STYRENE MONOMER CORPORATION

Chairmen Presentation

Ticker: 1310.TT EGM: 31st Jan, 2019 Presenters: Wu Yiqing, Lin Wenyuan Company Introduction

p-Diethylbenzene Styrene Monomer 7k tons per year 340k tons per year 1.8%

Toluene TSMC (1310.TT) 95.4% 8.7k tons per year (operating revenue) 1.3%

Established in 1979, TSMC’s facilities located in Linyuan, . Petrochemicals amounted to 96% of its operating revenue and is mainly derived from SM. Apart from its core petrochemical business, TSMC has diversified into Construction, Electronics, and Tourism, collectively contributing 5% to total consolidated operating revenue.

Source: TSMC annual report and company website 2 Agenda

1 Executive Summary

2 Our Achievements

3 Sun’s Nomination

4 Our Nominations

5 Conclusions Executive Summary

✓ The board election on Jan 31, 2019 is NOT about Dissident shareholders vs. the Company’s management ✓ This is to fix TSMC’s long-standing corporate governance issue and to further enhance TSMC’s performance

Chairmen presentation 4 Issues traced back to 2010

Loss Making Turn to Profit Continued 2010 2013 making 2016 Profit 2019

th th 11 Term: 9 seats 2010.6.23~2013.4.2 12th Term: 9 seats 2013.4.3~2016.4.2 13 Term: 9 seats 2016.4.3~2019.4.2 • By leveraging TSMC’s cross-holding structure, • Mr. Sun controlled 6 seats, and had Mr Lin • Mr. Sun controlled 4 seats, and had Ms. Wu Mr. Sun Tiehan obtained TSMC’s significant Wenyuan served as Chairman Yiqing served as Chairwoman th shares via acquiring TSM5C’s subsidiaries – • Mr Lin Wenyuan was expelled on 2016. 3.21 • Th election to 14 term will be held on Jan 31, Wonderland, Yuanjie, and Yujie. Mr. Sun (12 days before the term expired). 2019 controlled 5 seats of the 11th term board. • During the 3 year term, TSMC experienced 5 chairmen who are all Mr. Sun’s substitutes.

Under the 5-chairmen leadership: Under Mr. Lin’s Board leadership: Under Ms. Wu’s Board leadership:

• TSMC invested in Tienlai resort & spa in • TSMC started to review its cost structure and • Focus to manage the investment loss from Yanminshan (Tourism) focus on cost saving. various investments. • TSMC invested in Jingshuo Construction. • The Board approves Cogeneration CHP • The number of subsidiaries was reduced from (Construction) initiatives and which was completed in 45 to 9. • Both investment were later investigated and November 2015, operated in 2016 and • Chairwoman Wu disagree with Mr. Sun’s charged by the prosecutors. provided strong foundation to future growth. camp in divesting decisions. Mr. Sun’s camp • Financial statements of 2002, 2005, 2006 and made additional investment without board’s 2010 were restated, requested by TWSE approval. The relevant personnel were not •JanuaryCapital 15,reduction 2019 by 13.37% in 2012 slidemodel.com punished since Sun controlled the board. 5 So-called “Company management” actually represents Mr. Sun Tiehan’s interests

✓ Has served as board director from 11th to 13th term, representing investment companies controlled by Mr .Sun Tiehan. ✓ Among the three terms, he were replaced twice. 8 months after being elected as 13th term director, but then yielded the seat to Mr. Sun Tiehan and his acting agent. ✓ Assisted Mr. Sun to dismiss Mr. Lin’s chairmanship

WU Qingdian 11th T erm 12th Term 13th Term 吳清典 Period 2010-2013 2013-2016 2016-2019 SD1 Legal Rep for Wonderland美好 Yujie 裕捷 Wonderland美好 . Time served on the board 8M 35M 8M

 One of the 5-chairmanship of 11th term  The problematic financial year of 2010 and later restatement asked by TWSE and FSC was under Mr’ Liu’s chairmanship  Assisted Mr. Sun Tiehan to acquired TSMC’s key investment subsidiaries in 2010 which LIU Zhengyuan allowed Mr. Sun to leverage TSMC’s cross holding structure to control TSMC. 劉正元 SD3 .

Source: TSMC financial reports and MOPS 6 Ownership Comparison

VS

TSMC’s subsidiaries , Wonderland, Yuanjie and We are major shareholders. Yujie, collectively owns 11.4%. Sun’s Camp only owns 2.16%, rather than 13.56% 7 Our Achievements

✓ Cogeneration CHP plant initiatives has built the foundation of future profits ✓ Operating expense has been well controlled ✓ Hiring and overpaying were under review

Chairmen presentation 8 Increase overall profitability

LIN enforced cogeneration plant construction in 2014, and mass production in 2015

9 Eliminate unnecessary hiring & overpaying Average annual salary for last 5 years is 60% lower than the 5 years prior

10 Enforce expense control Operating expenses reduced significantly compared to under SUN’s period & prior

11 EPS and Oil Price

10 125

9.33 8 100 8.33 7.5 6 75 5.81 5.19 4 4.72 50 4.25 3.64 3.31 2 2.672.65 25 2.31 1.92 2.052.15 2 1.19 0.1 1.23 1.25 0.31 1.8 1.311.62 0 0 2009 2010 -1.712011 -0.882012 2013 -0.072014 2015 2016 2017 -2 TSMC Grand Pacific Petro Formosa Chem. & Fibre

 Although Grand Pacific Petro and Formosa Chem & Fibre are the common peers, TSMC’s business is more highly correlated with oil price January 15, 2019 slidemodel.com 12 Sun’s Nomination

The so-called “Company’s nomination” only represents Mr. Sun Tiehan’s interests

Chairmen presentation 13 LITIGATIONS CLAIMS Against Mr. SUN Tiehan

A. Judicial Document B. SFIPC (Securities and Futures Investors Protection Center) SFIPC files for Removal of SUN Tiehan as Director by SUN Tiehan and associates FOUND GUILTY of Court Order. Legal Proceedings Underway. Violation of Securities Laws Gov Link

COURT CASE No.105 Gim Su 13 / 2018.06.22 / Securities Law and Related CASE No. 107 Gim Su 144 / 2018.12.22

TRANSLATION

SUN Tiehan is complicit in 3 counts of Breaching of Trust, sentenced to 2 years and 4 months in prison, 10 months, and 1 year respectively. Prison term to be executed is set at 3 years and 8 months.

Any benefit SUN Tiehan received through the commission of the offense amounting to NTD 6,315,600 shall be forfeited; or if the whole or a part of such benefit cannot be forfeited, the value thereof shall be collected from the Source: MOPS offender.

14 SUN Tiehan Always Returned to TSMC Board

Misleading Statements to Media before board election 2016.03.01: SUN Tiehan expresses sentiments regarding returning to TSMC board: “I will not be participating on the TSMC board re-election on the EGM on April 1st , l will only participate on TSMC at a shareholder in the future.”

12th Term 13th Term 2013.04.03 ~ 2016.04.02 2016.04.03 ~ 2019.01.31 • WU Qingdian • JIAO Zhisheng • ZHANG Yongxiang Yuanjie Wonderland • SUN Tiehan Investment Returns to Board Enterprise Co., • SUN Tiehan 2013.11.25 Prosecuted by District Court 2016.6.22 Returns to Board 2017.9.21

Wonderland Enterprise, Yuanjie and Yujie assigns Legal Representative Directors to TSMC 15 Mr. Sun’s Nomination and Affiliations (1/2) Candidates Concerns ▪ Assisting SUN Tiehan in returning to the Board of Directors by manipulation of corporate representatives SUN Tiehan was unable to participate in the election due to the aforementioned legal cases in 2016. In April, 2016. WU Qingdian WU Qingdian 吳清典was elected as the representative of Wonderland Enterprise Co., Ltd. Wonderland Enterprise Co., Ltd. changed it representative from WU Qingdian to ZHANG Yongxiang.張永祥 in Dec 2016 and later changed 吳清典 to SUN Tiehan孫鐵漢. in Sep. 2017 (Anqing ▪ Anqing Development Co., Ltd owned by Sun’s sister Sun Lili. Development Co., The capital of Anqing Development Co., Ltd. is NT$1 million. Anqing Development Co., Ltd. was founded on December 10, 2018. Ltd) ▪ Breach of Trust (Criminal Law, Article 342) & (Securities and Exchange Act, Article 171, c) WU Qingdian was charged on Jan 9,2019 approved by Board meeting. Also was removed all the authorized power as President. He published the announcement without Board and Chairman’s approval.

XU Xiulan ▪ Both Ms Xu and Mr Yao have no SM or petrochemical related industry background and expertise. Ms. Xu also publicly acknowledged that it is too early to talk about TSMC to tap 徐秀蘭 into the specialty chemicals industry now. ▪ Affiliated to Mr Sun: SUN Tiehan was once the largest shareholder of Sino-American Silicon Product Inc (SAS). His sister, SUN Lili, was the former Chairperson of Sino-American Silicon Products Inc. Kaijing Co. (owned YAO Dangliang by Mr. Sun’s sister) is currently SAS board director. 姚宕梁 ▪ Xu Xiulian 徐秀蘭 is sitting on more than 31 company boards; YAO Dangliang 姚宕梁 is sitting on more than 19 company boards (According to Sino-American Silicon Products Inc annual report. ) 16 Mr. Sun’s Nomination and Affiliations (2/2) Candidates Concerns ▪ Wonderland Enterprise Co., Ltd., is TSMC’s subsidiary but controlled by Mr. Sun ▪ Undergoing litigation: Acting as the Chairman of Yangmingshan Tien Lai Resort & Spa and the Chairman of Jingshuo Construction Co., Ltd. LIU Zhengyuan 劉正 LIU Zhengyuan and SUN Tiehan were the accused in the receipt of commissions on the share transaction of 元 (Wonderland Yangminshan Tien Lai Resort & SPA and Jingshuo Construction Co., Ltd. financing case (SUN Tiehan was sentenced Enterprise Co., Ltd) to imprisonment for 3 years and 8 months, and LIU Zhengyuan was still reviewed by High court).

▪ Accounting and Corporate Governanceissues: When he was the chairman of TSMC, financial statements of 2002, 2005, 2006 and 2010 were restated with the requests from TWSE and FSC. ZHAO Guoshuai 趙國 ▪ Kaijiang Co., Ltd is owned by Mr. Sun’s sister. Kaijiang is currently board director as SAS 帥 (Kaijiang Co., Ltd) ZHAO is the incumbent INED but prevented TSMC from exercising due personnel punishment on wrongdoings ZHONG Chongguo 仲 ▪ Anqing Development Co., Ltd owned by Sun’s sister. 崇國 (Anqing The capital of Anqing Development Co., Ltd. is NT$1 million. Anqing Development Co., Ltd. was founded on Development Co., Ltd) December 10, 2018. ▪ No relevant background in SM-related industries or financial/accounting expertise ZHANG Guoqin 張國 ZHANG is the incumbent INED but prevent TSMC from exercising due personnel punishment on wrongdoings 欽 with ZHAO.

Issue of Independence. Former SAS CEO and SAS is associated with Mr. Sun ZHENG Jixiong 鄭繼 ▪ TSMC has many reinvestment, the board would require the professional accounting or Audit expertise. 雄 But INED Zheng has Incomplete Master of Accounting 17 SUN’s Nomination

SUN Tiehan 孫鐵漢 SUN Tiehan controlled SAS in 1998, YAO was hired as Family: • 3 Counts of Breaching of Trust, Sentenced to 3 President of SAS, Xu Xiulan SUN Tiehan years and 8 months was hired Sales VP of SAS SUN Lili • Fully control on Anqing, Wonderland, Kaijiang SUN Tiehan 孫鐵漢 was Kaijiang開疆 is SAS NED • • previously a substantial shareholder of SAS • Capital: NTD 1M Anqing 安慶 Wonderland Kaijiang Sino-American • SUN Lili 孫俐俐 was previously Development Enterprise美好 開疆 Silicon • Founded: 2018.12.10 Chairwoman of SAS (appendix 3-SAS MOPS)

• SUN Lili 孫俐俐 Owned • SUN Tiehan 孫鐵漢acquired AFFILIATED control for NTD 455M (NTD AFFILIATED SUN Lili 孫俐俐 Owned • SD2 XU Xiulan 徐秀蘭 702M Discount) • SD1 WU Qingdian 吳清典 YAO Dangliang 姚宕梁 • AFFILIATED AFFILIATED • SD4 • ZHONG Chongguo • ZHENG Jixiong SD6 SD5 ZHAO Guoshuai 趙國帥 SINED2 仲崇國 • SD3 LIU Zhengyuan 劉正元 • 鄭繼雄

Source: MOPS and Ministry of Economic Affairs company website https://www.moea.gov.tw/ 18 Shock resignation of XU Xiulan (HSU Doris) & YAO Dangliang (YAO Tom) as Non-Independent Director

SD2 XU Xu Xiulan 徐秀蘭

SD4 YAO Dangliang 姚宕梁

Despite only one day has passed since XU Xiulan (HSU Doris) and YAO Dangliang (YAO Tom) was proposed on the so-called management group’s slate, we have come to learn that directors above have declared they do not seek to take Sun Tiehan’s invitation to serve TSMC’s Board as members.

It is rare to see any public directors resign just two weeks’ before the vote to form a new board and raises further doubt about the suitability of the slate proposed by Wonderland Enterprises (Sun Tiehan).

Source: public news https://udn.com/news/story/7254/3594249 19 Our Nominations

Candidates’ skills linked to our direction to future TSMC

Chairmen presentation 20 Our Nominees List

D1 LIN Wenyuan 林文淵 D7 LI Shengchen 李勝琛 Taiwan Styrene Monomer Investment Chin-Chih-Hung Investment Corp. D2 CHEN Boyuan 陳柏元 D8 CHEN Jian 陳健 Taiwan Styrene Monomer Investment Chin-Chih-Hung Investment Corp. D3 PAN Wenyan 潘文炎 INED1 JIANG Jincheng 簡金成 Taiwan Styrene Monomer Investment Independent Director

D4 WU Yuqun 吳裕群 INED2 YU Shanrong 余珊蓉 Taiwan Styrene Monomer Investment Independent Director

D5 SUN Zhengqiang 孫正強 INED3 XU Gaowei 許高威 Taiwan Styrene Monomer Investment Independent Director D6 CHEN Jiafu 陳建甫 Taiwan Styrene Monomer Investment

21 Introduction to our nominees

D1 D2 D3 D4 D7 D5 D6 D8

INED3 INED1 INED2 INED2 INED3

22 Skill Matrix Nominees Related Knowledge, Expertise, and Experience STRATEGIC PETROCHEMICAL SALES ACCOUNTING INTERNATIONAL NAME LEADERSHIP LEGAL FINANCE INVESTMENT PLANNING BACKGROUND MANAGEMENT & AUDITING / BUSINESS [D1]D1 林文淵 ● ● ● ● ● LIN Wenyuan D2 陳柏元 ● ● ● ● CHEN Boyuan D3 潘文炎 ● ● ● ● ● PAN Wenyan D4 吳裕群 ● ● WU Yuqun D5 孫正強 ● ● ● ● ● SUN Zhengqiang D6 陳建甫 ● ● ● CHEN Jianfu D7 李勝琛 ● ● ● LI Shengchen D8 陳健 ● ● ● ● CHEN Jian INED1 簡金成 ● ● JIAN Jincheng INED2 余珊蓉 (F) ● ● ● ● YU Shanrong INED3 許高威 ● ● ● ● ● XU Gaowei Our Nomination D1 LIN Wenyuan 林文淵 Taiwan Styrene Monomer Investment Co., Ltd.

EDUCATION PAST POSITIONS CURRENT POSITIONS • Master's degree, Dept. of Civil Engineering, • Deputy Head Commissioner, State-owned Enterprise • Chairman, Eastern Broadcasting Co., Ltd. University of Hawaii Commission, Ministry of Economic Affairs, R.O.C. • Chairman, Overseas Engineering & Construction Co., • Chairman, China Steel Corporation Ltd. • Chairman, Taiwan Cogeneration Corporation • Executive Director, Bank of Kaohsiung • Chairman, Taiwan Styrene Monomer Corporation • Director, Taiwan Styrene Monomer Corporation • Chairman, • Director, Gloria Material Technology Corp. • Chairman, Eastern Integrated Marketing, Inc. • Independent Director, Chun Yu Group

D2 CHEN Boyuan 陳柏元 Taiwan Styrene Monomer Investment Co., Ltd. EDUCATION PAST POSITIONS CURRENT POSITIONS • Master's degree, Dept. of Chemistry, Illinois Institute • China Steel Chemical Corporation • Director, Taiwan Styrene Monomer Corporation of Technology

D3 PAN Wenyan 潘文炎 Taiwan Styrene Monomer Investment Co., Ltd. EDUCATION PAST POSITIONS CURRENT POSITIONS • Ph.D., Department of Chemistry, University of • Chairman, Kuo Kuang Power Co., Ltd. • Chairman, CTCI Foundation Wyoming • President and Chairman, CPC Corporation, Taiwan • Chairman, Gintech Energy Corporation • Senior Research Engineer, Monsanto Company • Director, Taiwan Styrene Monomer Corporation 24 Our Nomination D4 WU Yuqun 吳裕群 Taiwan Styrene Monomer Investment Co., Ltd. EDUCATION PAST POSITIONS CURRENT POSITIONS • EMBA in Public Management, National Taiwan • Secretary General, Securities & Futures Commission, • Independent Director, Chun Zu Machinery Industry University Ministry of Finance Co., Ltd. • Head of Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan • President, Taipei Exchange • Chairman, Masterlink Securities Group

D5 SUN Zhengqiang 孫正強 Taiwan Styrene Monomer Investment Co., Ltd. EDUCATION PAST POSITIONS CURRENT POSITIONS • EMBA from National Chiao Tung University • President, TMP Steel Corporation • Chairman, Ofco Industrial Corp. • MBA from National Chengchi University • President, Jinzhifu Asset Management Corporation • Chairman, Tian-Chuan Investment Co., Ltd. • Master of Chemical Engineering, National Taiwan • President, CDIB Asset Management Co., Ltd. • Director, QuinTain Steel Co., Ltd. University

D6 CHEN Jianfu 陳建甫 Taiwan Styrene Monomer Investment Co., Ltd. EDUCATION PAST POSITIONS CURRENT POSITIONS • EMBA, Guanghua School of Management, Peking • Researcher, Harvard Business School • Director, Chuan-Pu Investment Holding Co., Ltd. University • Director, Adimmune Corporation • Bachelor's degree in Mechanical Engineering, the • Director, Han-Hsien Hospitality Co. University of California, Berkeley 25 Our Nomination D7 LI Shengchen 李勝琛 Chin-Chih-Hung Investment Corp. EDUCATION PAST POSITIONS CURRENT POSITIONS • Master's degree, Institute of Mainland China Studies, • Presiding Judge, Taiwan Kaohsiung District Court • Partner Attorney, Yuan, Chen & Partners Attorneys- National Sun Yat-sen University at-Law • Supervisor, Taiwan Styrene Monomer Corporation • Independent Director, Taiwan Tea Corporation • Director, Bank of Kaohsiung • Supervisor, Synnex Technology International Corporation D8 CHEN Jian 陳健 Chin-Chih-Hung Investment Corp. EDUCATION PAST POSITIONS CURRENT POSITIONS • Bachelor's degree from Princeton University • Executive Director, Goldman Sachs • Argyle Street Management Limited • MBA from the Wharton School of the University of • Chief Executive Officer and Managing Director, • Founder and Executive Investment Officer Pennsylvania Lazard Asia Limited • Director of TIH Limited • Non-independent and Non-Executive Director, OUE Limited • The ONE Group • Hospitality, • Inc. Non-Executive Director

26 Our Nomination INED1 JIAN Jincheng 簡金成

EDUCATION PAST POSITIONS CURRENT POSITIONS • Ph.D. in Accounting, Rutgers University • Professor, National Cheng Kung University • Independent Director, Gloria Material Technology Corp. • Supervisor, Soft-World International Corporation

INED2 YU Shanrong 余珊蓉 (Female)

EDUCATION PAST POSITIONS CURRENT POSITIONS • Master's degree from Graduate Institute of National • Attorney, Jones Day • Partner Attorney, Zhong Yin Law Firm Development, National Taiwan University • Deputy Manager, Department of Legal Affairs, • Independent Director, Daily Polymer Corporation Yuanta Financial Holding Co., Ltd.

INED3 XU Gaowei 許高威

EDUCATION PAST POSITIONS CURRENT POSITIONS • Master's degree in Chemical Engineering, University • Assistant Researcher, National Chung-Shan Institute • President, Handy Chemical Corporation, Ltd. of Washington of Science & Technology • Senior Engineer, China Petrochemical Development Corporation

27 Conclusions • TSMC’s future directions • Concluding Remarks

Chairmen presentation 28 Our Directions to TSMC

1. FOCUS ON SM INDUSTRY 2. DEVELOP NEW MARKETS 3. FOCUS & CURB INVESTMENTS

• Enact Procurement Strategies According to IHS forecasts, SM • Continue merging and demand throughout 2018~2021 consolidation of Subsidiaries. • Reduce Emissions will increase by 2.2%~2.3% YOY. • Search for suitable managers • Increase Process Efficiencies Demand from Chinese markets to guide Subsidiaries. will increase 3.5%~3.9% YOY. • Maintain SM Competitiveness • Mitigate reliance over single product market by diversifying FROM core competencies.

29 Concluding Remarks GOING FOWARD • Mr. Sun Tiehan has controlled TSMC board since 11th term and has been making various investments not related to TSMC’s core strengths. Some of the investments are already been considered harmful to TSMC by the court. W would like to stop this from having Mr. Sun and his acting agent to sit in the board.

• Governance practice: • We are to promote the increase of Independent Directors to 4, and more than 1/3 of the Board. • Our nomination has shown our commitment to promote gender diversity and emphasize financial, investment, and legal expertise, to better supervise and advise on TSMC investment initiatives. • We are to put more effort on non-financial ESG information disclosure, pursue sustainability, stability and responsibility.

• Our AIM: “Acquire majority of Board, and increase Board share ownership, to promote management stability.”

30 Appendix I. How Mr. Sun leveraged TSMC’s cross holding structure II. Media report related to Sun’s verdict III. Sun’s association with Sino-American Silicon IV. 2018 disputes V. Little synergy between SAS and TSMC VI. Others

Chairmen presentation 31 Appendix1 HOW DID SUN TIEHAN GAIN TSMC CONTROL (1)

AFE Shareholding Structure

March 2010 Asia Fortune Enterprise Ltd. 50.62% of AFE Wonderland SD3 Enterprise 9.02% 34.40% 56.57% 31st March 2010 When LIU Zhengyuan was pointed to 1,180,000 Shares 4,500,000 Shares 7,400,000 Shares Chairman of TSMC.

TSMC immediately sold to SUN Tiehan GIH GFH GPH to gain 100% subsidiary holdings AFE Grand Investment Holdings Grand Future Holdings Ltd. Grand Prosperity Holdings Corp TSMC Subsidiary TSMC Subsidiary TSMC Subsidiary

Highly Controversial Transaction

Due to controlling stake in AFE, SUN Tiehan also gained control of Wonderland Enterprise, and on the same day nominated LIU Zhengyuan as the legal representative of Wonderland Enterprise.

Source: TSMC 2010 financials reports / MOPS company announcements 32 Appendix1 HOW DID SUN TIEHAN GAIN TSMC CONTROL (2)

31st March 2010

Reverse Takeover For NTD 455M 11.39% of TSMC at ONLY NTD 455M NTD 455M = Market Value for 4.43% SUN Market Value for 11.39% = NTD 1.157B Tiehan = NTD 702M DISCOUNT!

Due to controlling stake in AFE, SUN Tiehan only took NTD 455M (4.43%) to control 11.39% shares of TSMC

Source: TSMC 2010 consolidated financials reports / MOPS company announcements 33 Appendix2

News News

31st March 2010

34 Appendix3

Sino-American Silicon MOPS Announcement -Board & Chairman

31st March 2010 • SUN Lili 孫俐俐 (Sun Tiehan’s sister ) as Chairman SD4

SD2 GlobalWafers Co., Ltd was spin off from SAS in 2011 SAS owns over 70% of Global Wafers SD3

SINED2 ZHENG Jixiong 鄭繼雄 was president of SAS and Existing INED of Global Wafers

Considering SUN’s family’s close personal relationship and employment with the nominees related to SAS and the fact that Semiconductor industry is not relevant to TSMC’s future plan and development We recommend to vote Against / Abstain to the Above.

Source: MOPS company announcements / SAS annual reports 35 Appendix4 Taiwan Styrene Monomer Corporation SUBSIDIARY IN VIOLATION (TSMC)

Lei-Ting Yangmingsha Yung Asia Carbons Jingshuo Aikeru Datapr Constructio YSIC Ltd. n GVISION-USA Fu & Technology Construction i o 16.19% 3.08% n Tien Lai

10.57%

Corrupt Asset Procurement (Asia Carbons & YSIC) Repurposing an R&D grant into a Bonus (Datapro)

Due to continued losses at Asia Carbons, and a 258 Million debt to the To reward Datapro Chairman LIN Junxu’s effort in new product banks, Asia Carbons faced a shortage of cash on June 2018. development the successful transition to mass production, Datapro Board decides to issue NTD 3M Bonus to the Chairman, under the Board was implementing reduction of capital from losses in investment, prerequisite that Datapro generate some tangible revenue, and the consensus was to stop raising capital for Asia Carbons. But during through the proper procedures and application through the parent which subsidiary YSIC procures Asia Carbons’ operational assets, company TSMC. without the approval of the TSMC Board, violates the previous consensus. Datapro then converted the “Bonus” into “R&D grant” and was approved by Datapro Chairman LIN Junxu himself, without any regard to the Conflict of Interest at hand.

Clear violations of “Supervision and Management of Subsidiaries” Regulations.

36 Appendix4

Taiwan Styrene Monomer Corporation (TSMC)

YSIC Ltd. Board Members Asia Carbons & Technology Board Members Chair Directors Chair Directors • ZHOU Zisheng (TSMC) • LU Zhengxin (TSMC) • SHENG Shian (Yung Fu) • ZHOU Gengsheng (YSIC) TSMC Financial Officer TSMC Investment Division Officer • SUN Tiehan (YSIC) • LIN Junxu (TSMC) • SUN Zhiyao (TSMC) Daughter of SUN Tiehan • GUO Rengui (Natural Person) Directors are Stakeholders SUN Tiehan lead, breach of duty by ZHOU Zisheng and LU Zhengxin Circumvents TSMC Policy of not increasing further capital in Asia Graphite

2018.12.05 Determination to Clean House Neglect of Independent Director Duties

TSMC Parent Company Board Meeting Resolution to TSMC Independent Directors ZHAO Guoshuai and ZHANG prosecute related parties in this incident. Guoqin OPPOSED Resolution!

37 Appendix4

13th Term 15th Board Meeting 13th Term 19th Board Meeting

Sale of Asia Graphite Assets and DataPro Payment of R&D Grant Compensation Procurement of TWYS Construction Assets RE: Chairman’s R&D grant of NTD 3M w/o TSMC Consent Independent Directors Independent Directors

ZHAO Guoshuai ZHAO Guoshuai SUSPICIOUS EVASIVE & FULL OF EXCUSES ZHANG Guoqin DEFENCE ZHANG Guoqin Workflow Error, Lack of Governance Experience • OPPOSED to Resolutions to prosecute related • parties in this incident. • Grant was returned, did not incur losses • No intention of unlawful enrichment or wrongdoing

Supervisor Supervisor

LI Shengchen LI Shengchen

• Does it contradict TSMC Reinvestment Policy • Violation of Job Authorization related policies • Lack of management and supervision of subsidiaries • Serious violation of management and supervision of • Suggest reviewing and revising and providing more subsidiaries oversight to governance

38 Appendix5

1. Analyst’s Take 2. SAS First-Movers 2018.12.29 Economic Daily News

It is unlikely for polystyrene to be applied as a Sino-American Silicon Products (SAS) Already conductive material for solar panels, as the have invested nearly NTD 1B into TSCS(Taiwan heat resistance and conductivity pales in Special Chemicals Corporation), and in turn comparison to Indium tin oxide and Yttrium tin acquired 30% shares, becoming the largest oxide. Additionally, Indium tin oxide and shareholder. Yttrium tin oxide prices have fallen substantially. 3. XU Xiulan’s Sentiments With the Company’s current capital and value, it is impulsive to move so quickly into a high As XU Xiulan assumes the SAS Chair, XU risk (and full of already-established companies), emphasizes; We will assess future with many alternative competitive materials. It opportunities with TSMC, and take it on a step- is best to assess if it is in the best interest of the by-step basis. But currently she is nominated Company Shareholders. on a personal basis. Regarding TSMC cooperation, XU states “Currently, it’s too early”.

2018.12.29 Economic Daily News – ZENG Renkai

EXTREMELY UNLIKELY TO HAPPEN

39 Appendix6 Taiwan Styrene Monomer Corporation SUN’s Investment (TSMC)

89.16% 34.76% 100% 75.27% 99.99% 65.07% 64.79% 66.67% 100% Yung Asia Carbons Jingshuo Lei-Ting Yangmingshan YSIC Ltd. Aikerui GVISION-USA Datapro Fu & Technology Construction Construction Tien Lai 16.19% 3.08% 24.73% 12.10%

9.85% 10.57% 100% 100% From 2012.08.14 to date Tien Lai With WU Qingdian as President. Asia Graphenes Art Village SUN Tiehan has spearheaded investment initiatives in: • Yung Fu • Asia Carbons & Technology • Jingshou Consturction 97.22% 62.03% 50% • YSIC Ltd. Kun Shan Tien Lai Grand Capital • Yangmingshan Tien Lai 2.78% International Industries • Aikerui • GVISION-USA • Datapro • Asia Graphenes Tien Lai Art Village 100% • • Grand Capital Kun Shan • Kun Shan International Yu Fu Denotes SUN Tiehan’s investments • Kun Shan Yu Fu

40 Appendix6 TSMC SUN’s Investment

Tourism, Plastified Investment Electronics Construction, Industry Industry Industry Education (1 Total) (7 Total) (4 Total) and Others. (9 Total) REINVESTMENT IN 21 ENTITIES!

TSMC Reinvestment Profit and Loss • Book value of investments：3.7Billion, EPS 38.12% of Total Assets

• Over 3 consecutive years of losses: Asia Graphite and 7 other Entities.

• 11 Entities with losses in 2017：

• Asia Graphite亞碳 2015-2017 Losses: 680 Million Appendix6

Refer MSCI ESG reports & ISS reports

31st March 2010

ISS reports recommended Against on all INEDs for SAS in Board election

As of the date of this analysis, the company has yet to disclose its FY 2016 annual report. Absent the company's annual report, which provides disclosure such as the latest corporate governance report and shareholding structure, among other updates on the company's business affiliations, shareholders have limited ability to assess the independence and suitability of the independent director candidates. Therefore, a vote AGAINAST the nominees is warranted.

We do believe Sino-American Silicon & Global Wafer has a lot of improvement in Corporate Governance

42 Thank You