Finance Corporation Minutes of the 2019 Annual Shareholders’ Meeting (Translation)

Time and Date : 9:00 a.m. , June 25 , 2019 Place : 1F., No.3, Sec. 3, Zhongxing Rd., Xindian Dist., New City, . (The Dome Theater at Auto Mall) Total outstanding YFC common shares: 274,629,205 shares Total common shares represented by shareholders present in person or by proxy: 199,579,351 shares Percentage of common shares held by shareholders present in person or by proxy: 72.67% Directors present : Kuo-Rong Chen, Zhen-Xiang Yao, Kuo-Hsing Hsu

Independent Directors present :Yi-Hong Hsieh, Zhong-Qi Zhou、Chi-Ching Chen Attendees: Hsin-Wei Tai CPA, Deloitte & Touche Chairperson: Kuo-Rong Chen, the Chairman of the Board of Directors Recorder: May Liao

1. Call the meeting to order 2. Chairperson’s Remarks (omitted) 3. Management Presentations I. 2018 Business Report (omitted)

II. Audit Committee’s Review Report on the 2018 Financial Statements Yulon Finance Corporation Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2018 business report, Financial Statements (including consolidate and standalone statements) and the proposal for distribution of 2018 profits. The Yulon Finance Corporation’s Financial Statements have been audited and certified by Hsin-Wei Tai, CPA, and, Yu-Wei Fan CPA, of Deloitte & Touche and an audit report relating to the Financial Statements has been issued. The aforementioned business report, Financial Statements and the proposal for distribution of 2018 profits have been reviewed and determined to be correct and accurate by the Audit Committee members. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Law, we hereby submit this report.

To Yulon Finance Corporation 2019 Annual Meeting of Shareholders

Chairman of the Audit Committee: Yi-Hong Hsieh

March 25, 2019

III. 2018 the Compensations for the Employees and Directors

1. In accordance with the Articles of Incorporation, the Company shall distribute of the current year’s profit if any as compensation: No more than 0.5% as compensation for Directors；No less than 0.1% as compensation for employees. 2. The amount of income tax before deducting compensations to the Company’s employees and directors of the board of directors for the year 2018 is NT$ 3,087,273 thousands. In March 2019, the Compensation Committee and Board of Directors approved the directors’ compensation is 0.5% of the current year’s profit, the amounts of NT$ 15,436,364; the employees’ compensation is rounded to 0.80% of the current year’s profit, the amounts of NT$ 24,782,220, paid in cash. 3. In addition to the aforementioned employee compensation, the Company has incentives distributed, including three festival bonuses, annual bonus, and the management performance bonus according to the operating performance and personal performance in order to inspire employees to create better performance for the benefits of the Company and shareholders.

IV. 2018 Derivatives Transaction

The Company hedges interest and exchange rate risk though Interest Rate Swaps and Cross Currency Swap (IRS and CCS), the total amount of outstanding contracts is NT$ 948,800 thousands until December 31, 2018, and the amount of gain on valuation of financial derivatives is NT$ 12,476 thousands in 2018. This valuation did not involve the cash flow.

V. 2018 Status of Endorsement and Guarantee

The aggregate endorsement/guarantee limit of the Company that 500% of the the Company’s net equity is rounded to NT$ 82.345 billion. The limit on each endorsement/guarantee given to each company is 50% of the aggregate endorsement/guarantee limit. The aggregate endorsement/guarantee limit and the limit on each endorsement/guarantee given to each company were all complied with the regulation until December 31, 2018. The table for the details is as follows:

Unit: NT$ thousands

The object of making The amount of Actual amount for endorsement endorsement making endorsement

Car-Plus (Shanghai) Auto 320,000 0 Leasing Co., Ltd. TAC Finance Leasing Co.,Ltd. 10,000,000 8,242,268 TAC Leasing Co., Ltd 6,086,408 2,506,168 Yulon Finance 2,308,000 0 Corporation Total 18,714,408 10,748,436

VI. 2018 Issue of Domestic Unsecured Corporate Bonds

In order to repay financial borrowing, the Company has completed total amount of NT$ 2.1 billion domestic unsecured corporate bond offering in 2018. A summary of the major terms of the offering is as follows:

Series Term Coupon Rate Maturity Tranch Issue Amount Issue Date number (Year) (%, p.a.) Date 107 1 NT$ 2.1 billion 2018.01.08 3 0.85 2021.01.08 Distribution of Since the issuing date, based on the coupon rate distributing interest Interest once a year with simple interest-bearing. Repayment of The bond will be repaid in a lump sum upon the expiration of the Principal respective term.

VII. 2018 Issue of Preferred Share A

The Company issued NT$ 5 billion worth of preferred shares in 2018 to repay financial borrowing and strengthen financial structure. The conditions are as follows:

Issue (launch) date November 26, 2018 Item (Initial Issuance) Total NT$ 5,000,000,000 Distribution of Annual dividend rate of 4% dividends and bonuses ( 5-year IRS rate 0.93875%+3.06125%, noncumulative) Shareholders of preferred share A who have the same priority as holders of all subsequently issued preferred shares shall be given priority claim on the Priority of Claims in company’s residual property over ordinary shareholders, and are subordinat to Liquidation general creditors. The limit to preferred shareholders’ claim is amount of outstanding preferred shares at issue price. Shareholders of preferred share A do not have the right to vote and suffrage, Exercising of voting but they have the right to vote in the shareholder’ meeting for preferred shares rights or in the shareholders’ meeting that involves the rights and obligations of shareholders of preferred shares. 1. The Company has sole discretion on dividend issuance of preferred share A, including but not limited to its discretion to not declare dividends when no Rights and profit is recorded, or insufficient profit is recorded for preferred share obligations dividends. The Company’s cancellation of preferred share dividend declaration shall not be deemed an event of default. 2. The dividend rate of the preferred share A is 4% (5-year IRS 0.93875%+3.06125%), and is calculated based on the issue price. The 5-year IRS interest rate will be reset on the next day of maturity and in every five years. The interest rate reset pricing base date is the two business day for Others financial industry in Taipei prior to the reset date. The interest rate index for 5-year IRS is the arithmetic mean of the 5-year interest rate exchange pricing provided by “PYTWDFIX” and “COSMOS3” of Reuters at 11:00 a.m. of the interest rate pricing base date which is business day for financial industry in Taipei. If the aforementioned quotations are not available on the pricing base date, the company will determine the rate based on reasonable market price with good faith. 3. When the Company issues new shares for cash, shareholders of preferred shares A and common shareholders have equivalent preemptive rights. The number redeemed 0 or converted shares The balance of not redeemed or not NT$ 5,000,000,000 converted shares Outstanding The Company may redeem all or some preferred shares at issue price on the preferred Terms for redemption date after the date of five full years of issuance. Rights and obligations of the shares or conversion unredeemed preferred share A shall remain the same as mentioned above. Regulations Governing Issuance, Please refer to the Articles of Incorporation of the Company Conversion or Option of Shares

4. Matters for ratification Item I Proposed by the Board of Directors Subject: Ratification of 2018 Business Report and Financial Statements Descriptions:

1. The Company’s 2018 financial statements (including consolidate and standalone statements) have been audited and certified by Hsin-Wei Tai, CPA, and, Yu-Wei Fan, CPA, of Deloitte & Touche. The business report and financial statements have been reviewed by the Audit Committee. The Audit Committee found no unconformities, and their review report is submitted for examination. 2. Enclose 2018 business report, the independent auditors’ report issued by Deloitte & Touche and the financial statement (Refer to Appendix). 3. Ratification requested.

Voting Results :

Shares represented at the time of voting :199,579,351

% of the total represented share Voting Results * present Votes in favor : 196,703,352 (186,719,596) 98.56% Votes against : 31,016 (31,016) 0.02% Votes invalid : none 0% Votes abstained 2,844,983 (2,559,983) 1.42%

*including votes casted electronically (numbers in brackets)

RESOLVED, that the 2018 Business Report and Financial Statements be and hereby were accepted as submitted.

Item II Proposed by the Board of Directors Subject: Ratification of the proposal for the distribution of 2018 earnings Descriptions:

1. In accordance with 2018 Financial Statements of the Company, the proposal for distribution of 2018 earnings is established.

Yulon Finance Corporation Earning Distribution Table January 01, 2018-December 31, 2018 ( UNIT : NT$ ) Item Subtotal Total Undistributed earnings at beginning of the year 1,783,939,353 Effect of retrospective application and retrospective restatement 5,033 Restated undistributed earnings at beginning of the year 1,783,944,386 Plus: Remeasurement of defined benefit plans 5,045, 659 Minus:Change from investments by using the equity method (5,195,070) Minus: Disposal of investments in equity instruments at fair value through other (402,914) comprehensive income Plus: Net profit after tax of the year 2,587,987, 681 Minus: Legal reserve (10%) (258,798,768) Plus: reversal of special reserve- debit of previous stockholders' equity 81,579, 906 Minus: special reserve- debit of stockholders' equity (180,722,567) Appropriation of earnings for 2018 2,229,493,927 Appropriation of earnings as of Dec 31, 2018 4,013,438,313 Distribution items: Cash dividends to preferred shares (42,191,781) Cash dividends to common shares (1,510,460,628) (NT$5.50 per share) Stock dividends to common shares (274,629,200) (NT$1.00 per share) Undistributed earnings at the end of the year 2,186,156,704 Note 1: The Company appropriates special reserve of $180,723 thousand, since the Company has a net debit balance in 2018. According to Article 41 of Securities and Exchange Act and the Rule issued by the FSC, the Company shall appropriate special reserve at the amount equal to the difference between the net debit balance of other equity and the amount of special reserve that was appropriated. Due to RMB depreciation, the loss of exchange differences on translating foreign operations increased $95,535 thousand in 2018. Note 2: Cash payment shall be rounded to one NTD (amounts less than one NTD shall be ignored). Remaining amount will be considered the Company's other income. Note 3: The Preferred share A was issued 100,000,000 shares sold at $50. The preferred share dividends of $42,191,781 are prorated based on the outstanding days in 2018 (2018/10/16~12/31, 77 days in total) and 4% of the dividend rate.

Chairman：Kuo-Rong Chen Manager：Kuo-hsing Hsu Accounting Supervisor：Tsung-Hsing Han

2. In accordance with preceding distribution as follows

(1). First, cash dividends amounting to NT$42,191,781 are allocated to preferred shares A. (2). Next, dividend of NT$6.50 is allocated to per common share, including cash dividend per share of NT$5.50 and stock dividend per share of NT$1.00. Aforementioned issuance of new common shares as stock dividend shall be discussed in another item.

3. Upon recognition and adoption of this proposal at the annual meeting of shareholders, it is proposed to authorize the board of directors to determine ex-dividend date for preferred shares and common shares.

4. Ratification requested

Voting Results :

Shares represented at the time of voting : 199,579,351

% of the total represented share Voting Results * present Votes in favor : 196,719,155 (186,735,399) 98.57% Votes against : 15,213 (15,213) 0.01% Votes invalid : none 0% Votes abstained 2,844,983 (2,559,983) 1.42%

*including votes casted electronically (numbers in brackets)

RESOLVED, that the proposal for the distribution of 2018 earnings be and hereby were accepted as submitted.

Matters for Discussion Item I Proposed by the Board of Directors Subject: Issue of new shares via capitalization of retained earnings

Descriptions:

1. For the needs of future business development and capital structure strength, it is proposed to allot NT$274,629,200 from unappropriated retained earnings for capitalization and issue 27,462,920 new common shares at NT$10 par value. 2. The major terms of issue of new shares are as follows:

(1) Each common shareholder will receive a stock dividend of 100 shares to every 1,000 shares in proportion to the shareholdings shown on the shareholders register as of the ex-right date. (2) For fractional shares, the shareholders may apply to the Company’s Stock Office for aggregating the fractional shares into whole shares within five days of the ex-right date. Fractional shares which have not been aggregated, or after being aggregated but remaining fractional, the Company will distribute in cash, rounded down to NT$1, in accordance with Article 240 of Company Act. Furthermore, if there are any residual shares, the Chairman of the Board of Directors is authorized to negotiate with specified person regarding purchasing such shares at par value. The total issued common shares of the Company after the proposed capitalization will be increased from 274,629,205 shares to 302,092,125 shares. (3) The rights and obligation of the new shares to be issued will be equal to existing common shares.

3. Upon recognition and adoption of this proposal at the annual meeting of shareholders, it is proposed to authorize the board of directors to determine ex-right date of stock dividends with approval of competent authority. 4. It is proposed to authorize the board of directors to handle all metters relating to the proposed capitalization depending on accommodating the competent authority’s requirement or the operational needs of the circumstance to make any changes thereto. Voting Results :

Shares represented at the time of voting : 199,579,351

% of the total represented share Voting Results * present Votes in favor : 196,715,955 (186,732,199) 98.57% Votes against : 19,413 (19,413) 0.01% Vo tes invalid : none 0% Votes abstained 2,843,983 (2,558,983) 1.42%

*including votes casted electronically (numbers in brackets)

RESOLVED, that the proposal for the issue of new shares via capitalization of retained earnings be approved as proposed.

Item II Proposed by the Board of Directors Subject: The Amendment to the “Procedures for Acquisition and Disposal of Assets.”

Descriptions: In order to comply with the latest “Regulations Governing the Acquisition and Disposal of Assets by Public Companies,” the Company hereby proposes to amend the “Procedures for Acquisition and Disposal of Assets.” The comparison table is as follows:

Amended version Original version Reason Article 2 Article 2 Wording is amended The term "assets" as used in these The term "assets" as used in these to comply with Procedures includes the following: Procedures includes the following: “Regulations 1. Investments in stocks, government 1. Investments in stocks, government Governing the bonds, corporate bonds, financial bonds, corporate bonds, financial Acquisition and bonds, securities representing bonds, and securities representing Disposal of Assets by interest in a fund, depositary receipts, interest in a fund, depositary receipts, Public Companies” call (put) warrants, beneficial interest call (put) warrants, beneficial interest Article 3. securities, and asset-backed securities, and asset-backed securities. securities. 2. Real property (including land, 2. Real property (including land, houses and buildings, and investment houses and buildings, investment property) and equipment. property, and rights to use land) and 3. Memberships. equipment. 4. Patents, copyrights, trademarks, 3. Memberships. franchise rights, and other intangible 4. Patents, copyrights, trademarks, assets. franchise rights, and other intangible Amended version Original version Reason 5. Right-of-use assets. assets. 6. Claims of financial institutions 5. Claims of financial institutions (including receivables, bills (including receivables, bills purchased and discounted, loans, and purchased and discounted, loans, and overdue receivables). overdue receivables). 7. Derivatives. 6. Derivatives. 8. Assets acquired or disposed of in 7. Assets acquired or disposed of in connection with mergers, demergers, connection with mergers, demergers, acquisitions, or transfer of shares in acquisitions, or transfer of shares in accordance with law. accordance with law. 9. Other major assets. 8. Other major assets.

Article 3 Article 3 Wording is amended Terms used in these Procedures are Terms used in these Procedures are to comply with defined as follows: defined as follows: “Regulations 1. Derivatives: Forward contracts, 1. Derivatives: Forward contracts, Governing the options contracts, futures contracts, options contracts, futures contracts, Acquisition and leverage contracts, or swap contracts, leverage contracts, and swap Disposal of Assets by whose value is derived from a contracts, and compound contracts Public Companies” specified interest rate, financial combining the above products, Article 4. instrument price, commodity price, whose value is derived from assets, foreign exchange rate, index of interest rates, foreign exchange rates, prices or rates, credit rating or credit indices or other interests. The term index, or other variable; or hybrid "forward contracts" does not include contracts combining the above insurance contracts, performance contracts; or hybrid contracts or contracts, after-sales service structured products containing contracts, long-term leasing embedded derivatives. The term contracts, or long-term purchase "forward contracts" does not include (sales) agreements. insurance contracts, performance 2. Assets acquired or disposed contracts, after-sales service through mergers, demergers, contracts, long-term leasing acquisitions, or transfer of shares in contracts, or long-term purchase accordance with the law: Refers to (sales) contracts. assets acquired or disposed through 2. Assets acquired or disposed mergers, demergers, or acquisitions through mergers, demergers, conducted under the Business acquisitions, or transfer of shares in Mergers and Acquisitions Act, accordance with law: Refers to assets Financial Holding Company Act, acquired or disposed through Financial Institution Merger Act and mergers, demergers, or acquisitions other acts, or to transfer of shares conducted under the Business from another Company through Mergers and Acquisitions Act, issuance of new shares of its own as Financial Holding Company Act, the consideration therefore Financial Institution Merger Act and (hereinafter "transfer of shares") other acts, or to transfer of shares under Article 156, paragraph 8 of the from another company through Company Act. issuance of new shares of its own as the consideration therefor [subparagraph 3~6 omitted] (hereinafter "transfer of shares") Amended version Original version Reason under Article 156-3 of the Company Act.

[subparagraph 3~6 omitted]

7. Investment professional: Refers to financial holding companies, banks, insurance companies, bill finance companies, trust enterprises, securities 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 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. 9. Over-the-counter venue ("OTC venue", "OTC"): "Domestic OTC venue" refers to a venue for OTC trading provided by a securities firm in accordance with the Regulations Governing Securities Trading on the Taipei Exchange; "foreign OTC venue" refers to a venue at a financial institution that is regulated by the foreign competent authority and that is permitted to conduct securities business.

Article 4 Article 4 Wording is amended Professional appraisers and their Professional appraisers and their to comply with officers, certified public accounts, officers, certified public accounts, “Regulations attorneys, and securities underwriters attorneys, and securities underwriters Governing the that provide public companies with that provide public companies with Acquisition and appraisal reports, certified public appraisal reports, certified public Disposal of Assets by accountant's opinions, attorney's accountant's opinions, attorney's Public Companies” Amended version Original version Reason opinions, or underwriter's opinions opinions, or underwriter's opinions Article 5. shall meet the following may not be a related party of any requirements: party to the transaction. 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 , 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 Amended version Original version Reason 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 Article 6 Chinese wording is Where Board of Directors’ approval Where Board of Directors’ approval amended to comply is required for any acquisition or is required for any acquisition or with “Regulations disposal of assets pursuant to the disposal of assets pursuant to the Governing the Procedures, approval from the Procedures, approval from the Acquisition and one-half or more of the entire one-half or more of the entire Disposal of Assets by membership of the audit committee membership of the audit committee Public Companies” and a resolution of the Board of and a resolution of the Board of Article 8. Directors shall be obtained. Directors shall be obtained.

Article 8 Article 8 Wording is amended Total amounts of real property and Total amounts of real property and to comply with “IFRS right-of-use assets thereof or securities acquired by the Company 16 Leases”, taking in securities acquired by the Company and each subsidiary not for business account of not for and each subsidiary not for business use, and limits on individual business use real use, and limits on individual securities are as follows: property and securities are as follows: 1. Total amounts of real property and right-of-use assets 1. Total amounts of real property, equipment not for business use are limits. equipment, or right-of-use assets no more than 50% net worth of the thereof not for business use are no latest financial statement. more than 50% net worth of the 2. Total amounts of securities are no latest financial statement. more than net worth of the latest 2. Total amounts of securities are no financial statement. more than net worth of the latest 3. Limit amounts of individual financial statement. securities are no more than 50% net 3. Limit amounts of individual worth of the latest financial securities are no more than 50% net statement. worth of the latest financial statement.

Article 11 Article 11 Wording is amended In acquiring or disposing of real In acquiring or disposing of real to comply with property, equipment, or right-of-use property or equipment where the “Regulations Amended version Original version Reason assets thereof where the transaction transaction amount reaches 20 Governing the amount reaches 20 percent of the percent of the Company's paid-in Acquisition and company's paid-in capital or NT$300 capital or NT$300 million or more, Disposal of Assets by million or more, the company, unless the Company, unless transacting with Public Companies” transacting with a domestic a government agency, engaging Article 9. government agency, engaging others others to build on its own land, to build on its own land, engaging engaging others to build on rented others to build on rented land, or land, or acquiring or disposing of acquiring or disposing of equipment equipment for business use, shall or right-of-use assets thereof held for obtain an appraisal report prior to the business use, shall obtain an date of occurrence of the event from appraisal report prior to the date of a professional appraiser and shall occurrence of the event from a further comply with the following professional appraiser and shall provisions: further comply with the following 1. Where due to special provisions: circumstances it is necessary to give 1. Where due to special a limited price, specified price, or circumstances it is necessary to give special price as a reference basis for a limited price, specified price, or the transaction price, the transaction special price as a reference basis for shall be submitted for approval in the transaction price, the transaction advance by the board of directors, shall be submitted for approval in and the same procedure shall be advance by the board of directors; followed for any future changes to the same procedure shall also be the terms and conditions of the followed whenever there is any transaction. subsequent change to the terms and conditions of the transaction. [omitted]

[omitted]

Article 13 Article 13 Wording is amended Where the Company acquires or Where the Company acquires or to comply with disposes of intangible assets or disposes of memberships or “Regulations right-of-use assets thereof or intangible assets and the transaction Governing the memberships and the transaction amount reaches 20 percent or more Acquisition and amount reaches 20 percent or more of paid-in capital or NT$300 million Disposal of Assets by of paid-in capital or NT$300 million or more, except in transactions with a Public Companies” or more, except in transactions with a government agency, the Company Article 11. domestic government agency, the shall engage a certified public company shall engage a certified accountant prior to the date of public accountant prior to the date of occurrence of the event to render an occurrence of the event to render an opinion on the reasonableness of the opinion on the reasonableness of the transaction price; the CPA shall transaction price; the CPA shall comply with the provisions of comply with the provisions of Statement of Auditing Standards No. Statement of Auditing Standards No. 20 published by the ARDF. 20 published by the ARDF.

Amended version Original version Reason Article 16 Article 16 Wording is amended When the Company intends to When the Company intends to to comply with acquire or dispose of real property or acquire or dispose of real property “Regulations right-of-use assets thereof from or to from or to a related party, or when it Governing the a related party, or when it intends to intends to acquire or dispose of Acquisition and acquire or dispose of assets other assets other than real property from Disposal of Assets by than real property or right-of-use or to a related party and the Public Companies” assets thereof from or to a related transaction amount reaches 20 Article 15. party and the transaction amount percent or more of paid-in capital, 10 reaches 20 percent or more of paid-in percent or more of the company's capital, 10 percent or more of the total assets, or NT$300 million or company's total assets, or NT$300 more, except in trading of million or more, except in trading of government bonds or bonds under domestic government bonds or bonds repurchase and resale agreements, or under repurchase and resale subscription or redemption of money agreements, or subscription or market funds issued by domestic redemption of money market funds securities investment trust issued by domestic securities enterprises, the company may not investment trust enterprises, the proceed to enter into a transaction company may not proceed to enter contract or make a payment until the into a transaction contract or make a following matters have been payment until the following matters approved by one-half or more of the have been approved by one-half or entire membership of the audit more of the entire membership of the committee and resolved upon by the audit committee and resolved upon board of directors: by the board of directors: 1. The purpose, necessity and 1. The purpose, necessity and anticipated benefit of the acquisition anticipated benefit of the acquisition or disposal of assets. or disposal of assets. 2. The reason for choosing the 2. The reason for choosing the related party as a trading related party as a transaction counterparty. counterparty. 3. With respect to the acquisition of 3. With respect to the acquisition of real property from a related party, real property or right-of-use assets information regarding appraisal of thereof from a related party, the reasonableness of the preliminary information regarding appraisal of transaction terms in accordance with the reasonableness of the preliminary Article 17 and Article 18. transaction terms in accordance with 4. The date and price at which the Article 17 and Article 18. related party originally acquired the 4. The date and price at which the real property, the original trading related party originally acquired the counterparty, and that trading real property, the original transaction counterparty's relationship to the counterparty, and that transaction company and the related party. counterparty's relationship to the 5. Monthly cash flow forecasts for company and the related party. the year commencing from the 5. Monthly cash flow forecasts for anticipated month of signing of the the year commencing from the contract, and evaluation of the anticipated month of signing of the necessity of the transaction, and contract, and evaluation of the reasonableness of the funds Amended version Original version Reason necessity of the transaction, and utilization. reasonableness of the funds 6. An appraisal report from a utilization. professional appraiser or a CPA's 6. An appraisal report from a opinion obtained in compliance with professional appraiser or a CPA's the preceding article. opinion obtained in compliance with 7. Restrictive covenants and other the preceding article. important stipulations associated 7. Restrictive covenants and other with the transaction. important stipulations associated The calculation of the transaction with the transaction. amounts referred to in the preceding The calculation of the transaction paragraph shall be made in amounts referred to in the preceding accordance with Article 35, paragraph shall be made in paragraph 2 herein, and "within the accordance with Article 35, preceding year" as used herein refers paragraph 2 herein, and "within the to the year preceding the date of preceding year" as used herein refers occurrence of the current transaction. to the year preceding the date of Items that have been approved by occurrence of the current transaction one-half or more of the entire Items that have been approved by membership of the audit committee one-half or more of the entire and resolved upon by the board of membership of the audit committee directors need not be counted toward and resolved upon by the board of the transaction amount. directors need not be counted toward With respect to the acquisition or the transaction amount. disposal of business-use equipment With respect to the types of between the Company and its parent transactions listed below, when to be or subsidiaries, the Company’s board conducted between the Company and of directors may delegate the board its parent or subsidiaries, or between chairman to decide such matters its subsidiaries in which it directly or when the transaction amount not indirectly holds 100 percent of the reaches 20 percent of paid-in capital, issued shares or authorized capital, 10 percent of the Company’s total the Company's board of directors assets, or NT$300 million and have may delegate the board chairman to the decisions subsequently submitted decide such matters when the to and ratified by the next board of transaction amount not reaches 20 directors meeting. percent of paid-in capital, 10 percent of the Company’s total assets, or [omitted] NT$300 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.

[omitted] Amended version Original version Reason Article 17 Article 17 Wording is amended The Company that acquires real The Company that acquires real to comply with property or right-of-use assets property from a related party shall “Regulations thereof from a related party shall evaluate the reasonableness of the Governing the evaluate the reasonableness of the transaction costs by the following Acquisition and transaction costs by the following means: Disposal of Assets by means: Public Companies” [subparagraph 1~2 omitted] Article 16. [subparagraph 1~2 omitted] Where land and structures thereupon Where land and structures thereupon are combined as a single property are combined as a single property purchased in one transaction, the purchased or leased in one transaction costs for the land and the transaction, the transaction costs for structures may be separately the land and the structures may be appraised in accordance with either separately appraised in accordance of the means listed in the preceding with either of the means listed in the paragraph. preceding paragraph. The Company that acquires real The Company that acquires real property from a related party and property or right-of-use assets appraises the cost of the real property thereof from a related party and in accordance with paragraph 1 and appraises the cost of the real property paragraph 2 shall also engage a CPA or right-of-use assets thereof in to check the appraisal and render a accordance with the preceding two specific opinion. paragraphs shall also engage a CPA Where the Company acquires real to check the appraisal and render a property from a related party and one specific opinion. of the following circumstances Where the Company acquires real exists, the acquisition shall be property or right-of-use assets conducted in accordance with Article thereof from a related party and one 16 and the preceding three of the following circumstances paragraphs do not apply: exists, the acquisition shall be 1. The related party acquired the real conducted in accordance with the property through inheritance or as a preceding article, and the preceding gift. three paragraphs do not apply: 2. More than 5 years will have 1. The related party acquired the real elapsed from the time the related property or right-of-use assets party signed the contract to obtain thereof through inheritance or as a the real property to the signing date gift. for the current transaction. 2. More than 5 years will have 3. The real property is acquired elapsed from the time the related through signing of a joint party signed the contract to obtain development contract with the the real property or right-of-use related party, or through engaging a assets thereof to the signing date for related party to build real property, the current transaction. either on the company's own land or 3. The real property is acquired on rented land. through signing of a joint development contract with the related party, or through engaging a Amended version Original version Reason related party to build real property, either on the company's own land or on rented land. 4.The real property right-of-use assets for business use are acquired by the Company with its parent or subsidiaries, or by its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital.

Article 18 Article 18 Wording is amended When the results of the Company's When the results of the Company's to comply with appraisal conducted in accordance appraisal conducted in accordance “Regulations with paragraph 1 and paragraph 2 of with paragraph 1 and paragraph 2 of Governing the the preceding Article are uniformly the preceding Article are uniformly Acquisition and lower than the transaction price, the lower than the transaction price, the Disposal of Assets by matter shall be handled in matter shall be handled in Public Companies” compliance with Article 19 However, compliance with Article 19. Article 17. where the following circumstances However, where the following exist, objective evidence has been circumstances exist, objective submitted and specific opinions on evidence has been submitted and reasonableness have been obtained specific opinions on reasonableness from a professional real property have been obtained from a appraiser and a CPA have been professional real property appraiser obtained, this restriction shall not and a CPA have been obtained, this apply: restriction shall not apply: 1. Where the related party acquired 1. Where the related party acquired undeveloped land or leased land for undeveloped land or leased land for development, it may submit proof of development, it may submit proof of compliance with one of the following compliance with one of the following conditions: conditions: A. Where undeveloped land is A. Where undeveloped land is appraised in accordance with the appraised in accordance with the means in the preceding Article, and means in the preceding Article, and structures according to the related structures according to the related party's construction cost plus party's construction cost plus reasonable construction profit are reasonable construction profit are valued in excess of the actual valued in excess of the actual transaction price. The "Reasonable transaction price. The "Reasonable construction profit" shall be deemed construction profit" shall be deemed the average gross operating profit the average gross operating profit margin of the related party's margin of the related party's construction division over the most construction division over the most recent 3 years or the gross profit recent 3 years or the gross profit margin for the construction industry margin for the construction industry for the most recent period as for the most recent period as announced by the Ministry of announced by the Ministry of Finance, whichever is lower. Finance, whichever is lower. Amended version Original version Reason B. Completed transactions by B. Completed transactions by unrelated parties within the unrelated parties within the preceding year involving other floors preceding year involving other floors of the same property or neighboring of the same property or neighboring or closely valued parcels of land, or closely valued parcels of land, where the land area and transaction where the land area and transaction terms are similar after calculation of terms are similar after calculation of reasonable price discrepancies in reasonable price discrepancies in floor or area land prices in floor or area land prices in accordance with standard property accordance with standard property market sale or leasing practices. market sale practices. 2. Where the Company acquiring real C. Completed lease transactions by property, or obtaining real property unrelated parties within the right-of-use assets through leasing, preceding year involving other floors from a related party provides of the same property, where the land evidence that the terms of the area and transaction terms are similar transaction are similar to the terms of after calculation of reasonable price completed transactions involving discrepancies in floor or area land neighboring or closely valued parcels prices in accordance with standard of land of a similar size by unrelated property leasing market practices. parties within the preceding year. 2. Where the Company acquiring real Completed transactions involving property from a related party neighboring or closely valued parcels provides evidence that the terms of of land in the preceding paragraph in the transaction are similar to the principle refers to parcels on the terms of transactions completed for same or an adjacent block and within the acquisition of neighboring or a distance of no more than 500 closely valued parcels of land of a meters or parcels close in publicly similar size by unrelated parties announced current value; within the preceding year. transactions involving similarly sized Completed transactions involving parcels in principle refers to neighboring or closely valued parcels transactions completed by unrelated of land in the preceding paragraph in parties for parcels with a land area of principle refers to parcels on the no less than 50 percent of the same or an adjacent block and within property in the planned transaction; a distance of no more than 500 within the preceding year refers to meters or parcels close in publicly the year preceding the date of announced current value; occurrence of the acquisition of the transactions involving similarly sized real property or obtainment of the parcels in principle refers to right-of-use assets thereof. transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property.

Amended version Original version Reason Article 19 Article 19 Wording is amended Where the Company acquires real Where the Company acquires real to comply with property or right-of-use assets property from a related party and the “Regulations thereof from a related party and the results of appraisals conducted in Governing the results of appraisals conducted in accordance with Article 17 and Acquisition and accordance with the preceding two Article 18 are uniformly lower than Disposal of Assets by articles are uniformly lower than the the transaction price, the following Public Companies” transaction price, the following steps steps shall betaken: Article 18. shall be taken: 1. A special reserve shall be set aside 1. A special reserve shall be set aside in accordance with Article 41, in accordance with Article 41, paragraph 1 of the Act against the paragraph 1 of the Act against the difference between the real property difference between the real property transaction price and the appraised or right-of-use assets thereof cost, and may not be distributed or transaction price and the appraised used for capital increase or issuance cost, and may not be distributed or of bonus shares. Where a public used for capital increase or issuance company uses the equity method to of bonus shares. Where a public account for its investment in another company uses the equity method to company, then the special reserve account for its investment in another called for under Article 41, paragraph company, then the special reserve of the Act shall be set aside pro rata called for under Article 41, in a proportion consistent with the paragraph of the Act shall be set share of public company's equity aside pro rata in a proportion stake in the other company. consistent with the share of public 2. The audit committee shall comply company's equity stake in the other with Article 218 of the Company company. Act. 2. The audit committee shall comply 3. Actions taken pursuant to with Article 218 of the Company subparagraph 1 and subparagraph 2 Act. shall be reported to a shareholders 3. Actions taken pursuant to the meeting, and the details of the preceding two subparagraphs shall transaction shall be disclosed in the be reported to a shareholders annual report and any investment meeting, and the details of the prospectus. transaction shall be disclosed in the The Company that has set aside a annual report and any investment special reserve under the preceding prospectus. paragraph may not utilize the special The Company that has set aside a reserve until it has recognized a loss special reserve under the preceding on decline in market value of the paragraph may not utilize the special assets it purchased at a premium, or reserve until it has recognized a loss they have been disposed of, or on decline in market value of the adequate compensation has been assets it purchased or leased at a made, or the status quo ante has been premium, or they have been disposed restored, or there is other evidence of, or the leasing contract has been confirming that there was nothing terminated, or adequate unreasonable about the transaction, compensation has been made, or the and the FSC has given its consent. status quo ante has been restored, or When the Company obtains real there is other evidence confirming property from a related party, it shall Amended version Original version Reason that there was nothing unreasonable also comply with the preceding two about the transaction, and the FSC paragraphs if there is other evidence has given its consent. indicating that the acquisition was When the Company obtains real not an arms length transaction. property or right-of-use assets thereof from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arms length transaction.

Article 29 Article 29 Wording is amended [paragraph 1~4 omitted] [paragraph 1~4 omitted] to comply with Where any of the companies Where any of the companies “Regulations participating in a merger, demerger, participating in a merger, demerger, Governing the acquisition, or transfer of another acquisition, or transfer of another Acquisition and company's shares is neither listed on company's shares is neither listed on Disposal of Assets by an exchange nor has its shares traded an exchange nor has its shares traded Public Companies” on an OTC market, the company(s) on an OTC market, the company(s) Article 25. so listed or traded shall sign an so listed or traded shall sign an agreement with such company agreement with such company whereby the latter is required to whereby the latter is required to abide by the provisions of the abide by the provisions of paragraphs preceding two paragraphs. 3 and 4.

Article 34 Article 34 Wording is amended Where any of the companies Where any of the companies to comply with participating in a merger, demerger, participating in a merger, demerger, “Regulations acquisition, or transfer of shares is acquisition, or transfer of shares is Governing the not a public company, the public not a public company, the public Acquisition and company(s) shall sign an agreement company(s) shall sign an agreement Disposal of Assets by with the non-public company with the non-public company Public Companies” whereby the latter is required to whereby the latter is required to Article 30. abide by the provisions of Article 29, abide by the provisions of Article 29, Article 30, and the preceding article. Article 30, and Article 33.

Article 35 Article 35 Wording is amended Under any of the following Under any of the following to comply with circumstances, the Company circumstances, the Company “Regulations acquiring or disposing of assets shall acquiring or disposing of assets shall Governing the publicly announce and report the publicly announce and report the Acquisition and relevant information on the FSC's relevant information on the FSC's Disposal of Assets by designated website in the appropriate designated website in the appropriate Public Companies” format as prescribed by regulations format as prescribed by regulations Article 31. within 2 days counting inclusively within 2 days commencing from the date of occurrence of the immediately from the date of event: occurrence of the event: 1. Acquisition or disposal of real 1. Acquisition or disposal of real property or right-of-use assets property from or to a related party, or Amended version Original version Reason thereof from or to a related party, or acquisition or disposal of assets other acquisition or disposal of assets other than real property from or to a than real property or right-of-use related party where the transaction assets thereof from or to a related amount reaches 20 percent or more party where the transaction amount of paid-in capital, 10 percent or more reaches 20 percent or more of paid-in of the Company's total assets, or capital, 10 percent or more of the NT$300 million or more; provided, company's total assets, or NT$300 this shall not apply to trading of million or more; provided, this shall government bonds or bonds under not apply to trading of domestic repurchase and resale agreements, or government bonds or bonds under subscription or redemption of money repurchase and resale agreements, or market funds issued by domestic subscription or redemption of money securities investment trust market funds issued by domestic enterprises. securities investment trust 2. Merger, demerger, acquisition, or enterprises. transfer of shares. 2. Merger, demerger, acquisition, or 3. Losses from derivatives trading transfer of shares. reaching the limits on aggregate 3. Losses from derivatives trading losses or losses on individual reaching the limits on aggregate contracts set out in the procedures losses or losses on individual adopted by the Company. contracts set out in the procedures 4. Where the type of asset acquired adopted by the Company. or disposed is equipment/machinery 4. Where equipment or right-of-use for business use, the trading assets thereof for business use are counterparty is not a related party, acquired or disposed of, and and the transaction amount meets furthermore the transaction any of the following criteria: counterparty is not a related party, (1)For a public company whose and the transaction amount meets paid-in capital is less than NT$10 any of the following criteria: billion, the transaction amount (1)For a public company whose reaches NT$500 million or more. paid-in capital is less than NT$10 (2)For a public company whose billion, the transaction amount paid-in capital is NT$10 billion or reaches NT$500 million or more. more, the transaction amount reaches (2)For a public company whose NT$1 billion or more. paid-in capital is NT$10 billion or 5. Where land is acquired under an more, the transaction amount reaches arrangement on engaging others to NT$1 billion or more. build on the company's own land, 5. Where land is acquired under an engaging others to build on rented arrangement on engaging others to land, joint construction and build on the company's own land, allocation of housing units, joint engaging others to build on rented construction and allocation of land, joint construction and ownership percentages, or joint allocation of housing units, joint construction and separate sale, and construction and allocation of the amount the company expects to ownership percentages, or joint invest in the transaction reaches construction and separate sale, and NT$500 million. furthermore the transaction 6. Where an asset transaction other counterparty is not a related party, than any of those referred to in the Amended version Original version Reason and the amount the company expects preceding five subparagraphs, a to invest in the transaction reaches disposal of receivables by a financial NT$500 million. institution, or an investment in the 6. Where an asset transaction other area reaches 20 than any of those referred to in the percent or more of paid-in capital or preceding six subparagraphs, a NT$300 million; provided, this shall disposal of receivables by a financial not apply to the following institution, or an investment in the circumstances: mainland China area reaches 20 (1) Trading of government bonds. percent or more of paid-in capital or (2) Securities trading by investment NT$300 million; provided, this shall professionals on foreign or domestic not apply to the following securities exchanges or circumstances: over-the-counter markets, or (1) Trading of domestic government subscription by investment bonds. professionals of ordinary corporate (2) Where done by professional bonds or of general bank debentures investors-securities trading on without equity characteristics that are securities exchanges or OTC offered and issued in the domestic markets, or subscription of ordinary primary market, or subscription by a corporate bonds or general bank securities firm of securities as debentures without equity necessitated by its undertaking characteristics (excluding business or as an advisory subordinated debt) that are offered recommending securities firm for an and issued in the primary market, or emerging stock company, in subscription or redemption of accordance with the rules of the securities investment trust funds or Taipei Exchange. futures trust funds, or subscription by (3) Trading of bonds under a securities firm of securities as repurchase/resale agreements, or necessitated by its undertaking subscription or redemption of money business or as an advisory market funds issued by domestic recommending securities firm for an securities investment trust emerging stock company, in enterprises. accordance with the rules of the The amount of transactions above Taipei Exchange. shall be calculated as follows: (3) Trading of bonds under 1. The amount of any individual repurchase and resale agreements, or transaction. subscription or redemption of money 2. The cumulative transaction market funds issued by domestic amount of acquisitions and disposals securities investment trust of the same type of underlying asset enterprises. with the same trading counterparty The amount of transactions above within the preceding year. shall be calculated as follows: 1. The amount of any individual 3. The cumulative transaction transaction. amount of real property acquisitions 2. The cumulative transaction and disposals (cumulative amount of acquisitions and disposals acquisitions and disposals, of the same type of underlying asset respectively) within the same with the same transaction development project within the counterparty within the preceding preceding year. year. 4. The cumulative transaction Amended version Original version Reason 3. The cumulative transaction amount of acquisitions and disposals amount of acquisitions and disposals (cumulative acquisitions and (cumulative acquisitions and disposals, respectively) of the same disposals, respectively) of real security within the preceding year. property or right-of-use assets "Within the preceding year" as used thereof within the same development in the preceding paragraph refers to project within the preceding year. the year preceding the date of 4. The cumulative transaction occurrence of the current transaction. amount of acquisitions and disposals Items duly announced in accordance (cumulative acquisitions and with these Procedures need not be disposals, respectively) of the same counted toward the transaction security within the preceding year. amount. "Within the preceding year" as used The Company shall compile monthly in the preceding paragraph refers to reports on the status of derivatives the year preceding the date of trading engaged in up to the end of occurrence of the current transaction. the preceding month by itself and Items duly announced in accordance any subsidiaries that are not domestic with these Procedures need not be public companies and enter the counted toward the transaction information in the prescribed format amount. into the information reporting The Company shall compile monthly website designated by the FSC by reports on the status of derivatives the 10th day of each month. trading engaged in up to the end of When the Company at the time of the preceding month by the company public announcement makes an error and any subsidiaries that are not or omission in an item required by domestic public companies and enter regulations to be publicly announced the information in the prescribed and so is required to correct it, all the format into the information reporting items shall be again publicly website designated by the FSC by announced and reported in their the 10th day of each month. entirety within two days counting When the Company at the time of inclusively from the date of knowing public announcement makes an error of such error or omission. or omission in an item required by The Company when acquiring or regulations to be publicly announced disposing of assets shall keep all and so is required to correct it, all the relevant contracts, meeting minutes, items shall be again publicly log books, appraisal reports and announced and reported in their CPA, attorney, and securities entirety within two days counting underwriter opinions at the Company inclusively from the date of knowing headquarters, where they shall be of such error or omission. retained for 5 years except where The Company acquiring or disposing another act provides otherwise. of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company, where they shall be retained for 5 years except where another act provides otherwise. Amended version Original version Reason Article 37 Article 37 Wording is amended Information required to be publicly Information required to be publicly to comply with announced and reported in announced and reported in “Regulations accordance with the provisions of the accordance with the provisions of Governing the preceding Chapter on acquisitions Chapter 3 on acquisitions and Acquisition and and disposals of assets by the disposals of assets by a public Disposal of Assets by Company's subsidiary that is not company's subsidiary that is not itself Public Companies” itself a public company in Taiwan a public company in Taiwan shall be Article 34. shall be reported by the Company. reported by the public company. The paid-in capital or total assets of The paid-in capital or total assets of the Company shall be the standard the public company shall be the applicable to a subsidiary referred to standard applicable to a subsidiary in the preceding paragraph in referred to in the preceding determining whether, relative to paragraph in determining whether, paid-in capital or total assets, it relative to 20 percent of the paid-in reaches a threshold requiring public capital or 10 percent total assets, it announcement and regulatory filing reaches a threshold requiring public under Article 35, paragraph 1. announcement and regulatory filing under Article 35, paragraph 1.

Article 39 Article 39 To revise the date of The Rules shall be subject to the The Rules shall be subject to the amendment. approval of the shareholders’ approval of the shareholders’ meeting. meeting. These Rules shall be amended on These Rules shall be amended on June 22, 2016 and effective from June 22, 2016 and effective from July 1, 2016. July 1, 2016. These Rules shall be amended on These Rules shall be amended on June 27, 2017. June 27, 2017. These Rules shall be amended on 25 June 2019.

Voting Results :

Shares represented at the time of voting : 199,579,351

% of the total represented share Voting Results * present Votes in favor : 196,715,650 (186,731,894) 98.57% Votes against : 18,518 (18,518) 0.01% Votes invalid : none 0% Votes abstained 2,845,183 (2,560,183) 1.42%

*including votes casted electronically (numbers in brackets) RESOLVED, that the proposal for the amendment to the “Procedures for Acquisition and Disposal of Assets.” be approved as proposed.

Item III Proposed by the Board of Directors

Subject: The Amendment to the “Procedures for Loaning Funds to Others.” Descriptions: In order to comply with the latest “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.,” the Company hereby proposes to amend the “Procedures for Loaning Funds to Others.” The comparison table is as follows:

Amended version Original version Reason Article 2 Article 2 Wording is amended Under Article 15 of the Company Under Article 15 of the Company to comply with Act, the company shall not loan Act, the company shall not loan “Regulations funds to any of its shareholders or funds to any of its shareholders or Governing Loaning of any other person except under the any other person except under the Funds and Making of following circumstances: following circumstances: Endorsements/Guaran 1. Where an inter-company or 1. Where an inter-company or tees by Public inter-firm business transaction calls inter-firm business transaction calls Companies” Article 3. for a loan arrangement; or for a loan arrangement; or 2. Where an inter-company or 2. Where an inter-company or inter-firm short-term financing inter-firm short-term financing facility is necessary, provided that facility is necessary, provided that such financing amount shall not such financing amount shall not exceed 40 percent of the lender's net exceed 40 percent of the lender's net worth. worth. The term "short-term" as used in the The term "short-term" as used in the preceding paragraph means one year, preceding paragraph means one year, or where the company's operating or where the company's operating cycle exceeds one year, one cycle exceeds one year, one operating cycle. operating cycle. The term "financing amount" as used The term "financing amount" as used in paragraph 1, sub-paragraph 2 of in paragraph 1, sub-paragraph 2 of this Article means the cumulative this Article means the cumulative balance of the public company's balance of the company's short-term short-term financing. financing. The company with paid-in capital NT$1 billion or more, which has joined Leasing Association and declared high self-regulation, is able to loan out funds in accordance with Article 5 paragraph 2,3,4 regardless of certain monetary limit as in paragraph 1 subparagraph 2; this applies as long as loan funds do not exceed 100% of company net worth. Amended version Original version Reason Managers and personnels in charge who violates the provisions of the first and preceding paragraphs shall be responsible for returning the loan funds; if company is damaged from the above situation, that person shall also be liable for compensation.

Article 3 Article 3 Wording is amended After passage by one-half or more of After passage by one-half or more of to comply with the entire membership of the audit the entire membership of the audit “Regulations committee, submit the Procedures to committee, submit the Procedures to Governing Loaning of the board of directors and submit the board of directors and submit Funds and Making of them for approval by the them for approval by the Endorsements/Guaran shareholders' meeting; where any shareholders' meeting; where any tees by Public director expresses dissent and it is director expresses dissent and it is Companies” Article 8. contained in the minutes or a written contained in the minutes or a written statement, the company shall submit statement, the company shall submit the dissenting opinion and for the dissenting opinion and for discussion by the shareholders' discussion by the shareholders' meeting. meeting. Of the Act has not been consented to When the procedures were reported by one-half or more of the entire to the board, need to consider membership of the audit committee, independent director’s opinion. If an it may be adopted with the consent of independent director objects to or two-thirds or more of the entire expresses reservations about the board of directors, and recorded in matter, it shall be recorded in the the minutes of the board of directors' board meeting minutes. meeting. The term "entire membership" as used in these Procedures shall be calculated as the number of members actually in office.

Article 5 Article 5 Wording is amended Company loaning funds limits are as Company loaning funds limits are as to comply with follow: follow: “Regulations 1. Where funds are loaned for 1. Where funds are loaned for Governing Loaning of reasons of business dealings, the reasons of business dealings, the Funds and Making of total amount of loan shall not exceed total amount of loan shall not exceed Endorsements/Guaran company net worth. For specific company net worth. For specific tees by Public individual loan, the total amount individual loan, the total amount Companies” Article 9, shall not exceed 25 percent of shall not exceed 25 percent of with reference to The company net worth. company net worth. Banking Act of The 2. Where short-term financing is 2. Where short-term financing is Republic of China needed, the total amount of loan shall needed, the total amount of loan shall Article 33-2 second not exceed company net worth with not exceed 40 percent of company paragraph amended. strengthening risk assessment. For net worth. For specific individual specific individual loan, the total loan, the total amount shall not Amended version Original version Reason amount shall not exceed 10 percent exceed 10 percent of company net of company net worth. worth. 3. For unsecured loans to preceding 3. Where overseas companies in companies which is unrelated party, which the company holds, directly or the total amount shall not exceed 5 indirectly, 100% of the voting shares percent of company net worth. need to make loans to others, the 4. For loans to companies listed in total amount of loan shall not exceed the second paragraph, the aggregate 50 percent of company net worth. amount of loaning funds to a same For specific individual loan, the total industry shall not exceed 40 percent amount shall not exceed 20 percent of company net worth; the aggregate of company net worth. amount of loaning funds to a same affiliated enterprise or group shall not exceed 40 percent of company net worth. 5. Where overseas companies in which the company holds, directly or indirectly, 100% of the voting shares need to make loans to others, the total amount of loan shall not exceed company net worth. For specific individual loan, the total amount shall not exceed 20 percent of company net worth.

Article 9 Article 9 Amended the The company shall prepare a The company shall prepare a wording. memorandum book for its memorandum book for its fund-loaning activities and truthfully fund-loaning activities and truthfully record the following information: record the following information: borrower, amount, date of approval borrower, amount, date of approval by the board of directors, by the board of directors, lending/borrowing date, and matters lending/borrowing date, and matters to be carefully evaluated in to be carefully evaluated in accordance to the preceding Article. accordance to the preceding Article. The company's internal auditors shall The company's internal auditors shall audit the Operational Procedures for audit the Operational Procedures for Loaning Funds to Others and the Loaning Funds to Others and the implementation thereof no less implementation thereof no less frequently than quarterly and prepare frequently than quarterly and prepare written records accordingly. They written records accordingly. They shall promptly notify every shall promptly notify the audit independent director and the audit committee in writing of any material committee in writing of any material violation found. violation found.

Article 10 Article 10 Amended the If, as a result of a change in If, as a result of a change in wording. circumstances, an entity for which an circumstances, an entity for which an Amended version Original version Reason endorsement/guarantee is made does endorsement/guarantee is made does not meet the requirements of these not meet the requirements of these Procedures or the loan balance Procedures or the loan balance exceeds the limit, the Company shall exceeds the limit, the Company shall adopt rectification plans and submit adopt rectification plans and submit the rectification plans to every the rectification plans to the audit independent director and the audit committee, and shall complete the committee, and shall complete the rectification according to the rectification according to the timeframe set out in the plan. timeframe set out in the plan.

Article 12 Article 12 Wording is amended The company and its subsidiaries The company and its subsidiaries to comply with whose loans of funds reach one of whose loans of funds reach one of “Regulations the following levels shall announce the following levels shall announce Governing Loaning of and report such event within two and report such event within two Funds and Making of days commencing immediately from days commencing immediately from Endorsements/Guaran the date of occurrence: the date of occurrence: tees by Public 1. The aggregate balance of loans to 1. The aggregate balance of loans to Companies” Article 7. others by the company and its others by the company and its subsidiaries reaches 20 percent or subsidiaries reaches 20 percent or more of the company's net worth as more of the company's net worth as stated in its latest financial statement. stated in its latest financial statement. 2. The balance of loans by the 2. The balance of loans by the company and its subsidiaries to a company and its subsidiaries to a single enterprise reaches 10 percent single enterprise reaches 10 percent or more of the company's net worth or more of the company's net worth as stated in its latest financial as stated in its latest financial statement. statement. 3. The amount of new loans of funds 3. The amount of new loans of funds reaches NT$10 million or more, and by the company or its subsidiaries reaches 2 percent or more of the reaches NT$10 million or more, and company's net worth as stated in its reaches 2 percent or more of the latest financial statement. public company's net worth as stated The company shall announce and in its latest financial statement. report on behalf of any subsidiary The company shall announce and thereof that is not a public company report on behalf of any subsidiary of the Republic of China any matters thereof that is not a public company that such subsidiary is required to of the Republic of China any matters announce and report pursuant to that such subsidiary is required to subparagraph 3 of the preceding announce and report pursuant to paragraph. subparagraph 3 of the preceding The term "announce and report" as paragraph. used in these Regulations means the The term "announce and report" as process of entering data to the used in these Regulations means the information reporting website process of entering data to the designated by the Financial information reporting website Supervisory Commission (FSC). designated by the Financial “Date of occurrence” in these Supervisory Commission (FSC). Amended version Original version Reason Regulations means the date of “Date of occurrence” in these contract signing, date of payment, Regulations means the date of dates of boards of directors contract signing, date of payment, resolutions, or other date that can the dates of boards of directors counterparty and monetary amount resolutions, or other date that can of the loan of funds, whichever date confirm the counterparty and is earlier. monetary amount of the transaction, whichever date is earlier.

Article 18 Article 18 To revise the date of These Rules and any amendments These Rules and any amendments amendment. hereto, shall be implemented after hereto, shall be implemented after adoption by shareholders’ meetings adoption by shareholders’ meetings of the Company. of the Company. These Rules shall be amended on These Rules shall be amended on June 22, 2016 and effective from June 22, 2016 and effective from July 1, 2016. July 1, 2016. These Rules shall be amended on June 25, 2019

Voting Results :

Shares represented at the time of voting : 199,579,351

% of the total represented share Voting Results * present Votes in favor : 187,141,924 (177,158,168) 93.77% Votes against : 9,591,022 (9,591,022) 4.81% Votes invalid : none 0% Votes abstained 2,846,405 (2,561,405) 1.42%

*including votes casted electronically (numbers in brackets)

RESOLVED, that the proposal for the amendment to the “Procedures for Loaning Funds to Others.” be approved as proposed.

Item IV Proposed by the Board of Directors Subject: The Amendment to the “Procedures for Endorsements/Guarantees.” Descriptions: In order to comply with the latest “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.,” the Company hereby proposes to amend the “Procedures for Endorsements/Guarantees.” The comparison table is as follows:

Amended version Original version Reason Article 5 Article 5 Wording is amended After passage by one-half or more of After passage by one-half or more of to comply with the entire membership of the audit the entire membership of the audit “Regulations committee, submit the Procedures to committee, submit the Procedures to Governing Loaning of the board of directors and submit the board of directors and submit Funds and Making of them for approval by the them for approval by the Endorsements/Guaran shareholders' meeting; where any shareholders' meeting; where any tees by Public director expresses dissent and it is director expresses dissent and it is Companies” Article 8 contained in the minutes or a written contained in the minutes or a written and “Securities and statement, the company shall submit statement, the company shall submit Exchange Act” Article the dissenting opinion and for the dissenting opinion and for 14-5. discussion by the shareholders' discussion by the shareholders' meeting. meeting. Of the Act has not been consented to When the procedures were reported by one-half or more of the entire to the board, need to consider membership of the audit committee, independent director’s opinion. If an it may be adopted with the consent of independent director objects to or two-thirds or more of the entire expresses reservations about the board of directors, and recorded in matter, it shall be recorded in the the minutes of the board of directors' board meeting minutes. meeting. The term "entire membership" as used in these Procedures shall be calculated as the number of members actually in office.

Article 6 Article 6 The company has Before making an endorsement/ Before making an endorsement/ established the guarantee for others, the company guarantee for others, the company position of shall carefully evaluate with relevant shall carefully evaluate with relevant independent director, departments. After the evaluation departments. After the evaluation and hence amended results have been resolved upon by results have been resolved upon by the wording. one-half or more of the entire one-half or more of the entire membership of the audit committee, membership of the audit committee, submit the Procedures to the board of submit the Procedures to the board of directors, or approved by the directors, or approved by the chairman of the board, where chairman of the board, where empowered by the board of directors empowered by the board of directors under Article 11 to grant under Article 11 to grant Amended version Original version Reason endorsements/guarantees within a endorsements/guarantees within a specific limit, for subsequent specific limit, for subsequent submission to and ratification by the submission to and ratification by the next board of directors' meeting. next board of directors' meeting. Detailed review procedures, Detailed review procedures, including: including: 1. The necessity of and 1. The necessity of and reasonableness of reasonableness of endorsements/guarantees. endorsements/guarantees. 2. Credit status and risk assessment 2. Credit status and risk assessment of the entity for which the of the entity for which the endorsement/guarantee is made. endorsement/guarantee is made. 3. The impact on the company's 3. The impact on the company's business operations, financial business operations, financial condition, and shareholders' equity. condition, and shareholders' equity. 4. Whether collateral must be 4. Whether collateral must be obtained and appraisal of the value obtained and appraisal of the value thereof. thereof. For circumstances in which an entity For circumstances in which an entity for which the company makes any for which the company makes any endorsement/guarantee is a endorsement/guarantee is a subsidiary whose net worth is lower subsidiary whose net worth is lower than half of its paid-in capital, The than half of its paid-in capital, The company's internal auditors shall company's internal auditors shall audit the Operational Procedures for audit the Operational Procedures for Endorsements/Guarantees and the Endorsements/Guarantees and the implementation thereof no less implementation thereof no less frequently than quarterly and prepare frequently than quarterly and prepare written records accordingly. They written records accordingly. They shall promptly notify the audit shall promptly notify the audit committee in writing of any material committee in writing of any material violation found. violation found. In the case of a subsidiary with In the case of a subsidiary with shares having no par value or a par shares having no par value or a par value other than NT$10, for the value other than NT$10, for the paid-in capital in the calculation paid-in capital in the calculation under the preceding paragraph, the under the preceding paragraph, the sum of the share capital plus paid-in sum of the share capital plus paid-in capital in excess of par shall be capital in excess of par shall be substituted. substituted. The company submits the The company submits the Operational Procedures for Operational Procedures for Endorsements/Guarantees, the board Endorsements/Guarantees, where the of directors shall take into full company has established the position consideration each independent of independent director, the board of director's opinions; the independent directors shall take into full directors' opinions specifically consideration each independent expressing assent or dissent and the director's opinions; the independent reasons for dissent shall be included directors' opinions specifically Amended version Original version Reason in the minutes of the board of expressing assent or dissent and the directors' meeting. reasons for dissent shall be included in the minutes of the board of directors' meeting.

Article 7 Article 7 The company has The company shall prepare a The company shall prepare a established the memorandum book for its memorandum book for its position of endorsement/guarantee activities and endorsement/guarantee activities and independent director, record in detail the following record in detail the following and hence amended information for the record: the entity information for the record: the entity the wording. for which the endorsement/guarantee for which the endorsement/guarantee is made, the amount, the date of is made, the amount, the date of passage by the board of directors or passage by the board of directors or of authorization by the chairman of of authorization by the chairman of the board, the date the the board, the date the endorsement/guarantee is made, and endorsement/guarantee is made, and the matters to be carefully evaluated the matters to be carefully evaluated under the preceding article. under the preceding article. The company's internal auditors The company's internal auditors shall audit the Operational shall audit the Operational Procedures for Procedures for Endorsements/Guarantees and the Endorsements/Guarantees and the implementation thereof no less implementation thereof no less frequently than quarterly and prepare frequently than quarterly and prepare written records accordingly. They written records accordingly. They shall promptly notify every shall promptly notify the audit independent director and the audit committee in writing of any material committee in writing of any material violation found. violation found.

Article 8 Article 8 The company has Where the company needs to exceed Where the company needs to exceed established the the limits set out in the Operational the limits set out in the Operational position of Procedures for Procedures for independent director, Endorsements/Guarantees to satisfy Endorsements/Guarantees to satisfy and hence amended its business requirements, and where its business requirements, and where the wording. the conditions set out in the the conditions set out in the Operational Procedures for Operational Procedures for Endorsements/Guarantees are Endorsements/Guarantees are complied with, it shall obtain complied with, it shall obtain approval from one-half or more of approval from one-half or more of the entire membership of the audit the entire membership of the audit committee and the board of directors committee and the board of directors and half or more of the directors and half or more of the directors shall act as joint guarantors for any shall act as joint guarantors for any loss that may be caused to the loss that may be caused to the company by the excess company by the excess endorsement/guarantee. It shall also endorsement/guarantee. It shall also Amended version Original version Reason amend the Operational Procedures amend the Operational Procedures for Endorsements/Guarantees for Endorsements/Guarantees accordingly and submit the same to accordingly and submit the same to the shareholders' meeting for the shareholders' meeting for ratification after the fact. If the ratification after the fact. If the shareholders' meeting does not give shareholders' meeting does not give consent, the company shall adopt a consent, the company shall adopt a plan to discharge the amount in plan to discharge the amount in excess within a given time limit. excess within a given time limit. The board of directors shall take into Where the public company has full consideration each independent established the position of director's opinions; the independent independent director, the board of directors' opinions specifically directors shall take into full expressing assent or dissent and the consideration each independent reasons for dissent shall be included director's opinions; the independent in the minutes of the board of directors' opinions specifically directors' meeting. expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors' meeting.

Article 9 Article 9 The company has Where as a result of changes of Where as a result of changes of established the condition the entity for which an condition the entity for which an position of endorsement/guarantee is made no endorsement/guarantee is made no independent director, longer meets the requirements of longer meets the requirements of and hence amended these Regulations, or the amount of these Regulations, or the amount of the wording. endorsement/guarantee exceeds the endorsement/guarantee exceeds the limit, a public company shall adopt limit, a public company shall adopt rectification plans and submit the rectification plans and submit the rectification plans to all independent rectification plans to all the directors and the audit committee, supervisors, and shall complete the and shall complete the rectification rectification according to the according to the timeframe set out in timeframe set out in the plan. the plan.

Article 13 Article 13 1. In order to make The company and its subsidiaries The company and its subsidiaries “investment of a whose balance of whose balance of long-term nature” endorsements/guarantees reaches one endorsements/guarantees reaches one clear, this article of the following levels shall of the following levels shall referred to announce and report such event announce and report such event “Criteria within two days commencing within two days commencing Governing the immediately from the date of immediately from the date of Preparation of occurrence: occurrence: Financial Reports 1. The aggregate balance of 1. The aggregate balance of by Securities endorsements/guarantees by the endorsements/guarantees by the Firms” Article 9 company and its subsidiaries reaches company and its subsidiaries reaches Paragraph 4 50 percent or more of the company's 50 percent or more of the company's Subparagraph 1. Amended version Original version Reason net worth as stated in its latest net worth as stated in its latest 2. Endorsements/gua financial statement. financial statement. rantees is not 2. The balance of 2. The balance of transaction, the endorsements/guarantees by the endorsements/guarantees by the company hereby company and its subsidiaries for a company and its subsidiaries for a amends the single enterprise reaches 20 percent single enterprise reaches 20 percent wording. or more of the company's net worth or more of the company's net worth as stated in its latest financial as stated in its latest financial statement. statement. 3. The balance of 3. The balance of endorsements/guarantees by the endorsements/guarantees by the company and its subsidiaries for a company and its subsidiaries for a single enterprise reaches NT$10 single enterprise reaches NT$10 millions or more and the aggregate millions or more and the aggregate amount of all amount of all endorsements/guarantees for, endorsements/guarantees for, investment with book value investment of a long-term nature in, accounted for using equity method, and balance of loans to, such and balance of loans to, such enterprise reaches 30 percent or more enterprise reaches 30 percent or more of the company's net worth as stated of the company's net worth as stated in its latest financial statement. in its latest financial statement. 4. The amount of new 4. The amount of new endorsements/guarantees made by endorsements/guarantees made by the company or its subsidiaries the company or its subsidiaries reaches NT$30 million or more, and reaches NT$30 million or more, and reaches 5 percent or more of the reaches 5 percent or more of the company's net worth as stated in its company's net worth as stated in its latest financial statement. latest financial statement. The company shall announce and The company shall announce and report on behalf of any subsidiary report on behalf of any subsidiary thereof that is not a public company thereof that is not a public company of the Republic of China any matters of the Republic of China any matters that such subsidiary is required to that such subsidiary is required to announce and report pursuant to announce and report pursuant to subparagraph 4 of the preceding subparagraph 4 of the preceding paragraph. paragraph. The term "announce and report" as The term "announce and report" as used in these Regulations means the used in these Regulations means the process of entering data to the process of entering data to the information reporting website information reporting website designated by the Financial designated by the Financial Supervisory Commission (FSC). Supervisory Commission (FSC). “Date of occurrence” in these “Date of occurrence” in these Regulations means the date of Regulations means the date of contract signing, date of payment, contract signing, date of payment, dates of boards of directors dates of boards of directors resolutions, or other date that can resolutions, or other date that can confirm the counterparty and confirm the counterparty and monetary amount of the transaction, Amended version Original version Reason monetary amount of the whichever date is earlier. endorsement/guarantee, whichever date is earlier.

Article 18 Article 18 To revise the date of These Rules and any amendments These Rules and any amendments amendment. hereto, shall be implemented after hereto, shall be implemented after adoption by the shareholders’ adoption by shareholders’ meetings meetings. of the Company. These Rules shall be amended on These Rules shall be amended on June 22, 2016 and effective from June 22, 2016 and effective from July 1, 2016. July 1, 2016. These Rules shall be amended on June 25, 2019.

Voting Results :

Shares represented at the time of voting : 199,579,351

% of the total represented share Voting Results * present Votes in favor : 196,716,650 (186,732,894) 98.57% Votes against : 16,518 (16,518) 0.01% Votes invalid : none 0% Votes abstained 2,846,183 (2,561,183) 1.42%

*including votes casted electronically (numbers in brackets)

RESOLVED, that the proposal for the amendment to the “Procedures for Endorsements / Guarantees.” be approved as proposed.

Item V Proposed by the Board of Directors Subject: The Amendment to the “Rules and Procedures of Shareholders Meeting.” Descriptions: In order to comply with the Article 172 and 172-1 of Company Act,” the Company hereby proposes to amend the “Rules and Procedures of Shareholders Meeting.” The comparison table is as follows:

Amended version Original version Reason Article 3-1 Article 3-1 In order to comply [paragraph 1~3 omitted] [paragraph 1~3 omitted] with the amendment to Article 172 and Election or dismissal of directors, Election or dismissal of directors, 172-1 of the Company amendments to the articles of amendments to the articles of Act, the company incorporation, reduction of capital, incorporation, the dissolution, hereby amends the application for the approval of merger, or demerger of the wording. ceasing its status as a public corporation, or any matter under company, approval of competing Article 185, paragraph 1 of the with the company by directors, Company Act (major changes in the surplus profit distributed in the form corporation’s business activities) or of new shares, reserve distributed in Articles 26-1 and 43-6 of the the form of new shares, the Securities and Exchange Act (private dissolution, merger, or demerger of placements of securities) or Articles the corporation, or any matter under 56-1 and 60-2 of Regulations Article 185, paragraph 1 of the Governing the Offering and Issuance Company Act (major changes in the of Securities by Securities Issuers corporation’s business activities) or shall be set out in the notice of the Articles 26-1 and 43-6 of the reasons for convening the Securities and Exchange Act (private shareholders’ meeting. None of the placements of securities) or Articles above matters may be raised by a 56-1 and 60-2 of Regulations special motion. Governing the Offering and Issuance A shareholder holding one percent or of Securities by Securities Issuers more of the total number of issued shall be set out in the notice of the shares may submit to the Company a reasons for convening the written proposal for discussion at a shareholders’ meeting. None of the regular shareholders’ meeting. Such above matters may be raised by a proposals, however, are limited to special motion. one item only, and no proposal A shareholder holding one percent or containing more than one item will more of the total number of issued be included in the meeting agenda. In shares may submit to the Company a addition, when the circumstances of written proposal for discussion at a any subparagraph of Article 172-1, regular shareholders’ meeting. Such paragraph 4 of the Company Act proposals, however, are limited to apply to a proposal put forward by a one item only, and no proposal shareholder, the board of directors containing more than one item will may exclude it from the agenda. be included in the meeting agenda. A shareholder proposal proposed for urging the Company to promote public interests or fulfill its social Amended version Original version Reason responsibilities may still be included in the list of proposals to be discussed at a regular meeting of shareholders by the board of directors. In addition, when the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda.

Article 20 Article 20 To revise the date of These Rules and any amendments These Rules and any amendments amendment. hereto, shall be implemented after hereto, shall be implemented after adoption by shareholders’ meetings adoption by shareholders’ meetings of the Company. of the Company. These Rules shall be amended on These Rules shall be amended on June 22, 2016 and effective from June 22, 2016 and effective from July 1, 2016. July 1, 2016. These Rules shall be amended on June 25, 2019.

Voting Results :

Shares represented at the time of voting : 199,579,351

% of the total represented share Voting Results * present Votes in favor : 196,716,850 (186,733,094) 98.57% Votes against : 17,518 (17,518) 0.01% Votes invalid : none 0% Votes abstained 2,844,983 (2,559,983) 1.42%

*including votes casted electronically (numbers in brackets)

RESOLVED, that the proposal for the amendment to the “Rules and Procedures of Shareholders Meeting.” be approved as proposed.

5. Directors Election Item 1 Proposed by the Board of Directors Subject: Election of the 11th term directors

Descriptions:

1. The three-year tenure of the 10th term directors (including independent directors) will expire on June 30, 2019, and a re-election will be carried out in 2019 Annual Meeting of Shareholders. 2. Pursuant to Article 15 of the Articles of Incorporation and Article 14-2 of the Securities and Exchange Act, the shareholders’ meeting shall elect 10 seats of directors, including 3 seats of independent directors. The term of the new directors is three years, from 2019/07/01 to 2022/06/30. 3. Pursuant to Article 15 of the Articles of Incorporation, directors (including independent directors) shall be elected according to the candidate nomination system. The list of candidates of directors has been reviewed and approved by the Board of Directors on 2019/05/10, which education, professional qualifications and other information are as follow.

Director candidates list

(1). Candidates of Director

The name of juristic The name of Shareholder person and representative and Education Major Experience and present job No. or ID No. Shareholding Shareholding

Li-Lien Yen Chen Department of Physical, Chairman, Yulon Motor Co., Ltd. Shareholding: Chinese Culture Chairman, 500,000 Shares University Director, Yulon Finance Corporation Kuo-Rong Chen Master in Advanced Vice Chairman, Yulon Motor Co., Ltd. Shareholding: 6,252 Management, National Director, China Motor Corporation Yulon Motor Co., Shares Chaio Tung University Chairman, Yulon Finance Corporation Ltd. 3 Director and President, Yulon Motor Co., Shareholding: Ltd. 162,260,560 Shares Zhen-Xiang Yao MIB, Curtin University Director, Yulon Finance Corporation Shareholding: Of Tehnology, Director, Motor Co., Ltd. 0 Shares Australia Director, Yulon Energy Service Co., Ltd. Director, China Engine Corporation Chairman, Yulon TOBE Motor Co., Ltd Ph.D. in economics, Director, Yulon Motor Co., Ltd. State University of Director, Yulon Finance Corporation Yulon Management New York, USA Independent Director, My Humble House Liang Chang Co., Ltd. Hospitality Management Consulting Co., 53061 Shareholding: Shareholding: Ltd. 0 Shares 12,913 Shares Director, TSRC Corporation Director, Altek Corporation Director, Global Financial Services Co., Ltd. Wen-Rong Tsay Master in Advanced Director, Yulon Finance Corporation. Shareholding: Management, National Director and President, Luxgen Motor Co., 0 Shares Chaio Tung University Ltd. Department of Chen-Cheng Lee Director, Yulon Finance Corporation. Mechanical Shareholding: Director and President, Yulon Motor Engineering, National 10,000 Shares Co., Ltd Taiwan University Department of Kuo-Hsing Hsu Engineering, National Director and President, Yulon Finance Shareholding: Taiwan University of Corporation. 0 Shares Science and Technology

(2). Candidates of Independent Director

Shareholder No. Name and Education Major Experience and present job or ID No. Shareholding

Independent Director, Yulon Motor Co., Ltd. Independent Director, MOMO.COM INC. Visiting Professor, School of Law, City University of Hong Kong Yi-Hong Hsieh, Ph.D. in Law, The Leland Visiting Professor, School of Law, the Chinese University of F12*****20 Shareholding: Stanford Junior University, Hong Kong 0 Shares USA Visiting Professor, School of Law, Peking University Adjunct Professor, School of Law, National Central University Members of the Board of Examiners, Senior Civil Service Examination of the Examination Yuan of ROC Independent Director, Yulon Motor Co., Ltd. Senior Consultant of Chairman Office, Chunghwa Telecom Co., Ltd. Zhong-Qi Zhou Master of Science Independent Director, Standard Foods Co., Ltd. Q10*****97 Shareholding: Mathematics, Colorado General Manager, Siemens Nixdorf Informationssysteme 0 Shares State University, USA Taiwan Branch. Vice Chairman and President, Telecommunication Network Services Co. President, Vibo Telecom Inc. MBA, Massachusetts Institute of Technology Director, Hao-Feng Assset Co., Ltd. Sloan School of Independent Director, China Motors Corporation Chi-Ching Chen Management Independent Director, Yulon Finance Corporation F12*****02 Shareholding: Director, GigaMedia Limited Co. 0 Shares EMBA, Global Business Program, College of Director, Financial One Corp. Commerce, National Director, Chailease Holding Company Limited Chengchi University

4. Election requested. Voting Results :

Shareholder No. or Name Votes Received ID No. Yulon Motor Co., Ltd., representative: 3 184,938,716 Li-Lien Yen Chen Yulon Motor Co., Ltd., representative: 3 183,147,868 Kuo-Rong Chen Yulon Motor Co., Ltd., representative: 3 182,995,047 Zhen-Xiang Yao Yulon Management Co., Ltd., representative: 53061 182,811,414 Liang Chang Yulon Management Co., Ltd., representative: 53061 182,691,792 Wen-Rong Tsay Yulon Management Co., Ltd., representative: 53061 182,600,317 Chen-Cheng Lee Yulon Management Co., Ltd., representative: 53061 182,219,589 Kuo-Hsing Hsu F12*****20 Yi-Hong Hsieh, 179,381,205 Q10*****97 Zhong-Qi Zhou 179,171,448 F12*****02 Chi-Ching Chen 178,114,430

6. Others Item 1 Proposed by the Board of Directors Subject: Release the Prohibition on 11th term Directors from Participation in Competitive Business

Descriptions:

1. According to Article 209 of the Company Act, it is proposed to release the prohibition on 11th term directors from participation in competitive business. 2. If a juristic person’s authorized representative was elected as a director, the director is likely to engage in the company with identical properties of business operated by the Company, or serving as the directors or manager at the business, strategic alliance, or collaboration business reinvested by the Company. The prohibition on the directors from participation in competitive business is released from aforementioned regulations, if the part-time duty is required for business during the term and without the damage of company interests. Company name and the director's position in the enterprise:

The name of juristic person Positions held concurrently at other companies and representative Company name Title Yulon Motor Co., Ltd. Yulon Motor Co., Ltd. Chairman Representative: China Motor Corporation Chairman Li-Lien Yen Chen Yulon Nissan Motor Co., Ltd. Chairman Winsome Co., Ltd. Vice Chairman Tai-Yuen Textile Co., Ltd. Chairman

Yulon Management Co., Ltd. Chairman

Yu Pong Business Co., Ltd. Chairman

Alliance Investment & Management Co., Director Ltd. DIAMOND HOSIERY & THREAD CO., Chairman LTD. Yen Tjing Ling Medical Foundation Director Yen Tjing-Ling Industrial Development Chairman

Vivian Wu Yen News Award Foundation Chairman

Vivian Wu Yen Industrial Development Chairman Promotion Committee

Yung Hang Investment Co., Ltd. Chairman

Xiang Wei Co., Ltd. Chairman Shin Sheng Investment Co., Ltd. Chairman Wei Tai Investment Co., Ltd. Director Lowin Industrial Co, Ltd. Supervisors Vincent Investment Co., Ltd. Director

Yuan Wei Investment Co., Ltd. Chairman

Yong Shun Investment Corporation Chairman

Li Yuan Investment Co., Ltd. Chairman

Li Peng Investment Co., Ltd. Chairman

ADTO Company Chairman

The name of juristic person Positions held concurrently at other companies and representative Company name Company name Yulon Motor Co., Ltd. Yulon Motor Co., Ltd. Vice Chairman Representative: China Motor Corporation Director Kuo-Rong Chen Director & Special Yulon Nissan Motor Co., Ltd. Assistant of Chairman Luxgen Motor Co., Ltd. Chairman

Hwa-chuan Auto Technology Center Co., Chairman Ltd. Yulon Construction Co., Ltd. Chairman

Winsom Development Co., Ltd Director Tai-Yuen Textile Co., Ltd. Director

Yulon Management Co., Ltd. Director & President Yu Pong Business Co., Ltd. Director

Alliance Investment & Management Co., Director Ltd. DIAMOND HOSIERY & THREAD CO., Director LTD. Motor Co., Ltd. Vice Chairman

Dong Feng Yulon Motor Sales Limited Director

Yulon Automotive (China) Investment Chairman Limited Yen Tjing Ling Medical Foundation Director Yen Tjing-Ling Industrial Development Director Vivian Wu Yen News Award Foundation Director

Yung Hang Investment Co., Ltd. Director & President Xiang Wei Co., Ltd. Director

Shin Sheng Investment Co., Ltd. Director

Yu Xin Investment Co., Ltd. Director

Vincent Investment Co., Ltd. Director

Yuan Wei Investment Co., Ltd. Director

The name of juristic person Positions held concurrently at other companies and representative Company name Company name

Yulon Motor Co., Ltd. Yong Shun Investment Corporation Director Representative: Li Yuan Investment Co., Ltd. Director Kuo-Rong Chen Li Peng Investment Co., Ltd. Director Grand Win Overseas Ltd Director

Yulon China Investment (HK) Co., Ltd. Director

Yulon Motor Investment (HK) Co., Ltd. Director

Yulon New Energy Motor (HK) Limited Director

Jet Ford, Inc.(Jetford) Director

Yulon China Investment Co., Ltd. Director

Yulon Overseas Investment Co., Ltd. Director

PAC-LINK MANAGEMENT CORP. Director

Wen Yang Investment (Samoa) Co., Ltd. Chairman

Taixin Investment (Samoa) Co., Ltd. Chairman

Qing Yi Investment (Samoa) Co., Ltd. Chairman

Yi-Jan Overseas Investment Co., Ltd. Chairman

Yulon China Holdings (Cayman) Co., Ltd. Director

Yulon Philippine Investment Co., Ltd. Director

Yulon New Energy Motor (Cayman) Inc. Director

Luxgen () Motor Sales Co., Ltd. Director

Yulon Motor Co., Ltd. Yulon Motor Co., Ltd. Director & President Representative: Yulon Nissan Motor Co., Ltd. Director Zhen-Xiang Yao Luxgen Motor Co., Ltd. Director China Engine Corporation Director Uni Auto Parts Manufacture Co., Ltd. Chairman China Ogihara Co., Ltd. Chairman

The name of juristic person Positions held concurrently at other companies and representative Company name Company name

Yulon Motor Co., Ltd. Yulon Construction Co., Ltd. Director Representative: Zhen-Xiang Yao ESINN Co., Ltd. Chairman Yushin Motor Co., Ltd. Chairman

Ding Long Co., Ltd. Chairman

Yulon TOBE Motor Co., Ltd. Chairman

Yu Ching Business Co., Ltd. Chairman

China Cast Iron Pipe Co., Ltd. Chairman

Sin Chi Co., Ltd. Chairman

Dongfeng Yulon Motor Co., Ltd. supervisor

Luxgen (hangzhou) Motor Sales Co., Ltd. Chairman

Aeolus Automobile Co., Ltd. Vice Chairman

Guangzhou Fengshen Motor Sales Co., Ltd. Director Yulon Automotive (China) Investment Director Limited UNIVATION MOTOR PHILIPPINES, INC. Chairman

Yung Hang Investment Co., Ltd. Director

Yulon Management Co., Yulon Motor Co., Ltd. Director Ltd. Representative: Yulon Management Co., Ltd. Supervisors Liang Chang Fan International Consultants Inc. Director

IKEA Catalogue Director

Maxigen Biotech Inc. Director

JARDINE FOOD SERVICES (TAIWAN) CO., LTD. Chairman

Ho-Ping Power Co., Ltd. Independent Director

Jardine Matheson (Taiwan) Chairman My Humble House Hospitality Management Independent Director Consulting Co., Ltd.

The name of juristic person Positions held concurrently at other companies and representative Company name Company name Yulon Management Co., Luxgen Motor Co., Ltd. Director & President Ltd. TokyoMarineNewa Insurance Co., Ltd. Director Representative: Wen-Rong Tsay Yue Sheng Industrial Co., Ltd. Chairman Luxgen Taipei Motor Co., Ltd. Chairman

Luxgen Taoyuan Motor Co., Ltd. Chairman

Luxgen Taichung Motor Co., Ltd. Chairman

Luxgen Tainan Motor Co., Ltd. Chairman Luxgen Kaohsiung Motor Co., Ltd. Chairman

Luxgen Overseas Holdings Private Ltd. Director

Yulon Management Co., Yulon Nissan Motor Co., Ltd. Director & President Ltd. TokyoMarineNewa Insurance Co., Ltd. Director Representative: Chen-Cheng Lee Yu Chang Motor Co., Ltd. Director Yuan Lon Motor Co., Ltd. Executive Director Kai Xing Insurance Agent Co., Ltd. Director Automobile Co., Ltd. Director Fengshen Motor Sales Co., Ltd. Director Shenzhen Lan You Technology Co., Ltd. Chairman Dong Feng Yulon Used Co., Ltd. Director Aeolus Xiangyang Automobile Co., Ltd. Director Yen Tjing-Ling Industrial Development Director Jet Ford, Inc.(Jetford) Director

Yulon Management Co., -Plus Auto Leasing Corporation Chairman Ltd. Singan Co., Ltd., Chairman Representative: Kuo-Hsing Hsu Yulon Motor Finance(China) Co., Ltd. Chairman TAC Finance Leasing Co., Ltd. Chairman Car-Plus Leasing Co., Ltd. Director

The name of juristic person Positions held concurrently at other companies and representative Company name Company name Yulon Management Co., Car-Plus Leasing (Shanghai) Co., Ltd. Director Ltd. Representative: Kuo-Hsing Dong Feng Yulon Motor Sales Limited Director Hsu Yulon Automotive (China) Investment Limited Director

Independent Director Yulon Motor Co., Ltd. Independent Director Yi-Hong Hsieh momo.com Inc. Independent Director

Independent Director Yulon Motor Co., Ltd. Independent Director Zhong-Qi Zhou Fubon Life Insurance Co., Ltd. Independent Director

Standard Foods Co., Ltd. Independent Director

Representative of Kino Biotech Co., Ltd. legal person director

Easycard Investment Holding Co., Ltd. Director

Representative of Easycard Corporation legal person director

Independent Director China Motor Corporation Independent Director Chi-Ching Chen Hao-Feng Asset Co., Ltd. Director

Voting Results :

Shares represented at the time of voting : 199,579,351

% of the total represented share Voting Results * present Votes in favor : 187,116,353 (177,132,597) 93.76% Votes against : 5,438,108 (5,438,108) 2.72% Votes invalid : none 0% Votes abstained 7,024,890 (6,739,890) 3.52%

*including votes casted electronically (numbers in brackets)

RESOLVED, that the proposal for releasing the prohibition on 11th term directors from participation in competitive business be approved as proposed. 7. Questions and Motions N/A

8. Adjournment 09:40 a.m. at the day

( The minute is just a procedure of the shareholders’ meeting, to get more meeting detail, please refer to the meeting video.)

Chairperson : Kuo-Rong Chen

Recorder : May Liao (Appendix ) Yulon Finance Corporation Annual Business Report

Following the economic growth of the previous year, although the global economy in 2018 was affected by tariffs and trade conflicts of the major economies USA and China, the overall performance is still on the growing side; while the has gradually entered into the end of its high-speed growth period, it still plays an important and supporting role in the global economic development; Taiwan has become an economy booster by domestic demand as the global economy slows down in 2018, under the uncertainties and risks of trade frictions, the economy still grow steadily and moderately, the annual economic growth rate was 2.63%. The annual sales of automobiles in 2018 reached 435,000 cars, a slight decline of 2.1%, if compared with last year (a decrease of 9,495 cars). I. Operational Results For the overall performance of passenger car in 2018, we had a continued growth thanks to good performance in both of the self-owned channel of used cars and channel of agent, the performance was up 17% from the same period last year; and for the commercial vehicle performance, it was benefit from trade in policy and also grew 11%. For the financial business in the equipment and enterprises, thanks to the active development of business and the drive for manpower, we had a performance growth of 36%; and for the consumption and financial business, we had a growth of 21% at the motorcycle business, and 12% at commodity industry. The overall performance of Taiwan's financing industry has grown significantly over the past year, and its total profit has reached NT$2.49 billion, up 19% from the same period last year.

As for overseas subsidiaries, under the deep cultivation of business development and active expansion of the business scope, the performance of Yulon Motor Finance (China) Co., Ltd. has grown steadily, the Company's pre-tax profit is RMB 40,769,000, which is 247% growing from the previous year; TAC Leasing Co., Ltd.'s net pre-tax profit is RMB 94,451,000, which is 66% higher than the previous year; and TAC Finance Leasing Co., Ltd. is subject to external factors (such as suspension of automatic deduction by Agricultural Bank of China and the restrict number of court cases, so the bad debt costs increased, resulting in pre-tax loss of RMB 14,399,000. The Yulon Finance Philippines Corporation has officially operated in the 4th quarter of 2018, implementing the first step

77 to development of the Southeast Asian market; for the initial stage, the new car instalment business marks the main business, and the amount of operation reached 330 million pesos, which is a good start. With Yulon's steady growth of business and credit assets balance year after year, the Company’s consolidated revenue in 2018 was NT$ 23.13 billion, 18.7% higher than that of the previous year, and its operating profit was NT$3.69 billion, 20.9% higher than that of the previous year. Its pre-tax profit in 2018 was NT$ 3.81 billion, and its after-tax earnings per share was NT$9.27.

II. Future Prospects Looking to 2019, the global economic forecast can still maintain the growth rate of the previous year; although there are issues such as Brexit, Sino-US trade war and capital outflow from developing countries, the related countries are driven by the sustained economic growth of the United States, and the external source predicts that the global economic growth has entered a stable plateau. Taiwan's economy is mainly affected by Sino-US trade war, financial turmoil and global situation. The Accounting and Controlling Office of the Executive Yuan expects real economic growth of 2.27% in 2019.

Due to the uncertainties of the global economy, the slowdown of Taiwan's export growth and the persistent impact of annuity reform, Taiwan's auto market is expected to be slightly downgraded in 2019, with an estimated sales volume of 428,000 cars for the whole year. Yulon Nissan will continue to strengthen the sales of popular cars, Luxgen will launch "Eight New Species" and other brand-new models to boost buying, and the Company will continue to meet consumer's needs with car loans, and strive for more performance promotion and profit growth; in terms of car rental services, it will also integrate straight car rental and promote innovative business models; in addition, in terms of vehicle service, it will integrate horizontal value chain into vehicle service business, and build online e-commerce service model and develop off-line service of automobile after-service, or the integration of business with O2O.

In the aspect of overseas business expansion, Yulon Motor Finance (China) Co., Ltd. was established since the year before last, the retail volume has reached 40,000 units in 2018, it will comply with the group for brand sales in the future, but it will also duplicate the successful development experience of the main plant of the group, and actively develop new business and make full use of information technology (such as online feeding and

78 returning and review & approval) to improve service quality and competitiveness. TAC Leasing Co., Ltd. continues to deeply cultivate customer relations in the field of enterprise finance, and actively explore the business scale in machinery and equipment, medical equipment and new energy equipment. TAC Finance Leasing Co., Ltd. will start to develop used car marketing and sales business on the basis of existing used car financing business, to integrate and gradually build a post-service system. Yulon Finance Philippines Corporation will continue to strengthen its business and recruit team manpower, and the business scope of services will be expanded from Greater Manila to the whole country, we have grown steadily and laid the cornerstone for the development of Southeast Asian market undertakings.

Chairman：Kuo-Rong Chen Manager：Kuo-Hsing Hsu Accounting Supervisor：Tsung-Hsing Han

79 Yulon Finance Corporation (Formerly Taiwan Acceptance Corporation) Financial Statements and Independent Auditors’ Report

The Board of Directors and Shareholders Yulon Finance Corporation (Formerly Taiwan Acceptance Corporation)

Opinion

We have audited the accompanying financial statements of Yulon Finance Corporation (the Company), which comprise the balance sheets as of December 31, 2018 and 2017, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

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

80 The key audit matters of the 2018 financial statements are described as follows:

Estimated Impairment of Trade Receivable

As described in Note 5 to the accompanying financial statements, the provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company’s historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. Where the actual future cash inflows are less than expected, a material impairment loss may arise. The key assumptions and inputs used involved significant management judgment and estimation uncertainty ; thus, this is determined as a key audit matter. As of December 31, 2018, allowance for impairment loss of trade receivables was NT$1,914,962 thousand, representing 3.17% of total trade receivables; impairment loss of trade receivables recognized in the statements of comprehensive income for the year ended December 31, 2018 was NT$1,019,834 thousand, representing 29.55% of operating expenses.

Our audit procedures included the following:

1. We understood the policies on impairment of trade receivable and assessed the reasonableness of impairment of receivables by performing inquiry, inspection and re-performance of related internal controls.

2. We involved our IT specialists in testing the system that generated related documents used by management in performing controls, in order to verify the correctness of the assumptions used in the default rate and expected loss rate.

3. We calculated the expected credit loss based on the impairment policy of the Company.

Calculation of Interest Revenue from Acquired Accounts Receivable

As described in Note 4 to the accompanying financial statements, interest revenue from acquired accounts receivable consists of small amounts from a large number of debtors; interest revenue is recognized throughout the periods of individual receivable acquisition contracts using effective interest rates. Contracts involve various contract periods, principal amounts and interest rates, resulting in large data processing and complex calculation. Thus, we determined calculation of interest revenue from acquired accounts receivable as a key audit matter. For the year ended December 31, 2018, interest revenue recognized from acquired accounts receivable was NT$3,762,902 thousand, representing 75.36% of operating revenue.

Our audit procedures included the following:

1. We involved our IT specialists in the evaluation of IT general control environment and logic of accounts receivable interest revenue calculation system used by management.

2. We calculated interest revenue from acquired accounts receivable using effective interest rate to assess the reasonableness of recognized revenue.

3. We performed analytical procedures using the ratio of the balances of receivables acquired to the recognized interest revenue of current and prior years to assess the reasonableness of recognized revenue.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including the audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

82 5. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 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 Hsin-Wei Tai and Yu-Wei Fan.

Deloitte & Touche Taipei, Taiwan Republic of China

March 25, 2019

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

83 YULON FINANCE CORPORATION (Formerly Taiwan Acceptance Corporation)

BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

2018 2017 ASSETS Amount % Amount %

CURRENT ASSETS Cash $ 1,519,853 2 $ 757,674 1 Financial assets at amortized cost - current 216,324 - - - Financial assets for hedging - current 12,356 - - - Debt investments with no active market - current - - 195,248 - Notes and trade receivables from unrelated parties 58,170,312 78 51,576,809 79 Notes and trade receivables from related parties 405,991 1 320,187 - Other receivables 331,191 - 1,124,617 2 Inventories 1,463,799 2 449,278 1 Prepayments 30,614 - 1,260,126 2 Incremental costs of obtaining a contract - current 1,433,779 2 - -

Total current assets 63,584,219 85 55,683,939 85

NON-CURRENT ASSETS Held-to-maturity financial assets - non-current - - 5,578 - Financial assets at amortized cost - non-current 5,453 - - - Investments accounted for using equity method 10,297,530 14 9,240,321 14 Property, plant and equipment 194,003 - 194,203 - Intangible assets 22,425 - 17,948 - Deferred tax assets 316,737 1 244,673 1 Other non-current assets 11,521 - 10,915 -

Total non-current assets 10,847,669 15 9,713,638 15

TOTAL $ 74,431,888 100 $ 65,397,577 100

LIABILITIES AND EQUITY

CURRENT LIABILITIES Short-term borrowings $ 5,910,725 8 $ 9,450,000 14 Short-term bills payable 43,287,668 58 38,995,120 60 Derivative financial liabilities for hedging - current - - 201 - Financial liabilities for hedging - current 81 - - - Notes and trade payables to unrelated parties 95,897 - 72,933 - Notes and trade payables to related parties 775,562 1 607,505 1 Other payables 419,219 1 388,078 1 Current tax liabilities 282,751 1 176,089 - Provisions - current 281,226 - 292,184 - Bonds payable 6,443,671 9 4,342,919 7 Other current liabilities 252,245 - 344,579 1

Total current liabilities 57,749,045 78 54,669,608 84

NON-CURRENT LIABILITIES Deferred tax liabilities 197,222 - 106,289 - Net defined benefit liabilities 16,608 - 19,723 -

Total non-current liabilities 213,830 - 126,012 -

Total liabilities 57,962,875 78 54,795,620 84

EQUITY Share capital Common shares 2,746,292 4 2,746,292 4 Preferred shares 1,000,000 1 - - Total share capital 3,746,292 5 2,746,292 4 Capital surplus 6,541,029 9 2,541,960 4 Retained earnings Legal reserve 1,909,455 3 1,677,032 3 Special reserve 312,040 - 266,047 - Unappropriated earnings 4,371,380 6 3,682,666 6 Total retained earnings 6,592,875 9 5,625,745 9 Other equity (411,183) (1) (312,040) (1)

Total equity 16,469,013 22 10,601,957 16

TOTAL $ 74,431,888 100 $ 65,397,577 100

84 YULON FINANCE CORPORATION (Formerly Taiwan Acceptance Corporation)

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2018 2017 Amount % Amount %

OPERATING REVENUE Interest revenue from acquired accounts receivable $ 3,762,902 75 $ 3,478,465 77 Interest revenue from installment sales 652,576 13 417,170 9 Agency revenue 547,669 11 609,765 13 Other operating revenue 29,888 1 27,699 1

Total operating revenue 4,993,035 100 4,533,099 100

OPERATING COSTS Financing cost 471,844 10 373,157 8

GROSS PROFIT 4,521,191 90 4,159,942 92

OPERATING EXPENSES Other operating expenses 2,431,568 49 3,232,762 71 Expected credit loss 1,019,834 20 - -

3,451,402 69 3,232,762 71

OTHER OPERATING INCOME AND EXPENSES, NET 637,379 13 560,988 12

PROFIT FROM OPERATIONS 1,707,168 34 1,488,168 33

NON-OPERATING INCOME AND EXPENSES Share of profit or loss of subsidiaries, associates and joint ventures 1,251,988 25 1,169,834 26 Gain from financial assets and liabilities at fair value through profit or loss - - 1,145 - Other income 87,899 2 9,428 -

Total non-operating income and expenses 1,339,887 27 1,180,407 26

PROFIT BEFORE INCOME TAX 3,047,055 61 2,668,575 59

INCOME TAX EXPENSE 459,067 9 344,348 8

NET PROFIT FOR THE YEAR 2,587,988 52 2,324,227 51

(Continued)

85 YULON FINANCE CORPORATION (Formerly Taiwan Acceptance Corporation)

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2018 2017 Amount % Amount %

OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Share of the other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using the equity method $ 2,270 - $ (7,484) - Remeasurement of defined benefit plans 2,681 - (7,548) - Income tax relating to items that will not be reclassified subsequently to profit or loss 95 - 1,283 - Items that may be reclassified subsequently to profit or loss: Share of the other comprehensive income of subsidiaries, associates and joint ventures accounted for using the equity method (100,705) (2) (81,380) (2) Cash flow hedges 551 - (201) -

Other comprehensive income (loss) for the year, net of income tax (95,108) (2) (95,330) (2)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR $ 2,492,880 50 $ 2,228,897 49

EARNINGS PER SHARE Basic $ 9.27 $ 8.46 Diluted $ 9.26 $ 8.46

(Concluded)

86 YULON FINANCE CORPORATION (Formerly Taiwan Acceptance Corporation)

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Other Equity Unrealized Gain (Loss) on Financial Exchange Unrealized Assets at Fair Differences on Gain (Loss) on Value Through Capital Share Retained Earnings Translating Available-for- Other Gain (Loss) on Preferred Common Stock Capital Special Unappropriated Foreign sale Financial Comprehensive Cash Flow Hedging Stock Amount Amount Surplus Legal Reserve Reserve Earnings Operations Assets Income Hedges Instruments Total Total Equity

BALANCE, JANUARY 1, 2017 $ - $ 2,746,292 $ 2,541,960 $ 1,503,725 $ 35,588 $ 3,096,921 $ (228,227) $ (2,232) $ - $ - $ - $ (230,459) $ 9,694,027

Appropriation of 2016 earnings: Legal reserve - - - 173,307 - (173,307) ------Special reserve - - - - 230,459 (230,459) ------Cash dividends distributed by the Company - - - - - (1,320,967) ------(1,320,967)

Net profit for the year ended December 31, 2017 - - - - - 2,324,227 ------2,324,227

Other comprehensive income (loss) for the year ended December 31, 2017, net of income tax - - - - - (13,749) (84,343) 2,963 - (201) - (81,581) (95,330)

Total comprehensive income (loss) for the year ended December 31, 2017 - - - - - 2,310,478 (84,343) 2,963 - (201) - (81,581) 2,228,897

BALANCE, DECEMBER 31, 2017 - 2,746,292 2,541,960 1,677,032 266,047 3,682,666 (312,570) 731 - (201) - (312,040) 10,601,957

Effect of retrospective application and retrospective restatement - - - - - 5 - (731) 1,339 201 (201) 608 613

BALANCE, JANUARY 1, 2018 AS RESTATED - 2,746,292 2,541,960 1,677,032 266,047 3,682,671 (312,570) - 1,339 - (201) (311,432) 10,602,570

Appropriation of 2017 earnings: Legal reserve - - - 232,423 - (232,423) ------Special reserve reversed - - - - (35,588) 35,588 ------Special reserve - - - - 81,581 (81,581) ------Cash dividends distributed by the Company - - - - - (1,620,312) ------(1,620,312)

Change from investments in associates and joint ventures accounted for by using the equity method - - 1,012 - - (5,194) ------(4,182)

Net profit for the year ended December 31, 2018 - - - - - 2,587,988 ------2,587,988

Other comprehensive income (loss) for the year ended December 31, 2018, net of income tax - - - - - 5,046 (95,535) - (5,170) - 551 (100,154) (95,108)

Total comprehensive income (loss) for the year ended December 31, 2018 - - - - - 2,593,034 (95,535) - (5,170) - 551 (100,154) 2,492,880

Issuance of shares for cash 1,000,000 - 3,998,057 ------4,998,057

Associate disposed the of investments in equity instruments at fair value through other comprehensive income - - - - - (403) - - 403 - - 403 -

BALANCE, DECEMBER 31, 2018 $ 1,000,000 $ 2,746,292 $ 6,541,029 $ 1,909,455 $ 312,040 $ 4,371,380 $ (408,105) $ - $ (3,428) $ - $ 350 $ (411,183) $ 16,469,013

87 YULON FINANCE CORPORATION (Formerly Taiwan Acceptance Corporation)

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

2018 2017

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax $ 3,047,055 $ 2,668,575 Adjustments for: Interest income (4,994,030) (4,540,902) Amortization expenses 1,361,385 3,103 Share of profit of subsidiaries, associates and joint ventures (1,251,988) (1,169,834) Expected credit loss 1,019,834 - Financing cost 472,263 378,440 Reversal of provisions (10,958) (37,495) Depreciation expenses 10,303 7,174 Compensation costs of employee share options 4,077 - Net loss on disposal of property, plant and equipment 22 - Impairment loss recognized on trade receivables - 1,041,899 Changes in operating assets and liabilities Notes and trade receivables from unrelated parties (7,558,338) (6,048,203) Notes and trade receivables from related parties (85,804) (125,208) Other receivables 793,426 (817,169) Inventories (1,014,521) (209,988) Prepayments (19,301) (5,872) Incremental cost of obtaining a contract (1,537,769) - Financial liabilities held for trading - (1,145) Notes and trade payables to unrelated parties 22,964 (29,623) Notes and trade payables to related parties 168,057 175,628 Other payables 16,310 71,665 Other current liabilities (92,334) 43,177 Net defined benefit liabilities (434) (553) Cash used in operations (9,649,781) (8,596,331) Interest received 4,939,156 4,494,013 Interest paid (461,032) (411,813) Income tax paid (333,441) (309,799)

Net cash used in operating activities (5,505,098) (4,823,930)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of financial assets measured at cost (21,076) - Acquisition of subsidiaries and associates investment accounted for using the equity method (560,650) (1,128,439) Dividend received from subsidiaries and associate 653,425 275,096 Acquisition of property, plant and equipment (11,972) (68,612) Proceeds from disposal of property, plant and equipment 1,847 - Acquisition of intangible assets (15,311) (18,701) Proceeds from disposal of intangible assets 2,252 -

(Continued)

88 YULON FINANCE CORPORATION (Formerly Taiwan Acceptance Corporation)

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

2018 2017

Purchase of debt investments with no active market $ - $ (12,440) Increase in refundable deposits (606) (1,890)

Net cash generated from (used in) investing activities 47,909 (954,986)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of preference shares 4,993,980 - Proceeds from short-term bills payable 122,100,000 146,852,855 Repayments of short-term bills payable (117,800,000) (141,352,855) Proceeds from issurance of bonds payable 2,096,900 4,341,475 Repayments of bond payables - (3,000,000) Dividends paid (1,620,312) (1,320,967) Proceeds from short-term borrowings 63,276,400 66,570,000 Repayments of short-term borrowings (66,827,600) (65,920,000)

Net cash generated from financing activities 6,219,368 6,170,508

NET INCREASE IN CASH 762,179 391,592

CASH AT THE BEGINNING OF THE YEAR 757,674 366,082

CASH AT THE END OF THE YEAR $ 1,519,853 $ 757,674

(Concluded)

89 Yulon Finance Corporation and Subsidiaries (Formerly Taiwan Acceptance Corporation) Consolidated Financial Statements and Independent Auditors’ Report

The Board of Directors and Shareholders Yulon Finance Corporation (Formerly Taiwan Acceptance Corporation)

Opinion

We have audited the accompanying consolidated financial statements of Yulon Finance Corporation (the “Company”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 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 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 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, and we do not provide a separate opinion on these matters.

The descriptions of the key audit matters of the 2018 consolidated financial statements are as follows:

Estimated Impairment of Trade Receivable

As described in Note 5 to the accompanying consolidated financial statements, the provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Group uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. Where the actual future cash inflows are less than expected, a material impairment loss may arise. The key assumptions and inputs used involved significant management judgment and estimation uncertainty; thus, this is determined as a key audit matter. As of December 31, 2018, allowance for impairment loss of trade receivables was NT$3,060,412 thousand, representing 2.64% of total trade receivables; impairment loss of trade receivables recognized in the consolidated statements of comprehensive income for the year ended December 31, 2018 was NT$1,717,835 thousand, representing 22.53% of operating expenses.

Our audit procedures included the following:

1. We understood the policies on impairment of trade receivable and assessed the reasonableness of impairment of receivables by performing inquiry, inspection and re-performance of related internal controls.

2. We involved our IT specialists in testing the system that generated related documents used by management in performing controls, in order to verify the correctness of the assumptions used in the default rate and expected loss rate.

3. We calculated the expected credit loss based on the impairment policy of the Group.

Calculation of Interest Revenue from Acquired Accounts Receivable

As described in Note 4 to the accompanying consolidated financial statements, interest revenue from acquired accounts receivable consists of small amounts from a large number of debtors; interest revenue is recognized throughout the periods of individual receivable acquisition contracts using effective interest rates. Contracts involve various contract periods, principal amounts and interest rates, resulting in large data processing and complex calculation. Thus, we determined calculation of interest revenue from acquired accounts receivable as a key audit matter. For the year ended December 31, 2018, interest revenue recognized from acquired accounts receivable was NT$4,674,494 thousand, representing 20.21% of operating revenue.

Our audit procedures included the following:

1. We involved our IT specialists in the evaluation of IT general control environment and logic of accounts receivable interest revenue calculation system used by management.

2. We calculated interest revenue from acquired accounts receivable using effective interest rate to assess the reasonableness of recognized revenue.

3. We performed analytical procedures using the ratio of the balances of receivables acquired to the recognized interest revenue of current and prior years to assess the reasonableness of recognized revenue.

Other Matter

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

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

Those charged with governance, including 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 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:

1. 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.

2. 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.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. 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.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the 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 ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 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 Hsin-Wei Tai and Yu-Wei Fan.

Deloitte & Touche Taipei, Taiwan Republic of China

March 25, 2019

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

YULON FINANCE CORPORATION AND SUBSIDIARIES (Formerly Taiwan Acceptance Corporation)

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

2018 2017 ASSETS Amount % Amount %

CURRENT ASSETS Cash and cash equivalents $ 4,616,359 3 $ 2,861,100 2 Financial assets at fair value through profit or loss - current 13,795 - 19,728 - Financial assets at amortized cost - current 790,701 1 - - Financial assets for helding - current 12,356 - - - Debt investments with no active market - current - - 811,813 1 Notes and trade receivables from unrelated parties 112,409,187 66 90,033,859 66 Notes and trade receivables from related parties 586,192 - 1,107,904 1 Finance lease receivables 25,040,272 15 17,952,213 13 Other receivables 544,296 - 478,477 1 Inventories 1,466,074 1 452,006 - Prepayments 2,268,443 1 3,126,277 2 Other current assets 156,485 - 152,037 - Incremental costs of obtaining a contract - current 2,035,941 1 - -

Total current assets 149,940,101 88 116,995,414 86

NON-CURRENT ASSETS Held-to-maturity financial assets - non-current - - 16,632 - Financial assets at amortized cost - non-current 30,001 - - - Debt investment with no active market - non-current - - 3,551 - Investments accounted for using the equity method 256,924 - 261,461 - Property, plant and equipment 18,109,232 11 17,203,207 13 Intangible assets 263,717 - 249,012 - Deferred tax assets 754,906 - 542,044 - Long-term finance lease receivables 1,346,884 1 948,688 1 Other non-current assets 113,033 - 93,523 -

Total non-current assets 20,874,697 12 19,318,118 14

TOTAL $ 170,814,798 100 $ 136,313,532 100

LIABILITIES AND EQUITY

CURRENT LIABILITIES Short-term borrowings $ 47,943,692 28 $ 37,290,248 27 Short-term bills payable 77,848,821 46 63,867,603 47 Derivative financial liabilities for hedging - current - - 201 - Financial liabilities for hedging - current 81 - - - Notes and trade payables to unrelated parties 478,478 - 609,271 - Notes and trade payables to related parties 1,070,647 1 838,321 1 Other payables 1,642,487 1 1,342,354 1 Current tax liabilities 581,290 - 378,364 - Provisions - current 283,760 - 295,236 - Current portion of long-term borrowings 499,917 - 749,240 1 Bonds payable 6,443,671 4 4,342,919 3 Guarantee deposits received 9,878,477 6 9,103,468 7 Other current liabilities 1,440,801 1 1,419,611 1

Total current liabilities 148,112,122 87 120,236,836 88

NON-CURRENT LIABILITIES Long-term borrowings 1,649,188 1 1,199,177 1 Deferred tax liabilities 1,037,462 - 765,878 1 Deferred revenue - non-current - - 416 - Net defined benefit liabilities 104,229 - 104,765 -

Total non-current liabilities 2,790,879 1 2,070,236 2

Total liabilities 150,903,001 88 122,307,072 90

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share Capital Ordinary Shares 2,746,292 2 2,746,292 2 Preference Shares 1,000,000 - - - Total share capital 3,746,292 2 2,746,292 2 Capital surplus 6,541,029 4 2,541,960 2 Retained earnings Legal reserve 1,909,455 1 1,677,032 1 Special reserve 312,040 - 266,047 - Unappropriated earnings 4,371,380 3 3,682,666 3 Total retained earnings 6,592,875 4 5,625,745 4 Other equity (411,183) - (312,040) -

Total equity attributable to owners of the Company 16,469,013 10 10,601,957 8

NON-CONTROLLING INTERESTS 3,442,784 2 3,404,503 2

Total equity 19,911,797 12 14,006,460 10

TOTAL $ 170,814,798 100 $ 136,313,532 100

YULON FINANCE CORPORATION AND SUBSIDIARIES (Formerly Taiwan Acceptance Corporation)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2018 2017 Amount % Amount %

OPERATING REVENUE Rental revenue $ 7,680,202 33 $ 7,182,730 37 Sales 3,917,606 17 3,215,449 16 Interest revenue from acquired accounts receivable 4,674,494 20 3,888,908 20 Interest revenue from loan 1,220,644 5 602,090 3 Interest revenue from installment sales 1,578,401 7 1,282,701 7 Agency revenue 549,747 3 613,540 3 Interest revenue from capital leases 3,079,580 13 2,207,081 11 Other operating revenue 424,383 2 489,606 3

Total operating revenue 23,125,057 100 19,482,105 100

OPERATING COSTS Rental cost 6,596,881 28 6,200,521 32 Cost of goods sold 3,698,733 16 2,976,058 15 Financing cost 2,234,670 10 1,488,810 8 Other operating cost 140,968 1 166,615 1

Total operating costs 12,671,252 55 10,832,004 56

GROSS PROFIT 10,453,805 45 8,650,101 44

OPERATING EXPENSES Other operating expenses 5,433,399 24 6,331,461 32 Expected credit loss 2,192,662 9 - -

Total operating expenses 7,626,061 33 6,331,461 32

OTHER OPERATING INCOME AND EXPENSES, NET 859,825 4 730,684 4

PROFIT FROM OPERATIONS 3,687,569 16 3,049,324 16

NON-OPERATING INCOME AND EXPENSES Other gains and losses (81,491) (1) 6,789 - Other income 178,698 1 137,625 1 Share of profit or loss of associates and joint ventures 16,629 - 18,386 -

(Continued)

YULON FINANCE CORPORATION AND SUBSIDIARIES (Formerly Taiwan Acceptance Corporation)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2018 2017 Amount % Amount %

Gain from financial assets and liabilities at fair value through profit or loss $ 36 - $ 1,218 - Net gain on disposal of property, plant and equipment 3,650 - 4,040 -

Total non-operating income and expenses 117,522 - 168,058 1

PROFIT BEFORE INCOME TAX 3,805,091 16 3,217,382 17

INCOME TAX EXPENSE 1,022,470 4 688,101 4

NET PROFIT FOR THE YEAR 2,782,621 12 2,529,281 13

OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans 4,706 - (19,706) - Share of the other comprehensive income of associates and joint ventures accounted for using the equity method 84 - (370) - Income tax relating to items that will not be reclassified subsequently to profit or loss 856 - 3,260 - Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations (143,229) (1) (126,497) (1) Cash flow hedges - - (201) - Gain on hedging instruments not subject to basis adjustment 551 - - - Share of the other comprehensive income of associates and joint ventures accounted for using the equity method (5,170) - 2,722 -

Other comprehensive income (loss) for the year, net of income tax (142,202) (1) (140,792) (1)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR $ 2,640,419 11 $ 2,388,489 12

(Continued)

YULON FINANCE CORPORATION AND SUBSIDIARIES (Formerly Taiwan Acceptance Corporation)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2018 2017 Amount % Amount %

NET PROFIT ATTRIBUTABLE TO: Owners of the Company $ 2,587,988 11 $ 2,324,227 12 Non-controlling interests 194,633 1 205,054 1

$ 2,782,621 12 $ 2,529,281 13

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company $ 2,492,880 11 $ 2,228,897 11 Non-controlling interests 147,539 - 159,592 1

$ 2,640,419 11 $ 2,388,489 12

EARNINGS PER SHARE Basic $9.27 $8.46 Diluted $9.26 $8.46

(Concluded)

YULON FINANCE CORPORATION AND SUBSIDIARIES (Formerly Taiwan Acceptance Corporation)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Equity Attributable to Owners of the Company Other Equity Unrealized Gains (Loss) on Exchange Financial Assets Differences on Unrealized Gain at Fair Value Share Capital Retained Earnings Translating (Loss) on Through Other Gain (Loss) on Preference Ordinary Unappropriated Foreign Available-for-sale Comprehensive Cash Flow Hedging Non-controlling Capitals Capitals Capital Surplus Legal Reserve Special Reserve Earnings Operations Financial Assets Income Hedges Instruments Total Total Interests Total Equity

BALANCE, JANUARY 1, 2017 $ - $ 2,746,292 $ 2,541,960 $ 1,503,725 $ 35,588 $ 3,096,921 $ (228,227 ) $ (2,232 ) $ - $ - $ - $ (230,459 ) $ 9,694,027 $ 2,199,513 $ 11,893,540

Appropriation of 2016 earnings: Legal reserve - - - 173,307 - (173,307 ) ------Special reserve - - - - 230,459 (230,459 ) ------Cash dividends distributed by the Company - - - - - (1,320,967 ) ------(1,320,967 ) - (1,320,967 )

Cash dividends distributed by the subsidiaries ------(128,367 ) (128,367 )

Net profit for the year ended December 31, 2017 - - - - - 2,324,227 ------2,324,227 205,054 2,529,281

Other comprehensive income (loss) for the year ended December 31, 2017, net of income tax - - - - - (13,749 ) (84,343 ) 2,963 - (201 ) - (81,581 ) (95,330 ) (45,462 ) (140,792 )

Total comprehensive income (loss) for the year ended December 31, 2017 - - - - - 2,310,478 (84,343 ) 2,963 - (201 ) - (81,581 ) 2,228,897 159,592 2,388,489

Issuance of shares for cash ------1,173,765 1,173,765

BALANCE, DECEMBER 31, 2017 - 2,746,292 2,541,960 1,677,032 266,047 3,682,666 (312,570 ) 731 - (201 ) - (312,040 ) 10,601,957 3,404,503 14,006,460

Effect of retrospective application and retrospective restatement - - - - - 5 - (731 ) 1,339 201 (201 ) 608 613 - 613

BALANCE, JANUARY 1, 2018, AS RESTATED - 2,746,292 2,541,960 1,677,032 266,047 3,682,671 (312,570 ) - 1,339 - (201 ) (311,432 ) 10,602,570 3,404,503 14,007,073

Appropriation of 2017 earnings: Legal reserve - - - 232,423 - (232,423 ) ------Special reserve reversed - - - - (35,588 ) 35,588 ------Special reserve - - - - 81,581 (81,581 ) ------Cash dividends distributed by the Company - - - - - (1,620,312 ) ------(1,620,312 ) - (1,620,312 )

Cash dividends distributed by the subsidiary ------(103,085 ) (103,085 )

Changes from investments in associates and joint ventures accounted for by using the equity method - - 1,012 - - (5,194 ) ------(4,182 ) (1,192 ) (5,374 )

Changes in Non-controlling Interests ------(4,981 ) (4,981 )

Net profit for the year ended December 31, 2018 - - - - - 2,587,988 ------2,587,988 194,633 2,782,621

Other comprehensive income (loss) for the year ended December 31, 2018, net of income tax - - - - - 5,046 (95,535 ) - (5,170 ) - 551 (100,154 ) (95,108 ) (47,094 ) (142,202 )

Total comprehensive income (loss) for the year ended December 31, 2018 - - - - - 2,593,034 (95,535 ) - (5,170 ) - 551 (100,154 ) 2,492,880 147,539 2,640,419

Issuance of shares for cash 1,000,000 - 3,998,057 ------4,998,057 - 4,998,057

Associate disposed the investments in equity instruments at fair value through other comprehensive income - - - - - (403 ) - - 403 - - 403 - - -

BALANCE, DECEMBER 31, 2018 $ 1,000,000 $ 2,746,292 $ 6,541,029 $ 1,909,455 $ 312,040 $ 4,371,380 $ (408,105 ) $ - $ (3,428 ) $ - $ 350 $ (411,183 ) $ 16,469,013 $ 3,442,784 $ 19,911,797

YULON FINANCE CORPORATION AND SUBSIDIARIES (Formerly Taiwan Acceptance Corporation)

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

2018 2017

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax $ 3,805,091 $ 3,217,382 Adjustments for: Interest income (11,153,464) (8,647,375) Depreciation expenses 5,265,789 4,896,647 Expected credit loss 2,192,662 - Finance costs 2,234,692 1,488,810 Amortization expenses 1,634,456 16,740 Net loss (gain) on foreign currency exchange 38,198 (160,984) Share of profit of associates and joint ventures (16,629) (18,386) Reversal of provisions (11,476) (38,821) Compensation costs of employee share options 4,077 - Net gain on disposal of property, plant and equipment (3,650) (4,040) Impairment loss recognized on assets leased to others 2,613 1,299 Government grants revenue (417) (3,596) Impairment loss recognized on trade receivables - 1,664,162 Changes in operating assets and liabilities Financial assets held for trading - (8,573) Financial assets at fair value through profit or loss 5,933 - Notes and trade receivables from unrelated parties (24,685,182) (17,518,628) Notes and trade receivables from related parties 521,712 (583,852) Other receivables (65,804) (18,669) Inventories (1,014,068) (199,517) Prepayments (675,533) (507,318) Other current assets (4,448) (16,957) Finance lease receivables (8,389,654) (5,438,567) Incremental cost of obtaining a contract (2,148,491) - Other operating assets (12,866) (40,007) Financial liabilities held for trading - (1,145) Notes and trade payables to unrelated parties (130,793) 278,617 Notes and trade payables to related parties 232,326 311,995 Other payables 208,424 150,616 Available-for-sale operating assets held for rental to others (6,042,114) (6,488,767) Guarantee deposits received 842,695 863,617 Other current liabilities 21,191 83,251 Net defined benefit liabilities 5,026 1,816 Deferred revenue - 3 Cash used in operations (37,339,704) (26,720,247) Interest received 11,455,432 8,508,294 Interest paid (2,177,232) (1,446,856) Income tax paid (761,162) (605,731)

Net cash used in operating activities (28,822,666) (20,264,540) (Continued)

YULON FINANCE CORPORATION AND SUBSIDIARIES (Formerly Taiwan Acceptance Corporation)

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

2018 2017

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of financial assets measured at cost $ 10,413 $ - Purchase of debt investments with no active market - (170,683) Acquisition of property, plant and equipment (257,359) (128,574) (Increase) decrease in refundable deposits (6,644) 49,793 Proceeds from disposal of property, plant and equipment 103,421 43,092 Acquisition of intangible assets (54,899) (32,532) Proceeds from disposal of intangible assets 2,963 - Proceeds from sale of available-for-sale financial assets - 18,497 Acquisition of associates investment accounted for using the equity method - (10,812) Dividend received 10,212 7,265 Net cash outflow on acquisition of subsidiaries - (1,235)

Net cash used in investing activities (191,893) (225,189)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term bills payable 247,871,000 253,948,855 Repayments of short-term bills payable (233,850,993) (242,443,855) Proceeds from short-term borrowings 183,437,988 143,938,593 Repayments of short-term borrowings (172,218,657) (135,534,984) Dividends paid (1,723,397) (1,449,334) Proceeds from issuance of bonds payable 2,096,900 4,341,475 Repayments of bond payables - (3,000,000) Proceeds from issuance of preference shares 4,993,980 - (Decrease) increase in non-controlling interests (4,981) 1,173,765 Proceeds from long-term borrowings 950,000 1,950,000 Repayments of long-term borrowings (750,000) (1,950,000)

Net cash generated from financing activities 30,801,840 20,974,515

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES (32,022) (20,706)

NET INCREASE IN CASH AND CASH EQUIVALENTS 1,755,259 464,080

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 2,861,100 2,397,020

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 4,616,359 $ 2,861,100

(Concluded)