Handbook
for the 2016 Annual Regular Shareholders’ Meeting

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.
Transcend Information, Inc.

Handbook for the 2016 Annual Regular Shareholders’ Meeting
TABLE OF CONTENTSMEETING PROCEDURE ........................................................................................................................ 1
MEETING AGENDA ................................................................................................................................ 2
DISCUSSION ITEMS .............................................................................................................................. 3
REPORT ITEMS ..................................................................................................................................... 4
PROPOSED ITEMS ................................................................................................................................ 5
OTHER BUSINESS AND SPECIAL MOTION ................................................................................... 7
ATTACHMENT
I：
II：
III：
IV：
V：

COMPARISON TABLE FOR THE “ARTICLES OF INCORPORATION” ................................ 8
BUSINESS REPORT.................................................................................................................... 15
AUDIT COMMITTEE’S REVIEW REPORT .......................................................................... 172015 SEPARATE FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’REPORT....................................................................................................................................... 182015 CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’REPORT........................................................................................................................................ 25

APPENDIXRULES AND PROCEDURES OF SHAREHOLDERS’ MEETING ............................................ 32
I：
ARTICLES OF INCORPORATION ............................................................................................. 35
II：
III： SHAREHOLDINGS OF ALL DIRECTORS................................................................................. 41

Transcend Information, Inc.
2016 ANNUAL REGULAR SHAREHOLDERS’ MEETING PROCEDURE

1. Call the Meeting to Order
2. Chairman's Remarks
3. Discussion Items
4. Report Items
5. Proposed Items
6. Special Motions
7. Meeting Adjourned- 1 -Transcend Information, Inc.
2016 ANNUAL REGULAR SHAREHOLDERS’ MEETING AGENDA(Translation)
Time: 9:00 a.m., Tuesday, June 14, 2016
Place: No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan (Transcend Information, Inc.)
Chairman's Remarks
I. Discussion Items(1) Amend the Articles of Incorporation.

II. Report Items(1) The operating result of 2015
(2) Audit Committee’s review report(3) 2015 remuneration report of employees and directors(4) The status of endorsements and guarantees

III. Proposed Items(1) Adoption of 2015 Business Report and Financial Statements(2) Adoption of the proposal for distribution of 2015 earnings

IV. Special Motions
V. Meeting Adjourned- 2 -I. Discussion Items

Subject: Amend the Articles of Incorporation. (Proposed by the Board of Directors)
Explanatory Notes:
a. To comply with Article 170 of the Company Act.
b. To comply with Article 235, 235-1 and 240 of the Company Act.
c. The date of the annual meeting of the shareholders is confirmed and the company hereby proposes
to amend Article 24 of the Articles of Incorporation.
d. Please refer to page 8-14 Attachment I, Comparison table for the Articles of Incorporation.
e. It is submitted for approval.
Resolution:- 3 -II. Report Items(1) The operating result of 2015
Explanatory Notes: For the operating result of 2015, please refer to page 15 to 16 for Attachment II.
(2) Audit Committee’s review report
Explanatory Notes: For Audit Committee’s review report, please refer to page 17 for Attachment III.
(3) 2015 remuneration report of employees and directors
Explanatory Notes: The remuneration of 2015 profit to employees would be NTD 35,703,755(distributed by cash); and that to directors would be NTD 5,040,000. The estimated remuneration toemployees is NTD 34,908,959 and the different amount should be NTD 794,796; the estimatedremuneration to directors is NTD 6,328,785 and the different amount should be NTD 1,288,785. The
difference will be recognized as expense in the statement of income in 2016.
(4) The status of endorsements and guarantees
Explanatory Notes: The Company provided a guarantee for Transcend Japan Inc. amounting to JPY
2,000,000 thousand, and the actual amount of guarantee draw down is JPY 1,500,000 thousand by theend of 2015. Pursuant to the Company’s “Procedures for Endorsement and Guarantee”, the limit ofguarantee was NTD 8,200,832 thousand (approximate JPY 28,400,000 thousand).

- 4 -III. Proposed Items(1) Adoption of 2015 Business Report and Financial Statements (Proposed by the Board of Directors)
Explanatory Notes:
a. The separate financial statement and consolidated financial statement of the Company for the yearof 2015 have been audited by independent auditors, Mr. Chun - Yao, Lin and Mr. Chien - Hung
Chou, of the Pricewaterhouse Coopers. The Business Report, Independent Auditors’ Report and
Financial Statements are hereby also attached. (Please refer to page 15 to 16 for Attachment II, andpage 18 to 31 for Attachment IV and V)
b. It is submitted for ratification.
Resolution:(2) Adoption of the proposal for distribution of 2015 earnings (Proposed by the Board of Directors)
Explanatory Notes:
a. For appropriations of 2015 earnings, the Company will distribute cash dividend of NTD
2,929,179,390 from the available retained earnings of 2015 after setting aside legal reserve andspecial reserve.
b. Please refer to page 6 for the chart of 2015 earnings distribution.
c. Cash dividends will be distributed proportionately according to shareholders’ shares ownershipregistered in the Common Stockholders’ Roster as of the date of record.
d. To avoid the change in the total amount of common shares outstanding resulting from buyback ofcompany shares, or transfer or cancellation of treasury stock, it is proposed that the Chairman of theBoard be authorized to adjust the cash to be distributed to each common share.
e. It is submitted for ratification.
Resolution:- 5 -Transcend Information, Inc.
The Chart of 2015 Earnings Distribution
For the year ended December 31, 2015
(Expressed in New Taiwan dollar)
Item

AmountUnappropriated retained earnings at beginning

4,770,705,070

Add: Adjustment on unappropriated earnings for2015(

2,282,862)

Adjusted unappropriated retained earnings

4,768,422,208

Add: Net income for 2015

3,221,902,194

Less: Legal reserve (10%)

322,190,219

Less: Special reserve

21,690,772

Retained earnings available for appropriation asof December 31, 2015

7,646,443,411

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

Chairman：Shu, Chung-Wan

Remarks

2,929,179,390

Cash dividend(NTD $6.8 per share)

4,717,264,021

General Manager：Shu, Chung-Cheng- 6 -Accounting Supervisor：Lu, Chih-Yuan

IV. Special Motions

V. Meeting Adjourned- 7 -Attachment I
TRANSCEND INFORMATION INC.
COMPARISON TABLE FOR THE “ARTICLES OF INCORPORATION”
Proposed Amendment

Currently in EffectExplanation

Section III - Shareholders’ meetings

Section III - Shareholders’ meetings

To comply with Article 170 of the

Article 9：

Article 9：Company Act.

Shareholders’ meetings of the

Shareholders’ meetings of the

Corporation are of two types, namely:

Corporation are of two types, namely:(1) regular meetings and (2) special(1) regular meetings and (2) special

meetings.

meetings.

Regular meetings shall be convened at

Regular meetings shall be convened

least once a year, and within 6 months

within 6 months after the close of each

after the close of each fiscal year.

fiscal year. Special meetings may beSpecial meetings shall be convened inconvened in accordance withaccordance with applicable laws andapplicable laws and regulations

regulations whenever necessary.

whenever necessary. Written notices

Written notices shall be sent to all

shall be sent to all shareholders for theshareholders, at least 30 days inconvening of shareholders’ meetings,

advance; and at least 15 days inat least 30 days in advance, in case ofadvance, in case of special meetings.

regular meetings; and at least 15 daysin advance, in case of special meetings.

Section VI - Accounting

Section VI - Accounting

For the trend for expenditure of

Article 22：

Article 22：

employee bonus shares, employees are

If the Company has earnings after the

If the Company has earnings after the

not the subject of earnings distribution.

annual final accounting, it shall pay

annual final accounting, it shall be

To comply with Article 235, 235-1 andremuneration to employees at theallocated in the following order:

240 of the Company Act, an fixedminimum of 1% of the profit, and pay

1. To pay taxes.

amount or ratio of distributable profit

remuneration to directors at the

2. To cover accumulated losses, if any.

by the current year as employees' andmaximum of 0.2% of the profit.

3. To appropriate 10% legal reserve

directors’ compensation shall be

However, the Company's accumulated

unless the total legal reserve

definitely specified in the Articles oflosses shall have been covered.

accumulated has already reached theIncorporation.

- 8 -Proposed Amendment

Currently in EffectExplanation

Employees’ remuneration could beamount of the Company’s authorized

To comply with Rule No.

paid by cash or stock, and in the event

capital.

10402427800 issued by the MEA, theof stock payment, employees shall

4. To set aside special reserve in

Company shall definitely specify amean the Company’s employees andaccordance with the regulations

maximum ratio of distributable profit

employees serving with affiliates who

5. To reserve certain amount, on theby the current year as directors’

meet specific requirements. Suchpremise that there is no effect on thecompensation.

specific requirements shall beCompany’s normal operations and no

The Policy about employees' andprescribed by the board of directors.

violation of regulations, for

directors’ compensation is defined inmaintaining stability of dividends.

Article 22; the original Paragraph 1 to

6. To pay remuneration to directors

5 and 8 of Article 22 are defined inand supervisors at 0.2% of the balance

Article 22-1; original Article 22-1 isafter withholding the amounts under

defined in Article 22-2

subparagraphs 1 to 5.
7. To pay bonus to employees at 1%
minimum of the balance after
withholding the amounts undersubparagraphs 1 to 5. (The employees
to receive stock bonus may include
Transcend’s employees and employees
serving with affiliates who meet
specific requirements. Such specificrequirements shall be prescribed by theboard of directors.)
8. For any remainder, the board of
directors shall propose allocation ratios
and propose them at the shareholders’meeting.
Regarding the special reserve undersubparagraphs 4, the Company shallset aside special reserve, equal to the- 9 -Proposed Amendment

Currently in EffectExplanation

debit balance which happen at thecurrent 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 unappropriatedretained earnings prior year. If thedebit balance is cumulative before, theCompany shall set aside special
reserve not to distribute it from theunappropriated retained earnings prioryear. When debit balance on other
equity items is reversed subsequently,
the reversed amount could be includedin the distributable earnings.
Article 22-1

Original Paragraph 1 to 5 and 8 of

For the trend for expenditure of

If the Company has earnings after the

Article 22.

employee bonus shares, employees areannual final accounting, it shall be

not the subject of earnings distribution.

allocated in the following order:

To comply with Article 235, 235-1 and1. To pay taxes.

240 of the Company Act, an fixed

2. To cover accumulated losses, if any.

amount or ratio of distributable profit

3. To appropriate 10% legal reserveby the current year as employees' andunless the total legal reserve

directors’ compensation shall be

accumulated has already reached thedefinitely specified in the Articles ofamount of the Company’s authorized

Incorporation.

capital.

To comply with Rule No.

4. To set aside special reserve in

10402427800 issued by the MEA, theaccordance with the regulations

Company shall definitely specify a- 10 -

Proposed Amendment

Currently in EffectExplanation

5. To reserve certain amount, on the

maximum ratio of distributable profit

premise that there is no effect on theby the current year as directors’Company’s normal operations and nocompensation.

violation of regulations, for

The Policy about employees' andmaintaining stability of dividends.

directors’ compensation is defined in

6. For any remainder, the board of

Article 22; the original Paragraph 1 todirectors shall propose allocation ratios

5 and 8 of Article 22 are defined inand propose them at the shareholders’

Article 22-1; original Article 22-1 ismeeting.

defined in Article 22-2

Regarding the special reserve undersubparagraphs 4, the Company shallset aside special reserve, equal to thedebit balance which happens at thecurrent 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 unappropriatedretained earnings prior year. If thedebit balance is cumulative before, theCompany shall set aside special
reserve not to distribute it from theunappropriated retained earnings prioryear. When debit balance on other
equity items is reversed subsequently,
the reversed amount could be includedin the distributable earnings.

- 11 -

Proposed Amendment
Article 22-2

Currently in EffectOriginal Article 22-1.

Explanation
For the trend for expenditure of

The Company distributes dividends

employee bonus shares, employees aretaking into consideration the

not the subject of earnings distribution.

Company's economic environment andTo comply with Article 235, 235-1 andgrowth phases, future demands of

240 of the Company Act, an fixed

funds, long-term financial planning,

amount or ratio of distributable profit

and the cash flows that theby the current year as employees' andstockholders desire. Cash dividends

directors’ compensation shall beshall account for at least 5% of thedefinitely specified in the Articles of

total dividend distributed.

Incorporation.
To comply with Rule No.
10402427800 issued by the MEA, theCompany shall definitely specify amaximum ratio of distributable profit
by the current year as directors’compensation.
The Policy about employees' anddirectors’ compensation is defined in
Article 22; the original Paragraph 1 to
5 and 8 of Article 22 are defined in
Article 22-1; original Article 22-1 isdefined in Article 22-2

Article 24

Article 24

Article 9, 22 and 22-1 of the Articles

These Articles of Incorporation wereThese Articles of Incorporation wereof Incorporation were amended andadopted on August 23, 1989.
The first amendment was made on

adopted on August 23, 1989.
The first amendment was made on

Article 22-2 of the Articles ofJanuary 28, 1991.

January 28, 1991.

resolution of 5th Board of Directors

The second amendment was made on

The second amendment was made on

Meeting in 2015.

May 25, 1992.

May 25, 1992.

The third amendment was made on

The third amendment was made on- 12 -

Incorporation was added by theProposed Amendment

Currently in Effect

September 1, 1992.

September 1, 1992.

The fourth amendment was made on

The fourth amendment was made on

July 30, 1994.

July 30, 1994.

The fifth amendment was made on

The fifth amendment was made on

June 8, 1995.

June 8, 1995.

The sixth amendment was made on

The sixth amendment was made on

July 8, 1997.

July 8, 1997.

The seventh amendment was made on

The seventh amendment was made on

August 15, 1997.

August 15, 1997.

The eighth amendment was made on

The eighth amendment was made on

September 12, 1997.

September 12, 1997.

The ninth amendment was made on

The ninth amendment was made on

June 20, 1998.

June 20, 1998.

The 10th amendment was made on

The 10th amendment was made on

September 15, 1998.

September 15, 1998.

The 11th amendment was made on

The 11th amendment was made on

June 12, 1999.

June 12, 1999.

The 12th amendment was made on

The 12th amendment was made on

April 15, 2000.

April 15, 2000.

The 13th amendment was made on

The 13th amendment was made on

April 9, 2001.

April 9, 2001.

The 14th amendment was made on

The 14th amendment was made on

June 10, 2002.

June 10, 2002.

The 15th amendment was made on

The 15th amendment was made on

June 3, 2003.

June 3, 2003.

The 16th amendment was made on

The 16th amendment was made on

June 11, 2004.

June 11, 2004.

The 17th amendment was made on

The 17th amendment was made on

June 13, 2005.

June 13, 2005.

The 18th amendment was made on

The 18th amendment was made on- 13 -

Explanation

Proposed Amendment

Currently in EffectJune 14, 2006.

June 14, 2006.

The 19th amendment was made on

The 19th amendment was made on

June 11, 2007.

June 11, 2007.

The 20th amendment was made on

The 20th amendment was made on

June 13, 2008.

June 13, 2008.

The 21th amendment was made on

The 21th amendment was made on

June 16, 2009.

June 16, 2009.

The 22th amendment was made on

The 22th amendment was made on

June 17, 2010.

June 17, 2010.

The 23th amendment was made on

The 23th amendment was made on

June 10, 2011.

June 10, 2011.

The 24th amendment was made on

The 24th amendment was made on

January 5, 2012.

January 5, 2012.

The 25th amendment was made on

The 25th amendment was made on

June 13, 2013.

June 13, 2013.

The 26th amendment was made on

The 26th amendment was made on

June 12, 2014.

June 12, 2014.

The 27th amendment was made on
June 14, 2016.

- 14 -

Explanation

Attachment II
TRANSCEND INFORMATION INC.
BUSINESS REPORT2015 was a year with significant challenges for memory module industry. As Flash and DRAM
market supply exceeded demand, the prices of Flash and DRAM steadily decreased, therefore driving
down profit margin of the end-user products. Transcend, as a leading manufacturer of storage andindustrial-grade products, has executed our business strategy of deriving a greater portion of revenue
from high-margin projects, especially in industrial and embedded applications, and developing new
products to fulfill the demands of various applications needs. Despite that memory market was
shrinking in 2015, Transcend’s profit remained at the leading position in Taiwan. Hereby, we would
like to thank our valued shareholders, clients, suppliers and employees for your continued supports ofTranscend.
Transcend’s consolidated revenue totaled NT$24.9 billion in 2015. Consolidated gross profit
totaled NT$4.7 billion. Gross profit rate is 18.9 percent. Operating income totaled 3.05 billion. Income
before tax totaled 3.71 billion. Net income totaled 3.22 billion. EPS is NT$ 7.48 calculated at theweighted average of outstanding share capital amounting to 4.3 billion.
With our excellent brand operation, Transcend has been awarded by its innovative products andsuperior product quality. For the ninth year in a row, Transcend Information appears on Interbrand's
Best Taiwan Global Brands ranking. Our cutting-edge products have won Taiwan Excellence Awardfor eleventh consecutive year. Moreover, Transcend’s DrivePro 520 Dual Lens Car Video Recorderand JetDrive Lite Expansion Cards received the prestigious "Good Design Award 2015" for the top
design quality.
As a leading brand in the market, Transcend has managed to satisfy the fast-changing industrial
environment and demands of customers. This year, the solid state drives (SSD) market is expected to
grow due to their advantages over traditional hard disk drives. Since the price of SSD dropped to asweet spot that stimulate surging demands, Transcend’s sales revenue of SSD has reached record high.
Meanwhile, by broadening industrial product portfolio and offering customized solutions, Transcend
has generated steady profit growth with consistent increase of market share of industrial and embedded- 15 -

applications. In addition to industrial products, we also invest in strategic products such as body
cameras and car video recorders to expand the memory applications in the multimedia market.
Transcend focuses not only on sales performance, but also on corporate social responsibility.
Through a concerted effort to strengthen information disclosure, Transcend ranked in the top 20% oflisted company on “Corporate Governance Evaluation” conducted by the Securities and Futures
Institute (SFI) in 2014. Besides, we have sponsored sport activities in high school and universities,
including the High School Basketball League (HBL) and the Black Panther High School BaseballTournament, for over five years. We also kicked off a long-term Basball Mentoring Program aimed atunderprivileged school children last year, expecting to serve as a platform for young promisingathletes to fulfill their baseball dreams. Last year was the second year we received the “Sports
Activists Award” from the Sports Affairs Council as our continuing contribution to promote sports in
Taiwan.
Looking to 2016, memory market will still struggle with the oversupply problem and falling
DRAM and NAND Flash prices. Besides, the rising China supply chain competing in the market may
also be an influential factor to the future memory industry. Thus, the ability to quickly respond to themarket's changing needs is the key to remain a company’s revenue and profit.
In addition to implementing effective inventory management and purchasing strategy, Transcend
will continue to invest in research and development, as well as provide integrated service to our clients
through our 13 branches worldwide. Owing to the drastic drops in SSD pricing and its rising
popularity, we think we have a good opportunity for profitable growth during the year to come. Also,
we will continue to innovate with strategy product lines in consumer market to fulfill a broad range ofmultimedia applications.
Here again we sincerely thank all of our shareholders, for your continued support and for theconfidence that you have placed in us. We will make every effort to keep Transcend operational
excellence and look forward to sharing our progress with you.

Chairman：Shu, Chung-Wan

General Manager：Shu, Chung-Cheng- 16 -

Accounting Supervisor：Lu, Chih-Yuan

Attachment III

Audit Report of Audit Committee

The Board of Directors has prepared the Company’s 2015 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
and considered to be complied with relevant rules by the undersigned, the audit committee ofTranscend Corporation. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of
the Company Act, we hereby submit this report.

The audit Committee of Transcend Corporation

Chairman of the audit Committee:

March 10, 2016- 17 -

Wang, Yi-Shin

Attachment IV
REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Stockholders of Transcend Information, Inc.
We have audited the accompanying separate balance sheets of Transcend Information, Inc. as ofDecember 31, 2015 and 2014 and the related separate statements of comprehensive income, of changes
in equity, and of cash flows for the years ended December 31, 2015 and 2014. These separate financial
statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits 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. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

- 18 -

In our opinion, the separate financial statements referred to in the first paragraph present fairly, in allmaterial respects, the financial position of Transcend Information, Inc. as of December 31, 2015, andDecember 31, 2014, and financial performance and cash flows for the years then ended in conformity
with the "Rules Governing the Preparation of Financial Statements by Securities Issuers".

March 10, 2016
Taipei, Taiwan
Republic of China----------------------------------------------------------------------------------------------------------------------------- -------------------The accompanying separate 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 of China. 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, the accompanying separate financial statements and report of independent accountants are not intended foruse by those who are not informed about the accounting principles or auditing standards generally accepted in the Republicof 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.

- 19 -

TRANSCEND INFORMATION, INC.
SEPARATE BALANCE SHEETS(Expressed in New Taiwan thousand Dollar)
Assets

December 31, 2015
AMOUNT%

December 31, 2014
AMOUNT
%

10,867,629

45

15,768Current assets
Cash and cash equivalents$$

10,807,417

40-

53,545-607,9173

585,525

2

959

-

-

-

2,000,096

8

1,709,341

6

parties, net

914,0174

1,178,290

5

Other receivables

128,7381

254,029

1

Inventories, net

4,219,148

18

6,041,633

22

Other current assets

15,568-14,175-Current Assets

18,769,840

79

20,643,955

76

184,3041

232,6391

method2,928,897

12

4,087,977

15

Property, plant and equipment

1,718,153

7

1,798,337

7

Investment property, net

213,2961

214,878

1

Deferred tax assets

42,780-64,006-

Other non-current assets

46,592-

88,941-

Non-current Assets

5,133,950

21

6,486,778

24

23,903,790

100

27,130,733

100

Current financial assets at fair value
through profit or loss
Current bond investments without active
marketNotes receivable, net
Accounts receivable, net
Accounts receivable due from related

Non-current assets
Available-for-sale financial
assets-non-current
Investments accounted for using equity

Total Assets$(Continued)

~20~

$

TRANSCEND INFORMATION, INC.
SEPARATE BALANCE SHEETS(Expressed in New Taiwan thousand Dollar)
December 31, 2015
AMOUNT%

Liabilities and Equity

December 31, 2014
AMOUNT%

Current liabilities
Short-term borrowings$

492,3752

13$506,400

2

-

-

-

-

-

7

-

1,495,689

6

3,090,479

12

Accounts payable to related parties

566,4633

1,679,508

6

Other payables

298,5121

350,741

1

86

-

988

-

Current tax liabilities

269,3361

271,173

1

Other current liabilities

2,134

-

3,442

-

Current Liabilities

3,124,608

13

5,902,738

22

Deferred tax liabilities

259,1101

485,121

2

Other non-current liabilities

17,991-

24,269-Non-current Liabilities

277,1011

509,39023,401,709

14

6,412,128

24

4,307,617

18

4,307,617

16

4,799,075

20

4,799,075

18

Legal reserve

3,426,756

14

3,053,235

11

Unappropriated retained earnings

7,990,324

34

8,504,167

31

21,691)-54,511-

20,502,081

86

20,718,605

76

23,903,790

100

27,130,733

100

Financial liabilities at fair value throughprofit or loss - current
Notes payable
Accounts payable

Other payables to related parties

Non-current liabilities

Total Liabilities
Share capital
Common stock
Capital surplus
Capital surplus
Retained earnings

Other equity interest
Other equity interest(

Total Equity
Commitments and contingent liabilities
Significant subsequent event
Total Liabilities and Equity

$

~21~

$

TRANSCEND INFORMATION, INC.
SEPARATE STATEMENTS OF INCOME(Expressed in New Taiwan thousand Dollar, except Earnings Per Share)

Items
Operating Revenue
Operating Costs
Gross Profit
Unrealized gain fromintercompany transaction
Realized gain from intercompany
transaction
Gross Profit, net
Operating Expenses
Sales and marketing expenses
General and administrative expenses
Research and development expenses
Total operating expenses
Operating Profit
Non-operating Income and Expenses
Other income
Other gains and losses
Finance costs
Share of gain of associates and joint
ventures accounted for under equity
methodTotal non-operating income andexpensesProfit before Income Tax
Income tax expense
Profit for the Year
Other Comprehensive Income
Components of othercomprehensive income that will
not be reclassified to profit or loss
Losses on remeasurements ofdefined benefit plans
Components of othercomprehensive income that will bereclassified to profit or loss
Cumulative translation differences
for foreign operations
Unrealized loss onavailable-for-sale financial assets
Income tax on othercomprehensive income
Total Comprehensive Income
Earnings Per Share
Basic earnings per share$(

For the years ended December 31,
2015
2014
AMOUNT%AMOUNT%
24,021,076
100 $
26,325,967
100
20,267,171) (84) (21,777,028) (83)
3,753,905
16
4,548,939
17(

34,559)- (70,857)-70,8573,790,203

16

87,8894,565,971

17

572,201) (198,052) (134,062) (904,315) (2,885,888

2) (
1) (
1) (
4) (
12

629,163) (205,987) (174,011) (1,009,161) (3,556,810

2)
1)
1)
4)
13

(

144,734
502,588
1,657)

2- (172,465
430,406
6,248)

1
2-(

2,415)-

151,325-$

643,250
3,529,138
307,236) (3,221,902

2
14
1) (
13 $

747,948
4,304,758
569,553) (3,735,205

3
16
2)
14

($

2,283)- ($(33,575)

(

(
(
(
(

(

$
$
$

86)

-

-

92,968-48,335)- ($31,783)-

5,708
3,143,417

- (
13 $

15,805)3,780,499

14

7.48
7.47

~22~

$
$

8.67
8.66

TRANSCEND INFORMATION, INC.
SEPARATE STATEMENTS OF CHANGES IN EQUITY(Expressed in New Taiwan thousand Dollar)
Capital Reserves

Retained Earnings

Common stock

Additional
paid-in capital

Capital surplus,
donated assets
received

Capital surplus,
net assets frommergerLegal reserve

Unappropriatedretained earnings

Other equity interest
Currencytranslation
Unrealized gain or
differences ofloss onforeignavailable-for-sale
operations
financial assets

$

$

$

$

$

2,733,339$$

Total equity$ 19,824,209

For the year ended December 31, 2014
Balance at January 1, 2014

4,307,617

4,759,841

4,106

35,128

7,975,047

27,764($

18,633 )Appropriations of 2013 earnings: (Note 1)
Legal reserve

-

-

-

-

319,896(

319,896 )--Cash dividends

-

-

-

-

-

(

2,886,103 )--Net income for the year

-

-

-

-

-

3,735,205--

Other comprehensive income for the year

-

-

-

-

-

(

Balance at December 31, 2014

86 )

(

2,886,103 )
3,735,205

77,163(31,783 )45,294$

4,307,617$

4,759,841

$

4,106

$

35,128$3,053,235$

8,504,167$

104,927($

50,416 )$ 20,718,605$

4,307,617$

4,759,841

$

4,106

$

35,128$3,053,235$

8,504,167$

104,927($

50,416 )$ 20,718,605

For the year ended December 31, 2015
Balance at January 1, 2015
Appropriations of 2014 earnings: (Note 2)
Legal reserve

-

-

-

-

373,521(373,521 )--Cash dividends

-

-

-

-

-

(

3,359,941 )--Net income for the year

-

-

-

-

-

3,221,902--

Other comprehensive income (loss) for the year

-

-

-

-

-

(

3,426,756$

Balance at December 31, 2015$

4,307,617$

4,759,841

$

4,106

$

35,128$Note 1: Directors’ remuneration amounting to $5,192 and employees’ remuneration (bonus) amounting to $25,962 had been deducted from the separate statement of income in 2013.
Note 2: Directors’ remuneration amounting to $6,049 and employees’ remuneration (bonus) amounting to $30,243 had been deducted from the separate statement of income in 2014.

Click here to enter text.
~23~

2,283 )
7,990,324(

3,359,941 )
3,221,902(

27,867 )(48,335 )(78,485 )$77,060($98,751 )$ 20,502,081

TRANSCEND INFORMATION, INC.
SEPARATE STATEMENTS OF CASH FLOWS(Expressed in New Taiwan thousand Dollar)
Year ended December 31
2015
2014
CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax for the year
Adjustments to reconcile profit before tax to net cash provided by operating
activities:
Income and expenses having no effect on cash flows
Unrealized gain from intercompany transaction
Realized gain from intercompany transaction
Net gains on financial assets at fair value through profit or loss
Gain on disposal of financial assets
Share of gain of associates and joint ventures accounted for using equity
methodProvision for bad debt expense
Depreciation expense
Net loss on financial liabilities at fair value through profit or loss
Interest expense
Interest income
Dividend income
Gain on disposal of property, plant and equipment
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Notes and accounts receivable
Other receivables
Inventories
Other current assets
Net changes in liabilities relating to operating activities
Notes and accounts payable
Other payables
Other payables to related parties
Other current liabilities
Other non-current liabilities
Cash generated from operations
Cash dividends received
Interest received
Interest paid
Income tax paid
Net cash provided by operating activities$

3,529,138

34,55970,857 )
37,777
343 )

(
(

(
(

(

(
(
(
(
(

4,304,758

70,857
87,889 )53,545 )10,804 )

(
(
(

2,415
3,550
133,619
13
1,657
136,145 )11,016 )
-

(

(
(
(

164,053 )
13,781 )525 )40,750 )118,351
1,822,485
1,393 )((((

137,464 )11,555 )1,378,460 )
1,048 )

2,707,842 )
52,229 )902 )1,308 )
759
2,661,538
1,170,843
143,085
1,657 )
508,078 )3,465,731(($

151,325 )
12,463
126,323-

863,255
73,637988
1,173 )
22,8883,513,542
13,781
159,087
6,248 )
448,865 )3,231,297(((

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of bond investments without active markets
Disposal of bond investments without active markets
Acquisition of property, plant and equipment (including investment
property)
Proceeds from disposal of property, plant and equipment
Increase in investments accounted for using equity method(Increase) decrease in other non-current assets
Net cash used in investing activities(

751,339 )729,290(

765,473 )
265,265(

51,853 )42,34931,553 )(64,341 )695
103,008 )
70,564 )
737,426 )

(

(
(
(

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Payment of cash dividends (including cash distribution of capital reserve)
Net cash used in financing activities(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(
(
(

$

.

~24~

14,025 )3,359,941 )
3,373,966 )
60,212
10,807,417
10,867,629

(
(
(
$

211,260
2,886,103 )
2,674,843 )
180,972 )
10,988,389
10,807,417

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Expressed in New Taiwan thousand Dollar)

Attachment V
REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR15000292
To the Board of Directors and Stockholders of Transcend Information, Inc.
We have audited the accompanying consolidated balance sheets of Transcend Information, Inc. and its
subsidiaries as of December 31, 2015 and 2014 and the related consolidated statements of comprehensive
income, of changes in equity, and of cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits 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. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to in the first paragraph present fairly, in allmaterial respects, the financial position of Transcend Information, Inc. and its subsidiaries as ofDecember 31, 2015 and 2014, and their financial performance and cash flows for the years then ended inconformity with the “Rules Governing the Preparations of Financial Statements by Securities Issuers” andthe International Financial Reporting Standards, International Accounting Standards, IFRICInterpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

~25~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Expressed in New Taiwan thousand Dollar)

We have also audited the parent company only financial statements of Transcend Information, Inc. (notpresented herein) as of and for the years ended December 31, 2015 and 2014, and have expressed an
unqualified opinion on such financial statements, respectively.

March 10, 2016
Taipei, Taiwan
Republic of China~26~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Expressed in New Taiwan thousand Dollar)
December 31, 2015
AMOUNT%

Assets

December 31, 2014
AMOUNT%

Current assets
Cash and cash equivalents$

11,195,368

46

15,768$

11,565,344

44-

53,545-897,1804

637,025

3

959

-

-

-

3,203,340

13

2,993,131

11

9,347

-

-

-

Other receivables

129,0311

283,316

1

Inventories, net

4,513,756

19

6,364,987

24

Other current assets

52,486-44,515-Current Assets

20,017,235

83

21,941,863

83

184,3041

232,6391

317,5551

332,59312,995,091

13

3,160,974

12

Investment property, net

290,5811

298,614

1

Deferred tax assets

72,777-92,319

1

Other non-current assets

185,7061

234,2381

Non-current Assets

4,046,014

17

4,351,377

17

24,063,249

100

26,293,240

100

Current financial assets at fair value
through profit or loss
Current bond investments without active
marketNotes receivable, net
Accounts receivable, net
Accounts receivable- related parties, net

Non-current assets
Available-for-sale financial
assets-non-current
Investments accounted for using equity
methodProperty, plant and equipment, net

Total Assets$(Continued)

~27~

$

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Expressed in New Taiwan thousand Dollar)
December 31, 2015
AMOUNT%

Liabilities and Equity

December 31, 2014
AMOUNT%

Current liabilities
Short-term borrowings$

901,425

4

profit or loss - current

13

Notes payable$

903,300

4

-

-

-

-

-

8

-

1,589,112

73,202,531

12

Accounts payable to related parties

58,560-74,185-

Other payables

366,9322

475,052

2

Current tax liabilities

280,8611

319,927

1

Other current liabilities

36,092-60,063-Current Liabilities

3,232,995

14

5,035,066

19

Deferred tax liabilities

259,3481

485,378

2

Other non-current liabilities

68,825-54,191-

Non-current Liabilities

328,1731

539,5692

3,561,168

15

5,574,635

21

4,307,617

18

4,307,617

16

4,799,075

20

4,799,075

18

Legal reserve

3,426,756

14

3,053,235

12

Unappropriated retained earnings

7,990,324

33

8,504,167

32

21,691)-54,511

1

parent20,502,081

85

20,718,605

79

Total Equity

20,502,081

85

20,718,605

79

24,063,249

100

26,293,240

100

Financial liabilities at fair value throughAccounts payableNon-current liabilities

Total Liabilities
Share capital
Common stock
Capital surplus
Capital surplus
Retained earnings

Other equity interest
Other equity interest(

Total equity attributable to owners of

Significant contingent liabilities andunrecognized contract commitments
Significant subsequent event
Total Liabilities and Equity

$

~28~

$

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(Expressed in New Taiwan thousand Dollar, except Earnings Per Share)

Items
Operating Revenue
Operating Costs
Gross Profit
Operating Expenses
Sales and marketing expenses
General and administrative expenses
Research and development expenses
Total operating expenses
Operating Profit
Non-operating Income and Expenses
Other income
Other gains and losses
Finance costs
Share of (loss) gain of associates andjoint ventures accounted for underequity method
Total non-operating income andexpensesProfit before Income Tax
Income tax expense
Profit for the Year
Other Comprehensive Income
Components of othercomprehensive income that will not
be reclassified to profit or loss
Losses on remeasurements ofdefined benefit plans
Components of othercomprehensive income that will bereclassified to profit or loss
Cumulative translation differences
for foreign operations
Unrealized loss on available-for-salefinancial assets
Income tax on other comprehensive
incomeTotal Comprehensive Income
Net Profit attributable to:
Owners of parent
Comprehensive Income attributableto:Owners of parent
Earnings Per Share
Basic earnings per share
Diluted earnings per share$(

Year ended December 31
2015
2014 (Restated)
AMOUNT%AMOUNT
24,913,287
100 $
27,219,495
20,211,736) (81) (21,678,630) (4,701,551
19
5,540,865

(
(
(
(

%
100
80)
20

1,096,006) (419,887) (134,062) (1,649,955) (3,051,596

4) (
2) (
1) (
7) (
12

1,180,034) (439,532) (174,011) (1,793,577) (3,747,288

4)
1)
1)
6)
14

(

162,637
517,669
3,636)

1
2- (193,524460,0218,209)

1
1-(

15,038)

-

8,330

-

$

661,632
3,713,228
491,326) (3,221,902

3
15
2) (
13 $

653,666
4,400,954
665,749) (3,735,205

2
16
2)
14

($

2,283)- ($(33,575)

(

(

86)

-

-

92,968-48,335)- (31,783)

-

$

5,708
3,143,417

- (
13 $

15,805)3,780,499

14$

3,221,902

13$

3,735,205

14$

3,143,417

13$

3,780,499

14

7.48
7.47

$
$

$
$

~29~

8.67
8.66

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(Expressed in New Taiwan thousand Dollar)

Capital Reserves

Equity attributable to owners of the parent
Retained Earnings

Common stock

Additional
paid-in capital

Capital surplus,
donated assets
received

Capital surplus,
net assets frommergerLegal reserve

$

$

$

$

$

Unappropriatedretained earnings

Other equity interest
Currencytranslation
Unrealized gain or
differences ofloss onforeignavailable-for-sale
operations
financial assets

Total equity

2,733,339$$$ 19,824,209

Year ended December 31, 2014
Balance at January 1, 2014

4,307,617

4,759,841

4,106

35,128

7,975,047

27,764($

18,633 )Appropriation of 2013 earnings
Legal reserve

-

-

-

-

319,896(

319,896 )--Cash dividends

-

-

-

-

-

(

2,886,103 )--Net income for the year

-

-

-

-

-

3,735,205--

Other comprehensive income (loss) for the year

-

-

-

-

-

(

Balance at December 31, 2014

86 )

(

2,886,103 )
3,735,205

77,163(31,783 )45,294$

4,307,617$

4,759,841

$

4,106

$

35,128$3,053,235$

8,504,167$

104,927($

50,416 )$ 20,718,605$

4,307,617$

4,759,841

$

4,106

$

35,128$3,053,235$

8,504,167$

104,927($

50,416 )$ 20,718,605

Year ended December 31, 2015
Balance at January 1, 2015
Appropriations of 2014 earnings
Legal reserve

-

-

-

-

373,521(373,521 )--Cash dividends

-

-

-

-

-

(

3,359,941 )--Net income for the year

-

-

-

-

-

3,221,902--

Other comprehensive loss for the year

-

-

-

-

-

(

3,426,756$

Balance at December 31, 2015$

4,307,617$

4,759,841

$

4,106

.

~30~

$

35,128$2,283 )
7,990,324(

3,359,941 )
3,221,902(

27,867 )(48,335 )(78,485 )$77,060($98,751 )$ 20,502,081

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Expressed in New Taiwan thousand Dollar)
Year ended December 31
2015
2014
CASH FLOWS FROM OPERATING ACTIVITIESConsolidated profit before tax for the year
Adjustments to reconcile profit before tax to net cash provided by operating
activities:
Income and expenses having no effect on cash flows
Net loss (gain) on financial assets at fair value through profit or loss
Gain on disposal of financial assets
Share of loss (gain) of associates and joint ventures accounted for using
equity method
Provision for bad debt expense
Net loss on financial liabilities at fair value through profit or loss
Depreciation
Interest income
Interest expense
Dividend income
Loss on disposal of property, plant and equipment
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Other current assets
Net changes in liabilities relating to operating activities
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash generated from operations
Cash dividends received
Interest received
Interest paid
Income tax paid
Net cash provided by operating activities

$

(

(
(

(
(
(

3,713,228

(
(
(
(
(

(
(

53,545 )13,023 )15,0382,549
13243,897
143,861 )3,636
11,016 )960(

8,330 )
13,200236,547
176,359 )8,209
13,781 )1,800

8)1,613,419 )
15,625 )108,120 )23,971 )12,351
3,846,310
11,016
179,906
3,636 )
731,172 )3,302,424((

4,400,954

37,7784,888 )

959 )
213,426 )
9,347 )
118,240
1,851,231
7,971 )

(

$

(
(

4,158
274,609 )23,247 )1,289,048 )8,204 )(((((

1,207 )
532,947
28,384
81,242
10,0504,756
3,460,894
13,781
170,818
8,209 )
525,162 )3,112,122((

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of bond investments without active markets
Acquisition of bond investments without active markets
Acquisition of property, plant and equipment (including investment
property)
Proceeds from disposal of property, plant and equipment
Increase in investments accounted for using equity method
Decrease (increase) in other non-current assets
Net cash used in investing activities

1,463,601
1,722,585 )((

87,083 )381
48,532
297,154 )(364,425
862,978 )((

23,399 )9,939
103,008 )
70,658 )685,679 )(((CASH FLOWS FROM FINANCING ACTIVITIES(Decrease) increase in short-term borrowings
Payment of cash dividends
Net cash used in financing activities
Effect of foreign exchange rate changes
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(
(
(
(
(
$

.

~31~

14,025 )3,359,941 )
3,373,966 )
1,280 )
369,976 )
11,565,344
11,195,368

(
(
(
$

343,560
2,886,103 )2,542,543 )
41,93974,161 )
11,639,505
11,565,344

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 ofChina.
- 32 -

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- 33 -

appropriate.

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.

- 34 -

APPENDIX II
TRANSCEND INFORMATION INC.
ARTICLES OF INCORPORATION (prior to the revision)
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.
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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.

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 within 6 months after the close of each fiscal year. special meetings may be
convened in accordance with applicable laws and regulations whenever necessary. Written notices shall be sent to allshareholders for the convening of shareholders’ meetings, at least 30 days in advance, in case of regular meetings; 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
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 the- 36 -

regulations 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 may acquire liability
insurance for all directors within their term of office, and the board of directors is authorized to resolute the scope of
insurance.
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 Law of the Republic of China, a meeting of the Board of Directors may be held if attended by amajority of total Directors and resolutions shall be adopted with the concurrence of the majority of the Directors present
at the meeting.
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
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.

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Article 17：The Board of the Directors is organized by directors, the duties 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 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 set aside special reserve in accordance with the regulations
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. To pay remuneration to directors and supervisors at 0.2% of the balance after withholding the amounts undersubparagraphs 1 to 5.
7. To pay bonus to employees at 1% minimum of the balance after withholding the amounts under subparagraphs 1 to 5.
(The employees to receive stock bonus may include Transcend’s employees and employees serving with affiliates
who meet specific requirements. Such specific requirements shall be prescribed by the board of directors.)
8. For any remainder, the board of directors shall propose allocation ratios and propose them at the shareholders’meeting.
Regarding the special reserve under subparagraphs 4, the Company shall set aside special reserve, equal to the debit- 38 -

balance which happen 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 22-1：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.
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.
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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.

Transcend Information Inc.
Chairman: Shu, Chung-Wan- 40 -

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

16,133,367

16,000,000

Note 1: The period of Book closure is from April 16, 2016 to June 14, 2016.
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
Share Ownership Ratios at Public Companies”.
2. Company’s current Directors’ shareholding are as follows on April 16, 2016:
Title

Name

Current Shareholding(Shares)

Chairman

SHU,CHUNG-WAN

8,892,453

Director

SHU,CHUNG-CHENG

6,244,098

Director

TSENG, CHUNG-HO

0

Director

CHUI, LI-CHU

0

Director

HSU, CHIA-HSIAN

834,244

Director

CHIU, CHIH-HENG

162,572

Independent Director CHEN,YI-LIANG
Independent Director CHEN,LO-MIN

0

Independent Director WANG,YI-HSIN

0

0

Total

16,133,367- 41 -