YP - Annual Report 2018 | FinancialReports.eu

2019 Shareholders’ Meeting

YIEH PHUI ENTERPRISE CO., LTD.

Time: 9:30 AM, June 20, 2019

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 or entrusted delegates is 1,677,957,831, or 89.45% of the shares outstanding 1,875,811,292 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 Executive Vice President Mr.Chen, Yung-Hsien Vice President-Marketing & Sales Mr. Yang, Shih-Chi Attorney Mr.Lin,Ching-Yun CPA Mr. Su, Ping-Chang

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

2018 Operation Report(See p.4 of the Program)
The Auditing Committee audits the final financial statement of 2018(See p. 27 of the Program )
The report on the remuneration of the emplyees and directors for 2018(See p. 28 of the Program)

IV. Matters to Be Approved

Proposal 1 ： Proposed by the board of directors

Brief ： Approval of the 2018 Final Financial Statement

Explain ：1. The 2018 operating report, the individual entity report and consolidated financial statement. See p. 4-26 of the Program

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 (TW) CPAs.
T he above financial statements and operating report has been audited by the Auditing

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Committee.

4. To be approved.

Resolution: approve. The shares present are 1,677,957,831, for1,658,804,560 against 83,539 and abstain 19,069,732

Proposal 2 ： Proposed by the board of directors

Brief ： Approve the distribution of retained earnings for 2018

Explain ： Yieh Phui plans to distribute earnings of 2018 as the table below:

Yieh Phui Enterprise Co., Ltd

Earnings Distribution Table

	2018	Unit:NT$
	Item	Amount
Unallocated earnings, beginning of year		1,010,370,734
+：	Effect of retrospective application	51,160,213
－：	Remeasurements of defined benefit pension plans recognized in retained earnings	(24,806,927)
+：	Changes in equity of associates and joint ventures under equity method	34,815,962
－：	Difference between consideration and carrying amount of subsidiaries acquired or disposed	(100,927,831)
－：	Changes of ownership interests in subsidiaries	(45,924,249)
	Disposal of equity instruments at fair value
+：	through other comprehensive income by associates	719,560
+：	Net income	308,506,041
－：	Legal reserve	(30,850,604)
+：	Reversal of special reserve	77,423,277
Distributable earnings		1,280,486,176
－：	Shareholders’ dividend	(562,743,389)
Unallocated earnings,end ofyear		717,742,787

Resolution: approve. The shares present 1,677,957,831 for 1,661,204,162, against, 85,058 and abstain 16,668,611

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 2018.

Explain ： 1. To implement according to the distribution of earnings of 2018.

The cash dividend to be paid is NT$187,581,129, or NT$0.1 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.

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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$375,162,260 to be used to issue new stocks to increase the capital.
(i) The amount to increase the capital is NT$375,162,260 or 37,516,226 shares and the capital after the new issue is NT$19,133,275,180 or 1,913,327,518 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 20 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 1,677,957,831, for 1,661,140,111, against 84,104, and abstain 16,733,616

Proposal 2 ： Proposed by the Board of Directors

Brief ： Proposal on modifying the “ Procedures for Acquisition and Disposal of Assets ＂

Explain ： 1. Based on the regulation of November 26, 2018 Order No.

Financial-Supervisory-Securities-Corporate- 1070341072 of the Financial Supervisory
Commission the company proposes to modify the “ Procedures for Acquisition and Disposal
of Assets ＂
The modified and comparison table of the”Procedures for Acquisition and Disposal of Assets” See pp. 32--42 and pp. 43-52 of the program.
Resolution: approve. The shares present are 1,677,957,831 for 1,661,113,372 against 83,817 and abstain 16,760,642

Proposal 3 ： Proposed by the Board of Directors

Brief ： Proposal on Modifying the” Operation Procedures for Loans to others and Endorsement”

Explain ： 1. Based on the regulation of March 7, 2019 Order No.

Financial-Supervisory-Securities-Corporate- 1080304826 of the Financial Supervisory

Endorsement ＂
The modified and comparison table of the ” Operation Procedures for Loans to others and

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Endorsement” See pp. 53--61 and pp. 62-67 of the program.

Resolution: approve. The shares present are 1,677,957,831, for1,661,109,880, against 85,336and abstain 16,762,615.

Proposal 4 ： Proposed by the Board of Directors Brief ： Proposal on modifying “ Corporate Charter ＂ .

Explain ： 1. the compliance of the Law of Corporation and the need for operation, Article 1, 27, 31, and Item 1 of Article 31, Article 36 of the charter of the company has to be modified.
The modified and comparison table of the“Corporate Charter” See pp. 68--70 and pp. 71-75 of the program.
Resolution: approve. The shares present are 1,677,957,831, for1,661,110,607, against84,795 and abstain 16,762,429.

VI Election

Proposal 1 ： Proposed by the Board of Directors

Brief ： Election of directors.

Explain ： 1. Article 18 of “Corporate Charter” of the Company requires that the Company shall have 7 directors (including 3 independent directors) adopting candidate nomination system and directors shall be elected by the shareholders’ meeting from among the persons with disposing capacity. Directors serve a three-year term and may be re-elected, and the minimum shareholding ratio of directors shall comply with regulations of FSC.
Directors of the current term took office on June 22,2016, and the term will be expired on June 21,2019. Thus, we are planning election.
The term of new directors will start from June 21, 2019 until June 20, 2022.
In accordance with Paragraph 4, Article 2 of “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies,” the shareholding ratio of all directors shall reach 3% or more of the paid-in capital of the Company.
The election of directors was conducted in accordance with “Rule for the Election of Directors”.

Election result ：

ction result：
Title	stockholder’s account	name of stockholder	representative	share holding	votes
Director	81896	Kuo Chiao Investment & Development Co., Ltd.	Lin I-Shou	60,657,497	2,255,854,247
Director	81896	Kuo Chiao Investment & Development Co., Ltd.	Wu Lin- Maw	60,657,497	2,207,299,202
Director	81896	Kuo Chiao Investment	LiangPyng	60,657,497	1,957,303,119

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		& Development Co., Ltd.	- Yeong
Director	81896	Kuo Chiao Investment & Development Co., Ltd.	Huang Ching-Tsung	60,657,497	1,951,646,449
Independent Director	none stockholder	Sun Chin-Su		0	1,104,658,865
Independent Director	none stockholder	Yang Der-Yuan		0	1,077,191,087
Independent Director	none stockholder	Chang Wen-Yi		0	1,073,090,292

VII. Other Matters

Proposal 1 ： Proposed by the Board of Directors

Brief ： Lifting of the Non-Compete clause for Director.

Explain ： 1. In accordance with Article 209 of Company Act, a director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.
2.In order to avoid the impact on the investment development of the Company’s directors, we plan to release the prohibition on all directors from participation in competitive business.
3.Positions Statements of Release the Prohibition on Directors from Participation in Competitive Business (See pp. 76 of the program ).
Resolution: approve. The shares present are 1,677,957,831, for 1,660,999,562, against 97,934 and abstain 16,860,335

VIII. Extempore Motions : None

P.S. Stockholder account No. 321429, No. 337709 and No. 129646 all asked questions about the operation of Yieh-Phui during the stockholders ＇ meeting. The chairman and those in charge had offered the running of the company in details. All such matters have been kept on file in good order.

IX Adjournment

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1. The Operation of 2018

In 2018 the up-stream steel industry of China is said to reduce 100 to 150 million tons of capacity in five years, but it has been done ahead of schedule. China's policy on reducing capacity, banning new facilities and substandard steel has made it easier for making sure the production under control.

Yieh Phui is of the mid-stream of the steel industry with the major products of metallic coated and prepainted steel sheets for sale worldwide, having been able to control the costs and gain steady profits when confronting the competition from China.

The Outline of the Operation of 2018

Comparing 2018 with 2017, the sale volume of Yieh Phui increases 2.04% and that of revenue is NT$847 million. Yieh Phui (China)’s sales decreased by NT$1.6 billion due to a lower sales than a year ago. The sales volume of Yieh Hsing rises by NT$749 million and the increase in revenue is NT$749 million. Overall, the consolidated revenue is NT$73.856 billion, an increase of 3.79% compared to the previous year of NT$71.159 billion. The consolidated net income after tax is NT$265 million, a reduction of 80.31% from NT$1.345 billion of the previous year, of which NT$308 million is for the mother company, comparing with the previous year of NT$1.367 billion, a reduction of 77.44%.

1. The Performance of Business Plan `：`

Consolidated Information of Financial Statements

			Unit NT$ in(000)	Unit NT$ in(000)
Year Item	2018	2017	Changes	Changes%
Operaiton Revenue	`73,856,189`	71,158,662	`2,697,527`	`3.79`
Operaiton Costs	`67,944,988`	64,859,279	`3,085,709`	`4.76`
Operaiton Gross Profit(Loss)	`5,911,201`	6,299,383	`-388,182`	`-6.16`
Operaiton Expenses	`4,452,691`	4,088,009	`364,682`	`8.92`
Operaiton Net Profit(Loss)	`1,458,510`	2,211,374	`-752,864`	`-34.05`
Non-operation Revenue and Expenses	`-1,102,964`	-406,009	`-696,955`	`-171.66`
Net Profit (Loss) before Tax	`355,546`	1,805,365	`-1,449,819`	`-80.31`
Income Tax Expenses	`90,602`	460,055	`-369,453`	`-80.31`
Net Profit (Loss) after Tax	`264,944`	1,345,310	`-1,080,366`	`-80.31`
Other Comprehensive Income (net)	`-21,012`	-504,626	`483,614`	`95.84`

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Total Amount of Comprehensive Income in this Term	`243,932`	840,684	`-596,752`	`-70.98`
Net Profit that Belongs to the Owner of the Parent Company	`308,506`	1,367,405	`-1,058,899`	`-77.44`
Net Profit that Belongs to the Non-controllingequity	`-43,562`	-22,095	`-21,467`	`-97.16`
Total Amount of Comprehensive Income that Belongs to the Owner of the Parent Company	`293,049`	878,961	`-585,912`	`-66.66`
Total Amount of Comprehensive Income that Belongs to the Non-controllingequity	`-49,117`	-38,277	`-10,840`	`28.32`

Financial Information of Company

Financial Information	of Company
Year Item	2018	2017	Changes	Changes%
Operaiton Revenue	`30,026,324`	`29,179,218`	`847,106`	`2.90`
Operaiton Costs	`27,587,558`	`25,389,583`	`2,219,975`	`8.66`
Operaiton Gross Profit(Loss)	`2,438,766`	`3,789,635`	`-1,350,869`	`-35.65`
Operaiton Expenses	`1,562,679`	`2,328,306`	`-765,627`	`-32.88`
Operaiton Net Profit(Loss)	`876,087`	`1,461,329`	`-585,242`	`-29.22`
Non-operation Revenue and Expenses	`-587,176`	`208,432`	`-795,608`	`-381.71`
Net Profit (Loss) before Tax	`288,911`	`1,669,761`	`-1,380,850`	`-82.70`
Income Tax Expenses	`-19,595`	`302,356`	`-321,951`	`-106.48`
Net Profit (Loss) after Tax	`308,506`	`1,367,405`	`-1,058,899`	`-77.44`

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.
Analysis of the Revenue/Expenditure and Profitability :

Consolidated Financial Report Information

Consolidated Financial Report Information
Item	2018	2017
Net cash inflow of operation activities (thousand dollars)	`2,336,596`	`-1,462,060`
Equity/Assets(%)	`34.05`	`33.98`

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Item	2018	2017
Liabilities/Assets(%)	`65.95`	`66.02`
Long-term Funds accounting for the ratio of real estates, plants and equipments(%)	`146.73`	`152.91`
Current ratio(%)	`93.56`	`100.90`
Quick ratio(%)	`47.75`	`52.82`
Return on assets(%)	`1.46`	`2.69`
Return on equity (%)	`0.89`	`4.49`
Netprofit margin(%)	`0.36`	`1.89`
Earningsper share(dollar)	`0.16`	`0.75`
Number of shares bythe end of theyear(share)	`1,875,811,292`	`1,821,176,011`

Financial Information of Company

Financial Information of Company
Item	2018	2017
Net cash inflow of operation activities (thousand dollars)	`2,043,610`	`537,317`
Equity/Assets(%)	`54.84`	`54.65`
Liabilities/Assets(%)	`45.16`	`45.35`
Long-term Funds accounting for the ratio of real estates, plants and equipments(%)	`504.59`	`473.70`
Current ratio(%)	`62.43`	`73.79`
Quick ratio(%)	`28.66`	`38.28`
Return on assets(%)	`1.30`	`3.42`
Return on equity (%)	`1.11`	`4.94`
Netprofit margin(%)	`1.03`	`4.69`
Earningsper share(dollar)	`0.16`	`0.75`
Number of shares bythe end of theyear(share)	`1,875,811,292`	`1,821,176,011`

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

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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 130,000 tons landmark in 2018.

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 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 2019, there have been 191 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. Recently, EU asks again to set a deadline on the use of steel products that contain hexavalent chromium and other 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, Impact from competition, legal environment, and overall economy

To maintain stable growth, Yieh Phui is getting the fourth expansion done in Changshu Economic Development Zone, Jiangsu, of Yieh Phui (China). The total production of hot-dip galvanizing in

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Taiwan and China has reached 26 million tons per year, becoming the largest independent coated steel sheet producer in the world. The fourth expansion of Yieh Phui (China) includes a one-million ton pickling and tandem cold mill (PLTCM), 500,000 tons of continuous annealing line (CAL), a 400,000 tons of hot-dip galvanizing line that can produce galvannealed steel sheets and a 220,000 tons of coil coating line. In addition, under the third hot-dip galvanizing line, an aluminum coated equipment is added. The products of the expansion will supply the massive cars and appliances markets in China.

Yieh Phui and Yieh Phui (China) both can produce hot-dip galvanized, hot-dip 5% Al-Zn coated, and hot-dip 55% Al-Zn coated steel coils. In addition Yieh Phui (China) can produce hot-dip Al-Zi coated steel coils and prepainted hot-dip galvanized steel coils using the above materials as a base with all sorts of variety and sizes to satisfy the needs of one-stop shopping for customers worldwide. The competitiveness and profitability is second to none.

In recent years, under the dual-production base model formed by Yieh Phui and Yieh Phui (China), the Company has begun to reinforce dual-axis operations through developing export markets outside of China and the niche markets. In response to the environmental trends, we have also been actively developing green steel products, aiming to exceed the competitors in the industry through the blue ocean strategy

I.The impact of external environment to domestic market ：

Cheap imports of steel products poured into Taiwan, filling the market with low-price, low-quality materials that pose potential risks to people’s lives and the quality of public infrastructure. As a countermeasure, the government joined the domestic coated steel manufacturers to put forward anti-dumping complaints against China and South Korea in 2016. The 5-year-term anti-dumping duty has been inflicted since August 22, 2016. Nonetheless, attempts of low-price steel imports from other countries to enter the Taiwanese market still sustained, and the Company will continuously assess the effects on the domestic market.

Besides, the US started the implementation of section 232 on March 23, 2018 and has imposed 25% duty on imported steel products, arousing protectionism worldwide, impacting Taiwan’s steel business and rendering supply to exceed demand. The price competition is fierce and down-stream customers tend to be conservative. On the other hand, the trade war between China and the US has made the prospect of China’s economy and the steel market dubious. To avoid any adverse impact, many Taiwanese producers based in China have moved to southeastern Asia or back to Taiwan. The whole scenario needs time to observe.

For the domestic market, the investment has slowed down and the clampdown on farmhouses, building on farmland and tearing down on new violations have contributed to the lower the demand for galvanized steel products, hurting the domestic market. In contrast, the policy on electricity, green energy, solar/wind power all will increase the demand for related industries and help the sale of galvanized steel products.

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II. The impact of external environment to the market of China ：

China has rapidly expanded its steel production and exports. Many countries around the world have retaliated, forcing China to implement supply side reform. In 2016, China strongly cuts steel capacity; in 2017 China further enforced cuts on dirty steel and allows no production during winter. In 2018, it strengthened production cut coupled with the supervision on the real estate market, global protectionism and the trade between China and the US, weakening the down-stream demand and the economy. It is said that in 2019 China would remain bearish on steel production, but will stimulate the investment on infrastructure. Thus, the impact of the exports from China will reduce.

The state-run steel mills of China proved to be lucrative in 2018 and the profit once exceeded 1,000 RMB per ton. This incurs high costs to the downstream private cold rolling and galvanizing steel mills, rendering it hard to transfer costs to customers and unable to compete with state-owned BF ） steel mills producing cold rolled steel (including coated steel). Their burdens have become much heavier and grumbled for quite some time.

III. The impact of external environment to the export market ：

In the global market, due to anti-dumping of numerous countries and defensive measures against China’s dumping, Taiwan has been adversely affected, particularly the accusation on anti-dumping and anti-subsidy by the US. The most severe impact is the section 232 imposition of 25% tariff on steel and aluminum, causing the dramatic increase of the price of steel and reducing customers’ demand for imported products willing to purchase what is necessary. However, the Commerce Department of the US announced on February 19, 2019 that the rate for Yieh Phui will be 2.24%, much lower than the others being assessed, enhancing our competitiveness.

On February 2, 2019, EU implemented a final defensive measure, which will last for three years. To get quota to avoid the 25% tariff, there have already been low price steel flooding the Europe market. The precarious situation of global trade and Brexit has made IMF to lower down the economic growth of Eurozone 1.3%.

The costs of imports have been higher due to the trade war between the US and China continues coupled with the depreciation of the currencies of Southeast Asian countries. In the meantime, major competitors have increased capacity and lowered price to stimulate sales, making it hard for Taiwan steel mills.

Australia is completely exempt from section 232 and their steel mills will export more to the US, reducing their sales to the domestic market, good news for companies exporting to Australia.

In October 2018, World Steel Association (WSA) estimated that the global demand for steel will increase in the short term as well as 2019. However, the global steel market is still full of challenges because the growth for the economies China and other areas will slow down, though the US and emerging countries may increase.

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Crowe Horwath (TW) CPAs Member Crowe Horwath International 27F-1., No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City 80250, Taiwan Tel +886 7 3312133 Fax +886 7 3331710 www.crowe.tw

Independent Auditors’ Report

To the Board of Directors and Shareholders Yieh Phui Enterprise Co., Ltd.

Opinion

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

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

Basis for Opinion

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

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

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31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group's consolidated financial statements for the year ended December 31, 2018 are stated as follows:

Revenue recognition

Please refer to Note 4.22 to the consolidated financial statements for the accounting policy on revenue recognition; Note 5.2.A for major accounting estimates and assumptions of revenue recognition; and Note 6.34 for the details of revenue recognition.

Description of key audit matter

Due to fierce competition in the industry, the Group may be affected by the growth of its performance and competition in the same industry, which increases the risk of recognition of operating income. Therefore, we determined the revenue recognition for those product lines and customers with significant sales increase in 2018 as a key audit matter.

How the matter was addressed in our audit

Our key audit procedures included analyzing the industry trends, income types, product lines, and customer group's two-year operating income status to confirm whether there are abnormal circumstances or centralized transactions and identify possible risks; understanding and testing the internal control procedure to assess the effectiveness of the relevant internal control for revenue recognition; conducting a sample test on the sales transactions of the top ten new customers to confirm the authenticity of the sales transaction and executing sales cutoff test.

Valuation of inventory

Please refer to Note 4.8 to the consolidated financial statements for the accounting policy on inventories; Note 5.2.G for major accounting estimates and assumptions of inventories; and Note 6.7 for inventory valuation.

Description of key audit matter

The Group's inventory amounted to $10,347,451 thousand (net of $10,608,387 thousand of total inventory less $260,936 thousand of allowance for inventory valuation loss) as of 31 December 2018, which accounted for 11.89% of total assets. The inventory valuation is measured at the lower 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.

How the matter was addressed in our audit:

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

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Other Matters

We did not audit the financial statements of certain associates accounted for using equity method. Those financial statements were audited by the other independent accountants, whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the consolidated financial statements was based solely on the reports of the other independent accountants. Investments in these associates amounted to $4,779,519 thousand and $5,394,163 thousand, representing 5.49% and 6.18% of total consolidated assets as of December 31, 2018 and 2017, and the share of profit of these associates accounted for using equity mentod amounted to ($424,772) thousand and $82,282 thousand, representing (119.47%) and 4.56% of total consolidated income before income tax for the years then ended, respectively. In addition, other comprehensive income of these associates accounted for using equity method amounted to $27,756 thousand and ($85,997) thousand, representing (132.10%) and 17.04% of total consolidated comprehensive income for the years then ended, respectively.

We have also audited the standalone financial statements of Yieh Phui Enterprise Co., Ltd. as of and for the years ended December 31, 2018 and 2017 on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered

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material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in Our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financia1 statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethica1 requirements regarding independence, and to communicate with them all re1ationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those

-15-

matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Ling Wen Huang and Jen Yao Hsieh.

Crowe (TW) CPAs Kaohsiung, Taiwan Republic of China March 21, 2019

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YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

Amount % $5,522,926 7 285,944 - 532,786 1 1,650,972 2 1,990,296 2 1,166,014 1 - - - - 274,801 - 12,577 - 10,347,451 13 1,893,869 2 218,096 - 1,109,111 1 $25,004,843 29 $1,011,252 1 715,117 1 - - - - - - 15,492,641 18 41,118,529 46 776,270 1 452,363 1 583,658 1 7,534 - 1,350,617 2 114,465 - 434,304 - $62,056,750 71 $87,061,593 100 December 31, 2018	Amount % $7,704,426 9 49,534 - - - 1,389,916 2 2,511,585 3 759,908 1 175,452 - 192,200 - 277,705 - 12,308 - 9,993,445 12 3,032,728 3 - - 1,236,064 1 $27,335,270 31 $9,999 - - - 44,910 - 551,462 1 554,755 1 17,412,043 20 39,326,842 45 988,576 1 8,880 - 609,736 1 - - 69,570 - 63,827 - 252,478 - $59,893,078 69 $87,228,348 100 December 31, 2017	Amount % $16,001,636 19 837,598 1 7,437 - 1,410,498 2 1,156,449 1 1,245,748 1 - - 1,557,229 2 153,410 - 111,092 - 62,423 - 69 - 4,183,655 5 $26,727,244 31 $29,894,253 34 17,547 - 32,854 - 733,314 1 14,749 - $30,692,717 35 $57,419,961 66 $18,758,113 22 4,883,218 6 2,835,202 3 636,655 1 1,233,913 1 (559,232) (1) $27,787,869 32 1,853,763 2 $29,641,632 34 $87,061,593 100 December 31, 2018	December 31, 2017	December 31, 2017
Amount $5,522,926 285,944 532,786 1,650,972 1,990,296 1,166,014 - - 274,801 12,577 10,347,451 1,893,869 218,096 1,109,111 $25,004,843 $1,011,252 715,117 - - - 15,492,641 41,118,529 776,270 452,363 583,658 7,534 1,350,617 114,465 434,304 $62,056,750 $87,061,593	Amount $7,704,426 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	Amount $16,001,636 837,598 7,437 1,410,498 1,156,449 1,245,748 - 1,557,229 153,410 111,092 62,423 69 4,183,655 $26,727,244 $29,894,253 17,547 32,854 733,314 14,749 $30,692,717 $57,419,961 $18,758,113 4,883,218 2,835,202 636,655 1,233,913 (559,232) $27,787,869 1,853,763 $29,641,632 $87,061,593	Amount $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	%
				19 1 - - 2 1 - 2 - - - 2 4
				31
				34 - - 1 -
				35
				66
				21 6 3 - 3 (1)
				32 2
				34
				100

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

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YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Year Ended December 31	Year Ended December 31	Year Ended December 31
2018	% 100 92 8 5 2 - - 7 1 2 - (2) (1) (1) - - - - - - - - - - - - - - - - - - -	2017
Amount $73,856,189 67,944,988 $5,911,201 3,280,971 1,068,227 100,245 3,248 4,452,691 $1,458,510 $1,254,320 (20,238) (1,264,244) (1,072,802) ($1,102,964) $355,546 90,602 $264,944 ($32,943) 5,241 30,031 (3,043) ($125,682) - 74,598 (24,700) ($21,012) $243,932 $308,506 (43,562) $264,944 $293,049 (49,117) $243,932 $0.16		Amount $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 $0.73	%
			100 91
			9 3 2 - -
			5
			4
			- - (1) -
			(1)
			3 1
			2
			- - - - - - - -
			(1) 1
			2 -
			2
			1 -
			1

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

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YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

Capital Stock -	Common Stock	Capital Surplus		Retained Earnings	Retained Earnings		Other Adjustment Items	Other Adjustment Items		Non-controlling Interests	Total Equity
Shares (In Thousands)	Amount		Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translating Foreign Operations	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income	Unrealized Gain (Loss) on Available-for-sale Financial Assets	Cash Flow Hedges Reserve
1,718,090 - - 103,086	$17,180,905 - - 1,030,855	$4,737,131 - - -	$2,448,261 250,201 - -	$327,757 - - -	$3,010,948 (250,201) (687,236) (1,030,855)	($226,298) - - -	- $ - - -	$47,562 - - -	$11,385 - - -	$2,706,328 - - -	$30,243,979 - (687,236) -
103,086	1,030,855	-	250,201	-	(1,968,292)	-	-	-	-	-	(687,236)
- -	- -	- -	- -	- -	1,367,405 (19,140)	- (471,480)	- -	- 7,171	- (4,995)	(22,095) (16,182)	1,345,310 (504,626)
-	-	-	-	-	1,348,265	(471,480)	-	7,171	(4,995)	(38,277)	840,684
- - - -	- - - -	5,404 131,235 - -	- - - -	- - - -	(1,328) - (22,996) -	- - - -	- - - -	- - - -	- - - -	107 (131,235) 22,996 (765,749)	4,183 - - (765,749)
1,821,176 -	18,211,760 -	4,873,770 -	2,698,462 -	327,757 -	2,366,597 51,160	(697,778) -	- 123,526	54,733 (54,733)	6,390 -	1,794,170 3,515	29,635,861 123,468
1,821,176 - 54,635 - -	18,211,760 - 546,353 - -	4,873,770 - - - -	2,698,462 136,740 - - -	327,757 - - 308,898 -	2,417,757 (136,740) (546,353) (308,898) (364,235)	(697,778) - - - -	123,526 - - - -	- - - - -	6,390 - - - -	1,797,685 - - - -	29,759,329 - - - (364,235)
54,635	546,353	-	136,740	308,898	(1,356,226)	-	-	-	-	-	(364,235)
- -	- -	- -	- -	- -	308,506 (24,807)	- (26,025)	- 35,086	- -	- 289	(43,562) (5,555)	264,944 (21,012)
-	-	-	-	-	283,699	(26,025)	35,086	-	289	(49,117)	243,932
	- - - - -	6,930 2,518 - - -	- - - - -	- - - - -	34,815 (100,928) (45,924) - 720	- - - - -	- - - - (720)	- - - - -	- - - - -	204 98,410 45,924 (39,343) -	41,949 - - (39,343) -
1,875,811	18,758,113	4,883,218	2,835,202	636,655	1,233,913	(723,803)	157,892	-	6,679	1,853,763	$29,641,632

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

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YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

Item 1.CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for : Income and expenses having no effect on cash flows: Depreciation Amortization Expected credit loss Provision for (reversal of) allowance for doubtful accounts Net loss (gain) on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of associates and joint ventures Loss on disposal and retirement of property, plant and equipment Transfer of property, plant and equipment to expenses Loss (gain) on disposal of investments Impairment loss recognized on financial assets Impairment loss recognized on nonfinancial assets Others Total income and expenses having no effect on cash flows Changes in operating assets and liabilities Net changes in oprating assets: Decrease (increase) in financial assets held for trading Decrease (increase) in financial assets as at fair value through profit or loss Decrease (increase) in contract assets Decrease (increase) in notes receivable Decrease (increase) in accounts receivables Decrease (increase) in accounts receivables - related parties Decrease (increase) in construction contract receivable	Year Ended December 31	Year Ended December 31
	2018 $355,546 1,739,734 10,701 3,248 - (41,609) 1,264,244 (105,056) (34,213) 1,072,802 30,138 23,825 (115,938) - 42,889 (217) $3,890,548 - $ (23,452) (129,575) (261,060) 489,021 (406,959) -	2017
		$1,805,365 1,660,759 23,492 - (174) 35,418 1,120,195 (101,638) (73,952) (163,162) (309,013) 9,211 (15) 1,060 13,534 (217)
		$2,215,498
		$55,105 - - (659,449) (339,650) 161,920 277,871

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Item Decrease (increase) in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other financial assets Total net changes in operating assets Net changes in oprating liabilities: Increase (decrease) in contract 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 provisions Increase (decrease) in advance receipts Increase (decrease) in net defined benefit liabilities Total net changes in operating liabilities Total net changes in operating assets and liabilities Total adjustments Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from (used in) operating activities 2.CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Acquisition of debt investments with no active market Acquisition of financial assets carried at cost Proceeds from disposal of financial assets carried at cost Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Acquisition of subsidiaries (deducting cash received) Proceeds from capital reduction of investments accounted for using equity mothod	Year Ended December 31	Year Ended December 31
	2018 58,527 (302,601) 1,149,647 783 $574,331 (524,662) (660,045) 131,317 - (40,050) (3,013) (41) (240,074) ($1,336,568) ($762,237) $3,128,311 $3,483,857 102,796 82,213 (1,248,176) (84,094) $2,336,596 2,352 (605,179) - - - (95,105) 617,884 (30,375) 21,981	2017
		(17,074) (1,744,327) (860,320) (615)
		($3,126,539)
		- (277,756) (79,385) (15,071) (99,234) 31,836 (244,162) (132,743)
		($816,515)
		($3,943,054)
		($1,727,556)
		$77,809 97,381 179,347 (1,126,859) (689,738)
		($1,462,060)
		- - (348,450) ($68,396) $15 ($585,976) - 13 620

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Item Proceeds from disposal of non-current assets held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Dncrease (increase) in other receivables Acquisition of investment properties Decrease (increase) in other financial assets Decrease (increase) in other noncurrent assets Net cash used in investing activities 3.CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term loans Increase (decrease) in short - term notes and bills payable Repayment of bonds payable Increase in long-term loans Repayment of long - term loans Increase (decrease) in guarantee deposits received Increase (decrease) in other noncurrent liabilities Cash dividends paid Increase (decrease) in non - controlling interests Net cash generated from financing activities 4.EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 5.NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6.CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 7.CASH AND CASH EQUIVALENTS, END OF YEAR	Year Ended December 31	Year Ended December 31
	2018 62,423 (4,245,853) 20,471 (1,277,718) 46,072 (8,229) 75,532 4,213 ($5,411,531) $176,113 (150,000) - 7,711,366 (6,602,770) 110 (2,815) (364,235) (75,770) $691,999 $201,437 ($2,181,499) 7,704,425 $5,522,926	2017
		- (3,428,503) 361,381 (5,078) - (16,263) (191,567) 11,068
		($4,271,136)
		$5,311,016 310,000 (278,940) 9,984,035 (8,480,026) (4,100) (2,727) (687,236) (767,816)
		$5,384,206
		($79,766)
		($428,756) 8,133,181
		$7,704,425

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

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Crowe Horwath (TW) CPAs Member Crowe Horwath International 27F-1., No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City 80250, Taiwan Tel +886 7 3312133 Fax +886 7 3331710 www.crowe.tw

Independent Auditor’s Report

To the Board of Directors and Shareholders Yieh Phui Enterprise Co., Ltd.

Opinion

We have audited the accompanying standalone balance sheets of Yieh Phui Enterprise Co., Ltd. (the “Company") as of December 31, 2018 and 2017, and the standalone statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the standalone financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of the other independent accountants, as described in the other matters section of our report, the accompanying standalone financial statements present fairly, in all material respects, the standalone financial position of the Company as of December 31, 2018 and 2017, and its standalone financial performance and its standalone cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

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

Key audit matters for the Company's standalone financial statements for the year ended December 31, 2018 are stated as follows:

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Revenue recognition

Please refer to Note 4.16 to the standalone financial statements for the accounting policy on revenue recognition; Note 5.2.A for major accounting estimates and assumptions of revenue recognition; and Note 6.29 for the details of revenue recognition.

Description of key audit matter

Due to fierce competition in the industry, the Company may be affected by the growth of its performance and competition in the same industry, which increases the risk of recognition of operating income. Therefore, we determined the revenue recognition for those product lines and customers with significant sales increase in 2018 as a key audit matter.

How the matter was addressed in our audit

Our key audit procedures included analyzing the industry trends, income types, product lines, and customer Company's two-year operating income status to confirm whether there are abnormal circumstances or centralized transactions and identify possible risks; understanding and testing the interal control procedure to assess the effectiveness of the relevant internal control for revenue recognition; conducting a sample test on the sales transactions of the top ten new customers to confirm the authenticity of the sales transaction and executing sales cutoff test.

Valuation of inventory

Please refer to Note 4.7 to the standalone financial statements for the accounting policy on inventories; Note 5.2.G for major accounting estimates and assumptions of inventories; and Note 6.7 for inventory valuation.

Description of key audit matter

The Company's inventory amounted to $3,783,904 thousand (net of $3,799,790 thousand of total inventory less $15,886 thousand of allowance for inventory valuation loss) as of 31 December 2018, which accounted for 7.47% of total assets. The inventory valuation is measured at the lower 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.

How the matter was addressed in our audit:

Other Matters

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amounted to $4,644,045 thousand and $5,248,378 thousand, representing 9.17% and 10.30% of total standalone assets as of December 31, 2018 and 2017, and the share of profit of these associates accounted for using equity mentod amounted to ($417,282) thousand and $86,232 thousand, representing (144.43%) and 5.16% of total standalone income before income tax for the years then ended, respectively. In addition, other comprehensive income of these associates accounted for using equity method amounted to $27,596 thousand and ($83,553) thousand, representing (178.53%) and 17.11% of total standalone comprehensive income for the years then ended, respectively.

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

Management is responsible for the preparation and fair presentation of the standalone financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of the standalone financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors' Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit

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procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in Our auditors' report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the standalone financia1 statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Ling Wen Huang and Jen Yao Hsieh.

Crowe (TW) CPAs Kaohsiung, Taiwan Republic of China March 21, 2019

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YIEH PHUI ENTERPRISE CO., LTD. STANDALONE BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

Amount % $327,063 1 227,960 - 535,243 1 28,911 - 895,226 2 710,459 1 - - - - 196,643 - 16,960 - 6,508 - 3,783,904 8 278,228 1 218,096 - 285,559 1 $7,510,760 15 $790,797 2 710,093 1 - - - - - - 31,068,139 61 7,656,732 15 1,115,497 2 389,068 1 1,295,104 3 46,875 - 83,597 - $43,155,902 85 $50,666,662 100 December 31, 2018	Amount % $1,469,705 3 33,634 - - - 20,494 - 1,253,935 2 328,289 1 175,452 - 194,461 - 171,214 - 966,250 2 6,508 - 4,145,137 9 308,860 1 - - 180,149 - $9,254,088 18 $9,999 - - - 44,910 - 549,321 1 433,401 1 30,713,470 60 8,106,718 16 1,332,100 3 366,936 1 43,932 - 857 - 86,503 - $41,688,147 82 $50,942,235 100 December 31, 2017	Amount % $7,628,382 16 499,472 1 1,998 - 826,831 2 626,515 1 710,534 1 - - 474,542 1 131,576 - 67,958 - 62,423 - - - 1,000,945 2 $12,031,176 24 $10,216,633 20 16,825 - 612,159 1 2,000 - $10,847,617 21 $22,878,793 45 $18,758,113 37 4,883,218 10 2,835,202 6 636,655 1 1,233,913 2 (559,232) (1) $27,787,869 55 $50,666,662 100 December 31, 2018	December 31, 2017	December 31, 2017
Amount $327,063 227,960 535,243 28,911 895,226 710,459 - - 196,643 16,960 6,508 3,783,904 278,228 218,096 285,559 $7,510,760 $790,797 710,093 - - - 31,068,139 7,656,732 1,115,497 389,068 1,295,104 46,875 83,597 $43,155,902 $50,666,662	Amount $1,469,705 33,634 - 20,494 1,253,935 328,289 175,452 194,461 171,214 966,250 6,508 4,145,137 308,860 - 180,149 $9,254,088 $9,999 - 44,910 549,321 433,401 30,713,470 8,106,718 1,332,100 366,936 43,932 857 86,503 $41,688,147 $50,942,235	Amount $7,628,382 499,472 1,998 826,831 626,515 710,534 - 474,542 131,576 67,958 62,423 - 1,000,945 $12,031,176 $10,216,633 16,825 612,159 2,000 $10,847,617 $22,878,793 $18,758,113 4,883,218 2,835,202 636,655 1,233,913 (559,232) $27,787,869 $50,666,662	Amount $8,180,776 649,616 1,751 - 635,683 529,357 14,397 514,312 - 67,890 - 1,275,342 671,777 $12,540,901 $9,683,048 227,145 647,450 2,000 $10,559,643 $23,100,544 $18,211,760 4,873,770 2,698,462 327,757 2,366,597 (636,655) $27,841,691 $50,942,235	%
				16 1 - - 1 1 - 1 - - - 3 1
				24
				20 - 1 -
				21
				45
				35 10 5 1 5 (1)
				55
				100

The accompanying notes are an integral part of the financial statements. -27-

YIEH PHUI ENTERPRISE CO., LTD.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Year Ended December 31	Year Ended December 31	Year Ended December 31
2018	% 100 92 8 4 1 5 3 4 - (1) (5) (2) 1 - 1 - - - - - - - - 1	2017
Amount $30,026,324 27,587,558 $2,438,766 1,184,854 377,825 1,562,679 $876,087 $1,088,806 128,970 (442,745) (1,362,207) ($587,176) $288,911 (19,595) $308,506 ($15,660) 5,410 21,455 926 - (50,436) (24,700) ($15,457) $293,049 $0.16		Amount $29,179,218 25,389,583 $3,789,635 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 $0.73	%
			100 87
			13 7 1
			8
			5
			1 - (1) 1
			1
			6 1
			5
			- - - - - (2) -
			(2)
			3

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

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YIEH PHUI ENTERPRISE CO., LTD.

STANDALONE STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

Capital Stock -	Common Stock	Capital Surplus		Retained Earnings	Retained Earnings		Other Adjustment Items	Other Adjustment Items		Total Equity
Shares (In Thousands)	Amount		Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translating Foreign Operations	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income	Unrealized Gain (Loss) on Available-for-sale Financial Assets	Cash Flow Hedges Reserve
1,718,090 - - 103,086	$17,180,905 - - 1,030,855	$4,737,131 - - -	$2,448,261 250,201 - -	$327,757 - - -	$3,010,948 (250,201) (687,236) (1,030,855)	($226,298) - - -	- $ - - -	$47,562 - - -	$11,385 - - -	$27,537,651 - (687,236) -
103,086	1,030,855	-	250,201	-	(1,968,292)	-	-	-	-	(687,236)
- -	- -	- -	- -	- -	1,367,405 (19,140)	- (471,480)	- -	- 7,171	- (4,995)	1,367,405 (488,444)
-	-	-	-	-	1,348,265	(471,480)	-	7,171	(4,995)	878,961
- - -	- - -	5,404 131,235 -	- - -	- - -	(1,328) - (22,996)	- - -	- - -	- - -	- - -	4,076 131,235 (22,996)
1,821,176 -	18,211,760 -	4,873,770 -	2,698,462 -	327,757 -	2,366,597 51,160	(697,778) -	- 123,526	54,733 (54,733)	6,390 -	27,841,691 119,953
1,821,176 - 54,635 - -	18,211,760 - 546,353 - -	4,873,770 - - - -	2,698,462 136,740 - - -	327,757 - - 308,898 -	2,417,757 (136,740) (546,353) (308,898) (364,235)	(697,778) - - - -	123,526 - - - -	- - - - -	6,390 - - - -	27,961,644 - - - (364,235)
54,635	546,353	-	136,740	308,898	(1,356,226)	-	-	-	-	(364,235)
- -	- -	- -	- -	- -	308,506 (24,807)	- (26,025)	- 35,086	- -	- 289	308,506 (15,457)
-	-	-	-	-	283,699	(26,025)	35,086	-	289	293,049
	- - - -	6,930 2,518 - -	- - - -	- - - -	34,815 (100,928) (45,924) 720	- - - -	- - - (720)	- - - -	- - - -	41,745 (98,410) (45,924) -
1,875,811	18,758,113	4,883,218	2,835,202	636,655	1,233,913	(723,803)	157,892	-	6,679	$27,787,869

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

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YIEH PHUI ENTERPRISE CO., LTD.

STANDALONE STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

Item 1.CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for : Income and expenses having no effect on cash flows: Depreciation Net loss (gain) on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of associates, subsidiaries and joint ventures Loss on disposal and retirement of property, plant and equipment Transfer of property, plant and equipment to expenses Loss (gain) on disposal of investments Impairment loss recognized on financial assets Others Total income and expenses having no effect on cash flows Changes in operating assets and liabilities Net changes in oprating assets: Decrease (increase) in financial assets held for trading Decrease (increase) in financial assets as at fair value through profit or loss Decrease (increase) in contract assets Decrease (increase) in notes receivable Decrease (increase) in accounts receivables Decrease (increase) in accounts receivables - related parties Decrease (increase) in construction contract receivable Decrease (increase) in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Total net changes in operating assets	Year Ended December 31	Year Ended December 31
	2018 $288,911 556,096 (21,454) 442,745 (20,798) (33,688) 1,362,207 36,616 186 (37,520) - 9,064 $2,293,454 - $ (19,256) (129,771) (8,421) 329,877 (383,023) - 55,153 361,233 30,632 $236,424	2017
		$1,669,761 555,656 912 396,624 (31,238) (73,652) (515,734) 27,786 8,539 (15) 1,060 19,995
		$389,933
		$58,988 - - (19,714) (7,385) (146,545) 277,083 (37,716) (495,122) (24,559)
		($394,970)

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Item Net changes in oprating liabilities: Contract 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 provisions Increase (decrease) in advance receipts Increase (decrease) in net defined benefit liabilities Total net changes in operating liabilities Total net changes in operating assets and liabilities Total adjustments Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities 2.CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Acquisition of debt investments with no active market Acquisition of financial assets carried at cost Proceeds from disposal of financial assets carried at cost Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Proceeds from capital reduction of investments accounted for using equity mothod Proceeds from disposal of non-current assets held for sale Acquisition of property, plant and equipment Decrease (increase) in refundable deposits Decrease (increase) in other receivables - related parties Acquisition of investment properties Decrease (increase) in other financial assets	Year Ended December 31	Year Ended December 31
	2018 (460,433) (9,168) 181,177 - (33,920) (8,277) - (50,951) ($381,572) ($145,148) $2,148,306 $2,437,217 22,651 83,032 (441,783) (57,507) $2,043,610 2,352 (481,483) - - - (3,277,429) 617,884 774,713 62,423 (231,795) (1,251,172) 950,000 (2,454) (151,428)	2017
		- (6,365) (170,702) (15,068) (42,864) 27,619 (232,972) (48,044)
		($488,396)
		($883,366)
		($493,433)
		$1,176,328 29,540 179,047 (401,853) (445,746)
		$537,316
		- - (262,747) ($68,397) $15 ($1,751,426) - - - (178,732) (40,088) (640,000) (16,263) (46,332)

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Item Decrease (increase) in other noncurrent assets Net cash used in investing activities 3.CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term loans Increase (decrease) in short-term notes and bills payable Increase in long-term loans Repayment of long-term loans Cash dividends paid Net cash generated from (used in) financing activities 4.NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5.CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 6.CASH AND CASH EQUIVALENTS, END OF YEAR	Year Ended December 31	Year Ended December 31
	2018 2,906 ($2,985,483) ($552,394) (150,000) 1,105,000 (239,140) (364,235) ($200,769) ($1,142,642) 1,469,705 $327,063	2017
		2,906
		($3,001,064)
		$1,994,908 310,000 4,600,000 (3,830,140) (687,236)
		$2,387,532
		($76,216) 1,545,921
		$1,469,705

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

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2. The Auditing Committee Audits the Final Financial Statementsn of 2018

Report of the Auditing Committee

Yieh Phui Enterprise Co., Ltd

The board of directors has prepared the 2018 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.

the 2019 the Stockholder’s Meeting of Yieh Phui

Chairman of the Auditing Committee:Sun Chin-Su

March 21, 2019

3. The Remuneration of the employees and directors for 2018

Explan : 1. The Remuneration of the employees and directorsn for 2018 had been approved by the board of directors on March 21, 2019 and to be paid in cash.

The remuneration for the employees is NT$579,561
The remuneration for the directors is NT$144,890

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Annex 1

YIEH PHUI ENTERPRISE CO., LTD

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

	Before and After Revision	Before and After Revision	Before and After Revision
	BEFORE THE REVISION		AFTER THE REVISION
	Article 3 The applicability of the “assets” defined in the “Procedures for Handling Acquisition and Disposal of Assets:” 1. Investments of stocks, bonds, corporate bonds, financial bonds, fund-based marketable securities, depositary receipts, call (put) warrants, beneficial securities, and assets-based securities. 2. Real estate (including land, houses and buildings, investment real estate,land use rights,and inventories of construction industry) and equipment. 3. Membership card. 4. Intangible assets of patents, copyrights, trademarks, and charters. 5. Claims (including accounts receivable, foreign exchange discount and loans, and delinquent loans) of financial institutions. 6. Derivatives. 7. Acquisition or disposal of assets through legal merger, split, acquisition, or transfer of shares. 8. Other important assets.		Article 3 The applicability of the “assets” defined in the “Procedures for Handling Acquisition and Disposal of Assets:” 1. Investments of stocks, bonds, corporate bonds, financial bonds, fund-based marketable securities, depositary receipts, call (put) warrants, beneficial securities, and assets-based securities. 2. Real estate (including land, houses and buildings, investment real estate, and inventories of construction industry) and equipment. 3. Membership card. 4. Intangible assets of patents, copyrights, trademarks, and charters. 5. Right-of-use assets. 6. Claims (including accounts receivable, foreign exchange discount and loans, and delinquent loans) of financial institutions. 7. Derivatives. 8. Acquisition or disposal of assets through legal merger, split, acquisition, or transfer of shares. 9. Other important assets.
	Article 4 Terminology defined in the “Procedures for Handling Acquisition and Disposal of Assets:” 1. 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. 2. Acquisition or disposal of assets by legal merger,split,acquisition,or transfer of		Article4 Terminology defined in the “Procedures for Handling Acquisition and Disposal of Assets:” 1.Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term"forward contracts"does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) contracts. 2. Acquisition or disposal of assets by legal merger,split,acquisition,or transfer of shares:

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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”).

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 156-3 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 Firms.” 4. Professional appraisers: refers to real estate appraiser or others engaged in real estate and equipment appraisal business in accordance with the law.
The related party and subsidiaries: The identity should be verified in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Firms.” 4. Professional appraisers: refers to real estate appraiser or others engaged in real estate and equipment appraisal business in accordance with the law.
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
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

dates or the competent authorities approval 6. Investment in Mainland China: refers to the date whichever is sooner (earlier) shall investment in China in accordance with the prevail Regulations Governing Licensing Investment or 6. Investment in Mainland China: refers to Technical Cooperation in Mainland China of the the investment in China in accordance with Investment Commission the Regulations Governing Licensing 7. Investment professional: Refers to financial Investment or Technical Cooperation in holding companies, banks, insurance companies, Mainland China of the Investment bill finance companies, trust enterprises, securities Commission firms operating proprietary trading or underwriting business, futures commission merchants operating proprietary trading business, securities investment trust enterprises, securities investment consulting enterprises, and fund management companies, that are lawfully incorporated and are regulated by the competent financial authorities of the jurisdiction where they are located. 8. Securities exchange: "Domestic securities exchange" refers to the Taiwan Stock Exchange Corporation; "foreign securities exchange" refers to any organized securities exchange market that is regulated by the competent securities authorities of the jurisdiction where it is located. Article5 Article5 For the appraisal report and the opinions of For the appraisal report and the opinions of CPAs,

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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.		attorneys, or security underwriters collected by the Company, the relevant appraisers and appraising personnel, CPAs, attorneys, or security underwritersshall meet the following requirements: 1. May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed since completion of service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received. 2. May not be a related party or de facto related party of any party to the transaction. 3. If the company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other. When issuing an appraisal report or opinion, the personnel referred to in the preceding paragraph shall comply with the following: 1. Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience, and independence. 2. When examining a case, they shall appropriately plan and execute adequate working procedures, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The related working procedures, data collected, and conclusion shall be fully and accurately specified in the case working papers. 3. They shall undertake an item-by-item evaluation of the comprehensiveness, accuracy, and reasonableness of the sources of data used, the parameters, and the information, as the basis for issuance of the appraisal report or the opinion. 4. They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that they have evaluated and found that the information used is reasonable and accurate, and that they have complied with applicable laws and regulations.
Article 6 Proceduresfor HandlingAcquisition and		Article 6 Proceduresfor HandlingAcquisition andDisposal

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Disposal of Assets

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.
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.
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.

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

of Assets

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 intangible assets, real estate, and equipment or right-of-use assets thereof or memberships conducted in accordance with the Company’s internal control system general management and fixed assets, plants, and equipment revolving procedures.

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

(1) Acquisition: The Company’s acquisition of intangible assets, real estate, and equipment or right-of-use assets thereof or membership cards ,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 intangible assets, real estate, and equipment or right-of-use assets thereof or membership cards, 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.

Article 7

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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. 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. 2. 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 1. 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. 2. 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

and submitted to the board of directors for a resolution. If approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting.

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 or right-of-use asset thereof or securities not used in business operation and marketable securities investment of the Company and its subsidiaries is subject to the following restrictions:

The acquisition of real estate or right-of-use asset thereof or securities 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.

Article9 The procedures for handling acquisition and disposal of assets by the subsidiary of the Company 1. 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. 2. 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. 3. If the subsidiaries stated in the preceding

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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 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.
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. 4. The date of the report issued by a professional appraiser may not be more

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

Article 10

The Company’s acquisition or disposal of real estate ,equipment, or right-of-use assets except for the transactions with domestic 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. the same procedure shall also be followed whenever there is any subsequent change to the terms and conditions of the transaction.
Two professional appraisal services must be solicited for a transaction amount more than NT$1 billion.
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.

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

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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. 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 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. 5. 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.

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.

Article 12

The Company’s acquisition or disposal of intangible assets, or right-of-use assets thereof or memberships except for the transactions with domestic 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 15

The Company’s acquisition or disposal of real estate or right-of-use assets， 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 or right-of-use assets 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 domestic 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. 2. 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 or

right-of-use assets 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.
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.
The appraisal report received from a professional appraiser or an opinion from the CPA in accordance with the requirements stated in the

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The appraisal report received from a professional appraiser or an opinion from the CPA in accordance with the requirements stated in the last Article. 7. The restrictions and other important stipulations of this transaction. 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.

last Article.

The restrictions and other important stipulations of this transaction. 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. With respect to the types of transactions listed below, when to be conducted between The company and its subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, the company's board of directors may delegate the board chairman to decide such matters when the transaction is within NT$500 million and have the decisions subsequently submitted to and ratified by the next board of directors meeting: . 1.Acquisition or disposal of equipment or right-of-use assets thereof held for business use. 2.Acquisition or disposal of real property right-of-use assets held for business use.

Article 16

The Company should have the reasonableness of transaction cost of the real estate or right-of-use assets acquired from the related party assessed in accordance with the following methods: 1. 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 or leased jointly, the transaction cost of land and housing can be calculated respectively in accordance with any of the methods listed in the

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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.

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. Article 17

If the price assessed in accordance with Paragraph 1 and Paragraph 2 is lower than the 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:

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

(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

preceding paragraph.

The cost of the real estate or right-of-use assets acquired from the related party should be assessed in accordance with the requirements of preceding two paragraphs; also, a CPA should be commissioned to review and express an opinion specifically.

The real estate or right-of-use assets acquired from the related party in one of the following circumstances should be processed in accordance with preceding paragraph and it is not subject to the requirements of the last three paragraphs: 1. The related party has acquired the real estate or right-of-use assets by inheritance or donation. 2. The related party has an agreement signed to acquire the real estate or right-of-use assets over 5 years ago from the current transaction.

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. The real property right-of-use assets for business use are acquired by the company with its subsidiaries, or by its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital.

Article 17

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

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whichever is lower. year for the similar floorage. In addition, the (2) The other floors of the same underlying trading conditions are equivalent according to the premise and land or the transaction assessment of the reasonable floor or regional conducted by a non-related party in the price spread in a general real estate trade or adjacent area within one year for the similar leasing trade. floorage. In addition, the trading conditions 2. Prove the trading conditions for the real estate are equivalent according to the assessment or obtaining real property right-of-use assets of the reasonable floor or regional price through leasing, acquired from the related party is spread in a general real estate trade. equivalent with the transaction conducted by a (3) The other floors of the same underlying non-related party in the adjacent area within one premise or land or the leasing conducted by year for the same floorage. a non-related party within one year; also, The successful transaction conducted in the the trading conditions are equivalent adjacent area stated in the preceding paragraph according to the assessment of the refers to the real estate on the same or adjacent reasonable floor price spread in a general street that is less than 500m in radius distanced real estate leasing. from the underlying object or it is with the similar 2. Prove the trading conditions for the real announced present value. The “same floorage” estate acquired from the related party is means that the area of the real estate transaction equivalent with the transaction conducted conducted by the non-related party may not be by a non-related party in the adjacent area more than 50% smaller than the underlying within one year for the same floorage. object. The “within one year” refers to one year The successful transaction conducted in the prior to the baseline date for the acquisition of the adjacent area stated in the preceding real estate or right-of-use assets. 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

A 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

Article 18

If the price of the real estate or right-of-use assets acquired by the Company from the related party that is assessed in accordance with preceding two paragraphs is lower than the trading price, it should be handled in accordance with the follows: 1. For the spread between the real estate or right-of-use assets 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

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proportionally to the shareholding ratio in Act. accordance with Article 41 Paragraph 1 of 2. An independent director of the Audit the Securities and Exchange Act. Committee should have it handled in accordance 2. An independent director of the Audit with Article 218 of the Company Act. Committee should have it handled in 3. Preceding two paragraphs should be presented accordance with Article 218 of the in the shareholders meeting; also, the transaction Company Act. details should be disclosed in the annual report 3. The processes referred to in Paragraph 1 and prospectus. and Paragraph 2 should be presented in the The special reserve appropriated in accordance shareholders meeting; also, the transaction with the requirements stated in the preceding details should be disclosed in the annual paragraph cannot be used until the assets report and prospectus. purchased or leased at high price are with The special reserve appropriated in allowance for loss in valuation appropriated or it accordance with the requirements stated in is disposed, or, the leasing contract has been the preceding paragraph cannot be used terminated with proper compensation restitution until the assets purchased at high price are made, or without evidence of unreasonableness, with allowance for loss in valuation and with the consent of the Financial Supervisory appropriated or it is disposed, or, with Commission. proper compensation restitution made, or The acquisition of real estate or right-of-use assets without evidence of unreasonableness, and from the related party that is with a breach of with the consent of the Financial regular operation evidenced should be processed Supervisory Commission. in accordance with the preceding two paragraphs. 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.rticle 18

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

Article 32

The Company’s acquisition or disposal of real estate or right-of-use assets 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 or right-of-use assets 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 domestic 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.

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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.
The cumulative acquisition or disposal (independent cumulative acquisition or cumulative disposal) amount of the same real estate development project within one year.
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
The acquisition or disposal of the assets or right-of-use 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 and furthermore the transaction counterparty is not a related party 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) Domestic 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:

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 or right-of-use assets 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 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.

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designated by the Financial Supervisory 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.

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Annex 2

YIEH PHUI ENTERPRISE CO., LTD

Comparison Table for the “Operation Procedures for Loans to Others and Endorsements”

Before and After Revision

BEFORE THE REVISION AFTER THE REVISION Article 3 Article 3 The Company’s loaning of funds and The Company’s loaning of funds and making making endorsements/guarantees should endorsements/guarantees should be processed in be processed in accordance with the accordance with the “Procedures for Loaning of “Procedures for Loaning of Funds and Funds and Making of Endorsements/Guarantees,” Making of Endorsements/Guarantees,” unless otherwise provided by other related unless otherwise provided by other law and financial law and regulations that shall prevail. regulations that shall prevail. Article 4 Article 4 In terms of the objects for the loaning of In terms of the objects for the loaning of funds by funds by the Company, according to Article the Company, according to Article 15 of the 15 of the Company Law, the Company’s Company Law, the Company’s funds may not be funds may not be loaned to the loaned to the shareholders or any other except shareholders or any other except for in the for in the following circumstances: following circumstances: I. The companies or firms that have business deals I. The companies or firms that have conducted with the Company. business deals conducted with the II. The companies or firms that are with the need Company. of short-term financing. II. The companies or firms that are with the III. The foreign companies with 100% voting need of short-term financing. shares held by the Company directly or indirectly; III. The foreign companies with 100% voting The so-called “short-term” in the preceding shares held by the Company directly or paragraph meant for one year; however, if the indirectly; Company’s operating cycle is longer than one The so-called “short-term” in the preceding year, it is subject to the business cycle. paragraph meant for one year; however, if The financing period of the foreign companies the Company’s operating cycle is longer with 100% voting rights held by the Company than one year, it is subject to the business directly or indirectly or foreign companies directly cycle. and indirectly owned by Yieh Phui with 100% The financing period of the foreign voting rights,is subject to the requirements of companies with 100% voting shares held by Article 6. the Company directly or indirectly is subject The loaning of funds for the business transactions to the requirements of Article 6. conducted between the Company and other The loaning of funds for the business companies or firms should be processed in transactions conducted between the accordance with Article 5 Paragraph 1 Clause 2. Company and other companies or firms The loaning of funds for short-term financing is should be processed in accordance with limited to the following circumstances: Article 5 Paragraph 1 Clause 2. The loaning (I) The short-term financing needed for business of funds for short-term financing is limited operation of the company with over 20% shares to the following circumstances: held by the Company.

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(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 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

(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 rights held by the Company directly or indirectly or foreign companies directly and indirectly owned by Yieh Phui with 100% voting rights,.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 rights held by the Company directly or indirectly or

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foreign companies with 100% voting shares foreign companies directly and indirectly owned held by the Company directly or indirectly by Yieh Phui with 100% voting rights,.may not may not exceed 10 years in response to the exceed 10 years in response to the need of need of business operation. 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 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

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 that are sufficient to determine the amount of loans or the endorsed, , 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

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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.

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 approved by the auditing committee and then implemented with the approval of 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. 2. Detailed review procedures

The loaning of funds between the Company its subsidiaries or among the subsidiaries should and its subsidiaries or among the be presented to the Board of Directors for subsidiaries should be presented to the resolutions in accordance with the provisions in Board of Directors for resolutions in the preceding paragraph. In addition, the accordance with the provisions in the Chairman may be authorized to grant certain preceding paragraph. In addition, the loans amount to one borrower that is resolved in Chairman may be authorized to grant the board meeting distributed in installments or certain loans amount to one borrower that revolving use within one year. is resolved in the board meeting distributed The so-called “certain loan amount” in the in installments or revolving use within one preceding paragraph, unless otherwise in year. compliance with Article 5 Paragraph 1 Clause 4, The so-called “certain loan amount” in the means that the Company or its subsidiaries are preceding paragraph, unless otherwise in authorized to grant loans to one enterprise for an compliance with Article 5 Paragraph 1 amount limited to 10% of the enterprise’s net Clause 4, means that the Company or its worth in the most recent financial statements. subsidiaries are authorized to grant loans to 2. Detailed review procedures 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. 2. Detailed review procedures ……….. Article 12 Article 12 The Company’s “Procedures for Making of The Company’s “Procedures for Making of Endorsements/Guarantees” Endorsements/Guarantees” I. The Company’s decision-making unit and I. The Company’s decision-making unit and levels levels of authority for handling the making of authority for handling the making of of endorsements/guarantees: endorsements/guarantees: (I) The Company shall have the (I) The Company shall have the endorsements/guarantees approval endorsements/guarantees approval handled in

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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

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) If the company has to endorse over the limit designated on Item 9,…………………………

………………………………………………..

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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,………………………… 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 10th 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:

(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

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 10th 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, the book value of the investment determined by the equity method, and loaning of fund balance to one

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	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 handled bytheparent companyinstead.		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 handled by the parent company instead.
	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		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 before submitted to the board of directors for approval, it has to be approved by the auditing committee If it is not approved by the auditing committee with a majority vote, it can be done with the approval of the board of directors with two thirds of the members present. However, the minutes of the board of the directors have to specify the decision of the auditing committee. The whole members of the aforementioned auditing committee and the board of the directors are

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those still active. This operation procedures stipulates what must be approved by the board of the directors, for those to be decided by the board of the directors may follow the rule of Item 2.

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Annex 3

YIEH PHUI ENTERPRISE CO., LTD Comparison Table for the “Corporate Charter” Before and After Revision

BEFORE THE REVISION Chapter 1 The Company was organized pursuant to the limited corporation provisions of the Company Act and named as “Yieh Phui Enterprise Co., Ltd.”

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

AFTER THE REVISION

Chapter1 The Company was organized pursuant to the limited corporation provisions of the Company Act and the English named as “Yieh Phui Enterprise Co., Ltd.” Article 27: The company has a general managers. Their commission, decommission and remuneration all follow Item 29 of the Corporation Law.

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, 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. 2. 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. 3. Types of dividends: Assess capital needs in accordance with the

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, 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. 2. 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. when the board of the directors decides to distribute retained earnings,if it is to be

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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.		done by issuing new shares, it has to be approved by the stockholders’meeting. Based on the Corporation Law Article 240 Item 5, the board of the directors may distribute dividends and bonuses in whole or in part in cash after a resolution has been adopted by a majority vote with two thirds of the members present; such a decision should report to 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.
Article 31-1: Apended article		Article 31-1: Based on Article 241 of the Corporation Law, if Yieh Phui is to distribute the whole or part of its legal reserve and capital reserve, by issuing new shares or cash prorata to the holdings of the stockholders, The following is to be observed. If cash dividend is issued, the board of the directors may do so with two thirds of members present with a majority vote and report to the stockholders’meeting. If that is done by issuing new shares, the distribution has to be done with the approval of the stockholders’meeting

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Annex 4

YIEH PHUI ENTERPRISE CO., LTD.

Position Statements of Release the Prohibition on Directors from Participation in Competitive Business

	Business	Business
Name	The Position of the Company and the Name of the Company
Lin I-Shou	Chairman	Yieh United Steel Corp. Ltd.
	Director	Yieh Hsing Enterprise Co., Ltd. Yieh Mau Corp.. Yieh Hong Enterprise Co., Ltd.
Wu Lin-Maw	Chairman	Yieh Hsing Enterprise Co., Ltd Asiazon Co., Ltd. Pt. Genba Mvlti Mineral Pt. Genba Indo Resources
	Director	E United Japan Co., Ltd. Pt. Yieh Ferro Indonesia LianSo(H.K)Co.,Ltd.
Liang Pyng - Yeong	Director	Yieh United Steel Corp. Ltd. Tangeng Iron Works Co., Ltd.
Huang Ching-Tsung	Director	Yieh Mau Corp Yeou Yih Steel Co., Ltd. Yieh Hong Enterprise Co., Ltd. Tangeng Iron Works Co., Ltd.
Sun Chin-Su	Independent Director	Yieh Hsing Enterprise Co., Ltd.
Yang Der-Yuan	Independent Director	Yieh Hsing Enterprise Co., Ltd.
Chang Wen-Yi	Independent Director	Yieh Hsing Enterprise Co., Ltd.

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AI assistant

YP — Annual Report 2018

51950_rns_2019-07-08_31dfb49d-96c3-48cf-a0b9-e27194c3e262.pdf

YIEH PHUI ENTERPRISE CO., LTD.

Time: 9:30 AM, June 20, 2019

III. Company Report

IV. Matters to Be Approved

4. To be approved.

Proposal 2 ： Proposed by the board of directors

Yieh Phui Enterprise Co., Ltd

Earnings Distribution Table

V. Matters for Discussion

VI Election

Election result ：

VII. Other Matters

VIII. Extempore Motions : None

IX Adjournment

1. The Operation of 2018

The Outline of the Operation of 2018

1. The Performance of Business Plan ：

Consolidated Information of Financial Statements

Financial Information of Company

Independent Auditors’ Report

Opinion

Basis for Opinion

Revenue recognition

Description of key audit matter

How the matter was addressed in our audit

Valuation of inventory

Description of key audit matter

How the matter was addressed in our audit:

Other Matters

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Independent Auditor’s Report

Opinion

Basis for Opinion

Key Audit Matters

Revenue recognition

Description of key audit matter

How the matter was addressed in our audit

Valuation of inventory

Description of key audit matter

How the matter was addressed in our audit:

Other Matters

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

Auditors' Responsibilities for the Audit of the Standalone Financial Statements

YIEH PHUI ENTERPRISE CO., LTD. STANDALONE BALANCE SHEETS

YIEH PHUI ENTERPRISE CO., LTD.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME

YIEH PHUI ENTERPRISE CO., LTD.

STANDALONE STATEMENTS OF CHANGES IN EQUITY

YIEH PHUI ENTERPRISE CO., LTD.

STANDALONE STATEMENTS OF CASH FLOWS

Report of the Auditing Committee

Yieh Phui Enterprise Co., Ltd

3. The Remuneration of the employees and directors for 2018

YIEH PHUI ENTERPRISE CO., LTD

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

Disposal of Assets

Article 8

Article 10

Article 12

Article 18

Article 32

Article 32

YIEH PHUI ENTERPRISE CO., LTD

Comparison Table for the “Operation Procedures for Loans to Others and Endorsements”

Before and After Revision

Article 6

YIEH PHUI ENTERPRISE CO., LTD Comparison Table for the “Corporate Charter” Before and After Revision

AFTER THE REVISION

YIEH PHUI ENTERPRISE CO., LTD.

YP Annual Report 2018

1. The Performance of Business Plan `：`