YULON NISSAN MOTOR CO., LTD.

2017 Annual General Shareholders’ Meeting

I. Procedure ···················································· 1 II.Agenda ························································ 2 1. Report Items ············································ 3 2. Ratification Items ····································· 11 3. Discussions Items ····································· 45 4. Election Items ··········································· 58 5. Extraordinary Motions ································· 60 III.Appendices 1. Articles of Incorporation ······························ 61 2.Directors’ Shareholdings & Minimum Shareholdings Required ·················································· 70 3. Rules of Procedure for Shareholders’ Meetings ··· 71 4. Rules of Directors and Supervisors Election ········ 75

YULON NISSAN MOTOR CO., LTD.

2017 Annual General Shareholders’ Meeting

Meeting Procedure

1. Call to Order

2. Chairman’s Address

3. Report Items

4. Ratification Items

Discussions Items
Election Items

7. Extraordinary Motions

Closure of the Meeting
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YULON NISSAN MOTOR CO., LTD.

2017 Annual General Shareholders’ Meeting

Agenda

Time: Monday, June 26, 2017 9:00 a.m.

Location: No.3, Sec. 3, Zhongxing Rd., Xindian Dist., New Taipei City, Taiwan, R.O.C

1. Call to Order

2. Chairman’s Address

3. Report Items

(1) To report the business operations of 2016

(2) 2016 supervisors’ review financial report
(3) To report 2016 compensation distribution.

4. Approval Items

(1) Adoption of the 2016 Business Report and Financial Statements

(2) Adoption of the Proposal for Distribution of 2016 Profits

5. Discussions Items

(1) Amendment to Articles of Incorporation
(2) Amendment to “Rules of Directors and Supervisors Election”
(3) Amendment to the system of “Operational Procedures for Acquisition or Disposal of Assets”

6. Elections Items

By-election of the supervisor

7. Extraordinary Motions

8. Closure of the Meeting

Report Items

Item One:

The 2016 Business Report

Business Report

(I) Taiwan economic development With the international economic recovery, the continuous stabilization of raw material prices, and other favorable factors, Taiwan economic environment with the support of three indexes, including private consumption, private investment, and government spending was improving quarterly in 2016 with 1.5% growth achieved.

A total of 430,000 vehicles were sold in 2016 as a result of the subsidy policy for trade-in promoted by the government and the new vehicles launched actively by all car makers, representing 4.8% growth over the year of 2015. The sale of made-in-Taiwan vehicle had grown by 1.5%, imported vehicle grown by 10.2%; passenger vehicle declined by 0.2%, RV vehicle grown by 9.5%, and commercial vehicle grown by 14.0%.

(II) The Company’s business report
The Company sold 44,723 vehicles in 2016, representing 3% growth over the year of 2015 and with a marketing share of 10.4%; also, the operating income amounted to NT$34.86 billion, the operating profit amounted to NT$1.202 billion, the net income before tax amounted to NT$5.586 billion, representing 11.7% growth over the year of 2015, and the earnings per share after tax was NT$15.44, representing 11.2% growth over the year of
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The relevant business activities in 2016 are as follows:

1.New car models marketed

NISSAN brand was with the third generation “MURANO HYBRID” introduced to effectively enhance the competitive advantage of the product portfolio with the features of “highest standard full safety protection” and “luxury comfortable interior configuration.”

INFINITI brand was with the Q30 introduced as the first luxury metropolitan crossover sport utility vehicle of INFINITI by combining it with the streamline design of Coupe two-door race car and spacy small SUV; therefore, it has become the main driving force for the growth of brand sales.

2.Corporate Social Responsibility

The Company upholds the business philosophy of “pursuit of customer satisfaction,” “creation of business prosperity,” and “contribution to social well-being” to pursue a steady growth and make it the Company’s policy of corporate social responsibility. The Company is committed to have this business philosophy substantiated in every detail in daily operation by exercising the Company’s core competence and value. The effort of reducing the generation of waste in each stage of R&D, design, production, and sale is implemented, not only introducing the recyclable plastic material to all car series comprehensively but also responding to the EU “parts material engraved” norms in order to consume natural resources thriftily and to reduce the burden on the environment and pollution as well.

In response to global warming, the Company, in

addition to substantiating energy-saving and carbon emission reduction measures internally and in the overall distribution system, in terms of the supply chain, has exercised the charisma of the central plant to actively establish a sustainable relationship with suppliers, and to urge the supply chain manufacturers urged to care about the environmental protection, safety and health, labor human right, and other issues in order to create a green value system together. In addition, a fun outdoor event is held regularly to blend education in entertainment together in order to invite car-owners and their families to care for environmental protection and to make an effort for the environment. The “Yulon-Nissan Taiwan Innovation Award” design competition has been held for years to cultivate outstanding design and R&D talents for Taiwan auto industry and to promote industrial upgrading and development. The “Employer Liability Insurance” premium is donated to the part-time janitors of the Department of Environmental Protection, Taipei City Government so to give a peace of mine to this group of silent heroes who have worked hard to keep the city clean and tidy.

At the same time, the corporate social responsibility report is prepared annually to disclose the Company’s fulfilling corporate social responsibility comprehensively and to continuously focus on the development of the relevant system and the change in corporate environment in order to enhance the performance of corporate social responsibility.

3.Business operation in Mainland China

A total of 28.028 million vehicles were sold in

Mainland China in 2016, representing 13.9% growth over the year of 2015. Of which, a total of 24.377 million (increased by 15.3%) passenger cars and 3.651 million (increased by 5.8%) commercial vehicles were sold. For Dongfeng Nissan passenger cars, 1.144 million vehicles were sold in 2016, representing 11.5% growth over the year of 2015.

(III) The prospects

The business performance in 2017Q1 The Company sold 11,352 vehicles in the first quarter, representing 3.2% growth over the same period last year and with a market share of 10.7%, representing 0.2% growth over last year. The operating income amounted to NT$9.857 billion, representing 3.7% growth over the same period last year; the operating profit amounted to NT$703 million, representing 83.7% growth over the same period last year. The net income before tax amounted to NT$1.738 billion, representing 31.8% growth over the same period last year and the earnings per share after tax was NT$4.81/share, representing 32.0% growth over the same period last year.
Introduction of new products NISSAN brand was with the “iTIIDA” car model launched in April; also, the new improved SUPER SENTRA will be launched in Q4 with a more stylish young look and a better competitive product portfolio. INFINITI brand was with the “Q60” introduced in April that was a streamline two-door race car with luxury appearance and sport performance offering more excellent product competitiveness. It is introduced with the promotion
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of the 20[th] anniversary of branding to secure the domestic market share.

3. Sales and service satisfaction upgrade

NISSAN brand had been appreciated continuously by car owners in the 2016 J.D. Power “SSI new car sales satisfaction” and “CSI customer satisfaction” survey with the “No. 1 non-luxury car brand” awarded again. The sale and service quality will be upgraded continuously in 2017 with the hardware and software equipment improved and the customer satisfaction upgraded effectively with the innovative information technology used and the prompt service provided. For INFINITI brand, the Company will continue to have the show room upgraded in accordance with the internationally renowned “IREDI (INFINITI Retail Environment Design Initiative) global display site design specifications” and have a spacy, bright, and full of gallery atmosphere exhibition space created. At the same time, bases on the “P.C.E (Premium Customer Experience)” five-star service to give customers a “home coming” experience.

4. Export expansion

The auto parts exporting revenue amounted to NT$216 million in 2016, including Thailand, Malaysia, the Philippines, Mainland China, South Korea, Japan, Egypt, Indonesia, and Vietnam. The Company will continue to expand auto parts export business in order to create greater revenue growth momentum for the Company.

5. Business operation in Mainland China

According to the forecast of the China Association of

Automobile Manufacturers, due to the policy stimulus effect, 29.4 million vehicles will be sold in 2017 in China, representing 5% growth over last year. We are cautiously optimistic about the car sales of Dongfeng Nissan and the trend of total market growth.

With the support of all our shareholders and the concerted efforts of all our colleagues, Yulon-Nissan Taiwan is confident in creating the greatest benefits in a competitive market.

Chairman: President:

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Chief Accountant:

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Item Two:

2016 supervisors’ review financial report

Yulon Nissan Motor Co., Ltd.

Supervisors’ Review Report

The Board of Directors submits the 2016 Business Report, Financial Statements, and Earnings Distribution Proposal. Among them, the Financial Statements were audited by accountants Chien-Hsin Hsieh and Wan-Yi Liao of Deloitte Touche Tohmatsu Ltd., who issued the audit report. The aforementioned Business Report, Financial Statements and Earnings Distribution Proposal were inspected by the Supervisors who affirmed that these reports have complied with related law and regulations of Company Act and, therefore, announced according to the regulation of Article 219 in Company Act.

Submitted to:

2017 Regular Shareholders’ Meeting of the Company

Supervisors:

Wei Wen Investment Co., Ltd.

Representative: Kuan-Tao Lee

Representative: Tai-Ming Chen

Supervisors: Toru Nakano

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May 12 , 2017

Item Three:

The 2016 Distribution of Employees' Remuneration

I According to the article 31 of incorporation, the Company’s profits of current year shall be distributed not less than 0.1% as the employee compensation after offset the accumulated losses.
II The employee compensation shall be distributed in cash with the amount of NT$5,772,860.
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Ratification Items

Proposal 1: Ratification of the 2016 Business Report and Financial Statements. Please ratify.

(Proposed by the Board of Directors.)

Description:

(1)The compilation of the Company's Fiscal 2016 Business Report and Financial Statements are completed and has been approved by the Board of Directors. The Financial Statements have been audited and certified by Wan-Yi Liao, CPA, and Chien-Hsin Hsieh, CPA, of Deloitte & Touche. The Business Report and Financial Statements have been audited by the Supervisors, and are hereby submitted for adoption by this Annual General Shareholders’ Meeting.
(2)Please refer to page 3 to page 8 and page 12 to page 42 of this handbook for the Fiscal 2016 Business Report, the CPA Audit Report issued by Deloitte & Touche and the Financial Statements, respectively.
(3)Adoption requested.

Resolution :

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Yulon Nissan Motor Company, Ltd.

Opinion

We have audited the accompanying financial statements of Yulon Nissan Motor Company, Ltd. (the Company), which comprise the balance sheets as of December 31, 2016 and 2015, 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, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2016 and 2015, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

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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 for the year ended December 31, 2016. 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.

Depreciation of Molds and Dies

In the application of IAS 16 “Property, Plant and Equipment”, the depreciable amount of an asset should be allocated on a systematic basis over its useful life. The Company depreciates molds and dies on the basis of unit of production method and examines the estimated units sold of each model according to the changes of market semiannually for a basis to calculate amounts allocated to each mold and die. Depreciation of molds and dies in 2016 was $412,271 thousand. The amount of depreciation of molds and dies is significant and estimates of units sold are highly dependent on management’s judgment. Therefore, the depreciation of molds and dies is considered to be a key audit matter.

The related accounting policy and critical accounting judgements are disclosed in Notes 4 and 5 to the financial statements, respectively; the related amounts are disclosed in Note 11 to the financial statements.

We obtained the information and documents regarding the estimated number of units of future sales by each model from management, and assessed the rationality and reliability of the supporting information. In addition, we sampled the transactions of molds and dies to verify original documents and cash flows and performed procedures such as field inventory and confirmation. Besides, we recalculated the amount of depreciation of molds and

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dies on the basis of estimated production volume in order to assess rationality of calculated depreciation and accuracy of carrying amount.

Moreover, we compared whether there was a significant difference between the amended estimated number of units of future sales used in the financial statement last year and the actual sales units, so as to evaluate the appropriateness of the management’s estimation.

Provision for Warranty

According to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”, provisions are recognized at the best estimate of the expenditure required to settle the present obligation at the end of the reporting date. The provision for warranty is calculated on the basis of estimate of quarterly warranty expenditure per car and estimated units subject to warranty during the future warranty period. The estimate of quarterly warranty expenditure per car is calculated based on average of actual warranty expense in the past and estimated number of units of cars subject to warranty at the end of every quarter. As of December 31, 2016, the carrying amount of provision for warranty was $136,731 thousand. Due to the management’s use of judgments in estimating the number of units of cars subject to warranty, warranty provision recognized is considered to be a key audit matter.

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we sampled the ledgers of actual warranty expenditure this year to verify original documents and cash flows and we recalculated the amount that should be of provision for warranty according to the warranty policy.

Moreover, we compared whether there was a significant difference between the estimated number of units of cars subject to warranty used in the financial statements last year and the actual units of cars subject to warranty, so as to evaluate the appropriateness of the management’s estimation.

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 independent directors and supervisors, are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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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 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 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 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.
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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 appropriate audit evidence regarding the financial information of the 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.

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.

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2016 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 partner on the audit resulting in this independent auditors’ report is Wan-I Liao.

Deloitte & Touche Taipei, Taiwan Republic of China

March 27, 2017

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YULON NISSAN MOTOR COMPANY, LTD. BALANCE SHEETS

DECEMBER 31, 2016 AND 2015

ASSET CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss Notes receivable - related parties Trade receivables Trade receivables - related parties Other receivables Inventories Prepayments Total current assets NON-CURRENT ASSETS Investments accounted for using equity method Property, plant and equipment Computer software Deferred tax assets Other non-current assets Total non-current assets	2016 Amount ％ $ 9,268,414 31 2,275,103 8 4,174 - 40,532 - 545,098 2 57,311 - 2,509 - 15,853 - 12,208,994 41 15,281,346 51 1,703,040 6 17,407 - 128,364 1 387,771 1 17,517,928 59	2015
		Amount ％ $ 8,363,612 27 1,491,543 5 6,139 - 70,932 - 483,892 2 38,469 - 3,020 - 15,906 - 10,473,513 34 18,175,364 58 1,936,231 6 14,330 - 152,728 1 408,397 1 20,687,050 66

TOTAL $29,726,922 100 $31,160,563 100 Chairman: President:

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(In Thousands of New Taiwan Dollars, Except Par Value)

LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings Notes payable Notes payable - related parties Trade payables Trade payables - related parties Other payables Current tax liabilities Provisions Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Provisions Net defined benefit liabilities Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities EQUITY Capital stock - NT$10 par value; authorized - 600,000 thousand shares; issued and outstanding - 300,000 thousand shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL	2016 Amount ％ $3,630,000 12 - - 1536 - 33,967 - 1,083,176 4 886,241 3 452,079 1 196,036 1 27,730 - 6,310,765 21 65,387 - 441,009 2 1,315,478 4 39,940 - 1,861,814 6 8,172,579 27 3,000,000 10 6,129,405 21 4,056,853 14 788,877 3 7,541,356 25 12,387,086 42 37,852 - 21,554,343 73 $29,726,922 100	2015
		Amount ％ $3,630,000 12 243,000 1 - 53,973 - 1,178,190 4 901,930 3 747,255 2 202,844 1 31,432 - 6,988,624 23 43,706 - 573,363 2 1,599,692 5 2,216,761 7 9,205,385 30 3,000,000 9 6,129,405 20 3,640,263 12 788,877 2 7,094,172 23 11,523,312 37 1,302,461 4 21,955,178 70 $31,160,563 100

Chief Accountant:

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YULON NISSAN MOTOR COMPANY, LTD. STATEMENTS OF COMPREHENSIVE INCOME DECEMBER 31, 2016 AND 2015

(In Thousands of New Taiwan Dollars, Except Par Value)

2016		2015
Amount	％	Amount	％
	100 - -	$33,155,124 11,646 51,624 33,218,394 27,913,181 5,305,213 3,130,745 399,943 516,723 4,047,411 ( 1,486 ) 1,256,316 3,866,456 219,540 11,333 1,866 ( 301,141 ) ( 36,636 )	100 - - 100 84 16 9 1 2 12 - 4 11 1 - - ( 1) -
	100 86
	14
	8 1 2
	11
	-
	3

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- 22 - 2016 Amount (Loss) gain on disposal of investment, net ($ 19,444) Overseas business expenses ( 13,259 ) Other losses ( 4,222 ) Total non-operating income and expenses 4,361,841 PROFIT BEFORE INCOME TAX 5,586,104 INCOME TAX EXPENSES 955,489 NET PROFIT FOR THE YEAR 4,630,615 OTHER COMPREHENSIVE INCOME Items that will not be Reclassified subsequently to profit or loss: Remeasurement of defined benefit plans ( 20,226 ) Share of the other comprehensive (loss) income of subsidiaries accounted for using equity method ( 64 ) Income tax relating to items that will not be reclassified subsequently to profit or loss 3,449 ( 16,841 ) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations ( 1,264,609 ) Other comprehensive income for the year, net of income tax ( 1,281,450 ) TOTAL COMPREHENSIVE INCOME FOR THE YEAR $ 3,349,165 EARNINGS PER SHARE Basic $ 15.44 Diluted $ 15.43 Chairman: President:	2016		2015
	Amount	％	Amount	％
				- - - 11 15 3 12 - - - - - - 12

YULON NISSAN MOTOR COMPANY, LTD. STATEMENTS OF CHANGES IN EQUITY DECEMBER 31, 2016 AND 2015

BALANCE AT JANUARY 1, 2015 Appropriation of 2014 earnings Legal reserve Cash dividend distributed by the Company - $30 per share Net profit for the year ended December 31, 2015 Other comprehensive income for the year ended December 31, 2015, net of income tax Total comprehensive income for the year ended December 31, 2015 BALANCE AT DECEMBER 31, 2015 Appropriation of 2015 earnings Legal reserve Cash dividend distributed by the Company - $12.5 per share Net profit for the year ended December 31, 2016 Legal reserve Cash dividend distributed by the Company - $12.5 per share Total comprehensive income for the year ended December 31, 2016 BALANCE AT DECEMBER 31, 2016 Chairman:	C apital S toc k $ 3,000,000 - - - - - - 3,000,000 - - - - - - $ 3,000,000 President:	Capital Surplus	Capital Surplus
			$ 6,129,405 - - - - - - 6,129,405 - - - - - - $ 6,129,405

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(In Thousands of New Taiwan Dollars, Except Par Value)

Other E q uit y

			Other Equity
	Retained Earnings	Unappropriated Earnings $ 12,607,444 ( 652,376) ( 9,000,000 ) ( 9,652,376 ) 4,165,901 ( 26,797) 4,139,104 7,094,172 ( 416,590 ) ( 3,750,000 ) ( 4,166,590 ) 4,630,615 ( 16,841 ) 4,613,774 $ 7,541,356	Exchange Differences on Translating Foreign Operations $ 1,416,899 - - - - - ( 114,438) ( 114,438) 1,302,461 - - - - ( 1,264,609 ) ( 1,264,609 ) $ 37,852	Total Equity
Legal Reserve $ 2,987,887 652,376 - 652,376 - - - 3,640,026 416,590 - 416,590 - - - $ 4,056,853	Special Reserve $ 788,877 - - - 788,877 - - - - - - $ 788,877
			( (		$ 26,930,512 - - ( 9,000,000 ) ( 9,000,000 ) 4,165,901 ( 141,253) 4,024,666 21,955,178 - ( 3,750,000 ) ( 3,750,000 ) 4,630,615 ( 1,281,450 ) 3,349,165 $ 21,554,343

Chief Accountant:

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YULON NISSAN MOTOR COMPANY, LTD. STATEMENTS OF CASH FLOW

DECEMBER 31, 2016 AND 2015

(In Thousands of New Taiwan Dollars, Except Par Value) 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax $ 5,586,104 $ 4,999,687 Adjustments for: Depreciation expenses 442,764 431,998 Amortization expenses 4,941 5,557 Gain on financial assets at fair value through profit or loss, net ( 10,103 ) ( 11,333 ) Interest expense 34,726 36,636 Interest income ( 65,702 ) ( 219,540 ) Share of the profit of subsidiary ( 4,536,994 ) ( 3,866,456 ) Loss (gain) on disposal of property, plant and equipment, net ( 14,581) 1,486 Loss (gain) on disposal of investment, net 19,444 ( 1,866 ) Net foreign exchange loss 69,364 359,367 Net changes in operating assets and liabilities Financial assets at fair value through profit or loss ( 792,901 ) ( 1,147,312 ) Notes receivable - 2,000 Notes receivable - related parties 1,965 ( 5,234 ) Trade receivables 30,400 ( 795 ) Trade receivables - related parties ( 43,370 ) ( 259,397 ) Other receivables ( 2,545 ) ( 22,265 ) Inventories 511 ( 281 ) Prepayments 53 ( 6,013 ) Notes payable ( 243,000) 243,000 Notes payable - related parties 1,536 - Trade payables ( 20,006 ) ( 68,271 ) Trade payables - related parties ( 57,363) 469,293 Other payables ( 15,701) 19,507 Other current liabilities ( 3,702) 11,734 Provisions 14,873- ( 11,786) Other non-current liabilities 39,940 - Net defined benefit liabilities ( 152,580 ) ( 4,915 ) Cash generated from operations 288,073 954,801	(In Thousands of New Taiwan Dollars, Except Par Value) 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax $ 5,586,104 $ 4,999,687 Adjustments for: Depreciation expenses 442,764 431,998 Amortization expenses 4,941 5,557 Gain on financial assets at fair value through profit or loss, net ( 10,103 ) ( 11,333 ) Interest expense 34,726 36,636 Interest income ( 65,702 ) ( 219,540 ) Share of the profit of subsidiary ( 4,536,994 ) ( 3,866,456 ) Loss (gain) on disposal of property, plant and equipment, net ( 14,581) 1,486 Loss (gain) on disposal of investment, net 19,444 ( 1,866 ) Net foreign exchange loss 69,364 359,367 Net changes in operating assets and liabilities Financial assets at fair value through profit or loss ( 792,901 ) ( 1,147,312 ) Notes receivable - 2,000 Notes receivable - related parties 1,965 ( 5,234 ) Trade receivables 30,400 ( 795 ) Trade receivables - related parties ( 43,370 ) ( 259,397 ) Other receivables ( 2,545 ) ( 22,265 ) Inventories 511 ( 281 ) Prepayments 53 ( 6,013 ) Notes payable ( 243,000) 243,000 Notes payable - related parties 1,536 - Trade payables ( 20,006 ) ( 68,271 ) Trade payables - related parties ( 57,363) 469,293 Other payables ( 15,701) 19,507 Other current liabilities ( 3,702) 11,734 Provisions 14,873- ( 11,786) Other non-current liabilities 39,940 - Net defined benefit liabilities ( 152,580 ) ( 4,915 ) Cash generated from operations 288,073 954,801	(In Thousands of New Taiwan Dollars, Except Par Value) 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax $ 5,586,104 $ 4,999,687 Adjustments for: Depreciation expenses 442,764 431,998 Amortization expenses 4,941 5,557 Gain on financial assets at fair value through profit or loss, net ( 10,103 ) ( 11,333 ) Interest expense 34,726 36,636 Interest income ( 65,702 ) ( 219,540 ) Share of the profit of subsidiary ( 4,536,994 ) ( 3,866,456 ) Loss (gain) on disposal of property, plant and equipment, net ( 14,581) 1,486 Loss (gain) on disposal of investment, net 19,444 ( 1,866 ) Net foreign exchange loss 69,364 359,367 Net changes in operating assets and liabilities Financial assets at fair value through profit or loss ( 792,901 ) ( 1,147,312 ) Notes receivable - 2,000 Notes receivable - related parties 1,965 ( 5,234 ) Trade receivables 30,400 ( 795 ) Trade receivables - related parties ( 43,370 ) ( 259,397 ) Other receivables ( 2,545 ) ( 22,265 ) Inventories 511 ( 281 ) Prepayments 53 ( 6,013 ) Notes payable ( 243,000) 243,000 Notes payable - related parties 1,536 - Trade payables ( 20,006 ) ( 68,271 ) Trade payables - related parties ( 57,363) 469,293 Other payables ( 15,701) 19,507 Other current liabilities ( 3,702) 11,734 Provisions 14,873- ( 11,786) Other non-current liabilities 39,940 - Net defined benefit liabilities ( 152,580 ) ( 4,915 ) Cash generated from operations 288,073 954,801
	( ( ( ( ( ( ( ( ( ( ( ( (	$ 4,999,687 431,998 5,557 11,333 ) 36,636 219,540 ) 3,866,456 ) 1,486 1,866 ) 359,367 1,147,312 ) 2,000 5,234 ) 795 ) 259,397 ) 22,265 ) 281 ) 6,013 ) 243,000 - 68,271 ) 469,293 19,507 11,734 ( 11,786) - 4,915 ) 954,801

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Interest paid Income tax paid Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Dividends received Interest received Payments for property, plant and equipment (Note 23) Proceeds from disposal of property, plant, and equipment Payments for computer software Decrease in refundable deposits Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends 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	2016 ( $ 34,714 ) ( 867,376 ) ( 614,017 ) 5,549,705 49,405 ( 281,772 ) 22,478 ( 8,018 ) 29,410 5,361,208 ( 3,750,000 ) ( 92,389 ) 904,802 8,363,612 $ 9,268,414	2015
		( $ 36,814 ) ( 1,193,953 ) ( 275,966 ) 8,439,039 242,942 ( 441,433 ) 6,329 ( 7,541 ) 132,614 8,371,950 ( 9,000,000 ) ( 226,330 ) ( 1,130,346 ) 9,493,958 $ 8,363,612

Chairman:

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President: Chief Accountant:

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Yulon Nissan Motor Company, Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Yulon Nissan Motor Company, Ltd. and its subsidiaries (the Group), which comprise the consolidated balance sheets as of December 31, 2016 and 2015, 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, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2016 and 2015, 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

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2016. 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.

Depreciation of Molds and Dies

In the application of IAS 16 “Property, Plant and Equipment”, the depreciable amount of an asset should be allocated on a systematic basis over its useful life. The Group depreciates molds and dies on the basis of unit production method and examines the estimated units sold of each model according to the changes of market semiannually for a basis to calculate amounts allocated to each mold and die. Depreciation of molds and dies in 2016 was $412,271 thousand. The amount of depreciation of molds and dies is

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significant and estimates of units sold are highly dependent on management’s judgment. Therefore, the depreciation of molds and dies is considered to be a key audit matter.

The related accounting policy and critical accounting judgements are disclosed in Notes 4 and 5 to the consolidated financial statements, respectively; the related amounts are disclosed in Notes 11 to the consolidated financial statements.

Moreover, we compared whether there was a significant difference between the amended estimated number of units of future sales used in the consolidated financial statements last year and the actual sales units, so as to evaluate the appropriateness of the management’s estimation.

Provision for Warranty

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the basis of estimate of quarterly warranty expenditure per car and estimated units subject to warranty during the future warranty period. The estimate of quarterly warranty expenditure per car is calculated based on average of actual warranty expense in the past and estimated number of units of cars subject to warranty at the end of every quarter. As of December 31, 2016, the carrying amount of provision for warranty was $136,731 thousand. Due to the management’s use of judgements in estimating the number of units of cars subject to warranty, warranty provision recognized is considered to be a key audit matter.

We obtained from management the information and documents regarding the estimated number of units of cars subject to warranty during warranty period from management, and assessed the rationality and reliability of the supporting information. In addition, we sampled the ledgers of actual warranty expenditure this year to verify original documents and cash flows and we recalculated the amount that should be of provision for warranty according to the warranty policy.

Moreover, we compared whether there was a significant difference between the estimated number of units of cars subject to warranty used in the consolidated financial statements last year and the actual units of cars subject to warranty, so as to evaluate the appropriateness of the management’s estimation.

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

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

by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including independent directors and supervisors, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue

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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.
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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.
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 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

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significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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, 2016 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 partner on the audit resulting in this independent auditors’ report is Wan-I Liao.

Deloitte & Touche Taipei, Taiwan Republic of China

March 27, 201

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YULON NISSAN MOTOR COMPANY, LTD.

CONSOLDATED BALANCE SHEETS DECEMBER 31, 2016 AND 2015

ASSET CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss Notes receivable - related parties Trade receivables Trade receivables - related parties Other receivables Inventories Prepayments Total current assets NON-CURRENT ASSETS Investments accounted for using equity method Property, plant and equipment Computer software Deferred tax assets Other non-current assets Total non-current assets	2016 Amount ％ $ 9,909,754 33 2,275,103 8 4,174 - 40,532 - 538,408 2 57,622 - 2,509 - 15,853 - 12,843,955 43 14,659,211 49 1,703,040 6 17,407 - 128,364 1 387,771 1 16,895,793 57	2015
		Amount ％ $10,136,832 32 1,491,543 5 6,139 - 71,154 - 478,985 2 38,978 - 3,020 - 87,080 - 12,313,731 39 16,353,618 53 1,936,231 6 14,330 - 152,728 1 408,397 1 18,865,304 61

Total $29,739,748 100 $31,179,035 100

Chairman:

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President:

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(In Thousands of New Taiwan Dollars, Except Par Value)

LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings Notes payable Notes payable - related parties Trade payables Trade payables - related parties Other payables Current tax liabilities Provisions Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Provisions Credit balance of investments accounted for using equity method Net defined benefit liabilities Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities EQUITY Capital stock - NT$10 par value; authorized - 600,000 thousand shares; issued and outstanding - 300,000 thousand shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity EQUITY Total	2016 Amount ％ $ 3,630,000 12 - - 1,536 - 33,967 - 1,083,176 4 886,241 3 452,079 1 196,036 1 27,730 - 6,310,765 21 65,387 - 12,826 - 441,009 2 1,315,478 5 39,940 - 1,874,640 7 8,185,405 28 3,000,000 10 6,129,405 20 4,056,853 14 788,877 3 7,541,356 25 12,387,086 42 37,852 - 21,554,343 72 $29,739,748 100	2015
		Amount ％ $ 3,630,000 12 243,000 1 - - 53,973 - 1,178,190 4 901,930 3 747,255 2 202,844 1 32,507 - 6,989,699 23 43,706 - 17,397 - 573,363 2 1,599,692 5 - - 2,234,158 7 9,223,857 30 3,000,000 9 6,129,405 20 3,640,263 12 788,877 2 7,094,172 23 11,523,312 37 1,302,461 4 21,955,178 70 $31,179,035 100

Chief Accountant:

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YULON NISSAN MOTOR COMPANY, LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

DECEMBER 31, 2016 AND 2015

(In Thousands of New Taiwan Dollars, Except Par Value)

OPERATING REVENUE Sales Service revenue Other operating revenue Total operating revenue OPERATING COSTS Cost of goods sold GROSS PROFIT OPERATING EXPENSES Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses OTHER OPERATING INCOME AND EXPENSES PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Share of profit of associates Interest income Gain on financial assets at fair value through profit or loss, net Other revenue Net foreign exchange loss Interest expenses (Loss) gain on disposal of investment, net Overseas business expenses Other losses Total non-operating income and expenses	2016	％ 100 - - 100 84 14 8 1 2 11 - 3 14 1 - - ( 2) - - - 13	2015
	- 37 - Amount $ 34,792,566 6,173 61,707 34,860,446 29,813,797 5,046,649 2,938,452 395,067 525,674 3,859,193 14,581 1,202,037 4,904,037 140,726 10,103 1,541 ( 600,689 ) ( 34,726 ) ( 19,444) ( 13,259 ) ( 4,222 ) 4,384,067		Amount $ 33,155,124 11,646 51,624 33,218,394 27,913,181 5,305,213 3,130,745 421,443 516,723 4,068,911 ( 1,486 ) 1,234,816 4,263,739 344,492 11,333 1,871 ( 801,876 ) ( 36,636 ) 1,866 ( 14,710 ) ( 5,208 ) 3,764,871	％
				100 - - 100 84 16 9 1 2 12 - 4 13 1 - - ( 3) - - - 11

- 38 - 2016 Amount PROFIT BEFORE INCOME TAX $ 5,586,104 INCOME TAX EXPENSES 955,489 NET PROFIT FOR THE YEAR 4,630,615 OTHER COMPREHENSIVE INCOME Items that will not be Reclassified subsequently to profit or loss: Remeasurement of defined benefit plans ( 20,226 ) Share of the other comprehensive (loss) income of subsidiaries accounted for using equity method ( 64) Income tax relating to items that will not be reclassified subsequently to profit or loss 3,449 ( 16,841 ) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations ( 1,264,609 ) Other comprehensive income for the year, net of income tax ( 1,281,450 ) TOTAL COMPREHENSIVE INCOME FOR THE YEAR $ 3,349,165 NET PROFIT ATTRIBUTABLE TO Owner of the Company $ 4,630,615 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO Owner of the Company $ 3,349,165 EARNINGS PER SHARE Basic $ 15.44 Diluted $ 15.43 Chairman: President:	2016	％ 16 3 13 - - - - ( 3) ( 3) 10 13 10 Chief	2015
	Amount		Amount	％
			$ 4,999,687 833,786 4,165,901 ( 31,951 ) ( 334 ) 5,488 ( 26,797 ) ( 114,438 ) ( 141,235 ) $ 4,024,666 $ 4,165,901 $ 4,024,666 $ 13.89 $ 13.88 Accountant:		15 3 12 - - - - - - 12 13 12

YULON NISSAN MOTOR COMPANY, LTD. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY DECEMBER 31, 2016 AND 2015

BALANCE AT JANUARY 1, 2015 Appropriation of 2014 earnings Legal reserve Cash dividend distributed by the Company - $30 per share Net profit for the year ended December 31, 2015 Other comprehensive income for the year ended December 31, 2015, net of income tax Total comprehensive income for the year ended December 31, 2015 BALANCE AT DECEMBER 31, 2015 Net profit for the year ended December 31, 2016 Legal reserve Cash dividend distributed by the Company - $12.5 per share Net profit for the year ended December 31, 2016 Other comprehensive incomefor the year ended December 31, 2016,net of income tax Total comprehensive income for the year ended December 31,2016. BALANCE AT DECEMBER 31, 2016	C apital S toc k $ 3,000,000 - - - - - - 3,000,000 - - - - - - $ 3,000,000	Capital Surplus	Capital Surplus
			$ 6,129,405 - - - - - - 6,129,405 - - - - - - $ 6,129,405

Chairman:

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President:

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(In Thousands of New Taiwan Dollars, Except Par Value)

R	etained Earnings	Unappropriated Earnings $ 12,607,444 ( 652,376 ) ( 9,000,000 ) ( 9,652,376 ) 4,165,901 ( 26,797) 4,139,104 7,094,172 ( 416,590 ) ( 3,750,000 ) ( 4,166,590 ) 4,630,615 ( 16,841 ) 4,613,774 $ 7,541,356	Other Equity Exchange Differences Foreign Operations $ 1,416,899 - - - - ( 114,438) ( 114,438) 1,302,461 - - - - ( 1,264,609 ) ( 1,264,609 ) $ 37,852	Total Equity	Total Equity
Legal Reserve $ 2,987,887 652,376 - 652,376 - - - 3,640,263 416,590 - 416,590 - - - $ 4,056,853	Special Reserve $ 788,877 - - - - - - 788,877 - - - - - - $ 788,877
		( ( ( ( ( ( ( (			$ 26,930,512 - ( 9,000,000 ) ( 9,000,000 ) 4,165,901 ( 141,235) 4,024,666 21,955,178 - ( 3,750,000 ) ( 3,750,000 ) 4,630,615 ( 1,281,450 ) 3,349,165 $ 21,554,343

Chief Accountant:

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YULON NISSAN MOTOR COMPANY, LTD. CONSOLIDATED STATEMENTS OF CASH FLOW DECEMBER 31, 2016 AND 2015

(In Thousands of New Taiwan Dollars, Except Par Value)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Gain on financial assets at fair value through profit or loss, net Interest expense Interest income Share of the profit of subsidiary Loss (gain) on disposal of property, plant and equipment, net Loss (gain) on disposal of investment, net Net foreign exchange loss Net changes in operating assets and liabilities Financial assets at fair value through profit or loss Notes receivable Notes receivable - related parties Trade receivables Trade receivables - related parties Other receivables Inventories Prepayments Notes payable Notes payable - related parties Trade payables Trade payables - related parties Other payables Other current liabilities Provisions	2016 $ 5,586,104 442,764 4,941 ( 10,103 ) 34,726 ( 140,726 ) ( 4,904,037 ) ( 14,581 ) 19,444 522,564 ( 792,901 ) - 1,965 30,622 ( 41,556 ) ( 2,545 ) 511 53 ( 243,000) 1,536 ( 20,006 ) ( 57,363 ) ( 15,701 ) ( 4,777 ) 14,873	2015
		$ 4,999,687 431,998 5,557 ( 11,333 ) 36,636 ( 344,492 ) ( 4,263,739 ) 1,486 ( 1,866 ) 519,993 ( 1,147,312 ) 2,000 ( 5,234 ) ( 936 ) ( 258,852 ) ( 22,265 ) ( 281 ) ( 6,013 ) 243,000 - ( 68,271 ) 469,293 19,507 12,809 ( 11,786 )

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			2016		2015
Other non-current liabilities			39,940		-
Net defined benefit liabilities	(		152,580	) (	4,915	)
Cash generated from operations			300,167		594,671
Interest paid	(		34,714	) (	36,814	)
Income tax paid	(		1,379,706	) (	1,713,142	)
Net cash used in operating activities	(		1,114,253	) (	1,155,285	)
CASH FLOWS FROM INVESTING
ACTIVITIES
Dividends received			5,123,304		5,284,851
Interest received			124,627		423,931
Payments for property, plant and
equipment (Note 23)	(		281,772	) (	441,433	)
Proceeds from disposal of property,
plant, and equipment			22,478		6,329
Payments for computer software	(		8,018	) (	7,541	)
Decrease in other financial assets			-		2,198,866
Decrease in refundable deposits			29,410		132,614
Net cash generated from
investing activities			5,010,029		7,597,617
CASH FLOWS FROM FINANCING
ACTIVITIES
Cash dividends	(		3,750,000	) (	9,000,000	)
EFFECTS OF EXCHANGE RATE CHANGES
ON THE BALANCE OF CASH HELD IN
FOREIGN CURRENCIES	(		372,854	) (	137,365	)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS	(		227,078	) (	2,695,033	)
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR			10,136,832		12,831,865
CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR		$	9,909,754		$ 10,136,832
Chairman: President:			Chief Accountant:

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Proposal 2: Recognition of 2016 Earnings Distribution.

(Proposed by the Board of Directors.)

Description ：

Based on the audited 2016 financial statement,

YNM presents 2016 earnings distribution statement as page 44 .

According to earnings distribution statement, YNM proposes to distribute cash dividend of NT$22 per share.
Request to resolve.

Resolved:

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YULON NISSAN MOTOR CO., LTD.

2016 Earnings Distribution Statement

Unit: NT dollar

		Unit: NT dollar
Item	Sub-total	Total
Beginning retained earnings		2,927,582,300
Less: Adjustment arising from investments accounted for using equitymethod		(53,061)
Less: Remeasurement of defined benefit plans		(16,787,756)
2016 Adjusted undistributed earnings (excluded net income)		2,910,741,483
2016 Net income after tax	4,630,614,452
Less`：`Legal reserves	(463,061,445)
Less`：`Distribution of shareholders dividends (Cash dividends $22 per share)	(6,600,000,000)	(2,432,446,993)
Ending Undistributed Earnings		478,294,490

Chairman:

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President: Chief Accountant:

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Discussions Items

Proposal 1: Amendment to Articles of Incorporation.

Please discuss.

(Proposed by the Board of Directors.)

Explanation:

1.In accordance with the Article 14-4 of Securities

Exchange Act and an order by the Financial Supervisory of Commission (R.O.C.) Taiwan concerning establishment of an audit committee, the Company proposes to amend the Article of Incorporation therefore. Please refer to the comparison table as attached hereto (from page 46 to page 49).

Request to resolve.

Resolution:

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Comparison Table for the “Articles of Incorporation”

After the revision	Before The revision	Before The revision	Description
Article 13 The duties and power of shareholders’ meetings are as follows: 1.To modify the articles of incorporation. 2.To elect and discharge directors. 3.To verify annual financial statements. 4.To resolve the increase or reduction of total capital. 5.To resolve proposals of earnings distribution or loss appropriation. 6.To resolve the remuneration to Directors. 7.To resolve the dissolution, acquisition or disposal through merger, or spin-off of the Company. 8.Other duties and power that are authorized by the Company Act or other Laws.	Article 13 The duties and power of shareholders’ meetings are as follows: 1.To modify the articles of incorporation. 2.To elect and discharge Directors and supervisors. 3.To verify annual financial statements. 4.To resolve the increase or reduction of total capital. 5.To resolve proposals of earnings distribution or loss appropriation. 6.To resolve the remuneration to Directors and supervisors. 7.To resolve the dissolution, acquisition or disposal through merger, or spin-off of the Company. 8.Other duties and power that are authorized by the CompanyAct or other Laws.		To delete the requirement about supervisors to be in line with the establishment of Audit Committee in lieu of supervisors.
Chapter 4 Directors,Functional Committee ,and Managers	Chapter 4 Directors, Managers	Supervisors ,and	To amend the heading of this chapter to be in line with the establishment of Audit Committee.
Article 20 The Company is with five to eleven (5~11 )directors, candidates nomination system is adopted for election of the directors, the shareholders shall elect the directors from among the nominees listed in the roster of director candidates in the shareholders’ meeting, for a 3-year term and maybe	Article 20 The Company is with five to ten (5~10 ) directorsand one to three (1~3) supervisors , candidates nomination system is adopted for election of the directorsand supervisors ,the shareholders shall elect the directorsand supervisors from among the nominees listed in the roster		To delete the requirement about supervisors and amend the seats of the independent directors to be in line with the establishment of Audit Committee in lieu of supervisors.

46 -

After the revision	Before	The revision	Description
re-elected. The proportion of total shares owned by all directors shall be in accordance with the regulations specified by the security authority. Among the Company’s aforementioned directors,at least three are independent directors who shall be elected by adopting candidate nomination system from the candidate list of independent director in the shareholders’ meeting. The professional qualification, shares, restrictions of holding two positions, nomination and election method and other conditions of the independent directors to be complied, shall be in accordance with the relevant regulations of the security authority.	of directorand supervisor candidates in the shareholders’ meeting, for a 3-year term and may be re-elected. The proportion of total shares owned by all directorsand supervisors shall be in accordance with the regulations specified by the security authority. Among the Company’s aforementioned directors, two are independent directors who shall be elected by adopting candidate nomination system from the candidate list of independent director in the shareholders’ meeting. The professional qualification, shares, restrictions of holding two positions, nomination and election method and other conditions of the independent directors to be complied, shall be in accordance with the relevant regulations of the security authority.
Article 24 Meetings of the Board of Directors shall be convened with a notice to all Directors, at least seven days prior to the meetings by specifying the meeting’s agenda. In case of urgent circumstances, meetings can be convened at any time. The notice of convention of board meetings may be delivered to the directors in writing or by e-mail or fax.	Article 24 Meetings of the Board of Directors shall be convened with a notice to all Directors and Supervisors ,at least seven days prior to the meetings by specifying the meeting’s agenda. In case of urgent circumstances, meetings can be convened at any time.		To delete the requirement about supervisors to be in line with the establishment of Audit Committee in lieu of supervisors; supplement the notification method of convention of a board meeting.

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After the revision	Before The revision	Description
Article 26 The Board of Directors may establish various functional committees. The functional committees shall define their own articles of association and enforce the same upon approval	Article 26 The job responsibilities of the	To delete the requirement about supervisors to be in line with the establishment of Audit Committeein lieu of supervisors; add the establishment of the functional committees.
	supervisors are as follows: 1.To review the financial statement reports submitted by the Board of Directors to the shareholders’meetings. 2.To review budget and financial status. 3.To supervise and investigate
of the Board of Directors.
	the Company’s business operations. 4.Other Job responsibilities according to the Company Act.
Article 27 The Company establishes the Audit Committee consisting of the whole independent directors pursuant to the Securities and Exchange Act. The functions and other compliance affairs of the Audit Committee shall be in accordance with to the Securities and Exchange Act and	Article 27 The supervisor shall attend the meetings of the Board of Directors to express opinions without voting right.	To delete the original provision and add the requirement about Audit Committee in lieu of supervisors.
other related laws and regulations.
Article 30 The Company’s fiscal year shall be from January 1 st to December 31 st . After the close of each fiscal year, financial settlement shall be processed. The Board of Directors shall prepare the following financial statement reports in accordance with the Company Act and submit to the shareholders’ meetings for acceptance:	Article 30 The Company’s fiscal year shall be from January 1 st to December 31 st . After the close of each fiscal year, financial settlement shall be processed. The Board of Directors shall prepare the following financial statement reports in accordance with the Company Act and delivered to thesupervisors for review thirty (30) days prior to the shareholders’	To delete the requirement about supervisors to be in line with the establishment of Audit Committee in lieu of supervisors;.

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After the revision	Before The revision	Description
1.Business reports 2.Financial statements 3.Proposals of earnings distribution or loss appropriation	meeting; the supervisors shall prepare the review reports to be submitted in the shareholders’ meetings for acceptance: 1.Business reports 2.Financial statements 3.Proposals of earnings distribution or loss appropriation
Article 32 The Company’s directors shall receive remuneration (including travel expenses) of 100,000 New Taiwan Dollars monthly. The Board of Directors are authorized to determine the remuneration of the Chairman of the Board of Directors, based on the level of participation in the Company’s operation and contribution without exceeding the highest salary standard decided by the Company. Such remuneration shall be paid regardless of whether the Company business generates profits or experiences loss.	Article 32 The Company’s directorsand supervisors shall receive remuneration (including travel expenses) of 100,000 New Taiwan Dollars monthly. The Board of Directors are authorized to determine the remuneration of the Chairman of the Board of Directors, based on the level of participation in the Company’s operation and contribution without exceeding the highest salary standard decided by the Company. Such remuneration shall be paid regardless of whether the Company business generates profits or experiences loss.	To delete the requirement about supervisors to be in line with the establishment of Audit Committee in lieu of supervisors.
Article 35 The Articles were formulated on June 30 th , 2003;….; and the eleventh amendmentwas made on June 30 th , 2016;the twelfth amendment is made on June 26 th , 2017 and shall be applicable as of the director election of 7th term.	Article 35 The Articles were formulated on June 30 th , 2003;….;and the eleventh amendmentis made on June 30 th , 2016..	Specify the dates of amendments and expressly define the date when the amendment shall be enforced.

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Proposal 2: Amendment to” Rules of Directors and

Supervisors Election”. Please proceed to discuss.

(Proposed by the Board of Directors.)

Explanation:

In accordance with the Article 14-4 of Securities Exchange Act and related regulations, the Company is planning to establish the Audit Committee starting from 2018 in replacement of the previous supervisor system. The “Election of Directors and Supervisors Procedures” shall be amended accordingly to conform to the compliance of relevant business operations. Please refer to the comparison table as attached hereto (from page 51 to page 53).
Request to resolve.

Resolution:

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Comparison Table for the “ Rules of Directors and Supervisors

Election”

	Election”
After the revision	Before The revision	Description
Name Yulon Nissan Motor Co., Ltd. Rules for the Election of Directors	Name Yulon Nissan Motor Co., Ltd. Rules for the Election of Directorsand Supervisors	To delete the requirement about supervisors to be in line with the establishment of Audit Committee
Article 1 The election of the Company’s directors, unless otherwise provided by the law and regulations and the Company’s Article of Incorporation, is to be processed in accordance with the “Rules for the Election of Directors.”	Article 1 The election of the Company’s directorsand supervisors, unless otherwise provided by the law and regulations and the Company’s Article of Incorporation, is to be processed in accordance with the “Rules for the Election of Directors and Supervisors. ”	To delete the requirement about supervisors to be in line with the establishment of Audit Committee
Article 2 For the Company’s election of directors is handled in accordance with the ballot cumulative suffrage system and each stock share contains the suffrage equivalent to the number of directors to be elected, which can be casted to one or more than one candidate.	Article 2 For the Company’s election of directorsand supervisors is handled in accordance with the ballot cumulative suffrage system and each stock share contains the suffrage equivalent to the number of directorsand supervisors to be elected, which can be casted to one or more than one candidate.	To delete the requirement about supervisors to be in line with the establishment of Audit Committee
Article 3 The board of directors is to have the ballots printed, which should be equivalent to the number of directors. The ballots should be prepared with the votes of suffrage noted before distributing to the shareholders at the meeting.	Article 3 The board of directors is to have the ballots printed, which should be equivalent to the number of directorsand supervisors .The ballots should be prepared with the votes of suffrage noted before distributing to the shareholders at the meeting.	To delete the requirement about supervisors to be in line with the establishment of Audit Committee

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After the revision	Before The revision	Description
Article 5 The board of directors is to have the ballot boxes prepared for the election of directors ; also, the ballot boxes should be inspected publicly by the ballot inspectors.	Article 5 The board of directors is to have the ballot boxes prepared for the election of directorsand supervisors ;also, the ballot boxes should be inspected publicly by the ballot inspectors..	To delete the requirement about supervisors to be in line with the establishment of Audit Committee
Article 8 The Company’s directors are elected from the competent individuals in the shareholder’s meeting as independent directors and non-independent directors in that order in accordance with the number of chairs designated in the Articles of Incorporation and the electoral votes from top down. If there are two or more candidates received the same votes of suffrage, resulting more candidates elected than the number of chairs designated, the candidates who received the same votes of suffrage are to take a draw for a solution; also, the Chairman is to take a draw on behalf of the absentees. The elected director who is found with false personal information presented or non-complying with the	Article 8 The Company’s directorsand supervisors are elected from the competent individuals in the shareholder’s meeting as independent directors and non-independent directors in that order in accordance with the number of chairs designated in the Articles of Incorporation and the electoral votes from top down. If there are two or more candidates received the same votes of suffrage, resulting more candidates elected than the number of chairs designated, the candidates who received the same votes of suffrage are to take a draw for a solution; also, the Chairman is to take a draw on behalf of the absentees. The individual who has been elected as a director and supervisor at the same time may determine discretionally to	To delete the requirement about supervisors to be in line with the establishment of Audit Committee
	assume either one of the positions but not both. The elected directoror supervisor who is found with false personal information presented or non-complying with the governing law and regulations will be dismissed

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After the revision	Before The revision	Description
governing law and regulations will be dismissed and with the vacancy filled by the un-elected candidate who has received the highest votes in the original election.	and with the vacancy filled by the un-elected candidate who has received the highest votes in the original election.
Article 9 Ballot inspectors are to monitor the count of the votes casted upon the completion of the voting process and then the Chairman is to announce the name of the elected directors publicly.	Article 9 Ballot inspectors are to monitor the count of the votes casted upon the completion of the voting process and then the Chairman is to announce the name of the elected directors and supervisors publicly.	To delete the requirement about supervisors to be in line with the establishment of Audit Committee
Article 10 The Company is to issue a certificate of election to each elected director.	Article 10 The Company is to issue a certificate of election to each elected directorand supervisor.	To delete the requirement about supervisors to be in line with the establishment of Audit Committee

Article 11: The matters that are not addressed in the “Rules for the Election of Directors ” should be processed in accordance with the Company Law, Articles of Incorporation, and the related regulations.	Article 11: The matters that are not addressed in the “Rules for the Election of Directors and Supervisors ” should be processed in accordance with the Company Law, Articles of Incorporation, and the related regulations.	To delete the requirement about supervisors to be in line with the establishment of Audit Committee
Article 12 The “Rules for the Election of Directors” is in effect after it is passed in the shareholders’ meeting, same for the amendments made. The Rules were developed on March 30, 2004, 1st revised on June 22, 2007, 2nd revised on June 26, 2017 and shall be applicable as of the director election of 7th term .	Article 12 The “Rules for the Election of Directors and Supervisors ” is in effect after it is passed in the shareholders’ meeting, same for the amendments made.	To delete the requirement about supervisors to be in line with the establishment of Audit Committee: and add the date of revision.

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Proposal 3: Amendment to “ Operational Procedures for Acquisition and Disposal of Assets “. Please proceed to discuss.

(Proposed by the Board of Directors.)

Explanation:

For complying with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies, the Company proposes to amend “ Operational Procedures for Acquisition and Disposal of Assets “. Please refer to the comparison table as attached hereto (from page 55 to page 57).
Request to resolve.

Resolution:

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Comparison Table for the” Operational Procedures for

Acquisition and Disposal of Assets”

After the revision	Before The revision	Description
Article 8 The company, unless transacting with a governmentorganization. engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, (Omit)	Article 8 The company, unless transacting with a governmentagency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, (Omit)	According the Act. change to amend wordings
Article 10 The company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a governmentorganization, (Omit)	Article 10 The company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a governmentagency , (Omit)	According the Act. change to amend wordings
Article 13 The company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription orbuy of domestic money market fundswhich issue by securities investment trust enterprises , (Omit)	Article 13 The company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription orredemption of domestic money market funds, (Omit)	According securities investment trust and consulting Act, money market funds means issue by securities investment trust enterprises and have the permission by Financial Supervisory Commission ROC.

55 -

After the revision	Before The revision	Description
Article 17 The company that conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit it to the board of directors for deliberation and passage. The company do not need to engage a CPA, attorney, or securities underwriter to give an	Article 17 The company that conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit it to the board of directors for deliberation and passage.	The situation which like exchange shares or distribute dividends will not suppose to happen when company group holding total share with each other.
opinion on the reasonableness of the merger when merger its directly or indirectly holding total share equity subordinate company, or when its directly or
indirectly holding total share equity subordinate companies merger each other.
Article 25, Paragraph 1, Subparagraph 1&4 Subparagraph 1: The company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription orbuy of	Article 25, Paragraph 1, Subparagraph 1&4 Subparagraph 1: The company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription orredemption	According securities investment trust and consulting Act, money market funds means issue by securities investment trust enterprises and have the permission by Financial Supervisory Commission ROC.

56 -

After the revision	Before The revision	Description
domestic money market fundswhich issue by securities investment trust enterprises . Subparagraph 4: Where an asset transaction other than any of those referred to in the preceding three items,...(omit) , this shall not apply to the following circumstances: (1)Trading of government bonds. (2) Government bonds or bonds under repurchase and resale agreements, or subscription or buy of domestic money market fundswhich issue by securities investment trust enterprises. (Omit)	of domestic money market funds. Subparagraph 4: Where an asset transaction other than any of those referred to in the preceding three items,...(omit) , this shall not apply to the following circumstances: (1)Trading of government bonds. (2) Government bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds. (Omit)
Article 25 Should there be any mistake or missing in the Company’s required public announcements, the Company needs to repeat its public announcement on all itemswithin 2 days . (Omit)	Article 25 Should there be any mistake or missing in the Company’s required public announcements, the Company needs to repeat its public announcement on all items. (Omit)	To make the deadline of the mistake or missing announcement.
Article 30 The Articles were formulated on March 30, 2004;….; the six amendment was made on June 30 , 2016; andthe seven amendment is made on June 26 ,	Article 30 The Articles were formulated on March 30, 2004;….; and the six amendment was made on June 30 , 2016	Specify the dates of amendments.
2017.

57 -

Elections Items

By-Election of the Supervisor

(Proposed by the Board of Directors.)

Explanation:

Mr. Toru Nakano resigned from his supervisors’ duty and it become effective on 25th of June. So the company hold a by-election of the supervisor. The term of tenure will be effective from the election date until June 29th, 2018.
According to Article 20 of the Articles of Incorporation, the by-election of the supervisor shall adopt candidate nomination system. The candidate nomination list has been reviewed by the Board of Directors with qualification on May 12, 2017, which education, experience and other information can be referred to from page 59.
Please proceed with the election.

Election results:

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Director Candidates List:


	Supervisor Candidate
Name	Takahiko Ikushima
Education	Rikkyo University, Faculty of economics
Current Position	Budget and Accounting Department, Financial Management Group, Nissan Motor Co. Ltd., General Manager
Stocks	0 unit

59 -

Extraordinary Motions

Closure of the Meeting

60 -

Appendix 1:

Articles of Incorporation of YULON NISSAN MOTOR CO., LTD.

Chapter 1 General Provisions

Article 1 The Company is incorporated in accordance with “Company Limited by Shares” of Company Act and named as “Yulon Nissan Motor Co., Ltd.”

Article 2 The scope of business of the Corporation shall be as follows:

I501010 Product design business.
CD01030 Automotive and parts manufacturing business.
F114010 Automotive wholesale business.
F214010 Automotive retail business.
CQ01010 Mold manufacturing business.
F106030 Mold wholesale business.
F206030 Mold retail business.
F114030 Automotive and motorcycle parts and accessories wholesale business.
F214030 Automotive and motorcycle parts and accessories retail business.
JA01010 Automotive repair business.
JA01990 Other automotive service business (vehicle decoration).
JA01020 Automotive towing business.
F401010 International trade business.
E701030 Installation engineering of telecommunication control and radio equipment business.
I103010 Enterprise management consulting business.
I401010 General advertising service business.
F113070 Telecommunication equipment wholesale business.
F213060 Telecommunication equipment retail business.
ZZ99999 Other than permitted business, business not prohibited or restricted by Laws.
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Article 3 In order to achieve the goal of diversification, the Company’s reinvestment to other companies may exceed forty percent of the Company’s paid-up capital. Article 4 The Company may make guarantee for business necessity. Article 5 The Company's headquarters is located in Miaoli County and the Company may establish branches in the appropriate domestic and abroad locations. Article 6 Public announcements of the Company shall be advertised at visual areas of the daily newspapers published in the region where the Company’s headquarters resides, unless otherwise specified in the Company Act and other relevant rules and regulations. Chapter 2 Shares

Article 7 The total capital stock of the Company shall be in the amount of 6,000,000,000 New Taiwan Dollars, divided into 600,000,000 shares, at ten New Taiwan Dollars each, and may be paid-up in installments. The first installment of 300,000,000 shares was issued upon the establishment of the Company, a total of 3,000,000,000 New Taiwan Dollars. Article 8 The Company’s share certificates shall be numbered, signed by or sealed with stamps of more than three Directors, and certified in accordance with laws before the share certificates are issued. The Company may issue shares without printing share certificate(s) and shall register with the Centralized securities depository enterprises. Article 9 Registration for transfer of shares shall be suspended sixty (60) days immediately before the date of regular meeting of shareholders, and thirty (30) days immediately before the date of any special meeting of shareholders, or within five (5) days before the day on which dividend bonus or any other benefit is scheduled to be paid by the Company. Article 10 All other stocks related operations should follow the “Regulations Governing the Administration of Shareholder Services of Public Companies” and related laws and regulations.

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Chapter 3 Shareholders’ Meetings

Article 11 Shareholders’ meetings of the Company are of the following two types:

Shareholders’ regular meetings: Regular meetings shall be convened, by the Board of Directors, at least once per year and within six (6) months after the close of each fiscal year.
Shareholders’ special meetings: Special meetings shall be convened in accordance with the Company Act when required.

Article 12 Written notices of date, time, location and purpose of convening shareholders’ meetings shall be sent to all shareholders, at least thirty (30) days in advance for regular meetings; and at least fifteen (15) days in advance for special meetings.

Article 13 The duties and power of shareholders’ meetings are as follows:
To modify the articles of incorporation.
To elect and discharge Directors and supervisors.
To verify annual financial statements.
To resolve the increase or reduction of total capital.
To resolve proposals of earnings distribution or loss appropriation.
To resolve the remuneration to Directors and supervisors.
To resolve the dissolution, acquisition or disposal through merger, or spin-off of the Company.
Other duties and power that are authorized by the Company Act or other Laws.
Article 14 Resolutions at a shareholders’ meeting shall, unless otherwise provided for in the Company Act, be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares.

Article 15 Shareholder’s voting power, unless otherwise specified in the Company Act, is deemed one vote for each share. Article 16 In case a shareholder is unable to attend the shareholders’ meeting, he or she may issue the proxy, printed by the Company and stamped with the Company’s seal and stating the scope of power, to commission an agent to

63 -

		attend the shareholders’ meeting. Except the security
		agents and securities investment trust enterprises
		approved by the security authority, the proxy voting of the
		aforementioned agents commissioned by two or more
		shareholders shall not exceed three (3) percent of the
		total voting right issued and the voting right beyond the
		said 3% threshold will be disregarded.
		One shareholder is limited to issue one proxy and
		commission one agent
		only. The proxy shall be submitted to the Company five (5)
		days prior to the shareholders’ meeting.
Article	17	The shareholders’ meeting, convened by the Board of
		Directors, shall be presided over by the chairman of the
		Board of Directors. When the chairman of the Board of
		Directors asks for leave or unable to fulfill the
		responsibility for reasons, his agent shall be appointed in
		accordance with item 3, Article 208 of the Company Act.
		When the shareholders’ meeting is convened by the
		authorized convener other than the chairman of the Board
		of Directors, the authorized convener shall preside over
		the meeting. In case of two or more authorized conveners,
		one of the authorized conveners is elected to act on the
		Chairman's behalf.
		The resolution of the shareholders’ meeting shall be
		executed in accordance with the Rules of Procedure for
		shareholders' meeting.
Article	18	The resolutions of the shareholders’ meeting shall be
		recorded in the minutes, and such minutes shall be signed
		by or sealed with the stamp of the chairman of the
		meeting. Such minutes, together with the attendance list
		and proxies, shall be filed and kept at the Company.
		The minutes shall record the year, month, day, location,
		name of the chairman, resolution method, outlines and
		conclusions of the meeting, and shall be kept permanently
		during the existence of the company. The attendance list
		and proxies shall be kept at least for one year, unless
		otherwise specified in the Company Act.
Article	19	If the Company’s shareholder is only one juristic person
		shareholder, the duties and power of shareholders’
		meetings shall be executed by the Board of Directors and
		the rules of the shareholders’ meeting shall not be

64 -

applied.

Chapter 4 Directors, Supervisors, and Managers

Article 20 The Company is with five to ten (5~10) directors and one to three (1~3) supervisors candidates nomination system is adopted for election of the directors and supervisors, the shareholders shall elect the directors and supervisors from among the nominees listed in the roster of director and supervisor candidates in the shareholders’ meeting, for a 3-year term and may be re-elected. The proportion of total shares owned by all directors and supervisors shall be in accordance with the regulations specified by the security authority. Among the Company’s aforementioned directors, two are independent directors who shall be elected by adopting candidate nomination system from the candidate list of independent director in the shareholders’ meeting. The professional qualification, shares, restrictions of holding two positions, nomination and election method and other conditions of the independent directors to be complied, shall be in accordance with the relevant regulations of the security authority.

Article 21 The Board of Directors is composed of directors, with job responsibilities as follows:

To compose business planning reports.
To submit proposals of earnings distribution or loss appropriation.
To submit the increase or reduction of total capital.
To prepare important regulations and compose contracts.
To recruit and discharge the general manager, vice general manager and associate manager of the Company.
To approve the Company’s reinvestment in other business.
To establish and dissolve the branch offices.
To compile the budget and settlement.
To recruit and discharge the certified accountants and chief accountant.
To approve, within the limits of the authorized capital,
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the amount of shares for shareholders to the Company’s monetary credit, technology, or commercial goodwill.

To approve, within the limits of the authorized capital, the Company to issue new shares to exchange shares of other companies.
To resolve the issuance of employee stock options.
To resolve the purchase of Company’s shares to transfer to employees.
To resolve the application for public offer to the Securities regulatory authorities.
Other duties or responsibilities according to the Company Act or the resolution of the shareholders’ meetings.

Execution of the Company’s business shall be governed by the Board of Directors, unless otherwise those specified by the Company Act or the resolution of the shareholders’ meetings according to the Article of Incorporation. Article 22 The Directors shall elect from among themselves a Chairman of the Board of Directors, and may elect a Vice Chairman of the Board of Directors among themselves based on the actual need, by a majority in a meeting attended by over two-thirds of the Directors. The Chairman of the Board of Directors shall have the authority to represent the Corporation. When the chairman of the Board of Directors asks for leave or unable to fulfill the responsibility for reasons, his agent shall be appointed in accordance with item 3, Article 208 of the Company Act. Article 23 Meetings of the Board of Directors shall be called and convened by the Chairman of the Board of Directors, unless otherwise specified by the Company Act and shall be agreed upon by a majority in a meeting attended by a majority of Directors. Article 24 Meetings of the Board of Directors shall be convened with a notice to all Directors and Supervisors, at least seven days prior to the meetings by specifying the meeting’s agenda. In case of urgent circumstances, meetings can be convened at any time. Article 25 When a Director is unable to attend the meeting in person, the Director may appoint another Director on his behalf to

66 -

attend any meeting of the Board of Directors in accordance with Laws, but no Director may act as proxy for more than one other Director.

Directors who reside abroad may, by written authorization, appoint other shareholders to attend on their behalf any meeting of the Board of Directors regularly, but the aforementioned agent shall register with the authority to be effective, so do the change of agents.

Article 26 The job responsibilities of the supervisors are as follows:

To review the financial statement reports submitted by the Board of Directors to the shareholders’ meetings.
To review budget and financial status.
To supervise and investigate the Company’s business operations.
Other Job responsibilities according to the Company Act.

Article 27 The supervisor shall attend the meetings of the Board of Directors to express opinions without voting right.

Article 28 The Company shall employ one general manager, agreed by a majority in a meeting of the Board of Directors attended by majority of the Directors. The general manager shall operate the Company’s business in accordance with the resolutions of the shareholders’ meetings or meetings of the Board of the Directors and, within the scope authorized by the Article of Incorporation or contract, has the authority to manage business and sign on behalf of the Company.

Article 29 The Company shall employ several vice general managers and several associate managers, proposed by the Chairman of the Board of Directors and agreed by a majority in a meeting of the Board of Directors attended by majority of the Directors. Vice general managers and associate managers shall assist the general manager on the Company’s business.

Chapter 5 Accounting

Article 30 The Company’s fiscal year shall be from January 1[st] to December 31[st] . After the close of each fiscal year, financial settlement shall be processed. The Board of Directors shall

67 -

prepare the following financial statement reports in accordance with the Company Act and delivered to the supervisors for review thirty (30) days prior to the shareholders’ meeting; the supervisors shall prepare the review reports to be submitted in the shareholders’ meetings for acceptance:

Business reports
Financial statements
Proposals of earnings distribution or loss appropriation

Article 31 If the Company has profits for the current year, it shall be distributed not less than 0.1% as employees' compensation. The employees' compensation to be resolved in the form of shares or in cash, is agreed upon by a resolution of the Board of Directors and shall be submitted to the shareholders' meeting. However, if the Company has the accumulated losses, the profits must be reserved in advance to offset such losses. Then according to the ratio mentioned in preceding paragraph, to be reserved for such employees' compensation.

For the Company’s net income at the end of each fiscal year, it shall cover the accumulated losses first, then, appropriating 10% as legal reserve, and set aside or reverse special reserve in accordance with the law. The shareholders' dividend or bonuses out of remaining current profit and undistributed retained earnings shall be proposed first by the Board of Directors and to be resolved in the shareholders meeting.

The Company is in a stable and mature industry. Factors such as Company's profitability, funding of future operation and change in industrial environment, shareholder's interest and long term financial planning shall be considered in planning the Company's dividend distribution scheme. The amount shall not exceed 90% of current net income as the principal, however, the final dividend distribution ratio shall be proposed first by the board of directors and to be resolved in the shareholders meeting, regardless of such principle. Distribution of dividend is in the form of cash or shares. Cash dividend each year shall not be less than 20% of the total amount of the appropriated dividend of current year.

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Article 32

The Company’s directors and supervisors shall receive remuneration (including travel expenses) of 100,000 New Taiwan Dollars monthly. The Board of Directors are authorized to determine the remuneration of the Chairman of the Board of Directors, based on the level of participation in the Company’s operation and contribution without exceeding the highest salary standard decided by the Company. Such remuneration shall be paid regardless of whether the Company business generates profits or experiences loss.

Chapter 6 Supplementary Provisions

Article 33 The Company’s organization regulations and detailed guidelines of operation shall be determined separately. Article 34 In regard to all matters not provided herein, the Company Act shall govern.

Article 35 The Articles were formulated on June 30[th] , 2003; the first amendment was made on March 30[th] , 2004; the second amendment was made on June 18[th] , 2004; the third amendment was made on November 11[th] , 2004; the fourth amendment was made on June 17[th] , 2005; the fifth amendment will be made on June 16[th] , 2006; the sixth amendment was made on June 22[nd] , 2007; the seventh amendment was made on June 21[st] , 2010; the eighth amendment was made on June 13[th] , 2012; the ninth amendment was made on June 14[th] , 2013, the tenth amendment was made on June 30[th] , 2015, and the tenth amendment was made on June 30[th] , 2016.

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Appendix 2:

Shareholdings of Directors and Supervisors

As of 04/28/2017, all directors and supervisors minimum
shareholding number and actually registered holding shares.

Title	Minimum number of shares to be held	Shares actually held in share register
Directors	12,000,000	263,505,000
Supervisors	1,200,000	1,878,000

2. As of 04/28/2017, table of shares held by all directors and supervisors.

supervisors.
Title	Name	Shares held in share register
President	Yulon Motor Co., Ltd. Representative： Kenneth K.T. Yen	143,505,000
Director	Yulon Motor Co., Ltd. Representative： Kuo-Rong Chen
Director	Yulon Motor Co., Ltd. Representative： Zhen-Xiang Yao
Director	Yulon Motor Co., Ltd. Representative： Leman C.C. Lee
Director	Yulon Motor Co., Ltd. Representative： Takashi Nishibayashi	120,000,000
Director	Yulon Motor Co., Ltd. Representative： Atsushi Kubo
Director	Yulon Motor Co., Ltd. Representative： JunichiOhori
Director	Kenji Shimoyama
Independent Director	Robert Ma	-
Independent Director	Jin-Shun Wu	-
Supervisor	Wei Wen Investment Co., Ltd Representative`：`Kuan-Tao Lee	1,878,000
Supervisor	Wei Wen Investment Co., Ltd Representative`：`Tai-MingChen
Supervisor	Toru Nakano	-

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Appendix 3:

Yulon Nissan Motor Co., Ltd.

Rules of Procedure for Shareholders Meeting

Formulated date: March 30th, 2004

Article 1: The Company has shareholders meeting arranged in accordance with this “Rules of Procedure for Shareholders Meeting.”
Article 2: Shareholders (representatives) present at the shareholders’ meeting shall submit the Attendance Card instead of signing in. The shareholding of the present shareholders is based on the Attendance Cards plus the number of shares whose voting rights are exercised by correspondence or electronically . Attendance at shareholders meetings shall be calculated based on numbers of shares.
Article 3: The Chairman is to have the meeting called on time; however, the Chairman may declare the meeting to be postponed if the shareholding of the present shareholders is less than half of the shares issued. The Chairman may have the meeting postponed for up to twice and may not last for more than one hour in total. If the shareholding of the present shareholders remains less than half but over one third of the shares issued after two postponements, a pseudo resolution can be reached in accordance with item 1, Article 175 of the Company Act. If the shareholding of the present shareholders exceeds half of the shares issued before the end of the shareholders’ meeting, the Chairman may have the pseudo resolution presented in the meeting for resolution in accordance with Article 174 of the Company Act.
Article 4: If a shareholders meeting is summoned by the Board of Directors, the meeting agenda shall be determined by the Board of Directors. The meeting shall be held in accordance with the aforementioned agenda accordingly without changes made unless it is resolved in the shareholders’ meeting. If a shareholders meeting is summoned by an authorized convener other than the Board of Directors, the provision of the foregoing paragraph shall prevail. For the aforementioned two
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agendas, the Chairman may not announce the meeting adjourned without resolution before the end of the procedures (including motions). If the Chairman has the meeting adjourned in violation of the “Rules of Procedure for Shareholders’ Meeting,” a new Chairman can be elected to preside the meeting continuously by present shareholders with majority votes. Upon meeting adjournment announced by the Chairman, the shareholders shall not elect a new Chairman and resume the meeting at the original or new site. Article 5: Present shareholders who wish to speak in the meeting must have the speech note filled out with the speech gist, Attendance Card Number, and Account Name detailed to be submitted to the Chairman. The Chairman is to deter the order of speaking. Present shareholders who have submitted the speech note but do not speak in the meeting are considered failure to address speech. If there is discrepancy between the content of the speech note and the speech in the meeting, the verbal speech shall prevail. The present shareholder who is speaking should not be interrupted by any other shareholders unless agreed by the Chairman and the speaking shareholder. The - 40 - Chairman should have the disorderly conduct disciplined. Article 6: Each shareholder may not speak more than twice and not more than five minutes each time on one subject unless agreed upon by the Chairman. The Chairman may stop the shareholder who has violated the rules, spoke beyond the subject scope, or behaved impolitely from speaking in the meeting. Article 7: If a juristic person is attending the meeting by proxy, the juristic person may have only one representative delegated to attend the meeting. If the juristic person has more than two representatives delegated to attend the meeting, only one representative may speak about one subject. Article 8: After the speech of the present shareholders, the Chairman may answer the questions in person or have it answered by the designated personnel. Article 9: During the discussion of the motions, Chairman may announce the end of discussion at his/her discretion and proceed for voting, or, may have the discussion suspended if necessary. Article 10: Voting on the proposals, unless otherwise specified by the Company Act and Articles of Incorporation, is passed with the

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consent of the present shareholders with majority votes. The validity of voting and consultation by Chairman without any opposition raised by shareholders is the same. The shareholder is deemed one vote for each share. Shareholders who have an agent to attend the shareholders’ meeting shall be in accordance with the “Rules of appointing agents to attend the shareholders’ meeting of Public Companies” and related laws and regulations. Article 11: During the meeting, the Chairman may announce a recess during the meeting discretionally. If the procedure fails to be completed in a meeting, the meeting may continue within five (5) days with the resolution of the shareholders’ meeting and no further notice and announcement are required. Article 12: If a proposal is with amendment and/or alternative, the Chairman may have it consolidated with the order of voting determined. If one of the proposals is passed, other proposals are deemed as vetoed without further voting. Article 13: The Chairman may direct pickets (or security guards) to maintain order of the meeting premise. The pickets (or security guards) must wear the “Picket” armband while disciplining the order at the meeting premise. Article 14: The Chairman is to determine the tellers and ballot counting officer. The teller must be a shareholder. Vote result must be reported on the spot and documented accordingly. Article 15: If a shareholders’ meeting is summoned by the Board of Directors, the Chairman is to preside the meeting. If the Chairman asks for leave or cannot preside the meeting for reasons, the Vice Chairman is to act on the Chairman’s behalf. If there is no Vice Chairman or the Vice Chairman asks for leave or cannot preside the meeting for reasons, the Chairman is to designate his/her agent to preside the meeting. If the Chairman has not had his/her agent designated, one of the Directors shall be elected to act on the Chairman’s behalf. If a shareholders’ meeting is summoned by an authorized convener other than the Board of Directors, the authorized convener is the Chairman of the shareholders’ meeting. If there are two or more authorized conveners, one shall be elected among themselves.

Article 16: The location summoned for the shareholders’ meeting shall be the location where the Company resides, or a location convenient for shareholders to attend and suitable for - 41 -
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organizing the shareholders’ meeting. The schedule of the meeting shall not start before nine (9) o’clock in the morning or later than three (3) o’clock in the afternoon.

Article 17: The Company may assign the appointed attorney, CPA, or related personnel to attend the meeting. Conference staffs who help organize the shareholders’ meeting should wear identification badge or armband.
Article 18: The whole process of the shareholders’ meeting should be documented with audio or video recording and archived for at least one year.
Article 19: Issues that are not addressed in the “Rules of Procedure for Shareholders’ Meeting” should be processed in accordance with the Company Act, the Company’s Articles of Incorporation, and applicable laws and regulations.
Article 20: The “Rules of Procedure for Shareholders’ Meeting” shall be enforced upon the resolution reached in the shareholders’ meeting, so is the amendment.
Article 21: The Procedures was regulated on March 30, 2004 ; the first amendment was made on June 30th, 2015.
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Appendix4:

Yulon Nissan Motor Co., Ltd.

Rules for the Election of Directors and Supervisors

Stipulated on March 30, 2004

Amended on June 22, 2007

Article 1： The election of the Company’s directors and supervisors, unless otherwise provided by the law and regulations and the Company’s Article of Incorporation, is to be processed in accordance with the “Rules for the Election of Directors and Supervisors.”
Article 2: For the Company’s election of directors and supervisors is handled in accordance with the ballot cumulative suffrage system and each stock share contains the suffrage equivalent to the number of directors and supervisors to be elected, which can be casted to one or more than one candidate.
Article 3: The board of directors is to have the ballots printed, which should be equivalent to the number of directors and supervisors. The ballots should be prepared with the votes of suffrage noted before distributing to the shareholders at the meeting.
Article 4: The Chairman is to have several ballot inspectors and tellers who are also shareholders designated before the beginning of the election to perform the election.
Article 5: The board of directors is to have the ballot boxes prepared for the election of directors and supervisors; also, the ballot boxes should be inspected publicly by the ballot inspectors.
Article 6: If the candidates are shareholders, the voters must have the account number and name of the candidates noted in the “candidate” column of each ballot. If the candidates are not shareholders, the “candidate” column on the ballot must be detailed with the name and identity document number of the candidates. However, if the candidates are institutional shareholders, the name of the juristic person must be detailed
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in the “candidate” column on each ballot, or the name of the juristic person and its representative. If there is more than one representative appointed, the name of all the representatives must be listed separately.

Article 6.1: The election of directors and independent directors is held at the same time with the votes counted and candidates elected separately.
Article 7: Ballots are invalid in any of the following circumstances:
Ballot that is not prepared by the board of directors;
Blank ballot that is casted in the ballot box;
Unidentifiable ballot due to illegible or incomplete corrections;
The account name and shareholder’s account number of the candidate who is a shareholder differs from the Shareholder Registry, or, the name and ID Card number of the candidate who is not a shareholder is found with nonconformity.
Ballot contains not only the candidate’s account name (name), shareholder account number (ID card number), and the votes of suffrage, but also other unauthorized information.
Ballot without the information of the candidate’s account name (Name) or shareholder’s account number (ID Card Number);
Ballot contains the name of two or more than two candidates.
The name of the voted candidate is same as other shareholder but failed to state the candidate’s shareholder account number or ID card number for identification.
Article 8: The Company’s directors and supervisors are elected from the competent individuals in the shareholder’s meeting as independent directors and non-independent directors in that order in accordance with the number of chairs designated in the Articles of Incorporation and the electoral votes from top down. If there are two or more candidates received the same
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votes of suffrage, resulting more candidates elected than the number of chairs designated, the candidates who received the same votes of suffrage are to take a draw for a solution; also, the Chairman is to take a draw on behalf of the absentees.

The individual who has been elected as a director and supervisor at the same time may determine discretionally to assume either one of the positions but not both.

The elected director or supervisor who is found with false personal information presented or non-complying with the governing law and regulations will be dismissed and with the vacancy filled by the un-elected candidate who has received the highest votes in the original election.

Article 9: Ballot inspectors are to monitor the count of the votes casted upon the completion of the voting process and then the Chairman is to announce the name of the elected directors and supervisors publicly.
Article 10: The Company is to issue a certificate of election to each elected director and supervisors.
Article 11: The matters that are not addressed in the “Rules for the Election of Directors and Supervisors” should be processed in accordance with the Company Law, Articles of Incorporation, and the related regulations.
Article 12: The “Rules for the Election of Directors and Supervisors” is in effect after it is passed in the shareholders’ meeting, same for the amendments made.
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AI assistant

YNM — AGM Information 2017

51984_rns_2017-07-21_1296d59e-c070-4211-8dff-9b51c1c52316.pdf

YULON NISSAN MOTOR CO., LTD.

Table of Contents

YULON NISSAN MOTOR CO., LTD.

Meeting Procedure

1. Call to Order

2. Chairman’s Address

3. Report Items

4. Ratification Items

7. Extraordinary Motions

YULON NISSAN MOTOR CO., LTD.

2017 Annual General Shareholders’ Meeting

Agenda

1. Call to Order

2. Chairman’s Address

3. Report Items

4. Approval Items

5. Discussions Items

6. Elections Items

7. Extraordinary Motions

8. Closure of the Meeting

Report Items

Item One:

The 2016 Business Report

2.Corporate Social Responsibility

(III) The prospects

3. Sales and service satisfaction upgrade

4. Export expansion

5. Business operation in Mainland China

According to the forecast of the China Association of

Item Two:

2016 supervisors’ review financial report

Yulon Nissan Motor Co., Ltd.

Supervisors’ Review Report

Submitted to:

2017 Regular Shareholders’ Meeting of the Company

Item Three:

The 2016 Distribution of Employees' Remuneration

Ratification Items

Proposal 1: Ratification of the 2016 Business Report and Financial Statements. Please ratify.

Description:

Resolution :

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Depreciation of Molds and Dies

Provision for Warranty

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

YULON NISSAN MOTOR COMPANY, LTD. BALANCE SHEETS

DECEMBER 31, 2016 AND 2015

YULON NISSAN MOTOR COMPANY, LTD. STATEMENTS OF COMPREHENSIVE INCOME DECEMBER 31, 2016 AND 2015

YULON NISSAN MOTOR COMPANY, LTD. STATEMENTS OF CHANGES IN EQUITY DECEMBER 31, 2016 AND 2015

(In Thousands of New Taiwan Dollars, Except Par Value)

DECEMBER 31, 2016 AND 2015

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Depreciation of Molds and Dies

Provision for Warranty

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

YULON NISSAN MOTOR COMPANY, LTD.

CONSOLDATED BALANCE SHEETS DECEMBER 31, 2016 AND 2015

YULON NISSAN MOTOR COMPANY, LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

DECEMBER 31, 2016 AND 2015

YULON NISSAN MOTOR COMPANY, LTD. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY DECEMBER 31, 2016 AND 2015

YULON NISSAN MOTOR COMPANY, LTD. CONSOLIDATED STATEMENTS OF CASH FLOW DECEMBER 31, 2016 AND 2015

Proposal 2: Recognition of 2016 Earnings Distribution.

YULON NISSAN MOTOR CO., LTD.

2016 Earnings Distribution Statement

Unit: NT dollar

Discussions Items

Proposal 1: Amendment to Articles of Incorporation.

Comparison Table for the “Articles of Incorporation”

Proposal 2: Amendment to” Rules of Directors and

YNM AGM Information 2017