Stock code:5263

Brogent Technologies Inc.
2022 Annual Shareholders’ Meeting Minutes
Time: 9:00AM, Friday, May 27, 2022
Venue: No. 9, Fuxing 4th Road, Qianzhen District, Kaohsiung City
(Assembly Hall, Building A, Brogent Technologies)
Total Outstanding Brogent shares: 60,964,358 shares
Total shares represented by shareholders present in person or by proxy: 36,966,084 shares(among them 21,045,330 shares voted via electronic transmission), percentage of shares heldby shareholders present in person or by proxy: 60.63%.
Chairman: Chih-Hung Ouyang , the Chairman of the Board of Directors
Presenters: Chih-Hung Ouyang (C.E.O.), Chin-Huo Huang (Director),
Lewis Lee (Independent Director & Audit Committee Convener),
Jih-Ching Chiu (Independent Director),
Li-Yuan Kuo ( CPA of Deloitte & Touche. Taiwan),
Kalvin Huang (Lawyer of Formosan Brothers),
Sui-Chuan Lin(C.F.O.)
Minutes Recorder: Shu-Ching Lin
The aggregate shareholding of the shareholders present in person or by proxy constituted aquorum. The Chairman called the meeting to order.

A. Chairman's Address (omitted)
B. Reports
I: The 2021 Business Report is hereby submitted for review.
Explanation: Please refer to Attachment 1 for the Business Report.
II: The 2021 Audit Committee Audit Report is hereby submitted for review.
Explanation: Please refer to Attachment 2 for the Audit Committee Audit Report.
III: The status of issuing corporate bonds is hereby submitted for review.
Explanation: The status of issuing corporate bonds is as follows:1Third domestic unsecured
convertible bonds

Forth domestic unsecured
convertible bonds

Issue date2020.10.12

2020.10.15

Par value

NTD$100,000

NTD$100,000

Issue price

Issued by 101.64% of par value

Issued by par value

Total value

NTD$700,000,000

NTD$500,000,000

Interest rate

0%0%

Expiration date

5 yearExpiration date: Oct. 12, 2025

4 yearExpiration date: Oct. 15, 2024

None

None

Type

Assurance
institution

Repayment

Outstanding
principal

Except for the repayment by the
Except for the repayment by thecompany, sell of the bond holders or company, sell of the bond holders or
person who convert, when it comes person who convert, when it comes
to expiration, the company will
to expiration, the company will
repay per par value along withrepay per par value along withinterest by cash.
interest by cash.
NTD$327,400,000

NTD$322,300,000

Till March 29, 2022
book closing date Amount of execution on conversion
amount of thebonds: NT$372,600,000; total
corporate bonds(converted) common shares:
convertible into
3,548,489
sharesAmount of execution on conversion
bonds: NT$177,700,000; total(converted) common shares:
1,668,459

The possible
dilution conditions
and influence onshareholders' equity
No great influences yet
caused by theissuance andconversion and theterms of issuanceNo great influences yet

2

C. Ratifications
Item 1: The 2021 Business Report and Financial Report are hereby submitted for
ratification. (Proposed by the Board of Directors)
Explanation: 1.The Company's 2021 Financial Report has been audited by CPAs
Chiu-Yen Wu and Li-Yuan Kuo of Deloitte & Touche. The Financial Reportand Business Report have been forwarded to the Audit Committee forreview, and the written Audit Report is submitted for approval.
2. The Company's 2021 Business Report (please refer to Attachment 1 of
the Manual) and Financial Report (please refer to Attachment 3 of theManual).
3. The reports are hereby submitted for ratification.
Resolution: The balloting outcome including votes exercised through electronic voting:
35,604,451 pro votes, accounting for 99.82% of the aggregate total votes;
11,039 disapproval votes, 0 invalid vote, abstention/ Non-voting votes:
52,890 votes. The present issue is duly resolved exactly as proposed.
Item 2: The 2021 Deficit Compensation Statement is hereby submitted for ratification.
(Proposed by the Board of Directors)
Explanation: 1. The Company's 2021 Deficit Compensation Statement is as follows:
BROGENT TECHNOLOGIES INC.
Deficit Compensation Statement
2021

UNIT：NT$
AmountItem

Subtotal

Deficit un-compensated at beginning of 2021

Total
(48,971,608)

ADD(LESS)：
Remeasurement of defined benefit plan

(280,386)

Retained earnings adjusted for investments
accounted for using equity method(516,215)

Net loss of 2021

(131,956,870)

accumulated deficit(132,753,471)

Deficit un-compensated at end of 2021

(181,725,079)

Chairman:

General Manager:
Accounting Manager:
2. The reports are hereby submitted for ratification.
Resolution: The balloting outcome including votes exercised through electronic voting:
35,598,437 pro votes, accounting for 99.80% of the aggregate total votes;
17,046 disapproval votes, 0 invalid vote, abstention/ Non-voting votes:
52,897votes. The present issue is duly resolved exactly as proposed.
3

D. Matters for Discussion and Votes
Item 1: The amendment of clauses of the “Articles of Incorporation” is hereby
submitted for discussion. (Proposed by the Board of Directors)
Explanation: 1. Revised in accordance with amendment in laws and regulations,amendments for clauses of the Company's “Articles of Incorporation”
are proposed.
2. Please refer to Attachment 4 of the Manual for the Comparison Table ofthe "Articles of Incorporation" before and after revision.
3. Submitted for discussion.
Resolution: The balloting outcome including votes exercised through electronic voting:
34,985,858 pro votes, accounting for 98.08% of the aggregate total votes;
628,633 disapproval votes, 0 invalid vote, abstention/ Non-voting votes:
53,889 votes. The present issue is duly resolved exactly as proposed.
Item 2: The amendment of clauses of the “Procedures for Acquisition or Disposal of
Assets” is hereby submitted for discussion. (Proposed by the Board of
Directors)
Explanation: 1. Revised in accordance with establishment of audit committee, it is
proposed to revise “Procedures for Acquisition or Disposal of Assets”.
2. Please refer to Attachment 5 of the Manual for the Comparison Tableof the “Procedures for Acquisition or Disposal of Assets” before andafter revision.
3. Submitted for discussion.
Resolution: The balloting outcome including votes exercised through electronic voting:
35,603,436 pro votes, accounting for 99.81% of the aggregate total votes;
11,052 disapproval votes, 0 invalid vote, abstention/ Non-voting votes:
53,892votes. The present issue is duly resolved exactly as proposed.
Item 3: A vote is hereby called for the case of by-election of a director. (Proposed by the
Board of Directors)
Explanation: 1. There is one vacancy in the current board of directors, and it is planned
to cooperate with this general meeting of shareholders to handle
by-election matters.
2. The Director elected this time shall serve a term from May 27, 2022 to
May 27, 2023, in order to complement the term of the original
directors.
3. According to Article 14 of the Company's Articles of Incorporation,
Directors are elected on a candidate nomination system. The list of
candidates for Director Information is as follows:
LARGOU MORI CO., LTD
Representative
CHENG SHENHAO

Name

4

The doctorate degree of Meiji University/Graduate School of Commerce.
LARGOU MORI CO., LTD
Chairman

Education
Experience
Number of shares held

1,688,888 shares

4. Submitted for election.
Election Results:
Directors
Account No. or
ID NO.
10698

Name

Number of votes

LARGOU MORI CO., LTD
Representative
CHENG SHENHAO

35,398,584

Item 4: The proposal for lifting the ban on competition between newly elected Directors
and their representatives is hereby submitted for discussion. (Proposed by the
Board of Directors)
Explanation: 1. Pursuant to Article 209 of the Company Act, a Director who acts forhimself or on behalf of another person within the scope of the Company's
business operations shall explain to the meeting of shareholders theessential contents of such act and obtain approval.
2. To make use of the expertise and related experience of the Company's
Directors, the lift of the ban on competition between newly elected
Directors and their representatives is hereby submitted for approval in
the 2022 Annual Shareholders Meeting in accordance with the law.
3. The details of the proposed shareholders' general meeting to dismiss
directors' competition are as follows:
Title
Director

Name

Other positions
LARGOU MORI CO., LTD(TW)

CHENG

Chairman
SHENHAO LARGOU MORI CO., LTD(JAPAN)
Chairman

4. Submitted for discussion.
Resolution: The balloting outcome including votes exercised through electronic voting:
35,587,742 pro votes, accounting for 99.77% of the aggregate total votes;
17,862 disapproval votes, 0 invalid vote, abstention/ Non-voting votes:
62,956votes. The present issue is duly resolved exactly as proposed.

E. Extempore motions
There being no other business and special motion, upon a motion duly made and seconded,5the meeting was adjourned.

F. Meeting adjourned
Meeting adjourned at 9:28 AM Friday, May 27, 2022.

6

(Attachment 1)

Brogent Technologies Inc.
Business Report

1) Operating policies
In 2022, Brogent Group will step forward toward the following directions: 1.
Develop diversified product lines, expand the penetration rate of the entertainment
market, and continue to enhance technical capabilities and refine core technologies. 2.
Continue to deepen and expand the operating locations, and strengthen the digital content
database (including IP authorization, etc.) to diversify the sources of cash inflow andincrease the proportion of revenue from non-amusement equipment sales. 3. Expand thescope of business services and provide comprehensive service solutions, including but
not limited to digital content design field, field theme design, on-site operation, etc.
Brogent has been in the market layout of immersive simulation equipment for along time. In addition to continuously investing in R&D optimization and expansion of
the product line, Brogent has also set up an independent digital content production teamto match the Metaverse topic and seize the opportunity in the entertainment market. In
the future, the results of the economic recovery can be expected.

2) Business Plan Implementation Results:
The Company's net operating revenue in 2021 amounted to NT$787.749 million, adecrease of approximately 25.87% from the net operating revenue of NT$1,062.899
million in 2020. The Company's net loss in the current period amounted to NT$133.323
million, an increase of 157.59% from the net loss of NT$51.758 million in 2020.

3) Operating Income and Budget Execution(1) Operating Income
The categories of consolidated operating revenue in 2021 included project revenue,
service revenue, ticket revenue and other operations, and the total amount was
NT$787.749 million. Affected by COVID-19, the progress of projects and new orders
was relatively delayed; as a result, the income recognition was postponed.
(2) Operating Expenses
Total consolidated operating expenses in 2021 amounted to NT$556.641 million, an
increase of NT$31.701 million from the NT$524.940 million of 2020. Although theglobal economic development is currently affected by changes in the COVID-19
pandemic, it is predicted that the pandemic will slow down over time and the economy
will recover. Therefore, the company continues to improve the products’ marketing andresearch and development.

4) Profitability Analysis
The Company's operating expense ratio increased 6.04% and net profits increased
157.59% compared with 2020, mainly affected by COVID-19 and the global stock andforeign exchange markets. The Company will maximize shareholder’s value throughproduct diversification, revenue diversification, high-end technology, and strong
competitive advantages in 2022.
7

5) Research and Development
To maintain core competitiveness, Brogent will keep engaging in advanced
technological R&D and innovative applications and implement product-centric design
and research as well as systematic management to maintain the leading position of
products and technologies. The R&D expenses increased NT$40.436 million comparedwith 2020. The R&D expenses were invested mainly in the optimization andimprovement of our mid-and small-sized products. In addition, to optimize productdesign and manufacturing process and reduce costs, we have also obtained patents fromvarious countries through continuous innovation and research and development, raising
the entry barrier and highlighting the competitiveness of enterprises.

Chairman:

General Manager:

Accounting Manager:8

(Attachment 2)

Brogent Technologies Inc.
Audit Committee Audit Report
The Business Report, Financial statements and Deficit Compensation Statementof 2021 prepared by the Board of Directors have been audited and certified
by Chiu-Yen Wu and Li-Yuan Kuo of Deloitte & Touche. After reviewing such
documents, this Audit Committee found no nonconformity, in accordance with
Article 14-4 of the Securities and Exchange Act and Article 219 of the Company
Act.
To

2022Annual Shareholders Meeting of Brogent Technologies Inc.

Audit Committee Convener:

March 8, 2022

9

(Attachment 3)
INDEPENDENT AUDITORS’ REPORTThe Board of Directors and Shareholders
Brogent Technologies Inc.
OpinionWe have audited the accompanying consolidated financial statements of Brogent Technologies Inc. (the“Corporation”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidatedbalance sheet as of December 31, 2020, the consolidated statements of comprehensive income, changes inequity and cash flows for the year then ended, and the notes to the consolidated financial statements, including asummary of significant accounting policies (collectively referred to as the “consolidated financial statements”).
In our opinion, the accompanying consolidated financial statements referred to above present fairly, in allmaterial respects, the consolidated financial position of the Group as of December 31, 2020, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance with theRegulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial
Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC
Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republicof China.
Basis for Opinion
We conducted our audit in accordance with the Regulations Governing Auditing and Attestation of Financial
Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China.
Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group in accordancewith The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we havefulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
The key audit matter of the Group’s consolidated financial statements for the year ended December 31, 2020 isstated as follows:
The recognition of construction contract revenue
Construction contract revenue, the main operating revenue of the Group, is recognized over time. The Group
recognizes revenue upon satisfaction of a performance obligation based on the input method. Due to the manual
calculation and management’s judgment, which involves critical accounting estimates, accuracy of the10

recognition of construction contract revenue is deemed to be a key audit matter.
Refer to Notes 4, 5 and 23 for accounting policy on construction contract, accounting estimates and assumptions,and details of construction revenue.
We performed the following audit procedures on the above key audit matter:
1. We understood and tested the design and operating effectiveness of the internal control relevant to theaccuracy of recognition of the construction contract revenue, including the measurement of the percentage
of completion.
2. We verified and recalculated, on a sampling basis, the accuracy of the percentage of completion, including
the related supporting documents.
3. We recalculated the sampled construction contract revenue measured by the percentage of completion, andchecked whether it was recognized correctly.
Other Matter
The consolidated financial statements of the Group and the parent company only financial statements of the
Corporation as of and for the year ended December 31, 2019 were audited by other auditors, who expressed anunmodified opinion with other matter paragraph on those statements on March 9, 2020.
We have also audited the parent company only financial statements of the Corporation as of and for the year
ended December 31, 2020 on which we have issued an unmodified opinion with other matter paragraph.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the
IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the
Republic of China, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance, including the audit committee, are responsible for overseeing the Group’s
financial reporting process.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the auditing standards generally accepted in the Republic of China will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.

11

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we
exercise professional judgment and maintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Group’s internal control.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists, we are required to draw attention in our auditors’ report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.
6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We areresponsible for the direction, supervision, and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit of the consolidated financial statements for the year ended December 31, 2020
and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determinethat a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

12

The engagement partners on the audit resulting in this independent auditors’ report are Chiu-Yen Wu and
Li-Yuan Kuo.

Deloitte & Touche
Taipei, Taiwan
Republic of China

March 10, 2021

Notice to Readers
The accompanying consolidated financial statements are intended only to present the consolidated financial
position, financial performance and cash flows in accordance with accounting principles and practices
generally accepted in the Republic of China and not those of any other jurisdictions. The standards, proceduresand practices to audit such consolidated financial statements are those generally applied in the Republic ofChina.
For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial
statements have been translated into English from the original Chinese version prepared and used in the
Republic of China. If there is any conflict between the English version and the original Chinese version or any
difference in the interpretation of the two versions, the Chinese-language independent auditors’ report andconsolidated financial statements shall prevail.
13

14

Brogent Technologies Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2020
Amount%2019
Amount%$ 1,062,899

100$ 2,080,441

100

OPERATING COSTS (Notes 10 and 24)

560,48353

1,094,762

53

GROSS PROFIT

502,41647

985,67947

OPERATING EXPENSES (Note 24)
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Expected credit loss (Notes 9 and 23)

55,382
240,125
167,313
62,120522
16
682,691
289,170
172,403
20,6064
14
8
1

Total operating expenses

524,940

49

564,87027

OPERATING INCOME (LOSS)(22,524)(2)

420,809

20

NON-OPERATING INCOME AND EXPENSES(Note 24)
Interest income
Other income
Other gains and losses
Finance costs
Share of profit or loss of associates accounted forusing the equity method (Note 12)

8,493
38,687(38,434)(29,202)

1
4
(4)
(3)

10,331
43,17826,845(23,727)

2
1
(1)

1,142

-

(5,535)-(19,314)(2)

51,092

2(41,838)(4)

471,901

22

INCOME TAX EXPENSE (Note 25)

9,920

1

88,091

4

NET PROFIT (LOSS) FOR THE YEAR

(51,758)(5)

383,810

18

(484)

-

(501)

-

(237)

-

100

-

(10,173)(1)

NET OPERATING REVENUE (Notes 4, 5, 23 and 30)

Total non-operating income and expenses
PROFIT (LOSS) BEFORE INCOME TAXOTHER COMPREHENSIVE INCOME (Note 22)
Items that will not be reclassified subsequently to
profit or loss:
Remeasurement of defined benefit plans (Note 20)
Income tax relating to items that will not bereclassified subsequently to profit or loss (Note25)
Items that may be reclassified subsequently to profit
or loss:
Exchange differences on translation of thefinancial statements of foreign operations

15(21,883)(1)(Continued)

Brogent Technologies Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2020
AmountShare of the other comprehensive income (loss) of
associates accounted for using the equity
method

$

(840)

-

(11,734)(1)$(63,492)(6)

NET PROFIT (LOSS) ATTRIBUTABLE TO:
Owners of the Corporation
Non-controlling interests$(49,184)(2,574)$TOTAL COMPREHENSIVE INCOME (LOSS)ATTRIBUTABLE TO:
Owners of the Corporation
Non-controlling interests

EARNINGS (LOSS) PER SHARE (Note 26)
Basic
Diluted-(22,242)(1)$

361,568

17

(5)
-

$

366,525
17,28517
1(51,758)(5)$

383,810

18$(61,512)(1,980)(6)-$

344,255
17,31316
1$(63,492)(6)$

361,56817$$(0.88)(0.88)

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

16

$

%

42

Other comprehensive income (loss) for the year,
net of income tax
TOTAL COMPREHENSIVE INCOME (LOSS) FOR
THE YEAR

2019
Amount

%

$
$

6.57
6.57

(Concluded)

17

Brogent Technologies Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)

2020
CASH FLOWS FROM OPERATING ACTIVITIESIncome (loss) before income tax
Adjustments for:
Income and expenses
Depreciation expense
Amortization expense
Expected credit loss
Net (gain) loss on fair value changes of financial assets andliabilities at fair value through profit or loss
Finance cost
Interest income
Compensation cost of employee share options
Share of (profit) loss of associates accounted for using the equity
methodGain on disposal of property, plant and equipment
Loss on inventories
OthersChanges in operating assets and liabilities
Financial assets mandatorily classified as at fair value throughprofit or loss
Notes receivable
Accounts receivable
Contract assets
Inventories
Prepayments
Other current assets
Notes payable
Accounts payable
Contract liabilities
Other payables
Provisions
Other current liabilities
Net defined benefit liabilities
Cash generated from operations
Income tax paid
Net cash generated from (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through other comprehensive
incomePurchase of financial assets at amortized cost
Proceeds from sale of financial assets at amortized cost
Acquisition of investments accounted for using equity method
Increase in prepayments for investments

18$(41,838)2019$

471,901

113,739
30,841
62,120111,161
30,866
20,606

10,097
29,202(8,493)281(55,727)
23,727(10,331)335(1,142)(192)
1,456(1,505)

5,535
(554)
24,840(126,926)(21,093)
70,955(134,880)
55,556
94,511
16,256(2,430)16,911(26,029)(70,540)52(30)
71
66,950(68,156)

225,594(23)(206)(413,184)(30,742)(66,486)(5,959)2,673(23,211)
10,69824,199(1,535)74344,251(64,576)(1,206)279,675(795,765)
887,365-(138,690)(7,645)
20,138(5,539)(4,537)(Continued)

Brogent Technologies Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)

2020
Payments for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Acquisition of intangible assets
Decrease (increase) in other noncurrent assets
Interest received$

Net cash generated from (used in) investing activities(48,077)
2,435
(887)
(40,291)
6,219
8,493

2019
$

(58,420)
1,249(1,006)(50,730)(39,698)
10,485

19,492(274,393)

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Issuance of convertible bonds
Proceeds from long-term borrowings
Repayment of long-term borrowings
Repayment of the principal portion of lease liabilities
Cash dividends distributed
Acquisition of subsidiaries
Interest paid
Changes in non-controlling interest

24,8671,206,229
25,895(737,527)(34,980)(312,186)(70,506)(25,102)-

191,340
320,050(120,153)(29,378)(212,371)(16,293)(2,335)

Net cash generated from financing activities

76,690130,860

EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF
CASH AND CASH EQUIVALENTS HELD IN FOREIGNCURRENCIES(5,452)(21,674)

NET INCREASE IN CASH AND CASH EQUIVALENTS

89,524

114,468

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR

774,817660,349

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR$

864,341

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

19$774,817(Concluded)

(Attachment 4)
Comparison Table of the "Articles of Incorporation" of Brogent Technologies Inc.
before and after Revision
Article Number
Article10

Before Revision
The Company holds annual andextraordinary shareholders'meetings. Annual shareholders'meetings shall be convened on a
yearly basis and within six
months after the end of eachfiscal year, and extraordinary
meetings shall be convened whennecessary in accordance with thelaw. Unless otherwise stipulated
in laws and regulations, theshareholders' meeting shall be
convened by the Board of
Directors. The notices for theshareholders' meeting prescribedin the preceding Paragraph may
be distributed in electronic form,
subject to agreement by therecipient thereof.

Article 14

The Company shall have seven tonine Directors, who are electedduring shareholders' meetingsfrom among persons of adequate
capacity to each serve a term of
three years. Their terms of service
may be renewed if they are
re-elected in the following
election. The total amount ofshares held by all Directors of theCompany shall be determined inaccordance with regulations of
the competent authority
responsible for securities.
The aforementioned Directors
shall consist of three Independent
Directors. A candidate
nomination system shall be
adopted in the election and theIndependent Directors shall beelected by the shareholders
meeting from the list of
candidates. Method of
nomination shall be governed by
the Article 192-1 of the Company

After Revision
The Company holds annual andextraordinary shareholders'meetings. Annual shareholders'meetings shall be convened on a
yearly basis and within six
months after the end of eachfiscal year, and extraordinary
meetings shall be convened whennecessary in accordance with thelaw. Unless otherwise stipulated
in laws and regulations, theshareholders' meeting shall be
convened by the Board of
Directors. The notices for theshareholders' meeting prescribedin the preceding Paragraph may
be distributed in electronic form,
subject to agreement by therecipient thereof.
When the shareholders' meetingis held, it may be held by videoconference or other methods
announced by the centralcompetent authority.
The Company shall have seven tonine Directors, who are electedduring shareholders' meetingsfrom among persons of adequate
capacity to each serve a term of
three years. Their terms of service
may be renewed if they are
re-elected in the following
election. The total amount ofshares held by all Directors of theCompany shall be determined inaccordance with regulations of
the competent authority
responsible for securities.
The aforementioned Directors
shall consist of at least three
Independent Directors. A
candidate nomination systemshall be adopted in the election
and the Independent Directors
shall be elected by theshareholders meeting from the listof candidates. Method of
nomination shall be governed by
the Article 192-1 of the Company
20

Description
Added inaccordance with
amendment inlaws

Revised inaccordance with
amendment inlawsArticle 22

Act.
The Company shall have the audit
committee which shall becomposed of all independent
directors consist of no less than
three independent directors, oneof whom shall be the convener.
The Company may purchaseliability insurance for the
Directors during their term ofoffice based on the compensation
liabilities associated with theirrespective businessaccountabilities. The Board of
Directors is authorized todetermine the insurance coveragebased on industry practices andstandards.
Final annual net profit of theCompany, if any, shall firstly beallocated for paying business tax
and compensating the deficit ofprevious years. Ten percent of theremaining profit shall beallocated as legal reserve. The
remaining profit, along with theaccumulated undistributed
earnings for the previous year,
shall be booked as theaccumulated distributableearnings; however, restrictions
shall not apply if the amount ofallocated legal reserve hasreached the total capital of theCompany. The cumulative
distributable profits, with the
exception of special reserve to beallocated or reversed as requiredby laws or regulations of thecompetent authority, may beconsidered for retention inaccordance with business
requirements. The remaining sum
shall be used for the distributionof dividends and if funds still
remain, a resolution may bepassed in the shareholder meetingfor the distribution of shareholder
bonus.

Act.
The audit committee shall becomposed of all independent
directors consist of no less than
three independent directors, oneof whom shall be the convener.
The Company may purchaseliability insurance for the
Directors during their term ofoffice based on the compensation
liabilities associated with theirrespective businessaccountabilities. The Board of
Directors is authorized todetermine the insurance coveragebased on industry practices andstandards.
Final annual net profit of theCompany, if any, shall firstly beallocated for paying business tax
and compensating the deficit ofprevious years. After adding theitems other than the net profit
after tax of the current period into
the undistributed earnings of thecurrent year. Ten percent of theremaining profit shall beallocated as legal reserve. The
remaining profit, along with theaccumulated undistributed
earnings for the previous year,
shall be booked as theaccumulated distributableearnings; however, restrictions
shall not apply if the amount ofallocated legal reserve hasreached the total capital of theCompany. The cumulative
distributable profits, with the
exception of special reserve to beallocated or reversed as requiredby laws or regulations of thecompetent authority, may beconsidered for retention inaccordance with business
requirements. The remaining sum
shall be used for the distributionof dividends and if funds still
remain, a resolution may bepassed in the shareholder meetingfor the distribution of shareholder
bonus.
The company authorizes theboard of directors with the21

Added inaccordance with
amendment inlawsArticle 25

The Articles of Incorporation
were established on October 22,
2001.
Omitted.
The twentieth amendment wasmade on May 28, 2020.

attendance of more than
two-thirds of the directors and theresolution of a majority of thedirectors present to distribute allor a part of dividends andbonuses, capital surplus or legal
reserve in cash, and report to theshareholders meeting. The
aforementioned provisions thatshould be resolved by theshareholders’ meeting do not
apply.
The Articles of Incorporation
were established on October 22,
2001.
Omitted.
The nineteenth amendment wasmade on May 29, 2019.
The twentieth amendment wasmade on May 28, 2020.
The twenty-first amendment wasmade on May 27, 2022.

22

Add the revisiondate and numberof times(Attachment 5)
Comparison Table of the "Procedures for the Acquisition or Disposal of Asset" ofBrogent Technologies Inc. before and after Revision
Article Number
Article 6

Before Revision
Professional appraisers and theirofficers, certified public accounts,
attorneys, and securities
underwriters that provide publiccompanies with appraisal reports,
certified public accountants
opinions, attorney's opinions, orunderwriter's opinions shall not bea related party of any party to thetransaction.
1) May not have previously
received a final and unappeasable
sentence to imprisonment for 1
year or longer for a violation of theAct, the Company Act, theBanking Act of The Republic ofChina, the Insurance Act, theFinancial Holding Company Act,or the Business Entity Accounting
Act, or for fraud, breach of trust,embezzlement, forgery of
documents, or occupational crime.
However, this provision does not
apply if 3 years have alreadypassed since completion of serviceof the sentence, since expiration of
the period of a suspended
sentence, or since a pardon wasreceived.
2) May not be a related party or defacto related party of any party to
the transaction.
3) If the company is required toobtain appraisal reports from two
or more professional appraisers,
the different professional
appraisers or appraisal officers
may not be related parties or defacto related parties of each other.
When issuing an appraisal reportor opinion, the personnel referred
to in the preceding paragraph shallcomply with the following:
1) Prior to accepting a case, theyshall prudently assess their own
professional capabilities, practicalexperience, and independence.
2) When examining a case, they23

After Revision
Professional appraisers and theirofficers, certified public accounts,
attorneys, and securities
underwriters that provide thecompany with appraisal reports,
certified public accountants
opinions, attorney's opinions, orunderwriter's opinions shall not bea related party of any party to thetransaction.
1) May not have previously
received a final and unappeasable
sentence to imprisonment for 1
year or longer for a violation of theAct, the Company Act, theBanking Act of The Republic ofChina, the Insurance Act, theFinancial Holding Company Act,or the Business Entity Accounting
Act, or for fraud, breach of trust,embezzlement, forgery of
documents, or occupational crime.
However, this provision does not
apply if 3 years have alreadypassed since completion of serviceof the sentence, since expiration of
the period of a suspended
sentence, or since a pardon wasreceived.
2) May not be a related party or defacto related party of any party to
the transaction.
3) If the company is required toobtain appraisal reports from two
or more professional appraisers,
the different professional
appraisers or appraisal officers
may not be related parties or defacto related parties of each other.
When issuing an appraisal reportor opinion, the personnel referred
to in the preceding paragraph shallcomply with the self-regulatory
rules of the industry associations towhich they belong and with thefollowing provisions:
1) Prior to accepting a case, theyshall prudently assess their own

Description
Revised inaccordance with
amendment inlaws

shall appropriately plan andexecute adequate working
procedures, in order to produce a
conclusion and use the conclusionas the basis for issuing the reportor opinion. The related working
procedures, data collected, andconclusion shall be fully andaccurately specified in the caseworking papers.
3) They shall undertake anitem-by-item evaluation of thecomprehensiveness, accuracy, andreasonableness of the sources ofdata used, the parameters, and theinformation, as the basis forissuance of the appraisal report or
the opinion.
4) They shall issue a statement
attesting to the professional
competence and independence ofthe personnel who prepared thereport or opinion, and that they
have evaluated and found that the
information used is reasonable andaccurate, and that they havecomplied with applicable laws andregulations.

Article 74) Appraisal report of real estateand other fixed assets
In acquiring or disposing of realestate or fix assets where thetransaction amount reaches 20
percent of the Company's paid-in
capital or NT$300 million or more,
the Company, unless transactingwith a government agency,
engaging others to build on its own
land, engaging others to build on
rented land, or acquiring or
disposing of machinery or
equipment for business use, shallobtain an appraisal report prior to
the date of occurrence of the eventfrom a professional appraiser andshall further comply with thefollowing provisions:(1) Where due to special
circumstances it is necessary togive a specific market value or
specified market value as areference basis for the transaction
24

professional capabilities, practicalexperience, and independence.
2) When conducting a case, theyshall appropriately plan andexecute adequate working
procedures, in order to produce a
conclusion and use the conclusionas the basis for issuing the reportor opinion. The related working
procedures, data collected, andconclusion shall be fully andaccurately specified in the caseworking papers.
3) They shall undertake anitem-by-item evaluation of theappropriateness andreasonableness of the sources ofdata used, the parameters, and theinformation, as the basis forissuance of the appraisal report or
the opinion.
4) They shall issue a statement
attesting to the professional
competence and independence ofthe personnel who prepared thereport or opinion, and that they
have evaluated and found that the
information used is appropriate
and reasonable, and that they havecomplied with applicable laws andregulations.
4) Appraisal report of real estateand other fixed assets
In acquiring or disposing of realestate or fix assets where thetransaction amount reaches 20
percent of the Company's paid-in
capital or NT$300 million or more,
the Company, unless transactingwith a government agency,
engaging others to build on its own
land, engaging others to build on
rented land, or acquiring or
disposing of machinery or
equipment for business use, shallobtain an appraisal report prior to
the date of occurrence of the eventfrom a professional appraiser andshall further comply with thefollowing provisions:(1) Where due to special
circumstances it is necessary togive a specific market value or
specified market value as areference basis for the transaction

Revised inaccordance with
amendment inlaws

price, the transaction shall be
submitted for approval in advanceby the Board of Directors, and thesame procedure shall apply to any
future changes to the terms andconditions of the transaction.
(2) Where the transaction amountis NT$1 billion or more, appraisals
from two or more professional
appraisers shall be obtained.
(3) Where any one of thefollowing circumstances applies
with respect to the professional
appraiser's appraisal results, unless
all the appraisal results for theassets to be acquired are higher
than the transaction amount, or all
the appraisal 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 inaccordance with the provisions ofStatements on Auditing Standards
No. 20 published by the
Accounting Research andDevelopment Foundation (ARDF)
and render a specific opinion
regarding the reason for thediscrepancy and theappropriateness of the transaction
price:
1. The discrepancy between theappraisal result and the transaction
amount is 20 percent or more of
the transaction amount.
2. The discrepancy between theappraisal results of two or more
professional appraisers is 10
percent or more of the transaction
amount.
(4) No more than 3 months may
elapse between the date of theappraisal report issued by aprofessional appraiser and thecontract execution date. However,where the publicly announced
current value for the same period
is used and not more than 6months have elapsed, an opinion
may still be issued by the original
professional appraiser.
5) Expert Opinion on Acquisition
and Disposal of Securities
The Company's acquisition or
25

price, the transaction shall be
submitted for approval in advanceby the Board of Directors, and thesame procedure shall apply to any
future changes to the terms andconditions of the transaction.
(2) Where the transaction amountis NT$1 billion or more, appraisals
from two or more professional
appraisers shall be obtained.
(3) Where any one of the following
circumstances applies with respect
to the professional appraiser's
appraisal results, unless all theappraisal results for the assets tobe acquired are higher than thetransaction amount, or all theappraisal results for the assets tobe disposed of are lower than thetransaction amount, a certified
public accountant shall be engaged
to render a specific opinion
regarding the reason for thediscrepancy and theappropriateness of the transaction
price:
1. The discrepancy between theappraisal result and the transaction
amount is 20 percent or more of
the transaction amount.
2. The discrepancy between theappraisal results of two or more
professional appraisers is 10
percent or more of the transaction
amount.
(4) No more than 3 months may
elapse between the date of theappraisal report issued by aprofessional appraiser and thecontract execution date. However,where the publicly announced
current value for the same period
is used and not more than 6months have elapsed, an opinion
may still be issued by the original
professional appraiser.
5) Expert Opinion on Acquisition
and Disposal of Securities
The Company's acquisition or
disposal of securities shall, prior to
the date of occurrence of the event,require financial statements of theissuing company for the mostrecent period, certified or reviewed
by a certified public accountant,

Article 8

disposal of securities shall, prior to
the date of occurrence of the event,require financial statements of theissuing company for the mostrecent period, certified or reviewed
by a certified public accountant,for reference in appraising thetransaction 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 additionallyengage a certified public
accountant prior to the date ofoccurrence of the event to provide
an opinion regarding thereasonableness of the transaction
price. If the CPA is required to use
the expert report as evidence, the
CPA shall do so in accordance withthe provisions of Statements on
Auditing Standards No. 20
published by the ARDF. Thisrequirement does not apply,
however, to publicly quoted pricesof securities that have an active
market, or where otherwise
provided by the regulations of the
Financial Supervisory Commission(FSC).
6) Expert Opinion Report on
Memberships or Intangible Assets
Where the Company acquires ordisposes of memberships orintangible assets and thetransaction amount reaches 20
percent or more of the Company’s
paid-in capital or NT$300 million
or more, the Company shallengage a certified public
accountant prior to the date ofoccurrence of the event to renderan opinion on the reasonablenessof the transaction price; the CPA
shall comply with the provisions ofStatements on Auditing Standards
No. 20 published by the
Accounting Research andDevelopment Foundation.
1) When the Company engages inany acquisition or disposal of
assets from or to a related party, in
addition to ensuring that the realestate processing procedures
specified in Article 7 are adopted,
26

for reference in appraising thetransaction 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 additionallyengage a certified public
accountant prior to the date ofoccurrence of the event to provide
an opinion regarding thereasonableness of the transaction
price. This requirement does not
apply, however, to publicly quoted
prices of securities that have an
active market, or where otherwise
provided by the regulations of the
Financial Supervisory Commission(FSC).
6) Expert Opinion Report on
Memberships or Intangible Assets
Where the Company acquires ordisposes of memberships orintangible assets and thetransaction amount reaches 20
percent or more of the Company’s
paid-in capital or NT$300 million
or more, the Company shallengage a certified public
accountant prior to the date ofoccurrence of the event to renderan opinion on the reasonablenessof the transaction price.

1) When the Company engages inany acquisition or disposal of
assets from or to a related party, in
addition to ensuring that the realestate processing procedures
specified in Article 7 are adopted,

Revised inaccordance with
amendment inlaws

related resolution procedures
specified below shall moreover becomplied with and thereasonableness of the transaction
terms by appraised; if thetransaction amount reaches 10
percent or more of the Company's
total assets, the Company shallalso obtain an appraisal reportfrom a professional appraiser or a
CPA's opinion in compliance withthe provisions of the preceding
Section. The "transaction amount"in the preceding paragraph shall becalculated in accordance with theprovisions stipulated in Article
7-1. In addition, when determining
whether the transaction target is arelated party, in addition to noting
its legal status, the actual relations
shall also be taken into
consideration.
2) Assessment and Operating
Procedures
When the Company acquires ordisposes of real estate from or to a
related party, or acquires ordisposes of assets other than realestate from or to a related party
and the transaction amount reaches
20 percent or more of theCompany’s paid-in capital, 10
percent or more of the Company's
total assets, or NT$300 million or
more, the Company may notproceed to enter into a transaction
contract or make a payment until
the following matters have been
approved by the Board of
Directors and ratified by theSupervisors:(1) The purpose, necessity andanticipated benefit of theacquisition or disposal of assets.
(2) The reason for choosing therelated party as a trading
counterparty.
(3) With respect to the acquisitionof real estate from a related party,
information regarding appraisal of
the reasonableness of thepreliminary transaction terms inaccordance with Subparagraphs (1)and (4) of Paragraph 3 of this
Article.
27

related resolution procedures
specified below shall moreover becomplied with and thereasonableness of the transaction
terms by appraised; if thetransaction amount reaches 10
percent or more of the Company's
total assets, the Company shallalso obtain an appraisal reportfrom a professional appraiser or a
CPA's opinion in compliance withthe provisions of the preceding
Section. The "transaction amount"in the preceding paragraph shall becalculated in accordance with theprovisions stipulated in Article 7-1.
In addition, when determining
whether the transaction target is arelated party, in addition to noting
its legal status, the actual relations
shall also be taken into
consideration.
2) Assessment and Operating
Procedures
When the Company acquires ordisposes of real estate from or to a
related party, or acquires ordisposes of assets other than realestate from or to a related party
and the transaction amount reaches
20 percent or more of theCompany’s paid-in capital, 10
percent or more of the Company's
total assets, or NT$300 million or
more, the Company may notproceed to enter into a transaction
contract or make a payment until
the following matters have been
approved by the Board of
Directors and ratified by theSupervisors:(1) The purpose, necessity andanticipated benefit of theacquisition or disposal of assets.
(2) The reason for choosing therelated party as a trading
counterparty.
(3) With respect to the acquisitionof real estate from a related party,
information regarding appraisal of
the reasonableness of thepreliminary transaction terms inaccordance with Subparagraphs (1)and (4) of Paragraph 3 of this
Article.

(4) The date and price at which therelated party originally acquired
the real estate, the original trading
counterparty, and that trading
counterparty's relationship to theCompany and the related party.
(5) Monthly cash flow forecasts
for the year commencing from theanticipated month of signing of thecontract, evaluation of thenecessity of the transaction, andreasonableness of fund utilization.
(6) An appraisal report from a
professional appraiser or a CPA's
opinion obtained in compliancewith the preceding Article.
(7) Restrictive covenants and otherimportant stipulations associatedwith the transaction.
The calculation of the "transaction
amount" referred to in thepreceding Paragraph shall be madein accordance with Article 11,
Paragraph 1 herein, and "within
the preceding year" as used hereinrefers to the year preceding thedate of occurrence of the current
transaction. Items that have been
approved by the Board of
Directors and ratified by theSupervisors in accordance with theprovisions of the Standards neednot be counted toward thetransaction amount.
With respect to the acquisition or
disposal of machinery or
equipment for business use
between the Company and its
subsidiaries, the Company's Boardof Directors may pursuant to
Article 7, Paragraph 2,
Subparagraph 2 delegate the
Chairperson of the Board to decidesuch matters when the transaction
is within a certain amount andhave the decisions subsequently
submitted to and ratified by thenext Board of Directors meeting.
1. Acquisition or disposal ofequipment or right-of-use assets
thereof held for business use.
2. Acquisition or disposal of real
property right-of-use assets held
for business use.
3) Appraisal of the reasonableness28(4) The date and price at which therelated party originally acquired
the real estate, the original trading
counterparty, and that trading
counterparty's relationship to theCompany and the related party.
(5) Monthly cash flow forecasts
for the year commencing from theanticipated month of signing of thecontract, evaluation of thenecessity of the transaction, andreasonableness of fund utilization.
(6) An appraisal report from a
professional appraiser or a CPA's
opinion obtained in compliancewith the preceding Article.
(7) Restrictive covenants and otherimportant stipulations associatedwith the transaction.
With respect to the acquisition or
disposal of machinery or
equipment for business use
between the Company and its
subsidiaries, the Company's Boardof Directors may pursuant to
Article 7, Paragraph 2,
Subparagraph 2 delegate the
Chairperson of the Board to decidesuch matters when the transaction
is within a certain amount andhave the decisions subsequently
submitted to and ratified by thenext Board of Directors meeting.
1. Acquisition or disposal ofequipment or right-of-use assets
thereof held for business use.
2. Acquisition or disposal of real
property right-of-use assets held
for business use.
3) Appraisal of the reasonablenessof the transaction price(1) When the Company acquires
real estate from a related party, it
shall evaluate the reasonablenessof the transaction costs by thefollowing means:
1. Based upon the related party's
transaction price plus necessaryinterest on funding and the costs tobe duly borne by the buyer.
"Necessary interest on funding" isimputed as the weighted averageinterest rate on borrowing in theyear the Company purchases theproperty; provided, it may not be

of the transaction price(1) When the Company acquires
real estate from a related party, it
shall evaluate the reasonablenessof the transaction costs by thefollowing means:
1. Based upon the related party's
transaction price plus necessaryinterest on funding and the costs tobe duly borne by the buyer.
"Necessary interest on funding" isimputed as the weighted averageinterest rate on borrowing in theyear the Company purchases theproperty; provided, it may not behigher than the maximum
non-financial industry lending rateannounced by the Ministry of
Finance.
2. Total loan value appraisal froma financial institution where therelated party has previously
created a mortgage on the property
as security for a loan; provided, theactual cumulative amount loanedby the financial institution shallhave been 70 percent or more of
the financial institution's appraisedloan value of the property and theperiod of the loan shall have been
1 year or more. However, this shallnot apply where the financial
institution is a related party of oneof the trading counterparties.
(2) Where land and buildings
thereupon are combined as a single
property purchased in one
transaction, the transaction costs
for the land and the buildings may
be separately appraised inaccordance with either of themeans listed in the preceding
paragraph.
(3) When the Company acquires
real estate from a related party andappraises the cost of the real estatein accordance with Paragraph 3,
Subparagraphs (1) and (2) of this
Article, it shall also engage a CPA
to review the appraisal and rendera specific opinion.
(4) Where the Company acquires
real estate from a related party andone of the following circumstances
exists, the acquisition shall only be29higher than the maximum
non-financial industry lending rateannounced by the Ministry of
Finance.
2. Total loan value appraisal froma financial institution where therelated party has previously
created a mortgage on the property
as security for a loan; provided, theactual cumulative amount loanedby the financial institution shallhave been 70 percent or more of
the financial institution's appraisedloan value of the property and theperiod of the loan shall have been
1 year or more. However, this shallnot apply where the financial
institution is a related party of oneof the trading counterparties.
(2) Where land and buildings
thereupon are combined as a single
property purchased in one
transaction, the transaction costs
for the land and the buildings may
be separately appraised inaccordance with either of themeans listed in the preceding
paragraph.
(3) When the Company acquires
real estate from a related party andappraises the cost of the real estatein accordance with Paragraph 3,
Subparagraphs (1) and (2) of this
Article, it shall also engage a CPA
to review the appraisal and rendera specific opinion.
(4) Where the Company acquires
real estate from a related party andone of the following circumstances
exists, the acquisition shall only berequired for implementation inaccordance with Paragraphs 1 and
2 of this Article regarding
appraisal and operating procedures
and where the regulations on thereasonableness of the transaction
cost provided in Paragraph 3,
Subparagraphs (1), (2), and (3) do
not apply:
1. The related party acquired thereal estate through inheritance or
as a gift.
2. More than 5 years will haveelapsed from the time the related
party signed the contract to obtainrequired for implementation inaccordance with Paragraphs 1 and
2 of this Article regarding
appraisal and operating procedures
and where the regulations on thereasonableness of the transaction
cost provided in Paragraph 3,
Subparagraphs (1), (2), and (3) do
not apply:
1. The related party acquired thereal estate through inheritance or
as a gift.
2. More than 5 years will haveelapsed from the time the related
party signed the contract to obtain
the real estate to the signing date
for the current transaction.
3. The real estate is acquired
through signing of a joint
development contract with therelated party, or through engaging
a related party to build real estate,either on the Company's own landor on rented land.
4. The real property right-of-use
assets for business use are acquiredby the public company with its
parent or subsidiaries, or by its
subsidiaries in which it directly or
indirectly holds 100 percent of theissued shares or authorized capital.
(5) When the Company acquires
real estate from a related party andappraises the cost of the real estatein accordance with Paragraph 3,
Subparagraphs (1) and (2) of this
Article, and the results are
uniformly lower than thetransaction price, the matter shallbe handled in compliance with theregulations in Paragraph 3,
Subparagraph (6) of this Article.
However, where the following
circumstances exist, objective
evidence has been submitted andspecific opinions on
reasonableness have been obtained
from a professional real estateappraiser and a CPA, thisrestriction shall not apply:
1. Where the related party acquired
undeveloped land or leased landfor development, it may submit
proof of compliance with one of
the following conditions:30

the real estate to the signing date
for the current transaction.
3. The real estate is acquired
through signing of a joint
development contract with therelated party, or through engaging
a related party to build real estate,either on the Company's own landor on rented land.
4. The real property right-of-use
assets for business use are acquiredby the public company with its
parent or subsidiaries, or by its
subsidiaries in which it directly or
indirectly holds 100 percent of theissued shares or authorized capital.
(5) When the Company acquires
real estate from a related party andappraises the cost of the real estatein accordance with Paragraph 3,
Subparagraphs (1) and (2) of this
Article, and the results are
uniformly lower than thetransaction price, the matter shallbe handled in compliance with theregulations in Paragraph 3,
Subparagraph (6) of this Article.
However, where the following
circumstances exist, objective
evidence has been submitted andspecific opinions on
reasonableness have been obtained
from a professional real estateappraiser and a CPA, thisrestriction shall not apply:
1. Where the related party acquired
undeveloped land or leased landfor development, it may submit
proof of compliance with one of
the following conditions:(i) Where undeveloped land isappraised in accordance with themeans in the preceding Article,
and structures according to therelated party's construction costplus reasonable construction profit
are valued in excess of the actual
transaction price. The "Reasonable
construction profit" shall bedeemed the average grossoperating profit margin of therelated party's construction
division over the most recent 3
years or the gross profit margin forthe construction industry for the(i) Where undeveloped land isappraised in accordance with themeans in the preceding Article,
and structures according to therelated party's construction costplus reasonable construction profit
are valued in excess of the actual
transaction price. The "Reasonable
construction profit" shall bedeemed the average grossoperating profit margin of therelated party's construction
division over the most recent 3
years or the gross profit margin forthe construction industry for themost recent period as announced
by the Ministry of Finance,
whichever is lower.
(ii) Completed transactions byunrelated parties within thepreceding year involving otherfloors of the same property orneighboring or closely valued
parcels of land, where the landarea and transaction terms are
similar after calculation ofreasonable price discrepancies infloor or area land prices inaccordance with standard property
market sale or leasing practices.
2. Where the Company acquires
real estate from a related party andprovides evidence that the terms ofthe transaction are similar to theterms of transactions completed
for the acquisition of neighboring
or closely valued parcels of land ofa similar size by unrelated parties
within the preceding year.
Completed transactions forneighboring or closely valued
parcels of land in the preceding
paragraph in principle refers toparcels on the same or an adjacent
block and within a distance of no
more than 500 meters or parcels
close in publicly announced
current value; transaction forsimilarly sized parcels in principle
refers to transactions completed byunrelated parties for parcels with aland area of no less than 50 percentof the property in the plannedtransaction; within the preceding
year refers to the year preceding31

most recent period as announced
by the Ministry of Finance,
whichever is lower.
(ii) Completed transactions byunrelated parties within thepreceding year involving otherfloors of the same property orneighboring or closely valued
parcels of land, where the landarea and transaction terms are
similar after calculation ofreasonable price discrepancies infloor or area land prices inaccordance with standard property
market sale or leasing practices.
2. Where the Company acquires
real estate from a related party andprovides evidence that the terms ofthe transaction are similar to theterms of transactions completed
for the acquisition of neighboring
or closely valued parcels of land ofa similar size by unrelated parties
within the preceding year.
Completed transactions forneighboring or closely valued
parcels of land in the preceding
paragraph in principle refers toparcels on the same or an adjacent
block and within a distance of no
more than 500 meters or parcels
close in publicly announced
current value; transaction forsimilarly sized parcels in principle
refers to transactions completed byunrelated parties for parcels with aland area of no less than 50 percentof the property in the plannedtransaction; within the preceding
year refers to the year preceding
the date of occurrence of theacquisition of the real estate.
(6) When the Company acquires
real estate from a related party andappraises the cost of the real estatein accordance with Paragraph 3,
Subparagraph (1) and (2) of this
Article, and the results are
uniformly lower than thetransaction price, the following
items shall be carried out. Where
the Company uses the equity
method to account for its
investment in a public company
that has set aside a special reservethe date of occurrence of theacquisition of the real estate.
(6) When the Company acquires
real estate from a related party andappraises the cost of the real estatein accordance with Paragraph 3,
Subparagraph (1) and (2) of this
Article, and the results are
uniformly lower than thetransaction price, the following
items shall be carried out. Where
the Company uses the equity
method to account for its
investment in a public company
that has set aside a special reserve
under the preceding paragraphmay not utilize the special reserve
until it has recognized a loss on
decline in market value of theassets 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 wasnothing unreasonable about thetransaction, and the FSC has given
its consent.
1. The Company shall set aside a
special reserve in accordance with
Article 41, Paragraph 1 of the
Securities and Exchange Act
against the difference between thereal estate transaction price and theappraised cost, and may not be
distributed or used for capitalincrease or issuance of bonus
shares. Where a public company
uses the equity method to accountfor its investment in anothercompany, then the special reserve
called for under Article 41,
Paragraph 1 of the Securities andExchange Act shall be set aside
pro rata in a proportion consistent
with the share of public company's
equity stake in the other company.
2. Supervisors shall comply with
Article 218 of the Company Act.
3. Actions taken pursuant to Item 1
and Item 2 of the Subparagraphshall be reported to a shareholders
meeting, and the details of thetransaction shall be disclosed in
the annual report and any
32

under the preceding paragraphmay not utilize the special reserve
until it has recognized a loss on
decline in market value of theassets 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 wasnothing unreasonable about thetransaction, and the FSC has given
its consent.
1. The Company shall set aside a
special reserve in accordance with
Article 41, Paragraph 1 of the
Securities and Exchange Act
against the difference between thereal estate transaction price and theappraised cost, and may not be
distributed or used for capitalincrease or issuance of bonus
shares. Where a public company
uses the equity method to accountfor its investment in anothercompany, then the special reserve
called for under Article 41,
Paragraph 1 of the Securities andExchange Act shall be set aside
pro rata in a proportion consistent
with the share of public company's
equity stake in the other company.
2. Supervisors shall comply with
Article 218 of the Company Act.
3. Actions taken pursuant to Item 1
and Item 2 of the Subparagraphshall be reported to a shareholders
meeting, and the details of thetransaction shall be disclosed in
the annual report and any
investment prospectus.
(7) When a public company
obtains real estate from a related
party, it shall also comply with
Paragraph 3, Subparagraph (6) of
the Article if there is otherevidence indicating that thetransaction was inconsistent withbusiness practice.
If a public company or asubsidiary thereof that is not adomestic public company will
have a transaction set out inparagraph 2and the transaction
amount will reach 10 percent orinvestment prospectus.
(7) When a public company
obtains real estate from a related
party, it shall also comply with
Paragraph 3, Subparagraph (6) of
the Article if there is otherevidence indicating that thetransaction was inconsistent withbusiness practice.

Article 111) Under any of the following
circumstances, a public company
acquiring or disposing of assets
shall publicly announce and report
the relevant information on the
FSC's designated website in theappropriate format as prescribedby regulations within 2 days
counting inclusively from the dateof occurrence of the event:(1) Acquisition or disposal of real
property or right-of-use assets
thereof from or to a related party,
or acquisition or disposal of assets
other than real property orright-of-use assets thereof from or
to a related party where thetransaction amount reaches 20
percent or more of paid-in capital,
10 percent or more of thecompany's total assets, or NT$300
million or more; provided, thisshall not apply to trading ofdomestic government bonds orbonds under repurchase and resaleagreements, or subscription orredemption of money market funds
issued by domestic securities
33

more of the public company’s total
assets, the public company shallsubmit the materials in all the
subparagraphs of paragraph 2 tothe shareholders meeting for
approval before the transaction
contract may be entered into andany payment made. However, thisrestriction does not apply totransactions between the publiccompany and its parent company
or subsidiaries or between its
subsidiaries.
The calculation of the transaction
amounts referred to in paragraph 2
and the preceding paragraph shallbe made in accordance with Article
11, paragraph 1 herein, and "within
the preceding year" as used hereinrefers to the year preceding thedate of occurrence of the current
transaction. Items that have been
approved by the shareholders
meeting or board of directors andrecognized by the supervisors neednot be counted toward thetransaction amount.
1) Under any of the following
circumstances, a public company
acquiring or disposing of assets
shall publicly announce and report
the relevant information on the
FSC's designated website in theappropriate format as prescribedby regulations within 2 days
counting inclusively from the dateof occurrence of the event:(1) Acquisition or disposal of real
property or right-of-use assets
thereof from or to a related party,
or acquisition or disposal of assets
other than real property orright-of-use assets thereof from or
to a related party where thetransaction amount reaches 20
percent or more of paid-in capital,
10 percent or more of thecompany's total assets, or NT$300
million or more; provided, thisshall not apply to trading ofdomestic government bonds orbonds under repurchase and resaleagreements, or subscription orredemption of money market funds
issued by domestic securities

Revised inaccordance with
amendment inlaws

investment trust enterprises.
(2) Merger, demerger, acquisition,
or transfer of shares.
(3) Losses from derivatives trading
reaching the limits on aggregate
losses or losses on individual
contracts set out in the procedures
adopted by the company.
(4) Where equipment orright-of-use assets thereof forbusiness use are acquired or
disposed of, and furthermore thetransaction counterparty is not a
related party, and the transaction
amount meets any of the following
criteria:
1. For a public company whose
paid-in capital is less than NT$10
billion, the transaction amountreaches NT$500 million or more.
2. For a public company whose
paid-in capital is NT$10 billion or
more, the transaction amountreaches NT$1 billion or more.
(5) Acquisition or disposal by apublic company in the construction
business of real property orright-of-use assets thereof forconstruction use, and furthermore
the transaction counterparty is nota related party, and the transaction
amount reaches NT$500 million;
among such cases, if the publiccompany has paid-in capital of
NT$10 billion or more, and it isdisposing of real property from acompleted construction project thatit constructed itself, andfurthermore the transaction
counterparty is not a related party,
then the threshold shall be atransaction amount reaching NT$1
billion or more.
(6) 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 andallocation of housing units, joint
construction and allocation ofownership percentages, or joint
construction and separate sale, andfurthermore the transaction
counterparty is not a related party,
and the amount the company
34

investment trust enterprises.
(2) Merger, demerger, acquisition,
or transfer of shares.
(3) Losses from derivatives trading
reaching the limits on aggregate
losses or losses on individual
contracts set out in the procedures
adopted by the company.
(4) Where equipment orright-of-use assets thereof forbusiness use are acquired or
disposed of, and furthermore thetransaction counterparty is not a
related party, and the transaction
amount meets any of the following
criteria:
1. For a public company whose
paid-in capital is less than NT$10
billion, the transaction amountreaches NT$500 million or more.
2. For a public company whose
paid-in capital is NT$10 billion or
more, the transaction amountreaches NT$1 billion or more.
(5) Acquisition or disposal by apublic company in the construction
business of real property orright-of-use assets thereof forconstruction use, and furthermore
the transaction counterparty is nota related party, and the transaction
amount reaches NT$500 million;
among such cases, if the publiccompany has paid-in capital of
NT$10 billion or more, and it isdisposing of real property from acompleted construction project thatit constructed itself, andfurthermore the transaction
counterparty is not a related party,
then the threshold shall be atransaction amount reaching NT$1
billion or more.
(6) 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 andallocation of housing units, joint
construction and allocation ofownership percentages, or joint
construction and separate sale, andfurthermore the transaction
counterparty is not a related party,
and the amount the company

expects to invest in the transaction
reaches NT$500 million.
(7) Where an asset transaction
other than any of those referred toin the preceding six subparagraphs,
a disposal of receivables by afinancial institution, or aninvestment in the mainland China
area reaches 20 percent or more ofpaid-in capital or NT$300 million;
provided, this shall not apply to thefollowing circumstances:
1. Trading of domestic government
bonds.
2. Where done by professional
investors-securities trading on
securities exchanges or OTC
markets, or subscription ofordinary corporate bonds orgeneral bank debentures without
equity characteristics (excluding
subordinated debt) that are offeredand issued in the primary market,
or subscription or redemption of
securities investment trust funds or
futures trust funds, or subscription
by a securities firm of securities asnecessitated by its undertaking
business or as an advisory
recommending securities firm foran emerging stock company, in
accordance with the rules of theTaipei Exchange.
3. Trading of bonds under
repurchase and resale agreements,
or subscription or redemption ofmoney market funds issued bydomestic securities investment
trust enterprises.
The amount of transactions above
shall be calculated as follows:
1. The amount of any individualtransaction.
2. The cumulative transaction
amount of acquisitions anddisposals of the same type ofunderlying asset with the sametransaction counterparty within thepreceding year.
3. The cumulative transaction
amount of acquisitions anddisposals (cumulative acquisitions
and disposals, respectively) of real
property or right-of-use assets
thereof within the same
35

expects to invest in the transaction
reaches NT$500 million.
(7) Where an asset transaction
other than any of those referred toin the preceding six subparagraphs,
a disposal of receivables by afinancial institution, or aninvestment in the mainland China
area reaches 20 percent or more ofpaid-in capital or NT$300 million;
provided, this shall not apply to thefollowing circumstances:
1. Trading of domestic government
bonds or foreign government
bonds with a rating that is not
lower than the sovereign rating of
Taiwan.
2. Where done by professional
investors—securities trading on
securities exchanges or OTC
markets, or subscription of foreign
government bonds, or of ordinary
corporate bonds or general bankdebentures without equity
characteristics (excluding
subordinated debt) that are offeredand issued in the primary market,
or subscription or redemption of
securities investment trust funds or
futures trust funds, or subscription
or redemption of exchange tradednotes, or subscription by asecurities firm of securities asnecessitated by its undertaking
business or as an advisory
recommending securities firm foran emerging stock company, in
accordance with the rules of theTaipei Exchange.
3. Trading of bonds under
repurchase and resale agreements,
or subscription or redemption ofmoney market funds issued bydomestic securities investment
trust enterprises.
The amount of transactions above
shall be calculated as follows:
1. The amount of any individualtransaction.
2. The cumulative transaction
amount of acquisitions anddisposals of the same type ofunderlying asset with the sametransaction counterparty within thepreceding year.

development project within thepreceding year.
4. The cumulative transaction
amount of acquisitions anddisposals (cumulative acquisitions
and disposals, respectively) of thesame security within the preceding
year.
"Within the preceding year" as
used in the preceding paragraphrefers to the year preceding thedate of occurrence of the current
transaction. Items duly announced
in accordance with theseRegulations need not be counted
toward the transaction amount.
2) A public company shall compile
monthly reports on the status ofderivatives trading engaged in up
to the end of the preceding monthby the company 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 the 10th day of eachmonth.
3) When a public company at thetime of public announcement
makes an error or omission in an
item required by regulations to be
publicly announced and so isrequired to correct it, all the items
shall be again publicly announced
and reported in their entirety
within two days counting
inclusively from the date ofknowing of such error or omission.
4) A public company acquiring or
disposing of assets shall keep all
relevant contracts, meeting
minutes, log books, appraisal
reports and CPA, attorney, andsecurities underwriter opinions at
the company, where they shall be
retained for 5 years except whereanother act provides otherwise.
5) Where any of the following
circumstances occurs with respect
to a transaction that a publiccompany has already publicly
announced and reported inaccordance with the precedingarticle, a public report of relevant
36

3. The cumulative transaction
amount of acquisitions anddisposals (cumulative acquisitions
and disposals, respectively) of real
property or right-of-use assets
thereof within the samedevelopment project within thepreceding year.
4. The cumulative transaction
amount of acquisitions anddisposals (cumulative acquisitions
and disposals, respectively) of thesame security within the preceding
year.
"Within the preceding year" as
used in the preceding paragraphrefers to the year preceding thedate of occurrence of the current
transaction. Items duly announced
in accordance with theseRegulations need not be counted
toward the transaction amount.
2) A public company shall compile
monthly reports on the status ofderivatives trading engaged in up
to the end of the preceding monthby the company 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 the 10th day of eachmonth.
3) When a public company at thetime of public announcement
makes an error or omission in an
item required by regulations to be
publicly announced and so isrequired to correct it, all the items
shall be again publicly announced
and reported in their entirety
within two days counting
inclusively from the date ofknowing of such error or omission.
4) A public company acquiring or
disposing of assets shall keep all
relevant contracts, meeting
minutes, log books, appraisal
reports and CPA, attorney, andsecurities underwriter opinions at
the company, where they shall be
retained for 5 years except whereanother act provides otherwise.
5) Where any of the following

information shall be made on theinformation reporting website
designated by the FSC within 2days counting inclusively from thedate of occurrence of the event:(1) Change, termination, or
rescission of a contract signed inregard to the original transaction.
(2) The merger, demerger,
acquisition, or transfer of shares is
not completed by the scheduled
date set forth in the contract.
(3) Change to the originallypublicly announced and reported
information.

37

circumstances occurs with respect
to a transaction that a publiccompany has already publicly
announced and reported inaccordance with the precedingarticle, a public report of relevant
information shall be made on theinformation reporting website
designated by the FSC within 2days counting inclusively from thedate of occurrence of the event:(1) Change, termination, or
rescission of a contract signed inregard to the original transaction.
(2) The merger, demerger,
acquisition, or transfer of shares is
not completed by the scheduled
date set forth in the contract.
(3) Change to the originallypublicly announced and reported
information.