YP — AGM Information 2017

Jun 29, 2017

Code: 2023

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2017 Shareholders’ Meeting

Program

Web site: http://mops.twse.com.tw Time: June 22, 2017

Location: Ziyi Community Center, No. 57, Jinxue Rd., Ziyi Vil., Ziguan Dist., Kaohsiung City

I. The Procedures and the Agenda

Yieh-Phui Enterprise Co., Ltd.

Procedures for 2017 Stockholders’ Meeting

Time: 9:30 AM, June 22, 2017

Location: Ziyi Community Center, No.57, Jinxue Rd., Ziyi Vil., Ziguan Dist., Kaohsiung City Ziyi Community Center

1. Announcement of the Number of Shares Present

2. Call the Meeting to Order

3. Chairperson Remark

4. Company Report

5. Matters to Be Approved

6. Matters for Discussion

7. Election

8. Other Matters

9. Extempore Motions

10. Adjournment

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Yieh Phui Enterprise Co., Ltd

Program for 2017 Stockholders’ Meeting

I. Chairperson Remarks ：

II. Company Report ：

1. 2016 Operation Report

2. The Auditing Committee on the Final Financial Statements

3. The 2016 Remuneration of Employees and Directors

III. Matters to Be Approved ：

1. Approval of the 2016 Final Financial Statements

2. Approval of the 2016 Distribution of Earnings

IV. Matters for Discussion ：

1. Declaration of cash and stock dividends to stockholders and the stock dividends to increase capital

2. Proposal on Modifying the “ Operation Procedures for Lending to Others and Endorsement ”

3. Proposal on Modifying the “ Procedures for Acquisition and Disposal of Assets ”

4. Proposal on Modifying “ Corporate Charter ”

V. Election

1. By-election for Independent Director .

VI. Other Matters

1. Lifting of the Non-compete clause for Director.

VII. Extempore Motions

VIII. Adjournment

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Contents

I. The Procedures and the Agenda------------------------------------------------------------------------------------ 1 II. Company Report---------------------------------------------------------------------------------------------------------------------------------- 4 1. 2016 Operation Report---------------------------------------------------------------------------------------------------------------------------- 4 2. The Auditing Committee on the Final Financial Statements-------------------------------------------------------------------------------36 3. The 2016 Remuneration of Employees and Directors---------------------------------------------------------------------------------------36 III. Matters To Be Approved-------------------------------------------------------------------------------------------------------------------- 37 1. Approval of the 2016 Final Financial Statements-------------------------------------------------------------------------------------------37 2. Approval of the 2016 Distribution of Earnings--------------------------------------------------------------------------------------------- 37 VI. Matters for Discussion-----------------------------------------------------------------------------------------------------------------------37 1. Declaration of cash and stock dividends to stockholders and the stock dividends to increase capital------------------------------- 38 2. Proposal on Modifying the “ Operation Procedures for Lending to Others and Endorsement ” ----------------------------------- 38 3. Proposal on Modifying the “ Procedures for Acquisition and Disposal of Assets ” --------------------------------------------------38 4. Proposal on Modifying the “ Corporate Charter ” --------------------------------------------------------------------------------------39 V. Election-----------------------------------------------------------------------------------------------------------------------------------------39 1. By-election for Independent Director---------------------------------------------------------------------------------------------------------39 VI Other Matters---------------------------------------------------------------------------------------------------------------------------------40 1. Lifting of Non-compete clause for Director-------------------------------------------------------------------------------------------------40 VII Extempore Motions--------------------------------------------------------------------------------------------------------------------------40 VIII Adjournment-----------------------------------------------------------------------------------------------------------------------------------40 VIIII Appendix----------------------------------------------------------------------------------------------------------------------------------------41 Appendix 1 Operation Procedures for Lending to Others and Endorsement (Table for Comparing Modified Items))-----------41 Appendix 2 Operation Procedures for Lending to Others and Endorsement (Modified)----------------------------------------------45 Appendix 3 Procedures for Acquisition and Disposal of Assets (Table for Comparing Modified Items)--------------------------53 Appendix 4 Procedures for Acquisition and Disposal of Assets (Modified)------------------------------------------------------------60 Appendix 5 Corporate Charter (Table for Comparing Modified Items)-----------------------------------------------------------------75 Appendix 6 Corporate Charter (Modified)---------------------------------------------------------------------------------------------------78 X. Appendix--------------------------------------------------------------------------------------------------------------------------------------------85 Appendix 1 Corporate Charter-----------------------------------------------------------------------------------------------------------------85 Appendix 2 Rule for the Election of Directors----------------------------------------------------------------------------------------------92 Appendix 3 Rule of the Stockholders’ Meeting---------------------------------------------------------------------------------------------95 Appendix 4 The Table of the Stock Holdings of the Directors -------------------------------------------------------------------------102 Appendix 5 The Table of Increased Capital------------------------------------------------------------------------------------------------103 Appendix 6 Dividend Policy-----------------------------------------------------------------------------------------------------------------105

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II Company Report

1. 2016 Operation Report

The global steel market was affected by China’s aggressive supply side economic policy, reducing its capacity and prompting to the price of steel to increase. Though the price of steel had continued to decrease since the fourth quarter of 2014, it has now started to increase and the customers downstream have accelerated their purchase without hesitation. The main products of Yieh-Phui and Yieh-Phui (China) are metallic and color coated steel sheets, which are for sale globally. With the over-capacity under control in China, the price of steel rebounds, and the efforts of the management of Yieh-Phui in materials acquisition, sales strategies and decent cost control, the profitability has been excellent, making it the best performance in a decade.

The Outline of the Operation of 2016

Comparing 2015 and 2016, the revenue increases by 11.93% or NT$1.644 billion, that for Yieh-Phui (China) is 9.04% or NT$ 964 million and for Yieh-Hsing it is lower by NT$232 million. Overall, the revenue for Yieh-Phui is NT$ 52,847,410(000) 6.15% higher than last year at NT$ 49,784,834(000). The after tax profit is NT$ 2,378,545 (000), 247.29% higher than last year, which is at a loss of NT$ 1,614,837(000). The after tax profit to the parent company is NT$ 2,502,005(000), 362.32% higher that last year at a loss of NT$ 953,786(000).

1. The Performance of Business Plan ：

Consolidated Information of Financial Statements

			Unit NT$ in(000)	Unit NT$ in(000)
Year Item	2016	2015	Changes	Changes%
Operaiton Revenue	52,847,410	49,784,834	3,062,576	6.15
Operaiton Costs	45,641,051	46,080,342	-439,291	-0.95
Operaiton Gross Profit(Loss)	7,206,359	3,704,492	3,501,867	94.53
Operaiton Expenses	3,362,322	2,842,815	519,507	18.27
Operaiton Net Profit(Loss)	3,844,037	861,677	2,982,360	346.11
Non-operation Revenue and Expenses	-471,965	-2,458,392	1,986,427	80.80
Net Profit (Loss) before Tax	3,372,072	-1,596,715	4,968,787	311.19
Income Tax Expenses	993,527	18,122	975,405	5,382.44
Net Profit (Loss) after Tax	2,378,545	-1,614,837	3,993,382	247.29
Other Comprehensive Income (net)	-904,716	190,111	-1,094,827	-575.89
Total Amount of	1,473,829	-1,424,726	2,898,555	203.45

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Comprehensive Income in this Term
Net Profit that Belongs to the Owner of the Parent Company	2,502,005	-953,786	3,455,791	362.32
Net Profit that Belongs to the Non-controllingequity	-123,460	-661,051	537,591	81.32
Total Amount of Comprehensive Income that Belongs to the Owner of the Parent Company	1,612,620	-761,465	2,374,085	311.78
Total Amount of Comprehensive Income that Belongs to the Non-controllingequity	-138,791	-663,261	524,470	79.07

Financial Information of Company

Financial Information	of Company
Year Item	2016	2015	Changes	Changes%
Operaiton Revenue	23,867,665	22,223,598	1,644,067	7.40
Operaiton Costs	20,009,747	20,354,559	-344,812	-1.69
Operaiton Gross Profit(Loss)	3,857,918	1,869,039	1,988,879	106.41
Operaiton Expenses	1,793,191	1,310,381	482,810	36.85
Operaiton Net Profit(Loss)	2,064,727	558,658	1,506,069	269.59
Non-operation Revenue and Expenses	948,024	-1,623,316	2,571,340	158.40
Net Profit (Loss) before Tax	3,012,751	-1,064,658	4,077,409	382.98
Income Tax Expenses	510,746	-110,872	621,618	560.66
Net Profit (Loss) after Tax	2,502,005	-953,786	3,455,791	362.32

1. Execution of the Budget: Yieh-Phui has not disclosed financial guidance and is not applicable to the rules on disclosing the execution of the budget.

2. Analysis of the Revenue/Expenditure and Profitability :

Consolidated Financial Report Information

Consolidated Financial Report Information
Item	2016	2015
Net cash inflow of operation activities (thousand dollars)	3,375,039	3,547,840
Equity/Assets(%)	36.87	37.98

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Item	2016	2015
Liabilities/Assets(%)	63.13	62.02
Long-term Funds accounting for the ratio of real estates, plants and equipments(%)	153.50	162.75
Current ratio(%)	102.10	120.89
Quick ratio(%)	58.52	77.76
Return on assets(%)	3.83	-1.23
Return on equity (%)	8.03	-5.54
Netprofit margin(%)	4.50	-3.24
Earningsper share(dollar)	1.46	-0.56
Number of shares bythe end of theyear(share)	1,718,090,576	1,718,090,576

Financial Information of Company

Financial Information of Company
Item	2016	2015
Net cash inflow of operation activities (thousand dollars)	2,003,887	2,677,000
Equity/Assets(%)	57.09	57.11
Liabilities/Assets(%)	42.91	42.89
Long-term Funds accounting for the ratio of real estates, plants and equipments(%)	434.09	387.63
Current ratio(%)	74.03	58.92
Quick ratio(%)	38.51	36.44
Return on assets(%)	5.98	-1.49
Return on equity (%)	9.37	-3.61
Netprofit margin(%)	10.48	-4.29
Earningsper share(dollar)	1.46	-0.56
Number of shares bythe end of theyear(share)	1,718,090,576	1,718,090,576

The Summary for Research and Development

Starting from 2007, Yieh Phui has developed the market for coated steel to be used for household appliances and has been recognized by famous appliance producers such as Whirlpool, Fisher & Paykel, SHARP, and Panasonic.

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Confronting with fierce market competition, Yieh Phui has been vigorously developing high end

quality products for high end market and cooperating with Japanese steel firms to expand in the overseas market. We have seen good results from this collaboration since December 2013 with the volume increasing each month every year, contributing to our earnings and expecting the cumulative total sales to reach 100,000 tons landmark in the second quarter of 2017.

On product differentiation, Yieh Phui has successfully developed anti-microbial metallic coated

steel sheets – regular spangle, used for the pipes for air-conditioning, and gained recognition by the public construction projects of Hong Kong, such as MRT and hospitals, and those of Macao. Yieh Phui continues to develop other high end prepainted steel sheets and Al-Zn coated steel sheets for inner panels of ovens. The sales have steadily increased in 2016 and expected to expand in the projects of other appliances. In addition, Yieh Phui has finalized the production of Printed Prepainted Steel Sheets (wood & hairline patterns) for special applications in the industry and will deliver those products in 2017, enhancing the market prospect and the diversity of our offers.

The trend of globalization has triggered the EU to issue the regulation of RoHS and WEEE, which focus on the recycling of electronic appliances, environment friendly production and their re-use. This policy has won the recognition of the whole world and Yieh Phui has developed products compliant with those regulations and earned big and long-term orders of major appliance producers. Later on in 2007 the EU issued REACH, controlling 16 ingredients in the materials, mixtures and products exporting to EU that may cause cancers, deformation and toxicity to ~~the~~ human reproductive system. Up to the end of 2016, there have been 173 such items and they have been put into Yieh Phui’s quality control and auditing system to protect the environment and the health of consumers. Later this year EU may have some new instructions on construction materials like metallic and color coated steel sheets in 2017 and 2018. The company has been aggressively and speedily developing multi-combination and multi-purpose products with suppliers of surface treatment and paints. Also, Yieh Phui will cooperate with the sales channels of the supply chain of dealers and roll formers, making sure that our products will reach the world market seamlessly and in a timely fashion to score another great performance in expansion and sales.

Corporate Strategies for Future Development

The vision of Yieh Phui is to become the best steel maker and service provider in the world. To

achieve this goal and with the TPM Campaign reaching the fifth stage, Yieh Phui Production & Service System (YPS) will move forward from the fourth stage of “YPS=TPM+MOT” to the fifth “YPS is excellent, TPM is perfect and MOT is outstanding”. Since 2013, Yieh Phui has started a series of changes to deal with the volatility of the steel market. Thus, 2013 is the very first year of Yieh Phui to start the “campaign for changes”. The slogan for the year is “adapting to the trend of steel market, changing the attitude and eager to change”. The slogan for the second year, 2014, is “change and more changes, better than better.” As the campaign reaches the third year, the slogan

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becomes there is “Just as water retains no constant shape, so in warfare there are no constant conditions. Change with constantly changing conditions. Changes are normality.” We must endeavor to make all necessary adjustments. For the efforts of the past three years, the corporate culture of Yieh Phui has evolved and reached a landmark of being awarded the “Advanced Special Award for TPM Achievement”. The YPS campaign has evolved from “touching service” to “supreme service”. Thus, the campaign for changes has now been turned to innovation and 2016 is the first year of innovation with the slogan “catalyzing creativity through learning and modeling--changing and improving,” short for utilization, learning from others, collaboration and innovation. 2017 is the second year of innovation and the slogan is “keep innovating and expanding product and service differentiation, creating greatest value for customers and Yieh Phui”. With excellence in production and outstanding services to promote sales and explore potential markets, the company will continue to innovate to offer more differentiation in products, services and marketing, creating the best value for customers and Yieh Phui coupled with enhancing the satisfaction for services and targeting the sales level of individual positions. In addition to satisfying the demand of customers and outstanding services, the company will make every effort to reduce the cost of sales and increase profitability.

In addition to Yieh Phui’s steady growth in Taiwan, Yieh Phui (China) has expanded its operation

in Changshu Economic Development Zone, Jiangsu, China, producing 1.2 million tons of cold-rolled steel sheets for automobiles and 400,000 tons of hot-dip Zn-Fe coated steel sheets for automobiles, advancing its technology in the market of steel sheets for automobiles. The first stage of this expansion of pickling and tandem cold mill (PLTCM) had been finished and started production on February 15, 2015, while the production of continuous annealing line (CAL) was done on August 15, 2015, No. 3 continuous coil coating line on February 21, 2017, and No. 4 continuous hot-dip galvanizing line will be available in the third quarter of 2017. Besides aiming for the 700,000 car market in Riverside Industrial Park, Changshu, Yieh Phui (China) also focuses on the market of ~~the~~ cars and car parts around the world. China is a member of ASEAN and its steel enjoys preferential tariff treatment. As a result, the steel products in China are more competitive than those produced in Taiwan for the sale in ASEAN. Then, the production of coated steel sheets will reach 1.5 million tons, higher than Yieh Phui’s 1.3 million tons in Taiwan. For the combined eight production lines of hot-dip galvanizing lines in Taiwan and China, the capacity will reach 2.8 million tons.

Aside from the steady business growth in Taiwan, the Company is also constructing the

production lines that can produce 1.2 million metric tons of cold-rolled steel sheets and 400,000 metric tons of hot-dip galvannealed steel sheets for automobiles in Yieh Phui (China) located at the economic development zone in Changshu, Suzhou, Mainland China. The Company upgrades the technology level and enters the steel market for cars. The PLTCM (Pickling and Tandem Cold Mill) started pilot production in the first quarter of 2015, and the CAL (Continuous Annealing Line) also entered the production in the third quarter of 2015 while other production lines were still under design, planning and construction. In addition to enter the new market of the Big City of Cars with annual capacity of 700,000 vehicles in the Riverside Industrial Park in Changshu, the Company also

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targets the steel market for vehicles and automotive parts for maintenance globally. Since Mainland China is a member of ASEAN+3, steel exported to Southeast Asia is granted tariff preference, which is more competitive compared with the tariff imposed on Taiwan’s exports to ASEAN countries. In the future, the annual production of galvanized steel sheets of Yieh Phui (China) will exceed 1.2 million metric tons, which is quite close to the maximum annual production of 1.3 metric tons of Yieh Phui in Taiwan. The combined maximum annual design capacity of Yieh Phui and Yieh Phui (China) would reach 2.5 million metric tons.

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Crowe Horwath (TW) CPAs Member Crowe Horwath International

27F., No.6, Siwei 3[rd] Rd., Lingya Dist., Kaohsiung, Taiwan ROC Tel: (07) 3312133 Facsimile: (07) 3331710

AUDIT REPORT OF ACCOUNTANTS

To Yieh Phui Enterprise Co., Ltd.

AUDIT REPORT

The accountants have audited the Consolidated Balance Sheet of Yieh Phui Enterprise Co., Ltd. and its subsidiaries (hereinafter referred to as the Yieh Phui Group) as of 31 December 2016 and 2015, the Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements (including Summary of Significant Accounting Policies) for the period of 1 January to 31 December 2016 and 2015.

Based on our review, the above Consolidated Financial Statements have been compiled in accordance with Regulations Governing the Preparation of Financial Reports, IFRSs and IAS with relevant interpretations and announcement approved and published by the Financial Supervisory Commission. These financial statements are sufficient to present the Consolidated Financial Position of the Yieh Phui Group as of 31 December 2016 and 2015 and the Consolidated Financial Performance and the Consolidated Cash Flow for the period of 1 January to 31 December 2016 and 2015.

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Basis of the Audit

We conducted our audit in accordance with the Regulations Governing Auditing and the Attestation of Financial Statements by Certified Public Accountants and Generally Accepted Auditing Standards (GAAS). Our responsibility under the above mentioned regulations will be further explained in the section titled "Accountant's Responsibility in Auditing the Consolidated Financial Statements." We have complied with the ethical requirements for accountants, fulfilled the relevant responsibilities under such requirements and we have maintained our independence from the Yieh Phui Group. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our audit.

Key Audit Matters

Key Audit Matters refer to the most vital matters in the process of auditing the 2016 Consolidated Financial Statement of the Yieh Phui Group based on the accountant’s professional judgment. Such matters have been handled during the process of auditing and compiling the Consolidated Financial Statements and in the preparation of our audit opinion. As such, we do not respond to each key matter individually. Herewith we list the following key matters regarding the Consolidated Financial Statements of the Yieh Phui Group as of 2016:

I. Timing of Sales Revenue Recognition

Please see note 4(29) of the Consolidated Financial Statement for accountant

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policies regarding revenue recognition; please see note 5(2)1. of the Consolidated Financial Statement for critical accounting estimates and assumptions regarding revenue recognition; please see note 6(31) of the Consolidated Financial Statement for details regarding revenue recognition.

Description of key audit matters:

The timing of sales revenue recognition pertains to confirming the timing for the transfer of ownership and risk to the customer. Since the sales conditions for each major customer may differ, the Yieh Phui Group determines whether to transfer the ownership and risk of goods sold to the customer according to the trading conditions of each order. As the timing for recognizing the sales revenue may have a major impact on the Yieh Phui Group's financial performance, we have included this issue as one of the key audit matters.

Audit Process Adopted:

Our audit process included investigating the effectiveness of the design and the execution of internal controls at the time of trial sales for revenue recognition; conducting surveys to sample trading conditions with major customers, and establishing trial deadlines to determine the appropriateness of the timing of sales for revenue recognition.

II. Inventory Valuation

Please refer to note 4(13) of the Consolidated Financial Statements for accounting policies regarding inventory valuation; please refer to note 5(2)5. of the Consolidated Financial Statements for critical accounting estimates and assumptions regarding inventory valuation and note 6(7) of the Consolidated Financial Statements for details of inventory valuation.

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Description of key audit matters:

The Yieh Phui Group's inventory amounted to NTD 8,249,118,000 (Total cost of inventory NTD 8,672,726,000 net of allowance for inventory valuation losses NTD 423,608,000) as of 31 December 2016, which accounted for 10.06% of total assets. The inventory valuation is based on the lesser of the value of cost and net realizable value. Given the valuation of the net realizable value of inventory has a significant impact on critical evaluations and estimates and since inventory valuation is dependent on the influence of frequent volatile fluctuations of international metal prices, we have thus included this item in the key audit matters.

Audit Process Adopted:

Our major audit process included obtaining valuation information of the cost and net realizable value of inventory, conducting surveys to sample the estimated selling price and the most recent sales records, and assessing the appropriateness of management's basis for estimating the net realizable value.

Other Matters

Part of the Consolidated Financial Statements for 2015 and 2016 relating to the investee(s) recognized under the equity method were audited by other accountants separately. Those reports were used as input for assessing values of the companies in the above mentioned Consolidated Financial Statements of our audit report. The value of investments in affiliated companies recognized under the equity method as of 31 December 2016 and 2015 were NTD 5,358,441,000 and NTD 4,956,947,000 respectively, each accounting for

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6.53% and 6.49% of the total assets. The share of the profit from affiliated company using the equity method in 2016 and 2015 was NTD 146,399,000 and (NTD 243,151,000) respectively, each accounting for 4.34% and 15.23% of income before tax.

Yieh Phui Enterprise Co., Ltd. has prepared the Consolidated Financial Statements for 2016 and 2015. We have issued audit reports of unqualified opinion and unqualified opinion subsequent to revision for consideration.

The responsibility of the management and governing body for the Consolidated Financial Statements

It is the management’s responsibility to prepare the Consolidated Financial Statements with appropriate information in accordance with the Regulations Governing the Preparation of Financial Reports, IFRSs and IAS with relevant interpretations and announcements approved and published by the Financial Supervisory Commission. The company’s management is also responsible for the necessary internal controls when preparing the Consolidated Financial Statements to avoid material misstatements due to fraud or errors contained therein.

In preparing the Consolidated Financial Statements, the responsibility of management included the assessment of the sustainability of the Yieh Phui Group, disclosure of related matters, as well as adoption of consistent accounting methods, unless the management intends to liquidate the Yieh Phui Group or terminate the business, or no measure other than liquidation or termination of the business may be taken.

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The governing bodies of the Yieh Phui Group (including the Audit Committee) have the responsibility to oversee the financial reporting process.

The Responsibility of Accountants in Auditing the Consolidated Financial Statements

The purpose of our audit is to provide reasonable certainty the Consolidated Financial Statements as a whole contain no material misstatements due to fraud or errors. "Reasonable Certainty" refers to a high level of credibility. Nevertheless, our audit, which was conducted according to GAAS, does not guarantee that a material misstatement(s) will be detected in the Financial Statements. Material misstatements may be due to fraud or error. If it could have been reasonably anticipated that amounts were misstated, individually or in aggregate, this could have influenced the economic decisions made by the users of the Consolidated Financial Statements; if this situation could occur, it will be deemed to be material.

We have exercised professional judgment and maintained professional skepticism while abiding by GAAS in our audit. The following tasks have also been performed:

1. Identified and evaluated the risk of a material misstatement(s) due to fraud or errors in the Consolidated Financial Statements; designed and executed appropriate countermeasures for the assessed risks; and obtained sufficient and appropriate evidence as the basis for the audit report. As fraud may involve collusion, forgery, deliberate omissions, false statements or

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violations of internal controls, the risks of material misstatements due to fraud is greater than that due to errors.

1. Acquired the necessary understanding of internal controls pertaining to the audit so as to provide appropriate audit procedures under such circumstances. Nevertheless, the purpose of such an understanding is not to provide any opinion on the effectiveness of the internal controls of the Yieh Phui Group.

2. Evaluated the appropriateness of the accounting policies adopted by management and the rationality of the accounting estimates and relevant disclosures.

3. Assessed the appropriateness of the going-concern principle adopted by management, and any factors that may cause material risks to the company’s existence. If we believe there may be factors causing significant uncertainties, we will remind the user of the Consolidated Financial Statements in our audit report of the relevant disclosure therein, or amend our report if inappropriate disclosures were made. Our conclusion is based on the evidence obtained as of the date of the audit report. However, there may be future factors subsequent to the audit report that cause the Yieh Phui Group's operations to be unstainable.

4. Evaluated the information, structure and content of the Consolidated Financial Statements (including the related notes) as a whole, as well as whether such statements convey relevant transactions and events

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appropriately.

1. Obtained adequate and appropriate audit evidence regarding financial information of members of the Group so as to express opinions for the Consolidated Financial Statements. We are responsible for the supervision and execution of auditing the Group and the preparation of the audit opinion.

The communications between us and the governing body take into account the scope and timing of the planned audit and the significant audit findings (including any significant deficiencies in the internal controls discovered during the audit process).

We have also provided the governing body with our statement of independence in accordance with the professional ethics of accountants and communicated with the governing body regarding any facts and issues that may be deemed to have an influence on our independence as accountants and other matters (including related protective measures).

Through communications with the governing body, we determined the key audit matters for the 2016 Consolidated Financial Statements. Such matters have been explicitly highlighted in the audit report, but do not include information that is not disclosable by law or when, in extremely rare cases and with reasonable anticipation, where we decided not to communicate specific items in the audit report as the negative effects of such disclosure would exceed the benefits gained for public interest.

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Crowe Horwath (TW) CPAs Accountant: Huang, Ling-Wen

Accountant: Hsieh, Ren-Yao

No. of the official approval: FSC No. 10200032833

21 March 2017

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Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries
Consolidated Balance Sheet
For the Years Ended December 31, 2016 and
2015

Unit: In Thousands of New Taiwan Dollars

Code Assets Notes	December 31, 2016 December 31, 2015 Amount ％ Amount ％ $8,133,181 10 $9,588,066 13 119,868 - 125,778 - 730,552 1 478,561 1 2,171,582 3 1,512,992 2 922,244 1 767,624 1 301,108 - 264,088 - 344,415 - 167,866 - 256,374 - 148,637 - 1,611 - 18,471 - 8,249,118 11 5,788,170 8 2,172,408 3 1,809,265 2 1,011,781 1 624,487 1 ---------------- ---- ---------------- ---- 24,414,242 30 21,294,005 28 ---------------- ---- ---------------- ---- 9,999 - 9,999 - 46,575 - 52,425 - 484,126 1 462,213 1 206,305 - - - 17,060,270 21 16,551,393 22 37,867,059 46 36,094,705 47 944,835 1 901,616 1 9,533 - 2,702 - 569,580 1 563,591 1 64,492 - 65,616 - 95,928 - 89,392 - 263,546 - 272,339 - -------------- ---- ---------------- ---- 57,622,248 70 55,065,991 72 ------------ ---- ---------------- ---- $82,036,490 100 $76,359,996 100 ============ ==== ================ ====	Code Liabilities and equity Notes	December 31, 2016 December 31, 2015
			Amount ％ Amount ％
Current assets 1100 Cash and Cash Equivalents 6 (I) 1110 Financial assets at fair value 6 (II) through profit or loss - current 1150 Notes receivable - net 6 (III) 1170 Accounts receivable-net 6 (IV) 1180 Accounts receivable--related parties (net) 7 1190 Construction contracts receivable 6 (V) 1195 Construction contract receivables –related parties 6 (V) 7 1200 Other receivables 6 (VI) 1220 Current income tax assets 130X Inventory 6 (VII) 1410 Prepayment 6 (VIII) 1476 Other financial assets - current 6 (IX) 11XX Total current assets Non-current Assets 1510 Financial assets at fair value 6 (II) Assets - noncurrent 1523 Available- for-sale financial assets - non-current 6 (XI) 1543 Financial assets carried at cost - non-current 6 (XII) 1546 Investments in debt instruments with no active markets 6 (XIII) - noncurrent 1550 Investment using equity method 6 (X) 1600 Property, plant and equipment 6 (XIV) 1760 Investment property, net 6 (XV) 1780 Intangible assets 1840 Deferred income tax assets 6 (XXXVI) 1920 Refundable Deposit 1980 Other financial assets - non- current 8 1985 Long-term prepaid rent 6 (XVI) 15XX Total Non-Current Assets 1XXX Total assets		Current liabilities 2100 Short-term loan 6 (XVII) 2110 Short-term notes and bills payable 6 (XVIII) 2150 Notes payable 2170 Accounts payable 2190 Construction contract payable 6 (V) 2200 Other payables 6 (XIX) 2230 Current income tax liabilities 2250 Provision - current 6 (XX) 2310 Advanced Receipts 2320 Long-term liabilities- 6 (XXI) current portion 21XX Total current liabilities Non-current liabilities 2530 Bonds payable 6 (XXII) 2540 Long-term loans 6 (XXIII) 2570 Deferred income tax liabilities 6 (XXXVI) 2630 Long-term deferred revenue 6 (XXV) 2640 Net defined benefit liability - non-current 6 (XXIV) 2645 Deposits Received 25XX Total noncurrent liabilities 2XXX Total liabilities Equity attributable to owners of the parent company Capital 3110 Capital of Common Stock 六(XXVI) 3200 Capital surplus 6 (XXVII) Retained earnings 3310 Legal reserve 6 (XXVIII) 3320 Special reserve 6 (XXVIII) 3350 Undistributed Earnings 6 (XXVIII) 3400 Other equity 6 (XXIX) 31XX Total equity attributable to shareholders of the parent 36XX Non-controlling equity 6 (XXX) 3XXX Total Equity 1XXX Total liabilities and equity	$10,514,507 13 $12,183,919 17 679,013 1 763,696 1 2,094,250 3 749,098 1 1,193,816 1 959,960 1 29,402 - 30,932 - 1,700,788 2 1,070,757 1 381,176 - 38,622 - 70,347 - 104,520 - 2,132,926 3 590,278 1 5,115,562 6 1,122,293 1 ---------------- ---- ---------------- ---- 23,911,787 29 17,614,075 23 ---------------- ---- ---------------- ---- - - 1,509,312 2 26,632,474 33 27,028,674 36 115,349 - 103,213 - 38,396 - 44,068 - 1,075,766 1 1,047,081 1 18,739 - 9,728 - ---------------- ---- ---------------- ---- 27,880,724 34 29,742,076 39 ---------------- ---- ---------------- ---- 51,792,511 63 47,356,151 62 ---------------- ---- ---------------- ---- 17,180,905 21 17,180,905 23 4,737,131 6 4,673,787 6 2,448,261 3 2,448,261 3 327,757 - 327,757 - 3,010,948 4 608,642 1 -167,351 - 645,189 1 ---------------- ---- ---------------- ---- 27,537,651 34 25,884,541 34 2,706,328 3 3,119,304 4 ---------------- ---- ---------------- ---- 30,243,979 37 29,003,845 38 ---------------- ---- ---------------- ---- $82,036,490 100 $76,359,996 100 ================ ==== ================ ====

Accounting Manager:  Lin,Jian-Hong

(Please refer to the notes to the consolidated financial statements) Manager: Wu, Lin-Maw －19－

Chairperson: Lin, I-Shou

Yieh Phui Enterprise Co., Ltd. and Subsidiaries
Consolidated Statements of Comprehensive Income
For the Years Ended December 31, 2016  and
2015Unit: In Thousands of New Taiwan Dollars

Code Item Notes	2016 Amount ％	2015
		Amount ％
4000 Operating Revenue 6 (XXXI) $52,847,410 100 $49,784,834 100 5000 Operating cost 6 (VII) 45,641,051 86 46,080,342 93 ----------------- ---- ----------------- ---- 5900 Gross profit (loss) 7,206,359 14 3,704,492 7 Operating expenses 6100 Selling expenses 2,284,023 4 1,866,832 3 6200 Administrative Expense 976,487 2 890,841 2 6300 R&D Expenses 101,812 - 85,142 - ----------------- ---- ----------------- ---- 6000 Total Operational Expenses 3,362,322 6 2,842,815 5 ----------------- ---- ----------------- ---- 6900 Operating income (loss) 3,844,037 8 861,677 2 ----------------- ---- ----------------- ---- Non-operating income and expenses 7010 Other income 6 (XXXII) 265,050 - 394,702 1 7020 Other gains and losses 6 (XXXIII) -177,374 - -336,830 -1 7050 Financing Cost 6 (XXXIV) -789,831 -1 -850,919 -2 7060 230,190 - -1,665,345 -3 ----------------- ---- ----------------- ---- 7000 Total Non-operating Income and Expenses -471,965 -1 -2,458,392 -5 ----------------- ---- ----------------- ---- 7900 Net income (loss) before tax 3,372,072 7 -1,596,715 -3 7950 Income tax expense (gain) 6 (XXXVI) 993,527 2 18,122 - ----------------- ---- ----------------- ---- 8200 Net income (loss) 2,378,545 5 -1,614,837 -3 ----------------- ---- ----------------- ---- Other comprehensive income (loss), net: Items not reclassified subsequently to profit or loss: 8311 Remeasurement of defined benefit plans -71,478 - -66,341 - 8320 Share of the loss (profit) of associates and joint ventures -26,336 - -23,220 - recognized under equity method 8349 Income tax relating to items that will not be reclassified to profit or loss -11,383 - -8,801 - Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences on translation of foreign financial statements -849,812 -2 -108,159 - 8362 Unrealized gain (loss) on available-for-sell financial assets -5,850 - 223,374 - 8370 Share of other consolidated loss (profit) of subsidiaries, associates and joint ventures recognized under equity method -104,959 - 126,291 - 8399 Income tax expense (or benefit) relating to items that may be reclassified to profit or loss -142,336 - -29,365 - ----------------- ---- ----------------- ---- 8300 Other comprehensive income (loss), 6 (XXXVII) -904,716 -2 190,111 - ----------------- ---- ----------------- ---- 8500 Total comprehensive income (loss) $1,473,829 3 $-1,424,726 -3 ================= ==== ================= ==== Net income (loss) attributable to: 8610 Owners of the parent company 2,502,005 5 -953,786 -2 8620 Non-controlling interest -123,460 - -661,051 -1 ----------------- ---- ----------------- ---- 8600 Total $2,378,545 5 $-1,614,837 -3 ================= ==== ================= ==== Total comprehensive income (loss) attributable to: 8710 Owners of the parent company 1,612,620 3 -761,465 -2 8720 Non-controlling interest -138,791 - -663,261 -1 ----------------- ---- ----------------- ---- 8700 Total $1,473,829 3 $-1,424,726 -3 ================= ==== ================= ==== Basic earnings per share (NTD) 9750 Basic earnings per share 6 (XXXVIII) $1.46 $-0.56 ================= ================= (Please refer to the notes to the consolidated financial statements) Chairperson:Lin, I-Shou Manager: Wu, Lin-Maw Accounting Manager: Lin,Jian-Hong Share of the loss (profit) of associates and joint ventures

－20－

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries
Consolidated Statement of Changes in Equity
For the Years Ended December 31, 2016 and
2015

Unit: In Thousands of New Taiwan Dollars

Equity Attributable to Shareholders of the Parent Company

Item	Capital Capital of Common Shares Capital surplus	Retained earnings	Exchange differences on Unrealized gain (loss) Profit (loss) on translation of foreign on available-for- sale hedge instrument for financial statements financial assets effective hedge Non-controlling interest Total equity Other Equity
		Legal reserve Special reserve Undistributed Earnings
Balance as of January 1, 2015 Earnings allocation and distribution: Legal reserves Cash dividends for common stock Stock dividends for common stock Total Net profit (loss) Other comprehensive income (loss) Total comprehensive income (loss) Changes in associated companies and joint ventures accounted for using equity method Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Change in ownership interests in subsidiaries Non-controlling interest Balance as of December 31, 2015 Net profit (loss) Other comprehensive income (loss) Total comprehensive income (loss) Changes in associated companies and joint ventures accounted for using equity method Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Change in ownership interests in subsidiaries Non-controlling interest Balance as of December 31, 2016	$16,680,490 $4,627,688 $2,324,376 $327,757 $2,649,026 $625,476 $-235,257 $-9,217 $2,257,832 $29,248,171 - - 123,885 - -123,885 - - - - - - - - - -333,610 - - - - -333,610 500,415 - - - -500,415 - - - - - ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 500,415 - 123,885 - -957,910 - - - - -333,610 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - - - - -953,786 - - - -661,051 -1,614,837 - - - - -71,866 -42,009 289,899 16,297 -2,210 190,111 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - - - - -1,025,652 -42,009 289,899 16,297 -663,261 -1,424,726 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - 9,924 - - -45,340 - - - -2,244 -37,660 - 36,175 - - - - - - -36,175 - - - - - -11,482 - - - 11,482 - - - - - - - - - 1,551,670 1,551,670 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 17,180,905 4,673,787 2,448,261 327,757 608,642 583,467 54,642 7,080 3,119,304 29,003,845 - - - - 2,502,005 - - - -123,460 2,378,545 - - - - -76,845 -809,765 -7,080 4,305 -15,331 -904,716 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - - - - 2,425,160 -809,765 -7,080 4,305 -138,791 1,473,829 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - 9,543 - - -11,648 - - - -566 -2,671 - 45,136 - - - - - - -45,136 - - 8,665 - - -11,206 - - - 2,541 - - - - - - - - - -231,024 -231,024 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $17,180,905 $4,737,131 $2,448,261 $327,757 $3,010,948 $-226,298 $47,562 $11,385 $2,706,328 $30,243,979 ================ ================ ================ ================ ================ ================ ================ ================ ================ ================

Chairperson :Lin, I-Shou

(Please refer to the notes to the consolidated financial statements)
Manager: Wu, Lin-Maw

Accounting Manager:  Lin,Jian-Hong

－21－

Unit: In Thousands of
New Taiwan Dollars

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries
Consolidated Cash Flow Statement
For the Years Ended December 31, 2016 and
2015

Item 2016 Cash flow from operating activities Net income (loss) before tax $3,372,072 Adjustments: Income and expense items Depreciation 1,474,184 Amortization 1,377 Bad debt provided (restated as income) - Net loss (gain) from financial assets and liabilities at fair value through profit or loss -12,682 Interest expense 789,831 Interest Income -49,136 Dividend income -8,250 Share of the loss (profit) of associates and joint ventures recognized under equity method -230,190 Loss (gain) on disposal of property, plant and equipment 25,766 Property, plant and equipment restated as expenses 17,355 Gain (loss) on disposal of investment property -200 Financial asset impairment loss - Impairment loss on non-financial assets 52,796 Gain from bargain purchase - Others -217 ----------------- Total income and expense items 2,060,634 ----------------- Changes in operating assets and liabilities: Net change in assets relating to operating activities (Increase) decrease in held-for-trading financial assets 17,814 (Increase) decrease in notes receivable -251,768 (Increase) decrease in accounts receivable -660,075 (Increase) decrease in accounts receivable - related parties -153,344 (Increase) decrease in construction contract receivables -213,569 (Increase) decrease in other receivables -90,234 (Increase) decrease in inventories -2,468,253 (Increase) decrease in prepayments -362,043 (Increase) decrease in other financial assets 2,204 ----------------- Total net changes in operating assets -4,179,268 ----------------- Net changes in operating liabilities Increase (decrease) in notes payable 1,345,152 Increase (decrease) in accounts payable 233,856 Increase (decrease) in accounts payable -1,530 Increase (decrease) in other payables 280,274 Increase (decrease) in provision -34,173 Increase (decrease) in advance receipts 1,542,648 Increase (decrease) in defined benefit liability, net -42,793 ----------------- Total net changes in operating liabilities 3,323,434 ----------------- Total net changes in operating assets and liabilities -855,834 ----------------- Total adjustments 1,204,800 ----------------- Cash inflow (outflow) from operations 4,576,872 Interest income received 49,113 Dividends received 25,950 Interest paid -801,322 Income tax refunded (paid) -475,574 ----------------- Net cash inflow (outflow) from operating activities 3,375,039 ----------------- －22－

2015

$-1,596,715 1,503,750 1,781 105 -13,055 850,919 -72,292 -12,323 1,665,345 38,373 49,627 -10,910 2,668 886,644 -527,995 -217 ----------------- 4,362,420 ----------------- 123,250 -193,222 628,784 353,355 -78,102 203,154 1,709,375 131,314 426,863 ----------------- 3,304,771 ----------------- -906,718 -653,353 -5,068 -1,083 -9,039 162,942 -26,494 ----------------- -1,438,813 ----------------- 1,865,958 ----------------- 6,228,378 ----------------- 4,631,663 86,463 23,423 -874,830 -318,879 ----------------- 3,547,840 -----------------

Item 2016 Cash flows from investing activities Acquisition of available-for-sale financial assets - Acquisition of investments in debt instruments with no active markets -206,305 Acquisition of financial assets measured at cost -21,913 Disposal of financial assets carried at cost 150 Acquisition of the investment using equity method -408,132 Acquisition of subsidiaries (deducting the cash received) - Disposal of subsidiaries - Proceeds received from capital reduction of investee accounted for by equity method 1,097 Acquisition of property, plant and equipment -4,174,303 Disposal of property, plant and equipment 837 Increases in refundable deposits - Decreases in refundable deposits 1,124 Acquisition of intangible assets -8,208 Acquisition of Investment property -44,067 Increase in other financial assets -396,034 Decrease in other financial assets - Decrease in other non-current assets 8,793 ----------------- Net cash provided by (used in) investing activities -5,246,961 ----------------- Cash flows from financing activities Decreases in short-term loan -1,669,412 Increases in short-term notes and bills payable - Decreases in short-term notes and bills payable -85,539 Repayment of corporate bonds -1,237,560 Issuance of long-term debts 4,284,850 Repayment of long-term debts -979,287 Increases in guarantee deposits 9,011 Decrease in other financial liabilities - Decrease in other non-current liabilities -5,672 Distribution of cash dividends - Changes in non-controlling equity -231,024 ----------------- Net cash inflow (outflow) from financing activities 85,367 ----------------- Impacts on cash and cash equivalents from changes in exchange rates 331,670 ----------------- Net increase (decrease) in cash and cash equivalents for the year -1,454,885 Balance of Cash and Cash Equivalents, Beginning of Year 9,588,066 ----------------- Balance of Cash and Cash Equivalents, End of Year $8,133,181 ================= (Please refer to the notes to the consolidated financial statements) Chairperson: Lin, I-Shou Manager: Wu, Lin-Maw

2015

-18,373 - -292,442 97,576 -2,307,193 98,742 -89,271 - -5,329,442 1,713 -29,863 - - - - 9,549 13,080 ----------------- -7,845,924 ----------------- -630,629 55,000 - - 14,740,591 -8,741,797 79 -7,254 -3,501 -333,610 -193,136 ----------------- 4,885,743 ----------------- 133,602 ----------------- 721,261 8,866,805 ----------------- $9,588,066 ================= Accounting Manager: Lin,Jian-Hong

－23－

Crowe Horwath (TW) CPAs Member Crowe Horwath International

==> picture [172 x 30] intentionally omitted <==

27F., No.6, Siwei 3 Rd., Lingya Dist., Kaohsiung, Taiwan R.O.C. Tel: (07) 3312133 Fax: (07) 3331710

AUDIT REPORT OF THE ACCOUNTANTS

To Yieh Phui Enterprise Co., Ltd.

AUDIT REPORT

The accountants have audited the Individual Financial Statements of Yieh Phui Enterprise Co., Ltd. (“Yieh Phui” or the “company”), which include the Balance Sheet as of 31 December 2016 and 2015, Statement of Comprehensive Income, Statement of Changes in Equity, Cash Flow Statement, and Notes to the Individual Financial Statements (including a Summary of Significant Accounting Policies) for the period 1 January to 31 December of 2016 and 2015.

Based on our review, our findings, and the audit reports of other accountants (please refer to the "Other Matters" section), the Individual Financial Statements have been compiled in accordance with the Regulations Governing the Preparation of Financial Reports and are sufficient in presenting the financial position of Yieh Phui as of 31 December 2016 and 2015, its financial performance, and its cash flow for the period of 1 January to 31 December of 2016 and 2015.

Basis of the Audit

We conducted our audit in accordance with the Regulations Governing Auditing and Attestation of Individual Financial Statements by Certified Public Accountants and Generally Accepted Auditing Standards (GAAS). Our responsibility under the above-mentioned regulations will be further explained in the section titled "Accountant's Responsibility in Auditing the Individual Financial Statements." We have complied with the ethical requirements for accountants, fulfilled the relevant responsibilities under such requirements, and we have maintained our independence from Yieh Phui. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our audit.

Key Audit Matters

－ －24－

Key audit matters refer to the most vital matters in the process of auditing of 2016 Individal Individual Financial Statements of Yieh Phui based on the accountants’ professional judgment. These matters have been dealt with during the process of auditing and compiling the Individual Financial Statements and in the preparation of our audit opinion. As such, we do not respond to each key matter individually. Herewith, we recite the key matters regarding the Individual Financial Statements of Yieh Phui in 2016:

I. Timing of Sales Revenue Recognition

Please refer to: note 4(25) of the Individual Financial Statements for accounting policies regarding revenue recognition; note 5(2)1. of the Individual Financial Statements for critical accounting estimates and assumptions regarding revenue recognition; and note 6(26) of the Individual Financial Statements for details regarding revenue recognition.

－ －25－

Description of key audit matters:

The timing of sales revenue recognition has to do with confirming the time of transfer of ownership and risk to the customer. Since the sales conditions for each major customer may differ, Yieh Phui determines whether to transfer the ownership and risk of goods sold to the customer according to the trading conditions of each order. As the timing of recognizing the sales revenue may have a major impact on Yieh Phui’s financial performance, we have thus included it as one of the key audit matters.

Audit process adopted:

Our audit process included investigating the effectiveness of the design and execution of internal controls at the time of trial sales for revenue recognition, conducting surveys to sample the trading conditions with major customers, and putting in place trial deadlines to determine the appropriateness of the timing of sales for revenue recognition.

II. Inventory Valuation

Please refer to: note 4(12) of the Individual Financial Statements for the accounting policies regarding inventory valuation; note 5(2)5. of the Individual Financial Statements for critical accounting estimates and assumptions regarding inventory valuation; and note 6(7) of the Individual Financial Statements for details of inventory valuation.

Description of key audit matters:

Yieh Phui’s inventory amounted to NT$3,650,015,000 (total cost of inventory of NT$3,652,353,000 minus the allowance for inventory valuation losses of NT$2,338,000) on 31 December 2016, which accounted for 7.57% of total assets. The inventory valuation is based on the lower of the value of cost and net realizable value. Given that the valuation of net realizable value of inventory has a significant impact on critical evaluations and estimates, and since inventory valuation is dependent on the frequently volatile fluctuations of international metals prices, we have thus included this item in the key audit matters.

Audit process adopted:

Our major audit process included obtaining valuation information of the cost and net realizable value of inventory, conducting surveys to sample estimated selling prices and the most recent sales records, and assessing the appropriateness of

－ －26－

management's basis for estimating the net realizable value.

Other Matters

Part of the Individual Financial Statements for 2016 and 2015 relating to investee(s) recognized under the equity method were audited separately by other accountants. Those reports were used as input for assessing the values of the companies in the Individual Financial Statements of our audit report. The value of investments in affiliated companies recognized under the equity method as of 31 December 2016 and 2015 were NT$4,422,752,000 and NT$3,808,043,000, respectively, each accounting for 9.17% and 8.40% of total assets. The share of profits from affiliated companies using the equity method in 2016 and 2015 were NT$123,277,000 and (NT$189,732,000), respectively, each accounting for 4.09% and 17.82% of income before tax.

The Management’s Responsibility and the Governing Body of the Individual Financial Statements

It is the management’s responsibility to prepare the Individual Financial Statements with appropriate expression in accordance with the Regulations Governing the Preparation of Financial Reports approved and published by the Financial Supervisory Commission. The company’s management is also responsible for the necessary internal controls when preparing the Individual Financial Statements so as to avoid material misstatements due to fraud or errors therein.

－ －27－

In preparing the Individual Financial Statements, the responsibility of management includes the assessment of the sustainability of the company, disclosure of related matters, and the adoption of a consistent accounting basis, unless the management intends to liquidate the company, terminate the business, or no practicable measures other than liquidation or termination of the business can be taken.

The governing bodies of Yieh Phui (including the Audit Committee) have the responsibility to oversee the financial reporting process.

The accountants’ Responsibility in Auditing the Individual Financial Statements

The purpose of our audit is to provide reasonable certainty that the Individual Financial Statements as a whole does not contain material misstatements due to fraud or errors. "Reasonable certainty" refers to a high level of credibility. Nevertheless, our audit, which was carried out according to GAAS, does not guarantee that a material misstatement(s) will be detected in the Individual Financial Statements. There may still be material misstatements due to fraud or errors. If it could have been reasonably anticipated that misstated amounts, individually or in aggregate, would have influenced the economic decisions made by the users of the Individual Financial Statements, it will be deemed as material.

We have exercised professional judgment and maintained professional skepticism while abiding by GAAS in our audit. The following tasks have also been performed:

1. Identified and evaluated the risk of material a misstatement(s) due to fraud or errors in the Individual Financial Statements, designed and carried out appropriate countermeasures for the assessed risks, and obtained sufficient and appropriate evidence as the basis for the audit report. As fraud may involve collusion, forgery, deliberate omissions, false statements, or violations of internal controls, the risks of material a misstatements due to fraud is greater than that due to errors.

2. Acquired the necessary understanding of internal controls pertaining to the audit so as to provide appropriate audit procedures under such circumstances. Nevertheless, the purpose of such an understanding is not to provide any opinion on the effectiveness of the internal controls at Yieh Phui.

3. Evaluated the appropriateness of the accounting policies adopted by management and the rationality of the accounting estimates and the relevant disclosures.

4. Assessed the appropriateness of the going-concern principle adopted by management as well as any factors that may cause material risks to the company’s

－ －28－

existence. If we are of the opinion that material risks exist in these matters or under these conditions, we will remind the users of the Individual Financial Statements to pay attention to relevant disclosures in the audit report, or revise the audit opinion if such disclosures are inappropriate. Our conclusion is based on the audit evidence obtained as of the date of the audit report. Nevertheless, there may be factors in the future that may cause the operations of Yieh Phui to be unstainable.

1. Evaluated the overall expression, structure and contents of the Individual Financial Statements, including the relevant Notes, and whether the Individual Financial Statements fairly present the relevant transactions and events.

2. Obtained adequate and appropriate audit evidence regarding financial information of Yieh Phui’s internal units so as to provide opinions for the Individual Financial Statements. We are responsible for the supervision and execution of auditing Yieh Phui and the preparation of the audit opinion.

Communications between us and the company’s governing body take account of the scope and timing of the planned audit and significant audit findings, including any significant deficiencies in the internal controls during the audit process.

－ －29－

We have also provided the governing body with our statement of independence in accordance with the professional ethics of accountants and communicated with the governing body the facts and issues that may be deemed to have an influence on our independence as accountants as well as other matters (including related protective measures).

Through communications with the governing body, we determined the key audit matters for the company’s 2016 Individual Financial Statements. Such matters have been explicitly highlighted in the audit report, but do not include information undisclosable by law or, in extremely rare cases and with reasonable anticipation, where we decided not to communicate specific items in the audit report as the negative effects of such disclosure would exceed the benefits gained for public interest.

Crowe Horwath (TW) CPAs Accountant: Huang, Ling-Wen

Accountant: Hsieh, Ren-Yao

No. of the official approval: FSC No. 10200032833 21 March 2017

－30－

Yieh Phui Enterprise Co., Ltd.
Statement of Balance Sheet
For the Years Ended December 31, 2016 and 2015

Unit:  In Thousands of
New Taiwan Dollars

Code Assets Notes	December 31, 2016 December 31, 2015	Code Liabilities and equity Notes	December 31, 2016 December 31, 2015
	Amount ％ Amount ％		Amount ％ Amount ％
Current assets 1100 Cash and Cash Equivalents 6 (I) 1110 Financial assets at fair value 6 (II) through profit or loss - current 1150 Notes receivable - net 6 (III) 1170 Accounts receivable-net 6 (IV) 1180 Accounts receivable--related parties (net) 7 1190 Construction contracts receivable 6 (V) 1195 Construction contract receivables –related parties 6 (V). 7 1200 Other receivables 6 (VI) 1210 Other Receivables - Related Parties 7 1220 Current income tax assets 130X Inventory 6 (VII) 1410 Prepayment 6 (VIII) 1476 Other financial assets - current 8 11XX Total current assets Non-current Assets 1510 Financial assets at fair value 6 (II) through profit or loss 1523 Available- for-sale financial assets - non-current 6 (X) 1543 Financial assets carried at cost - non-current 6 (XI) 1546 Investments in debt instruments with no active markets 6 (XII) - non-current 1550 Investment using equity method 6 (IX) 1600 Property, plant and equipment 6 (XIII) 1760 Investment property, net 6 (XIV) 1840 Deferred income tax assets 6 (XXXI) 1920 Refundable Deposit 1980 Other financial assets - non- current 8 1985 Long-term prepaid rents 6 (XV) 15XX Total Non-Current Assets 1XXX Total assets	$1,545,921 3 $1,753,811 4 91,783 - 100,107 - 865 - 48,443 - 1,246,049 3 951,132 2 182,160 - 449,474 1 301,108 1 264,088 1 345,888 1 184,524 - 134,250 - 61,592 - 323,800 1 15,891 - - - 6,558 - 3,650,015 7 2,193,707 6 284,301 1 206,729 - 93,817 - 55,066 - ---------------- ---- --------------- - ---- 8,199,957 17 6,291,122 14 ---------------- ---- --------------- - ---- 9,999 - 9,999 - 46,575 - 52,425 - 481,984 1 460,071 1 170,654 - - - 29,046,325 60 27,874,922 61 8,559,554 18 8,939,016 20 1,287,158 3 1,288,006 3 296,756 1 275,511 1 3,844 - 5,715 - 40,857 - 47,422 - 89,409 - 82,700 - ---------------- ---- --------------- - ---- 40,033,115 83 39,035,787 86 ---------------- ---- --------------- - ---- $48,233,072 100 $45,326,909 100 ================ ==== =============== = ==== (Please refer to the notes to the financial statement)	Current liabilities 2100 Short-term loan 6 (XVI) 2110 Short-term notes and bills payable 6 (XVII) 2150 Notes payable 2170 Accounts payable 2190 Construction contract payable 6 (V) 2200 Other payables 6 (XVIII) 2230 Current income tax liabilities 2250 Provision - current 6 (XIX) 2310 Advance receipts 2320 Long-term liabilities- 6 (20) current portion 21XX Total current liabilities Non-current liabilities 2540 Long-term loans 6 (20) 2570 Deferred income tax liabilities 6 (XXXI) 2640 Net defined benefit liability - non-current 6 (XXI) 2645 Deposit received 25XX Total noncurrent liabilities 2XXX Total liabilities Capital 3110 Capital of Common Shares 6 (XXII) 3200 Capital surplus 6 (XXIII) Retained earnings 3310 Legal reserve 6 (XXIV) 3320 Special Reserve 6 (XXIV) 3350 Undistributed earnings 6 (XXIV) 3400 Other equity 6 (XXV) 3XXX Equity 1XXX Total liabilities and equity	$6,185,868 13 $7,909,065 18 339,777 1 439,587 1 642,048 1 604,833 1 700,059 1 515,536 1 29,465 - 30,932 - 567,757 1 451,782 1 275,785 1 - - 40,271 - 75,851 - 1,508,314 3 358,153 1 787,147 2 291,200 1 --------------- - ---- ---------------- ---- 11,076,491 23 10,676,939 24 --------------- - ---- ---------------- ---- 8,803,213 19 7,986,274 18 108,870 - 100,664 - 704,847 1 676,491 1 2,000 - 2,000 - --------------- - ---- ---------------- ---- 9,618,930 20 8,765,429 19 --------------- - ---- ---------------- ---- 20,695,421 43 19,442,368 43 --------------- - ---- ---------------- ---- 17,180,905 35 17,180,905 39 4,737,131 10 4,673,787 10 2,448,261 5 2,448,261 5 327,757 1 327,757 1 3,010,948 6 608,642 1 -167,351 - 645,189 1 --------------- - ---- ---------------- ---- 27,537,651 57 25,884,541 57 --------------- - ---- ---------------- ---- $48,233,072 100 $45,326,909 100 =============== = ==== ================ ====

Chairperson: Lin, I-Shou

Manager: Wu, Lin-Maw

Accounting Manager:  Lin,Jian-Hong

－31－

Yieh Phui Enterprise Co., Ltd.
Statement of Comprehensive Income
For the Years Ended December 31,
2016and2015

Unit:  In Thousands
of New Taiwan
Dollars

Code Item Notes	2016 Amount ％ $23,867,665 100 20,009,747 84 ----------------- ---- 3,857,918 16 1,396,827 5 396,364 2 ----------------- ---- 1,793,191 7 ----------------- ---- 2,064,727 9 ----------------- ---- 113,804 - -20,049 - -355,796 -1 1,210,065 5 ----------------- ---- 948,024 4 ----------------- ---- 3,012,751 13 510,746 2 ----------------- ---- 2,502,005 11 ----------------- ---- -51,013 - -37,215 - -11,383 - -5,850 - -949,026 -3 -142,336 -1 ----------------- ---- -889,385 -4 ----------------- ---- $1,612,620 7 ================= ==== $1.46 =================	2015
		Amount ％
4000 Operating Revenue 6 (XXVI) 5000 Operating cost 6 (VII) 5900 Gross profit (loss) Operating expenses 6100 Selling expenses 6200 Administrative Expense 6000 Total operating expenses 6900 Operating income (loss) Non-operating income and expenses 7010 Other income 6 (XXVII) 7020 Other gains and losses 6 (XXVIII) 7050 Finance costs 6 (XXX) 7070 Share of the loss (profit) of subsidiaries, associates and joint ventures recognized under equity method 7000 Total non-operating income and expenses 7900 Net income (loss) before tax 7950 Income tax expenses (or benefits) 6 (XXXI) 8200 Net income (loss) Other comprehensive income (loss), net: Those that will not be reclassified subsequently to profit or loss: 8311 Re-measurement of defined benefit plan 8330 Share of other consolidated loss (profit) of subsidiaries, associates and joint ventures recognized under equity method 8349 Income tax expense (or benefits) relating to items that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss: 8362 Unrealized gain (loss) on available-for-sale financial assets 8380 Share of other consolidated loss (profit) of subsidiaries, associates and joint ventures recognized under equity method 8399 Income tax expense (or benefits) relating to items that may be reclassified to profit or loss 8300 Other comprehensive income (loss), net 6 (XXXII) 8500 Total comprehensive income (loss), net Basic earnings per share (NTD) 9750 Basic earnings per share 6 (XXXIII) (Please refer to the notes to the financial statement)		$22,223,598 100 20,354,559 92 ----------------- ---- 1,869,039 8 959,146 3 351,235 2 ----------------- ---- 1,310,381 5 ----------------- ---- 558,658 3 ----------------- ---- 276,232 1 502,611 2 -319,100 -1 -2,083,059 -9 ----------------- ---- -1,623,316 -7 ----------------- ---- -1,064,658 -4 -110,872 - ----------------- ---- -953,786 -4 ----------------- ---- -50,938 - -29,730 - -8,802 - 223,374 1 12,054 - -28,759 - ----------------- ---- 192,321 1 ----------------- ---- $-761,465 -3 ================= ==== $-0.56 =================

Chairperson:Lin, I-Shou Manager: Wu, Lin-Maw －32－

Accounting Manager:
Lin,Jian-Hong

Unit: In Thousands of New Taiwan Dollars

Yieh Phui Enterprise Co., Ltd.
Statement of Changes in Equity
For the Years Ended December 31, 2016 and
2015

Item	Capital Common shares Capital Surplus	Retained earnings	Exchange differences on Unrealized gain (loss) Profit (loss) on translation of foreign financial ~~statements~~ on available-for- sale financial ~~assets~~ hedge instrument for effective hedge Total equity Other Equity Items
		Legal reserve Special reserve Undistributed earnings
Balance as of January 1, 2015 Earnings allocation and distribution: Legal reserve Cash dividends for common stock Stock dividends for common stock Total Net profit (loss) Other comprehensive income (loss) Total comprehensive income (loss) Changes in associated companies and joint ventures accounted for using equity method Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Change in ownership interests in subsidiaries Balance as of December 31, 2015 Net profit (loss) Other comprehensive income (loss) Total comprehensive income (loss) Changes in associated companies and joint ventures accounted for using equity method Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Change in ownership interests in subsidiaries Balance as of December 31, 2016	$16,680,490 $4,627,688 $2,324,376 $327,757 $2,649,026 $625,476 $-235,257 $-9,217 $26,990,339 - - 123,885 - -123,885 - - - - - - - - -333,610 - - - -333,610 500,415 - - - -500,415 - - - - ---------------- -------------- -- ---------------- --------------- - --------------- - ---------------- ---------------- ---------------- ---------------- 500,415 - 123,885 - -957,910 - - - -333,610 ---------------- -------------- -- ---------------- --------------- - --------------- - ---------------- ---------------- ---------------- ---------------- - - - - -953,786 - - - -953,786 - - - - -71,866 -42,009 289,899 16,297 192,321 ---------------- -------------- -- ---------------- --------------- - --------------- - ---------------- ---------------- ---------------- ---------------- - - - - -1,025,652 -42,009 289,899 16,297 -761,465 ---------------- -------------- -- ---------------- --------------- - --------------- - ---------------- ---------------- ---------------- ---------------- - 9,924 - - -45,340 - - - -35,416 - 36,175 - - - - - - 36,175 - - - - -11,482 - - - -11,482 ---------------- -------------- -- ---------------- --------------- - --------------- - ---------------- ---------------- ---------------- ---------------- 17,180,905 4,673,787 2,448,261 327,757 608,642 583,467 54,642 7,080 25,884,541 - - - - 2,502,005 - - - 2,502,005 - - - - -76,845 -809,765 -7,080 4,305 -889,385 ---------------- -------------- -- ---------------- --------------- - --------------- - ---------------- ---------------- ---------------- ---------------- - - - - 2,425,160 -809,765 -7,080 4,305 1,612,620 ---------------- -------------- -- ---------------- --------------- - --------------- - ---------------- ---------------- ---------------- ---------------- - 9,543 - - -11,648 - - - -2,105 - 45,136 - - - - - - 45,136 - 8,665 - - -11,206 - - - -2,541 ---------------- -------------- -- ---------------- --------------- - --------------- - ---------------- ---------------- ---------------- ---------------- $17,180,905 $4,737,131 $2,448,261 $327,757 $3,010,948 $-226,298 $47,562 $11,385 $27,537,651 ================ ============== == ================ =============== = =============== = ================ ================ ================ ================

(Please refer to the notes to the financial statement)

Manager: Wu, Lin-Maw

Chairperson :Lin, I-Shou

Accounting Manager:

－33－

Yieh Phui Enterprise Co., Ltd.
Statements of Cash Flows
For the Years Ended December 31, 2016 and 2015

Unit: In Thousands of New Taiwan Dollars

Item 2016 Cash flow from operating activities Net income (loss) before tax $3,012,751 Adjustments: Income and expense items Depreciation 528,387 2,118 Interest expense 355,796 Interest Income -3,696 Dividend income -7,906 Share of the loss (profit) of associates and joint ventures recognized under equity method -1,210,065 Loss (gain) on disposal of property, plant and equipment 18,408 Reclassification of property, plant and equipment to expense 15,848 Gain (loss) on disposal of investment -150 Impairment loss on non-financial assets 2,564 Gain from bargain purchase - Others 52,192 ----------------- Total income and expense items -246,504 ----------------- Changes in operating assets and liabilities Net changes in operating assets (Increase) decrease in held-for-trading financial assets 6,206 (Increase) decrease in notes receivable 47,801 (Increase) decrease in accounts receivable -296,416 (Increase) decrease in accounts receivable - related parties 268,590 (Increase) decrease in construction contract receivables -198,384 (Increase) decrease in other receivables -62,151 (Increase) decrease in inventories -1,460,500 (Increase) decrease in prepayments -77,572 (Increase) decrease in other financial assets - ----------------- Total net changes in operating assets -1,772,426 ----------------- Net changes in operating liabilities Increase (decrease) in notes payable 37,215 Increase (decrease) in accounts payable 184,523 Increase (decrease) in construction contract payable -1,467 Increase (decrease) in other payables 110,841 Increase (decrease) in provision -35,580 Increase (decrease) in advance receipts 1,150,161 Increase (decrease) in defined benefit liability, net -22,657 ----------------- Total net changes in operating liabilities 1,423,036 ----------------- Total net changes in operating assets and liabilities -349,390 ----------------- Total adjustments -595,894 ----------------- Cash inflow (outflow) from operations 2,416,857 Interest received 3,298 Dividends received 25,606 Interest paid -354,151 Income tax refunded (paid) -87,723 ----------------- Net cash provided by (used in) operating activities 2,003,887 ----------------- Net loss (gain) from financial assets and liabilities at fair value through profit or loss －34－

2015

$-1,064,658 501,676 -10,787 319,100 -2,425 -11,948 2,083,059 26,479 20,907 -17,764 - -500,705 21,179 ----------------- 2,428,771 ----------------- 132,221 -33,124 391,182 460,523 -59,658 84,907 738,139 -77,511 5,619 ----------------- 1,642,298 ----------------- 69,285 -192,905 -5,793 664 5,326 217,291 -27,733 ----------------- 66,135 ----------------- 1,708,433 ----------------- 4,137,204 ----------------- 3,072,546 16,231 23,048 -325,496 -109,329 ----------------- 2,677,000 -----------------

Cash flows from investing activities
Acquisition of available-for-sale financial assets	-	-18,373
Acquisition of investments in debt instruments	-170,654	-
with no active markets
Acquisition of financial assets carried at cost	-21,913	-292,442
Disposal of financial assets carried at cost	150	97,576
Acquisition of the investment using equity method	-976,981	-3,547,970
Proceeds received from capital reduction of	-	1,250,651
investee accounted for by using equity method
Acquisition of property, plant and equipment	-181,034	-417,626
Disposal of property, plant and equipment	76	-
Increases in refundable deposits	-	-1,590
Decreases in refundable deposits	1,871	-
Increase in other receivables - related parties	-310,000	-
Increase in other financial assets	-32,186	-9,565
Increase in other non-current assets	-6,709	-
Decrease in other non-current assets	-	2,400
	-----------------	-----------------
Net cash provided by (used in) investing	-1,697,380	-2,936,939
activities
	-----------------	-----------------
Cash flows from financing activities
Decreases in short-term loan	-1,723,197	-862,848
Decrease in short-term notes and bills payables	-100,000	-50,000
Issuance of long-term debts	1,600,000	7,180,000
Repayments of long-term debts	-291,200	-4,464,000
Distribution of cash dividends	-	-333,610
	-----------------	-----------------
Net cash provided by (used in) financing	-514,397	1,469,542
activities
	-----------------	-----------------
Net increase (decrease) in cash and cash	-207,890	1,209,603
equivalents
Cash and Cash Equivalents, Beginning of Year	1,753,811	544,208
	-----------------	-----------------
Cash and Cash Equivalents, End of Year	$1,545,921	$1,753,811
	=================	=================
(Please refer to the notes to the financial
report)
Chairperson: Lin, I-Shou	Manager: Wu, Lin-Maw	Accounting Manager:
		Lin,Jian-Hong

－35－

2. The Auditing Committee on the Final Financial Statements

Report of the Auditing Committee

Yieh Phui Enterprise Co., Ltd

The board of directors has prepared the 2016 operating report, consolidated financial statement, which includes the individual entity report, and the declaration of dividends, among which has been audited and signed off by Crowe Horwath (TW)CPAs. The operating report, consolidated financial statement and the declaration of dividends have been audited by the auditing committee and no abnormality found. Thus, the report has been released according to Article 14-4 and Article 219 of the Company Act. Herein kindly ask for approval.

To

the 2017 the Stockholder’s Meeting of Yieh Phui

Chairman of the Auditing Committee: Sun Chin-Su

March 21, 2017

3. The 2016 Remuneration of Employees and Directors

Explan : 1. The remuneration of the employees and directors had been approved by the board of directors on March 21, 2017 and to be paid in cash.

1. The remuneration for the employees is NT$6,043,632

2. The remuneration for the directors is NT$1,510,908

－36－

III Matters to Be Approved

Proposal ： Proposed by the board of directors.

Brief ： Approve of the 2016 final financial statements.

Explain ： 1.The 2016 operating report, the individual entity report and consolidated financial

• statement. Please refer to the program of the meeting.

• The individual entity report and the consolidated financial statement have been done and audited by accounts Huang, Ling-Wen and Hsieh Yen-Yao of Crowe Horwath (TW) CPAs.I

• The above financial statements and operating report has been audited by the Auditing Committee.

• To be approved.

Resolution ：

Proposal 2 ： Proposed by the board of directors.

Brief ： Approve of the 2016 Distribution of Earnings.

Explain ： Yieh Phui plans to distribute earnings of 2016 as the table below:

	Yieh Phui Enterprise Co., Ltd
	Earnings Distribution Table
	2016	Unit:NT$
	Item	Amount
Undistributed earnings at the beginning of the term		608,641,931
－：	Re-measure amount of confirmed benefit plans recognized as retained earnings	(76,845,020)
－：	Variation of affiliated enterprises and joint ventures recognized adopting equity method	(11,647,538)
－：	Change of ownership equity of subsidiaries	(11,205,942)
+：	Net loss after tax of this term	2,502,004,855
－：	Legal reserve	(250,200,486)
Earnings available for distribution		2,760,747,800
－：	Shareholders’ dividends	(1,718,090,580)
Unappropriated earnings		1,042,657,220

Resolution:

VI Matters for Discussion

－37－

Proposal 1 ： Proposed by the Board of Directors.

Brief ： Declaration of cash and stock dividends to stockholders and the stock divideds to increase capital.

Explain ： 1. To implement according to the distribution of earnings.

1. The cash dividend to be paid is NT$687,236,230, or NT$0.4 per share. Herein kindly asks the stockholders’ meeting to allow the board of directors to set the ex-dividend day. Hereafter, if the shares outstanding are affected by the company’s share purchase, which in turn may affect the dividend yield, then the board of directors is permitted deal with the issue all necessary means.

2. The cash dividend to be paid is calculated to integer. The amount under NT$1 will be collected as the company’s other revenues.

3. The amount of stock dividend is NT$1,030,854,350 to be used to issue new stocks to increase the capital.

4. 3.The amount of stock dividend is NT$1,030,854,350 to be used to issue new stocks to increase the capital.

5. ( i) The amount to increase the capital is NT$1,030,854,350 or 103,085,435 shares and the capital after the new issue is NT$18,211,760,110 or 1,821,176,011 shares

6. (ii) The increased capital with the stockholder’s bonuses will be used to pay back loans, future projects of factory expansion, purchase of machinery and equipment, or for the investment for other projects.

7. (iii) The issue of new stocks stated above will be done according to the list of stockholders with 60 shares per 1,000 shares. If later on the outstanding shares are changed due to the company’s share buyback and the dividend yield is changed as a result, the board of directors asks for the stockholders’ meeting to deal with all related matters with all necessary means.

8. (vi) If the stock dividend above is less than one share, it will be paid by ash instead and authorize the chairman to ask designated person(s) to purchase it at par.

9. (v) have the same rights and obligation as the original.

10. (vi )After being approve by the authority, the board of directors ask the stockholders’ meeting for permission to set the ex-dividend day.

Resolution ：

Proposal 2 ： Proposed by the Board of Directors. Brief ： Proposal on Modify the “ Operation Procedures for Lending to Others and Endorsement”.

• Explain ： 1. Based on the needs of business, the company needs to modify the “ Operation Procedures for Lending to Others and Endorsement”.

• The modified and comparison table of the “ Operation Procedures for Lending to Others and Endorsement” before the changes are listed at attachment 1 and 2.

Resolution ：

Proposal 3 ： Proposed by the Board of Directors.

Brief ： Proposal on modify the “ Procedures for Acquisition and Disposal of Assets”.

Explain ： 1. Based on the needs of the company and the regulation of November 11, 2016 Order

－38－

No. Financial-Supervisory-Securities-Corporate-1050044504 of the Financial

Supervisory Commission and 9 February 2017 Order No.

Financial-Supervisory-Securities-Corporate-1060001296 of the Financial Supervisory Commission, the company proposes to modify the “ Procedures for Acquisition and Disposal of Assets ”

1. The modified and comparison table of the “ Procedures for Acquisition and Disposal of Assets” before the changes are listed at attachment 3 and 4.

Resolution ：

Proposal 4 ： Proposed by the Board of Directors.

Brief ： Proposal on modify the “ Corporate Charter ” .

Explain ： 1. Based on the business needs of the company and Article 14-4 of Securities and Exchange

Act, Yieh Phui establishes the Auditing Committee to replace the regulation on the Supervisors.

1. The modified and comparison table of the “ Corporate Charter” before the changes are listed at attachment 5 and 6.

Resolution ：

V Election

Proposal 1 ： Proposed by the Board of Directors.

Brief ： By-election of independent director

Explain: 1. There is one vacancy of independent director and the by-election held in the 2017

• stockholders’ meeting is done according to the law.

• The term for this new independent director is from June 22, 2017 to June 21, 2019.

• The candidate for this independent director has been nominated by the board of directors on May 9, 2017

Nominee for the director by stockholders ：

The candidates for directors are nominated as follows according to Article 192-1 of the Company Act

	Act
No.	Account No.	Name	Education and Experience	Shares Held
1	Independent Director	Chang, Wen-Yi	Current position： Yieh United Steel Corporation Remuneration Committee. Members of Appeal and Review for Kaohsiung Importers&Exporters Chamber of Commerce Education： FuHua Senior High School (1974 License passed for Senior Examination on Accounting/Auditing;1975 License passed for Customs Special Examination Level B Taxation Officer) Experience： Office and Head of Revenue Service Office, Kaohsiung County	0

－39－

Revenue Assessor 、 Chief and Inspector of National Tax Administration of Southern Taiwan Province, Ministry of Finance, Kaohsiung County. Inspector and Auditor of National Taxation Bureau of Kaohsiung, Ministry of Finance,Fengshan Branch

VI Other Matters

Proposal 1 ： Proposed by the Board of Directors.

Brief ： Lifting of Non-compete clause for Directors.

Explain ： 1. Based on Article 209 of the Company Act, if directors must be held responsible for

their own or others’ actions on the scope of business that is within the confines of the company and must explain the importance and get approval thereby.

1. The independent director to be elected in this by-election is to free from the non-compete clause.

Resolution ：

VII Extempore Motions

VIII Adjournment

－40－

VIIII Appendix

Appendix 1

YIEH PHUI ENTERPRISE CO., LTD

Comparison Table for the “ Operation Procedures for Lending to Others and Endorsement”

Before and After Revision

BEFORE THE REVISION		AFTER THE REVISION
Article 11 The Company’s “Procedures for Loaning of Funds” 1. Resolution of the Board of Directors The loaning of fund quota granted to one single enterprise should be with the consent of the Board of Directors. Carefully assess whether the loaning of funds is in compliance with the “Procedures for Loaning of Funds” before granting the loans and it should be presented to the Board of Directors for resolutions along with the evaluation of the Finance Office; moreover, the decision-making process cannot be reassigned to any other person. The loaning of funds between the Company and its subsidiaries or among the subsidiaries should be presented to the Board of Directors for resolutions in accordance with the provisions in the preceding paragraph. In addition, the Chairman may be authorized to grant certain loans amount to one borrower that is resolved in the board meeting distributed in installments or revolving use within one year. The so-called “certain loan amount” in the preceding paragraph, unless otherwise in compliance with Article 5 Paragraph 1 Clause 4, means that the Company or its subsidiaries are authorized to grant loans to one enterprise for an amount limited to 10% of the enterprise’s net worth in the most recent financial statements. The opinions of the independent directors should be included for consideration when the proposal is discussed in the Company’s Board meeting. In addition,the agreement and		Article 11 The Company’s “Procedures for Loaning of Funds” 1. Resolution of the Board of Directors The loaning of fund quota granted to one single enterprise should be with the consent of the Board of Directors. Carefully assess whether the loaning of funds is in compliance with the “Procedures for Loaning of Funds” before granting the loans and it should be presented to the Board of Directors for resolutions along with the evaluation of the Finance Office; moreover, the decision-making process cannot be reassigned to any other person. However, major loans have to be approved by the auditing committee and to be decided by the board of directors. The loaning of funds between the Company and its subsidiaries or among the subsidiaries should be presented to the Board of Directors for resolutions in accordance with the provisions in the preceding paragraph. In addition, the Chairman may be authorized to grant certain loans amount to one borrower that is resolved in the board meeting distributed in installments or revolving use within one year. The so-called “certain loan amount” in the preceding paragraph, unless otherwise in compliance with Article 5 Paragraph 1 Clause 4, means that the Company or its subsidiaries are authorized to grant loans to one enterprise for an amount limited to 10% of the enterprise’s net worth in the most recent financial statements. The opinions of the independent

－41－

disagreement and the reasons for disagreement should be detailed in the minutes of board meeting. 2. …… 3. ……		directors should be included for consideration when the proposal is discussed in the Company’s Board meeting. In addition, the agreement and disagreement and the reasons for disagreement should be detailed in the minutes of board meeting. 2. ….. 3. ……
Article 12 The Company’s “Procedures for Making of Endorsements/Guarantees” I. The Company’s decision-making unit and levels of authority for handling the making of endorsements/guarantees: (I) …… (II) …… (III) …… (VI) If the Company, due to business operations, needs to have the endorsements/guarantees amount expanded exceeding the quota defined in Article 9, it may not be processed without the resolution and consent of the Board of Directors and the signatures of a majority of the directors for the possible losses resulted from exceeding the threshold of endorsements/guarantees; also, the “Procedures for Making of Endorsements/Guarantees” must be amended and ratified in the shareholders meeting. If it is not resolved and approved in the shareholders meeting, a plan for eliminating the excessive loaning of funds within a certain period of time should be proposed. II. The Company’s “Procedures for Making of Endorsements/Guarantees” is as follows: (I) For the process of endorsements/guarantees, the Finance Officer should examine the itemized review of qualifications, ensure the loan quota complying with the requirements of the “Procedures for Making of Endorsements/Guarantees,” determine whether there are incidents to be noticed and declared mandatorily in accordance with the application filed by each endorsement/guarantee object		Article 12 The Company’s “Procedures for Making of Endorsements/Guarantees” I. The Company’s decision-making unit and levels of authority for handling the making of endorsements/guarantees: (I) …… (II) …… (III) …… (VI) If the company has to endorse over the limit designated on Item 9, it has to be done by the approval of the auditing committee and the board of directors with more than half of the directors to guarantee the likely losses, modify the operating procedures herein, to be ratified by the stockholder’s meeting and devise a plan to clear the upper bound within a set deadline. II. The Company’s “Procedures for Making of Endorsements/Guarantees” is as follows: (I) For the process of endorsements/guarantees, the Finance Officer should examine the itemized review of qualifications, ensure the loan quota complying with the requirements of the “Procedures for Making of Endorsements/Guarantees,” determine whether there are incidents to be noticed and declared mandatorily in accordance with the application filed by each endorsement/guarantee object and analyze the business operations and financial and credit conditions of the endorsement/guarantee object to assess and document the risk of endorsements/guarantees, and shall obtain collateral when necessary. The endorsements/guarantee contents, reasons, and risk assessment result approved by the Chairman should be presented to the Board of Directors for

－42－

and analyze the business operations and financial and credit conditions of the endorsement/guarantee object to assess and document the risk of endorsements/guarantees, and shall obtain collateral when necessary. The endorsements/guarantee contents, reasons, and risk assessment result approved by the Chairman should be presented to the Board of Directors for discussion and approval. The endorsements/guarantees within the authorized quota will be reviewed and approved by the Chairman discretionally in accordance with the credit and financial status of the endorsement/guarantee object. Article 14 Other matters to be handled I. If the Company’s subsidiary intends to arrange loaning of funds, the company should command the subsidiary to have the “Procedures for Loaning of Funds” stipulated in accordance with the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees by Public Companies;” also, it should be handled in accordance with the prescribed operating procedures. II. The subsidiary’s “Procedures for Making of Endorsements/Guarantees” is stipulated and handled in accordance with the Company’s. The subsidiaries are to have the endorsement/guarantee amount, object, and deadline reported to the Company before the 5th day of each month; however, it should be reported to the Company immediately for notice and declaration process when meeting the standards set in Article 13 Paragraph 1 Clause 2. III. The endorsement/guarantee and the related matters of the Company and its subsidiaries within the business year should be reported in the shareholders meeting of the following year.

IV. Internal auditors should have the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees” and its implementation audited at least quarterly with a written record prepared. The Audit Committee should

discussion and approval. The endorsements/guarantees within the authorized quota will be reviewed and approved by the Chairman discretionally in accordance with the credit and financial status of the endorsement/guarantee object. Major endorsement must be approved by the auditing committee and decided by the board of directors.

Article 14

Other matters to be handled I. If the Company’s subsidiary intends to arrange loaning of funds, the company should command the subsidiary to have the “Procedures for Loaning of Funds” stipulated in accordance with the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees by Public Companies;” also, it should be handled in accordance with the prescribed operating procedures. II. The subsidiary’s “Procedures for Making of Endorsements/Guarantees” is stipulated and handled in accordance with the Company’s. The subsidiaries are to have the endorsement/guarantee amount, object, and deadline reported to the Company before the 5th day of each month; however, it should be reported to the Company immediately for notice and declaration process when meeting the standards set in Article 13 Paragraph 1 Clause 2.

III. Internal auditors should have the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees” and its implementation audited at least quarterly with a written record prepared. The Audit Committee should be informed in writing immediately for any major nonconformity identified.

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be informed in writing immediately for any major nonconformity identified.

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Appendix 2

YIEH PHUI ENTERPRISE CO., LTD.

Operation Procedures for Lending to Others and Endorsement

• Article 1: The “Procedures for Loaning of Funds and Making of Endorsements/Guarantees” are stipulated to substantiate the Company’s loaning of funds and making of endorsements/guarantees in order to reduce operating risks.

• Article 2: The “Procedures for Loaning of Funds and Making of Endorsements/Guarantees” are stipulated in accordance with the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” of the Financial Supervisory Commission.

• Article 3: The Company’s loaning of funds and making endorsements/guarantees should be processed in accordance with the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees,” unless otherwise provided by other law and regulations that shall prevail.

• Article 4: In terms of the objects for the loaning of funds by the Company, according to Article 15 of the Company Law, the Company’s funds may not be loaned to the shareholders or any other except for in the following circumstances:

• I. The companies or firms that have business deals conducted with the Company.

• II. The companies or firms that are with the need of short-term financing.

• III. The foreign companies with 100% voting shares held by the Company directly or indirectly;

  • The so-called “short-term” in the preceding paragraph meant for one year; however, if the Company’s operating cycle is longer than one year, it is subject to the business cycle.

  • The financing period of the foreign companies with 100% voting shares held by the Company directly or indirectly is subject to the requirements of Article 6. The loaning of funds for the business transactions conducted between the Company and other companies or firms should be processed in accordance with Article 5 Paragraph 1 Clause 2. The loaning of funds for short-term financing is limited to the following circumstances:

  • (I) The short-term financing needed for business operation of the company with over 20% shares held by the Company.

  • (II) The short-term financing needed for raw material procurement or working capital of other companies or firms.

• Article 5: Total loaning of funds and individual loan limit

The Company’s total loaning of funds is limited to 40% of the Company’s net worth, in which, the limit of loaning of funds to each company is subject to the following criteria:

• I. The total and individual loaning of funds to the subsidiaries of the Company is limited to 40% of the Company’s net worth.

• II. The total loaning of funds to the company or firm conducting business with the Company is limited to 40% of the Company’s net worth. The loaning of funds to each individual company is limited to the total business transaction amount between the two companies within the year. The so-called “business transaction amount” meant for the higher of the purchase amount or sales amount between the two companies.

• III. The loaning of funds to the companies or firms in need is limited to 40% of the Company’s net worth. The loaning of fund to individual company or firm is limited to 5% of the Company’s net worth.

• IV. The loaning of funds to foreign companies with 100% voting shares held by the

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Company directly or indirectly is limited to 40% of the Company’s net worth. The borrowers referred to in the preceding paragraph must provide sufficient collateral for the loaning of funds from the Company; however, the Company’s subsidiaries are exempted from the requirement of providing collateral for loaning of funds.

Article 6: Financing period and interest-bearing methods

• I. Period: The financing period of each loaning of funds may not exceed 1 year from the date of the loan granted. However, the financing period for the foreign companies with 100% voting shares held by the Company directly or indirectly may not exceed 10 years in response to the need of business operation.

• II. Interest rate: Interest rate is determined depending on the financial market interest rate at the time; however, it may not be less than the maximum interest rate of short-term borrowings from financial institutions. The Company has loan interest accrued monthly and it may be adjusted depending on the actual practice under a special circumstance with the approval of the Board of Directors.

• Article 7: The endorsements/guarantees referred to in this “Procedures for Loaning of Funds and Making of Endorsements/Guarantees” include:

• I. Financing endorsements/guarantees:

  • (I) Checks discount financing.

  • (II) The making of endorsements/guarantees for the financing of other companies.

  • (III) The checks issued to non-financial businesses as collateral for the financing of the Company.

• II. Tariff endorsements/guarantees: The making of endorsements/guarantees for the tariff matters of the Company or other companies.

• III. Other endorsements/guarantees: The other endorsements/guarantees are other than those that are classified into the two categories in the preceding paragraphs. The Company offers properties or real properties to be mortgaged or pledged as collateral for the loans of other companies that is to be processed in accordance with the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees.”

Article 8: The Company’s endorsement/guarantee is limited to the following objects:

• I. The companies that conduct business transactions with the Company.

• II. The companies that are with over 50% voting shares held by the Company directly or indirectly.

• III. The companies that own over 50% voting shares of the Company directly or indirectly.

• IV. The companies that are with 100% voting shares held by the Company directly or indirectly.

The Company may make endorsements/guarantees for the companies that are with over 90% voting shares held by the Company directly or indirectly and it is for an amount limited to 10% of the invested company’s net worth. However, the endorsements/guarantees made for the companies that are with 100% voting shares held by the Company directly or indirectly are not subject to this restriction. The mutual guarantees between the industry or co-builder for the need of undertaking engineering projects according to the contract signed, or, the endorsement/guarantee made for the invested company by the shareholders proportionally to their shareholding ratio due to a joint investment, or, joint performance bond for the pre-sale house contract by the industry in accordance with the Consumer Protection Law are not subject to the restrictions in the preceding paragraphs. Therefore, making of endorsements/guarantees is permitted. The so-called “investment” in the preceding paragraph meant for the funding made by the companies directly or through the invested company with 100% voting shares held by the public companies.

Article 9: The Company’s total making of endorsements/guarantees amount may not exceed the

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Company’s net worth; in addition, the making of endorsements/guarantees amount for one single subsidiary may not exceed the subsidiary’s net worth depending on the actual business operation of the subsidiary. The total making of endorsements/guarantees amount by the Company and its subsidiaries as a whole shall not exceed twice of the net worth of the Company, for a single enterprise shall not exceed one-third of the Company’s net worth. The making of

endorsements/guarantees due to business operation shall not exceed the total transaction amount with the Company within the year (the higher of the sales or purchase amount between the two companies). The so-called “net worth” is based on the most recent financial statements audited or reviewed by the CPAs.

• Article 10: The so-called “subsidiary” and “parent company” in the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees” should be recognized in accordance with the definition given in the “Regulations Governing the Preparation of Financial Reports by Securities Firms.”

The financial reports of public companies are prepared in accordance with the International Financial Reporting Standards (IFRSs), in which, the so-called “net worth” means the “Shareholders’ Equity of Parent Company” in the balance sheet that is prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Firms.”

The so-called “notice and declaration” in the “Regulations Governing the Preparation of Financial Reports by Securities Firms” means to have information posted on the information reporting website designated by the Financial Supervisory Commission. The so-called “Event Date” in the “Regulations Governing the Preparation of Financial Reports by Securities Firms” means the deal signing date, payment date, board resolution date, or other date with the transaction counterparty and transaction amount sufficiently determined, whichever is sooner (earlier).

• Article 11: The Company’s “Procedures for Loaning of Funds” 1. Resolution of the Board of Directors

The loaning of fund quota granted to one single enterprise should be with the consent of the Board of Directors. Carefully assess whether the loaning of funds is in compliance with the “Procedures for Loaning of Funds” before granting the loans and it should be presented to the Board of Directors for resolutions along with the evaluation of the Finance Office; moreover, the decision-making process cannot be reassigned to any other person. However, major loans have to be approved by the auditing committee and to be decided by the board of directors.

The loaning of funds between the Company and its subsidiaries or among the subsidiaries should be presented to the Board of Directors for resolutions in accordance with the provisions in the preceding paragraph. In addition, the Chairman may be authorized to grant certain loans amount to one borrower that is resolved in the board meeting distributed in installments or revolving use within one year.

The so-called “certain loan amount” in the preceding paragraph, unless otherwise in compliance with Article 5 Paragraph 1 Clause 4, means that the Company or its subsidiaries are authorized to grant loans to one enterprise for an amount limited to 10% of the enterprise’s net worth in the most recent financial statements.

The opinions of the independent directors should be included for consideration when the proposal is discussed in the Company’s Board meeting. In addition, the agreement and disagreement and the reasons for disagreement should be detailed in the minutes of board meeting.

1. Detailed review procedures

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• (I) The borrowing enterprise or firm when requesting loans should have the Letter of Declaration delivered to the Company.

• (II) To ensure the borrowing company or firm having the loan amount repaid before deadline, the Company depending on the need may request the borrowing company or firm to issue a 1-year promissory note for the loan amount with the maturity date in blank and the Company as the payee, and protest exemption, which will be returned to the borrowing company or firm once the loan is fully repaid.

• (III) The application form should be reviewed by the highest supervisor of the Finance Office in advance as follows:

  1. The necessity and reasonableness of the loaning of funds.

  2. The credit and risk evaluation on the borrowers.

  3. Assessing the impact on the Company operational risk, financial status, and shareholders’ equity.

  4. Whether or not to obtain collateral and assess the value of the collateral.

• (IV) The application form reviewed by the Finance Officer along with the evaluation result of the Finance Officer is to be presented to the Board of Directors for discussion.

• (V) After the resolution reached by the Board of Directors, the Finance Officer issues and submits the voucher for the issuance of a check to the Chairman for approval.

• (VI) Upon the approval of the Chairman, the Finance Officer is to have a check issued and processed in accordance with the following requirements:

  1. The check must be stamped and crossed to prohibit endorsement and transfer; also, it is made payable to “limit deposit ×× bank account no. ×× company account;” so is the repayment.

  2. The contents of the “Borrowing Companies or Firms Registry” include the borrowers, amount, the Board approval date, the funds distribution date, and the matters stated in Clause (3) to be carefully assessed for controlling the loan amount; so is the repayment.

  3. Interest is accrued at the end of each month.

  4. Prepare the Borrowing Companies or Firms Statement at the end of each month for notice and declaration accordingly.

• Subsequent control of the loan amount and procedures for non-performing loan

• (I) Frequently observe the finance, business, and the related letter of credit of the borrower and guarantor after the loan distributed. If there is any collateral collected, observe whether there is any change in the value, in case of major changes in the collateral value, the Chairman should be notified immediately to give instructions for proper handling.

• (II) If the borrower has the loan repaid on or before the due date, the interest payable should be calculated for payment along with the principals. The promissory note for the loan can be returned or mortgage can be cancelled only when the loan is repaid in full.

• Finance Officer should assess the situation of loaning of funds and appropriate adequate allowance for bad debts; also, disclose the information of loaning of funds and provide the related information to the CPAs for implementing necessary auditing procedures.

• If the change of circumstances causes the Company’s borrowers to no longer

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comply with the requirements or the loan balance exceeding the quota, the Company should have a corrective plan formed and then delivered to each supervisor, deliver the related corrective action to the Audit Committee, and complete the corrective action in accordance with the project schedule.

Article 12: The Company’s “Procedures for Making of Endorsements/Guarantees”

• I. The Company’s decision-making unit and levels of authority for handling the making of endorsements/guarantees:

• (I) The Company shall have the endorsements/guarantees approval handled in accordance with Paragraph 2 of this Article after the resolution reached by the Board of Directors. However, to meet the need for adequate timing, for a total loan amount of NT$1 billion and a loan amount to one single enterprise for NT$500 million, the Chairman is authorized by the Board of Directors to make a decision first and report it in the latest Board meeting for ratification.

• (II) The Company before making endorsements/guarantees for the companies that are with over 90% voting shares held by the Company directly or indirectly in accordance with Article 8 Paragraph 2 should have it reported to the Board of Directors for resolutions. However, the endorsements/guarantees made for the companies that are with 100% voting shares held by the Company directly or indirectly are not subject to this restriction.

• (III) The Company, when intending to make endorsements/guarantees for others, should have the “Procedures for Making of Endorsements/Guarantees” enacted with the consent of the Audit Committee, passed in the Board meeting, and resolved in the shareholders meeting. If an objection is raised by a director in writing or recorded, the Company should have the objection presented in the shareholders’ meeting for discussion; so is the amendment.

When the Company has the “Procedures for Making of Endorsements/Guarantees” presented to the Board of Directors for discussion in accordance with the requirements stated in the preceding paragraph, the Company should take full account of the opinions of the independent directors. In addition, the agreement and disagreement and the reasons for disagreement should be detailed in the minutes of board meeting.

The Company when not intending to make endorsements/guarantees for others should report it to the Board or Directors for approval and will be exempted from the obligation of stipulating the “Procedures for Making of Endorsements/Guarantees.” The subsequent endorsements/guarantees process shall be handled in accordance with the requirements stated in the preceding paragraphs.

• (IV) If the company has to endorse over the limit designated on Item 9, it has to be done by the approval of the auditing committee and the board of directors with more than half of the directors to guarantee the likely losses, modify the operating procedures herein, to be ratified by the stockholder’s meeting and devise a plan to clear the upper bound within a set deadline.

• II. The Company’s “Procedures for Making of Endorsements/Guarantees” is as follows:

• (I)For the process of endorsements/guarantees, the Finance Officer should examine the itemized review of qualifications, ensure the loan quota complying with the requirements of the “Procedures for Making of

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Endorsements/Guarantees,” determine whether there are incidents to be noticed and declared mandatorily in accordance with the application filed by each endorsement/guarantee object and analyze the business operations and financial and credit conditions of the endorsement/guarantee object to assess and document the risk of endorsements/guarantees, and shall obtain collateral when necessary. The endorsements/guarantee contents, reasons, and risk assessment result approved by the Chairman should be presented to the Board of Directors for discussion and approval. The endorsements/guarantees within the authorized quota will be reviewed and approved by the Chairman discretionally in accordance with the credit and financial status of the endorsement/guarantee object.

Major endorsement must be approved by the auditing committee and decided by the board of directors.

• (II) The Finance Office shall have the endorsements/guarantees registry prepared. The endorsements/guarantees approved by the Board of Directors or reviewed and approved by the Chairman are to be stamped and sealed in accordance with the prescribed procedures. In addition, the information of the commitments and guarantee matters, the name of the guaranteed enterprise, the risk assessment result, endorsement/guarantee amount, obtained collateral, and the conditions of cancelling endorsement/guarantee and date should be detailed in the registry for records. Moreover, the related notes, agreements, etc. should be photocopied for safekeeping.

• (III) The Finance Office shall prepare the monthly statement for the guarantee matters occurred and cancelled for control, trace, notice, and declaration. The contingent loss of endorsement/guarantee should be assessed and recognized quarterly. Also, disclose the information of endorsement/guarantee in the financial statements and provide the related information to the CPAs for implementing necessary auditing procedures.

• (IV) The Finance Officer before the endorsement/guarantee expiry date should take the initiative to inform the guaranteed enterprise to collect the promissory note from the bank or creditor institution and have the endorsement/guarantee related deed and document destroyed.

• III. The Company’s endorsement/guarantee special specimen seals safekeeping and the procedures for the use of specimen seals:

• (I) The Company shall designate the corporate specimen seals that were filed with the Ministry of Economic Affairs for business registration as the specific specimen seals for endorsement/guarantee; also, the said specimen seals are placed under the custody of the Chairman’s secretary with the consent of the Board of Directors. The change of the specimen seals custodian must be reported to the Board of Directors for approval and the custody of the specimen seals will be transferred thereafter.

• (II) After the endorsement/guarantee resolved by the Board of Directors or approved by the Chairman, the Finance Office is to fill out the “Impression Application Form” to have the seal affixed on the document along with the record of approval and endorsement/guarantee agreement or guaranteed notes at the seal custodian’s with the approval of the Chairman.

• (III) The specimen seals custodian should check whether the approved record is enclosed, whether the “Impression Application Form” approved by the Chairman, and whether the document applied for impression is correct before affixing the specimen seals on the documents. The “Impression Application Form” should be marked for identification upon the completion

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of affixing specimen seals on the documents.

  - (IV) For the guarantees made for foreign companies, the Letter of Guarantee is to be signed by the Chairman or the President with the authorization of the Board of Directors.

• IV. If the change of circumstances causes the Company’s endorsement/guarantee object to no longer complying with the requirements or the loan balance exceeding the quota, the Company should have a corrective plan formed and then delivered to the Audit Committee, and complete the corrective action in accordance with the project schedule.

• Article 13: The “Procedures for Announcing and Declaring the Company’s Loaning of Funds and Making of Endorsements/Guarantees” is as follows:

• I. The Finance Office is to have the loaning of funds and making of endorsements/guarantees by the Company and its subsidiaries of the prior month along with the sales report announced before the 10[th] day of this month and declared on the information reporting website designated by the Financial Supervisory Commission.

• II. In addition to noticing and declaring the loaning of funds and making of endorsement/guarantee balance monthly, when the loaning of funds and making of endorsement/guarantee by the Company and its subsidiaries meets one of the following criteria, the Finance Office should submit relevant information for announcement and declaration within 2 days from the Event Date and declared on the information reporting website designated by Financial Supervisory Commission:

  • (I) For the endorsement/guarantee balance of the Company and its subsidiaries amounted to 50% or more of the company’s net worth on the most recent financial statements; and the loaning of fund balance by the Company and its subsidiaries amounted to 20% or more of the company’s net worth on the most recent financial statements.

  • (II) For the endorsement/guarantee balance of the Company and its subsidiaries to one single enterprise amounted to 20% or more of the company’s net worth on the most recent financial statements and the loaning of fund balance by the Company and its subsidiaries to one single enterprise amounted to 10% or more of the company’s net worth on the most recent financial statements.

  • (III) For the endorsement/guarantee balance of the Company and its subsidiaries to one single enterprise amounted to NT$10 million or more and endorsement/guarantee, long-term investment, and loaning of fund balance to one single enterprise amounted to 30% or more of the company’s net worth on the most recent financial statements.

  • (IV) For the cumulative loaning of fund and endorsement/guarantee amount exceeding the total business transaction amount conducted with the company within the year due to the consideration of business operations.

  • (V) For the new endorsement/guarantee of the Company and its subsidiaries amounted to NT$30 million or more and 5% or more of the company’s net worth on the most recent financial statements.

  • (VI) For the new loaning of funds of the Company and its subsidiaries amounted to NT$10 million or more and 2% or more of the company’s net worth on the most recent financial statements.

If the subsidiary is not a public company in Taiwan and is with the notice and declaration to be made as stated in Paragraph 5 or Paragraph 6, it should be

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handled by the parent company instead.

Article 14: Other matters to be handled

• I. If the Company’s subsidiary intends to arrange loaning of funds, the company should command the subsidiary to have the “Procedures for Loaning of Funds” stipulated in accordance with the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees by Public Companies;” also, it should be handled in accordance with the prescribed operating procedures.

• II. The subsidiary’s “Procedures for Making of Endorsements/Guarantees” is stipulated and handled in accordance with the Company’s. The subsidiaries are to have the endorsement/guarantee amount, object, and deadline reported to the Company before the 5[th] day of each month; however, it should be reported to the Company immediately for notice and declaration process when meeting the standards set in Article 13 Paragraph 1 Clause 2.

• III. Internal auditors should have the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees” and its implementation audited at least quarterly with a written record prepared. The Audit Committee should be informed in writing immediately for any major nonconformity identified.

• Article 15: Managers and organizers who have violated the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” of the Financial Supervisory Commission and the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees” will be punished in accordance with the “Disciplinary Act” of the Company.

• Article 16: If the endorsement/guarantee object is the subsidiary with a net worth less than 50% of paid-in capital, the relevant subsequent control measures should be specified. If the stock shares of the subsidiary has no face value or the face value is not for NT$10, the paid-in capital calculated in accordance with the provisions in the preceding paragraph should be the total of the capital stock plus additional paid-in capital – premium.

• Article 16.1: The foreign companies defined in Article 165.1 of the Securities and Exchange Act (hereinafter referred to as the “foreign company”) may have the loaning of funds and making of endorsements/guarantees handled in accordance with the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.”

Foreign companies without the use of specimen seals are not subject to the requirements of Article 12 Paragraph 3.

The net worth that is calculated by foreign company in accordance with the “Procedures for Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” meant for the “Shareholders’ Equity of Parent Company” in the balance sheet.

• Article 17: The “Procedures for Loaning of Funds and Making of Endorsements/Guarantees” must be done with the consent of the Audit Committee, resolution of the Board of Directors, and approved in the shareholders’ meeting before implementation, so is the amendment.

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Appendix 3

YIEH PHUI ENTERPRISE CO., LTD

Comparison Table for the “ Procedures for Acquisition and Disposal of Assets”

Before and After Revision BEFORE THE REVISION AFTER THE REVISION Article 7 Article 7 When the Company has acquisition and When the Company has acquisition and disposal disposal of assets handled in accordance of assets handled in accordance with the with the “Procedures for Handling “Procedures for Handling Acquisition and Acquisition and Disposal of Assets” or Disposal of Assets” or other laws and other laws and regulations that requires regulations that requires the process to be the process to be presented to the Board presented to the Board of Directors for of Directors for discussion, the Company discussion, the Company should take full should take full account of the opinions of account of the opinions of the independent the independent directors. Also, the directors. Also, the disagreements or disagreements or reservations should be reservations should be detailed in the minutes of detailed in the minutes of the board the board meeting. meeting. A material assets or material derivative A material assets or derivative transaction transaction must be approved by a majority of must be approved by a majority of the the Audit Committee members; also, it must be Audit Committee members; also, it must submitted to the Board of Directors for be submitted to the Board of Directors for resolutions. If a majority of the Audit resolutions. If a majority of the Audit Committee members does not approve it, it Committee members does not approve it, should be approved by two thirds of the board of it should be approved by two thirds of the directors and the resolutions of the Audit board of directors and the resolutions of Committee should be documented in the minutes the Audit Committee should be of the board meeting. documented in the minutes of the board meeting. Article 11 Article 11

Article 11

For the acquisition or disposal of For the acquisition or disposal of marketable marketable securities; except for those securities; except for those meet the following meet the following requirements; the requirements; the Company should collect the Company should collect the underlying underlying company’s most recent financial company’s most recent financial statements that are audited or reviewed by CPAs statements that are audited or reviewed by before the Event Date as reference to assess the CPAs before the Event Date as reference transaction price. In addition, for the transaction to assess the transaction price. In addition, amounted to 20% of the company’s paid-in for the transaction amounted to 20% of capital or NT$300 million or more, commission the company’s paid-in capital or NT$300 a CPA to express an opinion on the million or more, commission a CPA to reasonableness of the trading price before the express an opinion on the reasonableness Event Date. If a professional report is needed by of the trading price before the Event Date. the commissioned CPA, it should be processed If a professional report is needed by the in accordance with Article 20 of the Generally commissioned CPA, it should be Accepted Auditing Standards (GAAS) issued by processed in accordance with Article 20 the Accounting Research and Development of the Generally Accepted Auditing Foundation, unless a market quotation of the Standards (GAAS) issued by the marketable securities is available or it is Accounting Research and Development otherwise provided by the Financial Supervisory Foundation, unless a market quotation of Commission. the marketable securities is available or it (1) Securities acquired with cash and is otherwise provided by the Financial establishing or raising based on the Company

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Supervisory Commission. (1) Those who have had incorporation setup by sponsorship or public share offer with cash paid to acquire marketable securities.

(2) Those who have participated in subscribing the marketable securities that is lawfully issued at the par value by the underlying company for cash capitalization. (3) Those who have participated in subscribing the marketable securities that is issued by the wholly-owned subsidiary for cash capitalization. (4) The listed/OTC and emerging marketable securities traded at the TWSE or GTSM. (5) Government bonds and bonds with repurchase or resale conditions.

(6) Offshore and domestic funds. (7) The acquisition or disposal of listed/OTC stock in accordance with the Regulations Governing Listed/OTC Securities Tender Offer or Auction of TWSE or GTSM. (8) Those who have participated in subscribing the news shares issued by public companies for cash capitalization and the acquired marketable securities are not by private placement. (9) Those who have acquired the fund before it is established in accordance with Article 11 Paragraph 1 of the Securities Investment and Trust Act and FSC Investment (IV) No. 0990042831 Order dated September 3, 2010 by the Financial Supervisory Commission.

Act.

(2) Those who have participated in subscribing the marketable securities that is lawfully issued at the par value by the underlying company for cash capitalization.

(3) Those who have participated in subscribing the marketable securities that is issued by the wholly-owned subsidiary for cash capitalization. (4) The listed/OTC and emerging marketable securities traded at the TWSE or GTSM.

(5) Government bonds and bonds with repurchase or resale conditions.

(6) Rasing funds domestically or overseas.

(7) The acquisition or disposal of listed/OTC stock in accordance with the Regulations Governing Listed/OTC Securities Tender Offer or Auction of TWSE or GTSM. (8) Participating the fund rasising via cash or purchasing corporate debts (including financial bonds) of public companies and the securities thus acquired are not private securities.

(9) According to Article 11 Paragraph 1 of the Securities Investment and Trust Act and FSC Investment, the exception include the purchase of domestic funds before the founding of the funds, or purchase/repurchase of domestic private equity, having listed in the investment strategies of the trust contract and the related securities not written off. The rest is the same as the investment of public funds.

(10) For those who have purchased or repurchased domestic private placement funds, as the investment strategy stated in the Trust Agreement that except for the security credit trade and the outstanding securities-related instrument position, the scope of investment is same as the public placement funds.

(10) For those who have purchased or repurchased domestic private placement funds, as the investment strategy stated in the Trust Agreement that except for the security credit trade and the outstanding securities-related instrument position, the scope of investment is same as the public placement funds.

Article 15 Article 15 The Company’s acquisition or disposal of The Company’s acquisition or disposal of real real estate from or to the related party, or, estate from or to the related party, or, the the Company’s and the related party’s Company’s and the related party’s acquisition or acquisition or disposal of other assets disposal of other assets other than the real estate other than the real estate for an amount for an amount more than 20% of the paid-in more than 20% of the paid-in capital, capital, 10% of the total assets, or NT$300 10% of the total assets, or NT$300 million, except for the trade of government million, except for the trade of bonds, bonds with repurchase and resale government bonds, bonds with repurchase conditions, Except for the buy/sell of

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and resale conditions, or Call (Put) domestic monetary market fund, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment:

1. ……

2. ……

3. ……

4. ……

5. ……

6. ……

7. ……

government bonds, repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment:

1. ……

2. ……

3. ……

4. ……

5. ……

6. ……

7. ……

and resale conditions, or Call (Put) domestic monetary market fund, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment: 1. …… 2. …… 3. …… 4. …… 5. …… 6. …… 7. ……	and resale conditions, or Call (Put) domestic monetary market fund, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment: 1. …… 2. …… 3. …… 4. …… 5. …… 6. …… 7. ……	and resale conditions, or Call (Put) domestic monetary market fund, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment: 1. …… 2. …… 3. …… 4. …… 5. …… 6. …… 7. ……	and resale conditions, or Call (Put) domestic monetary market fund, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment: 1. …… 2. …… 3. …… 4. …… 5. …… 6. …… 7. ……	government bonds, repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment: 1. …… 2. …… 3. …… 4. …… 5. …… 6. …… 7. ……	government bonds, repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment: 1. …… 2. …… 3. …… 4. …… 5. …… 6. …… 7. ……	government bonds, repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment: 1. …… 2. …… 3. …… 4. …… 5. …… 6. …… 7. ……	government bonds, repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment: 1. …… 2. …… 3. …… 4. …… 5. …… 6. …… 7. ……	government bonds, repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment: 1. …… 2. …… 3. …… 4. …… 5. …… 6. …… 7. ……	government bonds, repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment: 1. …… 2. …… 3. …… 4. …… 5. …… 6. …… 7. ……
Ar Th tra ris 1. 2. 3. (1 th (in tra Ch (2 th (h co sc is in	ticle20 e Company engaged in derivatives ding should implement the following k management measures: …… …… Scope of authorization:: )If the derivatives transactions of e Company are for trade vestment) purpose, each nsaction must be submitted to the airman for approval in advance. )If the derivatives transactions of e Company are not for trade edging) purpose, it should nducted in accordance with the ope of authorization as follows: (It based on the contract amount stead ofbondamount) Hierarchy Daily amount Cumulative net amount 1. Board of Directors Over US$20 million (not inclusive) Over US$60 million (not inclusive) 2.Presented to the Board of Director s for ratificati on after the approval of the Chairma n Under US$20 million (not inclusive) Under US$60 million (not inclusive) 3. Under Under				Article 20 The Company engaged in derivatives trading should implement the following risk management measures: 1. …… 2. …… 3. Scope of authorization: (1) transaction (investment) (calculated by the amount of contract rather than the amount of guarantee) level Daily volume Authorised amount remark board of director greater than US$10 million none when the daily volume is over US$ 10 million, it has to be done with the approval of board of directors ratified by the chairman and to be approved by the latest meeting of the board of directors Not great than US$10 million Not greater than US$30 million directors authorize the chairman to ratify in advance and to be approved by the latest meeting of the board of directors the Not greater Not required
						than the	amount of guarantee)
					level		Daily volume	Authorised amount	remark
					board of director		greater than US$10 million	none	when the daily volume is over US$ 10 million, it has to be done with the approval of board of directors
	Hierarchy	Daily amount	Cumulative net amount
	1. Board of Directors	Over US$20 million (not inclusive)	Over US$60 million (not inclusive)
					ratified by the chairman and to be approved by the latest meeting of the board of directors		Not great than US$10 million	Not greater than US$30 million	directors authorize the chairman to ratify in advance and to be approved by the latest meeting of the board of directors
	2.Presented to the Board of Director s for ratificati on after the approval of the Chairma n	Under US$20 million (not inclusive)	Under US$60 million (not inclusive)
	3.	Under	Under
					the		Not greater	Not	required

Article20

The Company engaged in derivatives trading should implement the following risk management measures:

1. ……

2. ……

3. Scope of authorization::

(1)If the derivatives transactions of the Company are for trade (investment) purpose, each transaction must be submitted to the Chairman for approval in advance. (2)If the derivatives transactions of the Company are not for trade (hedging) purpose, it should conducted in accordance with the scope of authorization as follows: (It is based on the contract amount instead of bond amount)

－55－

	Chairman	US$5	US$15			chairman		than		greater	the
		million	million					US$2.5		than	approval
		(not inclusive) Under	(not inclusive) Under					million		US$7.5 million	of the board of directors due to
	4. President	US$1 million (not	US$5 million (not			the		Not greater		Not	over the limit required
		inclusive)	inclusive)			general		than		greater	the
						manager		US$500,000		than	approval
4. ……										US$2.5	of the
5. ……										million	chairman
6. ……											due to
7. ……											over the
											limit
					(2) non-transaction (hedging)
					calculated by the amount					of the contract, not the
					amountguaranteed
						level	Daily			Authorised	remark
							volume			amount
						board of	greater			none	when
						director	than US$20				the daily
							million				volume
											is over
											US$ 20
											million, it
											has to be
											done
											with the
											approval
											of board
											of
											directors
						ratified	Not great			Not greater	directors
						by the	than US$20			than US$60	authorize
						chairman	million			million	the
						and to					chairman
						be					to ratify
						approved					in
						by the					advance
						latest					and to
						meeting					be
						of the					approved
						board of					by the
						directors					latest
											meeting
											of the
											board of
											directors
						the	Not greater			Not greater	required
						chairman	than US$5			than US$15	the
							million			million	approval
											of the
											board of
											directors

－56－

			due to over the limit
the general manager	Not greater than US$1million	Not greater than US$5million	required the approval of the chairman due to over the limit
4. …… 5. …… 6. …… 7. ……

Article 23 Article 23 The Company while handling merge, The Company while handling merge, split, split, acquisition, or transfer of shares acquisition, or transfer of shares should should commission CPAs, lawyers, or commission CPAs, lawyers, or securities securities underwriters to express an underwriters to express an opinion on the opinion on the reasonableness of the swap reasonableness of the swap ratio, acquisition ratio, acquisition price, or the distribution price, or the distribution of cash or other assets of cash or other assets to shareholders to shareholders before the resolutions reached in before the resolutions reached in the the board meeting; also, it should be presented to board meeting; also, it should be the Board of Directors for review and approval. presented to the Board of Directors for However, if the parent company merges with its review and approval. 100% owned subsidiary, or the merge between its 100% owned subsidiaries, there is no need to acquire the feasibility assessment of specialists.

Article 32 Article 32 The Company’s acquisition or disposal of The Company’s acquisition or disposal of assets assets with any of the following with any of the following circumstances should circumstances should have the relevant have the relevant information documented in the information documented in the prescribed prescribed format by its nature and noticed and format by its nature and noticed and declared through the internet reporting system declared through the internet reporting designated by the Financial Supervisory system designated by the Financial Commission within two days from the Event Supervisory Commission within two days Date: from the Event Date: 1. The Company’s acquisition or disposal of real 1. The Company’s acquisition or disposal estate from or to the related party, or, the of real estate from or to the related party, Company’s and the related party’s acquisition or or, the Company’s and the related party’s disposal of other assets other than the real estate acquisition or disposal of other assets for an amount more than 20% of the paid-in other than the real estate for an amount capital, 10% of the total assets, or NT$300 more than 20% of the paid-in capital, million, Except for the buy/sell of government 10% of the total assets, or NT$300 bonds, repurchase/reverse repurchase bonds, million, except for the trade of purchase or repurchase the money market funds government bonds, bonds with repurchase issued by domestic securities trust firms.

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1. Conducting merger, split, acquisition, or transfer of shares. 3. Engaged in derivatives trading losses amounting to the loss limit amount of all contracts or individual contract regulated in the Procedures.

and resale conditions, or Call (Put) domestic monetary market fund. 2. Conducting merger, split, acquisition, or transfer of shares.

1. Engaged in derivatives trading losses amounting to the loss limit amount of all contracts or individual contract regulated in the Procedures. 4. The assets trades other than the ones stated in the last three paragraphs or investments in Mainland China amounting to 20% of the paid-in capital or NT$300 million, except for the following circumstances: (1) Government bonds trade. (2) Bonds with repurchase and resale conditions and Call (Put) domestic monetary market fund. (3) The acquisition or disposal of assets used in operation and the trade counterpart is not a related party for a trade amount less than NT$500 million. (4) The Companies investing less than NT$500 million for the acquisition of real estate by proprietary land commissioned for construction, leased land commissioned for construction, joint construction for units sharing, joint construction for percentage sharing, and joint construction for sales sharing. The transaction amount stated in the preceding paragraph is calculated in accordance with the following methods: 1. Referred to the amount of each transaction.

2. The acquisition or disposal of the assets used for operation and the transaction is not done with the related party, and the amount is over NT$1 billion.

3. If the company is expected to invest over NT$500 million when the acquisition of real estate via aonstrution by others on the compay’s own or rented land, construction to share houses, co-construction to share houses, co-construction to sell.

4. The assets trades other than the ones stated in the last five paragraphs or investments in Mainland China amounting to 20% of the paid-in capital or NT$300 million, except for the following circumstances:

(1) Government bonds trade.

(2) The buy/sell of repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms. The transaction amount stated in the preceding paragraph is calculated in accordance with the following methods:

1. Referred to the amount of each transaction. 2. The cumulative amount of the acquisition or disposal of the homogeneous underlying object with the same counterpart within one year. 3. The cumulative acquisition or disposal (independent cumulative acquisition or cumulative disposal) amount of the same real estate development project within one year. 4. The cumulative acquisition or disposal (independent cumulative acquisition or cumulative disposal) amount of the same marketable securities.

2. The cumulative amount of the estate development project within one year. acquisition or disposal of the 4. The cumulative acquisition or disposal homogeneous underlying object with the (independent cumulative acquisition or same counterpart within one year. cumulative disposal) amount of the same 3. The cumulative acquisition or disposal marketable securities. (independent cumulative acquisition or The “within one year” refers to one year prior to cumulative disposal) amount of the same the baseline date of the current event; however, real estate development project within one the requirement is exempted for the part of the year. transaction reported in accordance with the 4. The cumulative acquisition or disposal Procedures. (independent cumulative acquisition or The Company should have the derivatives cumulative disposal) amount of the same transactions of the Company and its subsidiaries marketable securities. up to the end of the last month prepared in the The “within one year” refers to one year prescribed format and posted on the information prior to the baseline date of the current reporting system designated by the Financial event; however, the requirement is Supervisory Commission before the tenth day of exempted for the part of the transaction each month. reported in accordance with the If there is any mistake or any item missing and Procedures. needs to be amended, the company has to The Company should have the derivatives re-announce the whole thing within two days of

－58－

transactions of the Company and its subsidiaries up to the end of the last month prepared in the prescribed format and posted on the information reporting system designated by the Financial Supervisory Commission before the tenth day of each month. If the notice items pursuant to the requirements are found with errors or omissions, the Company should have them corrected and have the complete information noticed and declared again.		uncovering.

－59－

Appendix 4

Y YIEH PHUI ENTERPRISE CO., LTD.

Procedures for Acquisition and Disposal of Assets

Article 1: Ordinance reference

The “Procedures for Handling Acquisition and Disposal of Assets” are stipulated in accordance with the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” of the Financial Supervisory Commission (hereinafter referred to as FSC).

• Article 2: The acquisition or disposal of assets is to be processed in accordance with the “Procedures for Handling Acquisition and Disposal of Assets,” unless otherwise provided by law that shall prevail.

• Article 3: The applicability of the “assets” defined in the “Procedures for Handling Acquisition and Disposal of Assets:”

• Investments of stocks, bonds, corporate bonds, financial bonds, fund-based marketable securities, depositary receipts, call (put) warrants, beneficial securities, and assets-based securities.

• Real estate (including land, houses and buildings, investment real estate, land use rights, and inventories of construction industry) and equipment.

• Membership card.

• Intangible assets of patents, copyrights, trademarks, and charters.

• Claims (including accounts receivable, foreign exchange discount and loans, and delinquent loans) of financial institutions.

• Derivatives.

• Acquisition or disposal of assets through legal merger, split, acquisition, or transfer of shares.

• Other important assets.

• Article 4: Terminology defined in the “Procedures for Handling Acquisition and Disposal of Assets:”

• Derivatives: refers to the value of the forward contract, options contracts, futures contracts, leveraged bond contracts, swap contracts, and a compound contract of the above commodities derived from the instruments of assets, interest rate, exchange rate, index, or other benefits. A “forward contract” does not include insurance contract performance contract, after-sale service contract, long-term lease contract, and long-term purchase (selling) contract.

• Acquisition or disposal of assets by legal merger, split, acquisition, or transfer of shares: refers to the acquisition or disposal of assets by legal mergers, splits, or acquisitions in accordance with the Merger Law, Financial Holding Company Law, Financial Institutions Merger Act, or other law, or by issuing new stock shares in accordance with Article 156 Paragraph 8 of the Company Law for the transfer of shares from other companies (hereinafter referred to as the “transfer of shares”).

• The related party and subsidiaries: The identity should be verified in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities

－60－

Firms.”

1. Professional appraisers: refers to real estate appraiser or others engaged in real estate and equipment appraisal business in accordance with the law.

2. Event Date: refers to the contract signing date, the payment date, commission closing date, the transfer date, the Board resolution date, or other date with the transaction counterpart and transaction amount sufficiently determined, whichever is sooner (earlier). However, if the approval of the competent authorities is mandatory to the investments, one of the aforementioned dates or the competent authorities approval date whichever is sooner (earlier) shall prevail

3. Investment in Mainland China: refers to the investment in China in accordance with the Regulations Governing Licensing Investment or Technical Cooperation in Mainland China of the Investment Commission MOEA.

4. Article 5: For the appraisal report and the opinions of CPAs, attorneys, or security underwriters collected by the Company, the relevant appraisers and appraising personnel, CPAs, attorneys, or security underwriters may not be a related party of the trade parties.

5. Article 6: Procedures for Handling Acquisition and Disposal of Assets

6. Assessment and operating procedures

   • (1) The acquisition or disposal of marketable securities investments is conducted in accordance with the investment revolving operations of the Company’s internal control system.

   • (2) The Company’s acquisition or disposal of membership cards, intangible assets, real estate, and equipment is conducted in accordance with the Company’s internal control system general management and fixed assets, plants, and equipment revolving procedures.

7. The Company’s acquisition or disposal of marketable securities investment should be approved by the President and Chairman and must also be resolved by the Board of Directors if it is for an amount over NT$300 million.

8. The Company’s acquisition or disposal of membership card, intangible assets, real estate, and equipment is conducted in accordance with the following requirements:

   • (1) Acquisition: The Company’s acquisition of membership cards, intangible assets, real estate, and equipment after the process of price inquiry, comparison, and bargaining should be presented to the competent supervisor for approval. For an amount of more than NT$300 million, it should be presented to the Board of Directors for resolutions.

   • (2) Disposal: The Company’s disposal or sale of membership cards, intangible assets, real estate, and equipment should be specially proposed by the original using department with the reasons explained and with the process of price inquiry, comparison, and bargaining handled by the property custodian, and then presented to the competent supervisor for approval. For an amount of more than NT$300 million, it should be presented to the Board of Directors for resolutions.

9. Article 7: When the Company has acquisition and disposal of assets handled in accordance with the “Procedures for Handling Acquisition and Disposal of Assets” or other laws and regulations that requires the process to be presented to the Board of Directors for discussion, the Company should take full account of the opinions of the independent directors. Also, the disagreements or reservations should be detailed in the minutes of the board meeting.

－61－

A material assets or material derivative transaction must be approved by a majority of the Audit Committee members; also, it must be submitted to the Board of Directors for resolutions. If a majority of the Audit Committee members does not approve it, it should be approved by two thirds of the board of directors and the resolutions of the Audit Committee should be documented in the minutes of the board meeting.

• Article 8: The acquisition of real estate not used in business operation and marketable securities investment of the Company and its subsidiaries is subject to the following restrictions:

• The acquisition of marketable securities investment and real estate not used in business operation by the Company and its subsidiaries shall not exceed 150% of the Company’s net worth at one time.

• Each marketable securities investment amount of the Company and its subsidiaries shall not exceed 50% of the Company’s net worth at the time.

• Article 9: The procedures for handling acquisition and disposal of assets by the subsidiary of the Company

• A subsidiary of the Company shall have the “Procedures for Handling Acquisition and Disposal of Assets” stipulated in accordance with the requirements and have it resolved in the Audit Committee and/or Board of Directors and/or Shareholders’ meeting for enforcement; the amendments should be processed the same way.

• If the subsidiary of the Company is not a public company with an acquisition or disposal of assets subject to the notice and declaration requirements of Article 32, the Company should handle the notice and declaration process, post it on the Internet reporting system, and present it for inspection.

• If the subsidiaries stated in the preceding paragraph with an acquisition or disposal of assets subject to the notice and declaration requirements of 20% paid-in capital or 10% total assets in Article 32 Paragraph 1, it is based on the Company’s paid-in capital or total assets.

• Article 9.1: Regarding the requirement of 10% total assets, it is based on the total assets amount in the most recent proprietary or individual financial statements that are prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Firms.” For the Company’s stock that has no face value or the face value is not for NT$10, the requirement of “trade amount equivalent to 20% of the paid-in capital” is replaced by the “10% of shareholders’ equity.”

• Article 10: The Company’s acquisition or disposal of real estate or equipment, except for the transactions with government agencies, proprietary land commissioned for construction, leased land commissioned for construction, or disposal of machinery and equipment used in operation, for an amount more than 20% of the paid-in capital or NT$300 million must be with an official appraisal report collected before the Event Date in accordance with the following requirements:

• If a specific price, particular price, or special price is applied for reference of the transaction price due to a special reason, the Board of Directors should resolve the transaction in advance. Also, it should be processed the same way for any change in trading conditions.

• Two professional appraisal services must be solicited for a transaction amount more than NT$1 billion.

－62－

1. For the appraisal result of a professional appraiser with one of the following circumstances, except for the appraisal result of the assets acquired higher than the transaction amount or the appraisal result of the assets disposed lower than the transaction amount, the commissioned CPAs should have it processed in accordance with Article 20 of the Generally Accepted Auditing Standards (GAAS) issued by the ROC Accounting Research and Development Foundation (hereinafter referred to as the “Accounting Research and Development Foundation”).

   • (1) The difference between the appraisal result and the transaction amount is more than 20% of the transaction amount.

   • (2) The difference of appraisal results between two appraisal services or more is more than 10% of the transaction amount.

2. The date of the report issued by a professional appraiser may not be more than 3 months away from the contract date. However, the original appraiser is to have an opinion issued if the two dates are subject to the same announced present value and it is not over 6 months.

3. Article 11: For the acquisition or disposal of marketable securities; except for those meet the following requirements; the Company should collect the underlying company’s most recent financial statements that are audited or reviewed by CPAs before the Event Date as reference to assess the transaction price. In addition, for the transaction amounted to 20% of the company’s paid-in capital or NT$300 million or more, commission a CPA to express an opinion on the reasonableness of the trading price before the Event Date. If a professional report is needed by the commissioned CPA, it should be processed in accordance with Article 20 of the Generally Accepted Auditing Standards (GAAS) issued by the Accounting Research and Development Foundation, unless a market quotation of the marketable securities is available or it is otherwise provided by the Financial Supervisory Commission.

   • (1) Securities acquired with cash and establishing or raising based on the Company Act ..

   • (2) Those who have participated in subscribing the marketable securities that is lawfully issued at the par value by the underlying company for cash capitalization.

   • (3) Those who have participated in subscribing the marketable securities that is issued by the wholly-owned subsidiary for cash capitalization.

   • (4) The listed/OTC and emerging marketable securities traded at the TWSE or GTSM.

   • (5) Government bonds and bonds with repurchase or resale conditions.

   • (6) Rasing funds domestically or overseas.

   • (7) The acquisition or disposal of listed/OTC stock in accordance with the Regulations Governing Listed/OTC Securities Tender Offer or Auction of TWSE or GTSM.

   • (8) Participating the fund rasising via cash or purchasing corporate debts (including financial bonds) of public companies and the securities thus acquired are not private securities.

   • (9) According to Article 11 Paragraph 1 of the Securities Investment and Trust Act

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and FSC Investment, the exception include the purchase of domestic funds before the founding of the funds, or purchase/repurchase of domestic private equity, having listed in the investment strategies of the trust contract and the related securities not written off. The rest is the same as the investment of public funds.

• Article 12: The Company’s acquisition or disposal of membership card or intangible assets, except for the transactions with government agencies, for an amount more than 20% of the paid-in capital or NT$300 million, must be with CPAs commissioned to express an opinion on the reasonableness of the trading price before the Event Date in accordance with Article 20 of the Generally Accepted Auditing Standards (GAAS) issued by the Accounting Research and Development Foundation.

• Article 12.1: The transaction amount referred to in the last three Articles should be calculated in accordance with Article 32 Paragraph 2. Also, the “within one year” refers to one year prior to the baseline date of the current event; however, the requirement is exempted if an appraisal report is collected from the professional appraiser or an opinion from the CPAs in accordance with the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies.”

• Article 13: For the acquisition or disposal of assets by a court auction process, the documents issued by the Court can be an alternative to an appraisal report or CPA’s opinion.

• Article 14: For the acquisition or disposal of assets by the Company and the related party, in addition to have the related resolution procedures and trade term reasonableness assessed in accordance with Article 10, Article 13, Article 15, Article 16, Article 17, and Article 18; if the trade amount is more than 10% of the Company’s total assets, an appraisal report or an opinion of the CPA should be obtained in accordance with the requirement stated in the preceding paragraph.

• The transaction amount in the preceding paragraph should be calculated in accordance with Article 12. 1.

When determining whether the transaction counterpart is a related party or not, in addition to the legal formality, the real relationship should be considered.

• Article 15: The Company’s acquisition or disposal of real estate from or to the related party, or, the Company’s and the related party’s acquisition or disposal of other assets other than the real estate for an amount more than 20% of the paid-in capital, 10% of the total assets, or NT$300 million, Except for the buy/sell of government bonds, repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms, must have the following data approved by the Audit Committee and resolved in the Board meeting before signing the trade agreement and making prepayment:

• The purpose, necessity, and expected benefits from the acquisition or disposal of asset.

• The reason for choosing the related party as the trade counterpart.

• The data related to assessing the reasonableness of the trade terms for the real estate acquired from the related party in accordance with Article 16 and Article 17.

• The initial acquisition date and price, trade counterpart and its relationship with the Company and the related party.

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1. The monthly statement of cash income and expense forecast within one year starting from the month the contract is signed. Also, assess the necessity of the transaction and the reasonableness of the fund use.

2. The appraisal report received from a professional appraiser or an opinion from the CPA in accordance with the requirements stated in the last Article.

3. The restrictions and other important stipulations of this transaction.

4. The transaction amount referred to in the preceding paragraph should be calculated in accordance with Article 32 Paragraph 2. Also, the “within one year” refers to one year prior to the baseline date of the current event; however, the requirement is exempted if it is presented to the Board of Directors for approval.

For the acquisition or disposal of machinery and equipment used in operation with an amount of NT$500 million or less between the Company and its subsidiaries or among the subsidiaries, the Chairman is authorized to make a decision first and report it in the latest Board meeting for ratification.

• Article 16: The Company should have the reasonableness of transaction cost of the real estate acquired from the related party assessed in accordance with the following methods:

• It includes the related party’s transaction price plus necessary fund interest and the cost to be borne by the buyer in accordance with the law. The “necessary fund interest cost” is calculated in accordance with the weighted average interest rate of the year the assets purchased; however, it may not be higher than the highest loan interest rate of non-financial sector announced by the Ministry of Finance.

• If the related party has the underlying object mortgaged as loan collateral to a financial institution, the financial institution is to assess the total loan value of the underlying object. However, the actual cumulative loan value of the underlying object granted by the financial institution should be more than 70% of the total assessed loan value with a loan period for more than one year, unless the trade counterpart is a related party of the financial institution.

For the underlying land and housing purchased jointly, the transaction cost of land and housing can be calculated respectively in accordance with any of the methods listed in the preceding paragraph.

The cost of the real estate acquired from the related party should be assessed in accordance with the requirements of Paragraph 1 and Paragraph 2; also, a CPA should be commissioned to review and express an opinion specifically.

The real estate acquired from the related party in one of the following circumstances should be processed in accordance with Article 15 and it is not subject to the requirements of the last three paragraphs:

1. The related party has acquired the real estate by inheritance or donation.

2. The related party has an agreement signed to acquire the real estate over 5 years ago from the current transaction.

3. The real estate is acquired by commissioning the related party to construct the real estate, including signing a joint construction contract, proprietary land commissioned for construction, and leased land commissioned for construction.

4. Article 17: If the price assessed in accordance with Paragraph 1 and Paragraph 2 is lower than the

－65－

trading price, it should be handled in accordance with Article 18, except for in the following circumstances with objective evidences presented, a real estate professional appraisal report received, and a specific and reasonable opinion issued by the CPA:

1. The related party that has acquired or leased a prime land for construction may evidence its complying with one of the following conditions:

2. (1) Prime land is assessed in accordance with the methods stated in the preceding paragraph. Housing is assessed in accordance with the total amount of related party’s construction cost plus reasonable construction profit exceeding the actual trading price. The “reasonable construction profit” is the average gross profit rate of the related party’s construction department within the last three years or the most recent gross profit rate of the construction industry published by the Ministry of Finance whichever is lower.

3. (2) The other floors of the same underlying premise and land or the transaction conducted by a non-related party in the adjacent area within one year for the similar floorage. In addition, the trading conditions are equivalent according to the assessment of the reasonable floor or regional price spread in a general real estate trade.

4. (3) The other floors of the same underlying premise or land or the leasing conducted by a non-related party within one year; also, the trading conditions are equivalent according to the assessment of the reasonable floor price spread in a general real estate leasing.

5. Prove the trading conditions for the real estate acquired from the related party is equivalent with the transaction conducted by a non-related party in the adjacent area within one year for the same floorage.

The successful transaction conducted in the adjacent area stated in the preceding paragraph refers to the real estate on the same or adjacent street that is less than 500m in radius distanced from the underlying object or it is with the similar announced present value. The “same floorage” means that the area of the real estate transaction conducted by the non-related party may not be more than 50% smaller than the underlying object. The “within one year” refers to one year prior to the baseline date for the acquisition of the real estate.

Article 18: If the price of the real estate acquired by the Company from the related party that is assessed in accordance with Article 16 and Article 17 is lower than the trading price, it should be handled in accordance with the follows:

1. For the spread between the real estate trading price and assessed cost, special reserve should be appropriated in accordance with Article 41 Paragraph 1 of the Securities and Exchange Act; also, it may not be applied for distribution or capitalized for stock dividend. For the Company’s investment valued in accordance with the equity method, special reserve should be appropriated for the aforementioned spread amount proportionally to the shareholding ratio in accordance with Article 41 Paragraph 1 of the Securities and Exchange Act.

2. An independent director of the Audit Committee should have it handled in accordance with Article 218 of the Company Act.

3. The processes referred to in Paragraph 1 and Paragraph 2 should be presented in the

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shareholders meeting; also, the transaction details should be disclosed in the annual report and prospectus.

The special reserve appropriated in accordance with the requirements stated in the preceding paragraph cannot be used until the assets purchased at high price are with allowance for loss in valuation appropriated or it is disposed, or, with proper compensation restitution made, or without evidence of unreasonableness, and with the consent of the Financial Supervisory Commission.

The acquisition of real estate from the related party that is with a breach of regular operation evidenced should be processed in accordance with the preceding two paragraphs.

Article 19: Procedures for Handling Acquisition and Disposal of Derivatives

The Company engaged in derivatives trading shall pay attention to the following important risk management and auditing matters control and they should be included in the “Procedures for Handling Acquisition and Disposal of Derivatives:”

1. Trading principles and guidelines: It shall include the type, operation or hedging strategy, division of responsibilities, performance evaluation criteria of the derivative transactions, the total contract amount of the derivative transactions, as well as the loss limit amount of all contracts and individual contract.

2. Risk management measures

3. Internal auditing system

4. Regular assessment methods and nonconformities handling

5. Article 20: The Company engaged in derivatives trading should implement the following risk management measures:

6. Risk management scope

The Company engaged in derivative transactions should consider the following risks with proper hedging measures implemented in advance:

• (1) Credit risk management: Conduct trades mainly with the associating banks and legitimate brokers and set the trade quota in advance for each associating banks. The Finance Officer is responsible for the control without focusing business transactions on few institutions. Also, adjust the trade quote of each associating financial institution flexibly in accordance with changes in market prices.

• (2) Market risk management: It is limited to the trades conducted in stock market and OTC market.

• (3) Liquidity risk management: It is mainly focusing on the instruments with long trading time, high liquidity, and stable market price.

• (4) Cash flow risk management: Changes in cash flow should be assessed; also, source of fund is limited to the proprietary fund.

• (5) Operational risk management: shall comply with the authorized quota and operating procedures regulated by the Company and should have it included in the internal auditing process to avoid operating risk. Moreover, derivatives traders and personnel responsible for confirmation and settlement may not be inter-changeable. Personnel responsible for derivatives settlement shall follow up on the derivatives transactions that will be due within one week and with the derivatives traders informed to ensure correct derivatives settlement.

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• (6) Legal risk management: Non-stereotyped transaction contract documents shall be countersigned by the Legal Affairs Office.

• Derivatives traders and personnel responsible for confirmation and settlement may not be inter-changeable.

• Scope of authorization:

• (1) transaction (investment)

(calculated by the amount of contract rather than the amount of guarantee)

level	Dailyvolume	Authorised amount	remark
board of director	greater than US$10 million	none	when the daily volume is over US$ 10 million, it has to be done with the approval of board of directors
ratified by the chairman and to be approved by the latest meeting of the board of directors	Not great than US$10 million	Not greater than US$30 million	directors authorize the chairman to ratify in advance and to be approved by the latest meeting of the board of directors
the chairman	Not greater than US$2.5 million	Not greater than US$7.5 million	required the approval of the board of directors due to over the limit
the general manager	Not greater than US$500,000	Not greater than US$2.5 million	required the approval of the chairman due to over the limit

(2) non-transaction (hedging)

(calculated by the amount of contract rather than the amount of guarantee)

level	Dailyvolume	Authorised amount	remark
board of director	greater than US$20 million	none	when the daily volume is over US$ 20 million, it has to be done with the approval of board of directors
ratified by the chairman and to be approved by the latest meeting of the board of directors	Not great than US$20 million	Not greater than US$60 million	directors authorize the chairman to ratify in advance and to be approved by the latest meeting of the board of directors
the chairman	Not greater than US$5 million	Not greater than US$15 million	required the approval of the board of directors due to over the limit
the general manager	Not greater than US$1million	Not greater than US$5 million	required the approval of the chairman due to over the limit

1. The Company has the derivatives operations assigned to the responsible units as follows in accordance with the nature of work.

2. Procurement Unit: Responsible for drafting up the operation strategies for the

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trade of instruments and futures in accordance with the scope of authorization.

1. Finance Office:

   • (1) Responsible for drafting up the operation strategies for the trade of derivatives other than instruments and futures.

   • (2) Conduct trades in accordance with the scope of authorization.

2. Legal Affairs Office: Responsible for reviewing the non-stereotyped transaction contract documents;

3. Accounting Office: Responsible for the accounting process of derivatives transactions, the preparation of financial statements, and regular data summary.

4. Audit Office: Understand the adequacy of internal control, including division of responsibilities and operational procedures; audit the compliance with the Procedures for Derivatives Trading of the trade department.

5. Risk measurement, monitoring, and control personnel should not be in the same department with the personnel stated in the preceding personnel; also, should report to the Board of Directors or the senior management that is not responsible for trade or position decision-making.

6. The department responsible for derivative transactions should base its assessment on the following criteria:

7. (1) Performance evaluation:

   1. Non-trading:

      • (1) The Finance Office has based the performance evaluation of the realized net profit and loss position after the closing of the trade day for each trade contract on the type of instrument.

      • (2) Compare the profit and loss performance and conduct regular reviews for the target set and report it to the Chairman for review and approval.

   2. Trading:

      • (1) Realized position: The Finance Office has based the performance evaluation on the actual profit or loss position.

      • (2) Unrealized position: Base the performance evaluation on the net profit and loss and total profit and loss of the open position calculated in accordance with the closing price every day.

8. (2) Regular assessment:

   1. The Finance Office regularly reviews whether the operation performance meets the established business strategies and the risk is within the tolerable range specified in accordance with the current Income Statement.

   2. The Finance Office should have the position held for trade assessed at least once a week. The position held not for trade assessed at least once every 15 days; also, the assessment report should be presented to the Chairman for review and approval.

9. Total contract amount and loss limit:

10. Non-trading transactions: The quota amount should not exceed the Company’s actual business needs.

Trading transactions: The quota amount is limited to 15% of the Company’s net

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worth.

All of the above and individual contract loss is limited to 15% of the contract amount.

If the changes in market causes individual contract with a loss over 10% after the transaction completed, the countermeasures must be developed and presented to the Chairman for approval.

• Article 21: The Board of Directors is to monitor and manage the Company’s derivatives trades in accordance with the following principles:

• The designated senior management should monitor and control the risk of the derivative transactions at any time.

• Regularly reviews whether the performance of derivative transactions meets the established business strategies and the risk is within the tolerable range specified.

The designated senior management should manage derivatives transactions in accordance with the following principles:

1. Regularly assess whether the current risk management measures are appropriate and are indeed handled in accordance with the Procedures for Derivatives Trading of the Company.

2. Supervise trading and profit and loss situation. Take necessary responsive measures upon identifying any nonconformity and it should be immediately reported to the Board of Directors. The independent directors of the Company, if appointed, should attend the meeting to express their opinions.

The Company having authorized responsible personnel to handle derivative transactions in accordance with the Procedures for Derivatives Trading should have it reported to the most recent Board of Directors afterwards.

• Article 22: The Company engaged in derivatives trading should have a registry established for recording the information of derivatives type, amount, the Board approval date, and the matters to be carefully assessed as stated in Article 20 Paragraph 6, and Article 21 Paragraph 1 Clause 1 and Paragraph 2 Clause 1.

The Company’s internal audit staff should regularly understand the adequacy of the internal controls, audit the compliance with the Procedures for Derivatives Trading of the trade department every month, analyze the transaction cycle, and prepare an audit report. The Audit Committee should be notified in writing for any major nonconformity identified.

• Article 23: The Company while handling merge, split, acquisition, or transfer of shares should commission CPAs, lawyers, or securities underwriters to express an opinion on the reasonableness of the swap ratio, acquisition price, or the distribution of cash or other assets to shareholders before the resolutions reached in the board meeting; also, it should be presented to the Board of Directors for review and approval. However, if the parent company merges with its 100% owned subsidiary, or the merge between its 100% owned subsidiaries, there is no need to acquire the feasibility assessment of specialists.

• Article 24: The Company while engaged in the merger, split, or acquisition should have the merger, split, or acquisition agreement and the related matters composed before the shareholders meeting for distribution to shareholders along with the opinions of

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specialists referred to in Paragraph 1 of the preceding Article and the shareholders meeting notice for shareholders’ reference in voting on the merger, split, or acquisition proposal; unless otherwise provided by other law and regulations exempting the merger, split, or acquisition proposal from being resolved in the shareholders meeting.

If the shareholders meeting of the parties engaged in the merger, split, or acquisition cannot be convened or resolved due to the issues of insufficient attendance rate, voting right inadequacy, or other legal restrictions, or, motions are vetoed in the shareholders meeting, the parties engaged in the merger, split, or acquisition should immediately disclose the root cause, the subsequent processing operations, and the expected date of the shareholders meeting to be convened.

• Article 25: The Company while engaged in the merger, split, or acquisition, unless otherwise provided by law or for some reasons with the consent of the Financial Supervisory Commission in advance, should have the board meeting and shareholders meeting convened in the same day to resolve the merger, split, or acquisition matters.

The Company while engaged in the transfer of shares, unless otherwise provided by law or for some reasons with the consent of the Financial Supervisory Commission in advance, should have the board meeting and shareholders meeting convened in the same day.

The Company while engaged in the merger, split, acquisition, or transfer of shares should have the following information documented in writing and reserved for 5 years for inspection. The data in Paragraph 1 and Paragraph 2 below should be reported in the prescribed format to the Financial Supervisory Commission for records through the internet reporting system within two days after the resolutions reached in the board meeting.

1. Personnel basic information: including the job title, name, and identity card number (or Passport No. for foreigners) of those who engaged in the merger, split, acquisition, or transfer of shares or the project leader before the news made public.

2. Important Event Date: including signing a letter of intent or memorandum of understanding, commissioning finance or legal adviser, signing a contract, and the Board meeting date.

3. Important documents and minutes of meeting: including merge, split, acquisition, or transfer of shares plan, letter of intent or memorandum of understanding, important contracts, and minutes of board meeting.

If the counterparts of the merger, split, acquisition, or transfer of shares that the Company is engaged in are not listed companies or their stocks are not traded at the GTSM, the Company should have an agreement signed with them in accordance with the requirements stated in the preceding paragraph.

• Article 26: The Company’s staff who is engaged in or knows about the merge, split, acquisition, or transfer shares plan should issue a written confidentiality commitment not to disclose the contents of the plan before it is made public; also, may not trade the stock and equity-based marketable securities of the companies that are engaged in the merge, split, acquisition, or transfer of shares for themselves or on behalf of others.

• Article 27: The Company engaged in the merger, split, acquisition, or transfer of shares may not have the swap ratio or purchase price changed arbitrarily except for in the following

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circumstances. In addition, it should have the conditions for changes stipulated in the merge, split, acquisition, or transferee of shares contract.

1. Processing cash capitalization, issuing convertible bonds, stock dividend, issuing corporate bonds with warrants, preferred stock with warrants, stock options, and other equity-based marketable securities;

2. The acts, including the disposal of material assets, that affect the Company’s financial operations;

3. The events, including major disasters and major changes in technology, that affect the Company’s shareholder equity or the price of securities;

4. The adjustment made for the Treasury stock repurchased by any of the companies engaged in the merger, split, acquisition, or transferee of shares;

5. The change in the main company or the number of companies that are engaged in the merger, split, acquisition, or transferee of the shares;

6. The additional conditions for changes illustrated in the contract that are already disclosed to the public;

7. Article 28: The Company engaged in the merger, split, acquisition, or transfer of shares should have the rights and obligations related to the merger, split, acquisition, or transfer of shares detailed in the contract, including the following matters:

8. Breach of contract.

9. The principles for handling the equity-based marketable securities issued or the Treasury stock repurchased before the Company extinguished due to a merger or split.

10. The shares of Treasury stock that can be repurchased and the handling principle after the Company’s swap baseline date.

11. Handling the change in the main company or the number of companies that are engaged in the transactions.

12. The expected project in progress and the expected project completion date;

13. When the project is not completed on time, the relevant procedures for convening a shareholders meeting in accordance with the law and regulations.

14. Article 29: If any company involved in the merger, split, acquisition, or transfer of shares after the information made public intends to engage in the merger, split, acquisition, or transfer of shares with other companies, unless the number of participating companies is reduced, the resolution is reached in the shareholders meeting, and the Board of Directors is authorized in the shareholders meeting to change the limit of authority, the participating companies may be exempted from convening a shareholders meeting in making another resolution. In addition, the procedures or legal acts completed in the original merger, split, acquisition, or transfer of shares should be repeated by all participating companies.

15. Article 30: The Company should have an agreement signed with the companies engaged in the merger, split, acquisition, or transfer of the shares that are not public companies in accordance with Article 25, Article 26, and Article 29.

16. Article 31: The Company’s Finance Office should have had the acquisition or disposal of assets related contracts, minutes of meeting, registries, appraisal reports, and the opinions of the CPAs, lawyers, or security underwriters ready at the Company, unless otherwise

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provided by laws, for at least five years.

• Article 32: The Company’s acquisition or disposal of assets with any of the following circumstances should have the relevant information documented in the prescribed format by its nature and noticed and declared through the internet reporting system designated by the Financial Supervisory Commission within two days from the Event Date:

• The Company’s acquisition or disposal of real estate from or to the related party, or, the Company’s and the related party’s acquisition or disposal of other assets other than the real estate for an amount more than 20% of the paid-in capital, 10% of the total assets, or NT$300 million, Except for the buy/sell of government bonds, repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms.

• Conducting merger, split, acquisition, or transfer of shares.

• Engaged in derivatives trading losses amounting to the loss limit amount of all contracts or individual contract regulated in the Procedures.

• The acquisition or disposal of the assets used for operation and the transaction is not done with the related party, and the amount is over NT$1 billion.

• If the company is expected to invest over NT$500 million when the acquisition of real estate via aonstrution by others on the compay’s own or rented land, construction to share houses, co-construction to share houses, co-construction to sell.

• The assets trades other than the ones stated in the last five paragraphs or investments in Mainland China amounting to 20% of the paid-in capital or NT$300 million, except for the following circumstances:

  • (1) Government bonds trade.

  • (2) The buy/sell of repurchase/reverse repurchase bonds, purchase or repurchase the money market funds issued by domestic securities trust firms.

The transaction amount stated in the preceding paragraph is calculated in accordance with the following methods:

1. Referred to the amount of each transaction.

2. The cumulative amount of the acquisition or disposal of the homogeneous underlying object with the same counterpart within one year.

3. The cumulative acquisition or disposal (independent cumulative acquisition or cumulative disposal) amount of the same real estate development project within one year.

4. The cumulative acquisition or disposal (independent cumulative acquisition or cumulative disposal) amount of the same marketable securities.

The “within one year” refers to one year prior to the baseline date of the current event; however, the requirement is exempted for the part of the transaction reported in accordance with the Procedures.

The Company should have the derivatives transactions of the Company and its subsidiaries up to the end of the last month prepared in the prescribed format and posted on the information reporting system designated by the Financial Supervisory

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Commission before the tenth day of each month.

If there is any mistake or any item missing and needs to be amended, the company has to re-announce the whole thing within two days of uncovering.

• Article 33: The notice and declaration of the trades as stated in the preceding paragraph with any of the following circumstances should be posted on the designated website within two days from the Event Date:

• The contracts of the original trade is changed, terminated, or cancelled.

• The merger, split, acquisition, or transfer of shares is not completed in accordance with the contracted schedule.

• The content of the original notice is changed.

• Article 34: The responsible personnel of the Company in violation of the Procedures for Handling Acquisition and Disposal of Assets should be punished in accordance with the Company’s Disciplinary Act.

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Appendix 5

YIEH PHUI ENTERPRISE CO., LTD

Comparison Table for the “Corporate Charter”

Before and After Revision

BEFORE THE REVISION

AFTER THE REVISION Article 18 The Company is with 7 directors appointed by a nomination system. They are elected among the competent shareholders in the shareholders meeting in accordance with Article 198 of the Company Act. Directors and supervisors are appointed for a term of 3-year and can be appointed for the 2nd term. Also, the minimum shareholding ratio of the directors shall comply with the requirements of the securities competent authorities.

Article 18 Article 18 The Company is with 7 directors and 2 The Company is with 7 directors supervisors appointed by a nomination appointed by a nomination system. They system. They are elected among the are elected among the competent competent shareholders in the shareholders in the shareholders meeting shareholders meeting in accordance with in accordance with Article 198 of the Article 198 of the Company Act. Company Act. Directors and supervisors Directors and supervisors are appointed are appointed for a term of 3-year and for a term of 3-year and can be can be appointed for the 2nd term. Also, appointed for the 2nd term. Also, the the minimum shareholding ratio of the minimum shareholding ratio of the directors shall comply with the directors and supervisors shall comply requirements of the securities competent with the requirements of the securities authorities. competent authorities. A majority of the Company’s directors A majority of the Company’s directors should not be in any of the following should not be in any of the following relationships: relationships: 1. Spouse 1. Spouse 2. Secondary relatives 2. Secondary relatives At least one of the Company’s directors At least one of the Company’s shall not be in any of the relationship supervisors or between the supervisors stated in preceding paragraph, unless or directors shall not be in any of the otherwise approved by the competent relationship stated in preceding authorities. paragraph, unless otherwise approved by the competent authorities. Article 19 Article 19 Directors and supervisors at the expiry Directors at the expiry of their terms of of their terms of office, due to delays in office, due to delays in re-election, shall re-election, shall continue to perform continue to perform duties until the duties until the newly elected directors newly elected directors are ready to take and supervisors are ready to take over over the office. However, the competent the office. However, the competent authorities may command the Company authorities may command the Company to complete the re-election before the to complete the re-election before the deadline. If the re-election is not deadline. If the re-election is not completed after the deadline, the current completed after the deadline, the current directors and supervisors will be directors and supervisors will be discharged automatically after the expiry discharged automatically after the expiry date. date. Article 21 Article 21 A contingent election should be arranged When the vacancy of directors is one when there is more than one third of the third, there has to be a by-election to board directors dismissed or all make up for the missing directors, whose supervisors dismissed. However, the term is limited to that of the current newly elected directors or supervisors board members. are to complete only the remaining

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tenure of the dismissed directors or supervisors. Article 22 The board meeting is convened quarterly at least. The reasons for convening the board meeting should be stated in the notice to directors and supervisors seven s and supervisors seven even days in advance. An extraordinary board meeting can be convened due to an urgent matter. The notice of a board meeting as stated in the preceding paragraph should be processed in writing or by fax or e-mail. If the Chairman deems it necessary or when requested by two or more directors to have an extraordinary board meeting convened, the Chairman of the Board of Directors is to chair the board meeting. If the Chairman is unable to exercise powers, the meeting is to be chaired by the individual designated by the Chairman. If there is not an individual designated, one director shall be elected among the directors toirectors toectors totors toors tors tos to too chair the meeting.hair the meeting.e meeting. meeting.eeting.ting.g.

Article 22 Article 22 The board meeting is convened quarterly The board meeting is convened quarterly at least. The reasons for convening the at least. The reasons for convening the board meeting should be stated in the board meeting should be stated in the notice to directors and supervisors seven s and supervisors seven even notice to directors seven days in days in advance. An extraordinary board advance. An extraordinary board meeting can be convened due to an meeting can be convened due to an urgent matter. The notice of a board urgent matter. The notice of a board meeting as stated in the preceding meeting as stated in the preceding paragraph should be processed in writing paragraph should be processed in writing or by fax or e-mail. If the Chairman or by fax or e-mail. If the Chairman deems it necessary or when requested by deems it necessary or when requested by two or more directors to have an two or more directors to have an extraordinary board meeting convened, extraordinary board meeting convened, the Chairman of the Board of Directors the Chairman of the Board of Directors is to chair the board meeting. If the is to chair the board meeting. If the Chairman is unable to exercise powers, Chairman is unable to exercise powers, the meeting is to be chaired by the the meeting is to be chaired by the individual designated by the Chairman. individual designated by the Chairman. If there is not an individual designated, If there is not an individual designated, one director shall be elected among the one director shall be elected among the directors toirectors toectors totors toors tors tos to too chair the meeting.hair the meeting.e meeting. meeting.eeting.ting.g. directors to chair the meeting. Article 25 Article 25 Supervisors, in addition to performing Based on Article 14.4 of the Securities - job responsibilities lawfully, may attend and Exchange Act, Yieh Phui sets up an the board meetings to express opinions auditing committee. The committee or but not to vote. its members are to execute the Company Since the re-election of the directors and Act, Securities and Exchange Act and supervisors after the expiry date of the other regulations that are under the term in 2013, the Company has had an purview of the supervisors. Audit Committee set up to replace the The board of directors may set up other supervisors in accordance with Article functionaries and their charters are to be 14.4 of the Securities and Exchange Act. set by the board. The Audit Committee or the members of the Audit Committee are responsible for the implementation of the supervisors' job responsibilities defined in accordance with the Company Act Securities and Exchange Act, other laws and regulations, and the Articles of Association. The provisions of the Articles of Association regarding the supervisors will no longer be applicable after the Audit Committee is formed. Article 26 Article 26 The traveling expenses of the directors The traveling expenses of the directors, and supervisors, the remuneration of the the remuneration of the independent independent directors, and the salaries of directors, and the salaries of the the Chairman and Vice Chairman are Chairman and Vice Chairman are determined by the Board of Directors in determined by the Board of Directors in accordance with the relevant standards accordance with the relevant standards of the industry and the listed companies. of the industry and the listed companies. Chairman and Vice Chairman may, Chairman and Vice Chairman may,

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	based on the Company’s payroll provisions, collect other compensations. The Company may purchase liability insurance for all directorsand supervisors.		based on the Company’s payroll provisions, collect other compensations. The Company may purchase liability insurance for all directors.
	Article 27 The Company may appoint the President, Vice President, and a number of other people. The appointment and dismissal of the President and Vice President is with the consent of the majority of directors. The appointment and dismissal of the Assisting Vice President, Junior Vice President, and Managers are proposed by the President tothe Chairman for approval.		Article 27 The company has a general managers and several vice general managers. Their commission, decommission and remuneration all follow Item 29 of the Company Act.
	Article 30 The Company should have the following reports composed at the end of each fiscal yearand then presented to the supervisors for review and approval 30 days prior to the general shareholders meeting andto be acknowledged in the general shareholders meeting. 1. Business operation report 2. Financial statements 3. Motion of Profit Appropriation or DeficitCompensationStatement		Article 30 At the end of the accounting year, the board of directors has to get the following statements ready to be approved by the auditing committee and the board of directors, then to be ratified by the stockholder’s meeting. 1. Operation Statement 2. Financial Statement 3. Dividend declaration or Statements of deficit compensated
	Article 31-1 An appropriate amount equivalent to 0.2% of the annual earnings (the so-called earnings refer to the net income before tax and refer to the profit before deducting remuneration to employees, directors,and supervisors), if any, as remuneration to employees and 0.1% or less as remuneration to directors and supervisors. However, an amount equivalent to the accumulated losses, if any, should be reserved in advance to make upsuch losses.		Article 31-1 An appropriate amount equivalent to 0.2% of the annual earnings (the so-called earnings refer to the net income before tax and refer to the profit before deducting remuneration to employees, directors, and supervisors), if any, as remuneration to employees and 0.1% or less as remuneration to directors. However, an amount equivalent to the accumulated losses, if any, should be reserved in advance to make upsuch losses.

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Appendix 6

YIEH PHUI ENTERPRISE CO., LTD. Corporate Charter

Chapter 1 General Rules

• Article 1: The Company was organized pursuant to the limited corporation provisions of the

Company Act and named as “Yieh Phui Enterprise Co., Ltd.”

• Article 2: The Company’s business services are as follows:

• A102080 Horticulture

• C801010 Basic Industrial Chemical Manufacturing

• C901990 Other Non-metallic Mineral Products Manufacturing

• CA01010 Iron and Steel Refining

• CA01020 Iron and Steel Rolls over Extends and Crowding

• CA01030 Iron and Steel Casting

• CA01050 Iron and Steel Rolling, Drawing, and Extruding

• CA01060 Steel Wires and Cables Manufacturing

• CA02010 Metal Architectural Components Manufacturing

• CA02090 Metal line Products Manufacturing

• CA02990 Other Fabricated Metal Products Manufacturing Not Elsewhere Classified

• CA04010 Metal Surface Treating

• CB01010 Machinery and Equipment Manufacturing

• CB01990 Other Machinery Manufacturing Not Elsewhere Classified

• CC01080 Electronic Parts and Components Manufacturing

• CD01030 Automobiles and Parts Manufacturing

• CD01040 Motor Vehicles and Parts Manufacturing

• F101100 Wholesale of Flowers

• F106010 Wholesale of Ironware

• F111090 Wholesale of Building Materials

• F113010 Wholesale of Machinery

• F114030 Wholesale of Motor Vehicle Parts and Supplies

• F199990 Other Wholesale Trade

• F201070 Retail sale of Flowers

• F206010 Retail Sale of Ironware

• F211010 Retail Sale of Building Materials

• F213080 Retail Sale of Machinery and Equipment

• F214030 Retail Sale of Motor Vehicle Parts and Supplies

• F299990 Retail Sale of Other Retail Trade Not Elsewhere Classified

• F401010 International Trade

• E103011 Steel Construction

• H701010 Residence and Buildings Lease Construction and Development

• H701040 Specialized Field Construction and Development

• H701060 New County and Community Construction and Investment

• H703090 Real Estate Commerce

• H703100 Real Estate Rental and Leasing

• JE01010 Rental and Leasing Business

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1. ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

2. Article 3: The Company was established in Kaohsiung City. When necessary, branches will be setup domestically and internationally with the resolutions of the Board of Directors.

3. Article 4: The total transfer investment amount of the Company is not subject to the limitation of 40% of total paid-in capital threshold defined in Article 13 of the Company Act.

Chapter 2 Stock shares

• Article 5: The Company’s total authorized capital amounted to NT$20 billion with 2 billion shares issued at NT$10 per share in installments.

• Article 5.1: The Company has stock shares transferred to employees at an average price lower than the actual repurchase price, has stock option certificates issued to employees at a price below the market price (net share value) that is resolved with the attendance of the shareholders representing a majority of the total outstanding shares and the consent of the attending shareholders representing two thirds of the voting rights.

Article 6: The Company issues only order shares with the signatures or seals of three directors affixed and numbered. In addition, the shares cannot be issued without the certification of the competent authorities or the registration agency authorized by the competent authorities. Also, the Company’s order shares can be issued without stock printout; however, should contact the Securities Central Depository Institution for registration. Article 7: Shareholders should have their name/title and domicile/residence reported to the Company, fill out the signature card and then send it to the Company for filing. The loss or destruction of the seal or for other reasons the seal specimen needed to be replaced should be processed in accordance with the Regulations Governing the Handling of Stock Affairs by Public Companies. Article 8: The transferor and the transferee shall fill out an “Application for Transfer of Shares” together with the transferred shares submitted to the Company to apply for stock transfer that cannot be used against the Company until it is post to the shareholder registry. Article 9: The lost or damaged stocks, if any, are to be processed in accordance with the Company Act and general law and regulations. Article 10: (Deleted) Article 11: The stock cut-off date is 60 days prior to the general shareholders meeting, 30 days prior to the extraordinary shareholders meeting, or 5 days prior to the baseline date announced by the Company for the distribution of dividends, bonuses, and other benefits.

Chapter 3 Shareholders meeting

Article 12: Shareholders meetings include general shareholders meetings and extraordinary

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• shareholders meetings. General shareholders meetings are held once a year and they are to be convened within 6 months after the fiscal year. The Board of Directors will notify all shareholders 30 days in advance. In addition, an extraordinary shareholders meeting will be convened if necessary.

• Article 13: Shareholders who are unable to attend a shareholders meeting for valid reasons may issue a proxy provided by the Company with the scope of authorization specified to have the representative attended the meeting on their behalf. Attending shareholders meeting by proxy is to be handled in accordance with Article 25.1 of the Securities and Exchange Act.

• Article 14: The Chairman of the Board of Directors is to chair the shareholders meeting. If the Chairman is on leave or unable to exercise powers, the meeting is to be chaired by the individual designated by the Chairman. If there is not an individual designated, one director shall be elected among the directors to chair the meeting.

• Article 15: Shareholders of the Company are entitled to one voting right per share except for those without voting right listed in Article 179 of the Company Act.

• Article 16: The resolution reached in the shareholders meeting is deemed passed that are with the attendance of the shareholders representing a majority of the total outstanding shares and the consent of the attending shareholders representing a majority of the voting right, unless otherwise provided by the Company Act.

• Article 17: The resolutions reached in the shareholders meeting must be documented in the minutes of meeting, which must be signed or sealed by the Chairman and then distributed to all shareholders within 20 days after the meeting. The Company may have the minutes of meeting in the preceding paragraph distributed by announcement. The minutes of meeting should be prepared in accordance with the year, month, date, place, the Chairman’s name, resolution methods, and the gist and result of the proceeding; also, the minutes of meeting should be kept for records at the Company’s along with the shareholder’s attendance registry and proxies.

Chapter 4 Directors and supervisors

• Article 18: The Company is with 7 directors appointed by a nomination system. They are elected among the competent shareholders in the shareholders meeting in accordance with Article 198 of the Company Act. Directors and supervisors are appointed for a term of 3-year and can be appointed for the 2[nd] term. Also, the minimum shareholding ratio of the directors shall comply with the requirements of the securities competent authorities.

• A majority of the Company’s directors should not be in any of the following relationships:

• Spouse

• Secondary relatives

At least one of the Company’s directors shall not be in any of the relationship stated in preceding paragraph, unless otherwise approved by the competent authorities.

Article 18.1: For the number of directors stated in the preceding paragraph, there must be at least two independent directors, which may not be less than one fifth of the total number

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		of directors. The professional qualifications of the independent directors,
		shareholdings, part-time job constraints, the nomination and election methods, and
		other binding matters should be handled in accordance with the relevant
		requirements of the securities competent authorities.
Article	19:	Directors at the expiry of their terms of office, due to delays in re-election, shall
		continue to perform duties until the newly elected directors are ready to take over
		the office. However, the competent authorities may command the Company to
		complete the re-election before the deadline. If the re-election is not completed
		after the deadline, the current directors and supervisors will be discharged
		automatically after the expiry date.
Article	20:	The Board of Directors is organized by the directors with the attendance of two
		thirds of the directors and the consent of the directors representing a majority of the
		attending directors to elect the Chairman and the Vice Chairman, if necessary. The
		Chairman is to execute all business matters resolved in accordance with law and
		regulations, Articles of Association, shareholders meeting, and Board meeting.
Article	21:	When the vacancy of directors is one third, there has to be a by-election to make up
		for the missing directors, whose term is limited to that of the current board
		members.
Article	22:	The board meeting is convened quarterly at least. The reasons for convening the
		board meeting should be stated in the notice to directors seven days in advance. An
		extraordinary board meeting can be convened due to an urgent matter. The notice
		of a board meeting as stated in the preceding paragraph should be processed in
		writing or by fax or e-mail. If the Chairman deems it necessary or when requested
		by two or more directors to have an extraordinary board meeting convened, the
		Chairman of the Board of Directors is to chair the board meeting. If the Chairman
		is unable to exercise powers, the meeting is to be chaired by the individual
		designated by the Chairman. If there is not an individual designated, one director
		shall be elected among the directors to chair the meeting.
Article	23:	The resolution reached in the board meeting is deemed as passed that is with the
		attendance of a majority of the directors and the consent of a majority of the
		attending directors, unless otherwise provided by the Company Act. Directors who
		are unable to attend the meeting for reasons may issue a proxy with the scope of
		authorization specified to have other director attended the meeting on their behalf;
		however, it is limited to one person, one proxy.
Article	24:	The motions resolved in the board meeting must be documented in the minutes of
		meeting, which must be signed and sealed by the Chairman and then distributed to
		all directors within 15 days after the meeting. The gist and result of the proceeding
		should be documented in the minutes of meeting; also, the minutes of meeting
		should be kept for records at the Company’s along with the shareholder’s
		attendance registry and proxies.
Article	25:	Based on Article 14.4 of the Securities and Exchange Act, Yieh-Phui sets up an
		auditing committee. The committee or its members are to execute the Company
		Act, Securities and Exchange Act and other regulations that are under the purview
		of the supervisors.
		The board of directors may set up other functionaries and their charters are to be
		set by the board.

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• Article 26: The traveling expenses of the directors, the remuneration of the independent directors, and the salaries of the Chairman and Vice Chairman are determined by the Board of Directors in accordance with the relevant standards of the industry and the listed companies. Chairman and Vice Chairman may, based on the Company’s payroll provisions, collect other compensations. The Company may purchase liability insurance for all directors.

Chapter 5 Managers and employees

• Article 27: The company has a general manager and several vice general managers. Their commission, decommission and remuneration all follow Item 29 of the Company Act.

• Article 28: The Company by the resolutions of the Board of Directors may hire consultants or important staff.

• Article 29: The appointment and dismissal of the Company’s other employees is to be handled in accordance with the Company’s Management Regulations.

Chapter 6 Final accounts

• Article 30: At the end of the accounting year, the board of directors has to get the following statements ready to be approved by the auditing committee and the board of directors, then to be ratified by the stockholder’s meeting.

• Operation Statement

• Financial Statement

• Dividend declaration or Statements of deficit compensated

• Article 30.1: An appropriate amount equivalent to 0.2% of the annual earnings (the so-called earnings refer to the net income before tax and refer to the profit before deducting remuneration to employees, directors), if any, as remuneration to employees and 0.1% or less as remuneration to directors. However, an amount equivalent to the accumulated losses, if any, should be reserved in advance to make up such losses.

• Article 31: The Company’s final accounts of each year are distributed as follows:

• Dividend policy

  • The industry the Company is engaged in is in a mature stage of its life cycle. The dividend policy is in support of the current and future development plans, taking into consideration the investment environment, capital requirements, domestic and international competition, and the interests of the shareholders. An amount not less than 20% of the distributable earnings is appropriated annually as the shareholder dividend and bonus. However, the accumulated distributable earnings that are less than 20% of the paid-in capital may not be distributed.

• Distribution conditions and timing:

  • The Company’s final accounts of each year, after paying tax and making up prior losses and the net of the 10% legal reserve, and with the special reserve appropriated or reserved according to the operational needs or ordinances, plus the cumulative total unallocated surplus are available for distribution. The earnings distribution is proposed by the Board of Directors and resolved in the shareholders meeting.

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1. Types of dividends:

2. Assess capital needs in accordance with the expansion planning and profitability. In general, stock dividend is distributed in order to retain the necessary funds. Cash dividend, depending on the profitability, amounts to 20-100% of the total dividends distributed while stock dividend amounts to 0-80%.

3. Dividend distribution, depending on the profitability, is proposed by the Board of Directors in accordance with the provisions stated in the preceding paragraph in the general shareholders meeting for resolutions.

Chapter 7 Bylaw

• Article 32: The Company may conduct external guarantee business.

• Article 33: The Company’s organizational procedures and work rules are to be regulated separately by the Board of Directors.

Article 34: The matters that are not addressed in the Articles of Incorporation should be processed in accordance with the Company Law and other laws and regulations. Article 35: The Articles of Incorporation after the resolution reached in the shareholders meeting is to be submitted to the competent authorities for approval before implementation; so is the amendment. Article 36: The Articles of Incorporation was enacted on March 30, 1978. The first amendment was made on February 17, 1984. The second amendment was made on December 20, 1985. The third amendment was made on January 20, 1986. The fourth amendment was made on March 12, 1986. The fifth amendment was made on May 9, 1986. The sixth amendment was made on October 6, 1987. The seventh amendment was made on November 20, 1987. The eighth amendment was made on April 14, 1988. The ninth amendment was made on May 21, 1988. The tenth amendment was made on October 28, 1989. The eleventh amendment was made on December 6, 1989. The twelfth amendment was made on March 22, 1990. The thirteenth amendment was made on July 20, 1991. The fourteenth amendment was made on October 29, 1991. The fifteenth amendment was made on April 15, 1992. The sixteenth amendment was made on October 7, 1992. The seventeenth amendment was made on December 31, 1992. The eighteenth amendment was made on May 20, 1994. The nineteenth amendment was made on April 22, 1995. The twentieth amendment was made on May 3, 1997. The twenty-first amendment was made on April 10, 1998. The twenty-second amendment was made on May 12, 1999. The twenty-third amendment was made on May 30, 2000. The twenty-fourth amendment was made on June 20, 2001. The twenty-fifth amendment was made on June 18, 2002. The twenty-sixth amendment was made on June 24, 2003.

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The twenty-seventh amendment was made on June 24, 2003. The twenty-eighth amendment was made on June 8, 2004. The twenty-ninth amendment was made on June 29, 2005. The thirtieth amendment was made on June 23, 2006. The thirty-first amendment was made on June 21, 2007. The thirty-second amendment was made on June 25, 2008. The thirty-third amendment was made on June 16, 2009. The thirty-fourth amendment was made on June 24, 2010. The thirty-fifth amendment was made on June 21, 2012. The thirty-sixth amendment was made on June 20, 2013. The thirty-seventh amendment was made on June 18, 2015. The thirty-eighth amendment was made on June 22, 2016. The thirty-ninth amendment was made on June 22, 2016. The Forty amendment was made on June 22, 2017

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X Appendix Appendix 1

YIEH PHUI ENTERPRISE CO., LTD. Corporate Charter

Chapter 1 General Rules

• Article 1: The Company was organized pursuant to the limited corporation provisions of the Company Act and named as “Yieh Phui Enterprise Co., Ltd.”

• Article 2: The Company’s business services are as follows:

• A102080 Horticulture

• C801010 Basic Industrial Chemical Manufacturing

• C901990 Other Non-metallic Mineral Products Manufacturing

• CA01010 Iron and Steel Refining

• CA01020 Iron and Steel Rolls over Extends and Crowding

• CA01030 Iron and Steel Casting

• CA01050 Iron and Steel Rolling, Drawing, and Extruding

• CA01060 Steel Wires and Cables Manufacturing

• CA02010 Metal Architectural Components Manufacturing

• CA02090 Metal line Products Manufacturing

• CA02990 Other Fabricated Metal Products Manufacturing Not Elsewhere Classified 50. CA04010 Metal Surface Treating 51. CB01010 Machinery and Equipment Manufacturing

• CB01990 Other Machinery Manufacturing Not Elsewhere Classified

• CC01080 Electronic Parts and Components Manufacturing 54. CD01030 Automobiles and Parts Manufacturing

• CD01040 Motor Vehicles and Parts Manufacturing

• F101100 Wholesale of Flowers

• F106010 Wholesale of Ironware

• F111090 Wholesale of Building Materials

• F113010 Wholesale of Machinery

• F114030 Wholesale of Motor Vehicle Parts and Supplies

• F199990 Other Wholesale Trade

• F201070 Retail sale of Flowers

• F206010 Retail Sale of Ironware

• F211010 Retail Sale of Building Materials

• F213080 Retail Sale of Machinery and Equipment

• F214030 Retail Sale of Motor Vehicle Parts and Supplies

• F299990 Retail Sale of Other Retail Trade Not Elsewhere Classified

• F401010 International Trade

• E103011 Steel Construction

• H701010 Residence and Buildings Lease Construction and Development

• H701040 Specialized Field Construction and Development

• H701060 New County and Community Construction and Investment

• H703090 Real Estate Commerce

• H703100 Real Estate Rental and Leasing

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1. JE01010 Rental and Leasing Business

2. ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

3. Article 3: The Company was established in Kaohsiung City. When necessary, branches will be setup domestically and internationally with the resolutions of the Board of Directors.

4. Article 4: The total transfer investment amount of the Company is not subject to the limitation of 40% of total paid-in capital threshold defined in Article 13 of the Company Act.

Chapter 2 Stock shares

• Article 5: The Company’s total authorized capital amounted to NT$20 billion with 2 billion shares issued at NT$10 per share in installments.

• Article 5.1: The Company has stock shares transferred to employees at an average price lower than the actual repurchase price, has stock option certificates issued to employees at a price below the market price (net share value) that is resolved with the attendance of the shareholders representing a majority of the total outstanding shares and the consent of the attending shareholders representing two thirds of the voting rights.

Article	6:	The Company issues only order shares with the signatures or seals of three
		directors affixed and numbered. In addition, the shares cannot be issued without the
		certification of the competent authorities or the registration agency authorized by
		the competent authorities. Also, the Company’s order shares can be issued without
		stock printout; however, should contact the Securities Central Depository
		Institution for registration.
Article	7:	Shareholders should have their name/title and domicile/residence reported to the
		Company, fill out the signature card and then send it to the Company for filing. The
		loss or destruction of the seal or for other reasons the seal specimen needed to be
		replaced should be processed in accordance with the Regulations Governing the
		Handling of Stock Affairs by Public Companies.
Article	8:	The transferor and the transferee shall fill out an “Application for Transfer of
		Shares” together with the transferred shares submitted to the Company to apply for
		stock transfer that cannot be used against the Company until it is post to the
		shareholder registry.
Article	9:	The lost or damaged stocks, if any, are to be processed in accordance with the
		Company Act and general law and regulations.
Article	10:	(Deleted)
Article	11:	The stock cut-off date is 60 days prior to the general shareholders meeting, 30 days
		prior to the extraordinary shareholders meeting, or 5 days prior to the baseline date
		announced by the Company for the distribution of dividends, bonuses, and other
		benefits.

Chapter 3 Shareholders meeting

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• Article 12: Shareholders meetings include general shareholders meetings and extraordinary shareholders meetings. General shareholders meetings are held once a year and they are to be convened within 6 months after the fiscal year. The Board of Directors will notify all shareholders 30 days in advance. In addition, an extraordinary shareholders meeting will be convened if necessary.

• Article 13: Shareholders who are unable to attend a shareholders meeting for valid reasons may issue a proxy provided by the Company with the scope of authorization specified to have the representative attended the meeting on their behalf. Attending shareholders meeting by proxy is to be handled in accordance with Article 25.1 of the Securities and Exchange Act.

• Article 14: The Chairman of the Board of Directors is to chair the shareholders meeting. If the Chairman is on leave or unable to exercise powers, the meeting is to be chaired by the individual designated by the Chairman. If there is not an individual designated, one director shall be elected among the directors to chair the meeting.

• Article 15: Shareholders of the Company are entitled to one voting right per share except for those without voting right listed in Article 179 of the Company Act.

• Article 16: The resolution reached in the shareholders meeting is deemed passed that are with the attendance of the shareholders representing a majority of the total outstanding shares and the consent of the attending shareholders representing a majority of the voting right, unless otherwise provided by the Company Act.

• Article 17: The resolutions reached in the shareholders meeting must be documented in the minutes of meeting, which must be signed or sealed by the Chairman and then distributed to all shareholders within 20 days after the meeting. The Company may have the minutes of meeting in the preceding paragraph distributed by announcement. The minutes of meeting should be prepared in accordance with the year, month, date, place, the Chairman’s name, resolution methods, and the gist and result of the proceeding; also, the minutes of meeting should be kept for records at the Company’s along with the shareholder’s attendance registry and proxies.

Chapter 4 Directors and supervisors

• Article 18: The Company is with 7 directors and 2 supervisors appointed by a nomination system. They are elected among the competent shareholders in the shareholders meeting in accordance with Article 198 of the Company Act. Directors and supervisors are appointed for a term of 3-year and can be appointed for the 2[nd] term. Also, the minimum shareholding ratio of the directors and supervisors shall comply with the requirements of the securities competent authorities.

• A majority of the Company’s directors should not be in any of the following relationships:

• Spouse

• Secondary relatives

At least one of the Company’s supervisors or between the supervisors or directors shall not be in any of the relationship stated in preceding paragraph, unless otherwise approved by the competent authorities.

Article 18.1: For the number of directors stated in the preceding paragraph, there must be at least

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		two independent directors, which may not be less than one fifth of the total number
		of directors. The professional qualifications of the independent directors,
		shareholdings, part-time job constraints, the nomination and election methods, and
		other binding matters should be handled in accordance with the relevant
		requirements of the securities competent authorities.
Article	19:	Directors and supervisors at the expiry of their terms of office, due to delays in
		re-election, shall continue to perform duties until the newly elected directors and
		supervisors are ready to take over the office. However, the competent authorities
		may command the Company to complete the re-election before the deadline. If the
		re-election is not completed after the deadline, the current directors and supervisors
		will be discharged automatically after the expiry date.
Article	20:	The Board of Directors is organized by the directors with the attendance of two
		thirds of the directors and the consent of the directors representing a majority of the
		attending directors to elect the Chairman and the Vice Chairman, if necessary. The
		Chairman is to execute all business matters resolved in accordance with law and
		regulations, Articles of Association, shareholders meeting, and Board meeting.
Article	21:	A contingent election should be arranged when there is more than one third of the
		board directors dismissed or all supervisors dismissed. However, the newly elected
		directors or supervisors are to complete only the remaining tenure of the dismissed
		directors or supervisors.
Article	22:	The board meeting is convened quarterly at least. The reasons for convening the
		board meeting should be stated in the notice to directors and supervisors seven days
		in advance. An extraordinary board meeting can be convened due to an urgent
		matter. The notice of a board meeting as stated in the preceding paragraph should
		be processed in writing or by fax or e-mail. If the Chairman deems it necessary or
		when requested by two or more directors to have an extraordinary board meeting
		convened, the Chairman of the Board of Directors is to chair the board meeting. If
		the Chairman is unable to exercise powers, the meeting is to be chaired by the
		individual designated by the Chairman. If there is not an individual designated, one
		director shall be elected among the directors to chair the meeting.
Article	23:	The resolution reached in the board meeting is deemed as passed that is with the
		attendance of a majority of the directors and the consent of a majority of the
		attending directors, unless otherwise provided by the Company Act. Directors who
		are unable to attend the meeting for reasons may issue a proxy with the scope of
		authorization specified to have other director attended the meeting on their behalf;
		however, it is limited to one person, one proxy.
Article	24:	The motions resolved in the board meeting must be documented in the minutes of
		meeting, which must be signed and sealed by the Chairman and then distributed to
		all directors within 15 days after the meeting. The gist and result of the proceeding
		should be documented in the minutes of meeting; also, the minutes of meeting
		should be kept for records at the Company’s along with the shareholder’s
		attendance registry and proxies.
Article	25:	Supervisors, in addition to performing job responsibilities lawfully, may attend the
		board meetings to express opinions but not to vote.
		Since the re-election of the directors and supervisors after the expiry date of the
		term in 2013, the Company has had an Audit Committee set up to replace the

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supervisors in accordance with Article 14.4 of the Securities and Exchange Act. The Audit Committee or the members of the Audit Committee are responsible for the implementation of the supervisors' job responsibilities defined in accordance with the Company Act Securities and Exchange Act, other laws and regulations, and the Articles of Association. The provisions of the Articles of Association regarding the supervisors will no longer be applicable after the Audit Committee is formed.

• Article 26: The traveling expenses of the directors and supervisors, the remuneration of the independent directors, and the salaries of the Chairman and Vice Chairman are determined by the Board of Directors in accordance with the relevant standards of the industry and the listed companies. Chairman and Vice Chairman may, based on the Company’s payroll provisions, collect other compensations. The Company may purchase liability insurance for all directors and supervisors.

Chapter 5 Managers and employees

• Article 27: The Company may appoint the President, Vice President, and a number of other people. The appointment and dismissal of the President and Vice President is with the consent of the majority of directors. The appointment and dismissal of the Assisting Vice President, Junior Vice President, and Managers are proposed by the President to the Chairman for approval.

• Article 28: The Company by the resolutions of the Board of Directors may hire consultants or important staff.

• Article 29: The appointment and dismissal of the Company’s other employees is to be handled in accordance with the Company’s Management Regulations.

Chapter 6 Final accounts

• Article 30: The Company should have the following reports composed at the end of each fiscal year and then presented to the supervisors for review and approval 30 days prior to the general shareholders meeting and to be acknowledged in the general shareholders meeting.

• Business operation report

• Financial statements

• Motion of Profit Appropriation or Deficit Compensation Statement

• Article 30.1: An appropriate amount equivalent to 0.2% of the annual earnings (the so-called earnings refer to the net income before tax and refer to the profit before deducting remuneration to employees, directors, and supervisors), if any, as remuneration to employees and 0.1% or less as remuneration to directors and supervisors. However, an amount equivalent to the accumulated losses, if any, should be reserved in advance to make up such losses.

Article 31: The Company’s final accounts of each year are distributed as follows:

1. Dividend policy

The industry the Company is engaged in is in a mature stage of its life cycle.

The dividend policy is in support of the current and future development plans,

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taking into consideration the investment environment, capital requirements, domestic and international competition, and the interests of the shareholders. An amount not less than 20% of the distributable earnings is appropriated annually as the shareholder dividend and bonus. However, the accumulated distributable earnings that are less than 20% of the paid-in capital may not be distributed.

1. Distribution conditions and timing:

2. The Company’s final accounts of each year, after paying tax and making up prior losses and the net of the 10% legal reserve, and with the special reserve appropriated or reserved according to the operational needs or ordinances, plus the cumulative total unallocated surplus are available for distribution. The earnings distribution is proposed by the Board of Directors and resolved in the shareholders meeting.

3. Types of dividends: Assess capital needs in accordance with the expansion planning and profitability. In general, stock dividend is distributed in order to retain the necessary funds. Cash dividend, depending on the profitability, amounts to 20-100% of the total dividends distributed while stock dividend amounts to 0-80%.

4. Dividend distribution, depending on the profitability, is proposed by the Board of Directors in accordance with the provisions stated in the preceding paragraph in the general shareholders meeting for resolutions.

Chapter 7 Bylaw

• Article 32: The Company may conduct external guarantee business.

• Article 33: The Company’s organizational procedures and work rules are to be regulated separately by the Board of Directors.

• Article 34: The matters that are not addressed in the Articles of Incorporation should be processed in accordance with the Company Law and other laws and regulations.

• Article 35: The Articles of Incorporation after the resolution reached in the shareholders meeting is to be submitted to the competent authorities for approval before implementation; so is the amendment.

• Article 36: The Articles of Incorporation was enacted on March 30, 1978. The first amendment was made on February 17, 1984. The second amendment was made on December 20, 1985. The third amendment was made on January 20, 1986. The fourth amendment was made on March 12, 1986. The fifth amendment was made on May 9, 1986. The sixth amendment was made on October 6, 1987. The seventh amendment was made on November 20, 1987. The eighth amendment was made on April 14, 1988. The ninth amendment was made on May 21, 1988. The tenth amendment was made on October 28, 1989. The eleventh amendment was made on December 6, 1989. The twelfth amendment was made on March 22, 1990. The thirteenth amendment was made on July 20, 1991. The fourteenth amendment was made on October 29, 1991.

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The fifteenth amendment was made on April 15, 1992. The sixteenth amendment was made on October 7, 1992. The seventeenth amendment was made on December 31, 1992. The eighteenth amendment was made on May 20, 1994. The nineteenth amendment was made on April 22, 1995. The twentieth amendment was made on May 3, 1997. The twenty-first amendment was made on April 10, 1998. The twenty-second amendment was made on May 12, 1999. The twenty-third amendment was made on May 30, 2000. The twenty-fourth amendment was made on June 20, 2001. The twenty-fifth amendment was made on June 18, 2002. The twenty-sixth amendment was made on June 24, 2003. The twenty-seventh amendment was made on June 24, 2003. The twenty-eighth amendment was made on June 8, 2004. The twenty-ninth amendment was made on June 29, 2005. The thirtieth amendment was made on June 23, 2006. The thirty-first amendment was made on June 21, 2007. The thirty-second amendment was made on June 25, 2008. The thirty-third amendment was made on June 16, 2009. The thirty-fourth amendment was made on June 24, 2010. The thirty-fifth amendment was made on June 21, 2012. The thirty-sixth amendment was made on June 20, 2013. The thirty-seventh amendment was made on June 18, 2015. The thirty-eighth amendment was made on June 22, 2016. The thirty-ninth amendment was made on June 22, 2016.

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Appendix 2

YIEH PHUI ENTERPRISE CO., LTD.

Rule for the Election of Directors

Article	1:	The Regulations Governing the Election of Directors and Supervisors are enacted in
		accordance with the Company Act and the Company’s Articles of Incorporation.
		The election of the Company’s directors and supervisors is to be processed in
		accordance with the Regulations Governing the Election of Directors and
		Supervisors.
Article	2:	The election of the Company’s directors and supervisors is to be held in the
		shareholders meeting.
Article	3:	The election of the Company’s directors is handled in accordance with the open
		ballot method. In terms of the elector’s open ballot method, the name of the elector
		is indicated by the attendance card number printed on the ballot. The elector’s equity
		stated in the shareholders registry shall prevail. Each stock share contains the
		number of voting rights equivalent to the number of directors and supervisors to be
		elected; also, the voting rights can be cast for one or more candidates.
Article	4:	For the number of the Company’s directors and supervisors to be elected according
		to the Company’s Articles of Incorporation, the candidates are elected as
		independent directors, directors, or supervisors in that order depending on the votes
		received from the electronic voting platform and vote statistics. If two or more
		candidates received the same votes that made the number of elected exceeding the
		quota, it will be resolved by a draw. Also, the Chairman is to take a draw on behalf
		of those who did not appear to take a draw.
		The candidate who has been elected as a director and supervisor at the same time in
		the preceding paragraph should decide to act as a director or supervisor, or, the
		candidate who has been elected as a director or supervisors and then is disqualified
		due to inconsistent personal data or the governing laws and regulations will be
		replaced by the candidate who had received the highest votes in the original election
		that is to be announced in the shareholders meeting.
Article	5:	The representatives of the government agency or legal person that is a shareholder
		can be elected as the director or supervisor. If there is more than one representative
		delegated, each representative can be elected separately but may not be elected at the
		same time as the director and supervisor.
Article	6:	The Board of Directors should have ballots printed with the Company’s seal affixed.
		In addition, the attendance card number and voting rights should be printed on the
		ballots. Ballots will not be printed for those votes casted electronically.

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Article 7: The Chairman is to have several scrutineers and counting personnel appointed at the beginning of the election to execute the relevant missions. Article 8: The Board of Directors is to prepare the ballot boxes and the scrutineers are to have them opened for inspection before voting.

Article 9: Electors must indicate the name and account number or I.D. Card Number of the candidates on each ballot. If the candidate is a government agency or legal person, the name of the government agency or legal person and their representatives must be filled in the “candidate” column of each ballot. Article 10: The director’s ballots casted for the election of directors and independent directors should be counted and elected separately. Article 11: The ballots with any of the following conditions are considered as invalid votes. (1) The ballots prepared by the Board of Directors which are not used.

• (2) Blank ballots are cast into the ballot box.

• (3) Ballots which are torn, damaged, or stained and the name of the candidate elected on the ballot is beyond recognition. Ballots are illegible or obliterated; however, writing corrections or additions and deletions are not subject to such restrictions.

• (4) The name or title and account number of the candidate elected on the ballot who is a shareholder is different from the information in the shareholder registry.

• (5) The name of the candidate on the ballot is same as other shareholders, but lack of the shareholders account number or I.D. Card number detailed for identification.

• (6) In addition to the candidate’s name, shareholder’s account number, I.D. Card number, corporate I.D. number, and the number of distribution rights, the ballot is filled with other written text.

• (7) Failure to have the attendance card submitted to complete the check-in procedure.

• (8) The name of two or more than two candidates is filled in on the ballot.

• (9) The candidate stated on the ballot is a non-shareholder natural person whose name is different from the identification document.

• (10)The independent directors or non-independent directors stated on the ballot are not on the candidate list of independent directors or non-independent directors.

• (11)The candidate stated on the ballot is a legal person or the representative of the institutional shareholder; also, the name of the legal person or institution shareholders and account number on the ballot are different from the information in the shareholder registry.

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Article 12: The votes are to be counted in public at the end of the voting. The Chairman is to announce the voting results. The Company’s Board of Directors will issue a notice to each elected director. Article 13: The elected directors and supervisors who do not comply with Article 26.3 Paragraph 3 Clause 4 of the Securities and Exchange Act will be disqualified. Article 14: The matters that are not addressed in the Regulations Governing the Election of Directors and Supervisors will be governed in accordance with the Company Act and the Company’s Articles of Incorporation Article 15: The Regulations Governing the Election of Directors and Supervisors is implemented after it is resolved in the shareholders meeting; so is the amendment.

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Appendix 3

YIEH PHUI ENTERPRISE CO., LTD.

Rule of Stockholders’ Meeting

Amended on 6.22.2016

Article	1	The Company’s shareholder meeting is subject to the Rules of Procedure for	The Company’s shareholder meeting is subject to the Rules of Procedure for	The Company’s shareholder meeting is subject to the Rules of Procedure for
		Shareholder Meetings, unless otherwise provided by the		applicable laws and
		regulations and the Company’s Articles of Incorporation.
Article	2	(Convening shareholder meeting and meeting notice)
		The Company’s shareholders meeting shall be convened		by the Board of Directors,
		unless otherwise provided by law and regulation.
		The Company shall have the cause of action and descriptive information for each
		motion, including the shareholders meeting notice, proxy, case for acknowledgement
		and discussion, election or dismissal of directors made into an electronic file			and
		posted on the Market Observation Post System (MOPS) thirty days prior to the general
		shareholders meeting or fifteen days prior to the extraordinary shareholders meeting. It
		shall also have the shareholders meeting agenda handbook and supplemental
		information made into an electronic file and posted on the MOPS twenty-one days
		prior to the general shareholders meeting or fifteen days prior to the extraordinary
		shareholders meeting. The shareholders meeting agenda handbook and supplemental
		information should be made available fifteen days prior to the shareholders meeting
		and available to shareholders at any time upon request and on display at the Company
		and the Shareholder Service Office. In addition, it should be distributed to the
		shareholders at the meeting.
		The meeting notice and announcement should be prepared with the reasons for
		convening the meeting stated. The meeting notice and announcement can be prepared
		in an electronic form with the consent of the counterparties.
		The election or dismissal of directors, change in the Articles of Incorporation, the
		company’s dissolution, merger, segmentation, or the matters stated in Article			185
		Paragraph 1 of the Company Act, Article 26.1 and Article 43.6 of the Securities and
		Exchange Act, and Article 56.1 and Article 60.2 of the Regulations Governing the
		Offering and Issuance of Securities by Securities Issuers		shall be illustrated in the
		reasons for convening the meeting not in the motion.
		Shareholders who have held more than 1% of the total outstanding shares may propose
		motions in writing to the Company’s shareholders meeting. However, they are limited
		to one motion and the remaining proposed motions will not be included for discussion.
		In addition, the Board of Directors may not have the motions proposed by shareholders
		that are subject to Article 172.1 Paragraph 4 of the Company Law included for
		discussion.
		The Company is to have the accepting shareholder’s proposal, the acceptance place,
		and acceptance time announced prior to the stock cut-off date before convening the
		shareholders meeting. In addition, the acceptance period		shall not be less than ten days.
		The motion proposed by shareholders is limited to 300 words and the remaining text of
		the motions will not be included for discussion. The motion-proposing shareholders

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		shall attend the general shareholders meeting in person or by proxy; also, shall get
		involved in the discussion of the motion.
		The Company shall have the motion proposing shareholders informed with the
		handling results prior to the shareholders meeting notice date. In addition, the motion
		complies with the requirements of this Article are listed in the meeting notice. The
		Board of Directors shall give reasons for the proposed motions that are not included for
		discussion in the shareholders meeting.
Article	3	Shareholders may attend the meeting by the representative each time with the scope of
		authorization stated in the proxy provided by the Company.
		Each shareholder is entitled to have one proxy issue for one representative designated
		only. In addition, the proxy must be delivered to the Company five days before the
		shareholders meeting. For the proxy issued in duplication, the first delivery shall
		prevail, unless the first delivered proxy is revoked by declarations.
		If the shareholders after the delivery of proxy to the Company decide to attend the
		shareholders meeting in person or to exercise voting rights in writing or by electronic
		means, shall have the Company notified in writing to have the proxy revoked two days
		prior to the shareholders meeting. For any delay in revoking the proxy, the voting right
		of the representative by proxy shall prevail.
Article	4	(The principle of convening shareholders meeting place and time)
		Shareholders meetings shall be convened at the Company’s premise or at the location
		that is convenient and suitable for shareholders’ attending; also, the meeting shall not
		be started before 9:00am or after 3:00pm. The opinions of the independent directors, if
		any, should be fully considered in determining the meeting place and time.
Article	5	(placement of attendance registry)
		The Company shall have the reporting time, place, and other considerations stated in
		the shareholders meeting notice.
		The shareholders meeting reporting time referred to in the preceding paragraph shall be
		30 minutes prior to the meeting started. There should be clear signs at the reporting
		place with adequate staff assigned to handle the process.
		Shareholders or shareholders’ representatives (hereinafter referred to as “shareholders”)
		shall attend the meeting with the attendance certificate, attendance registry card, or
		other documents presented. The Company shall not arbitrarily demand shareholders to
		produce additional identification documents for attending the shareholders meeting.
		The proxy solicitors shall have their identity documents ready for verification.
		The Company should have the attendance registry ready for the signature of the
		attending shareholders, or the attending shareholders shall submit the attendance
		registry card instead.
		The Company shall have the agenda handbook, annual reports, attendance certificate,
		statement slip, votes, and other conference materials delivered to the attending
		shareholders. In addition, for the election of directors, if any, the electoral ballots
		should be enclosed.
		The government agency or legal person that is a shareholder may have more than one
		representative assigned to attend the shareholders meeting. The legal person that is
		delegated to attend the shareholders may have only one representative assigned to
		attend the meeting.
Article	6	(Shareholders meeting presiding chairman and attending staff)

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		The Chairman of the Board of Directors shall chair the shareholders meeting when the	The Chairman of the Board of Directors shall chair the shareholders meeting when the
		Board of Directors convenes it. If the Chairman is on leave or unable to exercise
		powers; the meeting is to be chaired by the Vice Chairman. If there is no Vice
		Chairman appointed, the Vice Chairman is also on leave, or unable to exercise powers,
		the Chairman is to have one general director designated to exercise powers. If there is
		not any general director appointed, one director shall be designated to chair the
		meeting. If the Chairman does not have a representative designated to exercise power,
		the representative is to be elected among the general directors or directors.
		The power of the Chairman referred to in the preceding paragraph exercised by the
		general directors or directors that must be someone who has served for more than six
		months and understands the Company’s financial condition and	business operation.
		The same applies for the Chairman who is the representative of the director that is a
		legal person.
		The shareholders meeting convened by the Board of Directors should be chaired by the
		Chairman in person and attended in person by a majority of the board directors and at
		least one supervisor and one delegate from each functional committee; also, the
		attendance should be documented in the minutes of the meeting.
		For the shareholders meeting convened by other than the Board of Directors, the
		convener shall chair the meeting. If there are more than two conveners, one of the
		conveners should be elected to chair the meeting.
		The Company may appoint the contracted attorney, CPA, or the	related personnel to
		attend the shareholders meeting.
Article	7	(Shareholders meeting audio or video recording as evidence)
		The Company shall have the process of accepting shareholders’	reporting to the
		meeting, the meeting in progress, and vote counting recorded in	audio and video
		uninterruptedly.
		The audio and video data stated in the preceding paragraph shall be kept for at least
		one year. However, the relevant video or audio data must be reserved until the end of
		the legal proceedings that is filed in accordance with Article 189 of the Company Law.
Article	8	The attendance at the shareholders meeting shall be based on the ownership of stock
		shares. The attending shares are based on the signatures on the attendance registry or
		the attendance registry card submitted, and the number of shares used to exercise
		voting rights in writing or electronically.
		The Chairman shall call the meeting to order at the meeting time; however, the
		Chairman may announce to have the meeting postponed if there	is without the
		attendance of the shareholders representing a majority of the outstanding stock shares,
		which is limited to two postpones and for a total time of less than one hour. If there
		remains insufficient attendance of the shareholders representing	one third of the
		outstanding stock shares after two postponements, the Chairman may have the
		shareholders meeting reconvened. If there remains insufficient attendance of the
		shareholders but with more than one third of the outstanding stock shares after two
		postpones, a pseudo-resolution can be reached in accordance with Article 175
		Paragraph 1 of the Company Law; also, the pseudo-resolution should be forwarded to
		shareholders with a meeting to be convened within one month.
		If the attending shareholders represent a majority of the outstanding stock shares
		before the end of the meeting, the Chairman may have the pseudo-resolution proposed

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		to be resolved in the shareholders meeting in accordance with Article 174 of the
		Company Law.
Article	9	(Motion discussion)
		The Chairman of the Board of Directors shall determine the agenda of the shareholders
		meeting convened by the Board of Directors. The shareholders meeting should be
		conducted in accordance with the scheduled agenda and may not be changed without a
		resolution reached in the shareholders meeting.
		For the shareholders meeting convened by other than the Board of Directors, the
		provisions of the preceding paragraph shall apply mutatis mutandis.
		The Chairman may not have the meeting adjourned discretionally before the meeting
		agenda in the preceding two paragraphs completed with all motions discussed. For the
		violation of the Chairman against the Rules of Procedure for Shareholder Meetings by
		having the meeting adjourned discretionally, the other board directors shall promptly
		assist the attending shareholders to elect a Chairman to continue the meeting in
		accordance with the legal procedures and with the consent of the attending
		shareholders representing a majority of the voting rights.
		The Chairman should give the amendments and motions proposed by shareholders an
		opportunity for full explanation and discussion; also, the Chairman who believes that
		the motion in discussion is ready for voting may announce to stop discussion and start
		voting.
Article	10	(Shareholders’ statement)
		Shareholders who wish to speak in the meeting shall fill out the statement slip with the
		gist of the statement, shareholders account number (or attendance certificate number),
		and account name detailed in advance for the Chairman to determine the sequence of
		speakers.
		Shareholders who have submitted statement slips but do not speak in the meeting are
		considered as having made no statement. For any discrepancy found between the
		opinions given in the meeting and the statement slip submitted, the opinions given in
		the meeting shall prevail.
		Shareholders may not comment twice on the same motion without the consent of the
		Chairman and may not be for more than five minutes each time. However, The
		Chairman may instruct shareholders to stop speaking if they have spoken outside the
		scope of the motion.
		The other shareholders unless with the consent of the Chairman and the speaking
		shareholder may not interrupt the speech of the shareholder. In addition, the Chairman
		will stop the violators.
		If the institutional shareholders have two or more representatives delegated to attend
		the meeting, only one of the representatives may speak on the same motion.
		The Chairman may have the questions raised by the attending shareholders replied
		personally or by the designated personnel.
Article	11	Calculation of the voting shares and recusal system)
		The count of the votes casted in the shareholders meeting shall base on the ownership
		of stock shares.
		For the count of the votes casted in the shareholders meeting, the shares held by the
		shareholders without voting rights will not be included for the calculation of the total
		outstanding stock shares.

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The shareholders who are the stakeholders of the motion in discussion that are detrimental to the interests of the Company may not join the voting process and may not exercise voting rights on behalf of other shareholders. The stock shares without voting rights stated in the preceding paragraph may not be included in the number of voting rights of the attending shareholders. Except for the trust agencies or the stock service agencies authorized by the securities competent authorities, the voting rights by proxy of the representative designated by two or more shareholders may not exceed 3% of the total outstanding stock shares. In addition, the voting rights exceeding the threshold will not be counted. Article 12 Shareholders are entitled to one voting right per share except for those subject to restrictions or those without voting right listed in Article 179 Paragraph 2 of the Company Law. The votes can be casted in writing or electronically in the shareholders meeting of the Company (the company to adopt electronic voting according to the proviso in Article 177.1 Paragraph 1 of the Company Law: the company is to have voting rights exercised electronically and in writing in the shareholders meeting). When the voting right is exercised in writing or electronically, the method should be stated in the shareholders meeting notice. Shareholders who have exercised their voting rights in writing or by an electronic mean will be deemed as to attend the shareholders meeting in person. However, in respect of the motion or the amendment to the original motion in the shareholders meeting, it will be considered as a waiver; therefore, the Company should avoid proposing a motion and amendment to the original motion. For the voting right exercised in writing or electronically in the preceding paragraph, the intention should be expressed to the Company two days prior to the shareholders meeting. For the intention expressed in duplication, the first delivery shall prevail, unless the first delivered intention is revoked by declarations. After exercising their voting rights in writing or by an electronic mean, if the shareholders decide to attend the shareholders meeting in person, they shall have the intension of exercising voting right in writing or in an electronic mean revoked the same way it was expressed two days prior to the shareholders meeting. For any delay in revoking the intension expressed, the voting right exercised in writing or in an electronic mean shall prevail. If the voting rights are exercised in writing or by electronic means; also, proxy is issued for the representative to attend the shareholders meeting, the voting rights exercised by proxy shall prevail. The motion voted in the shareholders meeting is deemed as passed with the consent of a majority of the attending shareholders, unless otherwise provided by the Company Law and the Company’s Articles of Incorporation. In terms of voting, the Chairman or the designee shall announce the total number of voting rights of the attending shareholders for each motion proposed.

The motion voted in the shareholders meeting is deemed as passed with the attending shareholders consulted by the Chairman and no objection raised, which is with the same effectiveness as a vote. For any objection raised, the respective motion should be resolved by a vote as stated in the preceding paragraph. If all motions are voted by shareholders on a case-by-case basis, the results of shareholder approval, objection, and waiver should be posted on the Market Observation Post System (MOPS) in the shareholders meeting date.

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The amendment or substitute of the same motion, if any, is to be merged into the original motion by the Chairman for determining the voting priority. However, if one of the motions is passed, the other motions shall be deemed as vetoed without the need of further voting. The scrutineers and counting personnel that are needed for voting on a motion are to be designated by the Chairman; however, the said scrutineers must be appointed among the shareholders. The votes casted in the shareholders meeting or the vote count of an election should be held at the venue open to the attendees. In addition, the vote count result should be announced at the scene, including the number of voting rights and with the records kept. Article 13 (Election matters) The election of directors in the shareholders meeting, if any, should be handled in accordance with the election regulations defined by the Company; also, the election result should be announced at the scene, including the list of the elected directors and the respective elected voting rights. The electoral ballots of the election matters in the preceding paragraph should be sealed and signed by the scrutineers and properly safeguarded for at least one year. However, it must be reserved until the end of the legal proceedings that is filed by shareholders in accordance with Article 189 of the Company Law. Article 14 The resolutions reached in the shareholders meeting must be documented in the minutes of meeting, which must be signed or sealed by the Chairman and then distributed to all shareholders within 20 days after the meeting. The production and distribution of the minutes of meeting can be handled electronically. The Company may have the minutes of meeting in the preceding paragraph distributed by posting it on the Marketing Observation Post System (MOPS). The minutes of meeting should be prepared in accordance with the year, month, date, place, the Chairman’s name, resolution methods, and the gist and result of the proceeding throughout the duration of the Company and should be kept for records permanently. The resolution methods in the preceding paragraph are for the Chairman to consult the opinions of shareholders; also, for the motions without any objection from the shareholders, it should be documented as “with the attending shareholders consulted by the Chairman and no objection raised.” However, for the motion with any objection from the shareholders, the voting methods, the passing voting rights, and voting right ratio should be detailed and documented. Article 15 (Public announcement) The statistic reports of the number of shares solicited by the solicitors and the number of shares by proxy that is prepared in accordance with the specific format should be disclosed at the scene of the meeting. For the matters resolved in the shareholders meeting that are defined as material information in accordance with the governing law and regulations and stock competent authorities, the Company shall, within the specified time, have the relevant contents posted on the Market Observation Post System (MOPS). Article 16 (The maintenance and order of meeting venue) The shareholders meeting staffs shall wear identification card or armbands.

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The Chairman may instruct the monitors or security guards to assist maintaining order at the meeting venue. Monitors or security guards at the scene to assist in maintaining order should wear “Monitor” armbands or identification cards. The Chairman may stop the shareholders who use the loudspeaker equipment that is not provided by the Company from speaking in the meeting. Shareholders who have violated the Rules, Governing the Conduct of Shareholders Meetings, disobeyed the instruction of the Chairman, and hindered the meeting process without complying with the discipline guidelines, the Chairman may command the picketers or the security guards to have the offenders escorted to leave the meeting venue. Article 17 (Meeting in recess and in session) The Chairman may announce the meeting as in recess at his discretion, may have the meeting suspended upon the occurrence of force majeure and may announce the meeting as back in session, depending on the actual practice. If the meeting venue cannot be used continuingly before the end of the meeting with all scheduled motions discussed, a resolution can be reached in the shareholders meeting to find another venue for the meeting to be held continuously. The shareholders meeting may resolve to have the meeting postponed or continued within 5 days in accordance with Article 182 of the Company Law. Article 18: The Rules, Governing the Conduct of Shareholders Meetings, are implemented after they are resolved in the shareholders meeting and so is the amendment.

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Appendix 4

Yieh Phui Enterprise Co., Ltd

The Table of the Stock Holding of the Directors

The Statement for the Minimum Required Holding for All Directors and Those on the Registry

April 30, 2017

Title	The shares required	The shares registere
Directors	41,234,173	55,557,334

Note:1. According to Article 2 of “ Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies ” , for the companies with more than two independent directors, with exception for the independent directors, the shareholding for all the directors and supervisors is down to 80%.

• 2.Yieh Phui sets up the auditing committee and is thus not applicable to the rule on the shareholding on the supervisors.

• Statement of the stock holding for directors

April 30, 2017

Identity	Name or Name or Legal Institution	Shares Recorded in Shareholders’ Registry
Chairman	Kuo Chiao Investment & Development Co., Ltd. Representative：Lin I-Shou	55,557,334
Director	Kuo Chiao Investment & Development Co., Ltd. Representative：Liang Pyng - Yeong	55,557,334
Director	Kuo Chiao Investment & Development Co., Ltd. Representative：Wu Lin- Maw	55,557,334
Director	Kuo Chiao Investment & Development Co., Ltd. Representative：Huang Ching-Tsung	55,557,334
Independent Director	Mr. Sun Chin-Su	0
Independent Director	Mr. Hsieh, Ching-Huei	0	resigned due to health concers on March 3,2017
Independent Director	Mr. Yang Der-Yuan	0
Total of All Directors		55,557,334

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Appendix 5

Yieh Phui Enterprise Co., Ltd

The Table of Increased Capital

Unit ： NT$(000); (000)hares

					Unit：NT$(000);	(000)hares
Date	Amount of Increase			Source of funds	Purpose	Dividend %
	Shares	NT$ per share	total
2009.09	42,356	10	423,560	shares from stock dividend	The increased capital with the stockholder’s bonuses will be used to pay back loans, future projects of factory expansion, purchase of machinery and equipment, or for the investment for other projects.	30 per thousand
2010.10	72,711	10	727,110	shares from stock dividend	The increased capital with the stockholder’s bonuses will be used to pay back loans, future projects of factory expansion, purchase of machinery and equipment, or for the investment for other projects.	50 per thousand
2011.10	76,346	10	763,460	shares from stock dividend	The increased capital with the stockholder’s bonuses will be used to pay back loans, future projects of factory expansion, purchase of machinery and equipment, or for the investment for other projects.	50 per thousand
2012.10	32,065	10	320,655	shares from stock dividend	The increased capital with the stockholder’s bonuses will be used to pay back loans, future projects of factory expansion, purchase of machinery and equipment, or for the investment for other projects.	20 per thousand

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2014.09	32,706	10	327,068	shares from stock dividend	The increased capital with the stockholder’s bonuses will be used to pay back loans, future projects of factory expansion, purchase of machinery and equipment, or for the investment for other projects.	20 per thousand
2015.09	50,041	10	500,414	shares from stock dividend	The increased capital with the stockholder’s bonuses will be used to pay back loans, future projects of factory expansion, purchase of machinery and equipment, or for the investment for other projects.	30 per thousand

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Appendix 6

Yieh Phui Enterprise Co., Ltd

Dividend Policy

i. The dividend policy of Yieh Phui and its implementation ：

1. The dividend policy as stated in the corporate charter ：

2. Article 31 ： The distribution policy for the final earnings of each year is as follows ：

3. A. dividend policy

The life cycle of the company’s product has reached its maturity. The dividend policy has to consider the current and future development plan, the investment environment, the demand for capital, the domestic/oversea competition and the benefits of the stockholders. Each year the company has to declare 20% of the available earnings as dividends for stockholders. However, if the accumulated available earnings are less than 20% of the accrued capital, the company may choose not to declare dividends.

• B. Conditions and timing for dividend declaration ：

  • When finalizing the earnings, the company has to pay all taxes and compensate for the deficit in the past. With all that done, the company has to first deposit 10% as the required earned surplus and based on the operation needs or the law to set up or reverse special reserve, plus all the cumulative retained earnings as available to declare dividends. Then, the board of director will propose the declaration of dividends and to be decisided by the stockholder’s meeting.

• C. The types of dividends ： Based on the expansion plan and the profitability to evaluate the capital demand, the company generally will declare stock dividends to retain the funds needed. Based on the profitability, the cash stock dividends will be 20% to 100%, while that of the stock dividends is 0% to 80%.

• D.The declaration of dividends must consider the business operation of the company and to be proposed by the board of directors and then decided by the stockholders’ meeting..

• The dividends to be declared this stockholders’ meeting ：

The deficit Compensation planned for 2015 is listed as follows:

Yieh Phui Enterprise Co., Ltd Earnings Distribution Table

• 2016 Unit:NT$ Item Amount

• Undistributed earnings at the beginning of the term 608,641,931 －： Re-measure amount of confirmed benefit plans (76,845,020)

• recognized as retained earnings

• －： Variation of affiliated enterprises and joint (11,647,538)

• ventures recognized adopting equity method

• －： Change of ownership equity of subsidiaries (11,205,942) + ： Net loss after tax of this term 2,502,004,855 －： Legal reserve (250,200,486)

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Earnings available for distribution －： Shareholders’ dividend- stock dividend NT$0.6 Unappropriated earnings

2,760,747,800 (1,718,090,580) 1,042,657,220

ii. The impact of stock dividend on the operating efficiency of the company, EPS and ROE ：

Unit: NT$(000) except for EPS NT$

Year Item	Year Item	Year Item	2016(note) (Estimate)
Paid-in capital at the beginningof the term			17,180,905
Dividends and interest distribution of the year	Cash dividendsper share		0.4
	Shares distribution per share for capital increase out of earnings		0.6
	Shares distribution per share for capital increase out of capital reserve		－
Changes in business operation	Operatingincome		Not applicable(Note 2)
	Ratio increased (decreased) for operating income compared to the sameperiod of lastyear
	Netprofit after tax
	Ratio increased (decreased) for net profit after tax compared to the sameperiod of lastyear
	Earningsper share
	Ratio increased (decreased) for earnings per share compared to the sameperiod of lastyear
	Annual average return on investment (reciprocal of annual averageprice earnings ratio)
Pro forma EPS and P/E ratio	if the dividends were all cashI	Pro forma earningsper share	Not applicable(Note 2)
		Pro forma annual average return on investment
	if there is no capital surplus transferred to capital	Pro forma earningsper share
		Pro forma annual average return on investment
	if there is no capital surplus transferred to capital and the earnings transferred to capital is done by cash dividend	Pro forma earningsper share
		Pro forma annual average return on investment

Note 1 ： After the decision of 2016 stockholders’ meeting

Note 2 ： According to the regualtion of “ Regulations Governing the Publication of Financial Forecasts of Public

Companies”. Yieh Phui has no need to offer financial guidance for 2016.

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