197 2 2,000,657 2 - - 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

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

(With Deloitte & Touche auditors’ report dated February 27, 2020)

22 -

WALSIN LIHWA CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4 and 20) OPERATING COSTS (Note 10) REALIZED (UNREALIZED) GAIN ON THE 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 on disposal of investment properties (Note 27) Gain (loss) on disposal of investments (Note 21) Foreign exchange gain, net (Loss) gain on valuation of financial assets and liabilities at fair value through profit or loss Impairment loss (Note 21) Other expenses Interest expense Share of profit of subsidiaries and associates under equity method Total non-operating income and expenses PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS INCOME TAX (EXPENSE) BENEFIT (Notes 4 and 22)		2019 Amount % $ 71,596,648 100 (67,448,244) (94) 7,447 - 4,155,851 6 764,642 1 804,823 1 141,208 - 1,710,673 2 2,445,178 4 14,756 - 136,125 - 42,830 - 902 - 246,877 1 (1,289,999) (2) 61,396 - (85,444) - (1,678,822) (2) (60,700) - (535,938) (1) 3,792,534 5 644,517 1 3,089,695 5 59,984 -		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) -

(Continued)

23 -

WALSIN LIHWA CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET PROFIT FOR THE YEAR 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 gain (loss) on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income (loss) of associates accounted for using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences translating the financial statements of foreign operations Gain on cash flow hedges Share of other comprehensive loss of associates accounted for using the equity method Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 23) Basic Diluted		2019	% 5 - 2 2 4 (2) - (1) (3) 1 6		2018
		Amount 3,149,679 (22,786) 1,572,352 1,361,083 2,910,649 (1,748,719) 1,151 (230,099) (1,977,667) 932,982 $ 4,082,661 $ 0.95 $ 0.95			Amount % 11,756,781 14 (372) - (719,216) (1) (1,808,004) (2) (2,527,592) (3) (571,733) (1) 6,378 - (51,049) - (616,404) (1) (3,143,996) (4) $ 8,612,785 10 $ 3.53 $ 3.53

		$			$

The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated February 27, 2020)

(Concluded)

24 -

WALSIN LIHWA CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2018 Effect of retrospective application of IFRS 9 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' disposed of net assets Change in capital surplus from investments in associates accounted for using the equity method Cumulative unrealized loss of equity instruments transferred to retained earnings due to disposal (Note 11) 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 AT DECEMBER 31, 2018 Appropriation of 2018 earnings (Note 19) Legal reserve Special reserve Cash dividends Excess of the consideration received over the carrying amount of the subsidiaries' disposed of net assets Change in capital surplus and retained earnings from investments in accounted for using the associates under equity method Net profit for the year ended December 31, 2019 Other comprehensive income (loss) for the year ended December 31, 2019, net of income tax Total comprehensive income (loss) for the year ended December 31, 2019 Others BALANCE AT DECEMBER 31, 2019 The accompanying notes are an integral part of the financial statements.	Share Capital Capital Surplus $ 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 - - - - - - - (615 ) - 89,443 - - - - - - - (10) $ 33,260,002 $ 16,055,238		Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 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 1,175,678 - (1,175,678 ) - 1,330,888 (1,330,888 ) - - (3,991,200 ) - - (123,950 ) - - 55,134 - - 3,149,679 - - (54,879) - - 3,094,800 - - - $ 5,113,232 $ 4,043,138 $ 22,023,141	Other Equity Exchange Differences on Translating the Financial Unrealized Gain (Loss) on Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value through Other Statements of Foreign Operations Available-for-sale Financial Assets Comprehensive Income Cash Flow Hedges Treasury Shares $ (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 ) - - - - - - - - - - - - - - - - - - - - - - - (55,134 ) - - - - - - - (1,978,819) - 2,965,529 1,151 - (1,978,819) - 2,965,529 1,151 - - - - - - $ (5,546,359) $ - $ 2,435,949 $ - $ -	Total Equity $ 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 - - (3,991,200 ) (124,565 ) 89,443 3,149,679 932,982 4,082,661 (10) $ 77,384,341

(With Deloitte & Touche auditors’ report dated February 27, 2020)

25 -

WALSIN LIHWA CORPORATION

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

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss reversed on trade receivables Net loss (gain) 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 profit gain of subsidiaries and associates under equity method Gain on disposal of property, plant and equipment Gain on disposal of investment properties (Loss) gain on disposal of investments Impairment loss recognized on non-financial assets (Realized) unrealized gain on the transaction with associates Net loss (gain) on foreign currency exchange Changes in operating assets and liabilities (Increase) decrease in financial assets mandatorily classified as at fair value through profit or loss Increase in contract assets Decrease (increase) in notes receivable Decrease in trade receivables (Increase) decrease in other receivables Decrease (increase) in inventories Decrease (increase) in other current assets Increase in other operating assets Decrease in trade payables (Decrease) increase in other payables Decrease in net defined benefit liabilities Decrease in other current liabilities (Decrease) 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	2019 $ 3,089,695 1,205,774 - (900) 85,444 535,938 (14,756) (136,125) (3,792,534) (902) (246,877) 1,289,999 1,678,822 (7,447) 52,238 (1,077,055) (286,857) 31,695 453,555 (20,589) 1,925,349 361,958 - (1,345,812) (287,145) (144,668) (28,502) (26,524) 3,293,774 (542,489) 14,799 2,701,498 (608,646) 4,858,936	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

(Continued)

WALSIN LIHWA CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (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 Proceeds from sale of derivative financial assets for hedging Acquisition of associates accounted for using the equity method Payments for of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Purchase of investment properties Proceeds from the disposal of investment properties Other investing activities Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Proceeds from long-term borrowings Decrease in long-term borrowings Increase in other payables to related parties Repayment of the principal protion of lease Cash dividends paid Other financing activities Net cash (used in) 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 The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated February 27, 2020)	2019 (169,868) - - 1,151 (835,688) (2,397,498) 1,588 (1,487) (1,211) 250,420 (424,258) (3,576,851) 1,254,304 10,500,000 (11,500,000) 2,807,134 (18,097) (3,991,018) (10) (947,687) 334,398 949,956 $ 1,284,354	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 (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, 2019 and 2018, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

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, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission of the Republic of China on February 25, 2020 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, 2019. 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.

The following are the key audit matters of the consolidated financial statements of the Group as of and for the year ended December 31, 2019:

Sales Revenue Recognition

The Group’s business unit’s main products of 2019 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 24 to the consolidated financial statements for related accounting policies and disclosure information of revenue recognition.

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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, 2019, the manufacturing and trading inventory of the Group amounted to NT14,991,547 thousand, which constituted 10.86% of the Group’s consolidated total assets, as of December 31, 2019. 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, 2019 and 2018 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$10,076,558 thousand and NT$7,959,485 thousand, which constituted 7.30% and 6.00% of the Group’s consolidated total assets, as of December 31, 2019 and 2018, respectively, and the total net operating revenue of such subsidiaries amounted to NT$15,531,341 thousand and NT$11,999,669 thousand, which constituted 11.52% and 6.29% of the Group’s consolidated total net operating revenue, for the years ended December 31, 2019 and 2018, respectively.

The financial statements of certain equity-method investees included in the financial statements as of and for the year ended December 31, 2019 was audited by other auditors. The investment in such investees amounted to NT$0 thousand, which constituted 0% of the Group’s consolidated total assets as of December 31, 2019 and the investment loss amounted to NT$1,004,729 thousand, which constituted (21.20)% of the Group consolidated profit before income tax for the year ended December 31, 2019.

We have also audited the parent company only financial statements of Walsin Lihwa Corporation as of and for the years ended December 31, 2019 and 2018 on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by

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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 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.
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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, 2019 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 Wen-Yea, Shyu and Kwan-Chung, Lai.

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Deloitte & Touche Taipei, Taiwan Republic of China February 27, 2020

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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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, 2019 and 2018, 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, 2019 and 2018, 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, Rule No. 1090360805 issued by the Financial Supervisory Commission of the Republic of China on February 25, 2020 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, 2019. 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, 2019:

Sales Revenue Recognition

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 Notes 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.
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Inventory Valuation

As of December 31, 2019, the inventory of the Company amounted to NT$9,359,888 thousand which constituted 7.78% of the total assets, and the amount is material. Refer to Notes 4, 5 and 10 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, 2019 and 2018 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$3,574,547 thousand and NT$3,443,078 thousand, which constituted 2.97% and 2.89% of the total assets as of December 31, 2019 and 2018, respectively, and the investment gains amounted to NT$56,873 thousand and NT$502,129 thousand for the years ended December 31, 2019 and 2018, 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.

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.

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.

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We also:

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.

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, 2019 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 Wen-Yea, Shyu and Kwan-Chung, Lai.

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Deloitte & Touche Taipei, Taiwan Republic of China February 27, 2020

Notice to Readers

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

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

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Audit Report from the Audit Committee

The Board of Directors has prepared and submitted the Company's 2019 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 Wen-Ya Hsu and Kuan-Chung Lai, 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 27, 2020

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The Distribution Report of Compensation of the Employees and Directors for 2019

The distribution report of compensation of the employees and directors for 2019 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 2019, the audited profit of the Company was NT$3,159,195 (i.e., the gross profit before tax and excluding employees and directors compensation).
The Company intends to distribute NT$48,500,000 of employees compensation and NT$21,000,000 of directors compensation in cash for 2019.
The above employees and directors compensation has been adopted by a majority vote at the board of directors' meeting dated February 27, 2020 (i.e., the 19[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

	As of March 31,2020	As of March 31,2020	As of March 31,2020
Company Name	Investment Amount (inUSD)	Shareholding Ratio	Major Products Produced/Sold
Jiangying Walsin Steel Cable Co., Ltd. (Note 1)	26.04 million	100%	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 Specialty Steel Co., Ltd.	97 million	100%	Specialty steel 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
Nanjing Walsin Metal Co. Ltd. (Note 7)	62.609 million	79.51%	Copper alloys
Xi'an Walsin Metal Product Co. Ltd. (Note 8)	31.895 million	100%	Research and development, production and sales of medium-thickness specialty steel plates
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

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Company Name	Investment Amount (inUSD)	Shareholding Ratio	Major Products Produced/Sold
			substances and whole sale of related products
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 Taiwan Trade Mart Management Co., Ltd.	1 million	100%	Business, asset management and consultation of various kinds of advertising.
Shanxi Tianhong Silicon Industrial Corp. (Note 10)	RMB 228 million	19%	Polysilicon
Jiangsu Taiwan Trade Mart Development Co., Ltd.	RMB 2 million	20%	Development, operating and management of Nanjing Taiwan Trade Mart projects
Shaanxi Electronic Information Group Co., Ltd. (Note 10)	RMB 19 million	6.02%	Communications electronic equipment and electronic component materials
Walsin (Nanjing) Construction Limited	50 million	99.60%	Construction, rental and sale of buildings and industrial factories, etc.
Nanjing Walsin Property Management Co., Ltd. (Note 10)	RMB 1 million	99.60%	Property Management, Consulting for Property Management and rental of house, etc.
Walsin Nanjing Culture and Arts Co., Ltd. (Note 10)	RMB 1.5 million	99.60%	Organization of cultural and artistic exchange activities, performances, cultural and artistic brokerage

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Company Name	Investment Amount (inUSD)	Shareholding Ratio	Major Products Produced/Sold
			agent
Walsin Nanjing Commercial Management Co., Ltd. (Note 10)	RMB 6.5 million	99.60%	Business management, food sales, catering services and other daily necessities and other products sales

Note 1 Including the USD4.5 million invested through Walsin (China) Investment Co., Ltd. (hereinafter referred to as "Walsin CIC"). During 2019, by way of the investment structure, the Company acquired through Walsin CIC an additional 25% shareholding in Jiangying Walsin Steel Cable Co., Ltd. (hereinafter referred to as "Jiangying Walsin") from the original Chinese shareholder Fasten Group Co., Ltd. in a share transfer. After the transfer, the Company indirectly holds 100% of the shareholding in Jiangying Walsin; for this transfer transaction, Investment Commission, Ministry of Economic Affairs (hereinafter referred to as “MOEAIC”) approved (for reference) an investment amount of RMB73,750,000 (equivalent to US$11,041,080), with the cumulative approved (for reference) amount being US$ 26,041,080. In addition, the increase in the investment amount in mainland China due to this share transfer was partially offset by the amount of RMB53,290,669 (equivalent to US$ 7,978,123) arising from the disposal of the shares in Walsin (Hangzhou) Power Cable Co., Ltd. (hereinafter referred to as “Hangzhou Walsin”), which was retained in Walsin CIC; therefore, the actual increase in the amount of investment in mainland China for the Company was RMB20,459,331 (equivalent to US$3,062,957).
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
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ratio is 38.933%, and the actual investment amount went down to USD80.56 million. However, since the income received from the sales was not remitted to Taiwan, the investment in China has not been deducted. The investment amount approved for Hangzhou Walsin and registered with the MOEAIC 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 the MOEAIC was reduced to USD92.36 million. In 2019, the Company acquired through Walsin CIC an additional 25% shareholding in Jiangying Walsin by using the gain on the disposal of its shares in Hangzhou Walsin equal to US$7,978,123 (please refer to Note 1 for detail). After this transaction, the actual amount of the investment made by the Company in Hangzhou Walsin approved for reference and recorded by the MOEAIC was reduced to US$84,380,000 (which is equivalent to transferring the cumulative investment amount in China for Hangzhou Walsin to Jiangying Walsin).

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 MOEIC 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. Ltd.. 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. During 2019, the Company transferred all of its 94.3% shareholding in Nanjing Walsin through a BVI holding company Huagui International Co., Ltd. and Walsin CIC to a Chinese company Zhuhai Gree Electric Enterprise Co., Ltd. The contract was signed on May 24, 2019, and the registration
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of the corporate change in mainland China was filed on August 9, 2019. Therefore, the company has no indirect shareholding in Nanjing Walsin. Because the proceeds of this transaction have not been received, the shareholding change has not been reported to the MOEAIC.

Note 8 The Company has proceeded with the merger of Xi'an Walsin Precious Metal Product CO., LTD. (hereinafter referred to as "Xi'an Walsin (Metal)"), Xi'an Lv Jing Technology Co., Ltd., and Xi'an Walsin Electronics Co., Ltd. The merged company is Xi'an Walsin (Metal). The merger has been filed for the corporate change in mainland China on November 18, 2019. After the merger, the actual amount of the investment made by the Company in Xi'an Walsin (Metal) approved by the MOEAIC increased by US$21,895,467, with the total investment amount being US$31,895,467. This merger has been filed to the MOEAIC for reporting of transaction closing on March 6, 2020, and the China investment plans relating to Xi'an Lv Jing Technology Co., Ltd. and Xi'an Walsin Electronics Co., Ltd. were revoked, which was approved for reference by the MOEAIC on March 20, 2020.
Note 9: The Company holds a 100% shareholding in Yan Tai Walsin Stainless Steel Co., Ltd. (hereinafter referred to as "Yantai Walsin") through its holding company incorporated in the BVI, Concord Industries Ltd. (hereinafter referred to as “Concord”), and its wholly-owned Jiangyin Walsin Specialty Alloy Materials Co., Ltd. (hereinafter 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. In addition, the capital injection by the Company into Yantai Walsin in the amount of US$80,000,000 through Concord was approved by the MOEAIC on December 30, 2019; however, this investment has yet to be made.
Note 10: These entities are the investments made by the Company's existing investment entity in China, and thus such investments are not required to be reviewed by the MOEAIC.
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Walsin Lihwa Corporation Board of Directors Meeting Regulations

Article 1 Foundation

The Board of Directors Meeting Regulations (the Regulations) are adopted pursuant to Article 26-3 and Article 26-8 of the Securities and Exchange Act and the Regulations Governing Board of Directors Meetings.

Article 2 Scope

Unless relevant laws and regulations provide otherwise, agendum, procedures, minutes, announcements, and other relevant matters of the Company’s board of directors meetings (board meetings) shall be conducted in accordance with the Regulations.

Article 3 Convention and notification

Board meetings shall be convened at least once quarterly.

Directors of the board shall be notified in writing of the subject matters, time, and place of any board meeting seven days in advance, based on the date when such notification is sent, but a meeting may be called on short notice in case of emergency. Board meeting notices may be delivered via post, fax, or email.

The aforementioned board meeting notices can be delivered via email with the agreement by counterparts.

All matters set out in the subparagraphs of Article 7 shall be specified in the notice of the reasons for calling a board of directors meeting; none of them may be raised by an extraordinary motion except in the case of an emergency or legitimate reason.

Article 4 Meeting place and time

A board of directors meeting shall be held at the location and during the business hours of the Company, or at a place and time convenient to directors and suitable for holding such a meeting.

Article 5 Meeting notification and materials

The board of directors shall assign a secretary for board meeting planning and administration, and shall appoint Investor Relations as the agenda working group. The agenda working group shall prepare agenda items for board of directors meetings and provide sufficient pre-meeting materials, to be sent together with the notice of the meeting. A director of the opinion that the pre-meeting materials provided are insufficiently comprehensive may request the agenda working group to supplement the materials. If a director is of the opinion that materials concerning any proposal are insufficient in content, the deliberation of such proposal may be postponed by a resolution of the board of directors.

Article 6 Agenda A

Agenda items for regular board of directors meetings shall include at least the following:

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Reports:
a) Minutes of the last meeting and actions arising as well as follow-ups with any resolution that has yet to be completely executed
b) Important financial and business matters
c) Internal audit activities
d) Other important matters
Discussions:
a) Items discussed and continued from the last meeting
b) Items for discussion at this meeting
Extraordinary motions

Article 7 Agenda B

The Company shall submit the following items for discussion by the board of directors:

Shareholders’ meeting convention and execution of shareholders’ meeting resolutions
Any review of the articles of incorporation, important rules and regulations, and important contracts
Business plan decisions
Any budget settlement and business plan review
Annual and biannual financial statements but not including the biannual financial statements requiring no auditing and attestation by certified public accountants
Adoption or amendment of an internal control system pursuant to Article 14-1, and an assessment of the effectiveness of the internal control system
Adoption or amendment, pursuant to Article 36-1 of the Act, of 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
Performance evaluation and remuneration standards of managerial officers and associated persons
The appointment or discharge 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 following board of directors meeting for retroactive recognition.
Any acquisition and disposal of valuable property that is subject to approval by the board of the company
Decisions on branch, representative office, business premises, and plant establishment and dissolution as well as other changes
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Any matter required by Article 14-3 of the Securities and Exchange Act or any other law, regulation, or bylaw to be approved by resolution at a shareholders' meeting or board of directors meeting, or any such significant matter as may be prescribed by the competent authority

The term "related party" in subparagraph 11 of the preceding paragraph means a related party as defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The term "major donation to a non-related party" means any individual donation, or cumulative donations within a 1-year period to a single recipient, at an amount of NT$100 million or more, or at an amount equal to or greater than 1 percent of net operating revenue or 5 percent of paid-in capital as stated in the CPA-attested financial report for the most recent year.

The term "within a 1-year period" in the preceding paragraph means a period of 1 year calculated retroactively from the date on which the current board of directors meeting is convened. Amounts already submitted to and passed by a resolution of the board are exempted from inclusion in the calculation.

At least one independent director shall attend each meeting in person. In the case of a meeting concerning any matter required to be submitted for a resolution by the board of directors under paragraph 1, each independent director shall attend in person; if an independent director is unable to attend in person, he or she shall appoint another independent director to attend as his or her proxy.

Article 8 Agenda C

The remuneration committee charter, and any amendment thereto, shall be adopted by resolution of the board of directors

The remuneration committee members shall be appointed by resolution of the board of directors.

The remuneration committee shall provide recommendation on the remuneration for directors of the board and managerial officers for deliberation and resolution by the board of directors.

If the board of directors will decline to adopt, or will modify, a recommendation of the remuneration committee, it shall require the consent of a majority of the directors in attendance at a meeting attended by two-thirds or more of the entire board, which in its resolution shall specifically explain whether the remuneration passed by it exceeds in any way the recommendation of the remuneration committee.

If the remuneration passed by the board of directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified in the board meeting minutes, and shall be publicly announced and reported in accordance with Article 19-2.

Article 9 Authorization

When the board of directors delegates any party to exercise the power on its behalf, the

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levels of such delegation and matters delegated therein shall be definite and specific.

Article 10 Attendance book and proxy arrangement

When a meeting of the board of directors is held, an attendance book shall be made ready for signature by directors attending the meeting and thereafter made available for future reference. All board directors shall attend board meetings in person; if attendance in person is not possible, they may, pursuant to the Company's articles of incorporation, appoint another director to attend as their proxy. Attendance via tale- or video-conference is deemed as attendance in person.

A director appointing another director to attend a board meeting in his or her place shall in each case give to that director a written proxy stating the scope of authorization with respect to the reasons for meeting.

A proxy as provided in the preceding two paragraphs may accept a proxy from one person only.

Article 11 Chairperson and delegation

Meetings of the board of directors shall be called and chaired by the chairperson of the board. However, the first meeting of each newly elected board of directors shall be called and chaired by the director who received votes representing the largest portion of voting rights at the shareholders' meeting in which the directors were elected; if there are two or more directors so entitled to call the meeting, they shall choose one person by and from among themselves to do so.

In the board of directors meeting convened by a majority of the directors on their own in accordance with Paragraph 4, Article 203 or Paragraph 3, Article 203-1 of the Company Act, the directors shall elect from among themselves a chairman.

When the chairperson of the board is on leave or for any reason is unable to exercise the powers of the chairperson, delegation of the chairperson as provided in paragraph 3 of Article 208 of the Company Act shall apply mutatis mutandis.

Article 12 Reference materials and nonvoting participants

When holding a meeting of the board of directors, the Company may, as necessary for the agenda items of the meeting, notify non-director officers from relevant departments or subsidiaries to attend the meeting as nonvoting participants. When necessary, the Company may also invite certificated public accounts, attorneys, or other professionals to attend as nonvoting participants and to make explanatory statements, provided that they shall leave the meeting when deliberation or voting takes place.

Article 13 Meeting convention

When the time of a meeting has arrived and one-half all board directors are not present, the meeting chairperson may announce postponement of the meeting time, provided that only two postponements may be made. If the quorum is still not met after two such delays, the chairperson shall re-call the meeting following Article 3-2 of the Regulations.

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The term "all board directors" shall be calculated as the number of incumbent directors.

Article 14 Agenda discussion

A board of directors meeting shall be conducted in accordance with the order of business on the agenda as specified in the meeting notice. However, the order may be changed with the approval of a majority of directors present at the meeting.

The meeting chairperson may not declare the meeting closed without the approval of a majority of directors present at the meeting. During a meeting, the chairperson may, at his or her discretion, set time for intermission or negotiation.

If at any time during the proceeding of a board of directors meeting the directors sitting at the meeting are not more than half of the directors present at the meeting, upon motion by the directors sitting at the meeting the chairperson shall declare a suspension of meeting, in which case paragraph 1 of the preceding article shall apply mutatis mutandis.

Article 15 Control and moderation by the chairperson

The chairperson at a board meeting may personally answer the questions raised by attending directors or designate relevant executives to answer such questions, or designate nonvoting professionals at the meeting to provide relevant information as necessary. The chairperson may stop repeated statements on any same proposal or irrelevant statements when such statements hinder meeting proceeding.

Article 16 Voting A

When the chairperson at a board of directors meeting is of the opinion that a matter has been sufficiently discussed to a degree of putting to a vote, the chairperson may announce the discussion closed and bring the matter to vote.

When a proposal comes to a vote at a board of directors meeting, if the chairperson puts the matter before all directors present at the meeting and none voices objection, the matter is deemed approved. If there is an amendment to or substitute for this proposed resolution, the chairperson shall decide the sequence of voting for the proposed resolution and the amendment or substitute. If any one of them has been adopted, the others shall be deemed vetoed.

If objection is voiced after solicitation by the chairperson, the resolution shall be voted. The method of voting shall be one of the following as determined by the chairperson, but the chairperson shall solicit the opinions of a majority to determine the method when objection is voiced by any attending director.

By showing of hands
By voicing votes
By casting ballots
By other methods selected by the board of directors of the Company

The term “all board directors” as referred to in Article 12 does not include any non-voting director as prescribed in paragraph 1 of Article 17.

Article 17 Voting B, vote monitoring and ballot counting

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Except as otherwise stated in the Securities and Exchange Act or in the Company Act, a resolution on a matter at a board of directors meeting requires the approval of a majority of the directors present at the meeting that shall be attended by a majority of all directors. The resolution shall be reported and minuted at the meeting.

If and when necessary, the chairperson may appoint several persons for vote monitoring and ballot counting. Such persons shall be appointed from among the board of directors and shall help ensure the integrity of voting and ballot counting. Ballots shall be deemed void under any of the following conditions:

Ballots not prepared by the Company
Ballots not placed in the ballot box
Blank ballots not completed by the voter
Ballots with other written characters, letters, and/or symbols in addition to the area(s) required to be filled
Ballots that are illegible, altered, and/or written over

Article 18 Recusal of directors due to conflicts of interest

If an interested party relationship exists between any director, or a juristic person the director represents, and any agenda item, the director shall disclose the important aspects of the interested party relationship at the respective meeting, shall not participate in discussion of or voting on that agenda item, shall recuse himself or herself from the discussion or the voting on the item, and shall not exercise voting rights as proxy for any other director if such relationship is likely to prejudice the interests of the Company.

Where the spouse, a blood relative within the second degree of kinship of a director, or any company which has a controlling or subordinate relation with a director has interests in the matters under discussion in the meeting of the preceding paragraph, such director shall be deemed to have a personal interest in the matter.

With respect to a resolution at a board of directors meeting, paragraph 2 of Article 180 of the Company Act, as applied mutatis mutandis under paragraph 3 of Article 206 of that Act, shall apply in cases where a board director is prohibited by the preceding paragraph from exercising voting rights.

Article 19 Meeting minutes and signature

Minutes shall be prepared of the discussions at board of directors meetings; the meeting minutes shall record the following in detail:

Session (or year), time, and place of meeting
Name of the meeting chairperson
Attendance of directors at the meeting, specifying the names and number of members present, excused, and absent
Names and titles of those attending the meeting as nonvoting participants
Name of minutes taker
Matters reported
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Agenda items: the resolution method and result of each proposal, and the summary of comments as well as any objections or reservations made by directors, experts, or any others; the name of any director that is an interested party as referred to in paragraph 1 of the preceding article, an explanation of the important aspects of the relationship of interest, the reasons why the director was required or not required to enter recusal, and the status of their recusal; opinions expressing objections or reservations at the meeting that were included in records or stated in writing
Extraordinary motions: the name of the persons proposing the extraordinary motions, the resolution method and result of each motion, and the summary of comments as well as any objections or reservations made by directors, experts, or any others; the name of any director that is an interested party as referred to in paragraph 1 of the preceding article, an explanation of the important aspects of the relationship of interest, the reasons why the director was required or not required to enter recusal, and the status of their recusal; opinions expressing objections or reservations at the meeting that were included in records or stated in writing
Other matters required to be recorded: Objections or reservations expressed by independent directors on the items in Article 7 and the circumstances and cause for the difference if the remuneration passed by the board of directors exceeds the recommendation of the remuneration committee

Any resolution passed at a meeting of the board of directors that securities authorities require publication shall be published on the websites designated by such authorities within two days of the meeting.

The attendance book shall be part of the minutes for each board of directors meeting and shall be well preserved throughout the existence of the Company.

The minutes of a board of directors meeting shall bear the signature or seal of both the meeting chairperson and the minutes taker; a copy of the minutes shall be distributed to each director within 20 days after the meeting and well preserved as important company records throughout the existence of the Company.

The production and distribution of the meeting minutes referred to in paragraph 1 may be done in electronic form.

Article 20 Board meeting proceeding recording

The Company shall take audio or video record of tape the entire proceedings of a board of directors meeting, and preserve the recordings for at least five years in electronic form. If before the end of the preservation period referred to in the preceding paragraph any litigation arises in connection with a resolution of a board of directors meeting, the relevant audio or video recordings shall continue to be preserved until the litigation is concluded and the aforementioned five-year rule shall not be applicable.

Where a board of directors meeting is held via tale- or video conferencing, the

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documentation of the meeting shall be considered part of the meeting minutes and be well preserved throughout the existence of the Company.

Article 21 (Deleted)

Article 22 Supplement

The adoption of the Regulations and any amendment to the Regulations shall be approved by the board of directors of the Company and reported to the Company’s shareholders’ meeting.

The Regulations came into force on January 1, 2007. The first, second, third, fourth, fifth, and sixth amendments were respectively made on March 25, 2008; March 23, 2012;

March 21. 2013; August 13, 2014; August 4, 2017; and February 27, 2020, becoming effective with approval by shareholders’ meetings.

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Walsin Lihwa Corporation

Ethical Corporate Management Best Practice Principles

Article 1 Purpose of Enactment and Applicable Scope

These Principles are adopted to assist Walsin Lihwa (hereafter referred to as the Company) to foster a corporate culture of ethical management and sound development and offer a reference framework for establishing good commercial practices.
These Principles are applicable to the subsidiaries (affiliated enterprises) substantially controlled by the Company as the Company directly or indirectly holds more than 50% of the shares of a subsidiary.

Article 2 Prohibition of Unethical Conducts

When engaging in commercial activities, directors, managers, employees, or mandataries of the Company or persons having substantial control over the Company (substantial controllers) shall not directly or indirectly offer, promise to offer, request or accept any improper benefits, nor commit unethical acts including breach of ethics, illegal acts, or breach of fiduciary duty for purposes of acquiring or maintaining benefits (“Unethical Conduct”).
Parties referred to in the preceding paragraph include civil servants, political candidates, political parties or members of political parties, state-run or privateowned businesses or institutions, and their directors, supervisors, managers, employees or substantial controllers or other stakeholders.

Article 3 Types of Benefits

"Benefits" in these Principles means any valuable things, including money, endowments, commissions, positions, services, preferential treatment or rebates of any type or in any name. Benefits received or given occasionally in accordance with accepted social customs and that do not adversely affect specific rights and obligations shall be excluded.

Article 4 Compliance

The Company shall comply with the Company Act, Securities and Exchange Act, Business Entity Accounting Act, Political Donations Act, Anti-Corruption Statute, Government Procurement Act, Act on Recusal of Public Servants Due to Conflicts of Interest, TWSE/GTSM listing rules, or other laws or regulations regarding commercial activities, as the underlying basic premise to facilitate ethical corporate management.

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Article 5 Policies

The Company shall abide by its business philosophy of honesty, transparency and responsibility, base its policies on the principle of good faith with approval by its board of directors to establish good corporate governance and risk control and management mechanism to create an operational environment for sustainable development.

Article 6 Prevention Programs and Program Scopes

The Company shall in its own ethical management policy clearly and thoroughly prescribe the specific ethical management practices and the programs to forestall unethical conducts ("prevention programs"), including operational procedures, guidelines, and training.

When establishing the prevention programs, the Company shall comply with relevant laws and regulations of the territory where the Company and its businesses and organizations are operating.

When developing the prevention programs, the Company is advised to communicate with its staff, labor union members, important trading counterparties, or other stakeholders.

The Company shall establish assessment mechanisms against unethical conducts to regularly analyze the business activities that are possibly at a higher risk of being involved in any unethical conduct within the business scopes. Relevant preventive measures shall accordingly be stipulated with regular review of the appropriateness and effectiveness of such measures.

The prevention programs adopted by the Company shall take into account of applicable domestic and foreign criteria or guidelines, and shall at least include the following preventive measures against:

Offering and acceptance of bribes.
Illegal political donations.
Improper charitable donations or sponsorships.
Offering or acceptance of unreasonable presents or hospitality, or other improper benefits.
Misappropriation of trade secrets and infringement of trademark rights, patent rights, copyrights, and other intellectual property rights.
Engaging in unfair competitive practices.
Damage directly or indirectly caused to the rights or interests, health, or safety of consumers or other stakeholders in research and development, procurement, manufacture, supply or sale of products and services.
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Article 7 Commitment and Implementation

The Company shall require its board of directors and senior management to provide the statement of their adherence to ethical business management and also require their employees to adhere to ethical business practice as specified in employment terms.

The Company and its affiliated enterprises shall clearly specify their ethical corporate management policies and the commitment by the Company’s board of directors and management on rigorous and thorough implementation of such policies in their rules, external documents, and on their websites, and shall carry out the policies in internal management and in commercial activities.

The Company shall document the ethical business management policies, statement, commitment, and implementation as provided in Article 8-1 and 2 for proper safekeeping.

Article 8 Ethical Management of Commercial Activities

The Company shall engage in commercial activities in a fair and transparent manner based on the principle of ethical management.

Prior to any commercial transactions, the Company shall take into consideration the legality of their agents, suppliers, customers, or other trading counterparties and whether any of them are involved in any unethical conduct and shall avoid any dealings with anyone so involved.

When entering into contracts with its agents, suppliers, customers, or other trading counterparties, the Company shall include in such contracts terms requiring compliance with its ethical corporate management policy and that in the event the trading counterparties are involved in any unethical conduct, the Company terminate or rescind the contracts may at any time.

Article 9 Prohibition of Offering and Acceptance of Bribes

When conducting business, the Company and its directors, managers, employees, mandataries, and substantial controllers, may not directly or indirectly offer, promise to offer, request, or accept any improper benefits in whatever form to or from customers, agents, contractors, suppliers, public servants, or other stakeholders.

Article 10 Prohibition of Illegal Political Donations

When directly or indirectly offering a donation to political parties or organizations or individuals participating in political activities, the Company and its directors, managers, employees, mandataries, and substantial controllers, shall

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comply with the Political Donations Act and the Company’s own relevant internal operational procedures, and shall not make such donations in exchange for commercial gains or business advantages.

Article 11 Prohibition of Improper Charitable Donations or Sponsorships

When making or offering donations and sponsorships, the Company and its directors, managers, employees, mandataries, and substantial controllers shall comply with relevant laws and regulations and internal operational procedures and shall not surreptitiously engage in bribery.

Article 12 Prohibition of Offering or Acceptance of Unreasonable Presents, Hospitality, or Other Improper Benefits

The Company and its directors, managers, employees, mandataries, and substantial controllers shall not directly or indirectly offer or accept any unreasonable presents, hospitality or other improper benefits to establish business relationship or influence commercial transactions.

Article 13 Prohibition of Infringement of Intellectual Property Rights

The Company and its directors, managers, employees, mandataries, and substantial controllers shall observe applicable laws and regulations, the Company's internal operational procedures, and contractual provisions concerning intellectual property, and may not use, disclose, dispose, or damage intellectual property or otherwise infringe intellectual property rights without the prior consent of the owner of the intellectual property rights.

Article 14 Prohibition of Engaging in Unfair Competitive Practices

The Company shall engage in business activities in accordance with applicable competition laws and regulations, and may not fix prices, make rigged bids, establish output restrictions or quotas, or share or divide markets by allocating customers, suppliers, territories, or lines of commerce.

Article 15 Prevention of Stakeholders Damaged by Products or Services

In research and development, procurement, manufacture, provision, or sale of products and services, the Company and its directors, managers, employees, mandataries, and substantial controllers shall observe applicable laws and regulations and international standards to ensure the transparency of information about, and safety of, their products and services. The Company shall also adopt and publish a policy on the protection of the rights and interests of consumers or other stakeholders and carry out the policy in its operations to prevent its products and services from directly or indirectly damaging the rights and interests, health, and safety of consumers or other stakeholders. Where there are

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sufficient facts to determine that the Company's products or services are likely to pose any hazard to the safety and health of consumers or other stakeholders, the Company shall, in principle, recall those products or suspend the services immediately.

Article 16 Organization and Duties

The directors, managers, employees, mandataries, and substantial controllers of the Company shall exercise the due care of good administrators to urge the Company to prevent unethical conducts, always review the results of the preventive measures and continually make adjustment to ensure thorough implementation of its ethical corporate management policies.

To achieve sound ethical corporate management, the Company shall establish a dedicated unit with sufficient resources and competent personnel that is under the board of directors and responsible for establishing and supervising the implementation of the ethical corporate management policies and prevention programs. The dedicated unit shall oversee the following matters, and shall report to the board of directors on a regular basis (at least once a year):

Assisting in incorporating ethics and moral values into the Company's business strategy and adopting appropriate prevention measures against corruption and malfeasance to ensure ethical management in compliance with the requirements of laws and regulations.
Adopting programs based on regular analysis and assessment of the risks associated with unethical conducts within the business scopes to prevent unethical conducts and setting out in each program the standard operating procedures and conduct guidelines with respect to the Company's operations and business.
Planning the internal organization, structure, and allocation of responsibilities and setting up check-and-balance mechanisms for mutual supervision of the business activities within the business scope which are possibly at a higher risk for unethical conducts.
Promoting and coordinating awareness and educational activities with respect to the ethics policy.
Developing a whistle-blowing system and ensuring its operating effectiveness.
Assisting the board of directors and management in auditing and assessing whether the prevention measures taken for implementing ethical management are effectively operating and preparing reports on the regular assessment of compliance with ethical management in operating procedures.
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Article 17 Compliance for Conducting Business

The Company and its directors, managers, employees, mandataries, and substantial controllers shall comply with laws and regulations and the prevention programs when conducting business.

Article 18 Recusal

The Company shall adopt policies for preventing conflicts of interest to identify, monitor, and manage risks possibly resulting from unethical conducts, and shall also offer appropriate means for directors, managers, and other stakeholders attending or present at board meetings to voluntarily explain whether their interests would potentially conflict with those of the Company.

When a proposal at a given board of directors meeting concerns the personal interest of, or the interest of the juristic person represented by, any of the directors, supervisors, managers, and other stakeholders attending or present at board meetings of the Company, the concerned person shall state the important aspects of the Relationship of interest at the given board meeting. If his or her participation is likely to prejudice the interest of the Company, the concerned person may not participate in discussion of or voting on the proposal and shall recuse himself or herself from the discussion or the voting and may not exercise voting rights as proxy for another director. The directors shall practice selfdiscipline and must not support one another in improper dealings.

The Company's directors, managers, employees, mandataries, and substantial controllers shall not take advantage of their positions or influence in the Company to obtain improper benefits for themselves, their spouses, parents, children or any other person.

Article 19 Accounting and Internal Control

The Company shall establish an effective accounting system and internal control system for business activities possibly at a higher risk of being involved in any unethical conduct, not have under-the-table accounts or keep secret accounts, and conduct reviews regularly to ensure that the design and enforcement of the systems are showing results.

The internal audit unit of the Company shall map out relevant audit plans covering audit objects, scopes, items, and frequencies among others, based on which to periodically examine the Company's prevention program compliance and prepare audit reports and submit the same to the board of directors. The internal audit unit may engage a certified public accountant to carry out the audit

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and may engage professionals to assist if necessary. The audit results shall be reported to the senior management as well as the internal audit unit and such reports shall also be submitted to the board of directors of the Company.

Article 20 Operational Procedures and Conduct Guidelines

The Company shall guide its directors, managers, employees, and substantial controllers on how to conduct business regarding the following matters:

Standards for determining whether improper benefits have been offered or accepted.
Procedures for offering legitimate political donations.
Procedures and the standard rates for offering charitable donations or sponsorships.
Rules for avoiding work-related conflicts of interests and how they should be reported and handled.
Rules for keeping confidential trade secrets and sensitive business information obtained in the ordinary course of business.
Regulations and procedures for dealing with suppliers, customers and business transaction counterparties suspected of unethical conducts.
Handling procedures for violations of these Principles.
Disciplinary measures on offenders.

Article 21 Education, Training, and Appraisal

The chairperson, president, or senior management of the Company shall communicate the importance of corporate ethics to its directors, employees, and mandataries on a regular basis.

The Company shall periodically organize training and awareness programs for directors, managers, employees, mandataries, and substantial controllers and invite the Company’s commercial transaction counterparties, so that they can understand the Company’s resolve to implement ethical corporate management, the related policies, prevention programs and the consequences of unethical conducts.

The Company shall apply the policies of ethical corporate management when creating its employee performance appraisal system and human resource policies to establish a clear and effective reward and discipline system.

Article 22 Whistleblowing System and Disciplinary Action

The Company shall adopt a concrete whistleblowing system and scrupulously operate the system. The whistle-blowing system shall include at least the following:

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An independent mailbox or hotline, either internally established and publicly announced or provided by an independent external institution, to allow internal and external personnel of the Company to submit reports.
Dedicated personnel or unit to handle whistleblowing: Any tip involving a director of the board or the senior management shall be reported to the Audit Committee. Categories of reported misconducts shall be delineated and standard operating procedures for the investigation of each shall be adopted.
After investigation into a case: Relevant authorities or the judiciary shall be reported based on the extent of violation for follow-up investigation and/or prosecution when necessary.
Documentation of case acceptance, investigation processes, investigation results, and relevant documents.
Acceptance of anonymous reports for the confidentiality of whistleblowers and cases reported.
Measures for protecting whistleblowers from inappropriate disciplinary actions due to their whistleblowing.
Whistleblowing incentive measures.

When material misconducts or likelihood of material impairments to the Company comes to their awareness upon investigation, the dedicated personnel or unit handling the whistleblowing system shall immediately prepare a report and notify the Audit Committee in written form. The Company shall adopt a well-defined disciplinary and appeal system for handling violations of the ethical corporate management rules and shall make immediate disclosure on the Company's internal website of the details of the violation and the actions taken in response.

Article 23 Information Disclosure

The Company shall specifically analyze and assess the effectiveness of its ethical management policy promotion. The Company shall also disclose the measures taken for implementing ethical corporate management, the status of implementation, and the effectiveness of promotion on its company websites, annual reports, and prospectuses, and shall disclose the Ethical Corporate Management Best Practice Principles on the Market Observation Post System.

Article 24 Review and Improvement of Ethical Management Policy and Measures Taken

The Company shall always monitor the development of relevant local and international regulations concerning ethical corporate management and

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encourage its directors, managers, and employees to make suggestions, based on which its adopted ethical corporate management policy and measures taken will be reviewed and improved with a view to achieving better implementation of ethical management.

Article 25 Enactment and Implementation

The Company’s Ethical Corporate Management Best Practice Principles shall be approved by the board of directors and shall be reported at the shareholders' meeting. The same procedure shall be followed when the Principles have been amended.

When the Ethical Corporate Management Best Practice Principles are submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. An independent director that cannot attend the board meeting in person to express objection or reservations shall provide a written opinion before the board meeting, unless there is some legitimate reason to do otherwise, and the opinion shall be specified in the minutes of the board of directors meeting.

Enacted on August 13, 2014, the Principles were amended thrice respectively on January 14, 2015, January 19, 2017, and August 2, 2019.

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Walsin Lihwa Corporation

Corporate Social Responsibility Practice Principles

Chapter I General Principles

Article 1

The Corporate Social Responsibility Practice Principles of Walsin Lihwa (hereinafter referred to as the Company), developed pursuant to the Corporate Social Responsibility Best Practice Principles for TWSE/ GTSM Listed Companies, are intended to fulfill the Company’s corporate social responsibilities and promote economic, environmental, and social advancement.

Article 2

The Principles apply to the entire operations of the Company and its subsidiaries to encourage the Company and its subsidiaries to actively fulfill corporate social responsibility in the course of business operations so as to follow international development trends and to contribute to the economic development of the country, to improve the quality of life of employees, the community and society by acting as a responsible corporate citizen, and to enhance competitive edges built on corporate social responsibility.

Article 3

In fulfilling corporate social responsibility initiatives, the Company shall, in its corporate management guidelines and business operations, give due consideration to the rights and interests of stakeholders and, while pursuing sustainable operations and profits, also give due consideration to the environment, society and corporate governance.

The Company should conduct risk assessment of environmental, social and corporate governance issues related to the Company's operations and formulate relevant risk management policies or strategies based on the principle of materiality.

Article 4

To implement corporate social responsibility initiatives, the Company follows the principles as below:

Exercise corporate governance.
Foster a sustainable environment.
Preserve public welfare.
Enhance disclosure of corporate social responsibility information.

Article 5

The Company shall take into consideration the correlation between the development of domestic and international corporate social responsibility principles and corporate core business operations, and the effect of the operation of the Company and of its respective subsidiaries as a whole on stakeholders, in establishing their policies, systems or relevant

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management guidelines, and concrete promotion plans for corporate social responsibility programs, which shall be approved by the board of directors.

When a shareholder proposes a motion involving corporate social responsibility pursuant to Article 172-1 of the Company Act, the Company's board of directors is advised to review and consider including it in the shareholders meeting agenda.

Chapter II Exercising Corporate Governance

Article 6

The Company is advised to follow the Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies, Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and the Code of Ethical Conduct for TWSE/GTSM Listed Companies to establish its effective corporate governance framework and relevant ethical standards to enhance corporate governance.

Article 7

The directors of the Company shall exercise the due care of good administrators to urge the Company to perform its corporate social responsibility initiatives, examine the results of the implementation thereof from time to time and continually make adjustment to ensure the thorough implementation of its corporate social responsibility policies.

The board of directors of the Company is advised to give full consideration to the interests of stakeholders, including the following matters, in the Company's performance of its corporate social responsibility initiatives:

Identifying the Company's corporate social responsibility mission or vision, and declaring its corporate social responsibility policy, systems or relevant management guidelines;
Making corporate social responsibility the guiding principle of the Company's operations and development, and ratifying concrete promotional plans for corporate social responsibility initiatives; and
Enhancing the timeliness and accuracy of the disclosure of corporate social responsibility information.

The board of directors of the Com pan y shall appoint the Corporate Social Responsibility Committee or executive-level positions with responsibility for economic, environmental, and social issues resulting from the business operations and to report the status of the handling to the board of directors. The handling procedures and the responsible person for each relevant issue shall be concrete and clear.

Article 8

The Company is advised to, on a regular basis, organize education and training on the implementation of corporate social responsibility initiatives, including promotion of the matters prescribed in paragraph 2 of the preceding article.

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Article 9

For the management of corporate social responsibility initiatives, the Company has an exclusively (or concurrently) dedicated unit in charge of proposing and enforcing the corporate social responsibility policies, systems, or relevant management guidelines, and concrete promotional plans and to report on the same to the board of directors on a periodic basis.

The Company is advised to have reasonable remuneration policies to ensure that remuneration arrangements support the strategic aims of the organization and align with the interests of stakeholders.

The Company is advised to combine its employee performance evaluation system with its corporate social responsibility policy and establish a clear and effective incentive and discipline system.

Article 10

The Company shall, based on respect for the rights and interests of stakeholders, identify stakeholders of the Company, and establish a designated section for stakeholders on the Company website; understand the reasonable expectations and demands of stakeholders through proper communication with them, and adequately respond to the important corporate social responsibility issues which they are concerned about.

Chapter III Fostering a Sustainable Environment

Article 11

The Company shall follow relevant environmental laws, regulations and international standards to properly protect the environment and shall endeavor to promote a sustainable environment when engaging in business operations and internal management.

Article 12

The Company is advised to endeavor to utilize all resources more efficiently and use renewable materials which have a low impact on the environment to improve sustainability of natural resources.

Article 13

The Company is advised to establish proper environment management systems based on the characteristics of its industries. Such systems shall include the following tasks:

Collecting sufficient and up-to-date information to evaluate the impact of the Company's business operations on the natural environment.
Establishing measurable goals for environmental sustainability and examining whether the development of such goals should be maintained and whether it is still relevant on a regular basis.
Adopting enforcement measures such as concrete plans or action plans and examining the results of their operation on a regular basis.
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Article 14

The Company’s Environment, Health, and Safety Committee is responsible for drafting, promoting, and maintaining relevant environment management systems and concrete action plans, and should hold environment education courses for the Company’s managerial officers and other employees on a periodic basis.

Article 15

The Company is advised to take into account the effect of business operations on ecological efficiency, promote and advocate the concept of sustainable consumption, and conduct research and development, procurement, production, operations, and services in accordance with the following principles to reduce the impact on the natural environment and human beings from its business operations:

Reduce resource and energy consumption of its products and services.
Reduce emission of pollutants, toxins and waste, and dispose of waste properly.
Improve recyclability and reusability of raw materials or products.
Maximize the sustainability of renewable resources.
Enhance the durability of products.
Improve efficiency of products and services.

Article 16

To improve water use efficiency, the Com pan y shall properly and sustainably use water resources and establish relevant management measures.

The Company shall construct and improve environmental protection treatment facilities to avoid polluting water, air and land, and use its best efforts to reduce adverse impact on human health and the environment by adopting the best practical pollution prevention and control measures.

Article 17

The Company is encouraged to assess the potential risks and opportunities associated with climate change for its business now and in the future, and to take measures to address climate related issues.

The Company is advised to adopt standards or guidelines generally used in Taiwan and abroad to enforce corporate greenhouse gas inventory and to make disclosures thereof, the scope of which shall include the following:

Direct greenhouse gas emissions: emissions from operations that are owned or controlled by the Company.
Indirect greenhouse gas emissions: emissions resulting from the generation of externally purchased or acquired electricity, heating, or steam.

The Company is advised to calculate its emission of greenhouse gases, water usage and total

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weight of waste and to establish strategies for energy conservation, carbon and greenhouse gas reduction, water conservation or management of other waste, which strategies should include obtaining carbon credits. The Company should adopt such strategies in order to minimize the impact of its business operations on climate change.

Chapter IV Preserving Public Welfare

Article 18

The Company shall comply with relevant laws and regulations, and the International Bill of Human Rights, with respect to rights such as gender equality, the right to work, and prohibition of discrimination.

The Company, to fulfill its responsibility to protect human rights, shall adopt relevant management policies and processes, including:

Presenting a corporate policy or statement on human rights.
Reviewing on a regular basis the effectiveness of the corporate policy or statement on human rights.

The Company shall comply with the International Bill of Human Rights, including the freedom of association, the right of collective bargaining, caring for vulnerable groups, prohibiting the use of child labor, eliminating all forms of forced labor, eliminating recruitment and employment discrimination, and shall ensure its human resource policies do not contain differential treatments based on gender, race, socioeconomic status, age, or marital and family status, so as to achieve equality and fairness in employment, hiring conditions, remuneration, benefits, training, evaluation, and promotion opportunities.

The Company shall provide an effective and appropriate grievance mechanism with respect to matters adversely impacting the rights and interests of the labor force. Channels through which a grievance may be raised shall be clear, convenient, and unobstructed for the Company to respond to any employee's grievance in an appropriate manner.

Article 19

The Company shall provide information for its employees for them to understand the labor laws and the rights they enjoy in the countries where the Company has business operations.

Article 20

The Company is advised to provide safe and healthful work environments for its employees, including necessary health and first-aid facilities and shall endeavor to curb dangers to employees' safety and health and to prevent occupational accidents.

The Company is advised to organize training on safety and health for its employees on a regular basis.

Article 21

The Company is advised to create an environment conducive to the development of its

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employees' careers and establish effective training programs to foster career skills.

The Company shall establish and implement reasonable employee benefit measures (including compensation, leave and other benefits) and appropriately reflect the corporate business performance or achievements in the employee remuneration policy, to ensure the recruitment, retention, and motivation of human resources, and achieve the objective of sustainable operations.

Article 22

The Company shall establish a platform to facilitate regular two-way communication between the management and the employees for the employees to obtain relevant information on and express their opinions on the Company's operations, management and decisions.

The Company shall respect the employee representatives' rights to bargain for the working conditions and shall provide the employees with necessary information and hardware equipment to improve the negotiation and cooperation among the Company, its employees and employee representatives.

The Company shall, by reasonable means, inform employees of operation changes that might have material impacts.

Article 22-1

The Company is advised to treat customers or consumers of its products or services in a fair and reasonable manner, including according to the following principles: fairness and good faith in contracting, duty of care and fiduciary duty, truthfulness in advertising and soliciting, fitness of products or services, notification and disclosure, commensuration between compensation and performance, protection of the right to complain, professionalism of salespersons etc. The Company shall also develop the relevant strategies and specific measures for implementation.

Article 23

The Company shall take responsibility for its products and services and take marketing ethics seriously. In the process of research and development, procurement, production, operations, and services, the Company shall ensure the transparency and safety of its products and services. The Company further shall establish and disclose policies on consumer rights and interests and enforce them during business operations to prevent the products or services from adversely impacting the rights, interests, health, or safety of consumer.

Article 24

The Company shall ensure the quality of its products and services by following the laws and regulations of the government and relevant standards of tits industries.

The Company shall follow relevant laws, regulations and international guidelines in respect of customer health and safety, customer privacy, marketing or labeling relating to its products and services and shall not deceive, mislead, commit fraud or engage in any other acts which

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would betray consumers' trust or damage consumers' rights or interests.

Article 25

The Company is advised to evaluate and manage all types of risks that could cause interruptions in operations to reduce the impact on consumers and society.

The Company is advised to provide a clear and effective procedure for accepting consumer complaints to fairly and timely handle consumer complaints and shall comply with laws and regulations related to the Personal Information Protection Act for respecting consumers' rights of privacy and shall protect personal data provided by consumers.

Article 26

The Company is advised to assess the impact its procurement has on society as well as the environment of the community that it is procuring from and shall cooperate with its suppliers to jointly implement the corporate social responsibility initiative.

It is appropriate for the Company to formulate supplier management policies that require suppliers to comply with relevant regulations on issues such as environmental protection, occupational safety and health or labor rights. Prior to engaging in commercial dealings, the Company is advised to assess whether there is any record of a supplier's impact on the environment and society and avoid conducting transactions with those against its corporate social responsibility policy.

When the Company enters into a contract with any of its major suppliers, the content should include terms stipulating mutual compliance with both parties’ corporate social responsibility policies, and that the contract may be terminated or rescinded any time if the supplier has violated such policies and has caused significant negative impact on the environment and society of the community of the supply source.

Article 27

The Company shall evaluate the impact of tits business operations on the community, and adequately employ personnel from the location of the business operations to enhance community acceptance.

The Company is advised to, through commercial activities, endowments, volunteering service or other charitable professional services etc., participate in events held by citizen organizations, charities and local government agencies relating to community development and community education to promote community development.

Chapter V Enhancing Disclosure of Corporate Social Responsibility Information

Article 28

The Company shall disclose information according to relevant laws, regulations and the Corporate Governance Best Practice Principles for TWSE/GTSM listed Companies and shall fully disclose relevant and reliable information relating to its corporate social responsibility

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initiatives to improve information transparency.

Relevant information relating to corporate social responsibility which the Company shall disclose includes:

The policy, systems or relevant management guidelines, and concrete promotion plans for corporate social responsibility initiatives, as resolved by the board of directors.
The risks and the impact on the corporate operations and financial condition arising from exercising corporate governance, fostering a sustainable environment and preserving social public welfare.
Goals and measures for realizing the corporate social responsibility initiatives established by the Company, and performance in implementation.
Major stakeholders and their concerns.
Disclosure of information on major suppliers' management and performance with respect to major environmental and social issues.
Other information relating to corporate social responsibility initiatives.

Article 29

The Company shall adopt internationally widely recognized standards or guidelines when producing corporate social responsibility reports to disclose the status of its implementation of the corporate social responsibility policy. It also is advisable to obtain a third-party assurance or verification for reports to enhance the reliability of the information in the reports. The reports are advised to include:

The policy, system, or relevant management guidelines and concrete promotion plans for implementing corporate social responsibility initiatives.
Major stakeholders and their concerns.
Results and a review of the exercising of corporate governance, fostering of a sustainable environment, preservation of public welfare and promotion of economic development.
Future improvements and goals.

Chapter VI Supplementary Provisions

Article 30

The Company shall always monitor the development of domestic and foreign corporate social responsibility standards and business environment changes to examine and improve its established corporate social responsibility framework and obtain better results from the implementation of the corporate social responsibility policy.

Article 31

The formation of and any amendment to the Principles shall be approved by resolution of the

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board of directors.

The Principles became effective after passage by the board of directors of the Company on October 29, 2015, with the first amendment made on January 19, 2018 and the second amendment made on April 10, 2020 and passed by the board of directors.

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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 and the shareholders' meeting.

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 In accordance with 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 Company should have an adequate number of corporate governance personnel with appropriate qualifications according to the size , business conditions and management needs of the Company, and appoint a chief corporate governance officer as the highestranking officer in charge of the Company's corporate-governance-related matters according to the requirements of the competent authority, TWSE and TPEx. 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'
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meetings in accordance with the rules for the meetings.

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

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.

The provision in the foregoing paragraph is advisable to include the stock trading control measures for the Company's insiders as of the date of having access to the Company's financial reports or related business performance.

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

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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 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

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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 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.
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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 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:

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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, 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 In accordance with the laws and regulations stipulated by the competent authority, the Company shall specify in its Articles of Incorporation that it adopts the candidate nomination system for elections of directors, carefully reviews the
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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 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 officer with equivalent duties.

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 directors to the board of directors for approval by resolution as provided in the
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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 qualifications for its members, the exercise of their powers of office, the
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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, not only should conduct annually scheduled performance assessments of the board of directors and individual directors through selfassessment or peer-to-peer assessments, but also may engage outside professional institutions, or in any other appropriate manner. The performance assessment of the board of directors (functional committees) should include the following aspects, and that appropriate assessment indicators should 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) should 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 conducted by the Company 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 37-2 The Board of Directors is advisable to evaluate and monitor the Company's business direction and performance regarding intellectual property in the following aspects to ensure that the Company establishes its intellectual property management system based on the management cycle of "planning, execution, inspection and action":
Formulation of intellectual property management policies, objectives and systems related to operating strategies.
Establishment, implementation and maintenance of a management system for the acquisition, protection, maintenance and use of its intellectual property according to its scale and type.
Determination and provision of resources sufficient to effectively implement and maintain an intellectual property management system.
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Identification of internal and external risks or opportunities related to intellectual property management and implementation of response measures.

The Company will plan and implement mechanisms for continuous improvement to ensure the operation and effectiveness of the intellectual property system are in line with the Company's expectations.

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 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
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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 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.

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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 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.
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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.
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, on April 9, 2019 for the second time and on April 10, 2020 for the third time, and became effective after approval by the board of directors.
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Walsin Lihwa Corporation

Procedures for Ethical Management and Guidelines for Conduct

Article 1 Walsin Lihwa (hereafter referred to as the Company) engages in commercial activities following the principles of fairness, honesty, faithfulness, and transparency and, in order to fully implement its policy of ethical management and actively prevent unethical conducts, these Procedures for Ethical Management and Guidelines for Conduct (hereinafter referred to as Procedures and Guidelines) are adopted pursuant to the Company’s Ethical Corporate Management Best Practice Principles and the applicable laws and regulations of the places where the Company as well as its affiliated enterprises and organizations operate to provide all personnel of the Company with clear directions for the performance of their duties.

Article 2 The term "personnel of the Company" in the Procedures and Guidelines refers to any director, managerial officer, employee, mandatary or person having substantial control, of the Company as well as its affiliated enterprises and organizations. Any provision, promise, request, or acceptance of improper benefits by any personnel of the Company through a third party will be presumed to be an act by the personnel of the Company.

Article 3 "Unethical conducts" in the Procedures and Guidelines mean that any personnel of the Company, in the course of their duties, directly or indirectly provides, promises, requests, or accepts improper benefits or commits a breach of ethics, unlawful act, or breach of fiduciary duty for purposes of acquiring or maintaining benefits.
The counterparties of the unethical conducts under the preceding paragraph include public officials, political candidates, political parties or their staffs, and government-owned or private-owned enterprises or institutions and their directors, supervisors, managerial officers, employees, persons having substantial control, or other interested parties.
Article 4 The term "benefits" in the Procedures and Guidelines means any money, gratuity, gift, commission, position, service, preferential treatment, rebate, facilitating payment, entertainment, dining, or any other item of value in whatever form or name.
Article 5 The Company’s designated Business Integrity Promotion Group as the solely /
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concurrently responsible unit (hereinafter referred to as responsible unit) under the board of directors with sufficient resources and competent personnel oversees the amendment, implementation, interpretation, and advisory services with respect to the Procedures and Guidelines, the recording and filing of reports, and the monitoring of implementation. The responsible unit shall oversee the following matters and submit regular (at least annual) reports to the board of directors:

Assisting in incorporating ethics and moral values into this Company's business strategy and adopting appropriate prevention measures against corruption and malfeasance to ensure ethical management in compliance with the requirements of laws and regulations.
Periodically analyzing and assessing the risk of unethical conduct within the scope of business, and adopting programs to prevent unethical conduct accordingly and setting out in each program the standard operating procedures and conduct guidelines.
Planning the internal organization, structure, and allocation of responsibilities and setting up check-and-balance mechanisms for mutual supervision of the business activities within the business scope which are possibly at a higher risk for unethical conducts.
Promoting and coordinating awareness and educational activities with respect to the Company’s ethics policy.
Developing a whistleblowing system and ensuring its effectiveness.
Assisting the board of directors and management in auditing and assessing whether the prevention measures taken for implementing ethical management are effectively operating, and preparing reports on the regular assessment of compliance with ethical management in operating procedures.
Producing and properly maintaining documented information about the Company's ethical business policy and the compliance representation thereof, as well as the implementation and execution of the Company's commitments.
Article 6 Except under one of the following circumstances, when providing, accepting, promising, or requesting, directly or indirectly, any benefits as specified in Article 4, the conduct of the given personnel of the Company shall comply with the Company’s Ethical Corporate Management Best Practice Principles as well as the Procedures and Guidelines:
The conduct undertaken to meet business needs and is in accordance with local courtesy, convention, or custom during domestic (or foreign) visits, reception of guests, promotion of business, and communication and coordination.
Attendance to or invitation of others to ordinary social activities held in line
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with accepted social custom for commercial purposes or relationship development.

Attendance to or invitation of customers to specific commercial events or factory visits because of business needs when how related expenses should be paid, the number of participants, classes of accommodation, and duration of such events or visits have been specified in advance.
Attendance to folk festivals that are open to and invite the general public.
Rewards, emergency assistance, condolence payments, or honorariums from the management.
Money, property, or other benefits with a market value of NT$3,000 or less offered to or accepted from a person, with the total market value of what is offered to or comes from the same counterparty or the same source within a single fiscal year limited to NT$12,000.
Property with a market value of NT$6,000 or less received due to engagement, marriage, maternity, relocation, assumption of a position, promotion or transfer, retirement, resignation, or severance, or the injury, illness, or death of the recipient or the recipient's spouse or lineal relative, with the total market value of what comes from the same counterparty or the same source within a single fiscal year limited to NT$12,000. Unless the Company’s relevant regulations and rules stipulate otherwise or competent superiors approve otherwise.
Other conducts that comply with the rules of the Company.
Article 7 Except under any of the circumstances set forth in the preceding article, when any personnel of the Company are provided with or are promised, either directly or indirectly, any benefits as specified in Article 4 by a third party, the matter shall be handled in accordance with the following procedures:
If there is no relationship of interest between the party providing or offering the benefit and the official duties of the Company personnel, the personnel shall report to their immediate supervisor within 3 days from the acceptance of the benefit, and the responsible unit shall be notified if necessary.
If a relationship of interest does exist between the party providing or offering the benefit and the official duties of this Corporation's personnel, the personnel shall return or refuse the benefit, and shall report to his or her immediate supervisor and notify the responsible unit. When the benefit cannot be returned, within 3 days from the acceptance of the benefit, the personnel shall refer the matter to the responsible unit for handling.
A relationship of interest between the party providing or offering the benefit and the official duties of this Company's personnel, as referred to in the preceding paragraph, refers to one of the following circumstances:
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When the two parties have commercial dealings, a relationship of direction and supervision, or subsidies (or rewards) for expenses.
When a contracting, trading, or other contractual relationship is being sought, is in progress, or has been established.
Other circumstances in which a decision regarding this Company's business, or the execution or non-execution of business, will result in a beneficial or adverse impact.

The responsible unit of this Company shall make a proposal, based on the nature and value of the benefit under paragraph 1, that it be returned, accepted on payment, given to the public, donated to charity, or handled in another appropriate manner. The proposal shall be implemented after being reported to and approved by the President of the Company.

Article 8 The Company shall neither provide nor promise any facilitating payment.

If any personnel of the Company provide or promise any facilitating payment under threat or intimidation, they shall submit a report to their immediate supervisor stating the facts and shall notify the responsible unit.

Upon receipt of the report under the preceding paragraph, the responsible unit shall take immediate action and undertake a review of relevant matters in order to minimize the risk of recurrence. In a case involving alleged illegality, the responsible unit shall also immediately report to the relevant judicial agency.
Article 9 Political contributions by the Company shall be made in accordance with the following provisions, reported to the supervisor in charge for approval, and a notification given to the responsible unit, and when the accumulated value of contributions to a same recipient in a same fiscal year is expected to amount to NT$2 million or more, such contributions shall be made only after being reported to and approved by the board of directors:
It shall be ascertained that the political contribution complies with the laws and regulations governing political contributions in the country in which the recipient is located, including the maximum amount and the form in which a contribution may be made.
A written record of the decision-making process shall be kept.
Account entries shall be made for all political contributions in accordance with applicable laws and regulations and relevant procedures for accounting treatment.
When making political contributions, the Company shall refrain from engaging in business dealings with, applying for permits to, or carrying out other matters involving its interests with, relevant governmental bodies.
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Article 10 Charitable donations or sponsorships by this Company shall be provided in accordance with the following provisions and reported to the supervisor in charge for approval, and a notification shall be given to the responsible unit. When the accumulated value of donations or sponsorships to a same recipient in a same fiscal year is expected to amount to NT$2 million or more, such donations or sponsorships shall be provided only after being reported to and approved by the board of directors:

It shall be ascertained that the donation or sponsorship complies with the laws and regulations of the country where the Company is doing business.
A written record of the decision-making process shall be kept.
A charitable donation shall be given to a valid charitable institution and may not be a disguised form of bribery.
The reward that may be obtained as a result of the Company's sponsorship shall be clear and reasonable and shall not be any party with whom the Company have business dealings or any person who has an interest in the Company's personnel.
After giving a charitable donation or sponsorship, the Company should confirm that the money flow thereof is consistent with the purpose of the donation.

Article 11 When any director, officer or other stakeholder of the Company attending or present at a board meeting, or the juristic person represented thereby, has a stake in a proposal at the meeting, that director, supervisor, officer or stakeholder shall state the important aspects of the stake in the meeting and, where there is a likelihood that the interests of the Company would be prejudiced, may not participate in the discussion or vote on that proposal, shall recuse himself or herself from any discussion and voting, and may not exercise voting rights as proxy on behalf of another director. The Company’s directors shall exercise discipline among themselves, and may not support each other in an inappropriate manner.

If in the course of conducting company business, any personnel of the Company discovers that a potential conflict of interest exists involving themselves or the juristic person that they represent, or that they or their spouse,

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parents, children, or a person with whom they have a relationship of interest is likely to obtain improper benefits, the personnel shall report the relevant matters to both his or her immediate supervisor and the responsible unit, and the immediate supervisor shall provide the personnel with proper instructions. No personnel of the Company may use company resources on commercial activities other than those of the Company, nor may any personnel's job performance be affected by his or her involvement in the commercial activities other than those of the Company.

Article 12 The Company shall set up a special unit charged with formulating and implementing procedures for managing, preserving, and maintaining the confidentiality of this Company's trade secrets, trademarks, patents, works and other intellectual properties and it shall also conduct periodical reviews on the results of implementation to ensure the sustained effectiveness of the confidentiality procedures.
All personnel of the Company shall faithfully follow the operational directions pertaining to intellectual properties as mentioned in the preceding paragraph and may not disclose to any other party any trade secrets, trademarks, patents, works, and other intellectual properties of the Company of which they have learned, nor may they inquire about or collect any trade secrets, trademarks, patents, and other intellectual properties of the Company unrelated to their individual duties.
Article 13 The Company shall follow the Fair Trade Act and applicable competition laws and regulations when engaging in business activities, and may not fix prices, make rigged bids, establish output restrictions or quotas, or share or divide markets by allocating customers, suppliers, territories, or lines of commerce.
Article 14 The Company shall collect and understand the applicable laws and regulations and international standards governing its products and services which it shall observe and gather and publish all guidelines to help personnel of the Company ensure the transparency of information about, and safety of, the products and services in the course of their research and development, procurement, manufacture, provision, or sale of products and services.
The Company shall adopt and publish on its website a policy on the protection of the rights and interests of consumers or other stakeholders to prevent its products and services from directly or indirectly damaging the rights and interests, health, and safety of consumers or other stakeholders.
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Where there are media reports, or sufficient facts to determine, that the Company's products or services are likely to pose any hazard to the safety and health of consumers or other stakeholders, the Company shall immediately recall those products or suspend the services, verify the facts and present a review and improvement plan.

The responsible unit of the Company shall report the event as in the preceding paragraph, actions taken, and subsequent reviews and corrective measures taken to the board of directors.

Article 15 All personnel of the Company shall adhere to the provisions of the Securities and Exchange Act and may not take advantage of undisclosed information of which they have learned to engage in insider trading. They are also prohibited from divulging undisclosed information to any other party in order to prevent any other party from using such information to engage in insider trading.
Any organization or person outside of the Company that is involved in any merger, demerger, acquisition and share transfer, major memorandum of understanding, strategic alliance, other business partnership plan, or the signing of a major contract by the Company shall be required to sign a nondisclosure agreement in which they undertake not to disclose to any other party any trade secret or other material information of this Company acquired as a result, and that they may not use such information without the prior consent of the Company.
Article 16 The Company shall require its directors and senior management to issue a statement that they follow the integrity business policy, and shall require its employees to follow the same in their terms of employment.
The Company is advised to disclose its policy of ethical management in its internal rules, annual reports, on the Company's websites, and in other promotional materials, and shall make timely announcements of the policy in events held for outside parties to make its suppliers, customers, and other business-related institutions and personnel fully aware of its principles and rules with respect to ethical management.
Article 17 Before developing a commercial relationship with another party, such as an agent, supplier, customer, or any other counterparty in commercial dealings, this Company shall evaluate the legality and ethical management policy of the party and ascertain whether the party has a record of involvement in unethical conduct to ensure that the party conducts business in a fair and transparent manner and will not request, offer, or take bribes.
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When this Company carries out the evaluation under the preceding paragraph, it may adopt appropriate audit procedures for a review of the counterparty with which it will have commercial dealings with respect to the following matters to gain a comprehensive knowledge of its ethical management:

The enterprise's nationality, location of business operations, organizational structure, and management policy, and place where it will make payment.
Whether the enterprise has adopted an ethical management policy, and the status of its implementation.
Whether the enterprise's business operations are located in a country with a high risk of corruption.
Whether the business operated by the enterprise is in an industry with a high risk of bribery.
The long-term business condition and degree of goodwill of the enterprise.
Consultation with the enterprise's business partners on their opinion of the enterprise.
Whether the enterprise has a record of involvement in unethical conducts such as bribery or illegal political contributions.
Article 18 Any personnel of the Company, when engaging in commercial activities, shall make a statement to the trading counterparty about this Company's ethical management policy and related rules, and shall clearly refuse to provide, promise, request, or accept, directly or indirectly, any improper benefit in whatever form or name.
Article 19 All personnel of this Company shall avoid business transactions with an agent, supplier, customer, or any other counterparty that is involved in unethical conducts. When the counterparty or partner in cooperation is found to have engaged in unethical conducts, the personnel shall immediately cease dealing with the counterparty and blacklist it for any further business interaction to effectively implement the Company's ethical management policy.
Article 20 Before entering into a contract with another party, this Company shall gain a thorough knowledge of the status of the other party's ethical management, and shall make observance of the ethical management policy of the Company part of the terms and conditions of the contract, stipulating at the least the following matters:
When a party to the contract becomes aware that any personnel has violated the terms and conditions pertaining to prohibition of acceptance of commissions, rebates, or other improper benefits, the party shall
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immediately notify the other party of the violator's identity, the manner in which the provision, promise, request, or acceptance was made, and the monetary amount or other improper benefit that was provided, promised, requested, or accepted. The party shall also provide the other party with pertinent evidence and cooperate fully with the investigation. If there has been resultant damage to either party, the party may claim compensation for the damage from the other party.

Where a party is discovered to be engaged in unethical conducts in its commercial activities, the other party may terminate or rescind the contract unconditionally at any time.
Specific and reasonable payment terms, including the place and method of payment and the requirement for compliance with related tax laws and regulations.

Article 21 The Company encourages internal and external personnel to report unethical acts or misconduct, and shall reward them according to the severity of the circumstances they report; any internal personnel who make false reports or malicious allegations shall be subject to disciplinary actions, and those under serious circumstances shall be dismissed.

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

The whistleblower's name and I.D. number (an anonymous compliant may be made), and an address, telephone number and e-mail address where the whistleblower can be reached.
The name of the party informed against or other information sufficient to distinguish the party’s features.
Specific facts available for investigation.

Company personnel handling whistleblowing matters shall represent in writing they will keep the whistleblowers' identity and contents of information confidential. The Company also undertakes to protect the whistleblowers from improper treatment due to their whistleblowing.

The responsible unit of the Company shall handle the complaints in compliance with the following procedures:

It shall report to the Auditing Office if the rank and file are involved and reporting to the Audit Committee if any director or senior executive is involved.
The responsible unit of this Company and the department head or personnel being reported to in the preceding subparagraph shall
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immediately verify the facts in accordance with relevant regulations and rules of the Company and, where necessary, with the assistance of the legal compliance or other related departments.

If a person being informed against is confirmed to have indeed violated the applicable laws and regulations or the Company's policy and regulations of ethical management, this Company shall immediately require the violator to cease the conduct and shall make an appropriate disposition. When necessary, the Company will report the same to the competent authorities, transfer the same to the judicial authorities for investigation, or institute legal proceedings and seek damages to safeguard its reputation and its rights and interests.
Documentation of case acceptance, investigation processes and investigation results shall be retained for five years and may be retained electronically. In the event of a suit in respect of the whistleblowing case before the retention period expires, the relevant information shall continue to be retained until the conclusion of the litigation.
With respect to a confirmed information, this Company shall charge relevant units with the task of reviewing the internal control system and relevant procedures and proposing corrective measures to prevent recurrence.
The responsible unit of the Company shall submit to the board of directors a report on the whistleblowing case, actions taken, and subsequent reviews and corrective measures.
Article 22 Should any personnel of the Company discover that another party has engaged in unethical conducts towards this Company, and such unethical conducts involve alleged illegality, the Company shall report the relevant facts to the judicial and prosecutorial authorities. If any public service agency or public servant is involved, this Company shall additionally notify the governmental anti-corruption agency.
Article 23 The responsible unit of the Company shall organize at least one awareness session each year and arrange for the chairperson, president, or senior management to communicate the importance of ethics to the Company’s directors, employees, and mandataries.
This Company shall link ethical management to its employee performance evaluations and human resources policy, and establish clear and effective systems for rewards, penalties, and complaints.
If any personnel of the Company violates ethical conducts, the Company shall punish the violator in accordance with applicable laws and regulations or the personnel policy and procedures of the Company. The punishment includes but
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is not limited to dismissing the violator from his or her position or terminating his or her employment, as well as disclosing on the Company’s intranet the name and title of the violator, the date and details of the violation, and the actions taken in response.

Article 24 These Procedures and Guidelines, and any amendments hereto, shall be implemented after adoption by resolution of the board of directors, and shall be reported at the shareholders’ meeting. When these Procedures and Guidelines are submitted to the board of directors for discussion, each independent director's opinions shall be taken into full consideration, and their objections and reservations expressed shall be recorded in the minutes of the board of directors meeting. An independent director that is unable to attend a board meeting in person to express objection or reservation shall provide a written opinion before the board meeting unless there is a legitimate reason to do otherwise, and the opinion shall be recorded in the minutes of the board of directors meeting. Enacted on January 14, 2015, these Procedures and Guidelines were first amended on January 19, 2018 and secondly amended on April 10, 2020.

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Walsin Lihwa Corporation

Directors shareholdings stated in the shareholder register for the 2020 Annual Shareholders' Meeting

March 30, 2020	March 30, 2020	March 30, 2020	March 30, 2020
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-Cheng Chiao	39,508,661 shares	1.19%
Director	Yu-Heng Chiao	57,792,197 shares	1.74%
Director	Hui-Ming Cheng	880,000 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		446,366,670 shares	13.43%

Note: As of the book closure date for the 2020 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 Articles of Incor oration p

Amended Articles	Current Articles	Description
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 sharesmaybe 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 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 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 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.	Certain language has been amended
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.The shareholders of the Company may also exercise their voting rights by electronic means, and shall be deemed as present in person if they	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.	According to Article 177- 1 of the Company Act, it is specified that the shareholders may exercise their voting rights by electronic means.

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Amended Articles	Current Articles	Description
exercise their voting rights by electronic means. Relevant matters thereof shall be handled in accordance with the Company Act and relevant laws and regulations.
Article 21 The directors shall be entitled to be compensated with the respective remunerations. 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 participation and value of contributions of the directors as well as referring to the typical pay levels adopted by peer companies.	Article 21 The directors shall be entitled to be compensated with the respective remunerationsdespite 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 participation and value of contributions of the directors as well as referring to the typical pay levels adopted by peer companies.	In line with the corporate governance evaluation indicators, the relevant results of the directors' performance evaluation should be taken into consideration in the Company's compensation payment process. Certain language has also been revised.
Article 25-1 The 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 ofparents orsubsidiaries of the Company meeting certain specific requirements which shall be defined	Article 25-1 The 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	Certain language has been amended in line with the amendments to Articles 167-1, 167-2, 235-1 and 267 of the Company Act.

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Amended Articles	Current Articles	Description
by board of directors. The qualification requirements of or the distribution rules for the employees who are entitled to the treasury stock transferred, the employee warrants issued, subscription for new shares issued, and the restricted stock awards issued by the Company, including the employees of parents or subsidiaries of the company meeting certain specific requirements, shall be formulated by the board of directors as authorized.	directors.
be formulated by the
directors as authorized.
Article 26 The Company’s chairman, managerial officer and accounting managershall prepareand sign or affix their chopsthe 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’ meeting for ratification.	Article 26 The Company’sboard 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’ meeting for ratification.	Certain language has been amended in line with Article 14-5 of the Securities and Exchange Act.
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. From the remainder calculated above plus the surplus retained earnings of previous year, the Companyshall set aside or	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. From the remainder specified in the preceding paragraph plus the surplus retained earnings of previousyear,the Companyshall set	Certain language has been amended.

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Amended Articles	Current Articles		Description
reverse the special reserve as stipulated by the law or the competent authority.Thenthe Board of Directors shall draft an earning distribution proposal submitted to the Shareholders’ meeting for resolution to distribute shareholder's dividends.	aside or reverse the special reserve as stipulated by the law or the competent authority. For the remainder,the Board of Directors shall draft an earning distribution proposal submitted to the Shareholders’ meeting for resolution to distribute shareholder's dividends.
Article 31 These Articles of Incorporation were established on August 1, 1966. The first amendment was made on March 5, 1967…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 49thamendment were made on May 29, 2019. The same procedure shall apply to any future amendment.	Article 31 These Articles of Incorporation were established on August 1, 1966. The first amendment was made on March 5, 1967…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.		The date of amendment has been added.

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

Amended Article	Current Articles	Description
Chapter 2 Content Article 1 Responsible departments 1.1 FinanceDivision:(Omitted) 1.2 Risk Management Division: (Omitted) 1.3 Resources Business Group: (Omitted) 1.4 AccountingDivision:(Omitted) 1.5 AuditingOffice:Responsible for audit of transactions and outstanding positions based on the reports prepared by the Accounting Division…(Omitted) Article 2 Functions and management principles 2.2.2 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. 2.3 Limits on total transaction amount 2.3.1 Hedging positions: (1) Foreign exchange and interest rate trading: Conducted pursuant to the authorization provided to Risk Management Division. (2) Materials: Based on actual needs decided byResources Business Group.	Chapter 2 Content Article 1 Responsible departments 1.1 FinanceDepartment:(Omitted) 1.2 Foreign and Interest RateRisk Management Department: (Omitted) 1.3 Key Materials Risk Management Department: (Omitted) 1.4 Accounting Department: (Omitted) 1.5 Auditing Department: Responsible for audit of transactions and outstanding positions based on the reports prepared by the Accounting Department…(Omitted) Article 2 Functions and management principles 2.2.2 The AccountingDepartment shall prepare reports on a regular basis to inform the senior management of the net gain or loss in the current accounting period. 2.3 Limits on total transaction amount 2.3.1 Hedging positions: (1) Foreign exchange and interest rate trading: Conducted pursuant to the authorization provided toForeign Exchange and Interest Rate Risk Management Department. (2) Materials: Based on actual needs decided by Key Materials Risk Management Department.	1. Revising the names of the responsible departments in response to changes in the organization and to clearly define the responsible departments. 2. In response to the operating needs of the Company in relation to the sale of its subsidiary, Nanjing Walsin Metal Co., Ltd. in 2019, and the capital injection into Yantai Walsin Stainless Steel Co., Ltd.

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Amended Article	Current Articles	Current Articles	Current Articles	Current Articles
2.3.2 Non-hedging positions: (1) Foreign exchange and interest rate trading: Prohibited. (2) Materials: Copper: No more than40,000 tons; Nickel: No more than20,000 tons; Other metals: Subject to written approval by the chairman of the board with trading amount limits to be established. Article 3 Implementation procedures 3.2 Risk ManagementDivision shall abide by the authorized limits as provided in 3.3 when engaging in derivative trading, and written approval by the chairman of board shall be required for other categories of hedge trading.	2.3.2 Non-hedging positions: (1) Foreign exchange and interest rate trading: Prohibited. (2) Materials: Copper: No more than80,000 tons; Nickel: No more than6,000 tons; Other metals: Subject to written approval by the chairman of the board with trading amount limits to be established. Article 3 Implementation procedures 3.2 Risk Management Departmentsshall abide by the authorized limits as provided in 3.3 when engaging in derivative trading, and written approval by the chairman of board shall be required for other categories of hedge trading.
3.3 Total value of accumulated open interests to be approved bythe highestauthorizedlevelsof the Company: Foreign exchange and interest rate trading (in million USD) Level Hedging Contracts Non- Hedging Contracts Risk Manageme nt Division Head Authorize d by the Chairman based on actual needs 0 General Manager Authorize d by the Chairman based on actual 0	3.3 Total value of interests to be authorized Company: Foreign exchange trading (in million		accumulated approved by level of and interest USD)
	Level	Hedging Contracts		Non- Hedging Contracts
	Risk Manageme nt Departmen tHead	Authorize d by the Chairman based on actual needs		0
	General Manager	Authorize d by the Chairman based on actual		0

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Amended Article	Amended Article	Amended Article	Amended Article	Amended Article	Current Articles	Current Articles	Current Articles	Current Articles
		needs					needs
Chairman		Conducted according to actual needs	0		Chairman		Conducted according to actual needs	0
Materials					Materials
	Item	Hedging Contracts		Non- Hedging Contracts		Level	Hedging Contracts	Non- Hedging Contracts
Total value of accumulat ed open interests		Conducted according to actual needs		Copper: 40,000 Nickel: 20,000	Key Materials Departmen t Head		Conducted according to actual needs	Copper: 80,000 Nickel: 6,000
Highest authorized level		General Manager of Resources Business Group		Chairman

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Amended Article	Current Articles	Description
approval. Any amendment to the Procedures shall also follow the aforementionedprocess.	amendment to the Procedures shall also follow the aforementionedprocess.

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Walsin Lihwa Corporation Comparison Table of Amended Articles of Rules and Procedures of Shareholders’ Meetin s g

Amended Article Current Articles Description Article 2 Article 2 Unless otherwise provided by law or Unless otherwise provided by law or Amended in line with regulation, the Company's regulation, the Company's Paragraph 5, Article shareholders meetings shall be shareholders meetings shall be 172 of the Company convened by the Board of Directors. convened by the Board of Directors. Act. Election or discharge of directors, Election or discharge of directors, amendments to the Articles of amendments to the Articles of Incorporation, reduction of capital, Incorporation, the dissolution, application for the approval of merger, or spin-off of the Company, ceasing its status as a public or any matter prescribed in Article company, approval of competing 185, paragraph 1 of the Company with the company by directors, Act or Articles 26-1 and 43-6 of the surplus profit distributed in the form Securities and Exchange Act shall be of new shares, reserve distributed in set out in the notice of the reasons for the form of new shares, the convening the shareholders meeting. dissolution, merger, or spin-off of None of the above matters may be the Company, or any matter raised by an extraordinary motion. prescribed in Article 185, paragraph 1 of the Company Act ~~or Articles 261 and 43-6 of the Securities and Exchange Act s~~ hall be set out, and its essential content shall be explained, in the notice of the reasons for convening the shareholders meeting. None of the above matters may be raised by an extraordinary motion. The essential contents may be posted on the website designated by the competent authority in charge of securities affairs or the company, and such website shall be indicated in the above notice. Where the notice of reasons for This paragraph has been newly Newly added in line convening the shareholders' meeting added. with the letter dated has specified any entire re-election of August 6, 2018 (Ref. directors and the date of their No.: Jin-Shang-Ziassumption of office, after such 10702417500). completion of such re-election in such shareholders' meeting, the date of their assumption of office shall

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Amended Article not be changed by an extraordinary motion or otherwise in the same meeting.

Current Articles Description

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

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

The reasons for convening the The reasons for convening the meeting shall be specified in the meeting shall be specified in the notice or announcement. Upon the notice or announcement. Upon the

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Amended Article Current Articles consent of a receiving party, such consent of a receiving party, such information may be given in digital information may be given in digital form. form. The production and announcement of The production and announcement of the agenda handbook of the the agenda handbook of the Company’s shareholders meeting Company’s shareholders meeting shall be in compliance with the shall be in compliance with the Regulations Governing Content and Regulations Governing Content and Compliance Requirement for Compliance Requirement for Shareholders’ Meeting Agenda Shareholders’ Meeting Agenda Handbooks of Public Companies. Handbooks of Public Companies. Article 10 Article 10

Description

If a shareholders meeting is If a shareholders meeting is This revision has been convened by the Board of Directors, convened by the Board of Directors, made in line with the the meeting agenda shall be set by the meeting agenda shall be set by practical operation of the Board of Directors, and each the Board of Directors. The meeting electronic voting and proposal shall be voted on one by shall proceed in the order set by the to implement the one. The meeting shall proceed in the agenda and may not be changed proposal-by-proposal order set by the agenda and may not without a resolution of the voting. be changed without a resolution of shareholders meeting. the shareholders meeting.

Preceding paragraph also applies Preceding paragraph also applies shareholders’ meetings convened by shareholders’ meetings convened by a party with the power to convene a party with the power to convene that is not the Board of Directors. that is not the Board of Directors. The chair shall not declare the The chair shall not declare the meeting adjourned prior to the meeting adjourned prior to the completion of deliberation on the completion of deliberation on the meeting agenda of the preceding two meeting agenda of the preceding two paragraphs (including extraordinary paragraphs (including extraordinary motions), except by a resolution of motions), except by a resolution of the shareholders meeting. If the chair the shareholders meeting. If the chair declares the meeting adjourned in declares the meeting adjourned in violation of the rules of procedure, violation of the rules of procedure, the other members of the Board of the other members of the Board of Directors shall promptly assist the Directors shall promptly assist the attending shareholders in electing a attending shareholders in electing a new chair in accordance with new chair in accordance with statutory procedures, by agreement statutory procedures, by agreement of a majority of the votes represented of a majority of the votes represented by the attending shareholders, and by the attending shareholders, and then continue the meeting. then continue the meeting. The chair shall allow ample The chair shall allow ample The chair shall arrange opportunity during the meeting for opportunity during the meeting for an adequate amount of explanation and discussion of explanation and discussion of time for shareholders

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Amended Article	Current Articles	Description
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. In addition, the chair shall arrange an adequate amount of time for voting.	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.	to exercise their voting rights, in order to maintain shareholder's rights and interests.
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 voting results (including the calculation of the number of voting rights) (in case of any election of directors, the number of votes that each candidate wins shall be disclosed),and shall be retained for the duration of the existence of the Company.	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.	This revision has been made in line with the practical operation of electronic voting and to implement the proposal-by-proposal voting.

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Walsin Lihwa Corporation

List of Candidate for Directors and Independent Directors

No.	Title	Name	Sex	Education	Experience	Current Positions	Shareholding (Unit: share)
1	Director	Yu-Lon Chiao	M	Business Administration Department, University of Washington	Chairman, Walsin Lihwa Corporation	Chairman of Walsin Lihwa Corporation and Concord Venture Capital Group; Vice President of Walsin (Hangzhou) Power Cable Co., Ltd. and Jiangsu Taiwan Trade Mart Development Co., Ltd.; Director of Walton Advanced Engineering, Inc., Ltd., Jincheng Construction Co., Ltd., Walsin Lihwa Holding Co., Ltd., Walsin Specialty Steel Corporation, Walsin (Nanjing) Development Co., Ltd. and Nanjing Walsin Expo Exhibition Ltd.; Vice President and Commissioner of PT. Walsin Lippo Industries and P.T. Walsin Lippo Kabel.	45,961,773
2	Director	Patricia Chiao	F	MBA at College of Notre Dame	Former Assistant Vice President of Investment Dept., Assistant Vice President of Financial Dept., Head of Financial Investment Dept.,	Vice Chairman of Walsin Lihwa Corporation; Director of Walsin Lihwa Holding Co., Ltd., Renowned International Limited,Walsin Specialty	91,969,006

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No.	Title	Name	Sex	Education	Experience	Current Positions	Shareholding (Unit: share)
					Assistant Vice President of Commodity Center and Financial Investment Management Center, President of Insulated Wire & Cable BU of Walsin Lihwa Corporation	Steel Corporation; President of Chin- Xin Investment Co., Ltd.
3	Director	Yu- Cheng Chiao	M	University of Washington Masters of Electrical Engineer and Business Administration	Former Chairman of Walsin Lihwa Corporation	Chairman of Winbond Electronics Corporation, Chin-Xin Investment Co., Ltd; Director of Walsin Lihwa Corporation, Walsin Technology Corporation, Nuvoton Technology Corporation, Jincheng Construction Co., Ltd., United Industrial Gases Co., Ltd., MiTAC Holdings Corporation, Landmark Group Holdings Ltd., Peaceful River Corporation, Winbond International Corporation, Winbond Electronics Corporation America, Marketplace Management Limited, Nuvoton Investment Holding Ltd., Pigeon Creek Holding Co.,Ltd., Songyong Investment Co., Ltd.; CEO of Winbond Electronics Corporation; Manager, Goldbond LLC; Independent Director & convener of the Audit	39,508,661

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No.	Title	Name	Sex	Education	Experience	Current Positions	Shareholding (Unit: share)
						Committee and Compensation Committee at Taiwan Cement Corp.; Independent Director, member of the Audit Committee and convener of the Compensation Committee of Synnex Technology International Corporation.
4	Director	Yu- Heng Chiao	M	Golden Gate University, Master of Business Administration	Former Vice Chairman of Walsin Lihwa Corporation	Chairman of Walsin Technology Corporation, Walton Advanced Engineering, Inc., HannStar Board Corp., Global Brands Manufacture, Prosperity Dielectrics Co., Ltd., Info- Tek Corp., VVG Co. Ltd., and HannStar Board Corporation (Jiangyi); Director of Walsin Lihwa Corporation, Career Technology Mfg. Co., Ltd., Sheng Cheng Industry, Yu Yue Corporation, and An Xin e-Commerce.	57,792,197
5	Director	Wei- Shin Ma	F	Ph.D., College of Humanities and Social Sciences of National Tsing Hua University, Peking University, Master of Business	Chairman of Yuanta Securities Investment Trust Co., Ltd. and Hannstar Display Corporation	Chairman of Hannstouch Solution Incorporated, Golden Apple Investment Company and White Stone Management Consultancy; Director of Walsin Lihwa Corporation, Hannstar Display Corporation, and Winbond Electronics Corporation.	244,033

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No.	Title	Name	Sex	Education	Experience	Current Positions	Shareholding (Unit: share)
				Administration for Senior Managers, University of California (Berkeley), Department of East Asian Languages
6	Director	Chin- Xin Investm ent Co., Ltd.	N/A	N/A	Director of Walsin Lihwa Corporation, Nuvoton Technology Corporation, HannStar Board Corp., White Stone Management Consultancy, Global Investment Holdings and Huabao Seed Breeding Co., Ltd.	Director of Walsin Lihwa Corporation, Nuvoton Technology Corporation, HannStar Board Corp., White Stone Management Consultancy, Global Investment Holdings and Huabao Seed Breeding Co., Ltd.	210,011,000
7	Director	Andrew Hsia	M	Department of Law, Fu-Jen Catholic University; Master's Degree in Diplomacy, National Chengchi	Head of Political Section, Ministry of Foreign Affairs Representative Office in the United States; Deputy Representative of the Ministry of Foreign Affairs Representative Office in Canada; Director of the Ministryof Foreign Affairs Office in	Vice President of Phu My Hung International Corporation; Chief Representative of Central Trading & Development Corporation (Samoa)	0

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No.	Title	Name	Sex	Education	Experience	Current Positions	Shareholding (Unit: share)
				University; MLitt in Law, University of Oxford (UK)	New York; Representative of the Ministry of Foreign Affairs in India; Political Deputy Minister of the Ministry of Foreign Affairs; Representative of the Ministry of Foreign Affairs in Indonesia; Deputy Minister of the Ministry of National Defense; Chairman of the Mainland Affairs Council, Executive Yuan
8	Independent Director	Ming- Ling Hsueh	M	Soochow University, Master in Accountancy; Bloomsburg University of Pennsylvania, Master of Business Administration;	PwC Taiwan Director; Executive Director, Taiwan Corporate Governance Association; Adjunct Professor, EMBA, National Tsing Hua University	Independent Director of Wasin Lihwa Corporation, Yuanta Financial Holding Co., Ltd. and Yuanta Commercial Bank Co., Ltd., Lite-On Technology Corporation, TTY Biopharm Company Limited	0
9	Independent Director	King- LingDu	M	Mississippi State University,	U.S. representative of China Steel Corporation(Steel Division, U.S.	Director of Sheh Fung Screws Co., Ltd and Green River HoldingCo., Ltd.;	0

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No.	Title	Name	Sex	Education	Experience	Current Positions	Shareholding (Unit: share)
				Masters in Mechanical Engineering; New York University, Financial Management Research; Stanford University, Advance Marketing Research	Purchasing Group of Executive Yuan), Deputy General Manager of Business Department, Engineering Department, Corporate Planning Department, and Executive Deputy General Manager; General Manager, Kaohsiung Rapid Transit Corporation; Chairman, China Ecotek Corporation.	Independent Director of Walsin Lihwa Corporation，Ta Liang Technology Co., Ltd. and Sheh Kai Precision Co., Ltd.
10	Independent Director	Shiang- Chung Chen	M	The School of Industrial Engineering at Purdue University	President of Mercuries Data Systems Ltd.	Chairman of Mercuries Data Systems Ltd., Nanjing Mercuries Development of Software Co., Ltd., Mercuries Insurance Agent Co., Ltd., Hipact Tech Inc.; Director of Mercuries Holdings Corporation, Mercuries Data Systems Ltd., Shang-Ling Investment Inc., Shang-Hong Investment Inc., Yangzheng Investment Co., Ltd. and EASYCARD Investment Holding	0

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No.	Title	Name	Sex	Education	Experience	Current Positions	Shareholding (Unit: share)
						Company; Supervisor of Digicentre Co., Ltd.; Inpendent Director of Walsin Lihwa Corporation and Teco Image Systems Inc.; Director of Taiwan Masters Golf Promotion Foundation and Institute for National Policy Research Foundation; Director of the Friends of the Police Association of the Republic of China; Vice President of Criminal Investigation and Prevention Association of the Republic of China; Chairman of the Security Police Third Corps Police Club of the Friends of the Police Association of the Republic of China; President of Mercuries Data Systems Ltd..
11	Independent Director	Fu- Hsiung Hu	M	MBA, Graduate School of Business, National Taiwan University	Managing Director, Central Trust of China; Director, Mega International Commercial Bank; Director, Economic Energy and Agriculture Department, Executive Yuan; Deputy Chairman, Council of Agriculture; Chairman, Central	Chairman of Taiwan Cooperative Securities Co., Ltd.	0

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No.	Title	Name	Sex	Education	Experience	Current Positions	Shareholding (Unit: share)
					Animal Products Association, Animal Science and Technology Research Institute, and Joint Credit Information Center.

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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) Mr. Yu-Lon Chiao

Names of Other Companies Where		Business Items Identical or Similar to the
	Title
He Serves		Company’s

Jiangsu Taiwan Trade Mart Development Co., Ltd.	Vice Chairman	Commercial and real estate
Walsin (Hangzhou) Power Cable Co., Ltd.	Vice Chairman	Production and sale of wire and cable
Jincheng Construction Co., Ltd.	Director	Commercial and real estate H701010 Residence and Buildings Lease
Walsin (Nanjing) Development Co., Ltd.	Director	~~C~~ ~~i~~ ~~d D~~ ~~l~~ Commercial and real estate
Nanjing Walsin Expo Exhibition Ltd.	Director	Commercial and real estate
PT. Walsin Lippo Industries	Vice President & Commissioner	Production and sale of specialty steel
P.T. Walsin Lippo Kabel	Vice President & Commissioner	Production and sale of wire and cable
(2) Mr. Yu-Cheng Chiao
Names of Other Companies Where		Business Items Identical or Similar to the
	Title
He Serves		Company’s

Taiwan Cement Corporation	Independent Director	Commercial and real estate H701010 Residence and Buildings Lease
Jincheng Construction Co., Ltd.	Director	~~C~~ ~~i~~ ~~d D~~ ~~l~~ Commercial and real estate H701010 Residence and Buildings Lease
	~~C~~ ~~i~~ ~~d D~~ ~~l~~

(3) Mr. Yu-Heng Chiao

Names of Other Companies Where		Business Items Identical or Similar to the
	Title
He Serves		Company’s

Global Brands Manufacture Ltd.	Chairman	Production and sale of wire and cable Production and sale of specialty steel

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VVG Inc.	Chairman	Commercial and real estate H701010 Residence and Buildings Lease
Sheng Cheng Industry	Director	~~C~~ ~~i~~ ~~d D~~ ~~l~~ Commercial and real estate H701010 Residence and Buildings Lease
Yu Yue Corporation	Director	~~C~~ ~~i~~ ~~d D~~ ~~l~~ Commercial and real estate

(4) Ms. Wei-Shin Ma

Names of Other Companies Where		Business Items Identical or Similar to the
	Title
She Serves		Company’s

HannsTouch Solution Incorporated	Chairman	Commercial and real estate
White Stone Management Consultancy	Chairman	H701010 Residence and Buildings Lease Construction and Development
Xinshi Yuema Investment Co., Ltd.	Chairman	Commercial and real estate H701010 Residence and Buildings Lease Construction and Development
Hannstar Display Corporation	Director	H701010 Residence and Buildings Lease Construction and Development

(5) Chin-Xin Investment Co., Ltd.

Names of Other Companies Where		Business Items Identical or Similar to the
	Title
He Serves		Company’s

White Stone Management Consultancy	Director	H701010 Residence and Buildings Lease Construction and Development

(6) Mr. Andrew Hsia

Names of Other Companies Where		Business Items Identical or Similar to the
	Title
He Serves		Company’s

Phu My Hung Holdings Group	Vice President and Spokesman	Commercial and Real Estate; Residence and Buildings Lease Construction and Development
Central Trading & Development Corporation (Samoa)	Chief Representative

(7) Mr. Ming-Ling Hsueh

Names of Other Companies Where		Business Items Identical or Similar to the
	Title
He Serves		Company’s

Lite-On Technology Corporation	Independent Director	H701010 Residence and Buildings Lease Construction and Development E601010 Electric Appliance Construction

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(8) Mr. King-Ling Du

Names of Other Companies Where		Business Items Identical or Similar to the
	Title
He Serves		Company’s

Sheh Kai Precision Co., Ltd.	Independent Director	Production and sale of specialty steel
Sheh Fung Screws Co., Ltd.	Director	Production and sale of specialty steel

(9) Mr. Shiang-Chung Chen

Names of Other Companies Where	Title	Business Items Identical or Similar to the
~~H S~~ President of Mercuries Data Systems Ltd.	Chairman & President	~~C~~ ~~’~~ E601010 Electric Appliance Construction
Mercuries Data Systems Ltd.	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 amendment was made on April 19, 1977; the 14th amendment was made on May 12, 1978; the 15th

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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 the meeting 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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Methods of Election of Directors of the Board Walsin Lihwa

Approved by shareholders’ meeting on May 24, 2019 Article 1 Unless otherwise provided in relevant laws, regulations or Articles of Incorporation, the directors and of the board of Walsin Lihwa (the Company) shall be elected in accordance 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 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 Article 3 At the election, the chairperson may appoint several persons from among the shareholders present to monitor the voting procedure, and may appoint others for ballot counting and Article 4 If two or more persons receive the same number of votes and result in the total number of persons elected exceeding the prescribed seats, they shall draw lots to decide who will serve. The chairman shall draw lots on the absentee’s behalf. Article 5 Ballots shall be prepared by the board of directors of the Company and bear shareholder attendance card numbers and the number of voting rights. Article 6 Voters shall fill in the candidate column with candidate name(s), shareholder number(s), or ID card number(s) or uniform business number(s).

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Article 7 Ballots shall be deemed void under any of the following conditions:

Ballots are not prepared by the Company (as required by Article 5;
Ballots are not completed in accordance with Article 6 ;
The number of candidates filled in the ballot exceeds the number of seats to be elected ;
Article 8 The ballots should be calculated immediately after the votes are casted and under the supervision of persons designated by the chairperson to monitor the voting procedure. The results of the election should be announced by the chairperson or any person appointed by chairperson at the meeting.

Article 9 The Company shall issue notifications to the directors-elect. Article 10 The Company’s article of incorporation, the Company Act, and relevant laws and regulation shall apply mutatis mutandis to all matters not prescribed in the Methods

Article 11 The adoption of the Methods and any amendment to the Methods shall be approved at the Company’s shareholders’ meeting.

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AI assistant

WALSIN — AGM Information 2020

51877_rns_2020-06-20_9f5b427d-e804-4046-adbf-12933c3ad571.pdf

Walsin Lihwa Corporation

2020 Annual Shareholders' Meeting Handbook

Walsin Lihwa Corporation 2020 Annual Shareholders' Meeting Handbook

Table of contents

Walsin Lihwa Corporation

Meeting Procedure and Agenda of the 2020 Annual Shareholders' Meeting

1. The Meeting Called to Order

2. Chairman's Address

3. Matters to Be Reported:

4. Matters to Be Ratified, Discussed and Elected:

5. Ad-Hoc Motions

6. Adjournment

Matters to Be Reported

Matters to Be Ratified, Discussed and Elected

Proposal 1

Proposed by the Board of Directors

Proposal 2

Proposed by the Board of Directors

Walsin Lihwa Corporation Earnings Distribution Proposal for 2019

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

Ad-Hoc Motions

Adjournment

Appendix

Walsin Lihwa Corporation

2019 Business Report

1. Preamble

2. Explanation for Financial Result

3. Operating Overview and Prospects of the Business Units

(1) Wire and Cable

(2) Stainless Steel

(3) Real Estate

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

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

WALSIN LIHWA CORPORATION

BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

WALSIN LIHWA CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

WALSIN LIHWA CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

WALSIN LIHWA CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

WALSIN LIHWA CORPORATION

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

WALSIN LIHWA CORPORATION

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

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit 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

WALSIN AGM Information 2020