Handbook
for the 2014 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 2014 Annual Regular Shareholders’ Meeting
TABLE OF CONTENTSMEETING PROCEDURE ………………………………………………………………………………1
MEETING AGENDA ……………………………………………………………………………………2
REPORT ITEMS…………………………………………………………………………………………3
PROPOSED ITEMS．……………………………………………………………………………………4
DISCUSSION ITEMS……………………………………………………………………………………6
OTHER BUSINESS AND SPECIAL MOTION．………………………… …………………………7

ATTACHMENT
BUSINESS REPORT．……………………………………………………………………………8
AUDIT COMMITTEE’S REVIEW REPORT …………………………………………………10
ETHICAL CORPORATE MANAGEMENT BEST PRACTICE PRINCIPLES ………………11
INDEPENDENT AUDITORS’ REPORT AND 2013 FINANCIAL
STATEMENTS …………………………………………………………………………………15
INDEPENDENT AUDITORS’ REPORT AND 2013 CONSOLIDATED FINANCIAL
V：
STATEMENTS …………………………………………………………………………………22
COMPARISON TABLE FOR THE “PROCEDURES FOR ACQUISITION OR DISPOSAL OFVI：
ASSETS”…………………………………………………………………………………………29
VII： COMPARISON TABLE FOR THE “ARTICLES OF INCORPORATION．…………………36
VIII： COMPARISON TABLE FOR THE “PROCEDURES FOR ELECTION OF DIRECTOR……37
I：
II：
III：
IV：

APPENDIXI：
RULES AND PROCEDURES OF SHAREHOLDERS’ MEETING……………………………38
II：
ARTICLES OF INCORPORATION ……………………………………………………………39
III： PROCEDURES FOR ACQUISITION OR DISPOSAL OF ASSETS（Before amendment） …40
IV： PROCEDURES FOR ELECTION OF DIRECTOR（Before amendment）……………………58
V：
SHAREHOLDINGS OF ALL DIRECTORS ……………………………………………………60

Transcend Information, Inc.
2014 ANNUAL REGULAR SHAREHOLDERS’ MEETING PROCEDURE

1. Call the Meeting to Order
2. Chairman's Remarks
3. Report Items
4. Proposed Items
5. Discussion Items
6. Special Motions
7. Meeting Adjourned~1~Transcend Information, Inc.
2014 ANNUAL REGULAR SHAREHOLDERS’ MEETING AGENDA(Translation)
Time: 9:00 a.m., June 12, 2014
Place: Transcend Information, Inc. (No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan)
Chairman's Remarks
I. Report Items(1) The business conditions of 2013
(2) Audit Committee’s review report(3) The status of endorsements and guarantees(4) The making of the “Ethical Corporate Management Best Practice Principles”

II. Proposed Items(1) Adoption of 2013 Business Report and Financial Statements(2) Adoption of the proposal for distribution of 2013 earnings
III. Discussion Items(1) Proposal to release the Directors from non-competition restrictions(2) Approval of the Amendment to “Procedures for Acquisition or Disposal of Assets”(3) Approval of the Amendment to “Articles of Incorporation”(4) Approval of the Amendment to “Procedures for Election of Directors”

IV. Special Motions
V. Meeting Adjourned~2~

I. Report Items(1) The business conditions of 2013
Explanatory Notes: Please refer to page 8 to 9 for Attachment I.
(2) Audit Committee’s review report
Explanatory Notes: Please refer to page 10 for Attachment II.
(3) The status of endorsements and guarantees
Explanatory Notes:
The Company provided a guarantee for Transcend Japan Inc. to apply for the credit limit on bankfinancing of JPY 1,000,000 thousand and 500,000 thousand on May 1, 2013 and September 13, 2013
respectively, pursuant to the Company’s “Procedures for Endorsement and Guarantee”, the highest
amount of guarantee was TWD 7,929,684 thousand.
(4) The making of the “Ethical Corporate Management Best Practice Principles”
Explanatory Notes:
a. In order to foster the corporate culture of ethical management and sound development, theCompany set up “Ethical Corporate Management Best Practice Principles” in accordance with
“Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies”
and the Company’s practical operation.
b. Please refer to page 11 to 14 for Attachment III: the content of the “Ethical Corporate Management
Best Practice Principles”.

~3~II. Proposed Items(1) Adoption of 2013 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 2013 have been audited by independent auditors, Huei-Shyang Wang 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 9 to 10 for Attachment I, andpage 15 to 28 for Attachment IV and V)
b. It is submitted for ratification.
Resolution:(2) Adoption of the proposal for distribution of 2013 earnings (Proposed by the Board of Directors)
Explanatory Notes:
a. For appropriations of 2013 earnings, the Company will distribute cash dividend of NTD
2,886,103,223 from the available retained earnings of 2013 after setting aside legal reserve anddistributing employees’ profit sharing.
b. Please refer to page 5 for the 2013 estimated earnings distribution table.
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:~4~

Transcend Information, Inc.
The Chart of 2013 Earnings Distribution
For the year ended December 31, 2013
(Expresses in thousands of New Taiwan dollars)
Item

AmountUnappropriated retained earnings at beginning

4,690,448,698

Add: Reconciliation of adopting IFRSs for the

80,254,325

Remarks

first-time
Adjusted unappropriated retained earnings at
beginning

4,770,703,023

Add: Adjustment on unappropriated earnings for2013

5,387,815

Adjusted unappropriated retained earnings

4,776,090,838

Add: Net income for 2013

3,198,955,983

Less: Legal reserve (10%)
Retained earnings available for appropriation asof December 31, 2013

319,895,598
7,655,151,223

Less: Items of distribution Cash dividend to shareholders

2,886,103,223

Unappropriated retained earnings at end

4,769,048,000

Cash dividend(NT $6.7 per share)

Note
Directors' and supervisors' remuneration

5,192,385

Employees' bonus

25,961,917

Note: Regarding the abovementioned amount of profits resolved to be distributed, there is no material
difference between the resolved employees’ bonus and the estimated figures for 2013. The
remuneration for directors and supervisors would be NTD 5,192,385 calculated in accordance with
“Articles of Incorporation”, but was not recognized in 2013 financial statements After the actual
distributed amounts being resolved by the shareholders’ meeting, the difference between the resolved
amounts and the 2013 estimates will be recognized in the statement of income in 2014.

Director: Shu, Chung-won

Manager: Shu, Chung-cheng~5~

Accounting: Lu, Chihyuan

III. Discussion Items

Discussion Item (1)Subject: Proposal to release the Directors from non-competition restrictions. (Proposed by the Boardof Directors)
Explanatory Notes:
a. Because the director(s) of the Company may involve in investment or operation of other companies
with the same or similar business scope and assume the office of director(s), the Company,
pursuant to Article 209 of Company Act, proposes to release the Directors from non-competition
restrictions under the premise that no harm to the Company's interest.
b. The proposed list:
Director: Shu, Chung-cheng to be the representative of a juristic-person director of Taiwan IC
Packaging Corporation.
c. It is submitted for approval.
Resolution:

Discussion Item (2)Subject: Approval of the Amendment to “Procedures for Acquisition or Disposal of Assets”(Proposed by the Board of Directors)
Explanatory Notes:
a. The Company proposes to amend the “Procedures for Acquisition or Disposal of Assets” tocomply with amendment to “Regulations Governing Acquisition or Disposal of Assets by PublicCompanies”, and to fit with IFRSs and the Company’s practical operation.
b. Please refer to page 29 to 35 for Attachment VI: the comparison table for the “Procedures for
Acquisition or Disposal of Assets” before and after revision.
c. It is submitted for approval.
Resolution:~6~

Discussion Item (3)Subject: Approval of the Amendment to “Articles of Incorporation” (Proposed by the Board of
Directors)
Explanatory Notes:
a. To improve corporation government and to carry out Shareholder Activism, the Company proposes
to amend the “Articles of Incorporation” to adopt candidate nomination system for the election of
directors pursuant to Article 192-1 of the Company Act, and to include the use of an electronic
voting system by shareholders pursuant to Article 177-1 of the Company Act.
b. Please refer to page 36 for Attachment VII: the comparison table for “Articles of Incorporation”
before and after revision.
c. It is submitted for approval.
Resolution:

Discussion Item (4)Subject: Approval of the Amendment to “Procedures for Election of Directors” (Proposed by the
Board of Directors)
Explanatory Notes:
a. The Company proposes to amend the “Procedures for Election of Directors” to comply with
amendment to “Articles of Incorporation” regarding the adoption of a candidate nomination system
for the election of directors.
b. Please refer to page 37 for Attachment VIII: the comparison table for the “Procedures for Electionof Directors” before and after revision.
c. It is submitted for approval.
Resolution:

IV. Special Motions

V. Meeting Adjourned~7~

Attachment I

TRANSCEND INFORMATION INC.
BUSINESS REPORT

While economics of Europe, Japan and USA became better in 2013, IT industry in Taiwan was facinga growth crisis due to currency appreciation and decreased demand for PCs, which were graduallyreplaced with mobile devices. Flash and DRAM markets also acted differently. While an accidental
fire at SK Hynix' plant in China pushed up DRAM prices, NAND flash faced price decrease since thedemand was far lower than supply. In order to avoid being affected by price changes of raw materials,
Transcend chose to put emphasis on production efficiency, inventory management, long-term branding
management, and customer services.
In 2013, Transcend successfully sustained growth in the shrinking PC market with 8.5% growth in net
margin. Consolidated revenue totaled NT$26.12 billion. Consolidated gross profit totaled NT4.92
billion. Gross profit rate is 18.8 percent. Operating income totaled 3.35 billion. Income before tax
totaled 3.74 billion. Net income totaled 3.2 billion. Earnings per share (EPS) is NT$ 7.43 calculated at
the weighted average of outstanding share capital amounting to 4.3 billion.
To expand our market share and strengthen our brand penetration, we kept developing more innovative
products in consumer electronics and industrial applications. Last year, we expanded our productlineup to car video recorders. With confidence in industrial markets, we expanded our industrial R&D
and sales teams, and participated in at least ten international industrial exhibitions to get a better
understanding of the global industrial markets. We believe that SSD market is poised for strong growthin 2014, thus we will build up a more complete SSD product lineup and develop diverse models tomeet our customers’ needs.
For 7th consecutive year, Transcend was honored with Interbrand's Best Taiwan Global Brands.
Known as a fair company with reasonable pay and a good work/life balance, Transcend triumphedover 34 competitors to win the award for Best Companies to Work For last year, which was held by
the Department of Labor of the Taipei City Government. Transcend sees itself as a company that has a
responsibility to the public, its shareholders and the world it trades in. Therefore, we have sponsoredyoung athletes in high schools and colleges for three years. By sponsoring basketball games, volleyballgames, cheerleading tournaments, football games, etc., we aim to provide the youth with a better
environment where they can pursue their dreams and future careers.

~8~Lastly, I sincerely thank all of our shareholders, customers, suppliers and employees, for yourcontinued support and for the confidence that you have placed in us.

Director: Shu Chongwan
Manager：Shu Chongzheng
Chief of Accounting：Lu, Chihyuan~9~Attachment II

Audit Report of Audit Committee

The Board of Directors has prepared the Company’s 2013 Business Report, Financial Statements andEarnings Distribution Proposal. Transcend Corporation’s Financial Statements have been audited andcertified by Mr. Huei-Shyang Wang and Mr. Chien- Hung Chou, the CPA of the Pricewaterhouse
Coopers. The Business Report, Financial Statements and Earnings Distribution Proposal have beenreviewed 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 Law, we hereby submit this report.

The audit Committee of Transcend Corporation

Independent Director:

Wang, Yi-Shin

Independent Director:

Chen, Le-Min

Independent Director:

Chen, Yi-Liang

March 19, 2014~10~

Attachment III
TRANSCEND INFORMATION INC.
ETHICAL CORPORATE MANAGEMENT BEST PRACTICE PRINCIPLESArticle 1
To foster a corporate culture of ethical management and sound development, and offer a reference
framework for establishing good commercial practices, Transcend Information Inc. (the "Company")promulgated The Ethical Corporate Management Best Practice Principles ("Principles").
In accordance with the Principles, ethical corporate management best practice principles applicable to
the Company’s business groups and subsidiaries.
Article 2
When engaging in commercial activities, directors, audit committee, managers or employees of theCompany shall not directly or indirectly offer, promise to offer, request or accept any improper
benefits, nor commit unethical acts including breach of ethics, illegal acts, or breach of fiduciary duty("unethical conduct") for purposes of acquiring or maintaining benefits.
Parties referred to in the preceding paragraph include civil servants, political candidates, politicalparties or members of political parties, state-run or private-owned businesses or institutions, and theirdirectors, supervisors, managers, employees or substantial controllers or other interested parties.
Article 3"Benefits" in the Principles means any valuable things, including money, endowments, commissions,
positions, services, preferential treatment or rebates of any type or in any name. Benefits received or
given occasionally in accordance with accepted social customs and that do not adversely affect specificrights and obligations shall be excluded.
Article 4
The Company shall comply with the Company Act, Securities and Exchange Act, Business Entity
Accounting Act, Political Donations Act, Anti-Corruption Statute, Government Procurement Act, Act
on Recusal of Public Servants Due to Conflicts of Interest, TWSE/GTSM-listing rules, or other laws or
regulations regarding commercial activities, as the underlying basic premise to facilitate ethicalcorporate management.
Article 5
The Company shall abide by the operational philosophies of honesty, transparency and responsibility,
base policies on the principle of good faith and establish good corporate governance and risk control~11~and management mechanism so as to create an operational environment for sustainable development.
Article 6
The Company are advised to, in accordance with the operational philosophies and policies prescribedin the preceding article, establish in this ethical corporate management best practice principle
comprehensive programs to forestall unethical conduct ("prevention program"), including operational
procedures, guidelines, and training.
When establishing the prevention program, the Company shall comply with relevant laws andregulations of the territory where the companies and their business group are operating.
Article 7
The prevention program established by the Company shall at least include preventive measures against
the following:
A. Offering and acceptance of bribes.
B. Illegal political donations.
C. Improper charitable donations or sponsorship.
D. Offering or acceptance of unreasonable presents or hospitality, or other improper benefits.
Article 8
The Company and respective business group shall clearly specify ethical corporate management
policies in their external documents. The board of directors and the management level shall undertaketo rigorously and thoroughly enforce such policies for internal management and external commercial
activities.
Article 9
The Company shall engage in commercial activities in a fair and transparent manner.
Prior to any commercial transactions, the Company shall take into consideration the legality of theiragents, suppliers, clients or other trading counterparties, and their records of unethical conduct, if any.
It is advisable not to have any dealings with persons who have any records of unethical conduct.
When entering into contracts with other parties, the Company shall include in such contracts
provisions demanding ethical corporate management policy compliance and that in the event thetrading counterparties are suspected of engaging in unethical conduct, the Company may at any time
terminate or cancel the contracts.
Article 10
When conducting business, the Company and their directors, audit committee, managers andemployees, shall not directly or indirectly offer, promise to offer, request or accept any improper~12~benefits, unless the laws of the territories where the companies operate permit so.
Article 11
When directly or indirectly offering a donation to political parties or organizations or individuals
participating in political activities, the Company and their directors, audit committee, managers andemployees, shall comply with the Political Donations Act and their own relevant internal operational
procedures, and shall not make such donations in exchange for commercial gains or businessadvantages.
Article 12
When making or offering donations and sponsorship, the Company and their directors, audit
committee, managers and employees shall comply with relevant laws and regulations and internal
operational procedures, and shall not surreptitiously engage in bribery.
Article 13
The Company and their directors, audit committee, managers and employees shall not directly or
indirectly offer or accept any improper benefits to establish business relationship or influencecommercial transactions.
Article 14
The board of directors of the Company shall exercise the due care of good administrators to urge thecompany to prevent unethical conduct, always review the results of the preventive measures andcontinually make adjustments so as to ensure thorough implementation of its ethical corporate
management policies.
To achieve sound ethical corporate management, the Company are advised to form a dedicatedunit to be in charge of establishing and enforcing the ethical corporate management policies andprevention program and reporting to the board of directors on a regular basis.
Article 15
The Company and their directors, audit committee, managers and employees shall comply with laws
and regulations and the prevention program when conducting business.
Article 16
For preventing conflicts of interests, the Company’s directors shall exercise a high degree ofself-discipline, a director may present his opinion and answer relevant questions but is prohibited fromparticipating in discussion of or voting on any proposal where the director or the juristic person thatthe director represents is an interested party, and such participation is likely to prejudice the interests~13~

of the company; neither shall a director vote on such proposal as a proxy of another director in suchcircumstances. The directors shall practice self-discipline and must not support one another in
improper dealings.
The Company’s directors, audit committee and managers shall not take advantage of their positions in
the companies to obtain improper benefits for themselves, their spouses, parents, children or any otherperson.
Article 17
To lower the risk of being involved in an unethical conduct for business activities, the Company shallestablish effective accounting systems and internal control systems, and conduct reviews regularly so
as to ensure that the design and enforcement of the systems are showing results.
Internal auditors of the Company shall periodically examine the company's compliance with theforegoing and prepare audit reports and submit the same to the board of directors.
Article 18
The Company shall have in place a formal channel for receiving reports on unethical conduct and keep
the reporter's identity and content of the report confidential.
Article 19
The Company shall disclose the status of the enforcement of their own ethical corporate management
best practice principles on their company websites, annual reports and prospectuses.
Article 20
The Company shall at all times monitor the development of relevant local and international regulations
concerning ethical corporate management, and encourage directors, audit committee, managers andemployees to make suggestions so as to review and improve their ethical corporate management bestpractice principles and achieve better results from implementing the principles.
Article 21
The ethical corporate management best practice principles of the company shall be implemented
after the board of directors grants the approval, and shall be sent to the audit committee and reported ata shareholders' meeting. The same procedure shall be followed when the principles have been
amended.

~14~

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, 2013, December 31, 2012, and January 1, 2012 and the related separate statements ofcomprehensive income, of changes in equity, and of cash flows for the years ended December 31, 2013
and 2012. These separate financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these separate financial statements based on our audits.
The financial statements of equity investments accounted for under the equity method, Transcend
Information Inc. and Transcend Information Trading GmbH, Hamburg, and the associate, Taiwan IC
Packaging Corp., were audit by other auditors, whose reports thereon were furnished to us. Our
opinion, insofar as it relates to the amounts of investment income/loss and the information of investee
company as disclosed in Note 13, were solely based on the reports of other auditors. The share of
profit or loss of associates and equity investments accounted for under equity method solely based on
the reports of other auditors were (NT$8,128) thousand and NT$29,633 for the year ended December
31, 2013 and 2012, constituting 0.2% and 1% of the respective income before income tax. The equity
investments accounted for under the equity method in above companies were NT$412,683 thousands,
NT$ 161,999 thousands and NT$137,022 thousands, constituting 1.7 percent, 0.7 percent, and 0.6
percent of total assets.
We conducted our audits in accordance with the “Rules Governing the Examination of Financial
Statements by Certified Public Accountants” and generally accepted auditing standards in the Republicof China. Those standards and rules 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 and the reports of other auditors provide a reasonable basis for our opinion.

~15~

In our opinion, based on our audits and the reports of other auditors, the separate financial statements
referred to in the first paragraph present fairly, in all material respects, the financial position ofTranscend Information, Inc. as of December 31, 2013, December 31, 2012, and January 1, 2012, andthe results of their operations and their cash flows for the years ended December 31, 2013 and 2012 inconformity with the "Rules Governing the Preparation of Financial Statements by Securities Issuers".
.

March 19, 2014
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.
~16~

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

Assets

December 31, 2013
AMOUNT%

Notes

December 31, 2012
AMOUNT%

January 1, 2012
AMOUNT%

Current assets
10,988,389

44

9,096,189

38

8,936,277

40

without active market

74,513

-

-

-

-

-

1150

Notes receivable, net

4,158

-

9,987

-

7,780

-

1170

Accounts receivable, net

6(3)1,330,522

5

1,353,882

6

1,311,199

61180

Accounts receivable due from7(1)related parties, net

1,427,950

6

1,754,028

7

2,065,030

3

1200

Other receivables

237,508

1

253,5961

328,047

2

130X

Inventory, net

4,713,168

19

5,620,642

24

3,896,571

17

1470

Other current assets

13,127-36,314-23,442-

11XX

Current Assets

18,789,335

75

18,124,638

76

16,568,346

74

264,4221

417,3172

457,7482

3,747,410

15

3,217,680

13

3,071,327

14

and 8

1,838,184

8

1,919,956

8

1,932,607

9

1100

Cash and cash equivalents

6(1)

1147

Current bond investment

6(2)

$

6(4)

$

$

Non-current assets
1523

Non-current available-for-sale

6(5)financial assets
1550

Investments accounted for

6(6)using equity method
1600

Property, plant and equipment

6(7),7

1760

Investment property, net

6(8)217,5801

220,5731

223,736

1

1840

Deferred tax assets

6(20)58,347-59,702-55,256-

1900

Other non-current assets

8

37,980-21,281-

42,133-15XX

Non-current assets

6,163,923

25

5,856,509

19

5,782,807

26

24,953,258

100

23,981,147

100

22,351,153

100

1XXX

Total assets$(Continued)

~17~

$

$

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

Liabilities and Equity

December 31, 2013
AMOUNT%

Notes

December 31, 2012
AMOUNT%

January 1, 2012
AMOUNT%

Current liabilities
2100

Short-term loans

6(9)

2150

Notes payable

2170

Accounts payable

2180

Accounts payable to related$

295,140

2

1,215

$

-

-

-

3,607

2,571,3024

10

1,334,222

$

-

-

-

167

-

3,162,845

13

1,476,701

6

6637,9083

871,2094

283,266

1

325,9621

424,3292

218,8861

197,0101

415,170

2

7(1)parties
2200

Other payables

2230

Current tax liabilities

2300

Other current liabilities

4,615

-

1,977

-

4,210

-

21XX

Current Liabilities

4,708,646

19

4,329,309

18

3,191,786

14

6(20)

Non-current liabilities
2570

Deferred tax liabilities

6(20)395,2562

326,4112

304,878

2

2600

Other non-current liabilities

6(10)25,147-31,008-52,552-25XX

Non-current liabilities

420,4032

386,2781

388,678

2

2XXX

Total Liabilities

5,129,049

21

4,686,728

20

3,549,216

16

4,307,617

17

4,307,617

18

4,307,617

19

4,799,075

19

5,014,456

21

5,014,456

22

2,733,339

11

2,448,801

10

2,162,186

10

7,975,047

32

7,639,812

32

7,327,965

33

10,287)-18,801,937

84

22,351,153

100

6(11)

Share capital
3110

Common stock6(12)Capital surplus
3200

Capital surplus
6(13)Retained earnings
3310

Legal reserve

3350

Unappropriated retained
earnings
Other equity interest

3400

Other equity interest

3XXX

Total equity

6(15)
9,131

- (

19,824,209

79

24,953,258

100

116,267)- (19,294,419

80

23,981,147

100

Significant contingent liablities 9
and unrecongnised contract
commitments
Significant events after the11balance sheet date
Total liabilities and equity$$

The accompanying notes are an integral part of these separate financial statements.
See report of independent accountants dated March 19, 2014.

~18~

$

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESSEPARATE STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
(Expressed in thousands of New Taiwan Dollars, except earnings per share amount)

4000
5000
5900

6100
6200
6300
6000
6900
7010
7020
7050
7060

7000
7900
7950
8200
8310
8325
8360
8399
8500

9750
9850

Items
Notes
Operating Revenue
6(16) and 7
Operating Costs
6(4) and 7
Gross Profit
Unrealized gain fromintercompany transaction
Realized gain fromintercompany transaction
Gross Profit, net
Operating Expenses
6(19)Sales and marketing
expenses
General and administrative
expenses
Research and development
expenses
Total operating expenses
Operating Income
Non-operating Income andExpenses
Other income
6(17) and 7
Other gains and losses
6(18)Finance costs
Share of profit or loss of
6(6)associates and joint ventures
accounted for using equity
methodTotal non-operating
income and expenses
Income before income tax
Income tax expense
6(20)Net income
Other comprehensive income
Foreign exchange translationdifferences for foreign
operations
Unrealized gain (loss) on
6(5)available-for-sale financial
assetsActuarial gain on defined6(10)benefit plan
Income tax on other6(20)comprehensive income
Total comprehensive income
Net income attributable to:
Basic earnings per share
6(21)Basic earnings per share
Diluted earnings per share$(

Year ended December 31
2013
2012
AMOUNT%AMOUNT
25,087,848
100 $
25,382,153
21,072,049) (84) (21,502,817) (4,015,799
19
3,879,336(

87,889)73,1384,001,048

- (
16

%
100
85)
15

73,138)-90,833
3,897,031

15(

483,665) (2) (413,681) (2)(

204,448) (1) (207,636) (

1)

(
(

156,948)
845,061) (3,155,987

- (
3) (
13

145,155)
766,472) (3,130,559

3)
12

109,250
242,556
1,003)

1 (- (96,178110,447)
13)-

154,0291

241,9221$

504,832
3,660,819
461,862) (3,198,957

2
15
2) (
12 $

227,640
3,358,199
409,864) (2,948,335

1
13
2)
11

$

148,571- ($115,143)

-

2,085

- (

10,431)

-

5,387

-

19,317-25,258)3,329,742

13$

19,594
2,861,672

11

7.43
7.41

$
$

(

(

(
$

$
$

The accompanying notes are an integral part of these separate financial statements.
See report of independent accountants dated March 19, 2014.
~19~

6.84
6.83

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESSEPARATE STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
(Expressed in thousands of New Taiwan Dollars)
Capital Reserves

Equity attributable to owners of the parent
Retained Earnings

Common stock

Additional
paid-in capital

Capital surplus
from donatedassetsCapital surplus
from merger

Legal reserve

Unappropriatedearnings

Other equity interest
Foreignexchange
Unrealized
translation
gain or loss on
differences foravailable-forforeign
sale financial
operations
assets$ 4,307,617$ 4,975,222$$

35,128$ 2,162,186$$

Legal reserve

-

-

-

-

286,615(

286,615 )--Cash dividends

-

-

-

-

-

(

2,369,190 )--Net income for the year

-

-

-

-

-

2,948,335--

Other comprehensive income for the year

-

-

-

-

-

19,317(

95,549 ) (10,431 ) ($ 4,307,617$ 4,975,222

$

4,106

$

35,128$ 2,448,801$

7,639,812($

95,549 ) ($20,718 )$ 19,294,419$ 4,307,617$ 4,975,222

$

4,106

$

35,128$ 2,448,801$

7,639,812($

95,549 ) ($20,718 )$ 19,294,419

Legal reserve

-

-

-

-

284,538(

284,538 )--Cash dividends

-

-

-

-

-

(

2,584,571 )

-

-

(

2,584,571 )

-

-

-

-

-

-

(

215,381 )Total equity$ 18,801,937

For the year ended December 31, 2012
Balance at January 1, 2012

4,106

7,327,965-($

10,287 )Appropriations of 2011 earnings

Balance at December 31, 2012(

2,369,190 )2,948,335
86,663 )For the year ended December 31, 2013
Balance at January 1, 2013
Appropriations of 2012 earnings-

Change in capital reserve
Cash distribution of capital reserve-(

215,381 )Net income for the year

-

-

-

-

-

3,198,957--

3,198,957

Other comprehensive income for the year

-

-

-

-

-

5,387

123,313

2,085

130,785$ 4,307,617$ 4,759,841

35,128$ 2,733,339

Balance at December 31, 2013

$

4,106

$

The accompanying notes are an integral part of these separate financial statements.
See report of independent accountants dated March 19, 2014.

~20~

$

7,975,047$

27,764($

18,633 )$ 19,824,209

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESSEPARATE STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31(Expressed in thousands of New Taiwan Dollars)
2013

2012

CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax for the year
Adjustments to reconcile income before tax to net cash provided byoperating activities:
Income and expenses having no effect on cash flows
Unrealized gain from intercompany transaction
Realized gain from intercompany transaction
Net gains on valuation of financial assets at fair value throughprofit or loss
Gain on disposal of financial assets
Loss on disposal of equity investment accounted for using equity
methodShare of loss of associates and joint ventures accounted for using
equity method
Provision for (Reversal of) bad debt expense
Loss (gain) on market price decline (recovery) of inventory
Depreciation expense
Interest income
Dividend income
Impairment loss on financial assets
Gains on disposal of property, plant, and equipment
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Net gain on financial assets at fair value through profit
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 current liabilities
Other non-current liabilities
Cash generated from operations
Cash dividend received
Interest received
Interest paid
Income tax paid
Net cash provided by operating activities$

3,660,819$

3,358,199(

87,88973,138 ) (((29,979 )97,125 )

-

323

-

(

154,029 )13,325
9,673 )
120,042
100,837 )
15,074 )1,974 )

(
(
(
(

(

241,922 )981 )16,403
117,10987,767 )
24,584 )30,000156 )29,979341,942 )
20,366917,147(
2,308(

267,093
85,7501,740,474 )
12,872 )102,379 )
36,305 )2,638
1,670 )
4,779,353
15,07496,5591,004 )
395,044 )4,494,938

(
(

(
(

(
(

73,13890,833 )

(
(

(
(
(

(
(

1,456,283
75,040 )2,233 )
23,423 )3,103,690
24,58476,46813 )
595,341 )2,609,388

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

74,066 )5,263
32,612 ) (
2,438
1,051
(
97,926 ) (((73,715 )353
6,924 )
80,286 )CASH FLOWS FROM FINANCING ACTIVITIESShort-term loans
Payment of cash dividends (including cash distribution of capitalreserve)
Net cash used in financing activities
Increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

295,140(($

2,799,952 ) (2,504,812 ) (1,892,200
9,096,189
10,988,389$

The accompanying notes are an integral part of these separate financial statements.
See report of independent accountants dated March 19, 2014.

~21~

2,369,190 )2,369,190 )
159,9128,936,277
9,096,189

Attachment V
REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR13000270

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, 2013, December 31, 2012, and January 1, 2012 and the related
consolidated statements of comprehensive income, of changes in equity, and of cash flows for theyears ended December 31, 2013 and 2012. These consolidated financial statements are theresponsibility of the Company’s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. As disclosed in Note 4(3)B, we did not audit thefinancial statements of certain subsidiaries, which statements reflect total assets of NT$547,456
thousand, NT$636,489 thousand, and NT$684,112 thousand, constituting 2 percent, 3 percent, and 3
percent of the consolidated total assets, as of December 31, 2013, December 31, 2012, and January 1,
2012, respectively, and total revenues of NT$2,748,290 thousand and NT$2,958,740 thousand, bothconstituting 11 percent of the consolidated total operating revenue, for the years ended December 31,
2013 and 2012, respectively. Furthermore, we did not audit the financial statements of equity
investments accounted for under the equity method. The investment loss from these equity investments
amounting to NT$30,403 thousand for the year ended December 31, 2013, and the information of
investee company as disclosed in Note 13 were solely based on the reports of other auditors. As of
December 31, 2013, the equity investment accounted for under the equity method was NT$221,255
thousand.
We conducted our audits in accordance with the “Rules Governing the Examination of Financial
Statements by Certified Public Accountants” and generally accepted auditing standards in the Republicof China. Those standards and rules 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 and the reports of other auditors provide a reasonable basis for our opinion.

~22~In our opinion, based on our audits and the reports of other auditors, the consolidated financial
statements referred to in the first paragraph present fairly, in all material respects, the financial positionof Transcend Information, Inc. and its subsidiaries as of December 31, 2013, December 31, 2012, andJanuary 1, 2012, and the results of their operations and their cash flows for the years ended December
31, 2013 and 2012 in conformity with the "Regulations Governing the Preparation of Financial
Reports by Securities Issuers" and “International Financial Reporting Standards”, “International
Accounting Standards”, “International Financial Reporting Interpretations Committee”, and “Standing
Interpretations Committee” as endorsed by the Financial Supervisory Commission.
We have also audited the separate financial statements of Transcend Information, Inc. as of and for theyears ended December 31, 2013 and 2012, and have issued a modified unqualified opinion.

March 19, 2014
Taipei, Taiwan
Republic of China------------------------------------------------------------------------------------------------------------------------------------------------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.
~23~

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

Assets

December 31, 2013
AMOUNT%

Notes

December 31, 2012
AMOUNT%

January 1, 2012
AMOUNT%

Current assets
11,639,505

48

9,872,243

41

9,708,263

44

without active market

123,6981

470,0642

96,140-1150

Notes receivable, net

4,158

-

9,987

-

7,780

-

1170

Accounts receivable, net

6(3)2,732,001

11

2,418,600

102,430,418

11

1180

Accounts receivable due from7(1)related parties, net--

162,2471

108,774

1

1200

Other receivables

254,5281

278,2811

331,4782

130X

Inventory, net

5,075,939

21

6,222,330

26

4,502,324

20

1470

Other current assets

36,311-58,898-47,386-

11XX

Current Assets

19,866,140

82

19,492,650

81

17,232,563

78

264,4221

417,3172

457,7482

221,255

1

-

-

-

-

3,330,875

14

3,473,891

15

3,708,190

17

1100

Cash and cash equivalents

6(1)

1147

Current bond investment

6(2)

$

6(4)

$

$

Non-current assets
1523

Non-current available-for-sale

6(5)financial assets
1550

Investments accounted for

6(6)using equity method
1600

Property, plant and equipment

6(7) and 8

1760

Investment property, net

6(8)303,2321

306,2721

316,818

2

1840

Deferred tax assets

6(21)78,915-84,314-76,064-

1900

Other non-current assets

6(9) and 8

183,6911

157,9661

188,862

1

15XX

Non-current assets

4,382,390

18

4,439,760

19

4,747,682

22

24,248,530

100

23,932,410

100

21,980,245

100

1XXX

Total assets$(Continued)

~24~

$

$

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

Liabilities and Equity

December 31, 2013
AMOUNT%

Notes

December 31, 2012
AMOUNT%

January 1, 2012
AMOUNT%

Current liabilities
168,200

1

-

-

-

3,608

-

167

-

2,669,584

11

3,323,331

14

1,713,204

8

parties

45,801

-

-

-

-

-

2200

Other payables

393,8102

468,2022

589,3102

2230

Current tax liabilities

239,9671

248,795

1

427,4092

2300

Other current liabilities

50,013-39,577-59,540-21XX

Current Liabilities

3,979,430

16

4,251,713

18

2,789,630

12

2100

Short-term loans

2150

Notes payable

2170

Accounts payable

2180

Accounts payable to related

6(10)

$

579,040

2

1,215

$

$

7(1)

6(21)

Non-current liabilities
2570

Deferred tax liabilities

6(21)395,5422

326,4111

304,878

2

2600

Other non-current liabilities

6(11)49,349-59,867-83,800-25XX

Non-current liabilities

444,8912

386,2781

388,678

2

2XXX

Total Liabilities

4,424,321

18

4,637,991

19

3,178,308

14

4,307,617

18

4,307,617

18

4,307,617

20

4,799,075

20

5,014,456

21

5,014,456

23

2,733,339

11

2,448,801

10

2,162,186

10

7,975,047

33

7,639,812

32

7,327,965

33

10,287)-6(12)Share capital
3110

Common stock6(13)Capital surplus
3200

Capital surplus
Retained earnings

3310

Legal reserve

3350

Unappropriated retained

6(14)earnings
Other equity interest
3400
31XX

3XXX

6(16)
9,131

Other equity interest- (116,267)- (Total equity attributable toowners of parent

19,824,209

82

19,294,419

81

18,801,937

86

Total equity

19,824,209

82

19,294,419

81

18,801,937

86

24,248,530

100

23,932,410

100

21,980,245

100

Significant contingent liablities 9
and unrecongnised contract
commitments
Significant events after the11balance sheet date
Total liabilities and equity$$

The accompanying notes are an integral part of these consolidated financial statements.
See report of independent accountants dated March 19, 2014.

~25~

$

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
(Expressed in thousands of New Taiwan Dollars, except earnings per share amount)

8710

Items
Notes
Operating Revenue
6(17) and 7
Operating Costs
6(4) and 7
Gross Profit
Operating Expenses
6(20)Sales and marketing
expenses
General and administrative
expenses
Research and development
expenses
Total operating expenses
Operating Income
Non-operating Income andExpenses
Other income
6(18)Other gains and losses
6(19)Finance costs
Share of profit or loss of
6(6)associates and joint ventures
accounted for using equity
methodTotal non-operating
income and expenses
Income before income tax
Income tax expense6(21)Net income
Other comprehensive income
Foreign exchange translationdifferences for foreign
operations
Unrealized gain (loss) on
6(5)available-for-sale financial
assetsActuarial gain on defined6(11)benefit plan
Income tax on other6(21)comprehensive income
Total comprehensive income
Net income attributable to:
Owners of parent
Comprehensive income
attributable to:
Owners of parent

9750
9850

Basic earnings per share
6(22)Basic earnings per share
Diluted earnings per share

4000
5000
5900
6100
6200
6300
6000
6900
7010
7020
7050
7060

7000
7900
7950
8200
8310
8325
8360
8399
8500
8610

$
(

Year ended December 31
2013
2012
AMOUNT%AMOUNT
26,122,390
100 $
26,215,961
21,201,143) (81) (21,268,979) (4,921,247
19
4,946,982

%
100
81)
19

(

1,020,315) (4) (982,033) (4)(

392,338) (1) (399,418) (

1)

(
(

157,028) (1,569,681) (3,351,566

1) (
6) (
13

145,155) (1,526,606) (3,420,376

1)
6)
13

(

130,645
292,2365,900)

1 (- (109,938
78,559)1,581)-(

30,403)

-

-

-

$

386,578
3,738,144
539,187) (3,198,957

1
14
2) (
12 $

29,7983,450,174
501,839) (2,948,335

13
2)
11

$

148,5711 ($

115,143)

-

2,085

- (

10,431)

-

5,387

-

19,317-$25,258)3,329,742

13$

19,594
2,861,672

11$

3,198,957

12$

2,948,335

11$

3,329,742

13$

2,861,672

11

7.43
7.41

$
$

(

(

$
$

The accompanying notes are an integral part of these consolidated financial statements.
See report of independent accountants dated March 19, 2014.
~26~

6.84
6.83

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
(Expressed in thousands of New Taiwan Dollars)
Capital Reserves

Equity attributable to owners of the parent
Retained Earnings

Common stock

Additional
paid-in capital

Capital surplus
from donatedassetsCapital surplus
from merger

Legal reserve

Unappropriatedearnings

Other equity interest
Foreignexchange
Unrealized
translation
gain or loss on
differences foravailable-forforeign
sale financial
operations
assets$ 4,307,617$ 4,975,222$$

35,128$ 2,162,186$$

Legal reserve

-

-

-

-

286,615(

286,615 )--Cash dividends

-

-

-

-

-

(

2,369,190 )--Net income for the year

-

-

-

-

-

2,948,335--

Other comprehensive income for the year

-

-

-

-

-

19,317(

95,549 ) (10,431 ) ($ 4,307,617$ 4,975,222

$

4,106

$

35,128$ 2,448,801$

7,639,812($

95,549 ) ($20,718 )$ 19,294,419$ 4,307,617$ 4,975,222

$

4,106

$

35,128$ 2,448,801$

7,639,812($

95,549 ) ($20,718 )$ 19,294,419

Legal reserve

-

-

-

-

284,538(

284,538 )--Cash dividends

-

-

-

-

-

(

2,584,571 )

-

-

(

2,584,571 )

-

-

-

-

-

-

(

215,381 )Total equity$ 18,801,937

For the year ended December 31, 2012
Balance at January 1, 2012

4,106

7,327,965-($

10,287 )Appropriations of 2011 earnings

Balance at December 31, 2012(

2,369,190 )2,948,335
86,663 )For the year ended December 31, 2013
Balance at January 1, 2013
Appropriations of 2012 earnings-

Change in capital reserve
Cash distribution of capital reserve-(

215,381 )Net income for the year

-

-

-

-

-

3,198,957--

3,198,957

Other comprehensive income for the year

-

-

-

-

-

5,387

123,313

2,085

130,785$ 4,307,617$ 4,759,841

35,128$ 2,733,339

Balance at December 31, 2013

$

4,106

$

The accompanying notes are an integral part of these consolidated financial statements.
See report of independent accountants dated March 19, 2014.

~27~

$

7,975,047$

27,764($

18,633 )$ 19,824,209

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31(Expressed in thousands of New Taiwan Dollars)
2013

2012

CASH FLOWS FROM OPERATING ACTIVITIESConsolidated profit before tax for the year
Adjustments to reconcile income before tax to net cash provided byoperating activities:
Income and expenses having no effect on cash flows
Net gains on valuation of financial assets at fair value throughprofit or loss
Gain on disposal of financial assets
Share of loss of associates and joint ventures accounted for using
equity method
Provision for bad debt expense
Loss (gain) on market price decline (recovery) of inventory
Depreciation expense
Amortization expense
Interest income
Impairment loss on financial assets
Gains on disposal of property, plant, and equipment
Dividend income
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Net gain on financial assets at fair value through profit
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 current liabilities
Other non-current liabilities
Cash generated from operations
Cash dividend received
Interest received
Interest paid
Income tax paid
Net cash provided by operating activities

$

(
(

(
(
(
(

(

(
(
(

(
(

3,738,144$

3,450,174

29,979 )112,397 ) (27,973 )30,403
14,9009,668 )
238,147
2,238
115,182 ) (1,916 ) (15,074 ) (10,673
16,395
237,463
2,956
95,494 )30,000746 )
24,584 )29,979160,225 ) (39,086
1,156,059
(
1,708
(

54,535 )66,651
1,736,401 )
11,512 )

610,339 )
67,664 )10,436
5,131 )
4,133,525
15,074
99,8496,728 )
498,742 )3,742,9781,613,568
120,355 )
19,963 )4,616 )
3,331,701
24,58482,040753 )653,223 )2,784,349

(
(
(

(
(

CASH FLOWS FROM INVESTING ACTIVITIES
Decrease (increase) in bond investments without active markets
Acquisition of property, plant, and equipment
Disposal of property, plant, and equipment
Decrease (increase) in other non-current assets
Net cash provided by (used in) investing activities

388,276
54,858 )
7,780
8,640 )
332,558

(
(

(
(
(
(

350,943 )
48,915 )
3,579
990 )
397,269 )CASH FLOWS FROM FINANCING ACTIVITIESShort-term loans
Payment of cash dividends (including cash distribution of capitalreserve)
Net cash used in financing activities
Effect of foreign exchange rate changes
Increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year(($

447,390

168,200

2,799,952 ) (2,352,562 ) (44,288(1,767,262
9,872,243
11,639,505$

2,369,190 )
2,200,990 )
22,110 )163,980
9,708,263
9,872,243

The accompanying notes are an integral part of these consolidated financial statements.
See report of independent accountants dated March 19, 2014.

~28~

Attachment VI
TRANSCEND INFORMATION INC.
COMPARISON TABLE FOR THE “PROCEDURES FOR ACQUISITION OR DISPOSAL OF ASSETS
After the revision

Before the revision

Explanation

Article 3：Scope of assets

Article 3：Scope of assets

The Company proposes to amend the(omitting)(omitting)“Procedures for Acquisition or Disposal

2. Real property (including land, houses and 2. Real property (including construction of Assets” to comply with amendment tobuildings, investment property, rights toenterprise inventory) and other fixed “Regulations Governing Acquisition or

use land, and construction enterpriseassets.

inventory) and equipment.

Disposalof

Assetsby

PublicCompanies”, and to fit with IFRSs and(omitting)(omitting)

the Company’s practical operation.

Article 4：Definitions of Term

Article 4：Definitions of Term

The Company proposes to amend the(omitting)(omitting)“Procedures for Acquisition or Disposal

2. Assets acquired or disposed through 2. Assets acquired or disposed through of Assets” to comply with amendment tomergers, demergers, acquisitions, ormergers, demergers, acquisitions, or “Regulations Governing Acquisition ortransfer of shares in accordance withtransfer of shares in accordance with Disposal

law: Refers to assets acquired orlaw: Refers to assets acquired or Companies”, and to fit with IFRSs anddisposed through mergers, demergers,

disposed through mergers, demergers, the Company’s practical operation.

or acquisitions conducted under theor acquisitions conducted under theBusiness Mergers and Acquisitions Act,

Business Mergers and Acquisitions

Financial

Act,

Act, Financial Holding Company Act,

Financial Institution Merger Act and

Financial Institution Merger Act andother acts, or to transfer of shares fromother acts, or to transfer of shares fromanother company through issuance ofanother company through issuance of

new

new

Holding

sharesconsiderationofCompany

its

thereof

own

as

the

(hereinafter

sharesconsideration

of

its

thereof

own

as

the

(hereinafter"transfer of shares") under Article 156,

"transfer of shares") under Article 156,

paragraph 6 of the Company Act.

paragraph 6 of the Company Act.

3. Related party and Subsidiary: As defined 3. Related party: As defined in the4.

in the Regulations Governing theRegulations Governing the Preparation

Preparation of Financial Reports byof Financial Reports by Securities

Securities Issuers.

Issuers.

Professional appraiser: Refers to a real 4.

Subsidiary:

property appraiser or other person duly

Regulations Governing the Preparation

authorized by law to engage in theof Financial Reports by Securities

value appraisal of real property or

Issuers.

As

equipment.

- 29 -

defined

in

the

of

Assetsby

Public5.

6.

Date of occurrence: Refers to the date 5.

Professional appraiser: Refers to a realof contract signing, date of payment,

property appraiser or other person duly

date of consignment trade, date of

authorized by law to engage in thetransfer, dates of boards of directors

value appraisal of real property or

resolutions, or other date that canother fixed assets.

confirm the counterpart and monetary 6.

Date of occurrence: Refers to the dateamount of the transaction, whicheverof contract signing, date of payment,

date is earlier; provided, for investment

date of consignment trade, date offor which approval of the competenttransfer, dates of boards of directors

authority is required, the earlier of theresolutions, or other date that can

above date or the date of receipt ofconfirm the counterpart and monetary

approval by the competent authority

amount of the transaction, whichever

shall apply.

date

Mainland

China

area

is

earlier;

provided,forinvestment:

investment for which approval of theRefers to investments in the mainlandcompetent authority is required, theChina area approved by the Ministry ofearlier of the above date or the date of

Economic

Affairs

receipt of approval by the competentCommissionorInvestment
conducted

inauthority shall apply.

accordance with the provisions of the 7.

Mainland

China

Regulations Governing Permission for

Refers to investments in the mainland

Investment or Technical Cooperation in

China area approved by the Ministry

the Mainland Area.

of

Economic

Commissionarea

Affairsorinvestment:

Investment

conducted

inaccordance with the provisions of theRegulations Governing Permission for
Investment or Technical Cooperationin the Mainland Area.

Article 10：In acquiring or disposing of real Article 10：In acquiring or disposing of real The Company proposes to amend theproperty or equipment where theproperty or other fixed assets where the “Procedures for Acquisition or Disposaltransaction amount reaches 20 percent oftransaction amount reaches 20 percent

of Assets” to comply with amendment tothe company's paid-in capital or NT$300

of the company's paid-in capital or“Regulations Governing Acquisition or

million or more, the company, unless

NT$300 million or more, the company, Disposaltransacting with a government agency,

unless transacting with a government

Companies”, and to fit with IFRSs andengaging others to build on its own land,agency, engaging others to build on its

the Company’s practical operation.

engaging others to build on rented land,

own land, engaging others to build onor acquiring or disposing of equipment

rented land, or acquiring or disposing offor business use, shall obtain an appraisal

equipment for business use, shall obtainreport prior to the date of occurrence ofan appraisal report prior to the date of- 30 -

of

Assetsby

Publicthe event from a professional appraiser

occurrence of the event from aand shall further comply with theprofessional appraiser and shall further

following provisions:comply with the following provisions:

1. Where due to special circumstances it is 1. Where due to special circumstances it
necessary to give a limited price,

is necessary to give a limited price,specified price, or special price as a

specified price, or special price as areference basis for the transaction price,reference basis for the transaction

the transaction shall be submitted forprice, the transaction shall beapproval in advance by the board ofsubmitted for approval in advance bydirectors, and the same procedure shallthe board of directors, and the same

be followed for any future changes toprocedure shall be followed for any

the terms and conditions of the

future changes to the terms andtransaction.

conditions of the transaction.

2. Where the transaction amount is NT$1 2. Where the transaction amount is NT$1
billion or more, appraisals from two or

billion or more, appraisals from two or

more professional appraisers shall be

more professional appraisers shall beobtained.

obtained.

3. Where any one of the following

3. Where any one of the following

circumstances applies with respect tocircumstances applies with respect tothe professional appraiser's appraisal

the professional appraiser's appraisal

results, unless all the appraisal results

results, unless all the appraisal results

for the assets to be acquired are higher

for the assets to be acquired are higher

than the transaction amount, or all thethan the transaction amount, or all theappraisal results for the assets to beappraisal results for the assets to bedisposed of are lower than thedisposed of are lower than thetransaction amount, a certified public

transaction amount, a certified public

accountant shall be engaged to perform

accountant shall be engaged to performthe appraisal in accordance with thethe appraisal in accordance with theprovisions of Statement of Auditing

provisions of Statement of AuditingStandards No. 20 published by the ROC

Standards No. 20 published by the

Accounting Research and Development

Accounting Research andFoundation (ARDF) and render aDevelopment Foundation and render aspecific opinion regarding the reason

specific opinion regarding the reason

for the discrepancy and thefor the discrepancy and theappropriateness of the transaction price:

appropriateness of the transaction

A. The discrepancy between theprice:

appraisal result and the transaction

A. The discrepancy between theamount is 20 percent or more of theappraisal result and the transaction

transaction amount.

amount is 20 percent or more of the- 31 -

transaction amount.

B. The discrepancy between the

B. The discrepancy between theappraisal results of two or more
professional appraisers is 10 percent

appraisal results of two or moreor more of the transaction amount.

professional appraisers is 10
percent or more of the transaction

4. No more than 3 months may elapse

amount.

between the date of the appraisal reportissued by a professional appraiser and

4. No more than 3 months may elapse

the contract execution date; provided,

between the date of the appraisal

where the publicly announced current

report issued by a professional

value for the same period is used andappraiser and the contract execution

not more than 6 months have elapsed,

date; provided, where the publicly

an opinion may still be issued by theannounced current value for the same

original professional appraiser.

period is used and not more than 6months have elapsed, an opinion may
still be issued by the original
professional appraiser.

Article 12：The procedures for Related Party Article 12：The procedures for Related The Company proposes to amend theTransactions(omitting)2.

The“Procedures for Acquisition or Disposal

Party Transactionsof Assets” to comply with amendment to(omitting)Companythatacquiresreal 2.

The Company that acquires real “Regulations Governing Acquisition orproperty from a related party shallproperty from a related party shall Disposal

evaluate the reasonableness of theevaluate the reasonableness of the Companies”, and to fit with IFRSs andtransaction costs based the relatedtransaction costs based the related the Company’s practical operation.

requirement.

requirement.

When

the

following

When

the

followingconditions happens, the company shallconditions happens, the company shalladditionally engage a certified public

additionally engage a certified public

accountant to review the reasonablenessaccountant

and to provide an opinion:

reasonableness and to provide anA.

The related party acquired the real

opinion:property through inheritance or asA.

B.

reviewthe

The related party acquired thea gift.

real property through inheritanceMore than 5 years will haveor as a gift.

elapsed from the time the related

C.

to

B.

More than 5 years will haveparty signed the contract to obtainelapsed from the time the related

the real property to the signing

party signed the contract to obtaindate for the current transaction.

the real property to the signing

The real property is acquired

date for the current transaction.

throughsigning

of

a

joint

development contract with theC.

The real property is acquired
throughsigning- 32 -

of

a

joint

of

Assetsby

Publicrelated party, or through engaging

development contract with thethe related party to develop therelated party.

realproperty,eitheron

the 3.

Company's own land or on rented
land.
3.

When the Company intends to acquireor dispose of real property from or to a
related party, or when it intends toacquire or dispose of assets other thanreal property from or to a related party
and the transaction amount reaches 20
percent or more of paid-in capital, 10
percent or more of the company's total
assets, or NT$300 million or more,
except in trading of government bonds
or bonds under repurchase and resaleorsubscription

When the Company intends to acquireor dispose of real property from or to a

Appraisal and Operating procedures

agreements,

Appraisal and Operating proceduresor

redemption of domestic money market
funds, the company may not proceed toenter into a transaction contract ormake a payment until the following
matters have been approved by theboard of directors and recognized by
the supervisors:(omitting)
For acquisition or disposition of equipment
between the Company and its subsidiaries, it

related party, or when it intends toacquire or dispose of assets other thanreal property from or to a related party
and the transaction amount reaches 20
percent or more of paid-in capital, 10
percent or more of the company's total
assets, or NT$300 million or more, thecompany may not proceed to enter intoa transaction contract or make apayment until the following mattershave been approved by the board of
directors

andrecognized

by

the

supervisors:(omitting)

For acquisition or disposition of machinery
equipment between the Company and its
subsidiaries,

it is permissible

to beapproved first with specific limitation by
the chairman and then ratified at the next
board of directors meeting by submitting
the proposal.
(omitting)is permissible to be approved first withspecific limitation by the chairman and thenratified at the next board of directors
meeting by submitting the proposal.
(omitting)

Article 13：The procedures for acquisition or Article 13：The procedures for acquisition The Company proposes to amend thedisposition of memberships andor disposition of memberships and“Procedures for Acquisition or Disposal

intangible assets

intangible assetsof Assets” to comply with amendment toWhere the Company acquires or disposes of Where the Company acquires or disposes “Regulations Governing Acquisition orof
Assetsby
Publicmemberships or intangible assets and the of memberships or intangible assets and Disposal- 33 -

transaction amount reaches 20 percent or the transaction amount reaches 20 percent Companies”, and to fit with IFRSs andmore of paid-in capital or NT$300 million or more of paid-in capital or NT$300 the Company’s practical operation.
or more, except in transactions with a million or more, the company shall engage
government agency, the company shall a certified public accountant prior to theengage a certified public accountant prior to date of occurrence of the event to render an
the date of occurrence of the event to render opinion on the reasonableness of thean opinion on the reasonableness of the transaction price; the CPA shall comply
transaction price; the CPA shall comply with the provisions of Statement of
with

the

provisionsofStatementof Auditing Standards No. 20 published byAuditing Standards No. 20 published by the the ARDF.
ARDF.
Article 15：The procedures for acquisition or Article 15：The procedures for acquisition The Company proposes to amend thedisposition of Derivatives“Procedures for Acquisition or Disposal

or disposition of Derivatives(omitting)(omitting)of Assets” to comply with amendment to

6. Internal Control

6. Internal Control“Regulations Governing Acquisition or

G. A company shall report to the latest

G. A company shall report to the Disposal

Assetsby

Publicmeeting of the board of directors

meeting of the board of directors Companies”, and to fit with IFRSs andafter it authorizes the relevant

after it authorizes the relevant the Company’s practical operation.

personnel

personnel

tohandlederivatestohandlederivates

trading in accordance with thistrading in accordance with thisprocedures

proceduresforengaging

infor

engaging

derivatives trading.

derivatives trading.

Article 19：Information Disclosure

Article 19：Information Disclosure

Proceduresin

The Company proposes to amend the“Procedures for Acquisition or Disposal

Procedures

1. Projects that shall be declared or Report

1.

Standard
A.

of

Projects that shall be declared orof Assets” to comply with amendment toReport Standard“Regulations Governing Acquisition orproperty from or to a related party,

ofAssetsby
PublicAcquisition or disposal of real Disposal
property from or to a related Companies”, and to fit with IFRSs andor acquisition or disposal of assets

party, or acquisition or disposal the Company’s practical operation.

other than real property from or toof assets other than real propertyathefrom or to a related party wheretransaction amount reaches 20

the transaction amount reaches 20

percent or more of paid-in capital,

percent

10

capital, 10 percent or more of theAcquisition or disposal of real

relatedpercent

party

or

where

more

of

the

A.

or

more

of

paid-incompany's total assets, or NT$300

company's

total

assets,million or more; provided, thisNT$300

millionorshall not apply to trading ofprovided, this shall not apply to- 34 -ormore;government bonds or bonds under

trading of government bonds orrepurchase and resale agreements,

bonds

or subscription or redemption ofresale agreements.

under

repurchaseand(omitting)domestic money market funds.
(omitting)D.
D.

Where an asset transaction other

Where an asset transaction otherthan any of those referred to inthan any of those referred to in thethepreceding three subparagraphs, asubparagraphs,

disposal of receivables by areceivables

financialaninstitution, or an investment ininvestment in the mainland China

the mainland China area reaches

area reaches 20 percent or more of

20 percent or more of paid-in

paid-in capital or NT$300 million;

capitalprovided, this shall not apply toprovided, this shall not apply tothe following circumstances:

the following circumstances:(1) Trading of government bonds.

(1) Trading of government bonds.

(2) Securities(2) Securities

institution,or

tradingbypreceding

or

a

by

three
disposalaoffinancial

NT$300

million;tradingbyinvestment professionals on

investment professionals on

foreign or domestic securities

foreign or domestic securities

exchanges or over-the-counterexchanges or over-the-countermarkets, or subscription ofmarkets.

securities by a securities firm,(3) Trading

either in the primary market inaccordancewithrelevant

bonds

under

(4) Where the type of asset
acquired

of

bonds

repurchase/resale agreements.

regulations.
(3) Trading

of

under

machineryordisposedisequipmentfor

repurchase/resale agreements,

businessor subscription or redemption

counterparty is not a relatedof domestic money market

party, and the transaction

funds.

amount is less than NT$500(4) Whereacquired

the

type

or

of

disposed

asset

million.

is (omitting)equipment for business use, thetrading counterparty is not a
relatedparty,

andthetransaction amount is less than
NT$500 million.
(omitting)- 35 -

use,thetradingAttachment VII
TRANSCEND INFORMATION INC.
COMPARISON TABLE FOR THE “ARTICLES OF INCORPORATION
After the revision

Before the revision

Explanation

Section III - Shareholders’’ meetings

Section III - Shareholders’’ meetings

To carry out Shareholder Activism, theArticle 12：

Article 12：

Company proposes to amend the

Except as provided in the Company Law of Except as provided in the Company Law of “Articles of Incorporation” to include thethe Republic of China,

the Republic of China,

use of an electronic voting system byshareholders’meetings may be held if

shareholders’meetings may be held if

shareholders pursuant to Article 177-1 ofattended by shareholders more than one half attended by shareholders more than oneof the total issued and outstanding capital

half of the total issued and outstanding

stock of the Corporation, and resolutions

capital stock of the Corporation, andshall be adopted at the meeting with theresolutions shall be adopted at the meeting

the Company Act.

concurrence of a majority of the votes held with the concurrence of a majority of theby shareholders present at the meeting.

votes held by shareholders present at the

Pursuant to Article 177-1 of the Company

meeting.

Act, the shareholders may vote via written
form or an electronic voting system, and themanner or voting shall be clearly stated ineach meeting notice.

Article 13-1：

Article 13-1：

To improve corporation government, theTo harmonize with Article 14-2 of the

To harmonize with Article 14-2 of theCompany

proposed

to

amend

the

Securities and Exchange Act, there shall be Securities and Exchange Act, there shall be “Articles of Incorporation” to adopt a
at least three independent directors among
the Company's directors. A candidate

at least three independent directors among candidate nomination system for the
the Company's directors. A candidate
election of directors pursuant to Article

nomination system shall be adopted, and the nomination system shall be adopted, andshareholders meeting shall elect all directors the shareholders meeting shall elect(including independent directors) fromindependent directors from among theamong the those listed on the slate ofthose listed on the slate of independent

director candidates. The relevant regulations director candidates. The relevantof the competent securities authority shallregulations of the competent securities

be followed regarding the professional

authority shall be followed regarding thequalifications, shareholding, moonlighting

professional qualifications, shareholding,restrictions, nomination and election, andmoonlighting restrictions, nomination andother compliance requirements regarding

election, and other complianceindependent directors.

requirements regarding independent
directors.

- 36 -

192-1 of the Company Act.

Attachment VIII
TRANSCEND INFORMATION INC.
COMPARISON TABLE FOR THE “PROCEDURES FOR ELECTION OF DIRECTOR
After the revision

Before the revision

Explanation

Article 1：The directors of this Company Article 1：The directors of this Company

The Company proposes to amend theshall be elected in accordance with the rules shall be elected in accordance with the“Procedures for Election of Directors” tospecified herein and all directors (including rules specified herein. This Company’s

comply with amendment to “Articles of

independent directors) shall be elected by independent directors shall be elected by

Incorporation”.

adopting the candidate nomination system adopting the candidate nomination system
specified in Article 192-1 of the Company specified in Article 192-1 of the Company
Act.

Act.

- 37 -

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 taperecorded 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.
- 38 -

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, otheriwse 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- 39 -

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.

- 40 -

APPENDIX II
TRANSCEND INFORMATION INC.
ARTICLES OF INCORPORATION
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 percentof 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
the reinvestment 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.
- 41 -

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; andat 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.

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 electionof directors to take office. The aggregate shareholding percentages of the entire bodies of directors shall comply withthe regulations prescribed by the securities supervisory authorities. The board of directors is authorized to resolve the- 42 -

rates of directors’ remuneration based on the extent of their participation in the Company’s business operations orvalue of their contribution, at a level consistent with general practices in the industry. The company may acquireliability insurance for all directors within their term of office, and the board of directors is authorized to resolute thescope 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 independent directors from among the those listed on the slate of independent 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.

- 43 -

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
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.),- 44 -

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.
The 24th amendment was made on January 5, 2012.
The 25th amendment was made on June 13, 2013.
- 45 -

APPENDIX III
TRANSCEND INFORMATION INC.
PROCEDURES FOR ACQUISITION OR DISPOSAL OF ASSETS（Before amendment）
Article 1：Objective
For purposes of assets protection and public disclosure of information, the Company set this procedure.

Article 2：Basis
These Procedures for Acquisition or Disposal of Assets ("Procedures") are adopted in accordance with Article 36-1 of the
Securities and Exchange Act and the Regulations Governing the Acquisition or Disposal of Assets by Public Companies
issued by the Securities and Futures Bureau of the Financial Supervisory Commission.

Article 3：Scope of assets
1.

Security investments: including Investments in stocks, government bonds, corporate bonds, financial bonds,
securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, andasset-backed securities.

2.

Real property (including construction enterprise inventory) and other fixed assets.

3.

Memberships.

4.

Intangible assets: including Patents, copyrights, trademarks, and franchise rights.

5.

Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue
receivables).

6.

Derivatives.

7.

Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares inaccordance with law.

8.

Other major assets.

Article 4：Definitions of Term
1.

Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, and swap contracts, andcompound contracts combining the above products, whose value is derived from assets, interest rates, foreignexchange rates, indexes or other interests. The term "forward contracts" does not include insurance contracts,
performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales)
agreements.

2.

Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law:
Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the BusinessMergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts,or to transfer of shares from another company through issuance of new shares of its own as the consideration
thereof (hereinafter "transfer of shares") under Article 156, paragraph 6 of the Company Act.

3.

Related party: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

4.

Subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
- 46 -

5.

Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in thevalue appraisal of real property or other fixed assets.

6.

Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date oftransfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetaryamount of the transaction, whichever date is earlier; provided, for investment for which approval of the competentauthority is required, the earlier of the above date or the date of receipt of approval by the competent authority
shall apply.

7.

Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of
Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations
Governing Permission for Investment or Technical Cooperation in the Mainland Area.

8.

Latest Financial Statements" used herein should mean the financial statements of this Company audited or
examined by certified public accountant which has been published in accordance with applicable regulation before
the subject acquisition or disposal of assets.

Article 5：Limitation of investment amountThe acquisition of real estate by this Company for non-operating purpose should not exceed 30% of this Company's net
worth. The total amount of security investments by this Company should not exceed 20% of this Company's net worth.
The amount of investment by this Company in each respective security should not exceed 10% of this Company's net
worth.

Article 6：Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide thecompanies with appraisal reports, certified public accountants’ opinions, attorney's opinions, or underwriter's opinions
shall not be a related party of any party to the transaction.

Article 7：Appraisal procedures
1.

For acquisition or disposal of securities not traded on the centralized securities exchange market or an OTC market,
the price shall be determined through negotiation after consideration of net worth per share, profitability, and future
development potential, taking current market prices as a reference, or by negotiation after reference to current
market interest rates, bond coupon rates, and debtor creditworthiness.

2.

For acquisition or disposal of securities traded on the centralized securities exchange market or an OTC market, theprice shall be determined according to the current trading price.

3.

To acquire or dispose of other fixed assets, the Company shall make a price determination through one of threemethods, either price enquiry, price comparison, price negotiation, or call for tenders. Prices for the acquisition or
disposal of real property shall be determined through negotiation, with reference to the announced current value
and assessed value of the property and the actual transaction prices of neighboring real properties. If the transaction
amount reaches the amount required to publicly announce in accordance with this procedures, it shall refer to an
appraisal report from a professional appraiser- 47 -

Article 8：Operating procedures for acquisition or disposal of assets
1.

Acquisition or disposition of all assets shall be approved in accordance with the "approval authority table forPurchase Requisition and Procurement". If the asset is real estate or other fixed asset, registration, management anduse shall be in accordance with “Guideline for Assets management”.

2.

For acquisition or disposition of all assets, the host department shall evaluate feasibility based on the reason,
subject item, counterparty, transfer price, payment terms and price basis, and send the report to authority unit for
approval. The acquisition or disposition of all assets will be implemented by management department after
approval. All matter will be in accordance with the rules of company’s internal control and this procedure.

3.

The executive unit for long/short term security investment is financial department. The executive unit for realestate or other fixed assets is sponsoring or responsibility department. The acquisition or disposition of other assets
shall be done after the feasibility evaluation report conducted by the assets sponsoring department.

4.

For the acquisition of the real estate, it should immediately apply for insurance.

5.

Acquisition or disposition of all assets will be in accordance with the rules of company’s internal control. If there isa detection of material violation, the Company will penalize the related personnel based on the situation ofviolation.

Article 9：Approval authority
Acquisition or disposition of long/short term security investment shall be approved by General Manager and Chairman. If
the single transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, thetransaction shall be approved by Board of Directors.

Article 10：In acquiring or disposing of real property or other fixed assets where the transaction amount reaches 20 percent of thecompany's paid-in capital or NT$300 million or more, the company, unless transacting with a government agency,
engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing ofequipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a
professional appraiser and shall further comply with the following provisions:1.

Where due to special circumstances it is necessary to give a limited price, specified price, or special price as areference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of
directors, and the same procedure shall be followed for any future changes to the terms and conditions of thetransaction.

2.

Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shallbe obtained.

3.

Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results,
unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all theappraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant
shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No.
20 published by the Accounting Research and Development Foundation and render a specific opinion regarding thereason for the discrepancy and the appropriateness of the transaction price:- 48 -

C. The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction
amount.
D. The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of thetransaction amount.
4.

No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser andthe contract execution date; provided, where the publicly announced current value for the same period is used andnot more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

Article 11：The procedures for acquisition or disposition of long/short term security investment
The Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain financial
statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant, forreference in appraising the transaction price, and if the dollar amount of the transaction is 20 percent of the company's
paid-in capital or NT$300 million or more, the company shall additionally engage a certified public accountant prior to
the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. However,the provisions shall not apply if such securities conform to the following conditions:
1. Securities subscribed in cash on their initial issue or during the underwriting period.
2. Securities issued at par value by target companies for the purpose of cash capital increase according to relevantlaws.
3. Securities issued for the purpose of cash capital increase by 100% reinvestment target companies.
4. Listed, OTC-listed, and emerging securities that are traded at Taiwan Stock Exchange or securities firms
5. Securities that belong to government bonds, RP, or RS.
6. Overseas and domestic mutual funds.
7. Stocks of listed or OTC-listed companies acquired or disposed of according to regulations governing securities
purchase or auction in Taiwan Stock Exchange or GreTai Securities Market.
8. Securities acquired through participating in public companies’ cash capital increase subscription and not throughprivate placement.
9. Mutual funds subscribed prior to the establishment of such funds according to Paragraph 1, Article 11 of Securities
Investment Trust and Consulting Act and Letter Jin-Guang_Zheng_Tou_Tzu No.0930005249 issued by the FSC on
Nov. 1st, 1994.
10. Domestic private placement fund subscribed or repurchased whose investment strategies have been stated clearly inthe trust contracts and whose investment scopes are the same as public offering funds except for margin trading of
securities and positions related to held securities that are not offset.

Article 12：The procedures for Related Party Transactions
1.

When the Company engages in any acquisition or disposal of assets from or to a related party, in addition toensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised, if
the transaction amount reaches 10 percent or more of the company's total assets, the company shall also obtain an
appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of Article 10- 49 -

and this Article. When judging whether a trading counterparty is a related party, in addition to legal formalities, thesubstance of the relationship shall also be considered.
2.

The Company that acquires real property from a related party shall evaluate the reasonableness of the transaction
costs based the related requirement. When the following conditions happens, the company shall additionally engage
a certified public accountant to review the reasonableness and to provide an opinion:
A. The related party acquired the real property through inheritance or as a gift.
B. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real
property to the signing date for the current transaction.
C. The real property is acquired through signing of a joint development contract with the related party.

3.

Appraisal and Operating procedures
When the Company intends to acquire or dispose of real property from or to a related party, or when it intends toacquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20
percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more,
the company may not proceed to enter into a transaction contract or make a payment until the following mattershave been approved by the board of directors and recognized by the supervisors:
A. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.
B. The reason for choosing the related party as a trading counterparty.
C. With respect to the acquisition of real property from a related party, information regarding appraisal of thereasonableness of the preliminary transaction terms in accordance with Article 15 and Article 16.
D. The date and price at which the related party originally acquired the real property, the original trading
counterparty, and that trading counterparty's relationship to the company and the related party.
E. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract,and evaluation of the necessity of the transaction, and reasonableness of the funds utilization.
F. An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with thepreceding article.
G. Restrictive covenants and other important stipulations associated with the transaction.
For acquisition or disposition of machinery equipment between the Company and its subsidiaries, it is permissible tobe approved first with specific limitation by the chairman and then ratified at the next board of directors meeting bysubmitting the proposal.

4.

Evaluation on the reasonableness of the transaction cost
Where the Company acquires real property from a related party and the results of appraisals conducted inaccordance with the procedures are uniformly lower than the transaction price, the following steps shall be taken:
A. A special reserve shall be set aside in accordance with the regulations against the difference between the real
property transaction price and the appraised cost, and may not be distributed or used for capital increase orissuance of bonus shares. Where a public company uses the equity method to account for its investment inanother company, then the special reserve called for under the regulations shall be set aside pro rata in a
proportion consistent with the share of public company's equity stake in the other company.
B. Audit Committee shall comply with Article 218 of the Company Act.
C. Actions taken pursuant to subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, andthe details of the transaction shall be disclosed in the annual report and any investment prospectus.
- 50 -

The Company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve
until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been
disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is otherevidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent.
When the Company obtains real property from a related party, it shall also comply with the preceding two
paragraphs if there is other evidence indicating that the acquisition was not an arm length transaction.

Article 13：The procedures for acquisition or disposition of memberships and intangible assets
Where the Company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20
percent or more of paid-in capital or NT$300 million or more, the company shall engage a certified public accountant
prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA
shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

Article 13-1：The calculation of the transaction amounts referred to in the preceding four articles shall be done in accordance with
Article 19 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrenceof the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has
been obtained need not be counted toward the transaction amount.
Article 14：Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation
issued by the court may be substituted for the appraisal report or CPA opinion.

Article 15：The procedures for acquisition or disposition of Derivatives
1.

Category of trade
Derivative products that the Company can buy or sell are referred to in Article 4 of this procedure.

2.

Hedging Strategies
The purpose of the Company’s derivatives transaction includes hedge purpose and financial purpose as well as
non-hedge purpose. The principle that the Company engages in derivatives transactions is to hedge business risk.
The choices of derivative instrument is for hedging the risk of foreign exchange revenue, foreign exchange
expenditure, assets and liabilities resulted from the Company’s operation and capital management. As a result ofchanges in the objective environment, the Company will engage in non-hedging transaction of derivative
instrument at the appropriate timing in order to increase non-operating income or reduce non-operating losses. In
addition, transaction counterparties is better to be the Company-designated banks in order to avoid the credit risk.
It’s necessary and the basis of accounting recording to define the type of transaction which is hedging transaction
or financial transaction for generating profit before performing transaction.

3.

Division of Authority and duties
A.

Finance Department: understand the relative law and regulation of derivations transactions, plan thetransaction and build up the manager system, collect the market information and perform the transactions,periodically evaluate the holding parts and provide the evaluation report, and public announce and disclosure.
Each transaction of derivations shall be performed after getting approval of chief financial officer, chairman- 51 -

and general manager. Other personnel of financial department except for trading executive officer is incharge in processing accounting transactions, preparing statements and storing transaction records data.
B.

Audit Department: periodically evaluate the risk management measures currently employed are appropriate
and are faithfully conducted in accordance with these Regulations and the procedures for engaging inderivatives trading formulated by the company.

C.
4.

Legal Department: Review the legal article of any derivatives contracts.

Performance Evaluation
A.

Hedge purpose: Financial department shall evaluate on the position of derivation instruments at least twice
per month and provide the evaluation report to chairman, general manager and chief financial officer for
review.

B.

Financial purpose: Financial department shall evaluate the performance on hedging transaction based onmarket price per week and periodically propose to chairman, general manager and chief financial officer for
improving the hedging strategies.

5.

Contract amount and the loss-limit of total and individual derivatives trading
A.

Hedge transactions: The total hedge contract amount of derivatives which the Company is capable to take
don’t exceed than the net offset amount of accounts receivable and payable or assets and liabilities generated
by operating activities. The upper limit of total losses from derivative contracts don’t exceed than 20% ofsuch contract amount and this restriction is adopt to all contracts and individual contract.

B.

Financial transactions: The total contract amount of derivatives which the Company is capable to take don’t
exceed than the total gross amount of import and export. The upper limit of total losses from derivative
contracts is US$ 10 million. The upper limit of losses for individual derivative contract is 5% of suchcontract amount.

6.

Internal Control
A.

Personnel engaged in derivatives trading may not serve concurrently in other operations such as confirmationand settlement.

B.

Scope of Risk management:(1) credit risk: dealing with international known banks.
(2) market risk: targeting common and global financial products.
(3) liquidity risk: choosing banks that have large volume, time-to-market quotation.
(4) operational risk: strictly complying with the Procedure to reduce operation risk.
(5) legal risk: using standard contracts instead of designated contracts. Any designated contracts shall beinspected by legal department or lawyer.

C.

Risk measurement, monitoring, and control personnel shall be assigned to a different department that thepersonnel in the preceding subparagraph and shall report to the board of directors or senior management
personnel with no responsibility for trading or position decision-making.

D.

Derivatives trading positions held shall be evaluated at least once per week; however, positions for hedge
trades required by business shall be evaluated at least twice per month. Evaluation reports shall be submitted
to senior management personnel authorized by the board of directors.

E.

Senior management personnel authorized by the board of directors shall pay continuous attention tomonitoring and controlling derivatives trading risk, periodically evaluate whether derivatives trading- 52 -

performance is consistent with established operational strategy and whether the risk undertaken is within thecompany's permitted scope of tolerance, and periodically evaluate the risk management measures currently
employed are appropriate and are faithfully conducted in accordance with these Regulations and theprocedures for engaging in derivatives trading formulated by the company.
F.

When irregular circumstances are found in the course of supervising trading and profit or loss circumstances,appropriate measures shall be adopted and a report immediately made to the board of directors; where acompany has independent directors, an independent director shall be present at the meeting and express an
opinion.

G.

A company shall report to the meeting of the board of directors after it authorizes the relevant personnel tohandle derivates trading in accordance with this procedures for engaging in derivatives trading.

H.

The Company engaging in derivatives trading shall establish a log book in which details of the types andamounts of derivatives trading engaged in, board of directors approval dates, and the matters required to becarefully evaluated in accordance with the regulations shall be recorded in detail in the log book.

7.

Internal Audit System
The internal auditor shall regularly informed as to the fairness of the internal controls for derivatives transactions,check all related units’ compliance with the procedures of derivatives transactions trading, analyze the trading
cycle and prepare audit reports on a monthly basis. If any material violation is discovered, the audit committee
shall be notified in writing and the person who undertakes responsibilities in violation of these procedures will be
subject to penalty based on his violations.

8.

Information Disclosure
Completing the transaction of derivatives and confirming by the person in charge of confirming transaction shallbe in accordance with the related regulations. The Company shall compile monthly reports on the status ofderivatives trading engaged in up to the end of the preceding month by itself and any subsidiaries that are notdomestic public companies and enter the information in the prescribed format into the information reporting
website designated by the FSC by the 10th day of each month.

Article 16：The procedures for Mergers and Consolidations, Splits, Acquisitions, and Assignment of Shares
1.

Appraisal and Operating procedures
A.

The Company that conducts a merger, demerger, acquisition, or transfer of shares, prior to convening theboard of directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an
opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or otherproperty to shareholders, and submit it to the board of directors for deliberation and passage.

B.

The Company shall prepare a public report to shareholders detailing important contractual content andmatters relevant to the merger, demerger, or acquisition prior to the shareholders meeting and include it alongwith the expert opinion referred to in paragraph 1, subparagraph 1 of this Article when sending shareholders
notification of the shareholders meeting for reference in deciding whether to approve the merger, demerger,
or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders’meeting to approve the merger, demerger, or acquisition, this restriction shall not apply. In addition, where
the shareholders meeting of any one of the companies participating in a merger, demerger, or acquisition fails
to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the- 53 -

proposal is rejected by the shareholders’ meeting, the companies participating in the merger, demerger or
acquisition shall immediately publicly explain the reason, the follow-up measures, and the preliminary dateof the next shareholders’ meeting.
C.

Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shallissue a written undertaking of confidentiality and may not trade, in their own name or under the name ofanother person, in any stock or other equity security of any company related to the plan for merger, demerger,
acquisition, or transfer of shares.

2.

Other Matters Requiring Attention
The Company participating in a merger, demerger, or acquisition shall convene a board of directors meeting andshareholders meeting on the day of the transaction to resolve matters relevant to the merger, demerger, or
acquisition, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstancesand grants consent. A company participating in a transfer of shares shall call a board of directors meeting on the
day of the transaction, unless another act provides otherwise or the FSC is notified in advance of extraordinary
circumstances and grants consent.
When participating in a merger, demerger, acquisition, or transfer of another company's shares, the Company shallprepare a full written record of the following information and retain it for 5 years for reference:A.

Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (orpassport numbers in the case of foreign nationals) of all persons involved in the planning or implementationof any merger, demerger, acquisition, or transfer of another company's shares prior to disclosure of theinformation.

B.

Dates of material events: Including the signing of any letter of intent or memorandum of understanding, thehiring of a financial or legal advisor, the execution of a contract, and the convening of a board of directors
meeting.

C.

Important documents and minutes: Including merger, demerger, acquisition, and share transfer plans, any
letter of intent or memorandum of understanding, material contracts, and minutes of board of directors
meetings.

D.

When participating in a merger, demerger, acquisition, or transfer of another company's shares, the Company
shall, within 2 days commencing immediately from the date of passage of a resolution by the board of
directors, report (in the prescribed format and via the Internet-based information system) the information set
out in subparagraphs 1 and 2 of the preceding paragraph to the FSC for recordation.

E.

Where any of the companies participating in a merger, demerger, acquisition, or transfer of anothercompany's shares is neither listed on an exchange nor has its shares traded on an OTC market, the company
shall sign an agreement with such company whereby the latter is required to abide by the provisions ofparagraphs 3 and 4.

Article 17：The Company participating in a merger, demerger, acquisition, or transfer of shares may not arbitrarily alter the shareexchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances
permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares:
1.

Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance ofcorporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities.
- 54 -

2.

An action, such as a disposal of major assets, that affects the company's financial operations.

3.

An event, such as a major disaster or major change in technology, that affects shareholder equity or share price.

4.

An adjustment where any of the companies participating in the merger, demerger, acquisition, or transfer of sharesfrom another company, buys back treasury stock.

5.

An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition,
or transfer of shares.

6.

Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.

Article 18：Subsidiaries of the Company shall behave according to following regulations:1.

The acquisition or disposition of assets by a subsidiary shall in accordance with the parent’s regulations.

2.

Information required to be publicly announced and reported in accordance with the provisions of “Regulations
Governing the Acquisition and Disposal of Assets by Public Companies” on acquisitions and disposals of assets
by the subsidiary that is not itself a public company in Taiwan shall be reported by the parent company.

3.

The paid-in capital or total assets of the public company shall be the standard for determining whether or not a
subsidiary requiring a public announcement and regulatory filing in the event the type of transaction specified
therein reaches 20 percent of paid-in capital or 10 percent of the total assets.

A subsidiary means an investee with more than 50% voting interest directly held by the Company, an investee withmore than 50% voting interest indirectly held by the Company through the use of other subsidiaries or an investee withmore than 50% voting interest directly as well as indirectly held by the Company through the use of other subsidiaries.

Article 19：Information Disclosure Procedures
1.

Projects that shall be declared or Report StandardA.

Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets otherthan real property from or to a related party where the transaction amount reaches 20 percent or more ofpaid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more; provided, thisshall not apply to trading of government bonds or bonds under repurchase and resale agreements.

B.

Merger, demerger, acquisition, or transfer of shares.

C.

Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set
out in the procedures adopted by the company.

D.

Where an asset transaction other than any of those referred to in the preceding three subparagraphs, adisposal of receivables by a financial institution, or an investment in the mainland China area reaches 20
percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following
circumstances:(1) Trading of government bonds.
(2) Securities trading by investment professionals on foreign or domestic securities exchanges orover-the-counter markets.
(3) Trading of bonds under repurchase/resale agreements.
(4) Where the type of asset acquired or disposed is machinery equipment for business use, the trading
counterparty is not a related party, and the transaction amount is less than NT$500 million.

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(5) Where land is acquired under an arrangement on engaging others to build on the company's own land,engaging others to build on rented land, joint construction and allocation of housing units, joint
construction and allocation of ownership percentages, or joint construction and separate sale, and theamount the company expects to invest in the transaction is less than NT$500 million.
E.

The amount of transactions in preceding 5 subparagraph shall be calculated as follows. "Within the precedingyear" refers to the year preceding the date of occurrence of the current transaction. Items duly announced inaccordance with these Regulations need not be counted toward the transaction amount.
(1) The amount of any individual transaction.
(2) The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset
with the same trading counterparty within the preceding year.
(3) The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions
and disposals, respectively) within the same development project within the preceding year.
(4) The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals,
respectively) of the same security within the preceding year.

2.

Time Limit for Announcement and Reporting
The Company shall publicly announce and report the relevant information within 2 days commencing immediatelyfrom the date of occurrence of the event if the assets acquired or disposed of by the Company are within the scope
stipulated in paragraph 1 of this Article and the transaction amount reaches the announcement standard.

3.

Procedures for AnnouncementA.

The Company shall report related information to the designated website by FSC for announcement.

B.

The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of
the preceding month by itself and any subsidiaries that are not domestic public companies and enter the
information in the prescribed format into the information reporting website designated by the FSC by the10th day of each month.

C.

When the Company at the time of public announcement makes an error or omission in an item required byregulations to be publicly announced and so is required to correct it, all the items shall be again publicly
announced and reported in their entirety.

D.

The Company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes, log books,
appraisal reports and CPA, attorney, and securities underwriter opinions at the company headquarters, where
they shall be retained for 5 years except where another act provides otherwise.

E.

Where any of the following circumstances occurs with respect to a transaction that the Company has alreadypublicly announced and reported in accordance with the preceding paragraph, a public report of relevant
information shall be made on the information reporting website designated by the FSC within 2 days
commencing immediately from the date of occurrence of the event:(1) Change, termination, or rescission of a contract signed in regard to the original transaction.
(2) The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forthin the contract.
(3) Change to the originally publicly announced and reported information.

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Article 20：Penalty
Any person who undertakes responsibilities for acquisition or disposal of assets in violation of these procedures will be
subject to penalty in accordance the Company’s regulation.

Article 21：Implementation and Revision
The proposed “Procedures for Acquisition or Disposal of Assets” shall be approved by Audit Committee and the boardof directors, then proposed to the shareholders’ meeting for approval; any amendments shall also follow this procedure.
When “Procedures for Acquisition or Disposal of Assets” was proposed to the board of directors, opinions from all
independent directors shall be fully considered and consenting or objecting opinions and their grounds shall be listed
and entered into the meeting minutes.

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APPENDIX IV
TRANSCEND INFORMATION INC.
PROCEDURES FOR ELECTION OF DIRECTOR（Before amendment）
Article 1：The directors of this Company shall be elected in accordance with the rules specified herein. This Company’s
independent directors shall be elected by adopting the candidate nomination system specified in Article 192-1 of theCompany Act.
Article 2：In the election of directors of this Company, each share shall have voting rights equivalent to the number of seats to beelected and such voting rights can be combined to vote for one person or divided to vote for several persons. The electionof independent directors and non-independent directors shall be held together; provided, however, that the number of
independent directors and non-independent directors elected shall be calculated separately.

Article 3：The Board of Directors shall prepare ballots equivalent to the number of seats to be elected and note the number of voting
rights to distribute to the attended shareholders.

Article 4：Before the election, the Chairman shall appoint several persons each to check and record the ballots to carry out related
duties.

Article 5：In the election of directors of this Company, the ballot box used for voting shall be prepared by Board of Directors andchecked in public by the person to check the ballots before voting.

Article 6：If the candidate is a shareholder of this Company, voters shall fill in the "candidate" column the candidate's name andshareholder's number. If the candidate is not a shareholder of this Company, voters shall fill in the "candidate" column thecandidate's name and the candidate's ID number. If the candidate is a government agency or a legal entity, the full nameof the government agency or the legal entity or the name of their representative shall be filled in the column. When there
are several representatives, the name of their representative must be filled in the column, respectively.

Article 7：Ballots shall be deemed void under the following conditions:
1. Ballots not prepared in accordance with the rules;
2. Blank ballots placed in the ballot box;
3. Illegible writing or altered ballots;
4. If the candidate is a shareholder of this Company, the name or shareholder's number of the candidate filled in theballot inconsistent with the shareholders' register. If the candidate is not a shareholder of this Company, the name or
ID number of the candidate filled in the ballot is incorrect;
5. Ballots with other written characters or symbols in addition to candidate's name, shareholder's number (ID number)and the number of votes cast for the candidate;
6. Ballots not filled in the candidate's name or shareholder's number (ID number);
7. Two or more candidates filled in one ballot.
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Article 8：In the election of directors equal to the number stated in the Article of Incorporation of this Company, candidates who
acquire more votes sequentially should win the seats of directors. If two or more persons acquire the same number ofvotes and the number of such persons exceeds the specified seats available, such persons acquiring the same votes shalldraw lots to decide who should win the seats available, and the Chairman shall draw lots on behalf of the candidate who
is not present. If the director elected was checked that his/ her personal information is un-conformed or he/ she is notapplied for related regulations, the position left vacant by such decision shall be filled by the candidate with the next
highest number of votes in the original election.

Article 9：The ballots should be calculated during the meeting right after the vote casting and the results of the election should beannounced by the Chairman at the meeting.

Article 10：This Company shall issue notifications to the directors elected.

Article 11：Matters on which these Bylaws are silent shall be handled in accordance with the Articles of Incorporation of the
Corporation, the Company Act, and applicable laws and regulations.

Article 12：These Rules shall be effective from the date it is approved by the Shareholders' Meeting. The same applies in case ofrevision.

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APPENDIX V
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

71,365,057

16,000,000

Note 1: The period of Book closure is from April 14, 2014 to June 12, 2014.
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 14, 2014:
Title

Name

Current Shareholding(Shares)

Chairman

SHU,CHONG-WAN

6,349,139

Director

SHU,CHONG-ZHENG

5,629,229

Director

NI,JI-XI

0

Director

FAN,CHENG-JYU
Wan Chuan Investment Inc.
Representative：ZENG,ZHONG-HE
Wan Min Investment Inc.
Representative：CUEI,LI-JHU
CDIB Private Equity Corp.
Representative：YANG,KAI-CHAN
CHEN,SHI-HONG

0

Director
Director
Director
Director

29,545,896
29,711,397
90,93338,463

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

0

Independent Director WANG,YI-XIN

0

0

Total

71,365,057- 60 -