Yulon Motor Co., Ltd. 2019 Annual Shareholder's Meeting Agenda

Table of Contents

I. Meeting agenda ...... 1 II. Reporting Items ...... 2 III. Acknowledgements ...... 9 IV. Discussions ...... 35 V. Elections ...... 82 VI. Other Motions ...... 85 VII. Extemporary Motions ...... 85

Appendix

1. Shareholding of Directors ...... 86 2. Rules of Procedure for Shareholders’ Meeting ...... 87 3. Articles of Incorporation ...... 91 4. Rules for Director Elections ...... 99 5. The impact of stock dividend on the Company’s business performance, earnings per share, and return on shareholder’s investment ratio ...... 101

Yulon Motor Co., Ltd. 2019 Annual Shareholder’s Meeting Agenda

Meeting Time: 9:00am on June 21, 2019 (Friday) Meeting Place: 1F, No. 3, Sec. 3, Chung Hsing Road, Xindian District, New Taipei City (The Dome Theater at Auto Mall) Meeting Agenda: I. Call the Meeting to Order II. Chairman’s Address III. Reporting Items: 1. The 2018 Business Report and Prospect. 2. The 2018 Audit Committee’ Report. 3. The 2018 Distribution of Employees’ and Directors’ Remuneration. 4. The Status of Endorsement and Guarantee. 5. The Status of Corporate Bonds. IV. Acknowledgements: 1. Acknowledge the 2018 Financial Statements. 2. Acknowledge the 2018 Earnings Distribution. V. Discussions: 1. Amendments to the Company’s “Articles of Incorporation.” 2. Amendments to the Company’s “Procedures for Endorsements and Guarantees.” 3. Amendments to the Company’s “Procedures for Loaning of Funds.” 4. Amendments to the Company’s “Procedures for Derivatives Trading.” 5. Amendments to the Company’s “Procedures for Acquisition and Disposal of Assets.” VI. Elections: 1. Election of 16th Directors. VII. Other Motions: 1. Release the Prohibition on 16th Directors from Participation in Competitive Business. VIII. Extemporary Motions IX. Meeting Adjournment

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Reporting Items

I. The 2018 Business Report and Prospect

Yulon Motor Co., Ltd. Business Report and Prospect

Dear Shareholders, welcome to the 2019 annual shareholders’ meeting of Yulon Motor Co., Ltd. A total of 435,000 vehicles were sold last year, a small decline of 2.2% compared to the 445,000 vehicles sold last year. Looking to 2019, Yulon will continuously develop and manufacture new models in line with the global trend of energy saving and carbon reduction and the regulations governing fuel consumption and emissions. With the efforts made by all employees. The summary of operational performance last year is as follows: I. Sales profit: The Company had sold a total of 46,397 branded vehicles. In terms of operating profit, the total operating income last year was NT$31.809 billion, the operating profit was NT$1.673 billion, the net non-operating income was NT$0.489 billion, the net income before tax was NT$2.16 billion, and the EPS was NT$1.39 per share.

II. The development of Luxgen brand: LUXGEN had won the first prize of J.D. Power “2018 Taiwan Customer Satisfaction Index (CSI)” and the second prize of J.D. Power “2018 Taiwan Sales Satisfaction Index (SSI)”.U5 SUV was awarded Silver in the 27th Taiwan Excellence Award. Which featuring well-recognized customized style, innovative smart technology and best safety protection. For the prospect of 2019, LUXGEN’s U5 and U6 series will be equipped with the VIP- level “privilege seats”, and the M7 series will feature a new second-row independent double- seats, the “Ottoman seats”. The new generation of production models “URX” is also the only domestic car model applying “5+2 seats”, which is able to satisfy consumers’ ordinary driving, leisure traveling, family trips, welfare caring, business applications and other multi-functional and countless daily life demands, and bring unprecedented unique experience to consumers. III. Expansion of Chinese market: In 2018, 28.08 million automobiles were sold in China. In 2019, the sales are expected to reach 28.10 million. The LUXGEN 510 Program, which the new model "URX" for middle class will be launched in the third quarter of this year. Dongfeng Yulon first all-electric performance small SUV "U5 EV" with a 50kW DC rapid charger was officially put into production at the end of 2018. In the future, U5 EV will be used as a vehicle to provide "new

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travel" services to consumers.

IV. Promotion of environmentally friendly new energy vehicles: In response to the renewable energy policy of the government and to solve the urban mobile pollution problem brought by urbanization, Yulong proposed a mobile solution with low-carbon transportation and sharing economy, and took the lead in diversified electric taxis operated by LUXGEN S3 EV+ in Taiwan and strategically cooperate with Dafeng satellite fleet Taxi beginning trial operation in the Taipei and New Taipei City last year, with a total mileage of more than 130,000 kilometers and an 55,000 passengers electric taxi experience. V. Activating the use of assets: The construction of the base of Yulon Town’s commercial area commenced in October 2017, expected official public sale in the third quarter of 2020. VI. Strengthening corporate governance: The Company has been awarded the top 5 percent of the “Corporate Governance Evaluation” of the Taiwan Stock Exchange (TWSE) for five consecutive years and has been included in the FTSE4Good TIP Taiwan ESG Index. Taiwan Corporate Governance Association carried out the outside evaluation on the cooperate governance and awarded the Company with the “Standard” certificate. Among the 13 companies that have been awarded this certificate, the Company is one of two non-financial insurance companies. In the future, Yulon will continue to improve its corporate governance in the areas of integrity management, transparency of operational information, and effective functions of the board of directors and related functional committees. VI. Implementing corporate social responsibility: Yulon Motor ranked13rd in the large-scale company category of Excellence CSR Award of CommonWealth Magazine in 2018. In response to the demand from the aging population and the increasing disabled population in Taiwan, Yulong and social enterprises have joined hands to create the "9453.OurCityLove", through the innovative social benefit model, to bridge the mobile services and barrier-free travel through the CARPLUS Auto Leasing Corporation and friendly drivers from LUXGEN V7 well-being team; and the second Taiwan Carmaker event with the theme of "The Future Car Fantasy for the Future" awarded a million bonuses, encouraging start-up teams to explore the endless potential of future car and smart mobility. VII. Strengthening community care: The “Employer Liability Insurance” premium has been donated to the part-time janitors of the Department of Environmental Protection, Taipei City Government for 20 years consecutively. The “Employer Liability Insurance” premium has been donated to Sanyi Township Cleaning Team, which has benefited 30,000 people so far in order to provide them

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with a job security and livelihood protection. In addition, in the spirit of feedback to the village, the Company will continue to sponsor the “Taiwan International Woodcarving Competition,” provide scholarships to students at all levels of the school in Sanyi regularly, and organize “Yulon Kids Basketball Summer Camp” and “San Yi Yulon Car Design Camp” to provide children in the community with a variety of learning experiences. In 2017, Yulon Volunteer Society beach cleaning activity was held at Waipu Fishing Port in Miaoli County to fulfill the corporate social responsibility for environmental protection.

In the future, the Company will continue to work in pursuit of the welfare of employees, shareholders and society on the aforementioned basis. Finally we would like to express our gratitude for the support and care from all shareholders for Yulon Motor over the past. Thank you.

Chairman: Yen Chen Li-Lien

President: Zhen-Xiang Yao

Chief Accountant: Steven, W.Y. Lo

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2. The 2018 Audit Committee’ Report

The Board of Directors has prepared the 2018 Business Report, Financial Statements and proposal for earnings distribution. The CPA Hsin-Wei TAI and CPA Yu-Wei FAN, members of the Deloitte & Touche, were retained to audit Yulon Financial Statements and had issued the unqualified-standard wording audit report. The Business Report, Financial Statements, and earning distribution proposal have been reviewed and determined to be correct and accurate by the Audit Committee. According to Article 14.4 of the Securities Exchange Act and Article 219 of the Company Law, we hereby submit this report.

To the 2019 Annual Shareholders’ Meeting

Yulon Motor Co., Ltd.

Audit Committee Convenor：Yi-Hong Hsieh

Date: March 27, 2019

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3. The 2018 Distribution of Employees’ and Directors’ Remuneration (1) Pursuant to the provision of Article 27 of revised Articles of Incorporation, the Company shall appropriate remuneration for directors and employees of that year in case of any profits. The remuneration for Directors may not exceed 0.5% of the profit and the remuneration for employees may not fall below 0.1%. (2) The 2018 annual profit for the Company was NTD2.175 billion before distributing the employees’ and directors’ remuneration. Pursuant to the provisions of Article 27 of Incorporation, the Company has already appropriated 0.1% of the profits as compensation for employees, in the total amount of NTD2.17 million. Additionally, 0.5% of the profit was appropriated as the remuneration for directors, in the total amount of NTD10.87 million. Previous remuneration amount is approved by the Remuneration Committee and the Board of Directors and the remuneration is to be distributed in cash. (3) In addition to the NTD2.17 million appropriated for the employees, the Company also issued a bonus of NTD 60.73 million in January 2019.

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4. The Status of Endorsement and Guarantee On December 31 2018, the total endorsement and guarantee line was NTD 24.128 billion while the actual endorsement and guarantee amount was NTD14.118 billion and the maximum amount provided to single entity was NTD 8.560 billion. The status of endorsement and guarantee was in compliance with Article 4 of the Procedures for Endorsement and Guarantee (The total amount of endorsements and guarantees shall not exceed 75% of the Company’s net worth. The total amount of endorsement and guarantee provided by the Company to any single entity shall not exceed 40% of the guarantee line.) The endorsement and guarantee statement is as follows:

Yulon Motor Co., Ltd. Endorsement and Guarantee Statement December 31, 2018 In ten thousands of NTD Actual Drawdown Entity Name Guarantee Line Amount ESINN CO., LTD 69,000 46,000 Luxgen Motor Co., Ltd. 1,135,000 856,000 Yulon Development Co., Ltd. 60,000 0 Yu Ching Business Co., Ltd. 100,000 60,000 Sin Chi Co., Ltd. 50,000 0 UNIVATION MOTOR PHILIPPINES, INC. 76,833 16,393 Luxgen (Hangzhou) Automobile Sales Co., Ltd. 921,990 433,442 Total 2,412,823 1,411,835

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5. The Status of Corporate Bonds Corporate bonds was issued in 2017 and 2018, the amount is NTD 10 billion and 5.3 billion respectively. The purpose of issuance corporate bonds is to repayment of debt and increase working capital. The status of corporate bonds is as follows: In 100 millions of NTD Tenor Interest rate on Series number issue amount Issue date Maturity date (Year) yearly basis (%) 70 2017.12.12 5 1.04 111.12.12 2017-1 30 2017.12.12 7 1.17 113.12.12 36 2018.12.25 5 1.18 112.12.25 2018-1 17 2018.12.25 10 1.80 117.12.25 Interest payment From the date of the issuance, a simple interest is calculated and distributed method once a year per coupon rate Principal Repayment Bullet at maturity

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Acknowledgements

Proposal 1 Proposed by the Board of Directors Proposal: Acknowledge the 2018 Financial Statements Explanation: 1. Yulon’s 2018 Financial Statements were audited by CPA Hsin-Wei TAI and CPA Yu- Wei FAN, members of the Deloitte & Touche. The Financial Statements and Business Report have been reviewed and determined to be correct and accurate by the Audit Committee. 2. The 2018 Business Report (please refer to from page 2 to page 4) and Financial Statements (please refer to from page 10 to page 32 ) are enclosed for reference. 3. Please proceed with the acknowledgement.

Resolution:

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Yulon Motor Company Ltd.

Opinion

We have audited the accompanying financial statements of Yulon Motor Company Ltd. (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 Yulon Motor Company Ltd. 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.

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

Impairment Assessment of Vehicle Model Development Cost and Molds of Luxgen Motor, Subsidiary Accounted for Using Equity Method

(Please refer to Note 15.)

The vehicle model development cost of Luxgen, Subsidiary accounted for using equity method, was $8,949,224 thousand, and the molds equipment used for the production of the vehicle model was $3,481,588 thousand. Luxgen Motor Co., Ltd. identifies different models of vehicles as separate cash- generating units, and tests them for impairment annually.

The amounts of vehicle model development cost and molds equipment used for the production of the model were material to the financial statements as a whole. Furthermore, assessment of the recoverable amount used in impairment testing is an area of professional judgment. As a result, impairment assessment of the vehicle model development cost and molds equipment is determined as a key audit

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matter. The main audit procedures we have performed in respect of the key audit matter stated above were as follows:

1. We understood the process and basis for the estimated growth rate and profitability of the sales forecast of the Company.

2. We reviewed whether the estimated operating cash flow was consistent with operating prospectus approved by the board of directors and inquired whether the future cash flow considered the latest operating performance and industry overview.

3. We assessed the evaluation model used by the management.

4. We assessed the weighted average cost of capital (WACC) used by the management in calculating the recoverable amount in accordance with the valuation model, including risk-free rate, volatility and risk premium. We verified that the WACC was consistent with the Company’s status and the industry.

Impairment of Trade Receivable of Yulon Finance Corporation and its subsidiaries (“YFC Group”), Subsidiary Accounted for Using Equity Method

(Please refer to Note 15.)

The provision for impairment of trade receivables of TAC Group is based on assumptions about risk of default and expected loss rates. The TAC Group uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the TAC 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 receivablesof TAC Group was NT$3,060,142 thousand, representing 2.64% of total trade receivables; impairment loss of trade receivables of TAC Group recognized in the statements of comprehensive income of TAC Group for the year ended December 31, 2018 was NT$1,717,835 thousand, representing 22.53% of operating expenses.

Our audit procedures included:

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.

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

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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 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 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 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.

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.

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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 27, 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.

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YULON MOTOR COMPANY LTD.

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

2018 2017 ASSETS Amount % Amount %

CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) $ 7,410,223 8 $ 14,555,448 16 Financial assets at fair value through profit or loss - current (Notes 4 and 7) 22,295 - 166,945 - Financial assets at amortized cost - current (Notes 4 and 9) 1,432,880 2 - - Debt investments with no active market - current (Notes 4 and 11) - - 5,089,600 6 Note and trade receivable (Notes 4 and 12) 25,170 - 23,961 - Notes and trade receivable from related parties (Notes 4, 12 and 29) 1,084,994 1 635,451 1 Other receivables (Notes 4, 13 and 29) 290,585 - 212,682 - Inventories (Notes 4 and 14) 9,904,373 10 6,873,416 7 Other current assets (Notes 29) 1,418,207 1 850,281 1

Total current assets 21,588,727 22 28,407,784 31

NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8) 2,433,791 2 - - Available-for-sale financial assets - non-current (Note 4) - - 56,845 - Financial assets measured at cost - non-current (Notes 4 and 10) - - 27,931 - Investments accounted for using equity method (Notes 4 and 15) 54,272,734 56 44,253,861 48 Property, plant and equipment (Notes 4 and 16) 6,461,658 7 6,361,945 7 Investment properties (Notes 4 and 17) 9,840,094 10 12,087,160 13 Other intangible assets (Notes 4 and 18) 1,275,678 1 1,277,490 1 Deferred tax assets (Notes 4 and 25) 551,778 1 531,535 - Other non-current assets 622,081 1 12,320 -

Total non-current assets 75,457,814 78 64,609,087 69

TOTAL $ 97,046,541 100 $ 93,016,871 100

LIABILITIES AND EQUITY

CURRENT LIABILITIES Trade payables $ 1,858,817 2 $ 2,862,921 3 Trade payables to related parties (Note 29) 1,224,905 1 1,482,892 2 Other payables (Notes 20 and 29) 1,404,745 2 2,904,164 3 Current tax liabilities (Notes 4 and 25) 108,937 - - - Other current liabilities 67,752 - 38,466 -

Total current liabilities 4,665,156 5 7,288,443 8

NON-CURRENT LIABILITIES Bonds payable (Notes 4 and 19) 15,300,000 16 10,000,000 11 Long-term borrowings 1,480,000 1 1,500,000 1 Deferred tax liabilities (Notes 4 and 25) 2,570,313 3 2,541,633 3 Net defined benefit liabilities - non-current (Notes 4 and 21) 556,629 1 949,658 1 Deposits received 179,860 - 181,236 - Credit balance on the carrying value of investments accounted for using the equity method (Notes 4 and 15) 524,723 - 94,052 - Other non-current liabilities 32,732 - 29,696 -

Total non-current liabilities 20,644,257 21 15,296,275 16

Total liabilities 25,309,413 26 22,584,718 24

EQUITY (Note 22) Share capital Ordinary shares 15,729,199 16 15,729,199 17 Capital surplus 6,597,972 7 6,665,705 7 Retained earnings Legal reserve 8,078,119 8 7,849,288 8 Special reserve 38,373,565 40 37,373,565 40 Unappropriated earnings 2,787,202 3 2,693,149 3 Total retained earnings 49,238,886 51 47,916,002 51 Other equity Exchange differences on translating foreign operations (919,398) (1) (593,515) - Unrealized gain on available-for-sale financial assets - - 1,091,158 1 Unrealized gain on financial assets at fair value through other comprehensive income 1,466,521 1 - - Cash flow hedges - - (92) - Gain on hedging instrument 252 - - - 547,375 - 497,551 1 Treasury shares (376,304) - (376,304) - Total equity 71,737,128 74 70,432,153 76

TOTAL $ 97,046,541 100 $ 93,016,871 100

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

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YULON MOTOR COMPANY LTD.

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 (Notes 4, 23 and 29) Sales $ 30,440,107 96 $ 34,591,748 96 Other operating revenue 1,368,631 4 1,501,048 4

Total operating revenue 31,808,738 100 36,092,796 100

OPERATING COSTS (Notes 14, 16, 21, 24 and 29) Cost of goods sold 28,678,794 90 32,651,536 91 Other operating cost 279,630 1 462,013 1

Total operating costs 28,958,424 91 33,113,549 92

GROSS PROFIT 2,850,314 9 2,979,247 8

(UNREALIZED) REALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES (3,798) - (37,758) -

REALIZED GROSS PROFIT 2,846,516 9 2,941,489 8

OPERATING EXPENSES (Notes 21, 24 and 29) Selling and marketing expenses 119,834 - 118,435 - General and administrative expenses 885,971 3 820,698 2 Research and development expenses 168,092 1 155,206 1

Total operating expenses 1,173,897 4 1,094,339 3

PROFIT FROM OPERATIONS 1,672,619 5 1,847,150 5

NON-OPERATING INCOME AND EXPENSE Share of gains of subsidiaries, associates and joint ventures (Notes 4 and 15) 415,081 1 295,913 1 Other income (Note 24) 69,559 - 50,653 - Interest income 103,015 1 62,964 - Finance costs (148,352) - (15,959) - Other gains and losses (Note 24) 49,864 - 79,182 -

Total non-operating income 489,167 2 472,753 1

PROFIT BEFORE INCOME TAX 2,161,786 7 2,319,903 6

INCOME TAX EXPENSE (Notes 4 and 25) 124,754 - 31,597 -

(Continued) - 15 -

YULON MOTOR COMPANY LTD.

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 FOR THE YEAR 2,037,032 7 2,288,306 6

OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans 42,723 - (5,802) - Unrealized loss on investments in equity instruments at fair value through other comprehensive income (224,506) (1) - - Share of other comprehensive loss of subsidiaries, associates and joint ventures accounted for using the equity method (38,968) - (39,667) - (220,751) (1) (45,469) - Items that may be reclassified subsequently to profit or loss: Unrealized gain on available-for-sale financial assets - - 8,326 - Share of other comprehensive loss of subsidiaries, associates and joint ventures accounted for using the equity method (325,539) (1) (742,976) (2) (325,539) (1) (734,650) (2)

Other comprehensive loss for the year, net of income tax (546,290) (2) (780,119) (2)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR $ 1,490,742 5 $ 1,508,187 4

EARNINGS PER SHARE (NEW TAIWAN DOLLARS; Note 26) Basic $ 1.39 $ 1.56 - Diluted $ 1.39 $ 1.56 -

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

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YULON MOTOR COMPANY LTD.

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

BALANCE, JANUARY 1, 2017 $ 15,729,199 $ 6,664,910 $ 7,715,818 $ 36,373,565 $ 2,375,157 $ 75,147 $ - $ 1,157,054 $ - $ - $ (376,304) $ 69,714,546

Appropriation of 2016 earnings Legal reserve - - 133,470 - (133,470) ------Special reserve - - - 1,000,000 (1,000,000) ------Cash dividends distributed by the Company (NT$0.5 per share) - - - - (786,460) ------(786,460)

Change in equity from investments in subsidiaries, associates and joint ventures accounted for by using equity method - 795 - - (4,915) ------(4,120)

Net profit for the year ended December 31, 2017 - - - - 2,288,306 ------2,288,306

Other comprehensive loss for the year ended December 31, 2017, net of income tax - - - - (45,469) (668,662) - (65,896) (92) - - (780,119)

Total comprehensive income for the year ended December 31, 2017 - - - - 2,242,837 (668,662) - (65,896) (92) - - 1,508,187

BALANCE, DECEMBER 31, 2017 15,729,199 6,665,705 7,849,288 37,373,565 2,693,149 (593,515) - 1,091,158 (92) - (376,304) 70,432,153

Effect of retrospective application and retrospective restatement - - - - 131,744 - 1,755,559 (1,091,158) 92 (92) - 796,145

BALANCE AT JANUARY 1, 2018 AS RESTATED 15,729,199 6,665,705 7,849,288 37,373,565 2,824,893 (593,515) 1,755,559 - - (92) (376,304) 71,228,298

Appropriation of the 2017 earnings Legal reserve - - 228,831 - (228,831) ------Special reserve - - - 1,000,000 (1,000,000) ------Cash dividends distributed by the Company (NT$0.58 per share) - - - - (912,294) ------(912,294)

Change in equity from investments in subsidiaries, associates and joint ventures accounted for by using equity method - (69,178) - - (1,885) ------(71,063)

Change in equity from the differences between the consideration received or paid and the carrying amount of the subsidiaries' net assets during disposal or acquisition - 1,445 ------1,445

Net profit for the year ended December 31, 2018 - - - - 2,037,032 ------2,037,032

Other comprehensive income for the year ended December 31, 2018, net of income tax - - - - 71,119 (325,883) (291,870) - - 344 - (546,290)

Total comprehensive income for the year ended December 31, 2018 - - - - 2,108,151 (325,883) (291,870) - - 344 - 1,490,742

Associates disposed the investments in equity instruments designed as at fair value through other comprehensive income - - - - (2,832) - 2,832 - - - - -

BALANCE, DECEMBER 31, 2018 $ 15,729,199 $ 6,597,972 $ 8,078,119 $ 38,373,565 $ 2,787,202 $ (919,398) $ 1,466,521 $ - $ - $ 252 $ (376,304) $ 71,737,128

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

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YULON MOTOR COMPANY LTD.

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 Income before income tax $ 2,161,786 $ 2,319,903 Adjustments for: Depreciation expenses 350,151 360,480 Share of profit of subsidiaries, associates and joint ventures (415,081) (295,913) Finance costs 148,352 15,959 Interest income (103,015) (62,964) Amortization expenses 42,724 44,404 Unrealized loss/(gain) on foreign currency exchange 27,608 (58,418) Dividend income (18,861) (10,428) Realized (gain)/loss on the transactions with subsidiaries, associates and joint ventures (2,588) 5,654 Net gain on fair value changes of financial assets designated as at fair value through profit or loss (1,541) - Reversal of impairment loss/impairment loss recognized on non-financial assets (723) 36,103 Gain on disposal of property, plant and equipment (45) (701) Changes in operating assets and liabilities Financial assets held for trading - 282,146 Financial assets mandatorily classified as at fair value through profit or loss 146,190 - Notes and trade receivable (445,426) (217,306) Other receivables (84,593) 284,684 Inventories (359,802) (291,864) Other current assets (1,128,022) (609,510) Other operating assets (25,591) (7,120) Trade payables (1,292,702) 1,088,224 Other payables (1,511,220) 387,029 Other current liabilities 29,285 (125,026) Net defined benefit liabilities - non-current (350,306) (283,798) Other operating liabilities 3,035 827 Cash used in generated from operations (2,830,385) 2,862,365 Interest received 118,738 67,896 Interest paid (146,971) (9,677) Income tax paid (10,595) (517,711)

Net cash (used in) generated from operating activities (2,869,213) 2,402,873

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of associates investment accounted for using equity method (14,867,431) (8,142,330) Dividends received 5,235,296 4,661,124 Proceeds from disposal of financial assets at amortized cost 3,656,720 - Purchase of financial assets at fair value through other comprehensive income (1,830,200) - (Continued) - 18 -

YULON MOTOR COMPANY LTD.

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

2018 2017

Acquisition of property, plant and equipment (434,321) (459,869) Payments for investment properties (490,259) - Proceeds from the capital reduction of investments accounted for using the equity method 90,128 134,309 Proceeds from disposal of property, plant and equipment 45 3,744 Purchase of debt investments with no active market - (1,100,000)

Net cash used in investing activities (8,640,022) (4,903,022)

CASH FLOWS FROM FINANCING ACTIVITIES Issuance of bonds payable 5,300,000 10,000,000 Dividends paid (912,294) (786,460) Payments for transaction costs attributable to the issuance of debt instruments (20,000) - Decrease in guarantee deposits received (1,376) (276,656) Proceeds from long-term borrowings - 1,500,000

Net cash generated from financing activities 4,366,330 10,436,884

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES (2,320) 8,400

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (7,145,225) 7,945,135

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 14,555,448 6,610,313

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 7,410,223 $ 14,555,448

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

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Yulon Motor Company Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Yulon Motor Company Ltd. (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.

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

Impairment Assessment of Luxgen’s Vehicle Model Development Cost and Molds

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(Please refer to Notes 4, 5, 22, 24 and 33.)

The vehicle model development cost of Luxgen brand was NT$8,949,224 thousand, and the molds equipment used for the production of the vehicle model was NT$3,481,588 thousand. The Group identifies different models of vehicles as separate cash-generating units, and tests them for impairment at least annually.

The main audit procedures we have performed in respect of the key audit matter stated above were as follows:

1. We understood the process and basis for the estimated growth rate and profitability of the sales forecast of the Group.

3. We assessed the evaluation model used by the management.

Estimated Impairment of Trade Receivable

As described in Note 5, the determination of estimated impairment of trade receivable of the Group’s horizontal segments takes into consideration the present value of estimated future cash flows 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 receivable was NT$3,060,412 thousand, representing 2.54% of total trade receivable; impairment loss of trade receivable recognized in the consolidated statement of comprehensive income for the year ended December 31, 2018 was NT$1,717,835 thousand, representing 10.14% of operating expenses.

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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 reperformance of related internal controls.

2. We involved our IT specialists in testing the system that generated trade receivable related documents used by management in performing the controls.

3. We recalculated the impairment based on the impairment policy of the Group.

Other Matter

We have also audited the financial statements of Yulon Motor Company Ltd. as of and for the years ended December 31, 2018 and 2017 on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and 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.

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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.

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.

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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 27, 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.

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YULON MOTOR COMPANY LTD. AND SUBSIDIARIES

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 (Notes 4 and 6) $ 28,946,011 9 $ 24,631,189 9 Financial assets at fair value through profit or loss - current (Notes 4 and 7) 662,168 - 1,054,494 - Financial assets at fair value through other comprehensive income - current (Notes 4 and 8) 126,059 - - - Available-for-sale financial assets - current (Notes 4 and 11) - - 146,165 - Derivative financial assets for hedging - current (Note 13) 12,356 - - - Financial assets at amortized cost - current (Notes 4, 9 and 10) 3,971,638 1 - - Financial assets measured at cost - current (Notes 4 and 14) - - 2,991 - Debt investments with no active market - current (Notes 4, 15 and 40) - - 7,396,152 3 Notes and trade receivable (Notes 4, 16 and 39) 114,630,157 37 92,135,989 36 Notes and trade receivable from related parties (Notes 4, 16, 38 and 39) 2,141,153 1 2,200,030 1 Finance lease receivables (Notes 4 and 17) 25,017,877 8 17,952,213 7 Other receivables (Note 18) 5,686,913 2 4,041,993 2 Inventories (Notes 4, 19 and 33) 17,295,118 6 12,125,616 5 Other current assets (Note 39) 8,774,988 3 7,741,609 3 Incremental costs of obtaining a contract - current (Notes 32 and 39) 2,035,940 1 - -

Total current assets 209,300,378 68 169,428,441 66

NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 4 and 7) 2,620 - - - Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8) 602,818 - - - Available-for-sale financial assets - non-current (Notes 4 and 11) - - 58,244 - Financial assets at amortized cost - non-current (Notes 4, 9 and 10) 464,327 - - - Held-to-maturity financial assets - non-current (Notes 4 and 12) - - 16,632 - Financial assets measured at cost - non-current (Notes 4 and 14) - - 87,501 - Debt investment with no active market - non-current (Notes 4, 15 and 40) - - 183,991 - Investments accounted for using the equity method (Notes 4 and 21) 29,271,476 10 29,384,814 11 Property, plant and equipment (Notes 4, 22, 33 and 40) 37,519,751 12 35,764,145 14 Investment properties (Notes 4, 23 and 33) 9,756,450 3 11,923,408 5 Goodwill (Note 4) 882 - 882 - Vehicle model development cost (Notes 4 and 24) 10,159,224 3 6,479,471 3 Other intangible assets (Notes 4 and 24) 414,176 - 400,486 - Deferred tax assets (Notes 4 and 34) 1,499,140 1 1,277,349 1 Long-term finance lease receivables (Notes 4 and 17) 1,346,884 1 948,688 - Refundable deposits 1,213,254 1 1,218,987 - Long-term prepayments for lease (Note 25) 1,070,081 - 1,003,988 - Other non-current assets 3,051,632 1 239,480 -

Total non-current assets 96,372,715 32 88,988,066 34

TOTAL $ 305,673,093 100 $ 258,416,507 100

LIABILITIES AND EQUITY

CURRENT LIABILITIES Short-term bills payable (Note 26) $ 79,805,108 26 $ 65,410,076 25 Short-term borrowings (Note 26) 68,410,763 23 49,220,404 19 Derivative financial liabilities for hedging - current (Notes 4 and 13) - - 201 - Financial liabilities for hedging - current (Notes 4 and 13) 81 - - - Notes and trade payables 5,374,647 2 6,010,742 2 Notes and trade payable to related parties (Note 39) 8,854,427 3 8,675,235 3 Other payables (Notes 24, 28 and 39) 12,957,199 4 12,087,797 5 Current tax liabilities (Notes 4 and 34) 799,648 - 530,075 - Provisions - current (Notes 4 and 29) 283,760 - 295,236 - Current portion of long-term borrowings (Notes 4 and 27) 6,443,671 2 776,712 - Current portion of bonds payable (Notes 26) 592,897 - 4,342,919 2 Other current liabilities (Note 28) 12,469,990 4 11,483,566 5

Total current liabilities 195,992,191 64 158,832,963 61

NON-CURRENT LIABILITIES Bonds payable (Notes 4 and 27) 15,300,000 5 10,000,000 4 Long-term borrowings (Note 26) 3,478,650 1 2,952,752 1 Provisions - non-current (Notes 4 and 29) 873,808 - 898,195 - Deferred tax liabilities (Notes 4 and 34) 4,001,887 1 3,648,046 2 Long-term trade payables (Notes 24, 28 and 39) - - 1,050,000 - Deferred revenue - non-current (Note 28) 21,391 - 27,920 - Net defined benefit liabilities - non-current (Notes 4 and 30) 952,110 1 1,379,780 1 Other non-current liabilities (Note 28) 1,992,766 1 505,712 -

Total non-current liabilities 26,620,612 9 20,462,405 8

Total liabilities 222,612,803 73 179,295,368 69

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 31) Share capital Ordinary shares 15,729,199 5 15,729,199 6 Capital surplus 6,597,972 2 6,665,705 3 Retained earnings Legal reserve 8,078,119 3 7,849,288 3 Special reserve 38,373,565 12 37,373,565 14 Unappropriated earnings 2,787,202 1 2,693,149 1 Total retained earnings 49,238,886 16 47,916,002 18 Other equity Exchange differences on translating foreign operations (919,398 ) - (593,515 ) - Unrealized gain on financial assets at fair value through other comprehensive income 1,466,521 - - - Unrealized gain on available-for-sale financial assets - - 1,091,158 - Cash flow hedges - - (92 ) - Gain on hedging instrument 252 - - - Total other equity 547,375 - 497,551 - Treasury shares (376,304 ) - (376,304 ) -

Total equity attributable to owners of the Company 71,737,128 23 70,432,153 27

NON-CONTROLLING INTERESTS (Note 31) 11,323,162 4 8,688,986 4

Total equity 83,060,290 27 79,121,139 31

TOTAL $ 305,673,093 100 $ 258,416,507 100

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

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YULON MOTOR COMPANY LTD. AND SUBSIDIARIES

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 (Notes 4, 28, 33 and 39) Sales $ 63,345,325 72 $ 72,754,343 77 Investment income 18,560 - 156,027 - Rental revenue 8,105,901 9 7,571,120 8 Service revenue 3,528,631 4 3,196,922 4 Other operating revenue 13,117,284 15 10,432,616 11

Total operating revenue 88,115,701 100 94,111,028 100

OPERATING COSTS (Notes 4, 19, 30, 33 and 39) Cost of goods sold 56,071,453 64 63,315,628 67 Investment cost 21,780 - 41,688 - Rental cost 6,645,835 8 6,269,706 7 Service cost 2,047,297 2 1,741,454 2 Other operating cost 4,369,681 5 2,737,541 3

Total operating costs 69,156,046 79 74,106,017 79

GROSS PROFIT 18,959,655 21 20,005,011 21

REALIZED (UNREALIZED) GAIN ON TRANSACTIONS WITH ASSOCIATES AND JOINT VENTURES 5,571 - (3,597) -

REALIZED GROSS PROFIT 18,965,226 21 20,001,414 21

OPERATING EXPENSES (Notes 4, 30, 33 and 39) Selling and marketing expenses 8,416,494 10 9,283,443 10 General and administrative expenses 5,766,397 6 8,537,662 9 Research and development expenses 295,157 - 283,282 - Expected credit loss 2,468,835 3 - -

Total operating expenses 16,946,883 19 18,104,387 19

PROFIT FROM OPERATIONS 2,018,343 2 1,897,027 2

NON-OPERATING INCOME Other income (Notes 4 and 33) 1,190,465 1 932,919 1 Other losses (Notes 4 and 33) (322,421) - 220,082 - Finance costs (Notes 4 and 33) (513,165) - (292,382) - Share of profit of associates and joint ventures accounted for by the equity method (Notes 4 and 21) 2,693,289 3 1,161,441 1 (Continued) - 26 -

YULON MOTOR COMPANY LTD. AND SUBSIDIARIES

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 %

Interest income (Notes 4 and 33) 318,551 - 219,361 -

Total non-operating income 3,366,719 4 2,241,421 2

PROFIT BEFORE INCOME TAX 5,385,062 6 4,138,448 4

INCOME TAX EXPENSE (Notes 4 and 34) 1,538,026 1 1,060,027 1

NET PROFIT FOR THE YEAR 3,847,036 5 3,078,421 3

OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans 55,961 - (22,526) - Unrealized gain on investments in equity instruments at fair value through other comprehensive income (211,382) - - - Share of the other comprehensive losses of associates and joint ventures accounted for by the equity method (61,299) - (22,653) - (216,720) - (45,179) - Items that may be reclassified subsequently to profit or loss: Exchange differences arising on translation operations (160,396) - (412,510) (1) Unrealized gain (loss) on available-for-sale financial assets - - (304,108) - Cash flow hedges - - (201) - Loss on hedging instruments not subject to basis adjustment 643 - - - Share of the other comprehensive of associates and joint ventures accounted for by the equity method (311,323) (1) (108,240) - (471,076) (1) (825,059) (1)

Other comprehensive loss for the year, net of income tax (687,796) (1) (870,238) (1)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR $ 3,159,240 4 $ 2,208,183 2

NET PROFIT ATTRIBUTABLE TO: Owners of the Company $ 2,037,032 2 $ 2,288,306 2 (Continued)

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YULON MOTOR COMPANY LTD. AND SUBSIDIARIES

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 %

Non-controlling interests 1,810,004 2 790,115 1

$ 3,847,036 4 $ 3,078,421 3

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company $ 1,490,742 2 $ 1,508,187 1 Non-controlling interests 1,668,498 2 699,996 1

$ 3,159,240 4 $ 2,208,183 2

EARNINGS PER SHARE (Note 35) Basic $1.39 $1.56 Diluted $1.39 $1.56

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

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YULON MOTOR COMPANY LTD. AND SUBSIDIARIES

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

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

BALANCE, JANUARY 1, 2017 $ 15,729,199 $ 6,664,910 $ 7,715,818 $ 36,373,565 $ 2,375,157 $ 75,147 $ - $ 1,157,054 $ - $ - $ (376,304 ) $ 69,714,546 $ 9,348,274 $ 79,062,820

Appropriation of the 2016 earnings Legal reserve - - 133,470 - (133,470 ) ------Special reserve - - - 1,000,000 (1,000,000 ) ------Cash dividends distributed by the Company (NT$0.5 per share) - - - - (786,460 ) ------(786,460 ) - (786,460 ) Cash dividends distributed by subsidiaries ------(1,228,791 ) (1,228,791 )

Change in equity from investments in associates and joint ventures accounted for by using equity method - 795 - - (2,555 ) ------(1,760 ) (93 ) (1,853 )

Change in equity from the differences between the consideration received or paid and the carrying amount of the subsidiaries' net assets during disposal or acquisition - - - - (2,360 ) ------(2,360 ) 2,360 -

Change in non-controlling interests ------(132,760 ) (132,760 )

Net profit for the year ended December 31, 2017 - - - - 2,288,306 ------2,288,306 790,115 3,078,421

Other comprehensive income for the year ended December 31, 2017, net of income tax - - - - (45,469 ) (668,662 ) - (65,896 ) (92 ) - - (780,119 ) (90,119 ) (870,238 )

Total comprehensive income for the year ended December 31, 2017 - - - - 2,242,837 (668,662 ) - (65,896 ) (92 ) - - 1,508,187 699,996 2,208,183

BALANCE, DECEMBER 31, 2017 15,729,199 6,665,705 7,849,288 37,373,565 2,693,149 (593,515 ) - 1,091,158 (92 ) - (376,304 ) 70,432,153 8,688,986 79,121,139

Effect of retrospective application and retrospective restatement - - - - 131,744 - 1,755,559 (1,091,158 ) 92 (92 ) - 796,145 - 796,145

BALANCE AT JANUARY 1, 2018 AS RESTATED 15,729,199 6,665,705 7,849,288 37,373,565 2,824,893 (593,515 ) 1,755,559 - - (92 ) (376,304 ) 71,228,298 8,688,986 79,917,284

Appropriation of the 2017 earnings Legal reserve - - 228,831 - (228,831 ) ------Special reserve - - - 1,000,000 (1,000,000 ) ------Cash dividends distributed by the Company (NT$0.58 per share) - - - - (912,294 ) ------(912,294 ) - (912,294 ) Cash dividends distributed by subsidiaries ------(1,194,067 ) (1,194,067 )

Change in equity from investments in associates and joint ventures accounted for by using equity method - (24,422 ) - - (794 ) ------(25,216 ) - (25,216 )

Change in equity from the differences between the consideration received or paid and the carrying amount of the subsidiaries' net assets during disposal or acquisition - (43,311 ) - - (1,091 ) ------(44,402 ) 44,402 -

Change in non-controlling interests ------2,115,343 2,115,343

Net profit for the year ended December 31, 2018 - - - - 2,037,032 ------2,037,032 1,810,004 3,847,036

Other comprehensive income for the year ended December 31, 2018, net of income tax - - - - 71,119 (325,883 ) (291,870 ) - - 344 - (546,290 ) (141,506 ) (687,796 )

Total comprehensive income for the year ended December 31, 2018 - - - - 2,108,151 (325,883 ) (291,870 ) - - 344 - 1,490,742 1,668,498 3,159,240

Associates disposed the investments in equity instruments designed as at fair value through other comprehensive income - - - - (2,832 ) - 2,832 ------

BALANCE, DECEMBER 31, 2018 $ 15,729,199 $ 6,597,972 $ 8,078,119 $ 38,373,565 $ 2,787,202 $ (919,398 ) $ 1,466,521 $ - $ - $ 252 $ (376,304 ) $ 71,737,128 $ 11,323,162 $ 83,060,290

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

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YULON MOTOR COMPANY LTD. AND SUBSIDIARIES

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 Income before income tax $ 5,385,062 $ 4,138,448 Adjustments for: Interest income (11,447,206) (8,851,032) Depreciation expenses 6,815,997 6,685,723 Finance costs 2,787,334 1,782,709 Share of profit of associates and joint ventures accounted for by the equity method (2,693,289) (1,131,485) Expected credit loss 2,468,836 - Amortization expenses 2,104,069 794,764 Impairment loss recognized on non-financial assets 1,143,742 155,094 Net (gain) loss on foreign currency exchange 260,331 (674,585) Recognition of provisions 139,777 203,124 Dividend income (55,233) (53,472) Loss on disposal of property, plant and equipment 29,462 36,754 Net gain on fair value change of financial assets and liabilities designated as at fair value through profit or loss 20,339 (25,077) Realized gain on the transactions with associates and joint ventures 4,191 (23,805) Impairment loss recognized on financial assets 3,931 20,223 Net loss on disposal of intangible assets 2,963 36,281 Impairment loss recognized on trade receivables - 1,746,438 Gain on disposal of financial assets - (449,668) Gain on disposal of investment properties - (26,052) Changes in operating assets and liabilities Financial assets held for trading - 747,387 Financial assets mandatorily classified as at fair value through profit or loss 1,472,283 - Notes and trade receivable (24,871,608) (16,569,724) Other receivables (2,823,425) (2,097,629) Inventories (2,677,241) (1,978,392) Prepayments and other current assets (2,537,991) (2,638,695) Finance lease receivables (8,367,259) (5,441,959) Available-for-operating-sale leased assets (6,042,113) (6,488,767) Incremental costs of obtaining a contract (2,148,491) - Other operating assets (2,348,530) 265,219 Notes and trade payables (555,614) 1,528,314 Other payables (4,945,487) 1,335,532 Provisions (175,641) (194,694) Guarantee deposits 842,695 863,617 Other current liabilities 135,778 (492,103) Accrued pension liabilities (371,709) (371,794) Deferred revenue (23,742) 18,206 Other operating liabilities (101,747) 324,113 Cash used in operations (48,569,536) (26,826,987) Interest received 11,749,174 8,712,414 (Continued) - 30 -

YULON MOTOR COMPANY LTD. AND SUBSIDIARIES

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

2018 2017

Interest paid (2,741,023) (1,810,802) Income tax paid (1,114,203) (1,537,227)

Net cash used in operating activities (40,675,588) (21,462,602)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at amortized cost 5,861,518 - Dividend received 4,352,049 3,989,394 Purchase of property, plant and equipment (3,740,191) (3,650,199) Purchase of financial assets at amortized cost (2,413,956) - Payments for other non-current assets (1,197,397) - Proceeds from disposal of property, plant and equipment 863,962 1,165,431 Payments for investment properties (344,370) - Acquisition of associates investment accounted for using equity method (325,399) (1,921,798) Payments for intangible assets (144,823) (133,977) Proceeds from the capital reduction of investments accounted for using the equity method 90,128 - Increase (decrease) in prepayments for leases (41,172) 54,447 Increase in refundable deposits (13,438) (807,515) Proceeds on financial assets at fair value through other comprehensive income 3,040 - Purchase of financial assets at fair value through other comprehensive income (1,904) - Proceeds on intangible assets 293 1,363 Proceeds on sale of financial assets at fair value through profit or loss - 2,533,881 Purchase of debt investment with no active market - (2,319,134) Purchase of financial assets at fair value through profit or loss - (2,189,002) Proceeds on sale of available-for-sale financial assets - 395,764 Proceeds on sale of financial assets measured at cost - 204,523 Proceeds on investment properties - 53,321 Acquisition of financial assets measured at cost - (1,145) Purchase of available-for-sale financial assets - (954)

Net cash generated from investing activities 2,948,340 (2,625,600)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term bills payable 248,774,288 254,457,608 Repayment of short-term bills payable (234,214,646) (243,235,322) Proceeds from short-term borrowings 192,888,277 149,274,207 Repayment of short-term borrowings (173,105,661) (139,219,430) Issuance of bonds payable 7,396,900 14,341,475 Proceeds from subsidiaries of issuance of preference shares 2,356,594 - Dividends paid (2,085,150) (2,009,332) Proceeds from long-term borrowings 1,163,156 3,585,610 (Continued) - 31 -

YULON MOTOR COMPANY LTD. AND SUBSIDIARIES

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

2018 2017

Repayment of long-term borrowings (794,768) (1,983,138) Change in non-controlling interests (241,251) (132,760) Increase (decrease) in guarantee deposits received 54,692 (301,115) Payments for transaction costs attributable to the issuance of debt instruments (20,000) - Repayment of bonds payable - (3,000,000)

Net cash generated from financing activities 42,172,431 31,777,803

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES (130,361) (140,663)

NET INCREASE IN CASH AND CASH EQUIVALENTS 4,314,822 7,548,938

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 24,631,189 17,082,251

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 28,946,011 $ 24,631,189

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

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Proposal 2 Proposed by the Board of Directors Proposal: Acknowledge the 2018 Earnings Distribution Explanation: 1. In accordance with the 2018 financial statements, the net profit for the year is about NTD2.04 billion and an earnings per share is NTD1.39. Base on the consideration for the need of future working capital, changes in the industrial environment, the right of shareholders and the long-term financial planning, the 2018 earnings distribution statement is proposed in accordance with the Article 27 of the Articles of Incorporation. Please refer to page 34 for the Distribution Statement. 2. NTD 0.67 per share will be distributed as shareholders’ cash dividend for 2018 and the distribution date will be scheduled on July 29, 2019 in accordance with the Article 27 of the Articles of Incorporation “The Company shall distribute the earnings with cash dividend or stock dividend for each fiscal year. The earnings distribution amount is proposed by the Board of Directors for a resolution in the shareholders’ meeting.” 3. If the number of total shares outstanding, prior to the distribution date, changes due to the repurchasing of shares by the Company or the transfer of treasury shares to employees, such that the ratios of the cash dividends are affected and must be adjusted, the Board is authorized to make such adjustments. 4. In addition, in response to repay corporate bonds, NTD1 billion special reserves are proposed to be appropriated from the earnings distribution statement. 5. Please proceed with the acknowledgement.

Resolution:

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Yulon MOTOR CO., LTD. 2018 Earnings Distribution Statement

In NTD Item Subtotal Total Distributable amount 2,787,201,941 Undistributed earnings of prior period 552,024,945 Plus: Adjustments due to Adoption of IFRS 9 131,744,070 Adjustments distributed earnings of prior period 683,769,015 Less: Disposal of Investments in Equity Instruments at air (2,832,013) Value through Other Comprehensive Income Less: Long-term equity investment adjusted to retained (1,885,393) earnings Plus: The re-measured amount of defined benefit plans 71,118,576 recognized in retained earnings Adjusted undistributed earnings 750,170,185 Net income 2,037,031,756 Subtotal 2,787,201,941 Distribution items 2,257,559,515 Legal reserve (10%) 203,703,176 Special reserve – appropriated according to the amount 0 debited to shareholder’s equipment lawfully Distribution of shareholders dividends - Cash dividends 1,053,856,339 (NTD 0.67er share) Distribution of shareholders dividends - Stock dividends 0 (NTD 0.00 per share) Special reserve – Appropriated in accordance with 1,000,000,000 business needs Undistributed ending retained earnings 529,642,426 Note 1: for calculating the “additional 5% profit-seeking income tax” of the undistributed surplus earnings in accordance with Article 66-9 of the Income Tax Law, the earnings of the most recent fiscal year should be distributed with priority. Note 2: Distribution of cash dividends will be calculated to New Taiwan Dollar. Fractional amount less than one dollar will be set aside as other revenue.

Chairman: President: Chief Accountant:

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Discussions

Proposal 1 Proposed by the Board of Directors Proposal: Amendments to the Company’s “Articles of Incorporation.” Explanation: 1. In response to the development of the company's business, proposed amendments to the Company’s “Articles of Incorporation.” 2. The Company intends to adjust the number of directors from the original nine to fifteen to six to fifteen. In line with the actual operational requirements of the Company, the proposal is to delete the relevant regulations of the managing director and establish a functional committee to comply with the current operations. 3. Please refer to from page 36 to page 38 for the comparison table before and after revisions 4. Please proceed with the discussion.

Resolution:

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Comparison Table for the “Articles of Incorporation” Before and After Revision After the Revision Before the Revision Remark Article 6： Article 6： In response to The Company’s shares are ordered, The Company’s shares are ordered, the needs of numbered, and detailed with mandatory numbered, and detailed with mandatory company's information, and with the signature of information, and with the signature or actual three directors or affixed, the stamp of seal of the Chairman and two directors operational , the Company, and then certified for affixed, the stamp of the Company, and amend Articles lawful issuance. The Company may then certified for lawful issuance. The have dematerialized stock shares Company may have dematerialized issued; however, must contact the stock shares issued; however, must securities centralized depository contact the securities centralized institutions for registration depository institutions for registration

Article 14： Article 14： Item One The Company’s Board is with 6~15 The Company’s Board is with 9~15 adjustment of directors elected by a nomination directors elected by a nomination the number of system from the director candidate list system from the director candidate list directors in the shareholder’s meeting for 3-year in the shareholder’s meeting for 3-year tenure and eligible for reelection. The tenure and eligible for reelection. The total shareholding ratio of all directors total shareholding ratio of all directors is processed in accordance with the is processed in accordance with the securities regulatory authorities. securities regulatory authorities. The number of the Company’s The number of the Company’s independent directors at least 3 seats independent directors at least 3 seats and the nomination system is adopted and the nomination system is adopted to to have independent directors elected have independent directors elected from from the director candidate list. the director candidate list. The professional qualifications, The professional qualifications, shareholding, part-time job restrictions, shareholding, part-time job restrictions, nomination and election method, and nomination and election method, and other compliance matters of the other compliance matters of the independent directors shall be handled independent directors shall be handled in accordance with the securities in accordance with the securities regulatory authorities. regulatory authorities. (Deletion) The Board of Directors of the Company The fourth item may establish various functional moves to the committees. The regulations governing Chapter 5 the exercise of functional committees shall be developed and adopted by the Board of Directors before

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implementation.

Article 15： Article 15： In response to For the organization of the Board of For the organization of the Board of the needs of Directors, the Directors shall elect from Directors, at least three general directors company's among themselves a Chairman of the are elected with the consent of the actual Board of Directors, may elect a Vice majority attending directors and the operational , Chairman of the Board of Directors, by a attendance of two thirds of the directors. amend Articles majority in a meeting attended by over There must be at least one independent two-thirds of the Directors. director among the general directors and shall not be less than one fifths of the general directors. Chairman and/or Vice Chairman are to be elected among the general directors. If no general director is appointed by the Board of Directors, Chairman and/or Vice Chairman are to be elected among directors the same way Article 16： Article 16： In response to Chairman chairs the shareholder’s Chairman chairs the shareholder’s the needs of meeting and the Board meeting, meeting, the Board meeting, and the company’s internally, and represents the Company General Board meeting internally, and actual externally. The Chairman is responsible represents the Company externally. The operational , for the business operation of the Chairman is responsible for the business amend Articles Company. The Vice Chairman is to act operation of the Company. The Vice on the Chairman’s behalf when the Chairman is to act on the Chairman’s Chairman is on leave or unable to behalf when the Chairman is on leave or exercise powers for reasons. When there unable to exercise powers for reasons. is no Vice Chairman appointed or the When there is no Vice Chairman Vice Chairman is on leave or is unable to appointed or the Vice Chairman is on exercise powers for reasons, the leave or is unable to exercise powers for Chairman is to appoint one Director to reasons, the Chairman is to appoint one act on his/her behalf. If a representative General Director to act on his/her behalf. is not appointed by the Chairman, one of If there is not a General Director the Directors is elected to chair the appointed, a Director should be meeting. appointed to chair the meeting. If a representative is not appointed by the Chairman, one of the General Directors or Directors is elected to chair the meeting.

Article 20： Article 20： In response to (Deletion) If the Company has General Board of the needs of

Directors organized, the General Board company’s Meeting can be convened by the actual Chairman at any time while the Board

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Meeting is in recess. The resolutions operational , reached in the General Board Meeting amend Articles must be with the attendance of the majority of the General Directors and the consent of the majority of the attending General Directors. Chapter 5 Various Functional Chapter 5 Audit Committee In response to Committees the needs of (Deletion) company’s actual operational , amend Articles Article 21-1 Former Article The Board of Directors of the Company 14.4 may establish various functional committees. The regulations governing the exercise of functional committees shall be developed and adopted by the Board of Directors before implementation. Article 31 Article 31 Added revision The Articles of Incorporation was The Articles of Incorporation was date. established on July 23, 1953. established on July 23, 1953. …(omitted). The 53nd amendment was …(omitted). The 51st amendment was implemented on June 21, 2019. implemented on June 11, 2013. The 52nd amendment was implemented on June 21, 2016.

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Discussions

Proposal 2 Proposed by the Board of Directors Proposal: Amendments to the Company’s “Procedures for Endorsements and Guarantees.” Explanation: 1. In response to the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies" and International Financial Reporting Standards, enhancing the corporate governance principle, the proposal is to amend the title of “Procedures for Endorsements and Guarantees” of the Company to ”Operating for Endorsements and Guarantees”, and amend part of Articles. 2. Please refer to from page 40 to page 42 for the comparison table before and after revisions 3. Please proceed with the discussion.

Resolution:

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Comparison Table for the “Procedures for Endorsements and Guarantees.” Before and After Revision After the Revision Before the Revision Remark Title: Title: In response to YULON MOTOR CO.,LTD YULON MOTOR CO.,LTD the Procedures for Endorsements and Management for Endorsements and "Regulations Guarantees Guarantees Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies" ,amend the title.

Article 1： Article 1： In response to 1.This procedures is based on the 1.This procedures is based on the the "Regulations ”Regulations Governing Loaning of ”Regulations Governing Loaning of Governing Funds and Making of Funds and Making of Loaning of Endorsements/Guarantees by Public Endorsements/Guarantees by Public Funds and Companies”, established by competent Companies”, established by Financial Making of authority, and in consideration of the Supervisory Commission. Endorsements/ requirements for the endorsement Guarantees by guarantee management of the Company Public Companies" established. amend

2.Company of a pledge or mortgage on 2. Company of a pledge or mortgage on its chattel or real property as security for its chattel or real property as security the loans of another company shall also for the loans of another company shall comply with these procedures. also comply with these management.

Article 4: Article 4: In response to 6. Where a public company needs to 6. Where a public company needs to the exceed the limits set out in the exceed the limits set out in the “Regulations Governing procedures for Management for Loaning of Endorsements/Guarantees to satisfy its Endorsements/Guarantees to satisfy its Funds and business requirements, and where the business requirements, and where the Making of conditions set out in the Operational conditions set out in the Operational Endorsements/ Procedures for Procedures for Guarantees by Endorsements/Guarantees are complied Endorsements/Guarantees are complied Public with, it shall obtain approval from the with, it shall obtain approval from the Companies" ,amend the board of directors and half or more of board of directors and half or more of title. the directors shall act as joint guarantors the directors shall act as joint for any loss that may be caused to the guarantors for any loss that may be

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After the Revision Before the Revision Remark company by the excess caused to the company by the excess endorsement/guarantee. It shall also endorsement/guarantee. It shall also amend the Operational Procedures for amend the Operational Procedures for Endorsements/Guarantees accordingly Endorsements/Guarantees accordingly and submit the same to the shareholders' and submit the same to the meeting for ratification after the fact. If shareholders' meeting for ratification the shareholders' meeting does not give after the fact. If the shareholders' consent, the company shall adopt a plan meeting does not give consent, the to discharge the amount in excess within company shall adopt a plan to a given time limit. discharge the amount in excess within a given time limit.

Article 7：： Article 7：： It is to be 3.The balance of 3.The balance of amended in endorsements/guarantees by company endorsements/guarantees by company accordance and its subsidiaries for a single and its subsidiaries for a single with the enterprise reaches NT$10 millions or enterprise reaches NT$10 millions or "Regulations more and the aggregate amount of all more and the aggregate amount of all Governing endorsements/guarantees for, endorsements/guarantees for, Loaning of Investments accounted for using equity investment of a long-term nature in, Funds and method, and balance of loans to, such and balance of loans to, such enterprise Making of enterprise reaches 30 percent or more of reaches 30 percent or more of public Endorsements/ public company's net worth as stated in company's net worth as stated in its Guarantees by its latest financial statement. latest financial statement. Public Companies" and the actual operational requirements of the Company.

Article 8： Article 8： It is to be 4. “Date of occurrence” in these 4. “Date of occurrence” herein means amended in Regulations means the date of contract the transition date of contract signing, accordance signing, date of payment, dates of date of payment, dates of boards of with the boards of directors resolutions, or other directors resolutions, or other date that "Regulations date that can confirm the counterparty can confirm the counterpart of the Governing and monetary amount of the transaction, transaction and monetary amount of the Loaning of whichever date is earlier. transaction ,whichever date is earlier.。 Funds and Making of Endorsements/ Guarantees by Public Companies" and the actual

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After the Revision Before the Revision Remark operational requirements of the Company.

Article 12： Article 12： It is to be The Procedures approved by the The Procedures approved by the amended in Company’s Board of Directors is Company’s Board of Directors is accordance forwarded to the Audit Committee and forwarded to the Audit Committee and with the presented to be resolved in the presented to be resolved in the "Regulations shareholders’ meeting .Where there any shareholders’ meeting, so is the Governing director expresses dissent and it is amendment. If any director expresses Loaning of contained in the minutes or a written dissent and it is contained in the Funds and statement, the company shall submit the minutes or a written statement, the Making of dissenting opinions to each supervisor Company shall submit the director's Endorsements/ and for discussion by the shareholders' dissenting opinion to the Audit Guarantees by meeting. The same shall apply to any Committee. Public amendments to the Procedures. Companies" When submits the Operational and the actual Procedures for operational Endorsements/Guarantees for discussion requirements of by the board of directors, the board of the Company. directors shall take into full consideration each independent director's opinions; the independent directors' opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors' meeting.

Article 13： Article 13： Added revision date The Article was regulated on June 21, The Article was regulated on June 21, 1986……(omitted). The 11th time on 1986……(omitted). The 11th time on June 15, 2018, and for the 12th time on June 15, 2018. June 21, 2019.

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Discussions

Proposal 3 Proposed by the Board of Directors Proposal: Amendments to the Company’s “Procedures for Loaning of Funds.” Explanation: 1. In response to the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies" and International Financial Reporting Standards, to relax the flexibility of the funds raising and enhance the corporate governance principles， proposed amendments to the Company’s “Procedures for Loaning of Funds.”

2. Please refer to from page 44 to page 46 for the comparison table before and after revisions 3. Please proceed with the discussion.

Resolution:

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Comparison Table for the “Procedures for Loaning of Funds.” Before and After Revision After the Revision Before the Revision Remark Article 1： Article 1： It is to be 1. This procedures is based on This procedures is based on the amended in the”Regulations Governing Loaning of “Regulations Governing Loaning of accordance Funds and Making of Funds and Making of with the " Endorsements/Guarantees by Public Endorsements/Guarantees by Public Regulations Companies”,and in consideration of the Companies” , established by Financial Governing requirements for the funds management Supervisory Commission, and in Loaning of of the Company. consideration of the requirements for Funds and the funds management of the Making of Company . Endorsements/ 2.All matters of the Company relating to Guarantees by the loaning funds to others externally Public shall be handled in accordance with the Companies " provisions of this Operating Procedure. and the actual operational requirements of the Company.

Article 4： Article 4： It is to be The aggregate amount of loans and the The aggregate amount of loans and the amended in maximum amount permitted to a single maximum amount permitted to a single accordance borrower borrower with the " Regulations 1、2 ellipsis 1、2 ellipsis Governing The restriction in paragraph 1, The restriction in paragraph 1, Loaning of subparagraph 2 shall not apply to inter- subparagraph 2 shall not apply to inter- Funds and company loans of funds between foreign company loans of funds ,which the Making of companies in which the public company public company holds, directly or Endorsements/ holds, directly or indirectly, 100% of the indirectly, 100% of the voting shares, Guarantees by voting shares, the aggregate amount of the aggregate amount of loans shall not Public loans shall not exceed 20% of the net exceed 20% of the net value of the Companies " value of the Company and the maximum Company and the maximum amount and the actual amount permitted to a single borrower permitted to a single borrower shall not operational shall not exceed 6% of the net value of exceed 6% of the net value of the requirements of the Company. Company. the Company.

The responsible person of a company who has violated the provisions of the preceding Paragraph shall be liable, jointly and severally with the borrower, for the repayment of the loan at issue

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After the Revision Before the Revision Remark and for the damages, if any, to company resulted there-from.

Article 14： Article 14：Transaction It is to be The term "announce and report" as used he term "announce and report" as used amended in in these Regulations means the process in these Regulations means the process accordance of entering data to the information of entering data to the information with the " reporting website designated by the reporting website designated by the Regulations Financial Supervisory Commission Financial Supervisory Commission Governing (FSC). (FSC). “Date of occurrence” herein Loaning of “Date of occurrence” in these means the transition date of contract Funds and Regulations means the date of contract signing, date of payment, dates of Making of signing, date of payment, dates of boards of directors resolutions, or other Endorsements/ boards of directors resolutions, or other date that can confirm the counterpart of Guarantees by date that can confirm the counterparty the transaction and monetary amount of Public and monetary amount of the transaction, the transaction , whichever date is Companies " whichever date is earlier. earlier. and the actual operational requirements of the Company.

Article 16： Article 16： It is to be The Procedures approved by the The Procedures approved by the amended in Company’s Board of Directors is Company’s Board of Directors is accordance forwarded to the Audit Committee forwarded to the Audit Committee and with the " (approval of one-half or more of actual presented to be resolved in the Regulations number of persons currently holding shareholders’ meeting, so is the Governing those positions is obtained, if approval amendment. If any director expresses Loaning of of one-half or more of all audit dissent and it is contained in the Funds and committee members as required in the minutes or a written statement, the Making of preceding paragraph is not obtained, the Company shall submit the director's Endorsements/ procedures may be implemented if dissenting opinion to the Audit Guarantees by approved by two-thirds or more of all Committee. Public directors, and the resolution of the audit Companies " committee shall be recorded in the and the actual minutes of the board of directors operational meeting) and presented to be resolved in requirements of the shareholders’ meeting, so is the the Company. amendment. If any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to the Audit Committee. When submits the Operational

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After the Revision Before the Revision Remark Procedures for Endorsements/Guarantees for discussion by the board of directors, the board of directors shall take into full consideration each independent director's opinions; the independent directors' opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors' meeting.

Article 17： Article 17： Added revision The Articles of Incorporation was The Articles of Incorporation was date established on June 11,1988 established on June 11,1988 …(omitted). The 12st amendment was …(omitted). The 11st amendment was implemented on June 21, 2019. implemented on June 21, 2016.

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Discussions

Proposal 4 Proposed by the Board of Directors Proposal: Amendments to the Company’s “Procedures for Derivatives Trading.” Explanation: 1. In response to the “Procedures for Derivatives Trading " amendments and in accordance with the current organizational structure and the actual process of trading derivative product, proposed amendments to the Company’s “Procedures for Derivatives Trading..” 2. The amendment to scope of derivatives is made in line with the definition of Financial Instruments under International Financial Reporting Standard No. 9, and text revision 。 3. Please refer page 48 for the comparison table before and after revisions 4. Please proceed with the discussion.

Resolution:

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Comparison Table for the “Procedures for Derivatives Trading.” Before and After Revision After the Revision Before the Revision Remark Financial derivatives in the Procedures Financial derivatives in the The amendment to refer to the forward contracts, option Procedures refer to the forward scope of derivatives contracts (excluding option writer contracts, option contracts is made in line with contract), futures contracts, leveraged (excluding option writer the definition of margin contracts, swap contracts, and contract), futures contracts, Financial Instruments a compound contract derived from the leveraged margin contracts, under International above contracts with its value derived swap contracts, and a compound Financial Reporting from assets, specified interest rate, contract derived from the above Standard No. 9,and financial instrument price, commodity contracts with its value derived text revision. price ,exchange rate, index of prices or from assets, interest rates, rates index, or other benefits; or hybrid exchange rate, index, or other contracts combining the above benefits. The forward contracts contracts; or hybrid contracts or exclude insurance contracts, structured products containing performance contracts, after- embedded derivatives. The forward sales service contracts, long- contracts exclude insurance contracts, term lease contracts, and long- performance contracts, after-sales term purchase service contracts, long-term lease (sale) contracts. contracts, and long-term purchase (sale) contracts. Periodically evaluate the risk Periodically evaluate the risk It is to be management measures currently management measures currently text revision for employed are appropriate and are employed are appropriate and regulation faithfully conducted in accordance are faithfully conducted in with these Regulations and the accordance with these procedures for engaging in derivatives Regulations and the procedures trading formulated by the company. for engaging in derivatives trading formulated by the company. Effective and revised Effective and revised Text revision for regulation The Articles of Incorporation was The Articles of Incorporation was Added revision date established on August 28, 1996 , established on August 28, 1996 , amended for the 1st time on June 30, amended for the 1st time on June 2003, amended for the 2nd time on 30, 2003, amended for the 2nd June 12, 2006, amended for the 3rd time on June 12, 2006, amended time on June 19, 2008, amended for for the 3rd time on June 19, 2008, the 4th time on June 19, 2014, and for amended for the 4th time on June the 5th time on June 21, 2016, and for 19, 2014, and for the 5th time on the 6th time on June 22, 2017, and for June 21, 2016, and for the 6th time the 7th time on June 21, 2019. on June 22, 2017.

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Discussions

Proposal 5 Proposed by the Board of Directors Proposal: Amendments to the Company’s “Procedures for Acquisition and Disposal of Assets.” Explanation: 1. In response to the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies" and in accordance with the definition of the International Financial Reporting Standards No. 16 Leases and International Financial Reporting Standard No. 9 Financial Instruments, the scope of derivatives is defined, proposed amendments to the Company’s ”Regulations Governing the Acquisition and Disposal of Assets by Public Companies” (hereinafter referred to as the “Acquisition and Disposal Procedures”) relevant provisions. 2. In accordance with the provisions of Article 14 of Securities and Exchange Act, the powers of the supervisor shall be exercised by the independent directors of the Audit Committee or the Audit Committee, and to clearly define the intension for Procedures for Acquisition and Disposal of Assets of assets, the principles and objectives of the procedures on underlying assets and institutes, including at home and aboard, shall be consistent, the exception shall be stated, and the relevant provisions for Procedures for Acquisition and Disposal of Assets are proposed to be revised. 3. Please refer to from page 50 to page 81 for the comparison table before and after revisions 4. Please proceed with the discussion.

Resolution:

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Comparison Table for the “Procedures for Acquisition and Disposal of Assets.” Before and After Revision After the Revision Before the Revision Remark Article 2： Article 2： 1.In line with The term "assets" as used in these The term "assets" as used in these the provisions Regulations includes the following: Regulations includes the following: of the 1.Investments in stocks, government 1.Investments in stocks, government International bonds, corporate bonds, financial bonds, bonds, corporate bonds, financial bonds, Financial securities representing interest in a fund, securities representing interest in a fund, Reporting depositary receipts, call (put) warrants, depositary receipts, call (put) warrants, Standard No. beneficial interest securities, and asset- beneficial interest securities, and asset- 16 Leases, the backed securities. backed securities. paragraph 5 is 2.Real property (including land, houses 2.Real property (including land, houses added to and buildings, investment property, and and buildings, investment property, expand the construction enterprise inventory) and Right-of-use assets ,and construction scope of the equipment. enterprise inventory) and equipment. usage right 3.Memberships. 3.Memberships. over assets, 4.Patents, copyrights, trademarks, 4.Patents, copyrights, trademarks, and the right franchise rights, and other intangible franchise rights, and other intangible of land under assets. assets. Paragraph 2 is 5.Right-of-use assets. 5.Claims of financial institutions moved to (including receivables, bills purchased under and discounted, loans, and overdue Paragraph 5. receivables). 6.Claims of financial institutions 6.Derivatives. 2.Current (including receivables, bills purchased Subparagraphs and discounted, loans, and overdue 5 to 8 are receivables). moved to 7.Derivatives. 7.Assets acquired or disposed of in Subparagraphs connection with mergers, demergers, 6 to 9. acquisitions, or transfer of shares in accordance with law. 8.Assets acquired or disposed of in 8.Other major assets. connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law. 9.Other major assets.

Article 3： Article 3： 1. The Terms used in these Regulations are Financial derivatives in the amendment to defined as follows: Procedures refer to the forward scope of 1.Derivatives: Forward contracts, contracts, option contracts derivatives is options contracts, futures contracts, (excluding option writer contract), made in line leverage contracts, or swap contracts, futures contracts, leveraged margin with the

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After the Revision Before the Revision Remark whose value is derived from a specified contracts, swap contracts, and a definition of interest rate, financial instrument price, compound contract derived from Financial commodity price, foreign exchange rate, the above contracts with its value Instruments index of prices or rates, credit rating or derived from assets, interest rates, under credit index, or other variable; or hybrid exchange rate, index, or other International contracts combining the above contracts; benefits. The forward contracts Financial or hybrid contracts or structured exclude insurance contracts, Reporting products containing embedded performance contracts, after-sales Standard No. derivatives. The term "forward service contracts, long-term lease 9,and text contracts" does not include insurance contracts, and long-term purchase (sale) revision. contracts, performance contracts, after- contracts. 2.The sales service contracts, long-term leasing amendments contracts, or long-term purchase (sales) to the contracts Companies 2.Assets acquired or disposed through 2. Assets acquired or disposed through Act were mergers, demergers, acquisitions, or mergers, demergers, acquisitions, or issued on transfer of shares in accordance with transfer of shares in accordance with August 1, law: Refers to assets acquired or law: Refers to assets acquired or 2018 and were disposed through mergers, demergers, or disposed through mergers, demergers, implemented acquisitions conducted under the or acquisitions conducted under the on November Business Mergers and Acquisitions Act, Business Mergers and Acquisitions Act, 1, 2018. In Financial Holding Company Act, Financial Holding Company Act, line with such Financial Institution Merger Act and Financial Institution Merger Act and amendments, other acts, or to transfer of shares from other acts, or to transfer of shares from the reference another company through issuance of another company through issuance of under new shares of its own as the new shares of its own as the Paragraph 2 consideration therefor (hereinafter consideration therefor (hereinafter will be revised "transfer of shares") under Article 156-3 "transfer of shares") under Article 156-8 from Article of the Company Act. of the Company Act. 156 Paragraph 3. Related party: As defined in the 3. Related party: As defined in the 8 to Article Regulations Governing the Preparation Regulations Governing the Preparation 156-3. of Financial Reports by Securities of Financial Reports by Securities Issuers. Issuers. 4.Subsidiary：As defined in the 4.Subsidiary：As defined in the Regulations Governing the Preparation Regulations Governing the Preparation of Financial Reports by Securities of Financial Reports by Securities Issuers. Issuers. 5.Professional appraiser: Refers to a real 5.Professional appraiser: Refers to a real property appraiser or other person duly property appraiser or other person duly authorized by law to engage in the value authorized by law to engage in the value appraisal of real property or equipment. appraisal of real property or equipment. 6. Date of occurrence: Refers to the date 6. Date of occurrence: Refers to the date of contract signing, date of payment, of contract signing, date of payment,

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After the Revision Before the Revision Remark date of consignment trade, date of date of consignment trade, date of transfer, dates of boards of directors transfer, dates of boards of directors resolutions, or other date that can resolutions, or other date that can confirm the counterpart and monetary confirm the counterpart and monetary amount of the transaction, whichever amount of the transaction, whichever date is earlier; provided, for investment date is earlier; provided, for investment for which approval of the competent for which approval of the competent authority is required, the earlier of the authority is required, the earlier of the above date or the date of receipt of above date or the date of receipt of approval by the competent authority approval by the competent authority shall apply. shall apply. 7. Mainland China area investment: 7.Mainland China area investment: Refers to investments in the mainland Refers to investments in the mainland China area approved by the Ministry of China area approved by the Ministry of Economic Affairs Investment Economic Affairs Investment Commission or conducted in accordance Commission or conducted in with the provisions of the Regulations accordance with the provisions of the Governing Permission for Investment or Regulations Governing Permission for Technical Cooperation in the Mainland Investment or Technical Cooperation in Area. the Mainland Area.

Article 4： Article 4： 1.The letter Professional appraisers and their Professional appraisers and their with Ministry- officers, certified public accounts, officers, certified public accounts, Finance-SFC- attorneys, and securities underwriters attorneys, and securities underwriters 0920001151 that provide public companies with that provide public companies with issued by appraisal reports, certified public appraisal reports, certified public former accountant's opinions, attorney's accountant's opinions, attorney's Securities and opinions, or underwriter's opinions shall opinions, or underwriter's opinions may Futures meet the following requirements: not be a related party。 Commission, 1.May not have previously received a Ministry of final and unappealable sentence to Finance dated imprisonment for 1 year or longer for a March 21, violation of the Act, the Company Act, 2003 the Banking Act of The Republic of supplements China, the Insurance Act, the Financial the fourth Holding Company Act, or the Business point Entity Accounting Act, or for fraud, concerning the breach of trust, embezzlement, forgery guidelines of documents, or occupational crime. over the However, this provision does not apply experts, such if 3 years have already passed since as public completion of service of the sentence, appraisers since expiration of the period of a company and

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After the Revision Before the Revision Remark suspended sentence, or since a pardon its was received. professional 2.May not be a related party or de facto appraisers, related party of any party to the accountants, transaction. lawyers or 3.If the company is required to obtain securities appraisal reports from two or more underwriters, professional appraisers, the different etc. should be professional appraisers or appraisal aware of the officers may not be related parties or de matters facto related parties of each other. involved in When issuing an appraisal report or this procedure opinion, the personnel referred to in the and take into preceding paragraph shall comply with account the the following: negative 1.Prior to accepting a case, they shall qualifications prudently assess their own professional of directors, capabilities, practical experience, and supervisors independence. and managers 2.When examining a case, they shall and the issuer's appropriately plan and execute adequate offering and working procedures, in order to produce issuance by a conclusion and use the conclusion as the directors, the basis for issuing the report or supervisors opinion. The related working and managers procedures, data collected, and of Article 53 conclusion shall be fully and accurately of the specified in the case working papers. Securities 3.They shall undertake an item-by-item Exchange evaluation of the comprehensiveness, Law. The accuracy, and reasonableness of the provisions of sources of data used, the parameters, and Article 8 (1), the information, as the basis for issuance Article 15 of of the appraisal report or the opinion. the Securities 4.They shall issue a statement attesting Processing to the professional competence and Guidelines, independence of the personnel who and the prepared the report or opinion, and that integrity they have evaluated and found that the principle of information used is reasonable and the issuer or accurate, and that they have complied its responsible with applicable laws and regulations. person, add the first

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After the Revision Before the Revision Remark paragraphs 1 to 3 of the first paragraph, and specify the negative qualifications of relevant experts.

2.Clarify the responsibility of external experts, taking into account the relevant assessment, review and declaration matters, etc. about the reasonableness of the appraisal report by accountants concerning the investment property, and add Paragraph 2 to define the assessment, review and declaration matters, etc. about the reasonableness of the appraisal report issued by experts under this Procedure.

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After the Revision Before the Revision Remark Article 5： Article 5： 1.In Companies shall handle the acquisition Companies shall handle the acquisition accordance or disposal of assets in compliance with or disposal of assets in compliance with with the these Regulations these Regulations definition of 1.In the event that the acquisition or 1.In the event that the acquisition or the disposal of long-term and short-term disposal of long-term and short-term International securities investment of the Company, it securities investment of the Company, it Financial shall be handled in accordance with shall be handled in accordance with Reporting requirements under this Article requirements under this Article Standards No. Paragraphs 4, 6, and 9 concerning the Paragraphs 4, 6, and 9 concerning the 16，hereby purpose, nature, quantity and expected purpose, nature, quantity and expected the transaction date and price of the transaction date and price of the amendment to acquisition or disposal by the relevant acquisition or disposal by the relevant Paragraph 4 is department (if such investment is not department (if such investment is not to the right-of- trading in the centralized trading market trading in the centralized trading market use of real or the brokerage business office, an or the brokerage business office, an property not opinion on the reasonableness of the opinion on the reasonableness of the for business transaction price shall be provided by transaction price shall be provided by purpose are the securities analyst or accountant the securities analyst or accountant included in the before the date of occurrence) . before the date of occurrence) . limits of the handling 2.In the event that the acquisition or 2.In the event that the acquisition or procedures of disposal of real property, it shall be disposal of real property, it shall be the Company. handled in accordance with handled in accordance with requirements under this Article requirements under this Article Paragraphs 4, 6, and 8 concerning the Paragraphs 4, 6, and 8 concerning the purpose or use, the name, nature, purpose or use, the name, nature, location, area and expected transaction location, area and expected transaction date, method (bidding price or date, method (bidding price or bargaining price), price (if there is a bargaining price), price (if there is a broker, the brokerage fees shall be broker, the brokerage fees shall be included), delivery or payment terms. included), delivery or payment terms.

3. In the event that the acquisition or 3.In the event that the acquisition or disposal of equipment, it shall be disposal of equipment, it shall be handled in accordance with handled in accordance with requirements under this Article requirements under this Article Paragraphs 6 and 8 concerning the Paragraphs 6 and 8 concerning the purpose or use, the name, nature, purpose or use, the name, nature, amount and expected transaction date, amount and expected transaction date, method (bidding price or bargaining method (bidding price or bargaining price), price (if there is a broker, the price), price (if there is a broker, the brokerage fees shall be included), brokerage fees shall be included),

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After the Revision Before the Revision Remark delivery or payment terms. delivery or payment terms.

4. The total amount of the real property 4.The total amount of the real property and its right-to-use assets or securities and its right-to-use assets or securities that the Company acquires for non- that the Company acquires for non- business purpose shall not exceed 50% business purpose shall not exceed 50% of the net value of the Company. The of the net value of the Company. The limit of investment in individual limit of investment in individual securities shall not exceed 20% of the securities shall not exceed 20% of the net value of the Company. net value of the Company.

5.The total amount of real property or 5.The total amount of real property or securities acquired by subsidiaries of the securities acquired by subsidiaries of the Company for non-business purpose shall Company for non-business purpose not exceed three times the net value of shall not exceed three times the net the most recent financial statement value of the most recent financial verified by accountants. The investment statement verified by accountants. The in individual securities shall not exceed investment in individual securities shall the net value of the most recent financial not exceed the net value of the most statements verified by accountants. recent financial statements verified by accountants.。 6.In the event of the acquisition or 6.In the event of the acquisition or disposal of assets other than short-term disposal of assets other than short-term bonds, securities representing interest in bonds, securities representing interest in a fund and derivatives by the Company, a fund and derivatives by the Company, the chairman of the board of directors the chairman of the board of directors shall authorize the manager of the shall authorize the manager of the business unit to make decisions and the business unit to make decisions and the remaining authorized limits, levels, and remaining authorized limits, levels, and executing units shall be executed in executing units shall be executed in accordance to the following permission accordance to the following permission table that will be enforced after being table that will be enforced after being reported and approved. reported and approved. (In NTD) (In NTD) Range Vice President Vice Executive Range Vice President Vice Executive president Chairman unit president Chairman unit NT$100 organizer NT$100 organizer million~ million ~ ○ ○ NT$300 NT$300 million million NT$300 organizer NT$300 organizer million million ~ ○ ~ ○ NT$3000 NT$3000 million million OverNT organizer OverNT$ organizer $3000 ○ 3000 ○ million

million

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After the Revision Before the Revision Remark Article 8： Article 8： 1.The For the Company’s acquiring or For the Company’s acquisition or government disposing of real property, equipment, or disposal of real estate or equipment, agencies right-of-use assets thereof where the except for the transactions conducted designated in transaction amount reaches 20 % of the with the government institution, Paragraph 1 company's paid-in capital or NT$300 proprietary land construction, leased mean the million or more, the company, unless land construction, or the acquisition or central and transacting with a domestic government disposal of machinery equipment for local agency, engaging others to build on its business operation, for an amount government own land, engaging others to build on exceeding 20% of the Company’s paid agencies of rented land, or acquiring or disposing of in capital or exceeding NT$300 million, our country equipment or right-of-use assets thereof an appraisal report should be obtained that mainly held for business use, shall obtain an from the professional appraiser before considers appraisal report prior to the date of the event date in compliance with the transactions occurrence of the event from a following provisions: with central professional appraiser and shall further and local comply with the following provisions: 1. Where due to special circumstances it government 1.Where due to special circumstances it is necessary to give a limited price, agencies in is necessary to give a limited price, specified price, or special price as a Taiwan which specified price, or special price as a reference basis for the transaction price, is necessary to reference basis for the transaction price, the transaction shall be submitted for handle the the transaction shall be submitted for approval in advance by the board of auction or approval in advance by the board of directors; the same procedure shall also bidding, etc. in directors; the same procedure shall also be followed in future whenever there is accordance be followed whenever there is any any subsequent change to the terms and with relevant subsequent change to the terms and conditions of the transaction. regulations. conditions of the transaction. Hence the 2. Where the transaction amount is price 2. Where the transaction amount is NT$1 billion or more, appraisals from manipulation NT$1 billion or more, appraisals from two or more professional appraisers is less likely. two or more professional appraisers shall be obtained. Hereby, the shall be obtained. 3.Where any one of the following acquisition of 3.Where any one of the following circumstances applies with respect to expert circumstances applies with respect to the the professional appraiser's appraisal opinions is professional appraiser's appraisal results, results, unless all the appraisal results exempted. In unless all the appraisal results for the for the assets to be acquired are higher event of the assets to be acquired are higher than the than the transaction amount, or all the transaction transaction amount, or all the appraisal appraisal results for the assets to be with foreign results for the assets to be disposed of disposed of are lower than the government are lower than the transaction amount, a transaction amount, a certified public agencies, certified public accountant shall be accountant shall be engaged to perform because its engaged to perform the appraisal in the appraisal in accordance with the relevant accordance with the provisions of provisions of Statement of Auditing regulations

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After the Revision Before the Revision Remark Statement of Auditing Standards No. 20 Standards No. 20 published by the ROC and bargaining published by the ROC Accounting Accounting Research and Development mechanism are Research and Development Foundation Foundation (ARDF) and render a less (ARDF) and render a specific opinion specific opinion regarding the reason for transparent, regarding the reason for the discrepancy the discrepancy and the appropriateness the exemption and the appropriateness of the of the transaction price : scope of this transaction price: A.The discrepancy between the Article is not A.The discrepancy between the appraisal result and the transaction applicable appraisal result and the transaction amount is 20 percent or more of the herein. Hereby amount is 20 percent or more of the transaction amount. the transaction amount. B.The discrepancy between the amendment to B.The discrepancy between the appraisal appraisal results of two or more Paragraph 1 is results of two or more professional professional appraisers is 10 percent or limited to appraisers is 10 percent or more of the more of the transaction amount. domestic transaction amount. 4.No more than 3 months may elapse government 4.No more than 3 months may elapse between the date of the appraisal report agencies. between the date of the appraisal report issued by a professional appraiser and issued by a professional appraiser and the contract execution date; provided, 2.In line with the contract execution date; provided, where the publicly announced current the provisions where the publicly announced current value for the same period is used and of the value for the same period is used and not not more than 6 months have elapsed, International more than 6 months have elapsed, an an opinion may still be issued by the Financial opinion may still be issued by the original professional appraiser. Reporting original professional appraiser. Standard No. 16, the amendment to Paragraph 1 is made to include the right-of-use assets into this Article.

3.Text revision Article 8.1

Article 10： Article 10： 1. Reason for Company acquires or disposes of Company acquires or disposes of amendment is intangible assets or right-of-use assets memberships or intangible assets or the same as thereof or memberships and the right-of-use assets thereof or Article 8.1 and transaction amount reaches 20% or more memberships and the transaction Article 8.2. of paid-in capital or NT$300 million or amount reaches 20 % or more of paid-in 2.Text more, except in transactions with a capital or NT$300 million or more, revision. domestic government agency, the except in transactions with a domestic

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After the Revision Before the Revision Remark company shall engage a certified public government agency, the company shall accountant prior to the date of engage a certified public accountant occurrence of the event to render an prior to the date of occurrence of the opinion on the reasonableness of the event to render an opinion on the transaction price; the CPA shall comply reasonableness of the transaction price; with the provisions of Statement of the CPA shall comply with the Auditing Standards No. 20 published by provisions of Statement of Auditing the ARDF. Standards No. 20 published by the ARDF.

Article 11： Article 10-1： Article The calculation of the transaction The calculation of the transaction change, and amounts referred to in the preceding amounts referred to in the preceding amendments three articles shall be done in three articles shall be done in the reference. accordance with Article 27, paragraph 2 accordance with Article 26, paragraph 2 herein, and "within the preceding year" herein, and "within the preceding year" as used herein refers to the year as used herein refers to the year preceding the date of occurrence of the preceding the date of occurrence of the current transaction. Items for which an current transaction. Items for which an appraisal report from a professional appraisal report from a professional appraiser or a CPA's opinion has been appraiser or a CPA's opinion has been obtained need not be counted toward the obtained need not be counted toward the transaction amount. transaction amount.

Article 12： Article 11： Article change Where a public company acquires or Where a public company acquires or disposes of assets through court auction disposes of assets through court auction procedures, the evidentiary procedures, the evidentiary documentation issued by the court may documentation issued by the court may be substituted for the appraisal report or be substituted for the appraisal report or CPA opinion CPA opinion

Article 13： Article 12： Article When a public company engages in any When a public company engages in any change, and acquisition or disposal of assets from or acquisition or disposal of assets from or amendments to a related party, in addition to ensuring to a related party, in addition to ensuring the reference that the necessary resolutions are that the necessary resolutions are of paragraph adopted and the reasonableness of the adopted and the reasonableness of the 2. transaction terms is appraised, if the transaction terms is appraised, if the transaction amount reaches 10% or more transaction amount reaches 10% or of the company's total assets, the more of the company's total assets, the company shall also obtain an appraisal company shall also obtain an appraisal report from a professional appraiser or a report from a professional appraiser or a CPA's opinion in compliance with the CPA's opinion in compliance with the

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After the Revision Before the Revision Remark provisions of the preceding Section and provisions of the preceding Section and this Section. this Section. The calculation of the transaction The calculation of the transaction amount referred to in the preceding amount referred to in the preceding paragraph shall be made in accordance paragraph shall be made in accordance with Article 11 herein. with Article 10.1 herein. When judging whether a transaction When judging whether a transaction counterparty is a related party, in counterparty is a related party, in addition to legal formalities, the addition to legal formalities, the substance of the relationship shall also substance of the relationship shall also be considered. be considered.

Article 14： Article 13： 1. Article When a public company intends to When a public company intends to change, and acquire or dispose of real property or acquire or dispose of real property amendments right-of-use assets thereof from or to a thereof from or to a related party, or the reference related party, or when it intends to when it intends to acquire or dispose of of paragraph acquire or dispose of assets other than assets other than real property or right- 1(3) and real property or right-of-use assets of-use assets thereof from or to a related paragraph 2. thereof from or to a related party and the party and the transaction amount 2.The transaction amount reaches 20% or more reaches 20 % or more of paid-in capital, government of paid-in capital, 10% or more of the 10% or more of the company's total bond under company's total assets, or NT$300 assets, or NT$300 million or more, Paragraph 1 million or more, except in trading of except in trading of domestic means the domestic government bonds or bonds government bonds or bonds under domestic under repurchase and resale agreements, repurchase and resale agreements, or government or subscription or redemption of money subscription or redemption of money bond. The market funds issued by domestic market funds issued by domestic main securities investment trust enterprises, securities investment trust enterprises, consideration the company may not proceed to enter the company may not proceed to enter is that credit into a transaction contract or make a into a transaction contract or make a ranking of the payment until the following matters payment until the following matters central and have been approved by the board of have been approved by the board of local directors and recognized by the directors and recognized by the government supervisors: supervisors: bonds of our 1.The purpose, necessity and anticipated 1.The purpose, necessity and anticipated country are benefit of the acquisition or disposal of benefit of the acquisition or disposal of clear and easy assets. assets. to inquire, and 2.The reason for choosing the related 2.The reason for choosing the related hereby the party as a transaction counterparty. party as a transaction counterparty. procedures for 3.With respect to the acquisition of real 3.With respect to the acquisition of real submitting to property or right-of-use assets thereof property thereof from a related party, the board of from a related party, information information regarding appraisal of the directors for regarding appraisal of the reasonableness of the preliminary resolution and

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After the Revision Before the Revision Remark reasonableness of the preliminary transaction terms in accordance with the recognition transaction terms in accordance with Article 14 and Article 15. of the Article 15 and Article 16. 4.The date and price at which the supervisors are 4.The date and price at which the related related party originally acquired the real exempted. The party originally acquired the real property, the original transaction credit rankings property, the original transaction counterparty, and that transaction of foreign counterparty, and that transaction counterparty's relationship to the government counterparty's relationship to the company and the related party. bonds are not company and the related party. 5.Monthly cash flow forecasts for the uniform, so 5.Monthly cash flow forecasts for the year commencing from the anticipated the exemption year commencing from the anticipated month of signing of the contract, and scope of this month of signing of the contract, and evaluation of the necessity of the Article is not evaluation of the necessity of the transaction, and reasonableness of the applicable transaction, and reasonableness of the funds utilization. herein and funds utilization. 6.An appraisal report from a shall be 6.An appraisal report from a professional appraiser or a CPA's limited to professional appraiser or a CPA's opinion obtained in compliance with the domestic opinion obtained in compliance with the preceding article. government preceding article. 7.Restrictive covenants and other bonds; in 7.Restrictive covenants and other important stipulations associated with addition, in important stipulations associated with the transaction. accordance the transaction. The calculation of the transaction with the The calculation of the transaction amounts referred to in the preceding provisions of amounts referred to in the preceding paragraph shall be made in accordance the paragraph shall be made in accordance with Article 26, paragraph 2 herein, and International with Article 27, paragraph 2 herein, and "within the preceding year" as used Financial "within the preceding year" as used herein refers to the year preceding the Reporting herein refers to the year preceding the date of occurrence of the current Standard No. date of occurrence of the current transaction. Items that have been 16 Leases, the transaction. Items that have been approved by the board of directors and right-of-use approved by the board of directors and recognized by the supervisors need not assets shall be recognized by the supervisors need not be counted toward the transaction included in the be counted toward the transaction amount. provisions of amount. Company and its subsidiaries, this Article, With respect to the types of transactions acquisition or disposal of equipment and the listed below, when to be conducted thereof held for business use, the amendment to between a public company and its parent company's board of directors may Paragraph 1 is or subsidiaries, or between its pursuant to Article 5, paragraph 1, made to make subsidiaries in which it directly or subparagraph 6 delegate the board it clear. indirectly holds 100% of the issued chairman to decide such matters when shares or authorized capital, the the transaction is within a certain 3. In company's board of directors may amount and have the decisions consideration pursuant to Article 5, paragraph 1, subsequently submitted to and ratified that due to the

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After the Revision Before the Revision Remark subparagraph 6 delegate the board by the next board of directors meeting. overall chairman to decide such matters when planning of the the transaction is within a certain business, there amount and have the decisions is a need or subsequently submitted to and ratified requirement to by the next board of directors meeting: re-transfer 1.Acquisition or disposal of equipment (including or right-of-use assets thereof held for trading or business use. subletting) the 2.Acquisition or disposal of real co-ordinate the property right-of-use assets held for acquisition or business use. lease of Where the position of independent Where the position of independent equipment for director has been created in accordance director has been created in accordance business with the provisions of the Act, when a with the provisions of the Act, when a purpose, or to matter is submitted for discussion by the matter is submitted for discussion by the lease or board of directors pursuant to paragraph board of directors pursuant to paragraph sublease of 1, the board of directors shall take into 1, the board of directors shall take into real property full consideration each independent full consideration each independent between the director's opinions. If an independent director's opinions. If an independent Company and director objects to or expresses director objects to or expresses the reservations about any matter, it shall be reservations about any matter, it shall be subsidiaries of recorded in the minutes of the board of recorded in the minutes of the board of the Company, directors meeting.If Paragraph 1 is not directors meeting. If Paragraph 1 is not or the approved by one-half or more of all approved by one-half or more of all subsidiaries audit committee members, it may be audit committee members, it may be 100% directly implemented if approved by two-thirds implemented if approved by two-thirds or indirectly or more of all directors, and the or more of all directors, and the held by the resolution of the audit committee shall resolution of the audit committee shall Company. be recorded in the minutes of the board be recorded in the minutes of the board Hereby the of directors meeting. of directors meeting. amendment to The all audit committee members and all The all audit committee members and Paragraph 3 is directors in the preceding paragraph all directors in the preceding paragraph made to relax shall be counted as the actual number of shall be counted as the actual number of the acquisition persons currently holding those persons currently holding those or disposal of positions. positions. equipment for business purpose, its right-of-use assets or real property right- to-use assets for business

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After the Revision Before the Revision Remark purpose among the Companies and its subsidiaries by authorizing the chairman to proceed in advance, and text revision.

Article 15： Article 14： 1. Article A public company that acquires real A public company that acquires real change. property or right-of-use assets thereof property thereof from a related party 2. In from a related party shall evaluate the shall evaluate the reasonableness of the accordance reasonableness of the transaction costs transaction costs by the following with the by the following means: means: definition of 1.Based upon the related party's 1.Based upon the related party's the transaction price plus necessary interest transaction price plus necessary interest International on funding and the costs to be duly on funding and the costs to be duly Financial borne by the buyer. "Necessary interest borne by the buyer. "Necessary interest Reporting on funding" is imputed as the weighted on funding" is imputed as the weighted Standards No. average interest rate on borrowing in the average interest rate on borrowing in the 16,hereby the year the company purchases the year the company purchases the amendments property; provided, it may not be higher property; provided, it may not be higher to Paragraphs than the maximum non-financial than the maximum non-financial 1 to 4 are to industry lending rate announced by the industry lending rate announced by the include the Ministry of Finance. Ministry of Finance. real property 2.Total loan value appraisal from a 2.Total loan value appraisal from a right-to-use financial institution where the related financial institution where the related assets leased party has previously created a mortgage party has previously created a mortgage or acquired on the property as security for a loan; on the property as security for a loan; from provided, the actual cumulative amount provided, the actual cumulative amount interested loaned by the financial institution shall loaned by the financial institution shall parties in this have been 70% or more of the financial have been 70% or more of the financial Article. institution's appraised loan value of the institution's appraised loan value of the property and the period of the loan shall property and the period of the loan shall 3.In have been 1 year or more. However, this have been 1 year or more. However, this consideration shall not apply where the financial shall not apply where the financial that due to the institution is a related party of one of the institution is a related party of one of overall transaction counterparties. the transaction counterparties. planning of the Where land and structures thereupon are Where land and structures thereupon are business, combined as a single property purchased combined as a single property there is a or leased in one transaction, the purchased in one transaction, the possibility of

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After the Revision Before the Revision Remark transaction costs for the land and the transaction costs for the land and the collective structures may be separately appraised structures may be separately appraised leasing of real in accordance with either of the means in accordance with either of the means property, sub- listed in the preceding paragraph. listed in the preceding paragraph. lease further, A public company that acquires real A public company that acquires real and the risk of property or right-of-use assets thereof property thereof from a related party irregular from a related party and appraises the and appraises the cost of the real transactions in cost of the real property or right-of-use property thereof in accordance with the the previous assets thereof in accordance with the preceding two paragraphs shall also transaction is preceding two paragraphs shall also engage a CPA to check the appraisal and relatively low. engage a CPA to check the appraisal and render a specific opinion. The addition render a specific opinion. Where a public company acquires real to Paragraph 4 Where a public company acquires real property thereof from a related party Subparagraph property or right-of-use assets thereof and one of the following circumstances 4 is made to from a related party and one of the exists, the acquisition shall be exclude these following circumstances exists, the conducted in accordance with the transactions acquisition shall be conducted in article13, and the preceding three from the accordance with the article14, and the paragraphs do not apply: reasonable preceding three paragraphs do not apply: 1.The related party acquired the real assessment 1.The related party acquired the real property thereof through inheritance or over the property or right-of-use assets thereof as a gift. transaction through inheritance or as a gift. 2.More than 5 years will have elapsed cost (the 2.More than 5 years will have elapsed from the time the related party signed transaction from the time the related party signed the contract to obtain the real property price to the contract to obtain the real property or thereof to the signing date for the acquire the right-of-use assets thereof to the signing current transaction. real property date for the current transaction. 3.The real property is acquired through or payment to 3.The real property is acquired through signing of a joint development contract lease real signing of a joint development contract with the related party, or through property with the related party, or through engaging a related party to build real payment by engaging a related party to build real property, either on the company's own the interested property, either on the company's own land or on rented land. person,) land or on rented land. according to 4.The real property right-of-use assets this Article. In for business use are acquired by the addition, public company with its parent or because the subsidiaries, or by its subsidiaries in transaction has which it directly or indirectly holds excluded the 100% of the issued shares or authorized application of capital. this Article, there is no need to provide the

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After the Revision Before the Revision Remark evidence over the reasonableness of the transaction price required under Article 16 and to set aside a special reserve required under Article 17.

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After the Revision Before the Revision Remark Article 16： Article 15： 1. Article When the results of a public company's When the results of a public company's change, and appraisal conducted in accordance with appraisal conducted in accordance with amendments paragraph 1 and paragraph 2 of the paragraph 1 and paragraph 2 of the the reference preceding Article are uniformly lower preceding Article are uniformly lower of paragraph than the transaction price, the matter than the transaction price, the matter 1. shall be handled in compliance with shall be handled in compliance with 2. In line with Article 17. However, where the Article 16. However, where the the actual following circumstances exist, objective following circumstances exist, objective operation of evidence has been submitted and evidence has been submitted and real property specific opinions on reasonableness specific opinions on reasonableness leasing such as have been obtained from a professional have been obtained from a professional factory real property appraiser and a CPA have real property appraiser and a CPA have buildings, to been obtained, this restriction shall not been obtained, this restriction shall not relax the apply: apply: acquisition of 1.Where the related party acquired 1.Where the related party acquired real property undeveloped land or leased land for undeveloped land or leased land for right-to-use development, it may submit proof of development, it may submit proof of assets from compliance with one of the following compliance with one of the following interested conditions: conditions: parties, and A.Where undeveloped land is appraised A.Where undeveloped land is appraised enable non- in accordance with the means in the in accordance with the means in the interested preceding Article, and structures preceding Article, and structures lease according to the related party's according to the related party's transactions in construction cost plus reasonable construction cost plus reasonable neighboring construction profit are valued in excess construction profit are valued in excess regions as a of the actual transaction price. The of the actual transaction price. The reference case "Reasonable construction profit" shall be "Reasonable construction profit" shall for calculating deemed the average gross operating be deemed the average gross operating and estimating profit margin of the related party's profit margin of the related party's the construction division over the most construction division over the most reasonableness recent 3 years or the gross profit margin recent 3 years or the gross profit margin of transaction for the construction industry for the for the construction industry for the prices within most recent period as announced by the most recent period as announced by the one year, and Ministry of Finance, whichever is lower. Ministry of Finance, whichever is lower. the current B.Completed transactions by unrelated B.Completed transactions by unrelated Paragraph 1 parties within the preceding year parties within the preceding year Subparagraph involving other floors of the same involving other floors of the same 1 Item 3 to property or neighboring or closely property or neighboring or closely Item 2 and add valued parcels of land, where the land valued parcels of land, where the land leasing cases area and transaction terms are similar area and transaction terms are similar as the after calculation of reasonable price after calculation of reasonable price transaction discrepancies in floor or area land prices discrepancies in floor or area land prices reference

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After the Revision Before the Revision Remark in accordance with standard property in accordance with standard property cases. Hereby, market sale or leasing practices. market sale or leasing practices. the 2.Where a public company acquiring C. Completed transactions by unrelated amendment to real property, or obtaining real property parties within the preceding year Paragraph 1 right-of-use assets through leasing, from involving other floors of the same Subparagraph a related party provides evidence that property or neighboring or closely 1 Item 2 and the terms of the transaction are similar to valued parcels of land, where the land Subparagraph the terms of completed transactions area and transaction terms are similar 2 and involving neighboring or closely valued after calculation of reasonable price Paragraph 2 is parcels of land of a similar size by discrepancies in floor or area land prices made to make unrelated parties within the preceding in accordance with standard property it clear. year. market sale or leasing practices. Completed transactions involving 2.Where a public company acquiring neighboring or closely valued parcels of real property, or obtaining real property land in the preceding paragraph in right-of-use assets through leasing, from principle refers to parcels on the same or a related party provides evidence that an adjacent block and within a distance the terms of the transaction are similar of no more than 500 meters or parcels to the terms of completed transactions close in publicly announced current involving neighboring or closely valued value; transactions involving similarly parcels of land of a similar size by sized parcels in principle refers to unrelated parties within the preceding transactions completed by unrelated year. parties for parcels with a land area of no Completed transactions involving less than 50 percent of the property in neighboring or closely valued parcels of the planned transaction; within the land in the preceding paragraph in preceding year refers to the year principle refers to parcels on the same preceding the date of occurrence of the or an adjacent block and within a acquisition of the real property or distance of no more than 500 meters or obtainment of the right-of-use assets parcels close in publicly announced thereof. current value; transactions involving similarly sized parcels in principle refers to 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 .

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After the Revision Before the Revision Remark Article 17： Article 16： 1. Article Where a public company acquires real Where a public company acquires real change. property or right-of-use assets thereof property thereof from a related party 2. In from a related party and the results of and the results of appraisals conducted accordance appraisals conducted in accordance with in accordance with the preceding with the the preceding articles15 and articles16 articles14 and articles15 are uniformly definition of are uniformly lower than the transaction lower than the transaction price, the the price, the following steps shall be taken: following steps shall be taken: International 1.A special reserve shall be set aside in 1.A special reserve shall be set aside in Financial accordance with law the difference accordance with law the difference Reporting between the real property transaction between the real property transaction Standards No. price and the appraised cost, and may price and the appraised cost, and may 16,hereby the not be distributed or used for capital not be distributed or used for capital amendment to increase or issuance of bonus shares. increase or issuance of bonus shares. preamble of Where a public company uses the equity Where a public company uses the equity Paragraph 1, method to account for its investment in method to account for its investment in Subparagraph another company, according to the law, another company, according to the law, 1, Paragraphs shall be set aside pro rata in a proportion shall be set aside pro rata in a 2 and 3 is consistent with the share of public proportion consistent with the share of made to company's equity stake in the other public company's equity stake in the include the company. other company. handle matters 2.Supervisors shall comply with Article 2.Supervisors shall comply with Article regulations for 218 of the Company Act. Where an 218 of the Company Act. the event that audit committee has been established in the real accordance with the provisions of the property right- Act, the preceding part of this to-use assets subparagraph shall apply mutatis are leased mutandis to the independent director and/or members of the audit committee. acquired by 3.Actions taken pursuant to the 3.Actions taken pursuant to the the interested preceding two subparagraphs shall be preceding two subparagraphs shall be parties when reported to a shareholders meeting, and reported to a shareholders meeting, and the estimated the details of the transaction shall be the details of the transaction shall be cost is lower disclosed in the annual report and any disclosed in the annual report and any than the investment prospectus. investment prospectus. transaction Company that has set aside a special Company that has set aside a special price. reserve under the preceding paragraph reserve under the preceding paragraph may not utilize the special reserve until may not utilize the special reserve until 3. it has recognized a loss on decline in it has recognized a loss on decline in The latter market value of the assets it purchased market value of the assets it purchased section of or leased at a premium, or they have at a premium, or they have been Paragraph 1 been disposed of, or the leasing contract disposed of, or adequate compensation Subparagraph has been terminated, or adequate has been made, or the status quo ante 2 is added to

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After the Revision Before the Revision Remark compensation has been made, or the has been restored, or there is other define that the status quo ante has been restored, or evidence confirming that there was prior section there is other evidence confirming that nothing unreasonable about the of this there was nothing unreasonable about transaction, and the FSC has given its Subparagraph the transaction, and the FSC has given consent. is applicable to its consent. When a public company obtains real the When a public company obtains real property thereof from a related party, it independent property or right-of-use assets thereof shall also comply with the preceding board from a related party, it shall also comply two paragraphs if there is other members of with the preceding two paragraphs if evidence indicating that the acquisition the Audit there is other evidence indicating that was not an arms length transaction. Committee. the acquisition was not an arms length transaction.

Article 18： Article 17： Article The subsidiaries of the Company The subsidiaries of the Company change. that intend to engage in derivative that intend to engage in derivative transactions should be urged to transactions should be urged to enact the “Procedures for the enact the “Procedures for the Engagement in Financial Engagement in Financial Derivatives” and the relevant Derivatives” and the relevant regulations. regulations.

Article 19： Article 18： Article Company that conducts a merger, Company that conducts a merger, change. demerger, acquisition, or transfer of demerger, acquisition, or transfer of shares, prior to convening the board of shares, prior to convening the board of directors to resolve on the matter, shall directors to resolve on the matter, shall engage a CPA, attorney, or securities engage a CPA, attorney, or securities underwriter to give an opinion on the underwriter to give an opinion on the reasonableness of the share exchange reasonableness of the share exchange ratio, acquisition price, or distribution of ratio, acquisition price, or distribution of cash or other property to shareholders, cash or other property to shareholders, and submit it to the board of directors and submit it to the board of directors for deliberation and passage. However, for deliberation and passage. However, the requirement of obtaining an the requirement of obtaining an aforesaid opinion on reasonableness aforesaid opinion on reasonableness issued by an expert may be exempted in issued by an expert may be exempted in the case of a merger by a public the case of a merger by a public company of a subsidiary in which it company of a subsidiary in which it directly or indirectly holds 100% of the directly or indirectly holds 100% of the issued shares or authorized capital, and issued shares or authorized capital, and in the case of a merger between in the case of a merger between subsidiaries in which the public subsidiaries in which the public

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After the Revision Before the Revision Remark company directly or indirectly holds 100 company directly or indirectly holds % of the respective subsidiaries' issued 100 % of the respective subsidiaries' shares or authorized capital. issued shares or authorized capital.

Article 20： Article 19： Article Company participating in a merger, A public company participating in a change. demerger, acquisition, or transfer of merger, demerger, acquisition, or shares shall prepare a public report to transfer of shares shall prepare a public shareholders detailing important report to shareholders detailing contractual content and matters relevant important contractual content and to the merger, demerger, or acquisition matters relevant to the merger, prior to the shareholders meeting and demerger, or acquisition prior to the include it along with the expert opinion shareholders meeting and include it referred to in paragraph 1 of the along with the expert opinion referred to preceding Article when sending in paragraph 1 of the preceding Article shareholders notification of the when sending shareholders notification shareholders meeting for reference in of the shareholders meeting for deciding whether to approve the merger, reference in deciding whether to demerger, or acquisition. Provided, approve the merger, demerger, or where a provision of another act acquisition. Provided, where a provision exempts a company from convening a of another act exempts a company from shareholders meeting to approve the convening a shareholders meeting to merger, demerger, or acquisition, this approve the merger, demerger, or restriction shall not apply. acquisition, this restriction shall not Where the shareholders meeting of any apply. one of the companies participating in a Where the shareholders meeting of any merger, demerger, or acquisition fails to one of the companies participating in a convene or pass a resolution due to lack merger, demerger, or acquisition fails to of a quorum, insufficient votes, or other convene or pass a resolution due to lack legal restriction, or the proposal is of a quorum, insufficient votes, or other rejected by the shareholders meeting, the legal restriction, or the proposal is companies participating in the merger, rejected by the shareholders meeting, demerger or acquisition shall the companies participating in the immediately publicly explain the reason, merger, demerger or acquisition shall the follow-up measures, and the immediately publicly explain the preliminary date of the next shareholders reason, the follow-up measures, and the meeting. preliminary date of the next shareholders meeting.

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After the Revision Before the Revision Remark Article 21： Article 20： Article company participating in a merger, company participating in a merger, change. demerger, or acquisition shall convene a demerger, or acquisition shall convene a board of directors meeting and board of directors meeting and shareholders meeting on the day of the shareholders meeting on the day of the transaction to resolve matters relevant to transaction to resolve matters relevant to the merger, demerger, or acquisition, the merger, demerger, or acquisition, unless another act provides otherwise or unless another act provides otherwise or the FSC is notified in advance of the FSC is notified in advance of extraordinary circumstances and grants extraordinary circumstances and grants consent. consent. A company participating in a transfer of A company participating in a transfer of shares shall call a board of directors shares shall call a board of directors meeting on the day of the transaction, meeting on the day of the transaction, unless another act provides otherwise or unless another act provides otherwise or the FSC is notified in advance of the FSC is notified in advance of extraordinary circumstances and grants extraordinary circumstances and grants consent. consent. When participating in a merger, When participating in a merger, demerger, acquisition, or transfer of demerger, acquisition, or transfer of another company's shares, a company another company's shares, a company that is listed on an exchange or has its that is listed on an exchange or has its shares traded on an OTC market shall shares traded on an OTC market shall prepare a full written record of the prepare a full written record of the following information and retain it for 5 following information and retain it for 5 years for reference: years for reference: 1. Basic identification data for 1. Basic identification data for personnel: Including the occupational personnel: Including the occupational titles, names, and national ID numbers titles, names, and national ID numbers (or passport numbers in the case of (or passport numbers in the case of foreign nationals) of all persons foreign nationals) of all persons involved in the planning or involved in the planning or implementation of any merger, implementation of any merger, demerger, acquisition, or transfer of demerger, acquisition, or transfer of another company's shares prior to another company's shares prior to disclosure of the information. disclosure of the information. 2. Dates of material events: Including 2. Dates of material events: Including the signing of any letter of intent or the signing of any letter of intent or memorandum of understanding, the memorandum of understanding, the hiring of a financial or legal advisor, the hiring of a financial or legal advisor, the execution of a contract, and the execution of a contract, and the convening of a board of directors convening of a board of directors meeting. meeting.

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After the Revision Before the Revision Remark 3. Important documents and minutes: 3. Important documents and minutes: Including merger, demerger, acquisition, Including merger, demerger, acquisition, and share transfer plans, any letter of and share transfer plans, any letter of intent or memorandum of understanding, intent or memorandum of material contracts, and minutes of board understanding, material contracts, and of directors meetings. minutes of board of directors meetings. When participating in a merger, When participating in a merger, demerger, acquisition, or transfer of demerger, acquisition, or transfer of another company's shares, a company another company's shares, a company that is listed on an exchange or has its that is listed on an exchange or has its shares traded on an OTC market shall, shares traded on an OTC market shall, within 2 days counting inclusively from within 2 days counting inclusively from the date of passage of a resolution by the the date of passage of a resolution by board of directors, report (in the the board of directors, report (in the prescribed format and via the Internet- prescribed format and via the Internet- based information system) the based information system) the information set out in subparagraphs 1 information set out in subparagraphs 1 and 2 of the preceding paragraph to the and 2 of the preceding paragraph to the FSC for recordation. FSC for recordation. Where any of the companies Where any of the companies participating in a merger, demerger, participating in a merger, demerger, acquisition, or transfer of another acquisition, or transfer of another company's shares is neither listed on an company's shares is neither listed on an exchange nor has its shares traded on an exchange nor has its shares traded on an OTC market, the company(s) so listed or OTC market, the company(s) so listed traded shall sign an agreement with such or traded shall sign an agreement with company whereby the latter is required such company whereby the latter is to abide by the provisions of the required to abide by the provisions of preceding two paragraphs. the preceding two paragraphs.

Article 22： Article 21： Article Every person participating in or privy to Every person participating in or privy to change. the plan for merger, demerger, the plan for merger, demerger, acquisition, or transfer of shares shall acquisition, or transfer of shares shall issue a written undertaking of issue a written undertaking of confidentiality and may not disclose the confidentiality and may not disclose the content of the plan prior to public content of the plan prior to public disclosure of the information and may disclosure of the information and may not trade, in their own name or under the not trade, in their own name or under name of another person, in any stock or the name of another person, in any stock other equity security of any company or other equity security of any company related to the plan for merger, demerger, related to the plan for merger, demerger, acquisition, or transfer of shares. acquisition, or transfer of shares.

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After the Revision Before the Revision Remark Article 23： Article 22： Article companies participating in a merger, companies participating in a merger, change. demerger, acquisition, or transfer of demerger, acquisition, or transfer of shares may not arbitrarily alter the share shares may not arbitrarily alter the share exchange ratio or acquisition price exchange ratio or acquisition price unless under the below-listed unless under the below-listed circumstances, and shall stipulate the circumstances, and shall stipulate the circumstances permitting alteration in circumstances permitting alteration in the contract for the merger, demerger, the contract for the merger, demerger, acquisition, or transfer of shares: acquisition, or transfer of shares: 1.Cash capital increase, issuance of 1.Cash capital increase, issuance of convertible corporate bonds, or the convertible corporate bonds, or the issuance of bonus shares, issuance of issuance of bonus shares, issuance of corporate bonds with warrants, preferred corporate bonds with warrants, shares with warrants, stock warrants, or preferred shares with warrants, stock other equity based securities. warrants, or other equity based 2.An action, such as a disposal of major securities. assets, that affects the company's 2.An action, such as a disposal of major financial operations. assets, that affects the company's 3.An event, such as a major disaster or financial operations. major change in technology, that affects 3.An event, such as a major disaster or shareholder equity or share price. major change in technology, that affects 4.An adjustment where any of the shareholder equity or share price. companies participating in the merger, 4.An adjustment where any of the demerger, acquisition, or transfer of companies participating in the merger, shares from another company, buys back demerger, acquisition, or transfer of treasury stock. shares from another company, buys 5.An increase or decrease in the number back treasury stock. of entities or companies participating in 5.An increase or decrease in the number the merger, demerger, acquisition, or of entities or companies participating in transfer of shares. the merger, demerger, acquisition, or 6.Other terms/conditions that the transfer of shares. contract stipulates may be altered and 6.Other terms/conditions that the that have been publicly disclosed. contract stipulates may be altered and that have been publicly disclosed.

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After the Revision Before the Revision Remark Article 24： Article 23： Article The contract for participation by a The contract for participation by a change. public company in a merger, demerger, public company in a merger, demerger, acquisition, or of shares shall record the acquisition, or of shares shall record the rights and obligations of the companies rights and obligations of the companies participating in the merger, demerger, participating in the merger, demerger, acquisition, or transfer of shares, and acquisition, or transfer of shares, and shall also record the following: shall also record the following: 1.Handling of breach of contract. 1.Handling of breach of contract. 2.Principles for the handling of equity- 2.Principles for the handling of equity- type securities previously issued or type securities previously issued or treasury stock previously bought back treasury stock previously bought back by any company that is extinguished in a by any company that is extinguished in merger or that is demerged. a merger or that is demerged. 3.The amount of treasury stock 3.The amount of treasury stock participating companies are permitted participating companies are permitted under law to buy back after the record under law to buy back after the record date of calculation of the share exchange date of calculation of the share ratio, and the principles for handling exchange ratio, and the principles for thereof. handling thereof. 4.The manner of handling changes in the 4.The manner of handling changes in number of participating entities or the number of participating entities or companies. companies. 5.Preliminary progress schedule for plan 5.Preliminary progress schedule for plan execution, and anticipated completion execution, and anticipated completion date. date. 6.Scheduled date for convening the 6.Scheduled date for convening the legally mandated shareholders meeting legally mandated shareholders meeting if the plan exceeds the deadline without if the plan exceeds the deadline without completion, and relevant procedures. completion, and relevant procedures.

Article 25： Article 24： Article After public disclosure of the After public disclosure of the change. information, if any company information, if any company participating in the merger, demerger, participating in the merger, demerger, acquisition, or share transfer intends acquisition, or share transfer intends further to carry out a merger, demerger, further to carry out a merger, demerger, acquisition, or share transfer with acquisition, or share transfer with another company, all of the participating another company, all of the participating companies shall carry out anew the companies shall carry out anew the procedures or legal actions that had procedures or legal actions that had originally been completed toward the originally been completed toward the merger, demerger, acquisition, or share merger, demerger, acquisition, or share

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After the Revision Before the Revision Remark transfer; except that where the number transfer; except that where the number of participating companies is decreased of participating companies is decreased and a participating company's and a participating company's shareholders meeting has adopted a shareholders meeting has adopted a resolution authorizing the board of resolution authorizing the board of directors to alter the limits of authority, directors to alter the limits of authority, such participating company may be such participating company may be exempted from calling another exempted from calling another shareholders meeting to resolve on the shareholders meeting to resolve on the matter anew. matter anew.

Article 26： Article 25： 1.Article Where any of the companies Where any of the companies change. participating in a merger, demerger, participating in a merger, demerger, 2.Amendment acquisition, or transfer of shares is not a acquisition, or transfer of shares is not a s the public company, the public company(s) public company, the public company(s) reference. shall sign an agreement with the non- shall sign an agreement with the non- public company whereby the latter is public company whereby the latter is required to abide by the provisions of required to abide by the provisions of Article 21, Article 22 ,and Article 25 and Article 20, Article 21 ,and Article 24 the preceding article. and the preceding article.

Article 27: Article 26: 1.Article Under any of the following Under any of the following change. circumstances, a public company circumstances, a public company 2.The acquiring or disposing of assets shall acquiring or disposing of assets shall amendment to publicly announce and report the publicly announce and report the the relevant information on the FSC's relevant information on the FSC's government designated website in the appropriate designated website in the appropriate bond under format as prescribed by regulations format as prescribed by regulations Paragraph 1 within 2 days counting inclusively from within 2 days counting inclusively from Subparagraphs the date of occurrence of the event: the date of occurrence of the event: 1 to 6 is made 1.Acquisition or disposal of real 1.Acquisition or disposal of real because of the property or right-of-use assets thereof property thereof from or to a related main from or to a related party, or acquisition party, or acquisition or disposal of assets consideration or disposal of assets other than real other than real property thereof from or that the central property or right-of-use assets thereof to a related party where the transaction and local from or to a related party where the amount reaches 20% or more of paid-in government transaction amount reaches 20% or more capital, 10% or more of the company's bonds of our of paid-in capital, 10% or more of the total assets, or NT$300 million or more; country are company's total assets, or NT$300 provided, this shall not apply to trading clear and easy million or more; provided, this shall not of government bonds or bonds under to inquire. apply to trading of domestic government repurchase and resale agreements, or Hereby the bonds or bonds under repurchase and subscription or redemption of money public notices

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After the Revision Before the Revision Remark resale agreements, or subscription or market funds issued by domestic are exempted. redemption of money market funds securities investment trust enterprises. The credit issued by domestic securities investment rankings of trust enterprises. foreign 2.Merger, demerger, acquisition, or 2.Merger, demerger, acquisition, or government transfer of shares. transfer of shares. bonds are not 3.Losses from derivatives trading 3.Losses from derivatives trading uniform, so reaching the limits on aggregate losses reaching the limits on aggregate losses the exemption or losses on individual contracts set out or losses on individual contracts set out scope of this in the procedures adopted by the in the procedures adopted by the Article is not company. company. applicable 4. Where equipment or right-of-use 4. Where equipment or kind of assets herein and assets thereof for business use are thereof for business use are acquired or shall be acquired or disposed of, and furthermore disposed of, and furthermore the limited to the transaction counterparty is not a transaction counterparty is not a related domestic related party, and whose paid-in capital party, and whose paid-in capital is government is NT$10 billion or more NT$10 billion or more bonds. 5. Where land is acquired under an 5. Where land is acquired under an 3. In arrangement on engaging others to build arrangement on engaging others to build accordance on the company's own land, engaging on the company's own land, engaging with the others to build on rented land, joint others to build on rented land, joint definition of construction and allocation of housing construction and allocation of housing the units, joint construction and allocation units, joint construction and allocation International of ownership percentages, or joint of ownership percentages, or joint Financial construction and separate sale, and construction and separate sale, and the Reporting furthermore the transaction counterparty amount the company expects to invest Standards No. is not a related party, and the amount the in the transaction reaches NT$500 16, the company expects to invest in the million amendment to transaction reaches NT$500 million Paragraph 1 6.Where an asset transaction other than 6.Where an asset transaction other than Subparagraph any of those referred to in the preceding any of those referred to in the preceding 1, the five subparagraphs, a disposal of five subparagraphs, a disposal of provision of receivables by a financial institution, or receivables by a financial institution, or Paragraph 4, an investment in the mainland China an investment in the mainland China Paragraph 2 area reaches 20% or more of paid-in area reaches 20% or more of paid-in Subparagraph capital or NT$300 million; provided, capital or NT$300 million; provided, 3 is made to this shall not apply to the following this shall not apply to the following include the circumstances: circumstances: right-of-use (1)Trading of domestic government (1)Trading of government bonds. assets under bonds. (2) Trading of bonds under repurchase this Article. (2) Trading of bonds under repurchase and resale agreements, or subscription 4.In and resale agreements, or subscription or or redemption of money market funds consideration redemption of money market funds issued by domestic securities of the

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After the Revision Before the Revision Remark issued by domestic securities investment investment trust enterprises. The Amendment to trust enterprises. The amount of amount of transactions above shall be Paragraph 1 transactions above shall be calculated as calculated as follows: 1.The amount of Subparagraph follows: 1.The amount of any individual any individual transaction. 1 that defines transaction. 2.The cumulative transaction amount of the public 2.The cumulative transaction amount of acquisitions and disposals of the same announcement acquisitions and disposals of the same type of underlying asset with the same regulation type of underlying asset with the same transaction counterparty within the over the transaction counterparty within the preceding year. interested preceding year. 3.The cumulative transaction amount of parties 3.The cumulative transaction amount of acquisitions and disposals (cumulative transaction acquisitions and disposals (cumulative acquisitions and disposals, respectively) and the acquisitions and disposals, respectively) of real property thereof within the same Subparagraph of real property or right-of-use assets development project within the 5 that thereof within the same development preceding year. regulates the project within the preceding year. 4.The cumulative transaction amount of non-interested 4.The cumulative transaction amount of acquisitions and disposals (cumulative parties acquisitions and disposals (cumulative acquisitions and disposals, respectively) transaction, for acquisitions and disposals, respectively) of the same security within the the benefit of of the same security within the preceding year. the Company preceding year. "Within the preceding year" as used in to comply "Within the preceding year" as used in the preceding paragraph refers to the with, hereby the preceding paragraph refers to the year preceding the date of occurrence of the year preceding the date of occurrence of the current transaction. Items duly amendment to the current transaction. Items duly announced in accordance with these Paragraph 1 announced in accordance with these Regulations need not be counted toward Subparagraph Regulations need not be counted toward the transaction amount. 5 is made to the transaction amount. A public company shall compile make it clear. A public company shall compile monthly reports on the status of monthly reports on the status of derivatives trading engaged in up to the 5.Paragraphs 4 derivatives trading engaged in up to the end of the preceding month by the and 6 are end of the preceding month by the company and any subsidiaries that are subject to text company and any subsidiaries that are not domestic public companies and revision. not domestic public companies and enter enter the information in the prescribed the information in the prescribed format format into the information reporting into the information reporting website website designated by the FSC by the designated by the FSC by the 10th day 10th day of each month. of each month. When a public company at the time of When a public company at the time of public announcement makes an error or public announcement makes an error or omission in an item required by omission in an item required by regulations to be publicly announced regulations to be publicly announced and so is required to correct it, all the and so is required to correct it, all the items shall be again publicly announced

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After the Revision Before the Revision Remark items shall be again publicly announced and reported in their entirety within two and reported in their entirety within two days counting inclusively from the date days counting inclusively from the date of knowing of such error or omission. of knowing of such error or omission. A public company acquiring or A public company acquiring or disposing of assets shall keep all disposing of assets shall keep all relevant contracts, meeting minutes, log relevant contracts, meeting minutes, log books, appraisal reports and CPA, books, appraisal reports and CPA, attorney, and securities underwriter attorney, and securities underwriter opinions at the company, where they opinions at the company, where they shall be retained for 5 years except shall be retained for 5 years except where another act provides otherwise. where another act provides otherwise.

Article 28: Article 27： Article Where any of the following Where any of the following change. circumstances occurs with respect to a circumstances occurs with respect to a transaction that company has already transaction that company has already publicly announced and reported in publicly announced and reported in accordance with the preceding article, a accordance with the preceding article, a public report of relevant information public report of relevant information shall be made on the information shall be made on the information reporting website designated by the FSC reporting website designated by the FSC within 2 days counting inclusively from within 2 days counting inclusively from the date of occurrence of the event: the date of occurrence of the event: 1.Change, termination, or rescission of a 1.Change, termination, or rescission of a contract signed in regard to the original contract signed in regard to the original transaction. transaction. 2.The merger, demerger, acquisition, or 2.The merger, demerger, acquisition, or transfer of shares is not completed by transfer of shares is not completed by the scheduled date set forth in the the scheduled date set forth in the contract. contract. 3.Change to the originally publicly 3.Change to the originally publicly announced and reported information. announced and reported information.

Article 29: Article 28: Article Information required to be publicly Information required to be publicly change, announced and reported in accordance announced and reported in accordance amendments with the provisions of the preceding with the provisions of the preceding the reference Chapter on acquisitions and disposals of Chapter on acquisitions and disposals of of paragraphs assets by a public company's subsidiary assets by a public company's subsidiary 2 ,and text that is not itself a public company in that is not itself a public company in revision. Taiwan shall be reported by the public Taiwan shall be reported by the public company. company. The paid-in capital or total assets of the The paid-in capital or total assets of the

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After the Revision Before the Revision Remark public company shall be the standard public company shall be the standard applicable to a subsidiary referred to in applicable to a subsidiary referred to in the preceding paragraph in determining the preceding paragraph in determining whether, relative to paid-in capital or whether, relative transaction amount total assets, it reaches a threshold reaches 20% or more of paid-in capital, requiring public announcement and 10 %, it reaches a threshold requiring regulatory filing under Article 27, public announcement and regulatory paragraph 1. filing under Article 26, paragraph 1.

Article 30: Article 28-1: Article For the calculation of 10% of total assets For the calculation of 10% of total change. under these Regulations, the total assets assets under these Regulations, the total stated in the most recent parent company assets stated in the most recent parent only financial report or individual company only financial report or financial report prepared under the individual financial report prepared Regulations Governing the Preparation under the Regulations Governing the of Financial Reports by Securities Preparation of Financial Reports by Issuers shall be used. Securities Issuers shall be used. Company whose shares have no par Company whose shares have no par value or a par value other than NT$10- value or a par value other than NT$10- for the calculation of transaction for the calculation of transaction amounts of 20% of paid-in capital under amounts of 20% of paid-in capital under these Regulations, 10% of equity these Regulations, 10% of equity attributable to owners of the parent shall attributable to owners of the parent shall be substituted be substituted

Article 31: Article 29: Article The acquisition or disposal of assets of The acquisition or disposal of assets of change. the Company in accordance with the the Company in accordance with the procedures or other legal requirements procedures or other legal requirements shall be approved by the board of shall be approved by the board of directors that shall first be approved by directors that shall first be approved by one-half or more of all audit committee one-half or more of all audit committee members and then submitted to the members and then submitted to the board of directors for a resolution , so is board of directors for a resolution , so is the amendment. the amendment. When submits the “Procedures for When submits the “Procedures for Acquisition and Disposal of Assets” for Acquisition and Disposal of Assets” for discussion by the board of directors, the discussion by the board of directors, the board of directors shall take into full board of directors shall take into full consideration each independent consideration each independent

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After the Revision Before the Revision Remark director's opinions; the independent director's opinions; the independent directors' opinions specifically directors' opinions specifically expressing assent or dissent and the expressing assent or dissent and the reasons for dissent shall be included in reasons for dissent shall be included in the minutes of the board of directors' the minutes of the board of directors' meeting. meeting. If Paragraph 1 is not approved by one- If Paragraph 1 is not approved by one- half or more of all audit committee half or more of all audit committee members, it may be implemented if members, it may be implemented if approved by two-thirds or more of all approved by two-thirds or more of all directors, and the resolution of the audit directors, and the resolution of the audit committee shall be recorded in the committee shall be recorded in the minutes of the board of directors minutes of the board of directors meeting. meeting. The all audit committee members and all The all audit committee members and directors in the preceding paragraph all directors in the preceding paragraph shall be counted as the actual number of shall be counted as the actual number of persons currently holding those persons currently holding those positions. positions.

Article 32: Article 29-1: Article The acquisition or disposal of assets of The acquisition or disposal of assets of change, the Company in accordance with the the Company in accordance with the amendments procedures or other legal requirements procedures or other legal requirements the reference shall be approved by the board of shall be approved by the board of of paragraphs directors that shall first be approved by directors that shall first be approved by 3. one-half or more of all audit committee one-half or more of all audit committee members and then submitted to the members and then submitted to the board of directors for a resolution. board of directors for a resolution. When submits the “Procedures for When submits the “Procedures for Acquisition and Disposal of Assets” for Acquisition and Disposal of Assets” for discussion by the board of directors, the discussion by the board of directors, the board of directors shall take into full board of directors shall take into full consideration each independent consideration each independent director's opinions; the independent director's opinions; the independent directors' opinions specifically directors' opinions specifically expressing assent or dissent and the expressing assent or dissent and the reasons for dissent shall be included in reasons for dissent shall be included in the minutes of the board of directors' the minutes of the board of directors' meeting. meeting. The paragraph 1 is subject to the The paragraph 29 is subject to the provisions of Article 31, paragraphs 3 provisions of Article 31, paragraphs 3 and 4. and 4.

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After the Revision Before the Revision Remark Article 33： Article 30： 1.Article The Articles of Incorporation was The Articles of Incorporation was change established on June 30, 2003 , amended established on June 30, 2003 , amended 2.Added for the 1st time on June 12, 2006, for the 1st time on June 12, 2006, revision date amended for the 2nd time on June 21, amended for the 2nd time on June 21, 2007, amended for the 3rd time on June 2007, amended for the 3rd time on June 19, 2009, amended for the 4th time on 19, 2009, amended for the 4th time on June 14, 2010, and for the 5th time on June 14, 2010, and for the 5th time on June 12, 2012, and for the 6th time on June 12, 2012, and for the 6th time on June 19, 2014, and for the 7th time on June 19, 2014, and for the 7th time on June 19, 2016, and for the 8th time on June 19, 2016, and for the 8th time on June 22, 2017, and for the 9th time on June 22, 2017. June 21, 2019.

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Elections

Proposal 1 Proposed by the Board of Directors Proposal: Election of the 16th directors. Explanation: 1. The 3 year term of the directors and supervisors of the 15th Board will end on June 30, 2019. According to the Election of the Directors Procedures with revision, 9 seats of directors for the 16th Board (including 3 seats of independent directors) will be elected with a term of 3 years, from July 1, 2019 to June 30, 2022. 2. According to Article 14 of the Articles of Incorporation, the election of directors (including independent directors) shall adopt candidate nomination system. The candidate nomination list has been reviewed by the Board of Directors with qualification on May 10, 2019, which education, experience and other information can be referred to from page 83 to page 84. 3. Please proceed with the election.

Election results:

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Director Candidates List 1. Director Candidates

Stockholder The name of juristic person The name of representative Education and and and experience of No. or amount of shareholdings amount of shareholdings representative ID No. Department of Physical Education, Chinese Yen Chen Li-Lien Culture University Chairman, Yulon Motor Co., Ltd. Amount of shareholdings: Chairman, China Motor Corporation 377,924 shares Director, Taiwan Acceptance Tai Yuen Textile Co., Ltd. Corporation Kuo-Rong Chen Master in Advanced 94 Management, Amount of shareholdings: Amount of shareholdings: National Chaio Tung University 284,901,045 shares 11,901 shares President, Yulon Motor Co., Ltd. Director, China Motor Corporation Chairman, Taiwan Acceptance Corporation Department of Mechanical Engineering, National Cheng Kung Shin-I Lin University.

Amount of shareholdings: Vice premier of Executive Yuan China Motor Corporation and Chairperson of CEPD 0 shares Minister of Ministry of Economic 14181 Affairs Amount of shareholdings: Director, China Motor Corporation 262,228,166 shares Ph.D. in economics, New York State University Liang Zhang Director, Taiwan Amount of shareholdings: Acceptance Corporation, Director, Yulon Motor Co., Ltd. 0 shares Independent director ,My Humble House Hospitality Management Consulting MIB, Curtin University, Australia Director and General manager, Yulon Zhen-Xiang Yao Motor Co., Ltd.

Yen Tjing-Ling Industrial Amount of shareholdings: Director, Taiwan Acceptance Development Foundation Corporation, 10 15,412 shares Harvard University (S.J.D.); Amount of shareholdings: Director, Yulon Motor Co., Ltd. Jack J.T .Huang Independent director, Taiwan 17,287,844 shares Amount of shareholdings: Mobile Co., Ltd. Independent director, SYSTEX 0 shares Corporation,

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2. Independent Director Candidates

Stockholder No. Name Education and experience or and of ID No. amount of shareholdings representative Ph.D. of Stanford University Law School Yi-Hong Hsieh Adjunct Professor, National Taiwan University F12223XXXX Amount of shareholdings: Members of the Board of Examiners, Senior 0 shares Civil Service Examination of the Examination Yuan of ROC Independent Director, Fubon Media Co., Ltd. Doctor in Accounting, University of California, LosAngeles Chairman of Department/Institute of Accounting, National Taiwan University Yen-Chin, Tsai, Director, Financial Accounting Standards Committee of A1222XXXXX Number of shareholdings: Accounting Research and Development Foundation 0 shares External Advisor, Listing Department of Taiwan Stock Exchange Independent Director, Nan Shan Life Insurance Co., Ltd. Independent Director, GENESYSLOGIC,INC. Independent Director, Cowealth Medical Holding Co., Ltd. Mater of Mathematics, Colorado State University, USA Zhong-Qi, Zhou General Manager of Siemens Nixdorf Informationssysteme Q10066XXXX Amount of shareholdings: 0 Taiwan Branch shares President, Vibo Telecommunication Co., Ltd. Chairman of the Board of Directors of China Telecom Independent Director, Standard Foods Corporation

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Other Motions

Proposal 1 Proposed by the Board of Directors Proposal: Release the Prohibition on 16th Directors from Participation in Competitive Business. Explanation: 1. Pursuant to provisions prescribed in Article 209 of the Articles of Incorporation, the proposal for release the prohibition on the new Director by-election of the 16th-term from participation in competitive business is submitted. 2. The new director of the by-election of the 16th-term 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. Nonetheless such circumstances take into consideration mostly on the overall operational performance and the full utilization of human resource, and hence 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. 3. Please proceed with the discussion.

Resolution:

Extemporary Motions

Meeting Adjournment

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Appendix 1 Yulon Motor Co., Ltd. Shareholding of Directors

Record date: April 23, 2019 Unit: Share Shareholding Title Name Shareholding Remark ratio (%) Yen Chen Chairman Li-Lien Representative of Yen Tjing- 17,287,844 1.09% Ling Industrial Development Zhen-Xiang Director Foundation Yao Director Kuo-Rong Chen Representative of Tai Yuen 284,901,045 18.11% Jack J.T. Textile Co., Ltd. Director Huang

Director Shin-I Lin Representative of China 262,228,166 16.67% Motor Corporation Director Liang Zhang

Independent Yi-Hong - - director Hsieh Independent Zhong-Qi - - director Zhou Independent Yen-Chin - director Tsai Total shareholding of 564,417,055 35.87% directors According to Article 26 of the Securities and Exchange Act and the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies, the total shareholding of the Company’s directors shall not be less than 2.4%, that is, 37,750,077 shares. The shareholdings of the Company’s directors were 564,417,055 shares (35.87%) as of April 23, 2019, in compliance with the regulations. Please refer to the above table for the shareholding of the directors in details.

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Appendix 2 Yulon Motor Co., Ltd. Rules of Procedure for Shareholders’ Meeting

Article 1 The shareholders’ meeting of the Company is processed in accordance with the Rules of Procedure for Shareholders’ Meeting. Article 2 The attending shareholders should submit the signature card instead of signing on the register of shareholders; also, the shareholding of the attending shareholders is calculated by counting the signature cards collected. The shareholding of attendance is based on the signature card submitted, plus the votes exercised by electronic means. Attendance of the shareholder’s meeting and votes should be calculated in accordance with the shareholding. Article 3 The Chairman shall call the meeting to order when the shareholding of the attending shareholders represents the majority outstanding shares. If the shareholding of the attending shareholders does not meet the mandatory shareholding at the meeting time, the Chairman may announce to have the meeting postponed, which is limited to two postpones and for less than one-hour in total. If the shareholding of the attending shareholders does not meet the mandatory shareholding after two postpones but more than one thirds of the total number of shares issued, a pseudo-resolution can be resolved in accordance with Article 175 Paragraph 1 of the Company Law. If the shareholding of the attending shareholders is more than one half of the total number of shares issued before the end of the meeting, the Chairman may have the pseudo-resolution presented again in the shareholder’s meeting for resolution in accordance with Article 174 of the Company Law. Article 4 If the shareholder’s meeting is convened by the Board of Directors, the agenda is scheduled by the Board. The meeting should be conducted in accordance with the agenda scheduled and it may not be amended without the resolution reached in the shareholder’s meeting. If the shareholder’s meeting is convened by the authorized person other than the Board of Directors, the preceding provision is applicable. The Chairman may not have the meeting adjourned discretionally before the proposals (including motions) resolved in the preceding agenda. If the Chairman has the meeting adjourned in violation of the Rules of Procedure for Shareholder’s Meetings, the attending shareholders may have one shareholder elected as the Chairman to chair the meeting continuously with the majority votes of the attending shareholders. After the adjournment of the meeting by the Chairman lawfully, shareholders shall not elect another chairman to resume the meeting at the same meeting site or any other location. Article 5 Attending shareholders before speaking on the subject must fill out the speech slip,

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including shareholder account number, account name, and the subject in details for the Chairman to determine the order of speakers. Attending shareholders who have speech slips submitted but not speak shall be deemed as silent shareholders. If there is discrepancy found between the text of the speech and the speech slip submitted, the content of the speech shall prevail. The Chairman may reply to the speaking shareholders personally or by the designated personnel. Article 6 Each shareholder (or the representative) may not speak more than twice on the same motion for 5 minutes each time without the consent of the Chairman. Article 7 The juristic person that has attended the shareholder’s meeting by proxy can authorize only one representative to attend the meeting. If the juristic person shareholder has two or more representatives assigned to attend the shareholder’s meeting, only one of the representatives may speak on the same proposal in accordance with the provision in the preceding paragraph. Article 8 The Chairman may have the speaking shareholders who violated the rules of time limit, spoke beyond the scope of the underlying issues, or were impolite silenced. Attending shareholders may not interfere with the speaking shareholders without the consent of the Chairman and the speaking shareholders. The Chairman will have the violating shareholders stopped. Article 9 The Chairman may announce discretionally to have the proposal discussion ended for voting. When necessary, the Chairman may announce to have the proposal discussion terminated. Article 10 For the resolution of proposals, unless otherwise provided in the Company Law, the consent of a majority vote of the attending shareholders shall prevail. The motion resolved by the Chairman’s consulting the attending shareholders without dissent is deemed as passed and with the same effect as voting. Shareholder has one vote per share Shareholders may attend the shareholder’s meeting by proxy in accordance with the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meeting of Public Companies” and the related law and regulations. Article 11 The Chairman may announce the meeting in recess. If the meeting discussion cannot be completed in one assembly, the shareholder’s meeting may resolve to have the meeting resumed in five days without the need of issuing announcements and notices. Article 12 When there is an amendment or alternative for the same motion, the Chairman shall have

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the order of vote, including the original proposal, determined accordingly. If one of the motions has been passed, the other motions shall be deemed as rejected without the need of further resolution. Article 13 The Chairman may direct disciplinary personnel (or security personnel) to help keep the meeting place in order. The disciplinary personnel (or security personnel) that help keep the meeting place in order should wear an armband with “Marshal” affixed. Article 14 The Chairman is allowed to appoint the scrutineers and ballot counting officers, and the scrutineers must be shareholders. Ballot counting result should be announced immediately and with records kept. Article 15 If the shareholder’s meeting is convened by the Board of Directors, the Chairman of the Board is to chair the meeting. If the Chairman is on leave or is unable to perform powers for reasons, the Vice Chairman is to chair the meeting. If a Vice Chairman is not appointed or the Vice Chairman is also on leave or is unable to perform duties for reasons, the Chairman is to appoint one of the general directors to chair the meeting. If a representative is not appointed by the Chairman, one of the general directors should be elected to chair the meeting. If the shareholder’s meeting is convened by the other convener other than the Board of Directors, the convener is to chair the meeting. If there are two or more conveners, one of them should be elected to chair the meeting. Article 16 The shareholder’s meeting place should be at the Company’s or the suitable locations for the meeting held or for shareholders to attend the meeting conveniently; also, the shareholder’s meeting shall not be started before 9:00 or after 15:00. Article 17 The Company may assign the appointed attorney, CPA, or responsible personnel to attend the shareholder’s meeting. The staff responsible for organizing the shareholder’s meeting shall wear identification badges or armbands. Article 18 The entire shareholder’s meeting should be taped in audio or video recording and stored for at least one year. Article 19 The matters that are not addressed in the Rules of Procedure for Shareholder’s Meetings should be processed in accordance with the provisions of the Company Law and related law and regulations. Article 20 The Rules of Procedure for Shareholder’s Meetings is implemented after the resolution

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reached in the shareholder’s meeting, so is the amendment.

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Appendix 3 Yulon Motor Co., Ltd. Articles of Incorporation

Chapter 1 General rules Article 1 The Company was organized and incorporated in accordance with the Company Law and known as “YULON Motor Co., Ltd.” Article 2 The Company’s business operation is as follows: 1. Various automobile and related raw materials, components, molds, jigs, tools, and other parts production, sales, design, testing and inspection, processing, and repairing, Class A auto repair shop, auto components (accessories) sale, auto body facelift and sales, vehicle inspection agency business, and vehicle sales business; 2. Various automobile raw materials and components supplied to Nissan Motor Co., Ltd. and overseas automotive affiliated companies; 3. Vehicle low-power radio-frequency equipment installation, sales, and import/export business; 4. F113070 Telecommunications equipment wholesale business; 5. F213060 Telecommunications equipment retail business; 6. General import/export business (excluding licensing business); 7. Technical consulting and advisory business of the foregoing businesses; 8. General business management consulting. (Excluding CPA service); (Excluding securities investment and consulting business) 9. H701010 Residential and building development and rental business; 10. H703010 Plant rental business; 11. H703020 Warehouse rental business; 12. H703030 Office building rental business; 13. ZZ99999 Except for licensing business, all businesses no-prohibited by law; Article 2-1 The Company for business needs may have mutual guarantee arranged with the affiliated enterprises. Article 2-2 The Company shall not be a shareholder with unlimited liability or a business partner of another company. If the Company is a shareholder with limited liability of another company, the total investment amount of the Company is not subject to the 40% investment threshold restriction of the Company Law.

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Article 3 The Company locates in Miaoli County with branches, offices, and factories setup domestically and internationally for business operation. The establishment, change, or repeal of the preceding branches, offices, and factories is per the resolution of the Board. Article 4 The Company’s announcement is to be posted on the Company’s local daily newspaper, unless otherwise provided by the securities regulatory authorities. Chapter 2 Stock shares Article 5 The Company’s authorized capital amounted to NTD20 billion with 2 billion stock shares issued at NTD10 par, in which, the Board is authorized to have the unissued shares issued by installments. One hundred million shares of the total number of shares issued are reserved for the subscription of stock options, preferred stock with warrants, and corporate bonds with warrants. Article 6 The Company’s shares are ordered, numbered, and detailed with mandatory information, and with the signature or seal of the Chairman and two directors affixed, the stamp of the Company, and then certified for lawful issuance. The Company may have dematerialized stock shares issued; however, must contact the securities centralized depository institutions for registration. Article 7 The Company has the register of shareholders prepared with the mandatory information included. Shareholders should have the name or title, domicile or residence, and seal template filled in the seal card for the Company’s record. The collection of dividends or exercise of all rights in the future shall base on the seal card on file. The changes made to the register of shareholders are prohibited within 60 days prior to the annual shareholder’s meeting, 30 days prior to the extraordinary shareholder’s meeting, or 5 days prior to the record date of the Company’s distributing dividends or other benefits. Article 8 The Company’s stock is processed in accordance with the “Regulations Governing the Administration of Shareholder Services of Public Companies,” unless otherwise provided by law and regulations. Chapter 3 Shareholder’s Meeting Article 9 The Company has two types of shareholder’s meeting held. 1. Annual shareholder’s meeting: It is to be held within 6 months after the fiscal year. 2. Extraordinary shareholder’s meeting: It is to be convened in accordance with the Company Law.

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Article 10 Shareholders should be informed of the shareholder’s meeting date, time, place, and subject 30 days in advance for the annual shareholder’s meeting and 15 days in advance for the extraordinary shareholder’s meeting. Article 11 The resolutions reached in the shareholder’s meeting, unless otherwise provided in the Company Law, must be with the majority votes of the attending shareholders and the shareholding of the attending shareholders is over one half of the total number of shares issued. Shareholders are entitled to per share per vote, unless otherwise provided in the Company Law. Article 12 Shareholders who are unable to attend the shareholder’s meeting for reasons may issue the Company’s proxy with the scope of authorization detailed to commission the representative to attend the meeting. The restrictions and precautions of commission and representation are subject to the provisions of the Company Law. Shareholders may not have a proxy issued in exchange for equivalent consideration. The commission in violation of the requirements is invalid. Article 13 The minutes of the shareholder’s meeting shall include the meeting date, place, the name of the Chairman, the number of attending shareholders and the votes, the method of resolutions, the essentials of procedure and results, and the signature or seal of the Chairman. The minutes of the shareholder’s meeting together with the register of shareholders (signature cards) and proxy should be stored within the Company. The distribution of the minutes of the shareholder’s meeting can be processed by notices. Chapter 4 Directors and the Board of Directors Article 14 The Company’s Board is with 9~15 directors elected by a nomination system from the director candidate list in the shareholder’s meeting for 3-year tenure and eligible for reelection. The total shareholding ratio of all directors is processed in accordance with the securities regulatory authorities. The number of the Company’s independent directors at least 3 seats and the nomination system is adopted to have independent directors elected from the director candidate list. The professional qualifications, shareholding, part-time job restrictions, nomination and election method, and other compliance matters of the independent directors shall be handled in accordance with the securities regulatory authorities. The Board of Directors of the Company may establish various functional committees. The regulations governing the exercise of functional committees shall be developed and adopted by the Board of Directors before implementation.

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Article 15 For the organization of the Board of Directors, at least three general directors are elected with the consent of the majority attending directors and the attendance of two thirds of the directors. There must be at least one independent director among the general directors and shall not be less than one fifths of the general directors. Chairman and/or Vice Chairman are to be elected among the general directors. If no general director is appointed by the Board of Directors, Chairman and/or Vice Chairman are to be elected among directors the same way. Article 16 Chairman chairs the shareholder’s meeting, the Board meeting, and the General Board meeting internally, and represents the Company externally. The Chairman is responsible for the business operation of the Company. The Vice Chairman is to act on the Chairman’s behalf when the Chairman is on leave or unable to exercise powers for reasons. When there is no Vice Chairman appointed or the Vice Chairman is on leave or is unable to exercise powers for reasons, the Chairman is to appoint one General Director to act on his/her behalf. If there is not a General Director appointed, a Director should be appointed to chair the meeting. If a representative is not appointed by the Chairman, one of the General Directors or Directors is elected to chair the meeting. Article 17 The powers of the Board are as follows: 1. Business policies and decisions; 2. Review and approval of bylaws; 3. Review and approval of budget; 4. The proposed earnings distribution; 5. The proposed capital increase or decrease; 6. Discussion and approval of stock shares issuance; 7. The appointment and dismissal of the key employees; 8. The acquisition and disposal of the Company’s material property and real estate; 9. The other powers entrusted in accordance with the law and regulations and resolved in the shareholder’s meeting; Article 18 The Board is to convene a meeting every three-month with the directors notified within the prescribed time period. An extraordinary meeting can be convened for urgent matters or upon the request of a majority of the directors that is to be convened by the Chairman. The convention notice may be informed to the directors by paper, e-mail or fax. The directors who is unable to attend the meeting for reasons may appoint another director to attend the meeting by proxy that is limited to one representative only. Article 19 The resolutions of the Board, unless otherwise provided in the Company Law, must be with

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the attendance of the majority of the Directors and the consent of the majority of the attending Directors. The minutes of meeting should be signed or sealed by the Chairman and stored within the Company. Article 20 If the Company has General Board of Directors organized, the General Board Meeting can be convened by the Chairman at any time while the Board Meeting is in recess. The resolutions reached in the General Board Meeting must be with the attendance of the majority of the General Directors and the consent of the majority of the attending General Directors. Chapter 5 Audit Committee Article 21 The Company established the Audit Committee pursuant to the laws and regulations. The Audit Committee or Audit Committee members shall be responsible for the execution of Company Act, Securities Exchange Act, and other supervisory functions regulated by law. The supervisor system was deleted on the day of the establishment of Audit Committee by law. The Audit Committee should be constituted by all independent directors. The number of members, terms, functions, meeting rules, resources while the Audit Committee exercises and other matters shall be regulated in the Articles of Audit Committee Incorporation. Article 22 （Deletion） Article 23 （Deletion） Chapter 6 The management and staff Article 24 The Company has one President, Senior Vice President, Vice President, and several managers to be appointed and dismissed by the Board of Directors. The President is to have employees hired or dismissed. Article 25 The President leads the managers and department heads to manage the overall business per the instruction of the Chairman and with the assistance of the Senior Vice President and Vice President. Chapter 7 Accounting Article 26 The Company’s fiscal year is from January 1 to December 31. At the end of each fiscal year, the Board shall have the following books and statements prepared in accordance with

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Article 228 of the Company Law and forward to the Audit Committee to audit and propose the report, before acknowledged in the shareholder’s meeting. Article 27 If the Company makes profits for the fiscal year, the profits shall be appropriated for remuneration in the follows: 1. The remuneration for directors may not exceed 0.5% while independent directors may not participate in the distribution of the preceding remuneration. 2. The remuneration for employees may not fall below 0.1%. The preceding remuneration for employees is resolved by the Board of Directors and distributed in the form of stocks or cash. The distribution of remuneration for employees and directors shall be reported to the Shareholder’s Meeting. 3. If the Company still has cumulative loss, the amount to make up the loss shall be withheld beforehand, and then the remuneration is distributed in accordance with the previous proportions. The 14th supervisors could still acquire remuneration upon the expiration of term, dismissal or resignation in accordance with the 51st revision on June 11, 2013. The remuneration proportion, remuneration distribution procedure and distribution conditions shall comply with the regulations related to the remuneration for directors. 4. If the Company makes surplus for the fiscal year, apart from making up for the cumulative loss in the past and taxation according to the law, 10% of the legal reserve and special reserve according to the regulations of competent authority shall be appropriated. The balance together with the remaining amount as of the beginning unappropriated earnings shall be the available reserve for distribution. 5. The Company engages in an industry with stable maturity. In consideration of the profit status, funding requirement for future operational plan and changes in industry environment of the Company in addition to taking account of long-term shareholders’ equity and long-term financial planning of the Company, the dividend distribution of the Company should not fall below 10% of the available reserve. Dividends are distributed in cash or stock. In particular, the proportion of cash dividend distribution may not fall below 20% of total dividend amount. Finally the Board of Directors proposes the distribution statement to reach resolution at the Shareholder Meeting. Article 28 The remuneration of the Company’s directors is authorized Board of Directors to proposed base on the individual contribution to the Company and the standard of the same trade concerned. The Company’s profit, if any, are applied for the distribution of remuneration to directors in accordance with Article 27 of the Articles of Incorporation..

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Chapter 8 Appendix Article 29 The Company’s organizational rules and other by-laws are regulated and authorized separately by the Board of Directors. Article 30 The matters that are not regulated in the Articles of Incorporation should be processed in accordance with the Company Law and the related laws and regulations. Article 31 The Articles of Incorporation was established on July 23, 1953. The 1st amendment was implemented on October 23, 1954. The 2nd amendment was implemented on June 23, 1956. The 3rd amendment was implemented on July 20, 1958. The 4th amendment was implemented on June 29, 1960. The 5th amendment was implemented on September 28, 1964. The 6th amendment was implemented on July 5, 1965. The 7th amendment was implemented on November 14, 1966. The 8th amendment was implemented on November 14, 1967. The 9th amendment was implemented on November 27, 1968. The 10th amendment was implemented on November 28, 1969. The 11th amendment was implemented on September 29, 1970. The 12th amendment was implemented on November 29, 1971. The 13th amendment was implemented on May 31, 1972. The 14th amendment was implemented on November 30, 1973. The 15th amendment was implemented on December 12, 1974. The 16th amendment was implemented on June 30, 1975. The 17th amendment was implemented on March 18, 1976. The 18th amendment was implemented on June 16, 1977. The 19th amendment was implemented on April 19, 1979. The 20th amendment was implemented on May 2, 1980. The 21st amendment was implemented on May 2, 1981. The 22nd amendment was implemented on May 7, 1983. The 23rd amendment was implemented on June 9, 1984. The 24th amendment was implemented on June 1, 1985. The 25th amendment was implemented on August 31, 1985. The 26th amendment was implemented on June 21, 1986. The 27th amendment was implemented on June 6, 1987.

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The 28th amendment was implemented on June 11, 1988. The 29th amendment was implemented on June 10, 1989. The 30th amendment was implemented on December 16, 1989. The 31st amendment was implemented on May 12, 1990. The 32nd amendment was implemented on May 25, 1991. The 33rd amendment was implemented on May 23, 1992 The 34th amendment was implemented on May 15, 1993. The 35th amendment was implemented on May 7, 1994. The 36th amendment was implemented on June 8, 1996. The 37th amendment was implemented on May 17, 1997. The 38th amendment was implemented on May 9, 1998. The 39th amendment was implemented on May 6, 1999. The 40th amendment was implemented on May 15, 2000. The 41st amendment was implemented on December 8, 2000. The 42nd amendment was implemented on May 18, 2001 The 43rd amendment was implemented on June 14, 2002. The 44th amendment was implemented on June 16, 2004. The 45th amendment was implemented on June 13, 2005. The 46th amendment was implemented on June 12, 2006. The 47th amendment was implemented on June 21, 2007. The 48th amendment was implemented on June 19, 2009. The 49th amendment was implemented on June 17, 2011. The 50th amendment was implemented on June 12, 2012. The 51st amendment was implemented on June 11, 2013. The 52nd amendment was implemented on June 21, 2016.

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Appendix 4 Yulon Motor Co., Ltd. Rules for Director Elections Article 1 Elections of directors of the Company shall be conducted in accordance with these Rules. Article 2 The Company’s directors shall be elected by means of the single open cumulative ballot method. Each share is entitled to votes and equal to number of directors to be elected, and the number of votes may be used together to elect one per son or spread out over several persons. Shareholder numbers printed on the ballots may be used instead of recording the names of voting shareholders. Article 3 Before the election begins, the chair shall appoint a number of persons to perform the respective duties of vote monitoring and counting personnel. Article 4 The Company’s elections of both directors shall be conducted in accordance with the candidate nomination system. The number of directors will be as specified in the Company’s Articles of Incorporation. Those receiving ballots representing higher numbers of voting rights will calculated separately for directors. Elections of independent and non- independent directors shall be conducted together, with the number of elects calculated separately. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, those receiving ballots representing equal numbers of voting rights shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance. Article 5 The Board of Directors shall prepare separate ballots for directors in accordance with shareholder’s account and in numbers corresponding to the directors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots in accordance with the provision set forth in Article 2 of the Rules (Note: the ballots and meeting manual shall be distributed to the attending shareholders upon the submission of sign-in card at site). Article 6 If a candidate is a shareholder, a voter must enter the candidate's account name and shareholder account number in the "candidate" column of the ballot; for a non-shareholder, the voter shall enter the candidate's full name and identity card number. However, when the candidate is a governmental organization or juristic-person shareholder, the name of the governmental organization or juristic-person shareholder shall be entered in the column for the candidate's account name in the ballot paper, or both the name of the governmental organization or juristic-person shareholder and the name and the national identification

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number of its representative may be entered. When there are multiple representatives, the names and the national identification number of each respective representative shall be entered. Article 7 A ballot is invalid under any of the following circumstances: 1. The ballot was not prepared in accordance with provisions set forth in Article 5 of the Rules. 2. Two or more candidates is written on the same ballot. 3. Other words or marks are entered in addition to the candidate's account name, shareholder account number and identity card number. Article 8 Candidates are invalid in the event of one of the following conditions during the election: 1. The writing is unclear and indecipherable or has been altered. 2. The candidate whose name entered in the ballot is a shareholder, but the candidate's account name and shareholder account number do not conform with those given in the shareholder register, or the candidate whose name is entered in the ballot is a non- shareholder, and a cross-check shows that the candidate's name and identity card number do not match. 3. The name of the candidate entered in the ballot is identical to that of another shareholder, but no shareholder account number or identity card number is provided in the ballot to identify such individual. 4. A blank ballot or a ballot not including the shareholder’s name (Name) or shareholder’s number (personal ID number) is placed in the ballot box. Article 9 The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation shall be announced by the chair on the site. Article 10 The Board of Directors of the Company shall issue notifications to the persons elected as directors as announced in previous article. Article 11 The Rules hereto shall be implemented after approval by a shareholders meeting. The same procedures apply to revision. The Rules for Director Elections was established on June 30, 1975. The 1st amendment was implemented on June 21, 1986. The 2nd amendment was implemented on June 14, 2002. The 3rd amendment was implemented on June 12, 2006. The 4th amendment was implemented on June 21, 2016.

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Appendix 5

The impact of stock dividend on the Company’s business performance, earnings per share, and shareholder’s return on investment ratio: Year 2018 Item (Estimated) Beginning Paid-in capital (in Thousands of NTD) 15,729,199 Cash dividends per share (NTD) 0.67 Current Stock dividends from capitalization of earnings (share) - dividend and interest Stock dividend from capitalization of additional paid- - in capital (share) Operating Income (in Thousands of NTD) Operating income increase /decrease ratio from last year Net income (in Thousands of NTD) Changes in Net income increase/decrease ratio from last year Business Performance Earnings per share (NTD) Earnings per share increase/decrease ratio from last year Annual average return on investment ratio (reverse of annual average PE ratio) Proforma earnings per share If capitalized earnings (NTD) Not applicable (Note) is converted to cash dividends Proforma annual average return on investment ratio Proforma earnings per share If additional (NTD) Proforma paid-in capital is earnings per not capitalized Proforma annual average share and PE return on investment ratio ratio If additional paid-in Proforma earnings per share capital is not (NTD) capitalized and capitalized earnings is Proforma annual average converted to cash return on investment ratio dividends Note: It is not applicable since there is no stock dividends distributed this year.

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