YP — Annual Report 2017

Jun 28, 2018

YIEH PHUI ENTERPRISE CO., LTD. 2018 Shareholders’ Meeting

Time: 9:30 AM, June 21, 2018

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

Attendants ： The number of shares present with the stockholders attending in person is 1,240,200,547, or 68.09% of the shares outstanding 1,821,176,011 shares, above the quorum for the stockholders’ meeting.

Director attendance ：

Director Mr.Wu, Lin-Maw Independent Director Mr.Sun, Chin-Su Independent Director Mr.Yang Der-Yuan Independent Director Mr.Chang, Wen-Yi Audit Committee Mr.Sun, Chin-Su Audit Committee Mr.Yang Der-Yuan Audit Committee Mr.Chang, Wen-Yi Remuneration Committee Mr.Sun, Chin-Su Remuneration Committee Mr.Yang Der-Yuan Remuneration Committee Mr.Chang, Wen-Yi Vice Chief Finance Officer Mr.Chin, Yung-Hsien SR.Assistant Vice President Mr.Paul.Y.F. Yang Marketing &Sales Attorney Mr.Lin,Ching-Yun CPA Mr. Hsieh Yen-Yao

Chairperson ： Mr.Wu, Lin-Maw Minute taker ： Huang, Shu-Huei

• I. Meeting called to order ： at 9:30AM, the shares present of the stockholders and their delegates

have reach the quorum.

• II. Chairperson Remark ： The chairman could not be present and had asked the general manager to preside the stockholders’ meeting instead.

III. Company Report

1. 2017 Operation Report(See p.4 of the Program)

2. The Auditing Committee audits the final financial statement of 2017(See p. 26 of the Program )

3. The report on the remuneration of the emplyees and directors for 2017(See p. 27 of the Program)

IV. Matters to Be Approved

Proposal 1 ： Proposed by the board of directors

Brief ： Approval of the 2017 Final Financial Statement

Explain ：1. The 2017 operating report, the individual entity report and consolidated financial

statement. See p. 4-25 of the Program

1. 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)

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CPAs.

1. T he above financial statements and operating report has been audited by the Auditing Committee.

4. To be approved.

Resolution: approve. The shares present are 1,240,199,487, for 1,225,458,964, against 414,438 and abstain 14,326,085

Proposal 2 ： Proposed by the board of directors

Brief ： Approve the distribution of retained earnings for 2017

Explain ： Yieh Phui plans to distribute earnings of 2017 as the table below:

	Yieh Phui Enterprise Co., Ltd
	Earnings Distribution Table
	2017	Unit:NT$
	Item	Amount
Undistributed earnings at the beginning of the term		1,042,657,220
－：	Re‐measure amount of confirmed benefit plans recognized as retained earnings	(19,139,437)
－：	Variation of affiliated enterprises and joint ventures recognized adopting equity method	(1,329,517)
－：	Change of ownership equity of subsidiaries	(22,995,635)
+：	Net loss after tax of this term	1,367,404,267
－：	Legal reserve	(136,740,427)
－：	Special reserve	(380,897,725)
Earnings available for distribution		1,920,958,746
－：	Shareholders’ dividend	(910,588,012)
Unappropriated earnings		1,010,370,734

Resolution: approve. The shares present 1,240,199,487, for 1,225,423,414, against, 484,988 and abstain 14,291,085

V. Matters for Discussion

Proposal 1 ： Proposed by the Board of Directors.

• Brief ： 1. The cash and stock dividends to be issued and turning the retained earnings into stockholders’ equity for 2017.

• Explain ： 1. To implement according to the distribution of earnings of 2017.

• The cash dividend to be paid is NT$364,235,202, or NT$0.2 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.

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

• The amount of stock dividend is NT$546,352,810 to be used to issue new stocks to increase the capital.

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• 3.The amount of stock dividend is NT$546,352,810 to be used to issue new stocks to increase the capital.

• (i) The amount to increase the capital is NT$546,352,810 or 54,635,281 shares and the capital after the new issue is NT$18,758,112,920 or 1,875,811,292 shares

• (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.

• (iii) The issue of new stocks stated above will be done according to the list of stockholders with 30 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 permission of the stockholders’ meeting to deal with all related matters with all necessary means.

• (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.

• (v) The new shares issued have the same rights and obligation as the original.

• (vi ) After the approval of the authority, the board of directors ask the stockholders’ meeting for permission to set the ex-dividend day.

• Resolution: approve. The shares present are 1,240,200,547, for 1,224,955,233, against 952,025, and abstain 14,293,289.

Proposal 2 ： Proposed by the Board of Directors

Brief ： To modify the corporate charter of Yieh-Phui.

• Explain ： 1. Due to the demand of the operation of the company and to comply with related laws, the corporate charter of the Company has to be modified.

• The comparison table of the“Corporate Charter” before/after the changes are listed at attachment 1 and 2. See p. 29-30 and p. 31-35 of the program.

• Resolution: approve. The shares present are 1,240,200,547, for 1,225435,566, against 449,604 and abstain 14,315,377..

VI. Extempore Motions : None

VII. Adjournment

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Contents

II Company Report

1. 2017 Operation Report

With China’s acceleration of supply side reform, 65 million tons of capacity has been cut in 2016 and that of 2017 is over 50 million tons and that of medium frequency induction furnace and substandard steel is 140 million tons. The total reduction in capacity is over 115 million tons, excluding medium frequency induction furnace and substandard steel. With such effective reduction in production, the steel market has stabilized. However, in China, medium frequency induction furnaces have been converted to electric furnaces and the increase in price has pushed blast furnace mills to increase production, coupled with the strengthening in the industry, there will be many challenges in 2018. Yieh Phui is of the mid-stream of the industry with the major products of metallic coated and prepainted steel sheets for sale all over the world, having been able to control the costs and gain steady profits when confronting the competition from China.

The outline of 2017 operation report

Comparing 2017 with 2016, the volume of Yieh Phui increases 7.32% and that of revenue is NT$5.312 billion, while that of Yieh Phui (China) is NT$11.585 billion due to new production line and the increase in steel price. The volume of Yieh Hsing rises and the increase in revenue is NT$720 million. Overall, the consolidated revenue is NT$71.159 billion, an increase of 34.65% compared to the previous year of NT$52.847 billion. The consolidated net income after tax is NT$1.345 billion, a reduction of 43.44% from NT$2.379 billion of last year, of which NT$1.367 is for the mother company, comparing with last year of NT$2.502 billion, a reduction of 45.35%.

1. The Performance of Business Plan ：

Consolidated Information of Financial Statements

			Unit NT$ in(000)	Unit NT$ in(000)
Year Item	2017	2016	Changes	Changes%
Operaiton Revenue	71,158,662	52,847,410	18,311,252	34.65
Operaiton Costs	64,859,279	45,641,051	45,641,051	42.11
Operaiton Gross Profit(Loss)	6,299,383	7,206,359	-960,976	-12.59
Operaiton Expenses	4,088,009	3,362,322	725,687	21.58
Operaiton Net Profit(Loss)	2,211,374	3,844,037	-1,632,663	-42.47
Non-operation Revenue and Expenses	-406,009	-471,965	65,956	13.97
Net Profit (Loss) before Tax	1,805,365	3,372,072	-1,566,707	-46.46
Income Tax Expenses	460,055	993,527	-533,472	-53.69
Net Profit (Loss) after Tax	1,345,310	2,378,545	-1,033,235	-43.44
Other Comprehensive Income (net)	-504,626	-904,716	400,090	44.22

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Total Amount of Comprehensive Income in this Term	840,684	1,473,829	-633,145	-42.96
Net Profit that Belongs to the Ownerof theParentCompany	1,367,405	2,502,005	-1,134,600	-45.35
Net Profit that Belongs to the Non-controlling equity	-22,095	-123,460	101,365	82.10
Total Amount of Comprehensive Income that Belongs to the Owner of the ParentCompany	878,961	1,612,620	-733,659	-45.49
Total Amount of Comprehensive Income that Belongs to the Non-controllingequity	-38,277	-138,791	100,514	72.42

Financial Information of Company

Financial Information	of Company
Year Item	2017	2016	Changes	Changes%
Operaiton Revenue	29,179,218	23,867,665	5,311,553	22.25
Operaiton Costs	25,389,583	20,009,747	5,379,836	26.89
Operaiton Gross Profit(Loss)	3,789,635	3,857,918	-68,283	-1.77
Operaiton Expenses	2,328,306	1,793,191	535,115	29.84
Operaiton Net Profit(Loss)	1,461,329	2,064,727	-603,398	-29.22
Non-operation RevenueandExpenses	208,432	948,024	-739,592	-78.01
Net Profit (Loss) beforeTax	1,669,761	3,012,751	-1,342,990	-44.58
Income Tax Expenses	302,356	510,746	-208,390	-40.80
Net Profit (Loss) after Tax	1,367,405	2,502,005	-1,134,600	-45.35

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	2017	2016
Net cash inflow of operation activities (thousand dollars)	-1,462,060	3,375,039
Equity/Assets(%)	33.98	36.87
Liabilities/Assets(%)	66.02	63.13

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Item	2017	2016
Long-term Funds accounting for the ratio of real estates, plants and equipments(%)	152.91	153.50
Current ratio(%)	100.90	102.10
Quick ratio(%)	52.82	58.52
Return on assets(%)	2.69	3.83
Return on equity (%)	4.49	8.03
Netprofit margin(%)	1.89	4.50
Earningsper share(dollar)	0.75	1.46
Number of shares bythe end of theyear(share)	1,821,176,011	1,718,090,576

Financial Information of Company

Financial Information of Company
Item	2017	2016
Net cash inflow of operation activities (thousand dollars)	537,316	2,003,887
Equity/Assets(%)	54.65	57.09
Liabilities/Assets(%)	45.35	42.91
Long-term Funds accounting for the ratio of real estates, plants and equipments(%)	473.70	434.09
Current ratio(%)	73.79	74.03
Quick ratio(%)	38.28	38.51
Return on assets(%)	3.42	5.98
Return on equity (%)	4.94	9.37
Netprofit margin(%)	4.69	10.48
Earningsper share(dollar)	0.75	1.46
Number of shares bythe end of theyear(share)	1,821,176,011	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.

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

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total sales to reach 120,000 tons landmark in 2017.

On product differentiation, Yieh Phui has successfully developedanti-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 endprepainted 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. In 2017, Yieh Phui plans to develop coated steel with anti-microbial plus and anti-fingerprint treatment to be used in ducting and green construction materials in hospitals and luxurious residences, enhancing market expansion and product diversification.

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. In September 2018, EU may have new environmental instructions on construction materials like metallic and color coated steel sheets. The company has been aggressively and speedily developing multi-combination and multi-purpose products with suppliers of surface treatment and paints, becoming the first among Taiwan’s competitors to produce outdoor environmentally protective coated steel products. 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 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

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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”. 2018 is the third year of innovation with the slogan of “new epoch, new realities, new thinking, and new forms commit to growth not only in volume but value.”

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, since 2015 Yieh Phui (China) has expanded its operation in Changshu Economic Development Zone, Jiangsu, China, producing one million tons of cold-rolled steel sheets for automobiles and 400,000 tons of hot-dip galvannealed steel sheets for automobiles, advancing its technology in the market of steel sheets for automobiles. The first stage of this expansion ofpickling and tandem cold mill (PLTCM) had been finished and started production on February 15, 2015, while the production ofcontinuous 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 has been available on January 18, 2018. Besides aiming for the 700,000 car market in Riverside Industrial Park, Changshu, Yieh Phui (China) also focuses on the market of 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 in Yieh Phui (China) will reach 1.3 million tons, equivalent to Yieh Phui’s once highest record of 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 2.6 million tons.

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Crowe Horwath (TW) CPAs Crowe Horwath (TW) CPAs Member Crowe Horwath International

27F-1., No.6, Siwei 3rd Rd., Lingya Dist., 27F-1., No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City, Taiwan R.O.C. Tel:(07)3312133 Main line Fax:(07)3331710

Independent Auditors’ Report

To Yieh Phui Enterprise Co., Ltd.

Auditors’ Opinions

We have audited the Consolidated Balance Sheet of Yieh Phui Enterprise Co., Ltd. and its subsidiaries (hereinafter referred to as Yieh Phui Group) as of 31 December 2017 and 2016, 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 periods from January 1 to December 31, 2017 and 2016.

In our opinion, based on our audits and other auditors’ reports (please refer to other paragraphs), the afore-mentioned Consolidated Financial Statements present fairly, in all material respects, the consolidated financial position of Yieh Phui Group as of December 31, 2017 and 2016, and its consolidated financial performance and consolidated cash flows for the periods from January 1 to December 31, 2017 and 2016 in conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) to the extent endorsed and effected by the Financial Supervisory Commission.

Basis for Opinion

We planned and conducted our audits in accordance with Rules Governing the Auditing and Attestation of Financial Statements by Certified Public Accountants and Generally Accepted Auditing Standards in the Republic of China. 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 stayed independent from Yieh Phui Group as required by The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled other responsibilities as stipulated by the norm. Based on our audits and other auditors’ reports, we believe we have obtained sufficient and appropriate audit evidence to serve as a basis for our opinion.

Key Audit Matters

Key Audit Matters refer to most vital matters in the process of auditing of 2017 Consolidated Financial Statement of Yieh Phui Group based on our professional judgment. Such matters have been dealt with in the course of of auditing and compiling the Consolidated

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Financial Statements and in the preparation of our audit opinion. As such, we do not respond to each key matter individually. Key Audit Matters for the Yieh Phui Group’s Consolidated Financial Statements for the year ended December 31, 2017 are stated as follows:

• I. Timing of Sales Revenue Recognition

Please see Note 4(29) of the Consolidated Financial Statements for accounting policies regarding revenue recognition; please see note 5(2)1 of the Consolidated Financial Statements 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 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 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 of recognizing the sales revenue may have a major impact on Yieh Phui Group's financial performance, we have thus included it as one of the key audit matters.

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Audit Process Adopted:

Our audit process included understanding and testing the effectiveness of the design and execution of internal control over the timing of sales revenue recognition; sampling and testing the trading terms between the Company and its major customers, and performing deadline test to determine the appropriateness of revenue recognition timing.

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. Description of key audit matters:

Yieh Phui Group's inventory amounted to NT$ 9,993,445 thousand (net of NT$ 10,353,869 thousand of total inventory costs less NT$ 360,424 thousand of allowance for inventory valuation losses) as of 31 December 2017, which accounted for 11.46% of total assets. The inventory valuation is measured at the lower of the value of inventory cost and net realizable value. Given that the valuation of net realizable value of inventory has a significant impact on critical judgments and estimates and since inventory valuation is dependent on the influence of frequently volatile fluctuations of international metal price, we have thus included this item in the key audit matters.

Audit Process Adopted:

Our major audit process included obtaining management’s assessment information which determines the lower of the value of inventory cost and net realizable value of inventory, sampling estimated selling prices to the most recent sales records, and assessing the appropriateness of management's basis for estimating the net realizable value.

Other Matters

We do not audit the financial statements of some associates that have been included in the afore-mentioned Consolidated Financial Statements. They were audited by other auditors. Therefore, any value of such financial statements we have used to form our opinion for the afore-mentioned Consolidated Financial Statements are based on other auditors’ reports. The value of investments in the afore-mentioned associates recognized under the equity method as of December 31, 2017 and 2016 were NT$ 5,394,163 thousand and NT$ 5,358,441 thousand respectively, accounting for 6.18% and 6.53% of total assets. The share of profit (loss) of associates and joint ventures recognized under equity method in 2017 and 2016 were NT$ 82,282 thousand and NT$ 146,399 thousand respectively, accounting for 4.56% and 4.34% of income before tax.

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Yieh Phui Enterprise Co., Ltd. has prepared its Parent Only Financial Statements, on which we have issued an unqualified audit report for reference.

Responsibility of the management and the governing body for the Consolidated Financial Statements

It is the management’s responsibility to fairly present the Consolidated Financial Statements in conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) to the extent endorsed and effected by the Financial Supervisory Commission, and to sustain internal controls respecting preparation of the Consolidated Financial Statements so as to avoid material misstatements due to fraud or errors therein.

In preparing the Consolidated Financial Statements, the responsibility of management includes assessing Yieh Phui Group’s ability to continue as a going concern, disclosing going concern matters, as well as adopting going concern accounting, unless the management intends to liquidate Yieh Phui Group or terminate the business, or no practicable measure other than liquidation or termination of the business can be taken.

The governing bodies of Yieh Phui Group (including the Audit Committee) have the responsibility to oversee the financial reporting process. The Accountants’ Responsibility in Auditing the Consolidated Financial Statements

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The purpose of our audit is to provide reasonable assurance that the Consolidated Financial Statements as a whole contains no material misstatements, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. "Reasonable assurance" refers to a high level of assurance. Nevertheless, our audit, which was carried out according to GAAS, does not guarantee that a material misstatement(s) will be detected in the Consolidated 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, could have influenced the economic decisions made by the users of the Consolidated 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 a material misstatement(s) due to fraud or errors in the Consolidated 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 risk of an undetected material misstatement due to fraud is greater than that due to errors.

2. Acquired 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 Yieh Phui Group.

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

4. Concluded on the appropriateness of the management’s use of going concern basis of accounting, and determined whether there existed events or circumstances that might cast significant uncertainty over Yieh Phui Group’s ability to continue as a going concern. If we believe there may be factors causing significant uncertainties, we are required to remind the users of the Consolidated Financial Statements in our audit report of the relevant disclosures therein, or to amend our report if inappropriate disclosure was made. Our conclusion is based on the audit evidence obtained as of the date of the audit report. However, future events or circumstances may cause Yieh Phui Group to cease to continue as a going concern.

5. Evaluated the overall presentation, structure and content of the Consolidated Financial Statements (including the related notes), and determined whether the Consolidated Financial Statements present related transactions and events fairly.

6. Obtained adequate and appropriate audit evidence regarding financial information of

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members of the Group so as to express opinions for the Consolidated Financial Statements. We are responsible for the direction, supervision and execution of auditing the Group, and for formation of an 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.

We have also provided the governing body with our statement of independence in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and communicated with the governing body all relationships and other matters that may be deemed to have an influence on our independence (including safeguard measures).

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From the matters communicated with the governing body, we determined the key audit matters for Yieh Phui Group’s Consolidated Financial Statements for the year ended in December 31, 2017. Such matters have been explicitly stated in our audit report, unless laws or regulations prevent their disclosures, or, in extremely rare cases, we decide not to communicate such matters in our audit report in consideration that the reasonably anticipated adverse impacts of such communication would be greater than the public interest it would promote.

Crowe Horwath (TW) CPAs CPA: Huang Ling-Wen

CPA: Hsieh, Jen-Yao

No. of the official approval: FSC No. 10200032833 March 21, 2018

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Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries
Consolidated Balance Sheets
December 31, 2017, and December 31, 2016

Unit: In Thousands of New Taiwan Dollars

Code Notes Assets	December 31, 2	017	December 31,	2016:	Code Notes Liabilities and Equity	December 31, 20	17	December 31, 2016:
	Amount	％	Amount	％		Amount	％	％ Amount
1100 6(1) 1110 6(2) 1150 6(3) 1170 6(4) 1180 7 1190 6(5) 1195 6(5)、7 1200 6(6) 1220 130X 6(7) 1410 6(8) 1476 6(9) 11XX 1510 6(2) 1523 6(11) 1543 6(12) 1546 6(13) 1550 6(10) 1600 6(14) 1760 6(15) 1780 1840 6(36) 1920 1980 8 1985 6(16) 15XX 1XXX Total asset Chairperson: Lin, I-Shou Long-term prepaid rent Total non-current assets Deferred income tax assets Refundable deposits Other financial assets - non-current Property, plant and equipment Investment property, net Intangible assets Bond investments with no active market-non-current Investments accounted for using equity method Available-for-sale financial assets - non-current Financial assets carried at cost - non-current Non-current assets Financial assets at fair value through profit or loss - non-current Other financial assets - current Total current assets Current income tax assets Inventories Prepayments Construction contract receivable Construction contract receivables – related parties Other receivables Notes receivable - net Accounts receivable- Net Accounts receivable - related parties, net Cash and Cash Equivalents Financial assets at fair value through profit or loss - current	$7,704,425 49,534 1,389,916 2,511,585 759,908 175,452 192,200 277,705 12,308 9,993,445 3,032,728 1,236,064 ---------------- 27,335,270 ---------------- 9,999 44,910 551,462 554,755 17,412,043 39,326,842 988,576 8,880 609,736 69,570 63,827 252,478 ---------------- 59,893,078 ---------------- $87,228,348 ================	9 - 2 3 1 - - - - 12 3 1 ---- 31 ---- - - 1 1 20 45 1 - 1 - - - ---- 69 ---- 100	$8,133,181 119,868 730,552 2,171,582 922,244 301,108 344,415 256,374 1,611 8,249,118 2,172,408 1,011,781 ---------------- 24,414,242 ---------------- 9,999 46,575 484,126 206,305 17,060,270 37,867,059 944,835 9,533 569,580 64,492 95,928 263,546 ---------------- 57,622,248 ---------------- $82,036,490 ================ Man	10 - 1 3 1 - - - - 11 3 1 ---- 30 ---- - - 1 - 21 46 1 - 1 - - - ---- 70 ---- 100 ==== (Pl ager: Wu Lin	2100 6(17) 2110 6(18) 2120 6(2) 2150 2170 2190 6(5) 2200 6(19) 2230 2250 6(20) 2310 2320 6(21) 21XX 2540 6(23) 2570 6(36) 2630 6(25) 2640 6(24) 2645 25XX 2XXX 3110 6(26) 3200 6(27) 3310 6(28) 3320 6(28) 3350 6(28) 3400 6(29) 31XX 36XX 6(30) 3XXX 1XXX ease refer to Notes to the Financial Statements) -Mao Non-controlling interests Total equity Total liabilities and equity Legal reserve Special reserve Undistributed earnings Other equity Total equity attributable to shareholders of the parent company Capital of common shares Capital surplus Retained earnings Equity attributable to shareholders of the parent company Capital Total non-current liabilities Total liabilities Net defined benefit liability - non- current Deposits received Long-term loans Deferred income tax liabilities Long-term deferred revenue Total current liabilities Non-current liabilities Long-term liabilities - current portion Current income tax liabilities Provision - current Advance receipt Accounts payable Construction contract payable Other payables Financial liabilities at fair value through profit or loss - current Notes payable Current liabilities Short-term loan Short-term bills payable	$15,825,523 989,011 21,033 1,816,494 1,114,431 14,331 1,634,147 1,124 102,183 1,888,764 3,685,344 ---------------- 27,092,385 ---------------- 29,282,172 227,177 35,669 940,445 14,639 ---------------- 30,500,102 ---------------- 57,592,487 ---------------- 18,211,760 4,873,770 2,698,462 327,757 2,366,597 -636,655 ---------------- 27,841,691 1,794,170 ---------------- 29,635,861 ---------------- $87,228,348 ================ Ac	19 1 - 2 1 - 2 - - 2 4 ---- 31 ---- 34 - - 1 - ---- 35 ---- 66 ---- 21 6 3 - 3 -1 ---- 32 2 ---- 34 ---- 100 ==== counting Man	$10,514,507 13 679,013 1 - - 2,094,250 3 1,193,816 1 29,402 - 1,700,788 2 381,176 - 70,347 - 2,132,926 3 5,115,562 6 ---------------- ---- 23,911,787 29 ---------------- ---- 26,632,474 33 115,349 - 38,396 - 1,075,766 1 18,739 - ---------------- ---- 27,880,724 34 ---------------- ---- 51,792,511 63 ---------------- ---- 17,180,905 21 4,737,131 6 2,448,261 3 327,757 - 3,010,948 4 -167,351 - ---------------- ---- 27,537,651 34 2,706,328 3 ---------------- ---- 30,243,979 37 ---------------- ---- $82,036,490 100 ================ ==== ager: LIN,CHIEN-HUNG

－16－

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries
Consolidated Statements of Comprehensive Income
January 1, 2017 ~ December 31, 2017

Unit: In Thousands of New Taiwan Dollars

Code Note Item	2017		2016
	Amount	％	％ $52,847,410 100 45,641,051 86 ----------------- ---- 7,206,359 14 2,284,023 4 976,487 2 101,812 - ----------------- ---- 3,362,322 6 ----------------- ---- 3,844,037 8 ----------------- ---- 265,050 - -177,374 - -789,831 -1 230,190 - ----------------- ---- -471,965 -1 ----------------- ---- 3,372,072 7 993,527 2 ----------------- ---- 2,378,545 5 ----------------- ---- -71,478 - -26,336 - -11,383 - -849,812 -2 -5,850 - -104,959 - -142,336 - ----------------- ---- -904,716 -2 ----------------- ---- $1,473,829 3 ================= ==== 2,502,005 5 -123,460 - ----------------- ---- $2,378,545 5 ================= ==== 1,612,620 3 -138,791 - ----------------- ---- $1,473,829 3 ================= ==== $1.37 ================= Amount
4000 6(31) 5000 6(7) 5900 6100 6200 6300 6000 6900 7010 6(32) 7020 6(33) 7050 6(34) 7060 7000 7900 7950 6(36) 8200 8311 8320 8349 8361 8362 8370 8399 8300 6(37) 8500 8610 8620 8600 8710 8720 8700 9750 6(38) Total Basic earnings per share (NTD) Basic earnings per share Total Total comprehensive income (loss) attributable to: Shareholders of the parent company (net income/loss) Non-controlling interest (net income/loss) Total comprehensive income (loss) Net income (loss) attributable to: Shareholders of the parent company (net income/loss) Non-controlling interest (net income/loss) Share of other consolidated loss (profit) of associates and joint ventures recognized under equity method Income tax expense (profit) relating to items that may be reclassified to profit or loss. Other comprehensive income (loss), net Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign financial statements Unrealized valuation gain (loss) on available- for-sale financial assets Other comprehensive income (loss), net Items that are not reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Share of other comprehensive income (loss) of associates and joint ventures recognized under equity method income tax expenses (benefits) related to items that are not subsequently reclassified Net income (loss) before tax Income tax expense (gains) Net income (loss) Other gains and losses Finance costs Share of the loss (profit) of associates and joint ventures recognized under equity method Total non-operating income and expenses Total operating expenses Operating income (loss) Non-operating income and expenses Other income Gross profit (loss) Operating expenses Selling expense Administrative expense Research and development expenses Operating revenue Operating costs	$71,158,662 64,859,279 ----------------- 6,299,383 2,895,049 1,096,333 96,627 ----------------- 4,088,009 ----------------- 2,211,374 ----------------- 287,320 263,704 -1,120,195 163,162 ----------------- -406,009 ----------------- 1,805,365 460,055 ----------------- 1,345,310 ----------------- 2,578 -30,121 -6,312 -337,699 -1,665 -229,281 -85,250 ----------------- -504,626 ----------------- $840,684 ================= 1,367,405 -22,095 ----------------- $1,345,310 ================= 878,961 -38,277 ----------------- $840,684 ================= $0.75 =================	100 91 ---- 9 3 2 - ---- 5 ---- 4 ---- - - -1 - ---- -1 ---- 3 1 ---- 2 ---- - - - - - - - ---- -1 ---- 1 ==== 2 - ---- 2 ==== 1 - ---- 1 ====

Chairperson: Lin, I-Shou

(Please refer to Notes to the Financial Statements)
Manager: Wu Lin-MaoAccounting Manager:  LIN,CHIEN-HUNG

－17－

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries
Consolidated Statements of Changes in Equity
January 1, 2017 ~ December 31, 2017
January 1, 2016 ~ December 31, 2016

Unit: In Thousands of New Taiwan Dollars

Item	Capital	Capital surplus	R	etained earnings			Other Equity Items	$7,080 - 4,305 ---------------- 4,305 ---------------- - - - - ---------------- 11,385 - - - ---------------- - ---------------- - -4,995 ---------------- -4,995 ---------------- - - - - ---------------- $6,390 ================ Profit (loss) on the effective portion of cash flow hedging	$3,119,304 $29,003,845 -123,460 2,378,545 -15,331 -904,716 ---------------- ---------------- -138,791 1,473,829 ---------------- ---------------- -566 -2,671 -45,136 - 2,541 - -231,024 -231,024 ---------------- ---------------- 2,706,328 30,243,979 - - - -687,236 - - ---------------- ---------------- - -687,236 ---------------- ---------------- -22,095 1,345,310 -16,182 -504,626 ---------------- ---------------- -38,277 840,684 ---------------- ---------------- 107 4,183 -131,235 - 22,996 - -765,749 -765,749 ---------------- ---------------- $1,794,170 $29,635,861 ================ ================ Non-controlling interests Total Equity
						Exchange differences on translation of foreign financial statements	Unrealized gain (loss) of available-for-sale financial assets
	Capital of common shares		Legal reserve	Special reserve	Undistributed earnings
Balance, December 31, 2017 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 Changes in ownership interests in subsidiaries Non-controlling interests Net income (loss) Other comprehensive income (loss) Total comprehensive income (loss) Earnings allocation and distribution: Legal reserve Cash dividends for common stocks Stock dividends for common stocks Total Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Changes in ownership interests in subsidiaries Non-controlling interests Balance, December 31, 2016 Other comprehensive income (loss) Total comprehensive income (loss) Changes in associated companies and joint ventures accounted for using equity method Balance, January 1, 2016 Net income (loss)	$17,180,905 - - ---------------- - ---------------- - - - - ---------------- 17,180,905 - - 1,030,855 ---------------- 1,030,855 ---------------- - - ---------------- - ---------------- - - - - ---------------- $18,211,760 ================	$4,673,787 - - ---------------- - ---------------- 9,543 45,136 8,665 - ---------------- 4,737,131 - - - ---------------- - ---------------- - - ---------------- - ---------------- 5,404 131,235 - - ---------------- $4,873,770 ================	$2,448,261 - - ----------------- - ----------------- - - - - ----------------- 2,448,261 250,201 - - ----------------- 250,201 ----------------- - - ----------------- - ----------------- - - - - ----------------- $2,698,462 =================	$327,757 - - --------------- - --------------- - - - - --------------- 327,757 - - - --------------- - --------------- - - --------------- - --------------- - - - - --------------- $327,757 ===============	$608,642 2,502,005 -76,845 ---------------- 2,425,160 ---------------- -11,648 - -11,206 - ---------------- 3,010,948 -250,201 -687,236 -1,030,855 ---------------- -1,968,292 ---------------- 1,367,405 -19,140 ---------------- 1,348,265 ---------------- -1,328 - -22,996 - ---------------- $2,366,597 ================	$583,467 - -809,765 ---------------- -809,765 ---------------- - - - - ---------------- -226,298 - - - ---------------- - ---------------- - -471,480 ---------------- -471,480 ---------------- - - - - ---------------- $-697,778 ================	$54,642 - -7,080 ---------------- -7,080 ---------------- - - - - ---------------- 47,562 - - - ---------------- - ---------------- - 7,171 ---------------- 7,171 ---------------- - - - - ---------------- $54,733 ================

Chairperson: Lin, I-Shou

(Please Refer to Notes to the  Consolidated Financial Statements)
Manager: Wu Lin-Mao

Accounting Manager:  LIN,CHIEN-HUNG

－18－

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries

Consolidated Statements of Cash Flows

January 1, 2017 ~ December 31, 2017
January 1, 2016 ~ December 31, 2016

Unit: In Thousands of New Taiwan Dollars

Dividend received Interest paid Income tax refunded (paid) Net cash provided by (used in) operating activities Total net changes in operating assets and liabilities Total adjustments Cash inflow (outflow) from operations Interest received Increase (decrease) in provision Increase (decrease) in advance receipts Increase (decrease) in defined benefit liability, net Total net changes in operating liabilities Net changes in operating liabilities Increase (decrease) in notes payable Increase (decrease) in accounts payable Increase (decrease) in construction contract payable Increase (decrease) in other payables (Increase) decrease in other receivables (Increase) decrease in inventories (Increase) decrease in prepayments (Increase) decrease in other financial assets Total net changes in operating assets Net changes in operating assets (Increase) decrease in held-for-trading financial assets (Increase) decrease in notes receivable (Increase) decrease in accounts receivable (Increase) decrease in accounts receivable - related parties (Increase) decrease in construction contract receivables Impairment loss on non-financial assets Others Total income and expense items Changes in operating assets and liabilities: Dividend income Share of the loss (profit) of associates and joint ventures recognized under equity method Loss (gain) on disposal and retirement of property, plant and equipment Reclassification of property, plant and equipment to expense Gain (loss) on disposal of investment Impairment loss on financial assets Amortization Bad debt provision (restated as income) Net loss (gain) from financial assets and liabilities at fair value through profit or loss Interest expense Interest income Cash flows from operating activities Net income (loss) before tax Adjustments: Income and expense item: Depreciation Item

$1,805,365 $3,372,072 1,660,759 1,474,184 23,492 1,377 -174 - 35,418 -12,682 1,120,195 789,831 -101,638 -49,136 -73,952 -8,250 -163,162 -230,190 -309,013 25,766 9,211 17,355 -15 -200 1,060 - 13,534 52,796 -217 -217 ----------------- ----------------- 2,215,498 2,060,634 ----------------- ----------------- 55,105 17,814 -659,449 -251,768 -339,650 -660,075 161,920 -153,344 277,871 -213,569 -17,074 -90,234 -1,744,327 -2,468,253 -860,320 -362,043 -615 2,204 ----------------- ----------------- -3,126,539 -4,179,268 ----------------- ----------------- -277,756 1,345,152 -79,385 233,856 -15,071 -1,530 -99,234 280,274 31,836 -34,173 -244,162 1,542,648 -132,743 -42,793 ----------------- ----------------- -816,515 3,323,434 ----------------- ----------------- -3,943,054 -855,834 ----------------- ----------------- -1,727,556 1,204,800 ----------------- ----------------- 77,809 4,576,872 97,381 49,113 179,347 25,950 -1,126,859 -801,322 -689,738 -475,574 ----------------- ----------------- -1,462,060 3,375,039 ----------------- ----------------- 2016 2017

(to be continued)

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Cash and cash equivalents, end of the period Item Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of the period Increase in deposits received Decrease in deposits received Decrease in other non-current liabilities Cash dividends distributed Changes in non-controlling interests Decrease in short-term loans Increase in short-term bills payables Decrease in short-term bills payables Repayment of Bonds Increase in long-term loan Repayment of long-term loan Decrease in other non-current assets Net cash provided by (used in) investing activities Cash flows from financing activities: Increase in short-term loans Disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Acquisition of intangible assets Acquisition of investment property Increase in other financial assets Cash flows from investing activities: Acquisition of Bond investments with no active market Acquisition of financial assets measured at cost Disposal of financial assets carried at cost Acquisition of investment accounted for using equity method Acquisition of subsidiaries (less the cash received) Subscriptions returned due to capital reduction of investees accounted for using equity method Acquisition of property, plant and equipment

-348,450 -206,305 -68,396 -21,913 15 150 -585,976 -408,132 13 - 620 1,097 -3,428,503 -4,174,303 361,381 837 -5,078 - - 1,124 - -8,208 -16,263 -44,067 -191,567 -396,034 11,068 8,793 ----------------- ----------------- -4,271,136 -5,246,961 ----------------- ----------------- 5,311,016 - - -1,669,412 310,000 - - -85,539 -278,940 -1,237,560 9,984,035 4,284,850 -8,480,026 -979,287 - 9,011 -4,100 - -2,727 -5,672 -687,236 - -767,816 -231,024 ----------------- ----------------- 5,384,206 85,367 ----------------- ----------------- -79,766 331,670 ----------------- ----------------- -428,756 -1,454,885 8,133,181 9,588,066 ----------------- ----------------- $7,704,425 $8,133,181 ================= ================= 2017 2016

Chairperson: Lin, I-Shou

(Please Refer to Notes to the  Consolidated Financial Statements)
Manager: Wu Lin-MaoAccounting Manager:  LIN,CHIEN-HUNG

－20－

Crowe Horwath (TW) CPAs Crowe Horwath (TW) CPAs Member Crowe Horwath International

==> picture [173 x 30] intentionally omitted <==

27F. No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung, TaiwanR.O.C. Tel:(07)3312133 Main line Fax:(07)3331710

Independent Auditors’ Report

To Yieh Phui Enterprise Co., Ltd.

Auditors’ Opinions

We have audited the Standalone Balance Sheet of Yieh Phui Enterprise Co., Ltd. as of 31 December 2017 and 2016, the Standalone Statements of Comprehensive Income, Standalone Statements of Changes in Equity, Standalone Statements of Cash Flows, and Notes to Standalone Financial Statements (including Summary of Significant Accounting Policies) for the periods from January 1 to December 31, 2017 and 2016.

In our opinion, based on our audits and other auditors’ reports (please refer to other paragraphs), the afore-mentioned Standalone Financial Statements present fairly, in all material respects, the standalone financial position of Yieh Phui Enterprise Co., Ltd. as of December 31, 2017 and 2016, and its standalone financial performance and standalone cash flows for the periods from January 1 to December 31, 2017 and 2016 in conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We planned and conducted our audits in accordance with Rules Governing the Auditing and Attestation of Financial Statements by Certified Public Accountants and Generally Accepted Auditing Standards in the Republic of China. Our responsibility under the above mentioned regulations will be further explained in the section titled "Accountant's Responsibility in Auditing the Standalone Financial Statements". We have stayed independent from Yieh Phui Enterprise Co., Ltd. as required by The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled other responsibilities as stipulated by the norm. Based on our audits and other auditors’ reports, we believe we have obtained sufficient and appropriate audit evidence to serve as a basis for our opinion.

Key Audit Matters

Key Audit Matters refer to most vital matters in the process of auditing of 2017 Standalone Financial Statement of Yieh Phui Enterprise Co., Ltd. based on our professional judgment. Such matters have been dealt with in the course of of auditing and compiling the Standalone Financial

－21－

Statements and in the preparation of our audit opinion. As such, we do not respond to each key matter individually. Key Audit Matters for the Standalone Financial Statements of Yieh Phui Enterprise Co., Ltd. for the year ended December 31, 2017 are stated as follows: Timing of Sales Revenue Recognition

Please see Note 4(25) of the Standalone Financial Statements for accounting policies regarding revenue recognition; please see note 5(2)1 of the Standalone Financial Statements for critical accounting estimates and assumptions regarding revenue recognition; please see note 6(26) of the Standalone Financial Statement for details regarding revenue recognition.

－22－

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 Enterprise Co., Ltd. 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 the financial performance of Yieh Phui Enterprise Co., Ltd., we have thus included it as one of the key audit matters. Audit Process Adopted:

Our audit process included understanding and testing the effectiveness of the design and execution of internal control over the timing of sales revenue recognition; sampling and testing the trading terms between the Company and its major customers, and performing cut off test to determine the appropriateness of revenue recognition timing. II. Inventory Valuation

Please refer to Note 4(12) of the Standalone Financial Statements for accounting policies regarding inventory valuation; please refer to Note 5(2)5. of the Standalone Financial Statements for critical accounting estimates and assumptions regarding inventory valuation and Note 6(7) of the Standalone Financial Statements for details of inventory valuation. Description of key audit matters:

Inventory of Yieh Phui Enterprise Co., Ltd. amounted to NT$ 4,145,137 thousand (net of NT$ 4,146,681 thousand of total inventory costs less NT$ 1,544 thousand of allowance for inventory valuation losses) as of 31 December 2017, which accounted for 8.14% of total assets. The inventory valuation is measured at the lower of the value of inventory cost and net realizable value. Given that the valuation of net realizable value of inventory has a significant impact on critical judgments and estimates and since inventory valuation is dependent on the influence of frequently volatile fluctuations of international metal price, we have thus included this item in the key audit matters.

Audit Process Adopted:

Our major audit process included obtaining management’s assessment information which determines the lower of the value of inventory cost and net realizable value of inventory, sampling estimated selling prices to the most recent sales records, and assessing the appropriateness of management's basis for estimating the net realizable value.

Other Matters

We do not audit the financial statements of some associates that have been included in the afore-mentioned Standalone Financial Statements. They were audited by other auditors. Therefore, any value of such financial statements we have used to form our opinion for the afore-

－23－

mentioned Standalone Financial Statements are based on other auditors’ reports. The value of investments in the afore-mentioned associates recognized under the equity method as of December 31, 2017 and 2016 were NT$ 5,248,378 thousand and NT$ 4,422,752 thousand respectively, accounting for 10.30% and 9.17% of total assets. The share of profit (loss) of associates and joint ventures recognized under equity method in 2017 and 2016 were NT$ 86,232 thousand and NT$ 123,277 thousand respectively, accounting for 5.16% and 4.09% of income before tax.

Responsibility of the management and the governing body for the Standalone Financial Statements

It is the management’s responsibility to fairly present the Standalone Financial Statements in conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers, and to sustain internal controls respecting preparation of the Standalone Financial Statements so as to avoid material misstatements due to fraud or errors therein.

－24－

In preparing the Standalone Financial Statements, the responsibility of management includes assessing the ability of Yieh Phui Enterprise Co., Ltd. to continue as a going concern, disclosing going concern matters, as well as adopting going concern accounting, unless the management intends to liquidate Yieh Phui Enterprise Co., Ltd. or terminate the business, or no practicable measure other than liquidation or termination of the business can be taken.

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

The Accountants’ Responsibility in Auditing the Standalone Financial Statements

The purpose of our audit is to provide reasonable assurance that the Standalone Financial Statements as a whole contains no material misstatements, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. "Reasonable assurance" refers to a high level of assurance. Nevertheless, our audit, which was carried out according to GAAS, does not guarantee that a material misstatement(s) will be detected in the Standalone 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, could have influenced the economic decisions made by the users of the Standalone Financial Statements, it would 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 a material misstatement(s) due to fraud or errors in the Standalone 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 risk of an undetected material misstatement due to fraud is greater than that due to errors.

2. Acquired 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 Yieh Phui Enterprise Co., Ltd..

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

4. Concluded on the appropriateness of the management’s use of going concern basis of accounting, and determined whether there existed events or circumstances that might cast significant uncertainty over the ability of Yieh Phui Enterprise Co., Ltd. to continue as a going

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concern. If we believe there may be factors causing significant uncertainties, we are required to remind the users of the Standalone Financial Statements in our audit report of the relevant disclosures therein, or to amend our report if inappropriate disclosure was made. Our conclusion is based on the audit evidence obtained as of the date of the audit report. However, future events or circumstances may cause Yieh Phui Enterprise Co., Ltd. to cease to continue as a going concern.

1. Evaluated the overall presentation, structure and content of the Standalone Financial Statements (including the related notes), and determined whether the Standalone Financial Statements present related transactions and events fairly.

2. Obtained adequate and appropriate audit evidence regarding financial information of entities within the Company so as to express opinions for the Standalone Financial Statements. We are responsible for the direction, supervision and execution of auditing Yieh Phui Enterprise Co., Ltd., and for formation of an audit opinion.

3. Communications between us and the Company’s governing body take account of the scope

4. and timing of the planned audit and significant audit findings, including any significant deficiencies in the internal controls during the audit process.

－26－

We have also provided the governing body with our statement of independence in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and communicated with the governing body all relationships and other matters that may be deemed to have an influence on our independence (including safeguard measures).

From the matters communicated with the governing body, we determined the key audit matters for Standalone Financial Statements of Yieh Phui Enterprise Co., Ltd. for the year ended in December 31, 2017. Such matters have been explicitly stated in our audit report, unless laws or regulations prevent their disclosures, or, in extremely rare cases, we decide not to communicate such matters in our audit report in consideration that the reasonably anticipated adverse impacts of such communication would be greater than the public interest it would promote.

Crowe Horwath (TW) CPAs CPA: Huang Ling-Wen

CPA: Hsieh, Jen-Yao

No. of the official approval: FSC No. 10200032833 March 21, 2018

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Unit: In Thousands of New Taiwan Dollars

Yieh Phui Enterprise Co., Ltd. Balance Sheets December 31, 2017, and December 31, 2016

Code Notes Assets	December 31, 20	17	December 31, 2016:	Code Notes Liabilities and Equity	December 31, 201	7	December 31, 2016:
	Amount	％			Amount	％
1100 Cash and Cash Equivalents 6(1) 1110 6(2) 1150 6(3) 1170 6(4) 1180 7 1190 6(5) 1195 6(5)7 1200 6(6) 1210 Other receivable - related party 7 1220 Current income tax assets 130X 6(7) 1410 6(8) 1476 8 11XX 1510 6(2) 1523 6(10) 1543 6(11) 1546 6(12) 1550 6(9) 1600 6(13) 1760 6(14) 1840 6(31) 1920 1980 8 1985 Long-term prepaid rent 6(15) 15XX Total non-current assets 1XXX Total asset Chairperson: Lin, I-Shou Other financial assets - non-current Refundable deposits Deferred income tax assets Property, plant and equipment Investment property, net Investments accounted for using equity method Financial assets carried at cost - non-current Bond investments with no active market - non-current Available-for-sale financial assets - non-current Financial assets at fair value through profit or loss - non- current Non-current assets Total current assets Prepayments Other financial assets - current Inventories Other receivables Construction contract receivable Construction contract receivables – related parties Accounts receivable - related parties, net Notes receivable - net Accounts receivable- Net Financial assets at fair value through profit or loss - current Current assets	---------------- ---------------- ================ $50,942,235 41,688,147 857 86,503 43,932 366,936 8,106,718 1,332,100 30,713,470 549,321 433,401 44,910 9,999 ---------------- ---------------- 9,254,088 308,860 180,149 6,508 4,145,137 171,214 966,250 175,452 194,461 328,289 20,494 1,253,935 33,634 $1,469,705	3 - - 2 1 - - - 2 - 9 1 - ---- 18 ---- - - 1 1 60 16 3 1 - - - ---- 82 ---- 100 ====			- ---------------- ---------------- ---------------- ---------------- ---------------- - - ================ $50,942,235 Accounting Manager: -636,655 27,841,691 2,698,462 327,757 2,366,597 4,873,770 18,211,760 10,559,643 23,100,544 647,450 2,000 227,145 9,683,048 12,540,901 1,275,342 671,777 67,890 14,397 514,312 529,357 1,751 635,683 649,616 $8,180,776

－28－

Yieh Phui Enterprise Co., Ltd. Statements of Comprehensive Income January 1, 2017 ~ December 31, 2017

Unit: In Thousands of New Taiwan Dollars

Code Note 4000 6(26) 5000 6(7) 5900 6100 6200 6000 6900 7010 6(27) 7020 6(28) 7050 6(30) 7070 7000 7900 7950 Income tax expense (gains) 6(31) 8200 8311 8330 8349 8362 8380 8399 8300 6(32) 8500 == 9750 6(33) == Item Operating revenue Operating costs Gross profit (loss) Operating expenses Selling expense Administrative expense Total operating expenses Operating income (loss) Non-operating income and expenses Other income Other gains and losses Finance costs Share of loss (profit) of subsidiaries, associates and joint ventures accounted for using equity method Total non-operating income and expenses Net income (loss) before tax Net income (loss) Other comprehensive income (loss), net Items that are not reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method income tax expenses (gains) related to items that are not reclassified subsequently to profit or loss: Items that may be reclassified subsequently to profit or loss: Unrealized valuation gain (loss) on available- for-sale financial assets Share of other comprehensive income of subsidiaries, associates and joint ventures recognized under equity method Income tax expense (gains) relating to items that may be reclassified to profit or loss. Other comprehensive income (loss), net Total comprehensive income (loss) Basic earnings per share (NTD) Basic earnings per share	2017	％ 100 87 ---- 13 7 1 ---- 8 ---- 5 ---- 1 - -1 1 ---- 1 ---- 6 1 ---- 5 ---- - - - - -2 - ---- -2 ---- 3 ======= ====	2016
	$29,179,218 25,389,583 ----------------- 3,789,635 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- =============== =============== Amount 1,944,199 384,107 2,328,306 1,461,329 210,426 -121,104 -396,624 515,734 208,432 1,669,761 302,356 1,367,405 9,353 -34,051 -5,558 -1,665 -552,889 -85,250 -488,444 $878,961 $0.75		％ $23,867,665 100 84 ----------------- ---- 16 5 2 ----------------- ---- 7 ----------------- ---- 9 ----------------- ---- - - -1 5 ----------------- ---- 4 ----------------- ---- 13 2 ----------------- ---- 11 ----------------- ---- - - - - -3 -1 ----------------- ---- -4 ----------------- ---- 7 ============= ==== ============= Amount 20,009,747 3,857,918 1,396,827 396,364 1,793,191 2,064,727 113,804 -20,049 -355,796 1,210,065 948,024 3,012,751 510,746 2,502,005 -51,013 -37,215 -11,383 -5,850 -949,026 -142,336 -889,385 $1,612,620 $1.37

(Please refer to Notes to Standalone Financial Statements)

Chairperson: Lin, I-Shou

Manager: Wu Lin-Mao

Accounting Manager:

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Yieh Phui Enterprise Co., Ltd. Statements of Changes in Equity January 1, 2017 ~ December 31, 2017 January 1, 2016 ~ December 31, 2016

Unit: In Thousands of New Taiwan Dollars

Yieh Phui Enterprise Co., Ltd. Statements of Changes in Equity January 1, 2017 ~ December 31, 2017 January 1, 2016 ~ December 31, 2016	Unit: In Thousands of New Taiwan Dollars
Item	Capital Capital of comm Capital surplus Legal reserve Special reserve Undistributed earn Total Equity Retained earnings Exchange differences on translation of foreign financial statements Unrealized gain or loss for available- for-sale financial assets ~~The effective~~ portion of gains and losses of financial instruments designated as cash flow hedges
==== Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Changes in ownership interests in subsidiaries Balance, December 31, 2017 Balance, January 1, 2016 Net income (loss) Earnings allocation and distribution: Legal reserve Cash dividends for common stocks Stock dividends for common stocks Total Other comprehensive income (loss) Total comprehensive income (loss) Net income (loss) Other comprehensive income (loss) Total comprehensive income (loss) Changes in associates and joint ventures accounted for using equity method Changes in associates and joint ventures accounted for using equity method Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Changes in ownership interests in subsidiaries Balance, December 31, 2016	$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 - - 250,201 - -250,201 - - - - - - - -687,236 - - - -687,236 1,030,855 - - - -1,030,855 - - - - ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 1,030,855 - 250,201 - -1,968,292 - - - -687,236 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - - - - 1,367,405 - - - 1,367,405 - - - - -19,140 -471,480 7,171 -4,995 -488,444 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - - - - 1,348,265 -471,480 7,171 -4,995 878,961 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - 5,404 - - -1,328 - - - 4,076 - 131,235 - - - - - - 131,235 - - - - -22,996 - - - -22,996 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $18,211,760 $4,873,770 $327,757 $2,366,597 $-697,778 $54,733 $6,390 $27,841,691 ============ ================================================================================================= =============

Chairperson: Lin, I-Shou

Manager: Wu Lin-Mao

Accounting Manager: LIN,CHIEN-HUNG

－30－

Yieh Phui Enterprise Co., Ltd. Statements of Cash Flows January 1, 2017 ~ December 31, 2017 January 1, 2016 ~ December 31, 2016

Unit: In Thousands of New Taiwan Dollars

Item	2017		2016
Cash flows from operating activities
Net income (loss) before tax	$1,669,761		$3,012,751
Adjustments:
Income and expense item:
Depreciation	555,656		528,387
Net loss (gain) from financial assets and liabilities at fair value through profit
or loss	912		2,118
Interest expense	396,624		355,796
Interest income	-31,238		-3,696
Dividend income	-73,652		-7,906
Share of loss (gains) of subsidiaries, associates and joint ventures accounted
for using equity method	-515,734		-1,210,065
Loss (gain) on disposal and retirement of property, plant and equipment	27,786		18,408
Reclassification of property, plant and equipment to expense	8,539		15,848
Gain (loss) on disposal of investment	-15		-150
Impairment loss on financial assets	1,060
Impairment loss on non-financial assets			2,564
Others	19,995		52,192
	-----------------		-----------------
Total income and expense items	389,933		-246,504
	-----------------		-----------------
Changes in operating assets and liabilities:
Net changes in operating assets
(Increase) decrease in held-for-trading financial assets	58,988		6,206
(Increase) decrease in notes receivable	-19,714		47,801
(Increase) decrease in accounts receivable	-7,385		-296,416
(Increase) decrease in accounts receivable - related parties	-146,545		268,590
(Increase) decrease in construction contract receivables	277,083		-198,384
(Increase) decrease in other receivables	-37,716		-62,151
(Increase) decrease in inventories	-495,122		-1,460,500
(Increase) decrease in prepayments	-24,559		-77,572
	-----------------		-----------------
Total net changes in operating assets	-394,970		-1,772,426
	-----------------		-----------------
Net changes in operating liabilities
Increase (decrease) in notes payable	-6,365		37,215
Increase (decrease) in accounts payable	-170,702		184,523
Increase (decrease) in construction contract payable	-15,068		-1,467
Increase (decrease) in other payables	-42,864		110,841
Increase (decrease) in provision	27,619		-35,580
Increase (decrease) in advance receipts	-232,972		1,150,161
Increase (decrease) in defined benefit liability, net	-48,044		-22,657
	-----------------		-----------------
Total net changes in operating liabilities	-488,396		1,423,036
	-----------------		-----------------
Total net changes in operating assets and liabilities	-883,366		-349,390
	-----------------		-----------------
Total adjustments	-493,433		-595,894
	-----------------		-----------------
Cash inflow (outflow) from operations	1,176,328		2,416,857
Interest received	29,540		3,298
Dividend received	179,047		25,606
Interest paid	-401,853		-354,151
Income tax refunded (paid)	-445,746		-87,723
	-----------------		-----------------
Net cash provided by (used in) operating activities	537,316		2,003,887
		-----------------		-------

－31－

Cash flows from investing activities:
Acquisition of Bond investments with no active market	-262,747	-170,654
Acquisition of financial assets measured at cost	-68,397	-21,913
Disposal of financial assets carried at cost	15	150
Acquisition of investment accounted for using equity method	-1,751,426	-976,981
Acquisition of property, plant and equipment	-178,732	-181,034
Disposal of property, plant and equipment	-	76
Increase in refundable deposits	-40,088	-
Decrease in refundable deposits	-	1,871
Increase in other receivable - related party	-640,000	-310,000
Acquisition of investment property	-16,263	-
Increase in other financial assets	-46,332	-32,186
Increase in other non-current assets	-	-6,709
Decrease in other non-current assets	2,906	-
	-----------------	-----------------
Net cash provided by (used in) investing activities	-3,001,064	-1,697,380
	-----------------	-----------------
Cash flows from financing activities:
Increase in short-term loans	1,994,908	-
Decrease in short-term loans	-	-1,723,197
Increase in short-term bills payables	310,000	-
Decrease in short-term bills payables	-	-100,000
Increase in long-term loan	4,600,000	1,600,000
Repayment of long-term loan	-3,830,140	-291,200
Cash dividends distributed	-687,236	-
	-----------------	-----------------
Net cash provided by (used in) financing activities	2,387,532	-514,397
	-----------------	-----------------
Net increase (decrease) in cash and cash equivalents	-76,216	-207,890
Cash and cash equivalents, beginning of the period	1,545,921	1,753,811
	-----------------	-----------------
Cash and cash equivalents, end of the period	$1,469,705	$1,545,921

============== =================

(Please refer to Notes to Standalone Financial Statements)

Chairperson: Lin, I-Shou Manager: Wu Lin-Mao Accounting Manager: LIN,CHIEN-HUNG

－32－

2. The Auditing Committee Audits the Final Financial Statement of 2017

Report of the Auditing Committee

Yieh Phui Enterprise Co., Ltd

The board of directors has prepared the 2017 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 2018 the Stockholder’s Meeting of Yieh Phui

Chairman of the Auditing Committee:Sun Chin-Su

March 21, 2018

－33－

VII Appendix

Appendix 1

YIEH PHUI ENTERPRISE CO., LTD

Comparison Table for the “Corporate Charter”

Before and After Revision

	BEFORE THE REVISION	BEFORE THE REVISION	AFTER THE REVISION
	Chapter 4 Directors	and supervisors	Chapter 4 Directors
	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. A majority of the Company’s directors should not be in any of the following relationships: 1. Spouse 2. 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: 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. A majority of the Company’s directors should not be in any of the following relationships: 1. Spouse 2. Secondary relatives
	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 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 within20 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.
	Chapter5Managers and employees		Chapter5Managers and employees

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