Transcend Information, Inc.
2020 ANNUAL REGULAR SHAREHOLDERS’ MEETING MINUTES(This English version is a translation based on the original Chinese version.
Where any discrepancy arises between the two versions, the Chinese version shall prevail.)
Time: 9:00 a.m., June 19, 2020
Place: Transcend Information, Inc. (No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan)
Total share represented by shareholders present in person or by proxy are 349,877,439 shares (including
349,838,439 shares casted electronically), which is 81.54% of the total 429,061,675 outstanding shares.
Attended Directors:
Shu, Chung-Won, the chairman of Board of Directors, Shu, Chung-Cheng, Chui, Li-Chu, andWang, Jen-Ming
Attended Independent Directors:
Wang, Yi-Hsin, the convener of Audit Committee
Attendees:
Lin Chun-Yao, the independent auditors of the Pricewaterhouse Coopers
Li, Dan, the lawyer of World Patent & Trademark Office
Chairman: Shu, Chung-Won

Recorder: Hsiao, Sheng-Yin

Call meeting to order: The aggregate shareholding of the shareholders present in person or by proxy
constituted a quorum. The Chairman called the meeting to order.
Chairman's Remarks: (Omitted)
I. Report Items(1) To report the business of 2019.
Please refer to Attachment I.
(2) Audit Committee’s review report.
Please refer to Attachment II.
(3) To report 2019 employees’ profit sharing bonus and directors’ compensation.
Explanatory Notes:
A. The remuneration of 2019 profit to employees would be NT$ 20,684,330 (distributed in cash);and that to directors would be NT$ 2,790,000.
-1-B. The estimated remuneration to employees is NT$ 21,398,216 and the different amount should
be NT$ 713,886; the estimated remuneration to directors is NT$ 2,995,750 and the different
amount should be NT$ 205,750.
C. The difference will be recognized as expense in the statement of income in 2020.
(4) The status of guarantees provided by the Company.
Explanatory Notes:
The Company provided a guarantee for Transcend Japan Inc. amounting to JPY 2,000,000
thousands, and the actual amount of guarantee draw down is JPY 0 by the end of 2019. Pursuant to
the Company’s “Procedures for Endorsements and Guarantees”, the limit of guarantee was NT$
7,652,169 thousands (approximate JPY 27,800,000 thousands).
(5) Cash distribution from 2019 retained earnings.
Explanatory Notes:
A. To comply with Article 240 of the Company Act and Article 22-1 of the “Articles ofIncorporation”.
B. For appropriations of 2019 earnings, the Company will distribute cash dividend of NT$
1,544,622,030 (NT$3.60 per share).
C. Please refer to Page 7 for the chart of 2019 earnings distribution.
D. Cash dividend will be distributed proportionately according to shareholders’ shares ownershipregistered in the Common Stockholders’ Roster as of the date of record. The cash distribution
will be rounded down to NT$1 (any amount under NT$1 will be discarded), and the remaining
fraction will be incorporated into other revenues of the Company.
E. To avoid the change in the total amount of common shares outstanding resulting from buybackof company shares, or transfer or cancellation of treasury stock, it is proposed that the Chairmanof the Board be authorized to adjust the cash to be distributed to each common share.
(6) Cash distribution from capital surplus.
Explanatory Notes:
A. To comply with Article 241 of the Company Act and Article 22-1 of the “Articles ofIncorporation”.
B. The capital surplus derived from the issuance of new shares at a premium totaling NT$
386,155,508 will be distributed in cash of NT$0.90 per share.
C. Cash distribution from capital surplus will be distributed proportionately according toshareholders’ shares ownership registered in the Common Stockholders’ Roster as of the date ofrecord. The cash distribution will be rounded down to NT$1 (any amount under NT$1 will be-2-

discarded), and the remaining fraction will be incorporated into other revenues of the Company.
D. To avoid the change in the total amount of common shares outstanding resulting from buybackof company shares, or transfer or cancellation of treasury stock, it is proposed that the Chairmanof the Board be authorized to adjust the cash to be distributed to each common share.

-3-(7) The execution result of the 1st share repurchase program.
Explanatory Notes:

The number of times

1st Repurchase

Date of the board of directors resolution

2019/11/07

Purpose of the share repurchase

To maintain the Company’s credit andshareholders’ equity.

Scheduled period

2019/11/08~2020/01/07

Repurchase type and number of shares

3,000,000 common shares

Repurchase price range

NT$49~NT97

Repurchase period

2019/12/09~2020/01/07

Number of shares repurchased

1,700,000 common shares

Repurchase amount

NT$130,621,100

Average repurchase price per share

NT$76.84

Ratio of number of shares actually
repurchased to the originally determined

56.67%

number of shares to be repurchased
Cancelled number of shares

1,700,000 shares
Not completed.
Reason: To achieve the objective of securing
shareholders interests and stabilizing market

Execution result

price, share repurchase will be executed inseparate batches depending on market
condition. Therefore, the announced share
repurchase plan has not been fully executed.

Cumulative shares held

0 shareRatio of cumulative shares held of total

0%Company’s shares issued
Status

The repurchased shares were cancelled on
2020/4/24.

-4-II. Proposed Items(1) Adoption of 2019 Business Report and Financial Statements.
(Proposed by the Board of Directors)
Explanatory Notes:
A. The parent company only financial statement and consolidated financial statement of theCompany for the year of 2019 have been audited by independent auditors, Mr. Chun-Yao, Linand Mr. Chien-Hung Chou, of the Pricewaterhouse Coopers.
B. The Business Report, Independent Auditors’ Report and Financial Statements are hereby also
attached. (Please refer to Attachment I, III, and IV)
C. It is submitted for ratification.
Resolution:

Shares represented at the time of voting:(including votes casted electronically

349,877,439
349,838,439 )Voting Results*
Votes in favor:
329,105,992 votes (329,103,992 votes)
Votes against:
17,910 votes (17,910 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 20,753,537 votes (20,716,537 votes)*including votes casted electronically (number in brackets)
RESOLVED, the above proposal was approved as proposed.

-5-% of the total
represented share present
94.06%
0.00%
0.00%
5.93%

(2) Adoption of the proposal for distribution of 2019 earnings.
(Proposed by the Board of Directors)
Explanatory Notes:
A. Please refer to page 7 for the chart of 2019 earnings distribution.
B. The distribution of cash dividends part in the chart of 2019 earnings distribution has been
approved by the board of directors on 2020/03/05.
C. It is submitted for ratification.
Resolution:

Shares represented at the time of voting:(including votes casted electronically

349,877,439
349,838,439 )Voting Results*
Votes in favor:
329,101,982 votes (329,099,982 votes)
Votes against:
23,910 votes (23,910 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 20,751,547 votes (20,714,547 votes)*including votes casted electronically (number in brackets)
RESOLVED, the above proposal was approved as proposed.

-6-% of the total
represented share present
94.06%
0.00%
0.00%
5.93%

Transcend Information, Inc.
The Chart of 2019 Earnings Distribution
For the year ended December 31, 2019
(Expressed in New Taiwan dollar)
Item

AmountUnappropriated retained earnings at beginning

4,661,121,549

Add: Adjustment on unappropriated earnings for 201937,211,474

Adjusted unappropriated retained earnings

4,698,333,023

Add: Net income for 2019

1,728,966,885

Less: Legal reserve (10%)(172,896,689)

Less: Special reserve(69,329,826)

Retained earnings available for appropriation as ofDecember 31, 2019

6,185,073,393

Less: Items of distribution Cash dividend to shareholders
Unappropriated retained earnings at end

Chairman：Shu, Chung-Won

Remarks(1,544,622,030)

Cash dividend(NT$3.60 per share)

4,640,451,363

General Manager：Shu, Chung-Cheng-7-

Accounting Supervisor： Hsiao, Sheng-Yin

III. Discussion Items(1) To approve the amendments to “Articles of Incorporation”.
(Proposed by the Board of Directors)
Explanatory Notes:
A. To comply with Article 267 of the Company Act, the Company hereby proposes amendments to“Articles of Incorporation”.
B. Please refer to Attachment V: the comparison table for the “Articles of Incorporation”.
C. It is submitted for approval.
Resolution:

Shares represented at the time of voting:(including votes casted electronically

349,877,439
349,838,439 )Voting Results*
Votes in favor:
328,809,869 votes (328,807,869 votes)
Votes against:
288,051 votes (288,051 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 20,779,519 votes (20,742,519 votes)*including votes casted electronically (number in brackets)% of the total
represented share present
93.97%
0.08%
0.00%
5.93%

RESOLVED, the above proposal was approved as proposed.
(2) To approve the amendments to “Procedures for Acquisition and Disposal of Assets”.
(Proposed by the Board of Directors)
Explanatory Notes:
A. To increase the limit of investment amount, loosen the authority to approve, and add flexibilityof using company fund, the Company hereby proposes amendments to “Procedures for
Acquisition and Disposal of Assets”.
B. Please refer to Attachment VI: the comparison table for the “Procedures for Acquisition and
Disposal of Assets”.
C. It is submitted for approval.
Resolution:-8-

Shares represented at the time of voting:(including votes casted electronically

349,877,439
349,838,439 )Voting Results*
Votes in favor:
302,762,037 votes (302,760,037 votes)
Votes against:
26,335,717 votes (26,335,717 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 20,779,685 votes (20,742,685 votes)*including votes casted electronically (number in brackets)% of the total
represented share present
86.53%
7.52%
0.00%
5.93%

RESOLVED, the above proposal was approved as proposed.
(3) To approve the amendments to “Procedures for Lending Funds to other Parties”.
(Proposed by the Board of Directors)
Explanatory Notes:
A. Due to the amendment of “Regulations Governing Loaning of Funds and Making ofEndorsements/Guarantees by Public Companies” made on March 7, 2019 by Financial
Supervisory Commission, and to fulfill the requirement of practical operation, the Company
hereby proposes amendments to “Procedures for Lending Funds to other Parties”.
B. Please refer to Attachment VII: the comparison table for the “Procedures for Lending Funds toother Parties”
C. It is submitted for approval.
Resolution:

Shares represented at the time of voting:(including votes casted electronically

349,877,439
349,838,439 )Voting Results*
Votes in favor:
329,077,263 votes (329,075,263 votes)
Votes against:
23,241 votes (23,241 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 20,776,935 votes (20,739,935 votes)*including votes casted electronically (number in brackets)
RESOLVED, the above proposal was approved as proposed.

-9-% of the total
represented share present
94.05%
0.00%
0.00%
5.93%

(4) To approve the amendments to “Procedures for Endorsements and Guarantees”.
(Proposed by the Board of Directors)
Explanatory Notes:
A. Due to the amendment of “Regulations Governing Loaning of Funds and Making ofEndorsements/Guarantees by Public Companies” made on March 7, 2019 by Financial
Supervisory Commission, and to fulfill the requirement of practical operation, the Company
hereby proposes amendments to “Procedures for Lending Funds to other Parties”.
B. Please refer to Attachment VIII: the comparison table for the “Procedures for Endorsements andGuarantees”
C. It is submitted for approval.
Resolution:

Shares represented at the time of voting:(including votes casted electronically

349,877,439
349,838,439 )Voting Results*
Votes in favor:
329,078,263 votes (329,076,263 votes)
Votes against:
23,251 votes (23,251 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 20,775,925 votes (20,738,925 votes)*including votes casted electronically (number in brackets)% of the total
represented share present
94.05%
0.00%
0.00%
5.93%

RESOLVED, the above proposal was approved as proposed.

(5) Issuance of Restricted Stock Awards.
(Proposed by the Board of Directors)
Explanatory Notes:
A. Terms of Restricted Stock Awards are as the following:
I. Expected total shares of issuance: 2,000,000 common shares.
II. Terms and conditions:i.
Expected issue price: The current issue is gratuitous.
ii.

Vesting conditions:
Employees who achieve personal performance criterion or the Company’s operation
objectives set by the “Issuance Rules of Transcend 2020 Restricted Stock Awards
Plan” and who have no violation on any terms of the plan are qualified to receive thevested shares. Please refer to Attachment IX: “Issuance Rules of Transcend 2020
Restricted Stock Awards Plan”.
- 10 -

iii.

Measures to be taken when employees fail to achieve the vesting conditions or in theevent of inheritance:
The Company will redeem the issued restricted stock awards and cancel the fullnumber of share in accordance with the terms of the issuance rules set by theCompany.
B. Qualification requirements for employees:
I. Full-time employees of the Company and full-time employees of domestic or foreign
controlled or affiliated companies who are already employed on the date that the restricted
stock awards are awarded.
II. The number of granted shares shall be determined by seniority, position, performance,
overall contribution and other meaningful factors in management. The results of shares
distribution shall be reviewed by the Chairman and obtain approval in the Board of
Directors meeting. However, for employees who are managers, the awards of such shares
are subject to approval by the Compensation Committee.
III. The sum of the cumulative number of shares granted to each employee shall be inaccordance with the applicable laws and regulations in Offering Regulations.
C. Restricted rights before employees meet the vesting conditions:
I. During the vesting period, employee may not sell, pledge, transfer, give to another person,
create any encumbrance on, or otherwise disposal of, restricted stock awards.
II. Before the vesting conditions are met, except the aforementioned rights, the other rights ofrestricted stock awards, including but not limited to dividend, interest rights to receive
capital reserve, employee stock options at cash capital increase, shall be the same as theCompany’s common shares issued.
D. The reason why it is necessary to issue restricted stocks for employees:
To attract and retain talents, motivate and engage employees for the best interest of theCompany and its shareholders, so as to ensure the alignment of the employees’ and shareholders’interests.
E. Calculated expense amount and impact on dilution of EPS or other factors affecting
shareholder’s equity: If based on the March 2, 2020 closing price, NT$78, the annual amortized
expenses from 2021 to 2023 will be projected as: NT$91,000 thousand, NT$44,200 thousand
and NT$20,800 thousand, respectively with the total amounts of NT$156 million. As of March
2, 2020, the Company’s issued outstanding shares are 429,061,675 shares, the dilution from2021 to 2023 will be projected as: NT$0.21, NT$0.10 and NT$0.05, respectively. There islimited dilution of the Company’s future EPS, and there is no material impact on existing
shareholder’s equity.
F. Any other matters that need to be specified:
I. It is allowed to report to the competent authority in several times within one year after- 11 -

resolution of the shareholder’s meeting. The Company may issue the shares in batcheswithin one year after receiving the competent authority’s approval.
II. Before the vesting conditions are met, rights of the restricted stock awards to attend theshareholder’s meeting, submit proposal, speak and vote at the meeting shall be the same as
the Company’s common shares issued and shall be performed in accordance with thecustodian trust.
III. The plan is passed by the resolution of the shareholder’s meeting and the Board of
Directors is authorized to handle all the issues regarding the issuance of Restricted StockAwards. Any other matters not set forth in the plan, the Board of Directors authorizes the
Chairman to amend or execute pursuant to the applicable laws and regulations.
Resolution:

Shares represented at the time of voting:(including votes casted electronically

349,877,439
349,838,439 )Voting Results*
Votes in favor:
314,575,005 votes (314,573,005 votes)
Votes against:
14,519,648 votes (14,519,648 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 20,782,786 votes (20,745,786 votes)*including votes casted electronically (number in brackets)% of the total
represented share present
89.91%
4.14%
0.00%
5.94%

RESOLVED, the above proposal was approved as proposed.

IV. Other Business and Special Motion
There is no other special motion, the meeting was adjourned.

V. Meeting Adjourned

Note: This document is extracted from the meeting; the details are subject to the audio and video recordig.

- 12 -

Attachment I

TRANSCEND INFORMATION INC.
BUSINESS REPORT
Looking back in the first half year of 2019, due to the imbalanced supply and demand of DRAM and
NAND flash, the memory market had faced the pressure of continuous price decline. As the
manufacturers turned conservative towards holding inventory in response to market downturn, thememory industry experienced a decrease in both revenue and operating income compared to the same
period last year. From the second half of 2019, the decline of DRAM and NAND flash price started toslow down and the memory market was getting back to normal. Transcend was able to maintain the highgross margin rate while facing this economy uncertainty by dedicating on the strong focus of inventory
management and procurement strategy and it ensures the sufficient factory productivity and thecustomer satisfaction. In a bumpy memory market environment, Transcend adheres to a consistent andstable business strategy. In terms of consumer product, Transcend continues to improve existing productlines and launch new products in a timely manner to enhance customer satisfaction and brand value. For
embedded clients, through close cooperation between headquarters and global subsidiaries, Transcend isable to grasp needs of the end customers, provide best services, and foster good long-term relationshipwith business partners. Hereby, we would like to thank our valued shareholders, clients, suppliers andemployees for your continued supports to Transcend.
Transcend’s consolidated revenue totaled NT$13.5 billion in 2019. Consolidated gross margin
totaled NT$3.09 billion. Gross margin rate is 23.0 percent. Operating income totaled 1.78 billion.
Earnings before income tax totaled 2.09 billion. Net income totaled 1.73 billion. EPS is NT$4.01
calculated at the weighted average of outstanding share capital amounting to 4.3 billion.
The exceptional product design, quality assurance, and the trustworthy brand awareness hadbrought Transcend numerous prestigious awards for years. Transcend was named one of Interbrand’s
Top 20 Best Taiwan Global Brands for the thirteenth year in a row, winning Taiwan Excellence Awards
for the sixteenth consecutive year, and receiving Japan’s Good Design Award for four consecutive years.
The focus of brand management brought us to this great success and demonstrates that our outstanding
product design is internationally recognized.
As a global leader in memory manufacturing, Transcend strives to offer not only the latest
technologies and innovations, but also products and services of the highest quality to our valued
customers. Transcend successfully expanded its embedded product portfolio in 2019, launchingsolid-state drives featuring the latest 96-layer 3D NAND flash for superior performance, reliability, andendurance. For the consumer market this year, Transcend grew its strategic product lines by introducing- 13 -

new Type-C storage and Hub solutions, which aimed to boost customers’ work efficiency in the digitalage.
In addition to developing a sustainable business strategy and contributing to economic growth,
Transcend also actively invests in communities. For corporate social responsibility, we have sponsoredyouth sports activities, including the High School Basketball League (HBL) and the Black Panther HighSchool Baseball Tournament. Transcend continues to execute the long-term Baseball Mentoring
Program which aimed at underprivileged school baseball teams for the fifth year and expects it to serve
as a platform for young promising athletes to fulfill their dreams.
Looking forward to 2020, the memory market has been benefited by the healthier inventory level,
the stabilizing market demand and the coming new application in 5G, AIoT, automotive and so on. The
price of DRAM and NAND flash has increased gradually and we expect a prosperous outlook in thisyear would come.

By facing the fluctuation of economic cycle and drastic changes in the market environment,
Transcend believes that the embedded solution and industrial application will be the key to the future
success. In addition to maintaining a good relationship with existing customers and suppliers, Transcendcontinues to provide professional after-sales service and technical support, integrate clients’manufacturing process, and implement effective supply chain management through the assistance ofTranscend Information System. We are confident that Transcend will have the growth momentum withnew customer and new project development to increase our market share and create a win-win situation
for both Transcend and our partners.
Here again we sincerely thank all of our shareholders for your continued support and for theconfidence that you have placed in us. Transcend will act in the best interest of our shareholders, andmake full disclosure of information to investors. We make every effort to drive our operational
excellence, and look forward to sharing our progress with you.

Chairman：Shu, Chung-Won
General Manager：Shu, Chung-Cheng
Accounting Supervisor：Hsiao, Sheng-Yin- 14 -

Attachment II

Audit Report of Audit Committee

The Board of Directors has prepared the Company’s 2019 Business Report, Financial Statements andEarnings Distribution Proposal. Transcend Corporation’s Financial Statements have been audited andcertified by Mr. Chun-Yao, Lin and Mr. Chien-Hung Chou, the CPA of the Pricewaterhouse Coopers.
The Business Report, Financial Statements and Earnings Distribution Proposal have been reviewed andconsidered to be complied with relevant rules by the undersigned, the audit committee of Transcend
Corporation. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of theCompany Act, we hereby submit this report.

The audit Committee of Transcend Corporation

Chairman of the audit Committee: Wang, Yi-ShinMarch 05, 2020

- 15 -

Attachment III

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Transcend Information, Inc.

OpinionWe have audited the accompanying balance sheets of Transcend Information, Inc. (the“Company”) as at
December 31, 2019 and 2018, and the related statements of comprehensive income, of changes in equity
and of cash flows for the years then ended, and notes to the financial statements, including a summary ofsignificant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at December 31, 2019 and 2018, and its financial performance andits cash flows for the years then ended in accordance with the “Regulations Governing the Preparationsof Financial Reports by Securities Issuers”.

Basis for opinion
We conducted our audit of the accompanying financial statements as of and for the year ended
December 31, 2019 in accordance with the “Regulations Governing Auditing and Attestation of
Financial Statements by Certified Public Accountants”, ”Rule No. Financial-Supervisory-SecuritieAuditing-1090360805 issued by the Financial Supervisory Commission on February 25, 2020” ,andgenerally accepted auditing standards in the Republic of China (ROC GAAS)； and in accordance withthe “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public
Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS) for our
audit of the accompanying financial statements as of and for the year ended December 31, 2018. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Financial Statements section of our report. We are independent of the Company in accordancewith the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the“Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our- 16 -

opinion.

Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of
our audit of the financial statements as a whole and, in forming our opinion thereon, we do not provide aseparate opinion on these matters.
Key audit matters for the Company’s financial statements of the current period are stated as follows:
Evaluation of inventories
Description
Refer to Notes 4(12), 5(2) and 6(5) to the financial statements for the information on the Company’s
inventory accounting policy, estimates and assumptions and allowance for inventory evaluation losses.
The percentage of the Company’s inventories to total assets is material and the Company applies
judgements and estimates in determing the net realizable value of inventories at balance sheet date. The
Company mainly produces DRAM and flash memory. As these products have a short life cycle andbelong to a highly competitive industry, the market prices change frequently. Since the Company’s
inventories and the allowance for inventory valuation losses are material to the financial statements, theevaluation of inventories has been identified as a key audit matter.

How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
A. Obtained an understanding of the Company’s operations and industry. Assessed the reasonablenessof the policy and procedures to recognize allowance for inventory valuation losses.
B. Obtained an understanding of the Company’s inventory control procedures. Reviewed annual
inventory count plan and observed the annual physical count of inventory in order to assess theeffectiveness of internal controls over inventory.
C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information
to assess the reasonableness of allowance for inventory valuation losses.

- 17 -

Estimation of allowance for sales discountDescription
In consideration of business volume, the Company provides a variety of business incentives to specificcustomers or products, and based on that, the Company can estimate the allowance for sales discountmonthly. Refer to Note 4(23) and 6(4) to the financial statements for the information on the estimationof allowance for sales discount.
Since the contracts are numerous and the result could affect the net revenue in the financial statements,
the estimation of allowance for sales discount has been identified as a key audit matter.
How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
A. Obtained an understanding of the Company’s operations, industry and the procedures to recognize
allowance for sales discount.
B. Obtained an understanding of the Company’s sales procedures and interviewed management toassess the appropriateness of sales allowance contracts and internal control over estimation ofallowance.
C. Obtained the evaluation list of allowance for sales discount, and tested material sales allowance
contracts and recalculated it to assess the reasonableness of allowance determined by the Company.

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 inaccordance with the “Regulations Governing the Preparations of Financial Reports by Securities
Issuers”, and for such internal control as management determines is necessary to enable the preparationof 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 tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate the Company or tocease operations, or has no realistic alternative but to do so.
Those charged with governance, including audit committee, are responsible for overseeing theCompany’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements- 18 -

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with ROC GAAS will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintainprofessional skepticism throughout the audit. We also:
A. Identify and assess the risks of material misstatement of the financial statements, whether due tofraud 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 notdetecting 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 ofinternal control.
B. Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control.
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
D. 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 orconditions 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 auditor’sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
E. Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events ina manner that achieves fair presentation.
F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Company to express an opinion on the financial statements. We areresponsible 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- 19 -

scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal 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 othermatters 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 thatwere of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, we determinethat a matter should not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of such communication.

March 5, 2020----------------------------------------------------------------------------------------------------------------------------- -------------------The accompanying financial statements are not intended to present the financial position and results of operations and cash
flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic ofChina. The standards, procedures and practices in the Republic of China governing the audit of such financial statements
may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, theaccompanying financial statements and report of independent accountants are not intended for use by those who are notinformed about the accounting principles or auditing standards generally accepted in the Republic of China, and theirapplications in practice.
As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability
for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from thetranslation.

- 20 -

TRANSCEND INFORMATION, INC
BALANCE SHEETS(Expressed in thousands of New Taiwan Dollars)
December 31, 2019
AMOUNT%

Assets

December 31, 2018
AMOUNT%

Current assets
Cash and cash equivalents$

863,583

4$

1,052,350

52,505,073

12-

7,727,826

36

9,084,731

41

3,054

-

872

-

Accounts receivable, net

898,7074

1,437,231

6

Accounts receivable - related parties, net

454,7762

559,835

3

Other receivables

106,252

1

78,279-Inventories, net

1,967,896

9

3,045,740

14

5,220

-

10,675-

14,532,387

68

15,269,713

69

114,1641

163,155

1

148,527

1--

method2,241,388

10

2,374,787

11

Property, plant and equipment, net

1,644,401

8

1,712,699

8

88,521-2,560,460

12

2,567,451

11

Deferred tax assets

59,274-73,670-

Other non-current assets

43,977-50,895-6,900,712

32

6,942,657

31

21,433,099

100

22,212,370

100

Financial assets at fair value through profit
or loss - current
Current financial assets at amortised cost,net
Notes receivable, net

Other current assets
Total Current Assets
Non-current assets
Non-current financial assets at fair value
through other comprehensive income
Non-current financial assets at amortised
cost
Investments accounted for using equity

Right-of-use assets
Investment property, net

Total Non-current Assets
Total Assets$(Continued)

~21~

$

TRANSCEND INFORMATION, INC
BALANCE SHEETS(Expressed in thousands of New Taiwan Dollars)
December 31, 2019
AMOUNT%

Liabilities and Equity

December 31, 2018
AMOUNT%

Current liabilities
Accounts payable$

1,002,314

5

Accounts payable - related parties

457,364

Other payables

1,180,956

5

2

461,3062

211,4671

234,866

1

Other payables - related parties

17,308-16,875-Current tax liabilities

59,293-

129,873

1

Current lease liabilities

36,235---

Other current liabilities

26,754

-

3,692

-

1,810,735

8

2,027,568

9

Deferred tax liabilities

155,4631

179,600

1

Non-current lease liabilities

36,815-

Other non-current liabilities

23,238-24,900-215,5161

204,500

1

2,026,251

92,232,068

10

4,307,617

20

4,307,617

19

4,346,854

20

4,605,233

21

Legal reserve

4,510,981

21

4,302,782

19

Special reserve

61,572-

47,247-

6,427,300

30

6,778,995

31

61,572)-

Total Current Liabilities$

Non-current liabilities

Total Non-current Liabilities
Total Liabilities
Equity attributable to owners of parent
Share capital
Common stock
Capital surplus
Capital surplus
Retained earnings

Unappropriated retained earnings
Other equity interest
Other equity interest
Treasury shares(

130,902)- ((116,574)---

19,406,848

91

19,980,302

90

21,433,099

100

22,212,370

100

Total Equity
Significant contingent liabilities andunrecognized contract commitments
Significant events after the balance sheet
date
Total Liabilities and Equity$$

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

~22~

TRANSCEND INFORMATION, INC.
STATEMENTS OF COMPREHENSIVE INCOME(Expressed in thousands of New Taiwan Dollars, except earnings per share)
Years ended December 31
2019
2018
Items
AMOUNT%AMOUNT
Operating Revenue
16,809,530$
12,860,887
100$
Operating Costs
13,975,063) ((10,334,582) ( 80) (Gross Profit
2,526,305
20
2,834,467
Unrealized gross profit on sales to(25,422)(
20,596)
subsidiaries
Realized gross profit on sales to
48,746
subsidiaries
20,596Gross Profit, net
2,521,479
20
2,862,617
Operating Expenses
Sales and marketing expenses(
318,545) (3) (373,788) (Administrative expenses(
189,031) (1) (188,972) (Research and development expenses(
142,601) (1) (158,518) (Impairment loss determined in accordancewith IFRS 9
(
268)
(
599)
Total operating expenses(
650,445) (5) (721,877) (Operating Profit
1,871,034
15
2,140,740
Non-operating Income and Expenses
Other income
224,8222
195,823
Other gains and losses(
19,261)
347,917
Net gain from derecognizing financial
assets measured at amortised cost
20,552
16,691
Finance costs(
676)
Share of loss of associates and joint
ventures accounted for under equity
method(52,432) (1) (70,292)
Total non-operating income andexpenses
173,0051
490,139
Profit before Income Tax
2,044,039
16
2,630,879
Income tax expense(
315,072) (3) (548,884) (Profit for the Year$
1,728,967
13$
2,081,995
Other Comprehensive Income (Loss)
Components of other comprehensive
income (loss) that will not bereclassified to profit or loss
Gains (losses) on remeasurements ofdefined benefit plans$
724($
1,632)
Unrealized loss on financial assets at fairvalue through other comprehensive
income27,976(
6,047)
Share of other comprehensive income(loss) of associates and joint ventures
accounted for under equity method
479
2,164
Components of other comprehensive
income (loss) that will be reclassified to
profit or loss
Exchange differences on translation offoreign financial statements(
76,620)(12,378)
Income tax related to components of othercomprehensive income that will bereclassified to profit or loss
15,324
2,475
Other comprehensive (loss) income for theyear($
32,117($
15,418)
Total Comprehensive Income$
1,696,850
13$
2,066,577
Earnings Per Share
Basic earnings per share
Diluted earnings per share

$
$

4.01
4.01

$
$

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

~23~

%
100
83)
17
17
3)
1)
1)
5)
12
1
2
3
15
3)
12

-

12

4.83
4.83

TRANSCEND INFORMATION, INC
STATEMENTS OF CHANGES IN EQUITY(Expressed in thousands of New Taiwan dollars)
Equity attributable to owners of the parent
Capital Reserves

Notes

Retained Earnings

Common stock

Additional paid-in
capitalDonated assets
received

Net assets frommerger$$$$Legal reserve

Special reserve

Unappropriatedretained earnings

Other Equity Interest
Unrealized gain or
Exchangeloss on financial
differences on
assets at fair value Unrealized gain ortranslation ofthrough otherloss onforeign financial
comprehensive
available-for-salestatements
incomefinancial assets

$

$

($

Treasury shares$

Total equity

Year ended December 31, 2018
Balance at January 1, 2018
Effects of retrospective application and retrospective restatement

4,307,617

4,652,151

4,106

35,128$4,037,210

145,689

7,363,641

-

-

-

-

-

-

30,0004,307,617

4,652,151

4,106

35,1284,037,210

145,689

7,393,641

-

-

-

-

-

-

2,081,995

-

-

-

-

-

-

-

-

-

-

-

-

Legal reserve

-

-

-

-

265,572-(

Cash dividends

-

-

-

-

-

-

(

-

-

-

-

98,442 )86,152 )

-

-

-

-

Balance after adjustments at January 1, 2018
Net income for the year
Other comprehensive income (loss)

6(6)(17)

Total comprehensive income (loss)
Appropriation and distribution of 2017 earnings

67,262 )
-

$
(

-

$

9,985 ) (20,015-$

20,498,295

20,015 )--9,985 )--

20,498,295(

67,262 ) (
-

-

-

-

532

(

9,903 ) (6,047 )--

2,082,527(

9,903 ) (6,047 )--

265,572 )

-

-

-

-

2,498,418 )

-

-

-

-

98,442

-

-

-

-

-

-

-

-

-

2,081,995(

15,418 )2,066,577

6(16)Reversal of special reserve-

Cash payment from capital surplus

6(16)Net loss on disposal of financial assets at fair value through othercomprehensive income

6(6)(17)-(-

Balance at December 31, 2018

-

-

-

(

-

-

(

31,625 )-31,625-(2,498,418 )(

86,152 )

-

-

-

$

4,307,617$

4,565,999

$

4,106

$

35,128$4,302,782$

47,247$

6,778,995($

77,165 )$15,593

$

-

$

-

$

19,980,302$

4,307,617$

4,565,999

$

4,106

$

35,128$4,302,782$

47,247$

6,778,995($

77,165 )$15,593

$

-

$

-

$

19,980,302

Year ended December 31, 2019
Balance at January 1, 2019
Net income for the year

-

-

-

-

-

-

1,728,967

-

-

-

-

-

-

1,203

-

-

-

-

-

-

1,730,170

Legal reserve

-

-

-

-

208,199-(

Cash dividends

-

-

-

-

-

-

(

-

-

-

-

14,325(

258,458 )

-

-

-

-

Other comprehensive income (loss)

6(6)(17)

Total comprehensive income (loss)
Appropriation and distribution of 2018 earnings

-

-

-

(

61,296 )27,976--

1,728,967(

61,296 )27,976--208,199 )

-

-

-

-

1,895,351 )

-

-

-

-

14,325 )

-

-

-

-

-

-

-

-

-

36,010 )

-

-

-

-

-

-

79

(

32,117 )1,696,8506(16)Special reserve-

Cash payment from capital surplus

6(16)Net gain on disposal of financial assets at fair value through othercomprehensive income

6(6)(17)

Expired unclaimed dividends recognized as capital surplus

6(15)Stock repurchase6(14)Balance at December 31, 2019

-

-

(

-

-

-

-

-

-

36,010

-

-

-

79

-

-

-

-

-

$

4,307,617$

4,307,541

$

4,185

$

35,128$4,510,981$

61,572

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

~24~

$

6,427,300(($

138,461 )

$

7,559

$

(

1,895,351 )(

258,458 )--(

116,574 ) (-($116,574 )

116,574 )$

19,406,848

TRANSCEND INFORMATION, INC.
STATEMENTS OF CASH FLOWS(Expressed in thousands of New Taiwan Dollars)

2019Years ended December 31
2018

CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax
Adjustments
Adjustments to reconcile profit (loss)
Unrealized gross profit on sales to subsidiaries
Realized gross profit on sales to subsidiaries
Net loss on financial assets at fair value through profit or loss
Share of loss of associates and joint ventures accounted for using equity
methodExpected credit loss/(Gain on reversal of bad debts)
Depreciation
Interest income
Interest expense
Dividend income
Gain on disposal of property, plant and equipment
Changes in operating assets and liabilities
Changes in operating assets
Financial assets measured at fair value through profit or loss
Notes and accounts receivable
Other receivables
Inventories
Other current assets
Changes in operating liabilities
Accounts payable
Other payables
Other payables - related parties
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Dividends received
Interest received
Interest paid
Income tax paid
Net cash flows from operating activities$

2,044,039(

25,422
20,596 )
9,650(

52,432
268
170,840
187,470 )676
5,019 )
113((

2,514,723 )
641,133
43,764 )1,077,844
3,454 )

(
(
(
(
(
(

(

$

2,630,879(

20,596
48,746 )-(((70,292599
133,897
173,118 )3,558 )
775 )(

521,961
25,4322,004,828
715 )

182,584 )
23,399 )
433
262 )
938 )
1,038,641
5,019
205,261((

380,069 )868,852(

121,686
57,716
13,234
1,208
5,321
5,019,517
3,558
169,527
763,853
4,428,749

(

)
)
)

)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of financial assets at amortised cost
Acquisition of financial assets at amortised cost
Proceeds from disposal of financial assets at fair value through othercomprehensive income
Acquisition of financial assets at fair value through other comprehensive
incomeProceeds from disposal of property, plant and equipment
Acquisition of property, plant and equipment
Acquisition of investment property
Decrease in other non-current financial assets
Net cash flows (used in) from investing activities

6,457,566
5,249,188 )(

5,126,615
6,631,733 )(

76,967

(

5,152

1,600
66,990 )
6,918
1,226,873(

2,153,809 )
37,512 )79
93,250 )2,284,492 )
188,767 )
1,052,350
863,583(

105,480
4,038
120,056
2,365,030
52,741
4,033,753

(
(
(

)
)
)
)

CASH FLOWS FROM FINANCING ACTIVITIESCash dividends paid (including cash payment from capital surplus )Repayment of lease liabilities
Expired unclaimed dividends recognized as capital surplus
Stock repurchase
Net cash flows used in financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

~25~

(
(
(
(
(
$

(
(
$

2,584,570 )2,584,570 )
2,189,574 )
3,241,924
1,052,350

Attachment IV

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE
PWCR19000321
To the Board of Directors and Shareholders of Transcend Information, Inc.

OpinionWe have audited the accompanying consolidated balance sheets of Transcend Information, Inc. and its
subsidiaries (the “Group”) as at December 31, 2019 and 2018, and the related consolidated statementsof comprehensive income, of changes in equity and of cash flows for the years then ended, and 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 at December 31, 2019 and 2018, and its
consolidated financial performance and its consolidated cash flows for the years then ended inaccordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”
and the International Financial Reporting Standards, International Accounting Standards, IFRICInterpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion
We conducted our audit of the consolidated financial statements as of and for the year ended December
31, 2019 in accordance with the “Regulations Governing Auditing and Attestation of Financial
Statements by Certified Public Accountants”, “Rule No. Financial-Supervisory-Securities-Auditing1090360805 issued by the Financial Supervisory Commission on February 25, 2020” and generally
accepted auditing standards in the Republic of China (ROC GAAS); and in accordance with the“Regulations Governing Auditing and Attestation of Financial Statements by Certified Public
Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS) for
our audit of the consolidated financial statements as of and for the year ended December 31, 2018. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the Groupin accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic ofChina (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with theCode. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a~26~

basis for our opinion.

Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressedin the context of our audit of the consolidated financial statements as a whole and, in forming our
opinion thereon, we do not provide a separate opinion on these matters.
Key audit matters for the Group’s consolidated financial statements of the current period are stated asfollows:
Evaluation of inventories
Description
Refer to Notes 4(13), 5(2) and 6(5) to the consolidated financial statements for the information on theGroup’s inventory accounting policy, estimates and assumptions and allowance for inventory
evaluation losses.
The percentage of the Group’s inventories to total assets is material and the Group applies judgements
and estimates in determining the net realizable value of inventories at balance sheet date. The Group
mainly produces DRAM and flash memory. As these products have a short life cycle and belong to ahighly competitive industry, the market prices change frequently. Since the Group’s inventories and theallowance for inventory valuation losses are material to the financial statements, the evaluation of
inventories has been identified as a key audit matter.

How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
A. Obtained an understanding of the Group’s operations and industry. Assessed the reasonableness ofthe policy and procedures to recognize allowance for inventory valuation losses.
B. Obtained an understanding of the Group’s inventory control procedures. Reviewed annual
inventory count plan and observed the annual physical count of inventory in order to assess theeffectiveness of internal controls over inventory.
C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information
to assess the reasonableness of allowance for inventory valuation losses.

~27~

Estimation of allowance for sales discountDescription
In consideration of business volume, the Group provides a variety of business incentives to specificcustomers or products, and based on that, the Group can estimate the allowance for sales discountmonthly. Refer to Notes 4(25) and 6(4) to the consolidated financial statements for the information on
the estimation of allowance for sales discount.
Since the contracts are numerous and the result could affect the net revenue in the consolidated
financial statements, the estimation of allowance for sales discount has been identified as a key audit
matter.

How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
A. Obtained an understanding of the Group’s operations, industry and the procedures to recognize
allowance for sales discount.
B. Obtained an understanding of the Group’s sales procedures and interviewed management to assess
the appropriateness of sales allowance contracts and internal control over estimation of allowance.
C. Obtained the evaluation list of allowance for sales discount, and tested material sales allowance
contracts and recalculated it to assess the reasonableness of allowance determined by the Group.

Other matter –Parent company only financial reports
We have audited and expressed an unqualified opinion on the parent company only financial
statements of Transcend Information, Inc. as at and for the years ended December 31, 2019 and 2018.

Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the “Regulations Governing the Preparation of Financial Reports by
Securities Issuers” and the International Financial Reporting Standards, International AccountingStandards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory
Commission, and for such internal control as management determines is necessary to enable thepreparation 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 theGroup’s ability to continue as a going concern, disclosing, as applicable, matters related to going~28~

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 audit committee, are responsible for overseeing the Group’s
financial reporting process.

Auditor’s 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 auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with ROC GAAS will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintainprofessional skepticism throughout the audit. We also:
A.

B.

C.
D.

E.

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, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport 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 auditor’s report. However, future events or conditions may cause the Group tocease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

~29~

F.

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

We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal 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 andother 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 thatwere of most significance in the audit of the consolidated financial statements of the current period andare therefore the key audit matters. We describe these matters in our auditor’s 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 ofdoing so would reasonably be expected to outweigh the public interest benefits of such
communication.

Lin, Chun-Yao

Chou, Chien-Hung

For and on behalf of PricewaterhouseCoopers, Taiwan
March 5, 2020----------------------------------------------------------------------------------------------------------------------------- -------------------The accompanying consolidated financial statements are not intended to present the financial position and results ofoperations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions otherthan the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of suchfinancial statements may differ from those generally accepted in countries and jurisdictions other than the Republic ofChina. Accordingly, the accompanying consolidated financial statements and report of independent accountants are notintended for use by those who are not informed about the accounting principles or auditing standards generally accepted in
the Republic of China, and their applications in practice.
As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability
for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from thetranslation.

~30~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Expressed in thousands of New Taiwan Dollars)
Assets

December 31, 2019
AMOUNT%

Notes

December 31, 2018
AMOUNT%

Current assets
Cash and cash equivalents

6(1)

$

1,233,407

6

2,581,509$

1,429,737

7

1289,457-7,910,482

37

9,145,557

42

Financial assets at fair value through profit 6(2)or loss - current
Current financial assets at amortised cost,

6(3)

net
Notes receivable, net

6(4)

3,054

-

872

-

Accounts receivable, net

6(4)1,478,531

7

2,147,556

10

Accounts receivable due from related

7
8

-

-

-

124,0771

87,295-2,062,659

10

3,184,188

15

17,973-31,121-

15,411,700

73

16,115,783

74

114,1641

163,155

1

148,527

1--

97,434-105,322

12

parties, net
Other receivables
Inventories, net

6(5)Other current assets
Total Current Assets
Non-current assets
Non-current financial assets at fair value

6(6)through other comprehensive income
Non-current financial assets at amortised

6(3)

cost
Investments accounted for using equity

6(7)methodProperty, plant and equipment, net

6(8), 7 and 8

2,438,154

12

2,599,493

Right-of-use assets

6(9) and 7

241,050

1-Investment property, net

6(11)2,610,292

12

2,623,579

12

Deferred tax assets

6(22)75,859-90,301-Other non-current assets

6(12)63,610-166,8791

5,789,090

27

5,748,729

26

21,200,790

100

21,864,512

100

Total Non-current Assets
Total Assets$(Continued)

~31~

$

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Expressed in thousands of New Taiwan Dollars)
December 31, 2019
Liabilities and Equity

Notes

AMOUNT

December 31, 2018%

AMOUNT%

Current liabilities
1,005,350

552,828Other payables
Current tax liabilities

Accounts payable$

Accounts payable - related parties

7

1,187,300

6-39,874-

267,1161

265,2291

83,705

1

133,508

1$

Current lease liabilities

7

53,945---

Other current liabilities

6(14)38,635-23,376-

1,501,579

7

1,649,287

8

Total Current Liabilities
Non-current liabilities
Deferred tax liabilities

6(22)155,4821

179,6311

Non-current lease liabilities

7

83,697---53,184-55,292-

292,3631

234,923

1

1,793,942

8

1,884,210

94,307,617

21

4,307,617

20

4,346,854

20

4,605,233

21

Legal reserve

4,510,981

21

4,302,782

20

Special reserve

61,572-

47,247-

6,427,300

30

6,778,995

31

Other non-current liabilities
Total Non-current Liabilities
Total Liabilities
Equity attributable to owners of parent
6(14)Share capital
Common stock6(15)Capital surplus
Capital surplus

6(16)Retained earnings

Unappropriated retained earnings
6(17)Other equity interest
Other equity interest6(14)Treasury shares(

130,902)- ((116,574)-

19,406,848

92

21,200,790

100

Total Equity
Significant contingent liabilities and61,572) (1)

19,980,302

91

21,864,512

100

9unrecognized contract commitments
Significant events after the balance sheet

11

date
Total Liabilities and Equity$$

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

~32~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(Expressed in thousands of New Taiwan Dollars, except earnings per share)

Items
Notes
Operating Revenue
6(18) and 7
Operating Costs
6(5)(21) and 7
Gross Profit
Operating Expenses
6(21)Sales and marketing expenses
Administrative expenses
Research and development expenses
Reversal of impairment loss (impairment 6(4)loss) determined in accordance with IFRS
9
Total operating expenses
Operating Profit
Non-operating Income and Expenses
Other income
6(19)Other gains and losses
6(20)Net gain from derecognizing financial
6(3)assets measured at amortised cost
Finance costs
6(9)Share of loss of associates and joint
6(7)ventures accounted for under equity
methodTotal non-operating income andexpensesProfit before Income Tax
Income tax expense
6(22)Profit for the Year
Other Comprehensive Income (Loss)
Components of other comprehensive
income (loss) that will not bereclassified to profit or loss
Gains (losses) on remeasurements of
6(13)defined benefit plans
Unrealized gain (loss) on financial assets 6(6)(17)
at fair value through other comprehensive
incomeShare of other comprehensive income ofassociates and joint ventures accounted forunder equity method
Components of other comprehensive
income (loss) that will be reclassified to
profit or loss
Exchange differences on translation of6(17)foreign financial statements
Income tax related to components of other 6(17)(22)
comprehensive income that will bereclassified to profit or loss
Other comprehensive (loss) income for theyear
Total Comprehensive Income
Net profit attributable to:
Owners of parent
Comprehensive income attributable to:
Owners of parent
Earnings Per Share
Basic earnings per share
Diluted earnings per share$(

Years ended December 31
2019
2018
AMOUNT%AMOUNT
13,496,186
100 $
17,615,965
10,408,655) (77) (14,085,715) (3,087,531
23
3,530,250

%
100
80)
20

(
(
(

770,784) (395,057) (142,601) (

6) (
3) (
1) (

844,708) (387,262) (158,518) (

5)
2)
1)

(

1,921
1,306,521) (1,781,010

- (
10) (
13

8)
1,390,496) (2,139,754

8)
12

231,10267,3112
1208,041
359,025

1
2(

20,552
1,865)-

16,691--(

8,367)- (69,964)-$

308,733
2,089,743
360,776) (1,728,967

3
16
3) (
13 $

513,7932,653,547
571,552) (2,081,995

3
15
3)
12

$

724

- ($

1,632)-

27,976- (6,047)

-

479

-

2,164

-

76,620)- (12,378)-15,324

-

2,475

-

($
$

32,117)
1,696,850

- ($
13 $

15,418)2,066,577

12$

1,728,967

13$

2,081,995

12$

1,696,850

13$

2,066,577

12

4.01
4.01

$
$

(

(

6(23)
$
$

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

~33~

4.83
4.83

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(Expressed in thousands of New Taiwan dollars)
Equity attributable to owners of the parent
Capital Reserves

Notes

Retained Earnings

Common stock

Additional paid-in
capitalDonated assets
received

Net assets frommerger$$$$Legal reserve

Special reserve

Unappropriatedretained earnings

Other Equity Interest
Unrealized gain or
Exchangeloss on financial
differences on
assets at fair value Unrealized gain ortranslation ofthrough otherloss onforeign financial
comprehensive
available-for-salestatements
incomefinancial assets

$

$

($

Treasury shares$

Total equity

Year ended December 31, 2018
Balance at January 1, 2018
Effects of retrospective application and retrospective restatement

4,307,617

4,652,151

4,106

35,128$4,037,210

145,689

7,363,641

-

-

-

-

-

-

30,0004,307,617

4,652,151

4,106

35,1284,037,210

145,689

7,393,641

-

-

-

-

-

-

2,081,995

-

-

-

-

-

-

-

-

-

-

-

-

Legal reserve

-

-

-

-

265,572-(

Cash dividends

-

-

-

-

-

-

(

-

-

-

-

98,442 )86,152 )

-

-

-

-

Balance after adjustments at January 1, 2018
Net income for the year
Other comprehensive income (loss)

6(6)(17)

Total comprehensive income (loss)
Appropriation and distribution of 2017 earnings

67,262 )
-

$
(

-

$

9,985 ) (20,015-$

20,498,295

20,015 )--9,985 )--

20,498,295(

67,262 ) (
-

-

-

-

532

(

9,903 ) (6,047 )--

2,082,527(

9,903 ) (6,047 )--

265,572 )

-

-

-

-

2,498,418 )

-

-

-

-

98,442

-

-

-

-

-

-

-

-

-

2,081,995(

15,418 )2,066,577

6(16)Reversal of special reserve-

Cash payment from capital surplus

6(16)Net loss on disposal of financial assets at fair value through othercomprehensive income

6(6)(17)-(-

Balance at December 31, 2018

-

-

-

(

-

-

(

31,625 )-31,625-(2,498,418 )(

86,152 )

-

-

-

$

4,307,617$

4,565,999

$

4,106

$

35,128$4,302,782$

47,247$

6,778,995($

77,165 )$15,593

$

-

$

-

$

19,980,302$

4,307,617$

4,565,999

$

4,106

$

35,128$4,302,782$

47,247$

6,778,995($

77,165 )$15,593

$

-

$

-

$

19,980,302

Year ended December 31, 2019
Balance at January 1, 2019
Net income for the year

-

-

-

-

-

-

1,728,967

-

-

-

-

-

-

1,203

-

-

-

-

-

-

1,730,170

Legal reserve

-

-

-

-

208,199-(

Cash dividends

-

-

-

-

-

-

(

-

-

-

-

14,325(

258,458 )

-

-

-

-

Other comprehensive income (loss)

6(6)(17)

Total comprehensive income (loss)
Appropriation and distribution of 2018 earnings

-

-

-

(

61,296 )27,976--

1,728,967(

61,296 )27,976--208,199 )

-

-

-

-

1,895,351 )

-

-

-

-

14,325 )

-

-

-

-

-

-

-

-

-

36,010 )

-

-

-

-

-

-

79

(

32,117 )1,696,8506(16)Special reserve-

Cash payment from capital surplus

6(16)Net gain on disposal of financial assets at fair value through othercomprehensive income

6(6)(17)

Expired unclaimed dividends recognized as capital surplus

6(15)Stock repurchase6(14)Balance at December 31, 2019

-

-

(

-

-

-

-

-

-

36,010

-

-

-

79

-

-

-

-

-

$

4,307,617$

4,307,541

$

4,185

$

35,128$4,510,981$

61,572$

6,427,300

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

~34~

(

($

138,461 )

$

7,559

$

(

1,895,351 )(

258,458 )--(

116,574 ) (-($116,574 )

116,574 )$

19,406,848

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Expressed in thousands of New Taiwan dollars)

Years ended December 31,
Notes

2019

2018

CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax
Adjustments
Adjustments to reconcile profit (loss)
Net loss on financial assets at fair value through profit or loss
Share of loss of associates and joint ventures accounted forusing equity method(Gain on reversal of) expected credit loss
Gain on disposal of property, plant and equipment
Depreciation
Interest income
Interest expense
Dividend income
Changes in operating assets and liabilities
Changes in operating assets
Financial assets measured at fair value through profit or loss
Notes receivable
Accounts receivable (including related parties)
Other receivables
Inventories
Other current assets
Changes in operating liabilities
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Dividends received
Interest received
Income tax paid
Net cash flows from operating activities$
6(2)(20)
6(7)
6(4)
6(20)
6(21)
6(19)
6(9)
6(6)(20)

2,089,743

$

5,604
8,367
1,921 )
123 )
262,471
191,612 )
1,865
5,019 )

(
(
(
(
(
(
(

(
(
(

(

2,653,547
69,9648
1,204 )
210,873
175,210 )3,558 )(((

2,500,633 )
2,182 )
670,780
52,573 )
1,121,529
4,240(

89,457 )
4,990
351,519
30,642
2,056,962
13,089181,950 )12,954
1,887
8,065 )
1,384 )
1,233,978
5,019
207,403404,962 )
1,041,438(

50,252 )
2,420
82,623 )8,038 )
6,554
4,990,226
3,558
171,619
783,093 )4,382,310(((

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of financial assets at amortised cost
Acquisition of financial assets at amortised cost
Proceeds from disposal of financial assets at fair value throughother comprehensive income
Acquisition of financial assets at fair value through othercomprehensive income
Proceeds from disposal of property, plant and equipment
Acquisition of property, plant and equipment
Acquisition of investment property
Decrease in other non-current financial assets
Net cash flows from (used in) investing activities

6,457,566
5,380,646 )(

5,185,540
6,692,559 )(

6(6)
76,967

6(8)
6(11)

(

5,152

2,460
67,992 )9,967
1,098,322(

2,153,809 )
60,032 )79
93,250 )2,307,012 )
29,078 )196,330 )1,429,737
1,233,407(

105,480 )18,982
116,294 )2,365,030 )
61,4744,008,215 )(((CASH FLOWS FROM FINANCING ACTIVITIESCash dividends paid (including cash payment from capitalsurplus )Repayment of lease liabilities
Expired unclaimed dividends recognized as capital surplus
Stock repurchase
Net cash flows used in financing activities
Effect of exchange rate changes
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

6(16)
(
(
6(15)
6(14)

(
(
(
(
$

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

~35~

(
(
(
$

2,584,570 )2,584,570 )
5,702 )
2,216,177 )3,645,914
1,429,737

Attachment V
TRANSCEND INFORMATION INC.
COMPARISON TABLE FOR THE “ARTICLES OF INCORPORATION”
Proposed Amendment

Currently in Effect

Article 8-1：
When

the

(New)
Company

issue

new

Explanation
To motivate and enhance
employees’

shares,feelingofemployees who are entitled to subscribe for new

belonging to the company,

sharesand foster the best interests ofincludeemployeesofparentor

subsidiaries of the Company meeting certainthespecific requirements.

shareholders, so as to ensure

When the Company issue restricted stocks,

theemployees who are entitled to receive restricted

Company’s employees andstockshareholders’ interests.

includeemployeesofparentorCompanyalignment

and

of

its

the

subsidiaries of the Company meeting certain
specific requirements.
When the Company buy back stocks to transfer
to employees, employees who are entitled toreceive buyback stocks include employees ofparent or subsidiaries of the Company meetingcertain specific requirements.

Article 24：

Article 24：

Added date and times of

These Articles of Incorporation were adopted

These Articles of Incorporation were adopted

amendment of Articles ofon August 23, 1989.

on August 23, 1989.

Incorporation.

(Omitting)(Omitting)The 28th amendment was made on June 12,

The 28th amendment was made on June 12,

2019.

2019.

The 29th amendment was made on June 19,
2020.

~36~

Attachment VI
TRANSCEND INFORMATION INC.
COMPARISON TABLE FOR THE “PROCEDURES FOR ACQUISITION AND DISPOSAL OF ASSETS”
Proposed Amendment

Currently in EffectExplanation

Article 5：Limitation of investment amount

Article 5：Limitation of investment amountTo increase the limit

The acquisition of real estate and right-of-use

The acquisition of real estate and right-of-use assets

ofinvestment

assets thereof by this Company for non-operating

thereof by this Company for non-operating purpose

amountandpurpose should not exceed 30% of this Company's

should not exceed 30% of this Company's net worth.

flexibility of using

net worth. The total amount of security investments

The total amount of security investments by thiscompany fund.

by this Company and the amount of investment by

Company should not exceed 20% of this Company's

this Company in each respective security should

net worth. The amount of investment by thisnot exceed 30% of this Company's net worth.

Company in each respective security should not

addexceed 10% of this Company's net worth.

Article 6：Authority to approve

Article 6：Authority to approve

1.In acquiring and disposing of assets, except in

1.In acquiring and disposing of assets, except intrading of domestic government bonds, bonds

trading of domestic government bonds, bonds

approve and add

under repurchase and resale agreements, orunder repurchase and resale agreements, or

flexibility

subscription or redemption of money market

subscription or redemption of money market funds

using

funds issued by domestic securities investment

issued by domestic securities investment trust

fund.

trust enterprises, which should be approved byenterprises, which should be approved by financial

financial supervisor, the Company shall submit

supervisor,

the transaction to general manager or Chairmantransaction to general manager or Chairman forfor approval.

approval.

theCompany

1.

shallsubmitthe

2.Following transactions shall be submitted to

2.Following transactions shall be submitted to Audit

Audit Committee and Board of directors forCommittee and Board of directors for approval:

approval:(1) In acquiring or disposing of real property and(1) In acquiring or disposing of real property andright-of-use assets thereof from or to a related
party.

right-of-use assets thereof from or to a related
party.
(2) In acquiring assets and right-of-use assets(2) In acquiring assets other than real property

thereof other than real property from or to aand right-of-use assets from or to a related

related party and the transaction amount reaches

party and the transaction amount reaches 20

20 percent or more of paid-in capital or NT$300

percent or more of paid-in capital or NT$300

million or more.

million or more.

(3) In acquiring assets from or to a non-related(3) In acquiring assets from or to a non-related

party and the transaction amount reaches 20

party and the transaction amount reaches 20

percent or more of paid-in capital or NT$300

percent or more of paid-in capital.

million or more.

~37~

To loosen theauthority

2.

to

of

company

Modify wording.

Attachment VII
TRANSCEND INFORMATION INC.
COMPARISON TABLE FOR THE “PROCEDURES FOR LENDING FUNDS TO OTHER PARTIES”
Proposed Amendment

Currently in EffectExplanation

Article 3：Total amount of funds lending and

Article 3：Total amount of funds lending andModify wording to comply

limits for individual borrower

limits for individual borrower

with “Regulations Governing1.(Omitting)1.(Omitting)

Loaning of Funds and Making

2.(Omitting)2.(Omitting)of Endorsements/Guarantees

3.The restriction in paragraph 1 and paragraph 2

3.The restriction in paragraph 1 and paragraph 2

by Public Companies”.

shall not apply to inter-company loans ofshall not apply to inter-company loans offunds between overseas companies in whichfunds between overseas companies in which

the public company holds, directly or

the public company holds, directly or

indirectly, 100% of the voting shares, nor toindirectly, 100% of the voting shares. The

loans of fund to the public company by any

total amount of the Company’s loans of funds

overseas company in which the public

to others may not exceed 40 percent of thecompany holds, directly or indirectly, 100%Company’s net worth. The total amount forof the voting shares. The total amount of thelending to a company shall not exceed 20

Company’s loans of funds to others may not

percent of the Company’s net worth. The

exceed 40 percent of the Company’s net

duration of loan may not exceed 5 years.

worth. The total amount for lending to acompany shall not exceed 20 percent of theCompany’s net worth. The duration of loan
may not exceed 5 years.
Article 4：Loans of funds to Others

Article 4：Loans of funds to Others

In accordance with the current

1. (Omitting)

1. (Omitting)company structure, modify

2.Credit check: The borrower shall provide

2.Credit check: The borrower shall provide“Financial

Department”

necessary company and financial informationnecessary company and financial information“Financeandand submit proposal to apply for financing inand submit proposal to apply for financing in

Division”.

hard copies. (except for affiliated companies

hard copies. (except for affiliated companiesof the Company)of the Company)

After the Company accepts the application,

After the Company accepts the application,

the Finance and Accounting Division shallthe Financial Department shall investigate,

investigate, evaluate and prepare report on theevaluate and prepare report on the applicant’s

applicant’s business operations, financial

business

operations,status, solvency, credit, profitability and loan

solvency,

credit,profitability

andpurpose of the loan. The Finance andpurposeofloan.

Financial

Accounting Division conducts detailed review

Department conducts detailed review and theand the evaluation items should include atevaluation items should include at least:

~38~

the

financialThe

status,loan

toAccountingProposed Amendment

Currently in Effectleast:

Explanation(1) The necessity of and reasonableness of(1) The necessity of and reasonableness ofextending loans to others.

extending loans to others.
(2) Evaluate whether the loan is a must based(2) Evaluate whether the loan is a must basedon the financial status of the borrower.

on the financial status of the borrower.

(3) Whether the amount of accumulated loan

(3) Whether the amount of accumulated loan(4) Impact on the Company’s businessis within the limit.
(4) Impact on the Company’s business
operations,financialis within the limit.

condition,

andshareholders’ equity.
(5) Whether collateral must be obtained andappraisal of the value thereof.
(6) Provide record of borrower’s credit status
and risk assessment.

operations,financialcondition,

andshareholders’ equity.
(5) Whether collateral must be obtained andappraisal of the value thereof.
(6) Provide record of borrower’s credit status
and risk assessment.
(omitting)(omitting)

Article 5：Security

Article 5：Security

In accordance with the current

1. Except for land, collateral should be covered

1. Except for land, collateral should be covered

company structure, modify

by fire insurance or full insurance if it is aby fire insurance or full insurance if it is a

“Financial

Department”

vehicle. The insurance amount should be atvehicle. The insurance amount should be at“Financeandleast the appraisal value of the collateral. The

least the appraisal value of the collateral. The

Division”.

beneficiary should be the Company on thebeneficiary should be the Company on theinsurance policy.

insurance policy.

2. The company should consider obtaining the

2. The company should consider obtaining thesame amount of guarantee promissory notesame amount of guarantee promissory notewhen making loans to others. If necessary, thewhen making loans to others. If necessary, thecompany may also set mortgage on personal

company may also set mortgage on personal

property or real property. The board ofproperty or real property. The board of

directors may refer to the credit report

directors may refer to the credit report

prepared by the Finance and Accounting

prepared by the Financial Department if theDivision if the debtor provides considerable

debtor provides considerable personal or

personal or company credit as guarantee

company credit as guarantee instead of

instead of collateral. If the company is thecollateral. If the company is the guarantor,

guarantor, whether the company has related

whether the company has related regulations

regulations in its articles of incorporationin its articles of incorporation should beshould be checked.

checked.

(omitting)(omitting)

~39~

to

AccountingProposed Amendment

Currently in EffectExplanation

Article 6：Authority to approve

Article 6：Authority to approve

1.When making loans to others, the matter shall

1.When making loans to others, the matter shallcurrent

company

be reviewed by the Finance and Accounting

be reviewed by the Financial Department firststructure,modifyDivision first and be proposed to theand be proposed to the general manager. After“Financial

Department”

Chairman or the general manager. Afterobtaining approval from the general manager,toobtaining approval from the Chairman or thethe proposal should be submitted for a

Accounting Division”.

general manager, the proposal should be

resolution by the Board of Directors. The

submitted for a resolution by the Board ofCompany shall take into full consideration the

Directors. The Company shall take into fullopinionconsideration the opinion of each independent

Independent director’s opinions specificallydirector.

opinions

expressing assent or dissent and the reasonsspecifically expressing assent or dissent andfor dissent shall be recorded in the minutes of

the reasons for dissent shall be recorded in thethe Board of Directors meeting.

Independent

director’s

of

each

independent1.

“Finance

andModify wording.

director.

minutes of the Board of Directors meeting.

2.Loans of funds between the public company

2.Loans of funds between the public company

and its parent company or subsidiaries, orand its parent company or subsidiaries, or

between its subsidiaries, shall be submitted

between its subsidiaries, shall be submitted

for a resolution by the Board of Directors

for a resolution by the Board of Directors

pursuant to the preceding paragraph, and the

pursuant to the preceding paragraph, and the

Chairman may be authorized, for a specific

Chairman may be authorized, for a specificborrowing counterparty, within a certain

borrowing counterparty, within a certain

monetary limit resolved by the Board ofmonetary limit resolved by the Board of

Directors, and within a period not to exceed

Directors, and within a period not to exceed

one year, to give loans in installments or to

one year, to give loans in installments or to

make a revolving credit line available for the

make a revolving credit line available for thecounterparty to draw down.

counterparty to draw down.

2.

In accordance with the(omitting)(omitting)

Article 8：Announce and Report

Article 8：Announce and Report

Modify wording to comply(omitting)(omitting)with “Regulations Governing

3. “Date of occurrence” in these Regulations

3. “Date of occurrence” in these Regulations

Loaning of Funds and Making

means the date of contract signing, date ofmeans the date of contract signing, date ofof Endorsements/Guarantees

payment, dates of Boards of Directors

payment, dates of Boards of Directors

by Public Companies”.

resolutions, or other date that can confirm theresolutions, or other date that can confirm thecounterparty and monetary amount of the loantransaction party and transaction amount,of funds, whichever date is earlier.

whichever date is earlier.

4. The public company shall announce and4. The public company shall announce andreport on behalf of any subsidiary thereof thatreport on behalf of any subsidiary thereof that~40~

Proposed Amendment

Currently in Effectis not a public company of the Republic of

is not a public company of the Republic ofChina any matters that such subsidiary is

China any matters that such subsidiary is

required to announce and report pursuant torequired to announce and report pursuant topreceding paragraph.

preceding paragraph.

Explanation

Section 4：Effectiveness and amendment

Section 4：Effectiveness and amendment

Modify wording to comply

The Company intending to loan funds to others

The Company intending to loan funds to otherswith “Regulations Governing

shall formulated its operation procedures forshall formulated its operation procedures for

Loaning of Funds and Making

leading funds to other parties in complianceleading funds to other parties in complianceof Endorsements/Guarantees

with the regulations, and, after passage by thewith the regulations, and, after passage by theby Public Companies” andAudit Committee and the Board of Directors,

Audit Committee and the Board of Directors,“Securities

submit the Procedures for approval by thesubmit the Procedures for approval by the

Act”.

Shareholder’s meeting. If any director expresses

Shareholder’s meeting. If any director expresses

dissent and it is contained in the minutes or adissent and it is contained in the minutes or awritten statement, the Company shall submit thewritten statement, the Company shall submit thedissenting opinion for discussion by the

dissenting opinion for discussion by the

Shareholder’s meeting. The same shall apply to

Shareholder’s meeting. The same shall apply to

any amendment to the Procedures.

any amendment to the Procedures.

When the Company formulates or amends the

When the Company formulates or amends theProcedures, the case shall be approved by half

Procedures, the case shall be submitted to theor more of all Audit Committee members before

Board of Directors for a resolution pursuant tosubmitting to the Board of Directors for a

the preceding paragraph. The Company shallresolution.

take into full consideration the opinion of each

If approval of half or more of all Audit

independent director. Independent director’sCommittee members is not obtained, theopinions specifically expressing assent orProcedures may be implemented if approved bydissent and the reasons for dissent shall be

two-thirds or more of all directors, and therecorded in the minutes of the Board ofresolution of the Audit Committee shall be

Directors meeting.

recorded in the minutes of the Board of
Directors meeting.

~41~

and

Exchange

Attachment VIII
TRANSCEND INFORMATION INC.
COMPARISON TABLE FOR THE “PROCEDURES FOR ENDORSEMENTS AND GUARANTEES”
Proposed Amendment

Currently in Effect

Article 6：Procedures
1.The

entitywho

Explanation

Article 6：Procedures
wants

to

apply

for

1.The

entitywho

In accordance with the current
wants

to

apply

for

company structure, modify

endorsement/guarantee shall provide detailed

endorsement/guarantee shall provide detailed“Financial

Department”

financial information to the Finance andfinancial

Financial“FinanceandAccounting Division for credit check and risk

Department

andDivision”.

assessment. The Finance and Accounting

assessment. The Financial Department shall

Division shall prepare a credit report after

prepare a credit report after investigation. The

investigation. The report shall be submitted toreport shall be submitted to the general

the general manager and Chairman for

manager

approval. Collateral shall be collected if

Collateral shall be collected if necessary.

necessary.

information
for

and

to

creditthecheck

Chairman

for

risk

approval.

2.The Financial Department shall conduct

2.The Finance and Accounting Division shalldetailed review and the evaluation items

conduct detailed review and the evaluation

should include:

items should include:(1) The necessity of and reasonableness of(1) The necessity of and reasonableness ofendorsement/guarantee.
(2)

Evaluate

whetherendorsement/guarantee.
(2)

the

endorsement/

guarantee is a must based on the financial
status of the entity.

Evaluate

whethertheendorsement/

guarantee is a must based on the financial
status of the entity.
(3) Whether the amount of accumulated(3) Whether the amount of accumulatedendorsement/ guarantee is within the limit.

endorsement/ guarantee is within the limit.

(4) In the event that an endorsement/guarantee(4) In the event that an endorsement/guarantee

is made due to needs arising out ofis made due to needs arising out ofbusiness transaction, the Company should

business transaction, the Company should

check whether the amount of the businesscheck whether the amount of the business

transaction between two parties and thetransaction between two parties and theaccumulated

accumulated

amount is within the limit.

endorsement/guarantee(5) Impact on the Company’s businessamount is within the limit.
(5) Impact on the Company’s business
operations,financialcondition,

andshareholders’ equity.
(6) Whether collateral must be obtained andappraisal of the value thereof.
(7) Provide record of the entity’s credit status
and risk assessment.

endorsement/guarantee

operations,financialcondition,

andshareholders’ equity.
(6) Whether collateral must be obtained andappraisal of the value thereof.
(7) Provide record of the entity’s credit status
and risk assessment.
3.The company shall prepare a memorandum

~42~

to

AccountingProposed Amendment

Currently in Effect

3.The company shall prepare a memorandumbook for its endorsement/guarantee activities

book for its endorsement/guarantee activities

and record in detail the following information

and record in detail the following information

for the record: the entity for which thefor the record: the entity for which theendorsement/guarantee is made, the amount,endorsement/guarantee is made, the amount,the date of passage by the board of directors

the date of passage by the board of directors

or of authorization by the Chairman, the dateor of authorization by the Chairman, the datethe endorsement/guarantee is made, and thethe endorsement/guarantee is made, and thematters to be carefully evaluated undermatters to be carefully evaluated underpreceding paragraph.

preceding paragraph.

4.The Financial Department shall evaluate or

4.The Finance and Accounting Division shallrecordthecontingent

evaluate or record the contingent loss forendorsements/guarantees,

endorsements/guarantees,

adequately

adequately

disclose

and

shall

informationonendorsements/guarantees

in

its

financialreports

certifiedpublicandprovidedisclose

procedures.

shallinformationonfinancialreports

certifiedpublicandprovideaccountants with relevant information forprocedures.

audit

and

its

implementationnecessaryforin

implementation

of

loss

endorsements/guarantees

accountants with relevant information forofnecessaryaudit

5.(Omitting)5.(Omitting)

6.For circumstances in which an entity for

6.For circumstances in which an entity for
which

Explanation

theCompanytheCompany

makes

any

any

endorsement/guarantee is a subsidiary whose

endorsement/guarantee is a subsidiary whose

net worth is lower than half of its paid-in

net worth is lower than half of its paid-in

capital,capital, the Finance and Accounting Division

conduct risk assessment and propose control

shall conduct risk assessment and propose

plan to the Audit Committee periodically. In

controlCommittee

the case of a subsidiary shares having no parperiodically. In the case of a subsidiary sharesvalue or a par value other than NT$10, thehaving no par value or a par value other than

paid-in capital referred to in the preceding

NT$10, the paid-in capital referred to in thesentence shall be the sum of share capital plus

preceding sentence shall be the sum of sharepaid-in capital in excess of par.

plan

to

the

makes

which

Audit

the

Financial

Department

shallcapital plus paid-in capital in excess of par.

Article 7 ： Cancellation of endorsement andArticle 7 ： Cancellation of endorsement andIn accordance with the current

guarantee

guarantee

company structure, modify

1.If the relevant documents or notes need to be

1.If the relevant documents or notes need to be“Financial

Department”

cancelled due to settlement or renewal, thecancelled due to settlement or renewal, the“Finance

andentityentityDivision”.

for

which

the

Company

makes

for

which

~43~

the

Company

makestoAccountingProposed Amendment

Currently in EffectExplanation

endorsement/guarantee shall send the originalendorsement/guarantee shall send the original

documents or notes stamped with “Cancel”

documents or notes stamped with “Cancel”

seal to the Finance and Accounting Division.

seal to the Financial Department. The record

The record shall be kept for future reference.

shall be kept for future reference.

2.The Finance and Accounting Division shall

2.The Financial Department shall record therecord the cancellation in the memorandum

cancellation in the memorandum book at any

book at any time to reduce the amount oftime

endorsement/guarantee.

endorsement/guarantee.

toreducetheamountofArticle 10：Announcement and Report

Article 10：Announcement and Report

Modify wording to comply

The Company shall announce and report the

The Company shall announce and report thewith “Regulations Governing

previousofpreviousof

Loaning of Funds and Making

itsendorsements/guarantees

itsof Endorsements/Guarantees

month'sendorsements/guaranteesbalanceofitselfandmonth'sbalanceofitselfandsubsidiaries by the 10th day of each month.

subsidiaries by the 10th day of each month.

The

The

Company

whosebalanceofCompany

whosebalanceofendorsements/guarantees reaches one of theendorsements/guarantees reaches one of thefollowing levels shall announce and report such

following levels shall announce and report such

event

event

withintwodays

commencing

immediately from the date of occurrence:
(1)

The

aggregate

two

days

commencing

immediately from the date of occurrence:balance

of

by

the

endorsements/guarantees

within(1)

The

aggregatebalance

of

by

the

endorsements/guarantees

Company and its subsidiaries reaches 50

Company and its subsidiaries reaches 50

percent or more of the Company's net

percent or more of the Company's net

worth as stated in its latest financial

worth as stated in its latest financial

statement.

statement.

(2) The balance of endorsements/guarantees(2) The balance of endorsements/guarantees

by the Company and its subsidiaries for aby the Company and its subsidiaries for asingle enterprise reaches 20 percent or

single enterprise reaches 20 percent ormore of the Company's net worth as statedmore of the Company's net worth as statedin its latest financial statement.

in its latest financial statement.

(3) The balance of endorsements/guarantees(3) The balance of endorsements/guarantees

by the Company and its subsidiaries for aby the Company and its subsidiaries for asingle enterprise reaches NT$10 millions

single enterprise reaches NT$10 millions

or more and the aggregate amount of allor more and the aggregate amount of allendorsements/guarantees

carrying

endorsements/guarantees for, amount ofvalue of equity method investment in, andlong-term investment, and balance ofbalance of loans to, such enterpriseloans to, such enterprise reaches 30

reaches 30 percent or more of thepercent or more of the Company’s net

for,

~44~

by Public Companies”.

Proposed Amendment

Currently in EffectExplanation

Company’s net worth as stated in its latest

worth as stated in its latest financial

financial statement.

statement.

(4)

The

amount

of

new

(4)

The

amountofnewendorsements/guarantees made by theendorsements/guarantees made by theCompany or its subsidiaries reaches

Company or its subsidiaries reaches

NT$30 million or more, and reaches 5

NT$30 million or more, and reaches 5

percent or more of the Company's net

percent or more of the Company's net

worth as stated in its latest financial

worth as stated in its latest financial

statement.

statement.

“Date of occurrence” in these Regulations“Date of occurrence” in these Regulations

means the date of contract signing, date ofmeans the date of contract signing, date ofpayment, dates of Boards of Directors

payment, dates of Boards of Directors

resolutions, or other date that can confirm theresolutions, or other date that can confirm thecounterparty

transaction party and transaction amount,,andmonetary

amountofendorsement/guarantee, whichever date iswhichever date is earlier.

earlier.

The public company shall announce and

The public company shall announce andreport on behalf of any subsidiary thereof thatreport on behalf of any subsidiary thereof thatis not a public company of the Republic of

is not a public company of the Republic ofChina any matters that such subsidiary is

China any matters that such subsidiary is

required to announce and report pursuant torequired to announce and report pursuant topreceding paragraph.

preceding paragraph.

Article 13：

Article 13：

Modify wording to comply
torenderwith “Regulations Governing

othersshall

Loaning of Funds and Making

formulated it operational procedures for lending

formulated it operational procedures for lendingof Endorsements/Guarantees

funds to other parties in compliance with thefunds to other parties in compliance with theby Public Companies” andregulations, and,regulations, and,“Securities

The

Company

intendingendorsement/guaranteetotorenderThe

othersshallendorsement/guarantee

after passage by the Audit

Company

intendingtoafter passage by the Audit

Committee and the Board of Directors, submit

Committee and the Board of Directors, submit

the

the

Proceduresfor

approvalbytheProceduresfor

approval

bytheShareholder’s meeting. If any director expresses

Shareholder’s meeting. If any director expresses

dissent and it is contained in the minutes or adissent and it is contained in the minutes or awritten statement, the company shall submit thewritten statement, the company shall submit thedissenting opinion for discussion by the

dissenting opinion for discussion by the

Shareholders' meeting. The same shall apply to

Shareholders' meeting. The same shall apply to

any amendment to the Procedures.

any amendment to the Procedures.

When the Company formulate or amend theWhen the Company formulate or amend the

~45~

Act”.

and

ExchangeProposed Amendment

Currently in Effect

Procedures, the case shall be approved by half

Procedures, the case shall be submitted to theor more of all Audit Committee members before

Board of Directors for a resolution pursuant tosubmitting to the Board of Directors for a

the preceding paragraph. The Company shallresolution.

take into full consideration the opinion of each

If approval of half or more of all Audit

independent director. Independent director’sCommittee members is not obtained, theopinions specifically expressing assent orProcedures may be implemented if approved bydissent and the reasons for dissent shall be

two-thirds or more of all directors, and therecorded in the minutes of the Board ofresolution of the Audit Committee shall be

Directors meeting.

recorded in the minutes of the Board of
Directors meeting.

~46~

Explanation

Attachment IX
TRANSCEND INFORMATION INC.
ISSUANCE RULES OF TRANSCEND 2020 RESTRICTED STOCK AWARDS PLAN
Article 1：Purpose
To attract and retain talents, motivate and engage employees for the best interest of the Company and its shareholders, so as toensure the alignment of the employees’ and shareholders’ interests. The following issuance rules of Transcend 2020 Restricted
Stock Awards Plan (“the Rules”) are stipulated in accordance with Item 9, Article 267 of the Company Act, and Exchange Act andthe Regulations Governing the Offering Issuance of Securities by Securities Issuers (“the Regulation”) released by the Financial
Supervisory Commission.

Article 2：Duration of issuanceWith one year following the day the approval notice from the competent authority is delivered, the Company may issue therestricted stock awards once or multiple times. The actual date of issuance and related matters shall be determined by the Chairmanof the Company (“the Chairman”) as authorized by the Company’s Board of Directors (“the Board of Directors”).

Article 3：Qualification requirements for employees
1.

Full-time employees of the Company and full-time employees of domestic or foreign controlled or affiliatedcompanies who are already employed on the date that the restricted stock awards are awarded.

2.

The number of granted shares shall be determined by seniority, position, performance, overall contribution andother meaningful factors in management. The results of shares distribution shall be reviewed by the Chairman andobtain approval in the Board of Directors meeting. However, for employees who are managers, the awards of suchshares are subject to approval by the Compensation Committee.

3.

The sum of the cumulative number of share granted to each employee by share distribution warrant in accordancewith Article 56-1-1 of the Regulations and by restricted stock awards shall not exceed 0.3% of the total outstanding
shares of the Company. The aforesaid total amount of shares plus the share subscription warrant the Company
grants to each to each employee shall not exceed 1% of the total outstanding shares of the Company. However, withspecial approval from the central competent authority of the relevant industry, the total number of employee stock
warrants and restricted stock awards obtained by a single employee may be exempted from the above-mentioned
restriction. If the laws and regulations are revised in the future, the Company may apply the revised laws andregulations.

Article 4：Total amount of issuance
The total number of shares issued by the Company under this plan shall be 2,000,000 common shares, each share having a par valueof NT$10, for a total amount of NT$20,000,000.

Article 5：Terms and conditions for issuance1.

Issue price: The current issue is gratuitous.
~47~

2.

Class of issued shares: the Company’s newly issued common shares.

3.

Vesting conditions:i.

Employee’s continuous employment with the Company on each vesting date is required. Employees mustachieve both of personal performance target and the Company’s operation objectives during the vesting period
to be qualified to receive the vested shares. The proportions of the vesting shares to be granted each year are as
below:
Continuous employment with the Company one year after the granted date – 30%
Continuous employment with the Company two years after the granted date – 30%
Continuous employment with the Company three years after the granted date – 40%
The share calculation shall be rounded to the nearest thousand shares.

ii.

The personal performance target is set by the company and respective agreements of the employees and isbased on the rating result for the year preceding the vesting dates.

iii.

The Company’s operation objectives are based on the sales revenue and gross margin shown on the financial
statements certified by a certified public accountant and the internal performance assessment agreed by theCompany and the employees.

iv.

The Company shall revoke and cancel portions of the unvested shares of restricted stock awards granted to theemployee if the employee voluntarily resigns, discharges, been laid-off, retires, or transfers to an affiliatedcompany within three years after the granted date.

v.

The company shall revoke and cancel portions of the unvested shares of restricted stock awards granted to theemployee if the employee violates the Company’s employment agreement, employee handbook, or otherregulations set by the Company.

vi.

In the event of termination of employment due to disabilities or death resulted from occupational accidents of
employee or general death of employee, the unvested portion of restricted stock awards shall be handle asfollows.
A.

Termination of employment due to disabilities as a result of occupational accidents of employee: Any
unvested restricted stock awards shall immediately vest upon such termination date.

B.

Termination of employment due to death as a result of occupational accidents of employee:Anyunvested restricted stock awards shall immediately vest upon the date of death. The legal heirs of theemployee shall complete all required legal procedures and provide relevant supporting documentation
before being granted the shares to be inherited or interest disposed of.
C.

Termination of employment due to general death of employee: Any unvested restricted stock awards
shall be regarded as unvested upon the date of death. The Company will redeem the issued restricted
stock awards and cancel the full number of share in accordance with the terms of the issuance rules set
by the Company.

vii.

Leave of absence without pay (approved by the Company): Employee who has applied for leave of absence
without pay due to major personal illness, major family accidents, or study abroad according to thegovernment laws and regulations is considered as not meeting the requirements of vesting conditions. The
vesting period shall be postponed in accordance with the period of absence.

viii.

The Company will redeem the issued restricted stock awards and cancel the shares when the vesting
conditions are not met.
~48~

ix.

The rights that are subject to restriction until vesting conditions are met:A.

Before the vesting conditions are met, except for inheritance, employees may not sell, pledge, transfer,
give to another person, create any encumbrance on, or otherwise dispose of, the restricted stock awards.

B.

Before the vesting conditions are met, rights of the restricted stock awards to attend the shareholder’smeeting, submit proposals, speak and vote at the meeting shall be performed in accordance with thecustodian agreement. The Company shall withdraw cash and cancel the shares if there are cash dividend,
stock dividend, and interest rights to receive capital reserve be allocated to unvested shares of restricted
stock awards. After employee meets the vesting conditions, the company shall allocate the dividend
from the security trust account to the employee’s personal security and bank account.

C.

Before the vesting conditions are met, except the aforementioned rights, the other rights of restricted
stock awards, including but not limited to dividend, interest rights to receive capital reserve, employee
stock options at cash capital increase, shall be the same as the Company’s common shares issued.

x.

Other important stipulation: The restricted stock awards shall be deposited in a security trust account after theissuance. The management of the restricted stock awards in the security trust account shall be performed by
the Company or the person appointed on behalf of the employees.

Article 6：Execution and confidentiality of the agreement
1.

The employees are deemed to have been granted the restricted stock awards only when they have entered into the“agreement of receiving restricted stock awards” upon notification by the responsible unit of the Company andcomplete all the required process for trust custody service. If the employee fails to execute the agreement, the rights
to the restricted stock awards by the employee is deemed to have forfeited.

2.

Anyone receiving restricted stock awards or other rights derived from in accordance with the Rules shall comply
with the Rules and the “agreement of receiving restricted stock awards”. The employee shall keep confidential after
signing the agreement for the related contents of the Rules and the rights under the agreement. The company shallhave the right to revoke and cancel any and all portions of the unvested shares of restricted stock awards in theevent that the employee violates the Rules and agreement.

Article 7：Tax
Any tax incurred from granting the restricted stock awards under the Plan shall be governed by the applicable R.O.C laws andregulations.

Article 8：Implementation procedures
The relevant procedures and detailed operation timeline will be informed to granted employees by the responsible unit of theCompany.

Article 9：Implementation and revision
1.

The Rules shall obtain approval by the majority votes in a meeting of Board of Directors which two-thirds or more
directors are present, and then executed after effective registration with the competent authority. If modifications of
the issuance rules are required due to amendment to the laws and regulations or instructions from the competentauthority, the Chairman is authorized to make any necessary amendment to the Rules. The amendment to the Rules~49~

shall be proposed to be reviewed and approved by the Board of Directors for ratification and issuance.

2.

For the matters not stipulated in the Rules, relevant applicable laws and regulations shall be referred.

~50~

APPENDIX I
TRANSCEND INFORMATION INC.
RULES AND PROCEDURES OF SHAREHOLDERS’ MEETING
Article 1：Except for the regulation, regular Shareholders' Meeting of the Company (the "Meeting") shall be conducted inaccordance with these Rules and Procedures.

Article 2：An attendance book shall be prepared for signing in of the attended shareholders in the Shareholders' Meeting, or attended
shareholders shall submit the attendance card for the purpose of signing in. The number of shares represented by attended
shareholders shall be calculated in accordance with the attendance book signing by the shareholders and the attendancecards submitted by the shareholders.

Article 3：The attendance and voting of Shareholders' Meeting shall be calculated based on the shares.

Article 4：The Meeting shall be held at the head office of the Company or at any other appropriate place that is convenient for theshareholders to attend. The time to start the Meeting shall not be earlier than 9:00 a.m. or later than 3:00 p.m.

Article 5：The Chairman of the Board of Directors shall be the chairman presiding at the Meeting in the case that the Meeting isconvened by the Board of Directors. If, for any reason, the Chairman of the Board of Directors cannot preside at the
Meeting, the Vice Chairman of the Board of Directors shall preside at the Meeting. If, no Vice Chairman or for any
reason, the Vice Chairman of the Board of Directors cannot preside at the Meeting, the chairman may designate one
managing director to do so on the chairman's behalf. If there is no managing director, the chairman may designate one
director to preside at the Meeting. If the chairman does not designate a representative, the managing directors or directors
shall mutually select a chair from among themselves..
If the Meeting is convened by any other person entitled to convene the Meeting, such person shall be the chairman topreside at the Meeting. When two or more parties meet this description, they shall mutually select a chair from among
themselves.

Article 6：The Company may appoint designated counsel, CPA or other related persons to attend the Meeting. Persons handlingaffairs of the Meeting shall wear identification cards or badges.

Article 7： The process of the Meeting shall be tape-recorded or videotaped and these tapes shall be preserved for at least one year.

Article 8：Chairman shall call the Meeting to order at the time scheduled for the Meeting. If the number of shares represented by theshareholders present at the Meeting has not yet constituted the quorum at the time scheduled for the Meeting, thechairman may postpone the time for the Meeting. The postponements shall be limited to two times at the most andMeeting shall not be postponed for longer than one hour in the aggregate. If after two postponements no quorum can yet
be constituted but the shareholders present at the Meeting represent more than one - third of the total outstanding shares,
tentative resolutions may be made in accordance with Section 1 of Article 175 of the Company Law of the Republic of~51~

China.
If during the process of the Meeting the number of outstanding shares represented by the shareholders present becomes
sufficient to constitute the quorum, the chairman may submit the tentative resolutions to the Meeting for approval inaccordance with Article 174 of the Company Law of the Republic of China.

Article 9：The agenda of the Meeting shall be set by the Board of Directors if the Meeting is convened by the Board of Directors.
Unless otherwise resolved at the Meeting, the Meeting shall proceed in accordance with the agenda.
The above provision applies mutatis mutandis to cases where the Meeting is convened by any person, other than the
Board of Directors, entitled to convene such Meeting.
Unless otherwise resolved at the Meeting, the chairman cannot announce adjournment of the Meeting before all the
discussion items (including special motions) listed in the agenda are resolved.
The shareholders cannot designate any other person as chairman and continue the Meeting in the same or other place after
the Meeting is adjourned. However, in the event that the Chairman adjourns the Meeting in violation of these Rules andProcedures, the shareholders may designate, by a majority of votes represented by attended shareholders, one person as
chairman to continue the Meeting.

Article 10：When a shareholder present at the Meeting wishes to speak, a Speech Note should be filled out with summary of the
speech, the shareholder's number (or the number of Attendance Card) and the name of the shareholder. The sequence ofspeeches by shareholders should be decided by the chairman.
If any shareholder present at the Meeting submits a Speech Note but does not speak, no speech should be deemed tohave been made by such shareholder. In case the contents of the speech of a shareholder are inconsistent with thecontents of the Speech Note, the contents of actual speech shall prevail.
Unless otherwise permitted by the chairman and the shareholder in speaking, no shareholder shall interrupt the speechesof the other shareholders, otherwise the chairman shall stop such interruption.

Article 11：Unless otherwise permitted by the chairman, each shareholder shall not, for each discussion item, speak more than twotimes (each time not exceeding 5 minutes). In case the speech of any shareholder violates the above provision or
exceeds the scope of the discussion item, the chairman may stop the speech of such shareholder.

Article 12：Any legal entity designated as proxy by a shareholder(s) to be present at the Meeting may appoint only one
representative to attend the Meeting.
If a corporate shareholder designates two or more representatives to attend the Meeting, only one representative canspeak for each discussion item.

Article 13：After the speech of a shareholder, the chairman may respond himself/herself or appoint an appropriate person to respond.

Article 14：The chairman may announce to end the discussion of any resolution and go into voting if the Chairman deems it
appropriate.

~52~Article 15：The person(s) to check and the person(s) to record the ballots during a vote by casting ballots shall be appointed by thechairman. The person(s) checking the ballots shall be a shareholder(s).
The result of voting shall be announced at the Meeting and placed on record.

Article 16：During the Meeting, the chairman may, at his discretion, set time for intermission.

Article 17：Except otherwise specified in the Company Law or the Articles of Incorporation of the Company, a resolution shall be
adopted by a majority of the votes represented by the shareholders present at the Meeting. The resolution shall bedeemed adopted and shall have the same effect as if it was voted by casting ballots if no objection is voiced after
solicitation by the chairman.

Article 18：If there is amendment to or substitute for a discussion item, the chairman shall decide the sequence of voting for suchdiscussion item, the amendment or the substitute. If any one of them has been adopted, the others shall be deemedvetoed and no further voting is necessary.

Article 19：The chairman may conduct the disciplinary officers or the security guard to assist in keeping order of the Meeting place.
Such disciplinary officers or security guards shall wear badges marked "Disciplinary Officers" for identification
purpose.

Article 20：These Rules and Procedures shall be effective from the date it is approved by the Shareholders' Meeting. The same
applies in case of revision.

~53~

APPENDIX II
TRANSCEND INFORMATION INC.
ARTICLES OF INCORPORATION (Before amendment)
Section I - General Provisions
Article 1：The Corporation shall be incorporated, as a company limited by shares, under the Company Law of the Republic of China,
and its name shall be 創見資訊股份有限公司 in the Chinese language, and Transcend Information, Inc. in the English
language.

Article 2：The scope of business of the Corporation shall be as follows:
1.

CC01110 Computers and Computing Peripheral Equipments Manufacturing2.

CC01120 Data Storage Media Manufacturing and Duplicating

3.

F113050 Wholesale of Computing and Business Machinery Equipment

4.

F118010 Wholesale of Computer Software

5.

F119010 Wholesale of Electronic Materials

6.

F401010 International Trade

7.

I301010 Software Design Services

8.

CC01080 Electronic Parts and Components Manufacturing

9.

F401021 Restrained Telecom Radio Frequency Equipments and Materials Import

10. CC01101 Restrained Telecom Radio Frequency Equipments and Materials Manufacturing
11. ZZ99999 In addition to licensing business, business law may prohibit or restrict non-business.

Article 3：The Corporation shall have its head office in Taipei City, Taiwan, Republic of China, and shall be free, upon the
resolutions of Board of Directors to set up branch offices in Republic of China and abroad wherever and whenever the
Corporation deems it necessary or advisable to carry out any or all of its activities.
Article 4：The total amount of the Corporation’s reinvestment shall not be subject to the restriction of not more than forty percent of
the Corporation’s paid-up capital as provided in the Company Law but shall not be more than the Corporation’s paid-up
capital. The Corporation may provide endorsement and guarantee and act as a guarantor. Any matters regarding thereinvestment shall be resolved in accordance with the resolutions of the Board of Directors.

Article 5：Public announcements of the Corporation shall be made in accordance with the Article 28 of the Company Act.

Section II - Capital Stock
Article 6：The total capital stock of the Corporation shall be in the amount of 5,000,000,000 New Taiwan Dollars, divided into
500,000,000 shares, at ten New Taiwan Dollars each. The Board of directors is authorized to issue the shares in separate
installments as required. A total of 25,000,000 shares among the above total capital stock should be reserved for issuing
employee stock options. The Board of directors is authorized to issue employee stock options from time to time.
~54~

Article 6-1：If the Corporation issue employee stock options on the exercise price under the market price, it shall be issued after the
resolution of the Shareholders’ meetings in accordance with relevant rules and regulations of the Republic of China.
Employees, including the employees of parents or subsidiaries of the company meeting certain specific requirements, areentitled to receive employee stock options. Such specific requirements shall be prescribed by the board of directors.

Article 6-2：The Corporation may issue shares without printing share certificate(s), but shares issued shall be registered with asecurities depository enterprise.
Article 7：All stock transaction conducted by shareholders of the Corporation shall follow the “Guidelines for Stock Operations for
Public Companies”.

Article 8：Registration for transfer of shares shall be suspended 60 days immediately before the date of regular meeting ofshareholders, and 30 days immediately before the date of any special meeting of shareholders, or within 5 days before theday on which dividend, bonus, or any other benefit is scheduled to be paid by the Corporation.

Section III - Shareholders’ meetings
Article 9：Shareholders’ meetings of the Corporation are of two types, namely: (1) regular meetings and (2) special meetings.
Regular meetings shall be convened at least once a year, and within 6 months after the close of each fiscal year.
Special meetings shall be convened in accordance with applicable laws and regulations whenever necessary. Written
notices shall be sent to all shareholders, at least 30 days in advance; and at least 15 days in advance, in case of special
meetings.

Article 10：If a shareholder is unable to attend a meeting, he/she may appoint a proxy to attend it by using the proxy form issued by
the Company and specifying the scope of proxy. Shareholder attendance by proxy shall be subject to the Company Law
and also to the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies
issued by the competent authority.

Article 11：Each share of stock shall be entitled to one vote.

Article 12：Except as provided in the Company Law of the Republic of China, shareholders’meetings may be held if attended byshareholders more than one half of the total issued and outstanding capital stock of the Corporation, and resolutions
shall be adopted at the meeting with the concurrence of a majority of the votes held by shareholders present at themeeting. Pursuant to Article 177-1 of the Company Act, the shareholders may vote via written form or an electronic
voting system, and the manner or voting shall be clearly stated in each meeting notice.

Section IV - Directors
Article 13：The Corporation shall have seven to eleven Directors. The Board of Directors is authorized to determine the number of~55~

Directors, to be elected by the shareholders meeting from among candidates with legal capacity. The term of office for
Directors shall be 3 years, and all Directors shall be eligible for re-election. Once the term of office is expired and it
can’t elect directors immediately, directors can extend and continue the performance of their duties until the election of
directors to take office. The aggregate shareholding percentages of the entire bodies of directors shall comply with theregulations prescribed by the securities supervisory authorities. The board of directors is authorized to resolve the rates
of directors’ remuneration based on the extent of their participation in the Company’s business operations or value of
their contribution, at a level consistent with general practices in the industry.
The company shall acquire liability insurance for all directors within their term of office, and report to Board at the next
board meeting.

Article 13-1：To harmonize with Article 14-2 of the Securities and Exchange Act, there shall be at least three independent directors
among the Company's directors. A candidate nomination system shall be adopted, and the shareholders meeting shallelect all directors (including independent directors) from among those listed on the slate of director candidates. The
relevant regulations of the competent securities authority shall be followed regarding the professional qualifications,shareholding, moonlighting restrictions, nomination and election, and other compliance requirements regarding
independent directors.

Article 13-2：In compliance with Articles 14-4 of the ROC Securities and Exchange Law, the Corporation shall establish an Audit
Committee, which shall consist of all independent directors. The Audit Committee shall exercise their functions inaccordance with the ROC Company Law, Securities and Exchange Law, other relevant regulations and the procedure ofcorporation.

Article 13-3：(Deleted)

Article 14：The board of directors shall consist of the directors of the company, and the chairman of the board of directors shall beelected from among the directors by a majority of directors in attendance at a meeting attended by at least two-thirds ofthe directors. The chairman of the board of directors shall represent the Company in external matters. The board of
director may set up any functional committee.

Article 15：Board of Directors Meetings shall be convened by the Chairman of the Board of Directors. Except as otherwise provided
in the Company Act, resolutions of the Board of Directors shall be adopted by a majority of the directors at a meeting
attended by a majority of the directors.

Article 15-1：Each director shall be given at least 7 days advance notice of the convening of a board of directors meeting of the
Corporation. In emergency circumstances, however, a meeting may be convinced on shorter notice. The meeting noticereferred to in the preceding paragraph shall specify the reasons for convening the meeting, and shall be made in writing,by e-mail, or by facsimile.

Article 16：The Chairman of the Board of Directors shall preside over all meetings of the Board of Directors. If the Chairman of theBoard of Directors is on leave or cannot exercise powers or perform duties for any reason, an acting chairman shall be~56~designated in accordance with Article 208 of the Company Act. Directors shall attend meetings of the board of directors
in person. If a director is unavailable to attend a meeting in person, the director may appoint a proxy for the given
meeting specifying the scope of the authorized powers to authorize another director to attend the meeting on the
director's behalf, provided that a director may represent only one other director at a meeting.

Article 17：Duties of the Board of the Directors are as follows:1.

To propose concerning appropriation of net profits or covering of losses.

2.

To propose increasing or decreasing capital3.

To establish or dissolve branches

4.

To approve budget and final reports

5.

Other duties in accordance with Company Act or given by the resolution of shareholders’meeting

Article 18：(Deleted)

Article 19：(Deleted)

Section V - Managerial Officers
Article 20：The Company may have managerial officers, whose appointment, dismissal, and remuneration shall be handled inaccordance with Article 29 of the Company Act.

Section VI - Accounting
Article 21：After the close of each fiscal year, the Board of Directors shall prepare 1.Business Report 2. Financial Statements and3.Proposal Concerning Appropriation of Net Profits or Covering of Losses, and submitted to the regular shareholders’meeting for acceptance:

Article 22：If the Company has earnings after the annual final accounting, it shall pay remuneration to employees at the minimum of
1% of the profit, and pay remuneration to directors at the maximum of 0.2% of the profit. However, the Company's
accumulated losses shall have been covered.
Employees’ remuneration could be paid by cash or stock. Employees shall mean the employees of parent or subsidiariesof the company meeting certain specific requirements. Such specific requirements shall be prescribed by the board of
directors.

Article 22-1：If the Company has earnings after the annual final accounting, it shall be allocated in the following order:
1. To pay taxes.
2. To cover accumulated losses, if any.
3. To appropriate 10% legal reserve unless the total legal reserve accumulated has already reached the amount of theCompany’s authorized capital.
4. To appropriate or reverse special reserve in accordance with the regulations~57~

5. To reserve certain amount, on the premise that there is no effect on the Company’s normal operations and no
violation of regulations, for maintaining stability of dividends.
6. For any remainder, adding on accumulated unappropriated retained earnings, the board of directors shall propose theearnings distribution proposal and shall handle in accordance with the following provision: the board of directors is
authorized to distribute dividends and bonuses or legal reserve and capital reserve in whole or in part which be paidin cash after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by
two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted tothe shareholders’ meeting in accordance with Section 5 of Article 240 and Article 241 of the Company Act. In caseof the dividends and bonuses or legal reserve and capital reserve in whole or in part be distributed in the form of
new shares to be issued by the company, shall be proposed to the shareholders' meeting for review and approval by aresolution in accordance with Article 240 of the Company Act.
Regarding the special reserve under subparagraphs 4, the Company shall set aside special reserve, equal to the debit
balance which happens at the current year on other equity items (including unrealized loss on financial instrument,
cumulative translation adjustment, and unrecognized pension cost, which can be combined if there are unrealized gain.),from the current earnings after tax and unappropriated retained earnings prior year. If the debit balance is cumulative
before, the Company shall set aside special reserve not to distribute it from the unappropriated retained earnings prioryear. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the
distributable earnings.

Article 22-2：The Company distributes dividends taking into consideration the Company's economic environment and growth phases,
future demands of funds, long-term financial planning, and the cash flows that the stockholders desire. Cash dividends
shall account for at least 5% of the total dividend distributed.

Section VII - Supplementary Provisions
Article 23：In regard to all matters not provided for in these Articles of Incorporation, the Company Act of the Republic of China
shall govern.

Article 24：These Articles of Incorporation were adopted on August 23, 1989.
The first amendment was made on January 28, 1991.
The second amendment was made on May 25, 1992.
The third amendment was made on September 1, 1992.
The fourth amendment was made on July 30, 1994.
The fifth amendment was made on June 8, 1995.
The sixth amendment was made on July 8, 1997.
The seventh amendment was made on August 15, 1997.
The eighth amendment was made on September 12, 1997.
The ninth amendment was made on June 20, 1998.
The 10th amendment was made on September 15, 1998.
The 11th amendment was made on June 12, 1999.
~58~

The 12th amendment was made on April 15, 2000.
The 13th amendment was made on April 9, 2001.
The 14th amendment was made on June 10, 2002.
The 15th amendment was made on June 3, 2003.
The 16th amendment was made on June 11, 2004.
The 17th amendment was made on June 13, 2005.
The 18th amendment was made on June 14, 2006.
The 19th amendment was made on June 11, 2007.
The 20th amendment was made on June 13, 2008.
The 21th amendment was made on June 16, 2009.
The 22th amendment was made on June 17, 2010.
The 23th amendment was made on June 10, 2011.
The 24th amendment was made on January 5, 2012.
The 25th amendment was made on June 13, 2013.
The 26th amendment was made on June 12, 2014.
The 27th amendment was made on June 14, 2016.
The 28th amendment was made on June 12, 2019.

Transcend Information Inc.
Chairman: Shu, Chung-Won~59~

APPENDIX III
TRANSCEND INFORMATION INC.
SHAREHOLDINGS OF ALL DIRECTORS
1. Minimum Required Shareholding and Shareholding of all Directors:
Title
Minimum Required
Shareholding by all Directors
Directors

Current Shareholding (Shares)
16,721,795

16,000,000

Note 1: The period of Book closure is from April 21, 2020 to June 19, 2020.
Note 2: The Company has three independent directors, and the minimum required shareholding by all
Directors except for independent directors is downsized to 80% of the minimum required based on
Article 2, paragraph 2 of “Rules and Review Procedures for Director and Supervisor ShareOwnership Ratios at Public Companies”.
2. Company’s current Directors’ shareholding are as follows on April 21, 2020:
Title
Chairman

Name

Current Shareholding (Shares)

SHU,CHUNG-WON

9,990,453

Director

SHU,CHUNG-CHENG

6,244,098

Director

CHUI, LI-CHU

0

Director

HSU, CHIA-HSIAN

487,244

Director

WANG JEN-MING

0

Director

LI TSENG-HO

0

Independent Director

CHEN,YI-LIANG

0

Independent Director

CHEN,LO-MIN

0

Independent Director

WANG,YI-HSIN

0

Total

16,721,795~60~