Lite-On Technology Corporation
Annual General Meeting of Shareholders for 2019
Meeting Agenda
Date: June 21, 2019 at 9:00 a.m.
Location: 1F, No. 392, Ruey Kuang Road, Neihu Dist., Taipei City
(International Convention Center, Lite-On Technology Building)
Stock code
2301
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Lite-On Technology Corporation
Meeting Procedure for the Annual General Meeting of Shareholders for 2019
I. Chairperson Calls Meeting to Order
II. Opening Remarks by the Chairperson
III. Reports on Company Affairs
IV. Proposals and Discussions
V. Provisional Motions
VI. Adjournment
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Lite-On Technology Corporation
Agenda of the Annual General Meeting of Shareholders for 2019
I. Chairperson Calls the Meeting to Order (and reports equity shares in
attendance)
II. Opening Remarks by the Chairperson
III. Reports on Company Affairs
i. 2018 Business Report
ii. Audit Committee’s Review Report on 2018 Financial Statements
iii. Employees and Directors compensation for 2018
iv. Amendment to “Management of Operation of Board Meeting”
IV. Proposals, Election and Discussions
i. Adoption of 2018 Financial Statements
ii. Adoption of the Proposal for Appropriation of 2018 Earnings
iii. Amendment to “Articles of Incorporation”
iv. Amendment to “Procedures for the Acquisition and Disposal of Assets”
v. Amendment to “Regulations Governing Loaning of Funds and Making of
Endorsements/Guarantees”
vi. Amendment to “Rules Governing the Election of Directors”
vii. Election of the Board of Directors of the 11th Term.
viii. Discussion of Release of Directors from Non-Competition Restrictions
V. Provisional Motions
VI. Adjournment
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III. Reports on Company Affairs i. 2018 Business Report
Explanation: Please refer to attachment 1 from page 11 to page 12 - 2018 Business Report of the
Company.
ii. Audit Committee’s Review Report on the 2018 Financial Statements
Explanation:
1. 2018 Financial Statements of the Company have been duly audited by Certified Public
Accountant Meng-Chieh Chiu and Certified Public Accountant Tsai-Cheng Tsai of Deloitte
Touche Tohmatsu International Taiwan. The aforementioned financial statements, business report,
and proposals for Earnings appropriation have been duly reviewed by the Audit Committee.
Audit Committee’s Review Report is provided herein.
2. For details of the Certified Public Accountants’ Audit Report and aforementioned Financial
Statements, please refer to Attachment 2 from page 13 to page 25 & Attachment 3 from page
26 to page 38.
3. For the Review Report provided by the Audit Committee, please refer to Attachment 4 at
page39.
iii. Employees and Directors compensation for 2018
Explanation:
1. The Company allocated the profit of 2018 to employees and directors as compensation and were
discussed and resolved in the Board of Directors meeting convened on February 26, 2019, all
paid in cash.
2. The Company’s Board of Directors resolved 2018 compensation distributed to employees at the
amount of NT$ 1,125,892,616 and to directors at the amount of NT$67,633,125.
iv. Amendment to “Management of Operation of Board Meeting”
Explanation:
1. Pursuant to the amendment of regulations from competent authorities, an amendment to
“Management of Operation of Board Meeting” is discussed and resolved in the Board of
Directors meeting convened on April 26, 2019.
2. Please refer to Attachment 5 from page 40 to page 43 for a comparison of the contents
before and after amendment.
IV. Proposals and Discussions
Proposed by the Board of Directors
i. Proposal: Adoption of 2018 Financial Statements.
Explanation:
1. 2018 financial statements have been audited by Certified Public Accountant Meng-Chieh Chiu
and Certified Public Accountant Tsai-Cheng Tsai of Deloitte Touche Tohmatsu International
Taiwan and were discussed and resolved in the Board of Directors meeting convened on
February 26, 2019.
2. The aforementioned financial statements and business report were reviewed by the Audit
Committee.
3. For the business report for Year 2018, please refer to Attachment 1 from page 11 to page 12.
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4. For the financial statements for Year 2018, please refer to Attachments 2 from page 13 to page
25 & attachment 3 from page 26 to page 38.
5. Please proceed to adopt.
Resolution:
Proposed by the Board of Directors
ii. Proposal: Adoption of the Proposal for Appropriation of 2018 Earnings
Explanation:
1. The proposal for Lite-on Technology’s (the Company) 2018 appropriation of earnings was
already resolved in the Board of Directors meeting convened on February 26, 2019.
2. In Fiscal Year 2018, the Company made a net profit of NT$7,956,838,274. By adding
unallocated retained earnings of the previous year of NT$7,499,888,591, adding cumulative
effect of the initial application of IFRS9 recognized in retained earnings of $279,768,597,
adding adjustments on the equity method investments recognized in retained earnings of
NT$41,109,640, adding adjustments on re-measurement on define benefit plans recognized in
retained earnings of NT$8,081,619, adding cumulative unrealized gain on investments in
equity instruments designated as at fair value through other comprehensive income (FVTOCI)
was transferred directly to retained earnings due to disposal of NT$3,459,902, setting aside
10% of net profit as legal reserve of NT$795,683,827 and special reserve of NT$682,813,923,
total distributable earnings for the year amounted to NT$14,310,648,873. 3. The profit to be distributed among shareholders shall be NT$ 6,864,531,733 in cash dividends
(NT$2.92 per share). The distribution of cash dividends shall be based on share ratio and
rounded off to the integer. Fractional dividend amounts that are less than NT$1 shall be ranked
from high to low in value and from old to new in account number, and then they shall be
adjusted in this order until the total amount of cash dividend distribution is met. For dividend
distribution chart and descriptions, see Attachment 6 at page 44.
4. In the event of repurchase of the Company’s shares, transfer, conversion or annulment of
treasury stocks, and exercise of employees’ stock options, leading to a change in the number of
outstanding shares and a consequent change in dividend yield, it is proposed that the Board of
Directors are authorized to duly adjust cash payout rates.
5. For distribution of cash dividends, it is proposed that the Board of Directors be authorized to
determine the ex-dividend date and to put it into promulgation as required by law after
resolution is made in this shareholders’ meeting.
6. Please proceed to adopt.
Resolution
Proposed by the Board of Directors
iii. Proposal: Amendment to “Articles of Incorporation”, please discuss and resolve.
Explanation:
1. Pursuant to the amendment of regulations from competent authorities and to satisfy the
Company’s needs, an amendment to “The Articles of Incorporation” is proposed.
2. Please refer to Attachment 7 from page 45 to page 48 for a comparison of the contents before and
after amendment.
3. Please refer to Appendix 2 from page 76 to page 82 for the full contents before amendment.
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4. Please discuss and resolve.
Resolution:
Proposed by the Board of Directors
iv. Proposal: Amendment to “Procedures for the Acquisition and Disposal of Assets”, please
discuss and resolve.
Explanation:
1. Pursuant to the initial application to IFRS16 「Leases」on January 1, 2019, an amendment to
“Procedures for the Acquisition and Disposal of Assets” is proposed.
2. Please refer to Attachment 8 from page 49 to page 59 for a comparison of the contents before and
after amendment.
3. Please discuss and resolve.
Resolution:
Proposed by the Board of Directors
v. Proposal: Amendment to “Regulations Governing Loaning of Funds and Making of
Endorsements/Guarantees”, please discuss and resolve.
Explanation:
1. In order to comply with No.1080304826 of the Financial Supervisory Commission, satisfy the
Company’s needs and strengthen the corporate governance, an amendment to “Regulations Governing
Loaning of Funds and Making of Endorsements/Guarantees” is proposed.
2. Please refer to Attachment 9 from page 60 to page 62 for a comparison of the contents before and
after amendment.
3. Please discuss and resolve.
Resolution:
Proposed by the Board of Directors
vi. Proposal: Amendment to “Rules Governing the Election of Directors”, please discuss and
resolve.
Explanation:
1. Pursuant to the amendment of regulations from competent authorities, an amendment to “Rules
Governing the Election of Directors” is proposed.
2. Please refer to Attachment 10 from page 63 to page 68 for a comparison of the contents before and
after amendment.
3. Please refer to Appendix 3 from page 83 to page 88 for the full contents before amendment.
4. Please discuss and resolve.
Resolution:
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Proposed by the Board of Directors
vii. Proposal: Election of the Board of Directors of the 11th Term.
Explanation:
1. Please duly elect nine directors of the 11th term (including four independent directors). For
“Regulations Governing Election of Directors”, please refer to Attachment 10 from page 63 to page
68 and Appendix 3 from page 83 to page 88.
2. For candidates of directors and independent directors of the 11th term, please refer to Appendix 4
from page 89 to page 93.
3. The directors of the 11th term will serve a three-year term starting from June 21, 2019 to June 20,
2022.
Election result:
Proposed by the Board of Directors
viii. Proposal: Proposal of release of directors from non-competition restrictions, please discuss
and resolve.
Explanation:
1. In order to comply with the Article 209 of Company Act, “if a Director’s act on his/her or others’
behalf falls within the scope of the Company's business, the Director shall illustrate to the
shareholders the gist of such act, and obtain the shareholders’ approval.”
2. In view of the diversification needs of the Company’s and that directors (including independent
directors) might act in their own interests on matters within the Company’s business scopes, it is
proposed to release the non-competition restrictions on directors and independent directors with
the premise that directors do not have conflicts of the Company’s interests.
3. The detail of release of directors from non-competition restrictions, please refer to Attachment 11
from page 69 to page 70.
4. Please discuss and resolve.
Resolution:
V. Provisional Motions
VI. Adjournment
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Attachment 1
Lite-On Technology Corporation
Business Report
Dear Shareholders,
LITE-ON's global consolidated revenue amounted to NT$207.1 billion in 2018. Pre-tax profit was
NT$10.78 billion, after-tax profit was NT$7.96 billion, and earnings per share (EPS) was NT$3.42,
representing a 203% year-on-year increase. Net profit for the third quarter, in particular, grew by 50%,
the highest growth in the past two years, showing a return to normal growth in profitability. In recent
years, LITE-ON has been committed to a self-transformation that seeks to elevate profitability with a
realistic approach. With changes in operating models, adjustment to product portfolios, growth in
revenue, and even creation of excellent profitability, LITE-ON is building on sustainable business
development to become a centenarian corporation.
Business Performance
In 2018, LITE-ON's two pillars for growth — cloud applications, and LED component/LED vehicle
and outdoor lighting — reached nearly 30% of total revenue, for more than a 20% year-on-year gain.
This demonstrates the achievement of LITE-ON's efforts in new business incubation and
self-transformation. LITE-ON will continue to dedicate itself to using strategic perspectives for steady
development of core areas, and will steadily and stably develop promising new business into long-term
dynamics for growth.
In the opto-electronics business segment, market share in invisible LED applications and LED
components continued to increase, while LED vehicle lighting shipments have continued smoothly.
LED vehicle lighting and sensor components have gradually shown potential for growth, while
vehicular camera modules are scheduled to officially commence mass production by the end of 2019.
In the information technology business segment, high-end cloud computing servers and networked
power management systems experienced steady market growth; market share in keyboards, mice and
other computer peripherals rose as well. The storage business segment also benefited from cloud
computing-related applications and grew steadily.
In response to the many changes in the global industrial environment in 2018, we have streamlined and
focused LITE-ON’s business scope and business segments, and have successfully disposed two mobile
phone-related businesses. The consistent goal is profitability, even steadier operations, and higher
return on equity. Going forward into 2018, LITE-ON transferred some of the key business operations
and assets in the mobile imaging business segment to LuxVisions Innovation Ltd. through a transfer of
business operations. The transaction price was US$360 million, plus rights to a 10% stake in
LuxVisions. In the third quarter of 2018, Lite-On sold 100% of shares in three mobile device business
segment subsidiaries to Top Touch Electronics Co., Ltd., a subsidiary of Zhejiang Firstar Panel
Technology Co., Ltd., which is a listed company based in Shenzhen. The equity transfer price was
RMB 530 million.
Corporate Social Responsibility
The global trend of valuing sustainable investment remains in the ascendant. ESG performance has
become an important reference for investors. LITE-ON has been listed as a member of the Dow Jones
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Sustainability Index (DJSI) for eight years in a row since 2011, and has had a place on the MSCI ESG
Leaders Index for five years in a row. In 2018, LITE-ON was listed in the inaugural Thomson Reuters
Top 100 Global Technology Leaders. In Taiwan, LITE-ON was ranked top 5% in the 2018 Corporate
Governance Evaluation Survey jointly implemented by the Taiwan Stock Exchange (TWSE) and the
Taipei Exchange (TPEx); listed as a constituent stock in the FTSE4Good TIP Taiwan ESG Index;
awarded Commonwealth Magazine's Corporate Citizen Award in the large enterprise category by for
the 12th time in 2018; and was awarded the Platinum Award, the highest honor, in the electronic and
information manufacturing category in the 2018 Corporate Sustainability Report Awards from TCSA.
Future Outlook
LITE-ON will continue to push for transformation by developing business areas including cloud
computing, LED outdoor lighting, automobile electronics, smart manufacturing, and the Internet of
Things. The pace of LITE-ON’s globalization will also accelerate, with the establishment of the
Kaohsiung Operations Center and the asset expansion of the Huadong Operations Center. The new
factory for automobile electronic and optical core business at the Huadong Operations Center
commenced operation at the end of 2018, while the Kaohsiung Operations Center is scheduled to
commence production in the middle of 2019. We are continuously accelerating our improvement of
overall smart manufacturing, and strengthening LITE-ON's core competencies, mass production and
the competitiveness and advantages in customer service. We also continue to speed up integration of
new technologies, production line automation and digital transformation, as well as quality
manufacturing and supply chain management. We value quality above cost, and we substantially
realize internal system innovation that starts with product development.
Looking forward into 2019, uncertain factors and challenges such as China-U.S. trade negotiations, the
highly globalized market environment, chain reactions brought by political and economic conditions,
as well as changes in exchange rates and terminal market demands, may have unexpected impacts on
LITE-ON, our customers, or the technology industry as a whole. LITE-ON hopes to hold a receptive
and open attitude towards the changeable external environment, while taking an entrepreneurial
approach to corporate responsibility and continuing to exploit our strategic capacity to overtake
competitors through self-transformation. We strive for healthy growth and excellent business results
under One LITE-ON. We are grateful for the long-term support and recognition from our shareholders,
colleagues, customers, suppliers, and business partners, whom we hope will join LITE-ON in 2019 as
we continue our progress toward becoming a centenarian corporation.
Lite-On Chairman Lite-On Vice Chairman & Group CEO
Raymond Soong Warren Chen
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Attachment 2
INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Shareholders
Lite-On Technology Corporation
Opinion
We have audited the accompanying consolidated financial statements of Lite-On Technology Corporation and
its subsidiaries (collectively referred to as the Group), which comprise the consolidated balance sheets as of
December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and
cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary
of significant accounting policies (collectively referred to as the “consolidated financial statements”).
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial
performance and its cash flows for the years then ended in accordance with the Regulations Governing the
Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS),
International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC)
endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.
Basis for Opinion
We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial
Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China.
Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group in accordance
with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
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For the year ended December 31, 2018, the key audit matters for the Group’s consolidated financial statements
were as follows:
Allowance for Impairment Loss for Trade Receivables
The recoverable amount from the allowance for impairment loss is determined by management’s evaluation of
the credit risk of overdue receivables, and it is affected by management’s assumption of a client’s credit quality.
In our audit, we focused on clients with significant trade receivables and overdue balances, and we evaluated the
reasonableness of management’s estimation of the allowance for impairment loss.
Refer to Note 4 to the consolidated financial statements for a summary of significant accounting policies. Refer
to Note 13 to the consolidated financial statements for the carrying amount of trade receivables and impairment
loss for trade receivables. Our key audit procedures in respect of the above area included the following:
We assessed both the trade receivables aging report classified by client’s credit rating and the reasonableness of
the percent of impairment loss allowance; this assessment included the implementation of computer audit
sampling procedures to test the correctness of trade receivable aging reports. We confirmed the recoverability of
outstanding trade receivables by testing the after period-end collection of receivables.
Allowance for Inventory Valuation Loss
The value of inventory is affected by the volatility of market demand and ever-changing technology which
could make inventory outdated and obsolete. The allocation of inventory cost elements and estimations of the
net realizable value of inventory require management’s subjective judgment. In our audit, we focused on
whether the value of inventory was evaluated according to IAS 2, which is based on the lower of cost or net
realizable value method. We also assessed the reasonableness of management’s estimation of the allowance for
inventory valuation loss.
Refer to Note 4 to the consolidated financial statements for a summary of significant accounting policies. Refer
to Note 14 to the consolidated financial statements for the carrying amount of inventory. Our key audit
procedures in respect of the above area included the following:
1. We assessed both inventory aging reports classified by business segments and the reasonableness of the
percent of allowance for inventory valuation loss; this assessment included the implementation of computer
audit sampling procedures to test the correctness of inventory aging reports.
2. We obtained information of the year-end allowance for inventory valuation loss and inventory aging reports,
and we compared the current and prior years’ allowances and analyzed any differences. We drew samples
from the year-end inventory and compared the most recent price of goods sold to the carrying amount to
ensure that the inventory had been valued by the lower of cost or net realizable value method.
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Impairment Loss for Property, Plant and Equipment and Intangible Assets (Including Goodwill)
Management should assess, on the financial statement date, any indication of impairment to property, plant and
equipment and intangible assets. If there is any indication of impairment, management should estimate the
recoverable amount of these assets. If it is impossible to do so, management should estimate the recoverable
amount of the cash generating units to which these assets belong. Due to the complexity of this impairment
estimation, in our audit, we focused on whether the estimation was made in accordance with IAS 36 to ensure
that all assets’ carrying amounts did not exceed their respective recoverable amounts.
Refer to Note 4 to the consolidated financial statements for a summary of the significant accounting policies on
property, plant and equipment and intangible assets impairment. Refer to Notes 18 and 20 to the consolidated
financial statements for disclosures of property, plant and equipment and intangible assets. Our key audit
procedures performed in respect of the above area included the following:
1. Through internal control testing, we understood the methods of asset impairment valuation made by
management and the associated control policy’s design and implementation.
2. We obtained the asset impairment valuation table of each cash generating unit from management. We
consulted our firm experts on the reasonableness of management’s impairment assessments and
assumptions, including its cash generating unit classifications, cash flow predictions, discount rates, etc.
Other Matter
We have also audited the parent company only financial statements of Lite-On Technology Corporation as of
and for the years ended December 31, 2018 and 2017 on which we have issued an unmodified opinion.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and 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 the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance, including the audit committee, are responsible for overseeing the Group’s
financial reporting process.
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Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the auditing standards generally accepted in the Republic of China will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with 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 are
appropriate 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 estimates
and related disclosures made by management.
4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditors’ report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision, and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the consolidated financial statements for the year ended December 31, 2018
and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
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that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partners on the audit resulting in this independent auditors’ report are Meng-Chieh Chiu and
Cheng-Tsai Tsai.
Deloitte & Touche
Taipei, Taiwan
Republic of China
February 26, 2019
Notice to Readers
The accompanying consolidated financial statements are intended only to present the consolidated financial
position, financial performance and cash flows in accordance with accounting principles and practices
generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures
and practices to audit such consolidated financial statements are those generally applied in the Republic of
China.
For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial
statements have been translated into English from the original Chinese version prepared and used in the
Republic of China. If there is any conflict between the English version and the original Chinese version or any
difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and
consolidated financial statements shall prevail.
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LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES Attachment 2-1
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
2018 2017
ASSETS Amount % Amount %
CURRENT ASSETS
Cash and cash equivalents (Note 6) $ 63,285,301 32 $ 57,783,860 30 Financial assets at fair value through profit or loss (''FVTPL'') (Note 7) 132,139 - 101,677 -
Financial assets at amortized cost (Note 9) 223,738 - - - Contracts assets 3,024,589 2 - -
Debt instruments with no active market (Note 12) - - 911,783 1
Notes receivable, net (Note 13) 697,671 - 282,316 - Trade receivables, net (Note 13) 45,484,821 23 52,037,732 27
Trade receivables from related parties (Note 33) 90,095 - 79,288 -
Other receivables 10,910,806 6 1,364,028 1 Other receivables from related parties (Note 33) 4,417 - 2,806 -
Inventories, net (Note 14) 31,493,066 16 28,312,572 15
Non-current assets held for sale (Note 16) - - 815,143 - Other current assets (Note 21) 2,638,275 1 3,372,102 2
Total current assets 157,984,918 80 145,063,307 76
NON-CURRENT ASSETS
Financial assets at FVTPL (Note 7) 111,220 - - - Financial assets at fair value through other comprehensive income ("FVTOCI") (Note 8) 388,675 - - -
Available-for-sale financial assets (Note 11) - - 513,129 -
Financial assets at amortized cost (Note 9) 395,301 - - - Debt instruments with no active market (Note 12) - - 573,085 -
Investments accounted for using the equity method (Note 17) 4,972,609 3 3,681,951 2
Property, plant and equipment, net (Note 18) 20,484,992 10 22,490,411 12 Investment properties, net (Note 19) 1,178,393 1 1,426,134 1
Intangible assets, net (Note 20) 5,914,084 3 9,828,658 5
Deferred tax assets (Note 28) 4,333,202 2 3,614,920 2 Refundable deposits 499,984 - 641,387 -
Prepaid investments - - 1,354,950 1
Other non-current assets (Note 21) 872,691 1 807,825 1
Total non-current assets 39,151,151 20 44,932,450 24
TOTAL $ 197,136,069 100 $ 189,995,757 100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 22) $ 30,087,282 15 $ 30,155,790 16
Financial liabilities at FVTPL (Note 7) 51,877 - 147,052 -
Notes payable 18,235 - 38,797 -
Trade payables 52,309,412 27 56,152,649 30
Trade payables to related parties (Note 33) 781,623 - 803,894 -
Other payables 29,388,957 15 21,123,576 11
Other payables to related parties (Note 33) 16,684 - 19,927 -
Current tax liabilities 4,986,079 3 3,221,310 2
Provisions (Note 24) 1,011,238 - 866,119 -
Advance receipts 1,959,041 1 2,049,789 1
Current portion of long-term borrowings (Note 22) 184 - 16,204 -
Finance lease payables (Note 23) 1,469 - 1,600 -
Total current liabilities 120,612,081 61 114,596,707 60
NON-CURRENT LIABILITIES
Long-term borrowings, net of current portion (Note 22) - - 178 -
Deferred tax liabilities (Note 28) 1,605,349 1 1,324,792 1
Finance lease payables, net of current portion (Note 23) 351 - 1,764 -
Net defined benefit liabilities (Note 25) 160,997 - 224,025 -
Guarantee deposits 78,890 - 80,862 -
Total non-current liabilities 1,845,587 1 1,631,621 1
Total liabilities 122,457,668 62 116,228,328 61
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY
Share capital
Ordinary shares 23,508,670 12 23,508,670 12
Capital surplus
Additional paid-in capital from share issuance in excess of par value 3,471,812 2 9,372,488 5
Bond conversions 7,462,138 4 7,462,138 4
Treasury share transactions 477,697 - 400,329 -
Difference between consideration and carrying amounts adjusted arising from changes in percentage of ownership of subsidiaries 47,209 - 49,019 -
Changes in capital surplus from investments in associates accounted for using the equity method 271,367 - 276,782 -
Mergers 10,015,194 5 10,015,194 6
Total capital surplus 21,745,417 11 27,575,950 15
Retained earnings
Legal reserve 12,049,900 6 11,786,967 6
Special reserve 2,705,954 2 1,338,878 1
Unappropriated earnings 15,789,147 8 10,093,753 5
Total retained earnings 30,545,001 16 23,219,598 12
Other equity
Exchange differences on translating foreign operations (2,779,863 ) (2 ) (2,528,893 ) (1 )
Unrealized loss of financial assets at FVTOCI (449,461 ) - - -
Unrealized loss on available-for-sale financial assets - - (18,497 ) -
Gain on financial instruments in cash flow hedging securities 2,714 - 3,372 -
Total other equity (3,226,610 ) (2 ) (2,544,018 ) (1 )
Treasury shares (1,248,722 ) (1 ) (1,248,722 ) (1 )
Total equity attributable to owners of the Parent Company 71,323,756 36 70,511,478 37
NON-CONTROLLING INTERESTS 3,354,645 2 3,255,951 2
Total equity 74,678,401 38 73,767,429 39
TOTAL $ 197,136,069 100 $ 189,995,757 100
The accompanying notes are an integral part of the consolidated financial statements.
- 16 -
LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES Attachment 2-2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2018 2017
Amount % Amount %
OPERATING REVENUE
Sales (Notes 27 and 33) $ 211,390,341 102 $ 220,857,071 103
Less: Sales allowance 3,102,425 1 5,075,609 2
Sales returns 1,178,828 1 1,217,140 1
Total operating revenue 207,109,088 100 214,564,322 100
COST OF GOODS SOLD (Notes 14, 30 and 33) 180,006,839 87 186,854,505 87
GROSS PROFIT 27,102,249 13 27,709,817 13
OPERATING EXPENSES (Notes 30 and 33)
Selling and marketing expenses 7,084,795 3 6,774,460 3
General and administrative expenses 6,116,248 3 6,175,520 3
Research and development expenses 6,348,444 3 6,415,873 3
Expected credit loss (Note 32) 66,949 - - -
Total operating expenses 19,616,436 9 19,365,853 9
OPERATING INCOME 7,485,813 4 8,343,964 4
NON-OPERATING INCOME AND EXPENSES
Share of profit of associates 178,863 - 170,309 -
Interest income 1,710,052 1 1,365,837 -
Dividend income 39,400 - 39,811 -
Other income (Note 33) 5,265,003 2 1,401,724 1
Net gain on disposal of investments (Note 17) 86,603 - 179,115 -
Net gain (loss) on foreign currency exchange (497,693) - 226,478 -
Net gain on financial assets at FVTPL 1,338,423 1 341,680 -
Finance costs (875,318) (1) (603,844) -
Other expenses (380,339) - (937,955) (1)
Net loss on disposal of property, plant and equipment (20,018) - (96,747) -
Net loss on disposal of intangible asset (6) - - -
Impairment loss (Notes 11, 17, 18 and 20) (3,546,662) (2) (7,058,778) (3)
Total non-operating income and expenses 3,298,308 1 (4,972,370) (3)
PROFIT BEFORE INCOME TAX 10,784,121 5 3,371,594 1
INCOME TAX EXPENSE (Note 28) (2,817,037) (1) (740,463) -
NET PROFIT FOR THE YEAR 7,967,084 4 2,631,131 1
(Continued)
- 17 -
LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2018 2017
Amount % Amount %
OTHER COMPREHENSIVE INCOME (LOSS)
(Notes 25, 26 and 28)
Items not reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans $ 3,041 - $ (43,909) -
Unrealized gain (loss) on investments in equity
instruments designated as at FVTOCI (107,838) - - -
Share of other comprehensive loss of associates
accounted for using the equity method (1,770) - (9,920) -
Income tax benefit relating to items not
reclassified subsequently to profit or loss 4,441 - 9,552 -
(102,126) - (44,277) -
Items that may be reclassified subsequently to profit
or loss
Exchange differences on translating foreign
operations (369,243) - (1,591,874) -
Unrealized gain on available-for-sale financial
assets - - 100,061 -
Share of other comprehensive loss of associates
accounted for using the equity method (48,265) - (64,169) -
Income tax benefit relating to items that may be
reclassified subsequently to profit or loss 171,056 - 287,498 -
(246,452) - (1,268,484) -
Other comprehensive loss for the year, net of
income tax (348,578) - (1,312,761) -
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR $ 7,618,506 4 $ 1,318,370 1
NET PROFIT ATTRIBUTABLE TO:
Owners of the Parent Company $ 7,956,838 4 $ 2,629,334 1
Non-controlling interests 10,246 - 1,797 -
$ 7,967,084 4 $ 2,631,131 1
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owners of the Parent Company $ 7,602,588 4 $ 1,366,244 1
Non-controlling interests 15,918 - (47,874) -
$ 7,618,506 4 $ 1,318,370 1
(Continued)
- 18 -
LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2018 2017
Amount % Amount %
EARNINGS PER SHARE (NEW TAIWAN
DOLLARS; Note 29)
From continuing operations
Basic $3.42 $1.13
Diluted $3.38 $1.13
The accompanying notes are an integral part of the consolidated financial statements. (Concluded)
- 19 -
Attachment 2-3
LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Equity Attributable to Owners of the Parent Company
Capital Surplus (Note 26)
Additional
Difference
Between
Consideration
and Carrying
Amounts
Adjusted
Changes in
Capital Surplus
from Other Equity (Note 26)
Paid-in Capital Arising from Investments in Exchange Unrealized Gain Unrealized
from Share Changes in Associates Differences on (Loss) on Gain (Loss) on
Issue of Share Capital (Note 26) Issuance in Percentage of Accounted for Retained Earnings (Notes 26 and 28) Translating Financial Assets Available-for- Non-controlling
Shares Excess of Par Bond Treasury Share Ownership in Using Equity Special Unappropriated Foreign Designated as sale Financial Cash Flow Treasury Shares Interests
(In Thousands) Amount Value Conversions Transactions Subsidiaries Method Mergers Total Legal Reserve Reserve Earnings Total Operations FVIOCI Assets Hedges Total (Note 26) (Notes 26) Total Equity
BALANCE AT JANUARY 1, 2017 2,350,867 $ 23,508,670 $ 9,372,488 $ 7,462,138 $ 328,800 $ 45,612 $ 273,487 $ 10,015,194 $ 27,497,719 $ 10,845,332 $ 398,602 $ 16,252,206 $ 27,496,140 $ (1,195,684 ) $ - $ (126,588 ) $ - $ (1,322,272 ) $ (1,248,722 ) $ 3,348,901 $ 79,280,436
Appropriation of the 2016 earnings
Cash dividends - 29.2% - - - - - - - - - - - (6,864,532 ) (6,864,532 ) - - - - - - - (6,864,532 )
Special reserve - - - - - - - - - - 940,276 (940,276 ) - - - - - - - - -
Legal reserve - - - - - - - - - 941,635 - (941,635 ) - - - - - - - - -
Changes in non-controlling interests - - - - - - - - - - - - - - - - - - - (45,076 ) (45,076 )
Changes in percentage of ownership interest in subsidiaries - - - - - 3,407 - - 3,407 - - - - - - - - - - - 3,407
Changes in capital surplus from investments in associates accounted
for by using the equity method - - - - - - 3,295 - 3,295 - - - - - - - - - - - 3,295
Changes in capital surplus from cash dividends of the Parent
Company paid to subsidiaries - - - - 71,529 - - - 71,529 - - - - - - - - - - - 71,529
Net profit for the year ended December 31, 2017 - - - - - - - - - - - 2,629,334 2,629,334 - - - - - - 1,797 2,631,131
Other comprehensive income (loss) for the year ended December 31,
2017, net of income tax - - - - - - - - - - - (41,344 ) (41,344 ) (1,333,209 ) - 108,091 3,372 (1,221,746 ) - (49,671 ) (1,312,761 )
Total comprehensive income (loss) for the year ended December 31,
2017 - - - - - - - - - - - 2,587,990 2,587,990 (1,333,209 ) - 108,091 3,372 (1,221,746 ) - (47,874 ) 1,318,370
BALANCE AT DECEMBER 31, 2017 2,350,867 23,508,670 9,372,488 7,462,138 400,329 49,019 276,782 10,015,194 27,575,950 11,786,967 1,338,878 10,093,753 23,219,598 (2,528,893 ) - (18,497 ) 3,372 (2,544,018 ) (1,248,722 ) 3,255,951 73,767,429
Effect of retrospective application (Note 3) - - - - - - - - - - - 279,769 279,769 - (298,266 ) 18,497 - (279,769 ) - - -
BALANCE AT JANUARY 1, 2018 AS RESTATED 2,350,867 23,508,670 9,372,488 7,462,138 400,329 49,019 276,782 10,015,194 27,575,950 11,786,967 1,338,878 10,373,522 23,499,367 (2,528,893 ) (298,266 ) - 3,372 (2,823,787 ) (1,248,722 ) 3,255,951 73,767,429
Appropriation of the 2017 earnings
Legal reserve - - - - - - - - - 262,933 - (262,933 ) - - - - - - - - - Special reserve - - - - - - - - - - 1,367,076 (1,367,076 ) - - - - - - - - -
Cash dividends - 4.1% - - - - - - - - - - - (963,855 ) (963,855 ) - - - - - - - (963,855 )
Distribution of cash dividends from capital surplus - - (5,900,676 ) - - - - - (5,900,676 ) - - - - - - - - - - - (5,900,676 )
Changes in non-controlling interests - - - - - - - - - - - - - - - - - - - 82,776 82,776
Changes in percentage of ownership interest in subsidiaries - - - - - (1,810 ) - - (1,810 ) - - - - - - - - - - - (1,810 )
Changes in capital surplus from investments in associates accounted
for by using the equity method - - - - - - (5,415 ) - (5,415 ) - - - - - - - - - - - (5,415 )
Changes in capital surplus from cash dividends of the Parent
Company paid to subsidiaries - - - - 77,368 - - - 77,368 - - - - - - - - - - - 77,368
Disposal of investments in equity instruments designated as at
FVTOCI - - - - - - - - - - - 43,182 43,182 - (43,182 ) - - (43,182 ) - - -
Disposal of investments accounted for using the equity method - - - - - - - - - - - - - 4,078 - - - 4,078 - - 4,078
Net profit for the year ended December 31, 2018 - - - - - - - - - - - 7,956,838 7,956,838 - - - - - - 10,246 7,967,084
Other comprehensive income (loss) for the year ended December 31, 2018, net of income tax - - - - - - - - - - - 9,469 9,469 (255,048 ) (108,013 ) - (658 ) (363,719 ) - 5,672 (348,578 )
Total comprehensive income (loss) for the year ended December 31,
2018 - - - - - - - - - - - 7,966,307 7,966,307 (255,048 ) (108,013 ) - (658 ) (363,719 ) - 15,918 7,618,506
BALANCE AT DECEMBER 31, 2018 2,350,867 $ 23,508,670 $ 3,471,812 $ 7,462,138 $ 477,697 $ 47,209 $ 271,367 $ 10,015,194 $ 21,745,417 $ 12,049,900 $ 2,705,954 $ 15,789,147 $ 30,545,001 $ (2,779,863 ) $ (449,461 ) $ - $ 2,714 $ (3,226,610 ) $ (1,248,722 ) $ 3,354,645 $ 74,678,401
The accompanying notes are an integral part of the consolidated financial statements.
- 20 -
Attachment 2-4
LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
2018 2017
Interest paid $ (852,547) $ (598,421)
Income tax paid (1,492,648) (2,596,455)
Net cash generated from operating activities 13,483,544 11,153,180
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at FVTOCI (58,970) -
Proceeds from disposal of financial assets at FVTOCI 176,660 -
Proceeds from disposal of financial assets at amortized costs 868,455 -
Acquisition of available-for-sale financial assets - (15,110)
Proceeds from sale of available-for-sale financial assets - 298,632
Proceeds from sale of debt investments with no active market - 17,548
Proceeds from disposal of investments accounted for using the equity
method 2,849 246,708
Increase in prepaid investments - (1,354,950)
Cash provided by disposal of subsidiaries 5,590 -
Proceeds from disposal of non-current assets held for sale 658,211 -
Acquisition of property, plant and equipment (5,646,424) (4,204,726)
Proceeds from disposal of property, plant and equipment 3,444,871 84,065
Decrease (increase) in refundable deposits 140,857 (140,276)
Acquisition of intangible assets (166,322) (228,654)
Proceeds from disposal of intangible assets 418,442 17,688
Increase in other non-current assets (80,403) (67,148)
Dividend received from associates 101,714 95,057
Net cash used in investing activities (134,470) (5,251,166)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings - 16,066,496
Repayments of short-term borrowings (476,153) -
Repayments of long-term borrowings (16,645) (19,528,450)
Refunds of guarantee deposits received (1,345) (6,273)
Decrease in finance lease payables (1,617) (1,567)
Cash dividends (6,787,163) (6,793,003)
Changes in non-controlling interests (30,537) (47,305)
Net cash used in financing activities (7,313,460) (10,310,102)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE
OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN
CURRENCIES (534,173) (3,016,543)
(Continued)
- 21 -
LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
2018 2017
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS $ 5,501,441 $ (7,424,631)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR 57,783,860 65,208,491
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 63,285,301 $ 57,783,860
The accompanying notes are an integral part of the consolidated financial statements. (Concluded)
- 22 -
Attachment 3 INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Shareholders
Lite-On Technology Corporation
Opinion
We have audited the accompanying financial statements of Lite-On Technology Corporation (the
Company), which comprise the balance sheets as of December 31, 2018 and 2017, and the statements of
comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the
financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2018 and 2017, and its financial performance and its cash
flows for the years then ended, in accordance with the Regulations Governing the Preparation of Financial
Reports by Securities Issuers.
Basis for Opinion
We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of
Financial Statements by Certified Public Accountants and auditing standards generally accepted in the
Republic of China. Our responsibilities under those standards are further described in the Auditors’
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the
Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the
Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements for the year ended December 31, 2018. These matters were addressed in
the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
For the year ended December 31, 2018, the key audit matters to the Company’s financial statements were
as follows:
Allowance for Impairment Loss for Trade Receivables
The recoverable amount from the allowance for impairment loss is determined by management’s
evaluation of the credit risk of overdue receivables, and it is affected by management’s assumption of a
client’s credit quality. In our audit, we focused on clients with significant trade receivable balances and
overdue balances, and we evaluated the reasonableness of management’s estimation of the allowance for
impairment loss.
- 23 -
Refer to Note 4 to the Company’s financial statements for the summary of the significant accounting
policies on trade receivables and impairment loss for trade receivables. Refer to Note 12 to the Company’s
financial statements for the carrying amount of trade receivables and allowance for impairment loss for
trade receivables. Our key audit procedures performed in respect of the above area included the following:
We assessed both the trade receivables aging report classified by client credit rating and the reasonableness
of the percent of impairment loss allowance; this assessment included the implementation of computer
audit sampling procedures to test the correctness of trade receivable aging reports. We confirmed the
recoverability of outstanding trade receivables by testing the after period-end collection of receivables.
Allowance for Inventory Valuation Loss
The value of inventory is affected by the volatility of market demand and ever-changing technology which
could make inventory outdated and obsolete. The allocation of inventory cost elements and estimations of
the net realizable value of inventory require management’s subjective judgment. In our audit, we focused
on whether the value of inventory was evaluated according to IAS 2, which is based on the lower of cost or
net realizable value method. We also assessed the reasonableness of management’s estimation of the
allowance for inventory valuation loss.
Refer to Note 4 to the Company’s financial statements for the summary of the significant accounting
policies on inventory valuation. Refer to Note 13 to the Company’s financial statements for the carrying
amount of inventory. Our key audit procedures performed in respect of the above area included the
following:
1. We assessed both the inventory aging reports classified by business segments and the reasonableness
of the percent of allowance for inventory valuation loss; this assessment included the implementation
of computer audit sampling procedures to test the correctness of the inventory aging reports.
2. We obtained information of the year-end allowance for inventory valuation loss and inventory aging
reports, compared the current and prior years’ allowances and analyzed any differences. We drew
samples from the year-end inventory and compared the most recent price of goods sold to the carrying
amount to that ensure the inventory had been valued by the lower of cost or net realizable value
method.
Impairment Loss for Property, Plant and Equipment, Intangible Assets (Including Goodwill) and
Investments Accounted for Using the Equity Method
Management should assess, on the date of the balance sheets, any indication of impairment to property,
plant and equipment, intangible assets and investments accounted for using the equity method. If there is
any indication of impairment, management should estimate the recoverable amount of these assets. The
estimation would assume that management incorporates diversification or sustainability into business
operation. If it is impossible to do so, management should estimate the recoverable amount of the cash
generating units to which these assets belong. Due to the complexity of this impairment estimation, in our
audit, we focused on whether the estimation was made in accordance with IAS 36 to ensure that all assets’
carrying amounts did not exceed their respective recoverable amounts.
Refer to Note 4 to the Company’s financial statements for a summary of the significant accounting policies
on impairment loss. Refer to Notes 15, 16 and 17 to the Company’s financial statements for disclosures of
property, plant and equipment, intangible assets (including goodwill) and investments accounted for using
the equity method. Our key audit procedures performed in respect of the above area included the following:
1. Through internal control testing, we understood the methods of asset impairment valuation made by
management and the associated control policy’s design and implementation.
- 24 -
2. We obtained the asset impairment valuation table of each cash generating unit from management. We
consulted our firm experts on the reasonableness of management’s impairment assessments and
assumptions, including its cash generating unit classifications, cash flow predictions, discount rates,
etc.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and
for such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance, including the audit committee, are responsible for overseeing the
Company’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the auditing standards generally accepted in the Republic of China will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with the auditing standards generally accepted in the Republic of China,
we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
- 25 -
5. Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the parent company only financial
statements. We are responsible for the direction, supervision and performance of the audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the financial statements for the year ended December 31, 2018 and are
therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partners on the audit resulting in this independent auditors’ report are Meng-Chieh Chiu
and Cheng-Tsai Tsai.
Deloitte & Touche
Taipei, Taiwan
Republic of China
February 26, 2019
Notice to Readers
The accompanying financial statements are intended only to present the financial position, financial
performance and cash flows in accordance with accounting principles and practices generally accepted in
the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to
audit such financial statements are those generally applied in the Republic of China.
For the convenience of readers, the independent auditors’ report and the accompanying financial
statements have been translated into English from the original Chinese version prepared and used in the
Republic of China. If there is any conflict between the English version and the original Chinese version or
any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report
and financial statements shall prevail.
- 26 -
Attachment 3-1
LITE-ON TECHNOLOGY CORPORATION
BALANCE SHEETS
DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
2018 2017
ASSETS Amount % Amount %
CURRENT ASSETS
Cash and cash equivalents (Note 6) $ 7,082,108 5 $ 7,536,265 6
Financial assets at fair value through profit or loss (''FVTPL'') (Note 7) 2,857 - - -
Financial assets at amortized cost (Note 9) 4,680 - - -
Contracts assets 629,585 - - -
Notes receivable, net (Note 12) 1,203 - 1,436 -
Trade receivables, net (Note 12) 27,686,332 19 27,927,833 20
Trade receivables from related parties (Note 28) 11,098,911 7 11,950,083 9
Other receivables 932,490 1 469,072 -
Other receivables from related parties (Note 28) 413,982 - 255,156 -
Inventories, net (Note 13) 9,644,127 7 7,783,026 6
Prepayments 643,755 - 571,383 -
Total current assets 58,140,030 39 56,494,254 41
NON-CURRENT ASSETS
Financial assets at FVTPL (Note 7) 56,333 - - -
Financial assets at fair value through other comprehensive income ("FVTOCI") (Note 8) 213,473 - - -
Available-for-sale financial assets (Note 14) - - 225,698 -
Financial assets at amortized cost (Note 9) 304,010 - - -
Debt instruments with no active market (Note 11) - - 303,997 -
Investments accounted for using the equity method (Note 15) 73,960,509 50 64,705,045 47
Property, plant and equipment, net (Note 16) 7,640,678 5 6,654,089 5
Intangible assets, net (Note 17) 5,496,986 4 5,995,675 4
Deferred tax assets (Note 24) 3,595,595 2 2,632,621 2
Refundable deposits 99,697 - 106,050 -
Prepaid investments - - 1,624,770 1
Other non-current assets 6,470 - 6,470 -
Total non-current assets 91,373,751 61 82,254,415 59
TOTAL $ 149,513,781 100 $ 138,748,669 100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 18) $ 17,264,395 11 $ 17,291,220 12
Financial liabilities at FVTPL (Note 7) 3,997 - 43,447 -
Notes payable 2,571 - 630 -
Trade payables 6,599,857 4 6,641,532 5
Trade payables to related parties (Note 28) 35,361,931 24 28,659,451 21
Other payables 12,838,742 9 10,420,554 7
Other payables to related parties (Note 28) 93,444 - 121,456 -
Current tax liabilities 2,936,430 2 1,706,487 1
Provisions (Note 19) 851,041 1 715,037 1
Advance receipts 744,113 - 1,301,833 1
Total current liabilities 76,696,521 51 66,901,647 48
NON-CURRENT LIABILITIES
Deferred tax liabilities (Note 24) 1,399,170 1 1,131,711 1
Net defined benefit liabilities (Note 20) 78,236 - 126,851 -
Guarantee deposits 15,979 - 16,018 -
Credit balance of investments accounted for using the equity method (Note 15) 119 - 60,964 -
Total non-current liabilities 1,493,504 1 1,335,544 1
Total liabilities 78,190,025 52 68,237,191 49
EQUITY
Share capital
Ordinary shares 23,508,670 16 23,508,670 17
Capital surplus
Additional paid-in capital from share issuance in excess of par value 3,471,812 3 9,372,488 7
Bond conversions 7,462,138 5 7,462,138 6
Treasury share transactions 477,697 - 400,329 -
Difference between consideration and carrying amounts adjusted arising from changes in percentage of ownership of subsidiaries 47,209 - 49,019 -
Changes in capital surplus from investments in associates accounted for using the equity method 271,367 - 276,782 -
Mergers 10,015,194 7 10,015,194 7
Total capital surplus 21,745,417 15 27,575,950 20
Retained earnings
Legal reserve 12,049,900 8 11,786,967 9
Special reserve 2,705,954 2 1,338,878 1
Unappropriated earnings 15,789,147 10 10,093,753 7
Total retained earnings 30,545,001 20 23,219,598 17
Other equity
Exchange differences on translating foreign operations (2,779,863) (2) (2,528,893) (2)
Unrealized loss of financial assets at FVTOCI (449,461) - - -
Unrealized loss on available-for-sale financial assets - - (18,497) -
Gain on financial instruments in cash flow hedging securities 2,714 - 3,372 -
Total other equity (3,226,610) (2) (2,544,018) (2)
Treasury shares (1,248,722) (1) (1,248,722) (1)
Total equity 71,323,756 48 70,511,478 51
TOTAL $ 149,513,781 100 $ 138,748,669 100
The accompanying notes are an integral part of the financial statements.
- 27 -
LITE-ON TECHNOLOGY CORPORATION Attachment 3-2
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2018 2017
Amount % Amount %
OPERATING REVENUE
Sales (Notes 22 and 28) $ 140,583,612 103 $ 143,873,976 103
Less: Sales returns 864,980 1 808,758 -
Sales allowance 2,549,242 2 3,822,614 3
Total operating revenue 137,169,390 100 139,242,604 100
COST OF GOODS SOLD (Notes 13, 23 and 28) 124,808,157 91 124,507,607 89
GROSS PROFIT 12,361,233 9 14,734,997 11
UNREALIZED GAIN ON TRANSACTIONS WITH
SUBSIDIARIES AND ASSOCIATES 113,044 - - -
REALIZED GAIN ON TRANSACTIONS WITH
SUBSIDIARIES AND ASSOCIATES - - 143,082 -
GROSS PROFIT, NET 12,248,189 9 14,878,079 11
OPERATING EXPENSES (Notes 23 and 28)
Selling and marketing expenses 3,002,405 2 2,815,608 2
General and administrative expenses 4,655,078 3 4,790,239 3
Research and development expenses 3,748,991 3 3,841,727 3
Expected credit loss (Note 27) 5,847 - - -
Total operating expenses 11,412,321 8 11,447,574 8
OPERATING INCOME 835,868 1 3,430,505 3
NON-OPERATING INCOME AND EXPENSES
Share of profit of subsidiaries and associates 10,463,878 7 2,119,142 1
Interest income 67,046 - 83,785 -
Dividend income 6,599 - 6,968 -
Other income (Note 28) 1,386,003 1 820,996 1
Net gain on disposal of property, plant and
equipment 28,258 - 28,385 -
Net gain on disposal of investments 86,603 - 151,047 -
Net gain (loss) on foreign currency exchange (525,188) - 491,036 -
Net gain (loss) on financial assets at FVTPL 175,715 - (94,466) -
Finance costs (450,762) - (386,589) -
Other expenses (50,472) - (44,615) -
Impairment loss (Notes 14, 15 and 16) (3,394,351) (3) (5,186,588) (4)
Total non-operating income and expenses 7,793,329 5 (2,010,899) (2)
(Continued)
- 28 -
LITE-ON TECHNOLOGY CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2018 2017
Amount % Amount %
PROFIT BEFORE INCOME TAX $ 8,629,197 6 $ 1,419,606 1
INCOME TAX BENEFIT (EXPENSE) (Note 24) (672,359) - 1,209,728 1
NET PROFIT FOR THE YEAR 7,956,838 6 2,629,334 2
OTHER COMPREHENSIVE INCOME (LOSS)
(Notes 20, 21 and 24)
Items not reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans 3,050 - (38,263) -
Unrealized loss on investments in equity
instruments designated as at FVTOCI (78,200) - - -
Share of other comprehensive loss of subsidiaries
and associates accounted for using the equity
method (28,426) - (9,586) -
Income tax benefit relating to items not
reclassified subsequently to profit or loss 5,032 - 6,505 -
(98,544) - (41,344) -
Items that may be reclassified subsequently to profit
or loss:
Exchange differences on translating foreign
operations (372,739) - (1,571,489) (1)
Unrealized gain on available-for-sale financial
assets - - 156,525 -
Share of other comprehensive loss of subsidiaries
and associates accounted for using the equity
method (47,500) - (83,495) -
Income tax benefit relating to items that may be
reclassified subsequently to profit or loss 164,533 - 276,713 -
(255,706) - (1,221,746) (1)
Other comprehensive loss for the year, net of
income tax (354,250) - (1,263,090) (1)
TOTAL COMPREHENSIVE INCOME FOR THE
PERIOD $ 7,602,588 6 $ 1,366,244 1
(Continued)
- 29 -
LITE-ON TECHNOLOGY CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2018 2017
Amount % Amount %
EARNINGS PER SHARE (NEW TAIWAN
DOLLARS; Note 25)
From continuing operations
Basic $3.42 $1.13
Diluted $3.38 $1.13
The accompanying notes are an integral part of the financial statements. (Concluded)
- 30 -
LITE-ON TECHNOLOGY CORPORATION Attachment 3-3 STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
Capital Surplus (Note 21)
Additional
Difference
Between
Consideration and
Carrying
Amounts
Adjusted
Changes in
Capital Surplus
from Other Equity (Note 21)
Paid-in Capital Arising from Investments in Exchange Unrealized Unrealized
Issue of Share Capital (Note 21)
from Share
Issuance in
Changes in
Percentage of
Associates
Accounted for Retained Earnings (Note 21)
Differences on
Translating
Gain (Loss) on
Financial Assets
Gain (Loss) on
Available-for-
Shares
(In Thousands) Amount
Excess of Par
Value Bond Conversions
Treasury Share
Transactions
Ownership of
Subsidiaries
Using the Equity
Method Mergers Total Legal Reserve Special Reserve
Unappropriated
Earnings Total
Foreign
Operations
Designated as
FVTOCI
sale Financial
Assets Cash Flow Hedges Total
Treasury Shares
(Note 21) Total Equity
BALANCE AT JANUARY 1, 2017 2,350,867 $ 23,508,670 $ 9,372,488 $ 7,462,138 $ 328,800 $ 45,612 $ 273,487 $ 10,015,194 $ 27,497,719 $ 10,845,332 $ 398,602 $ 16,252,206 $ 27,496,140 $ (1,195,684 ) $ - $ (126,588 ) $ - $ (1,322,272 ) $ (1,248,722 ) $ 75,931,535
Appropriation of 2016 earnings
Legal reserve - - - - - - - - - 941,635 - (941,635 ) - - - - - - - -
Special reserve - - - - - - - - - - 940,276 (940,276 ) - - - - - - - -
Cash dividends - 29.2% - - - - - - - - - - - (6,864,532 ) (6,864,532 ) - - - - - - (6,864,532 )
Changes in percentage of ownership interest in subsidiaries - - - - - 3,407 - - 3,407 - - - - - - - - - - 3,407
Changes in capital surplus from investments in associates accounted for using the equity method - - - - - - 3,295 - 3,295 - - - - - - - - - - 3,295
Changes in capital surplus from cash dividends of the
Company paid to subsidiaries - - - - 71,529 - - - 71,529 - - - - - - - - - - 71,529
Net profit for the year ended December 31, 2017 - - - - - - - - - - - 2,629,334 2,629,334 - - - - - - 2,629,334
Other comprehensive income (loss) for the year ended
December 31, 2017, net of income tax - - - - - - - - - - - (41,344 ) (41,344 ) (1,333,209 ) - 108,091 3,372 (1,221,746 ) - (1,263,090 )
Total comprehensive income (loss) for the year ended December 31, 2017 - - - - - - - - - - - 2,587,990 2,587,990 (1,333,209 ) - 108,091 3,372 (1,221,746 ) - 1,366,244
BALANCE AT DECEMBER 31, 2017 2,350,867 23,508,670 9,372,488 7,462,138 400,329 49,019 276,782 10,015,194 27,575,950 11,786,967 1,338,878 10,093,753 23,219,598 (2,528,893 ) - (18,497 ) 3,372 (2,544,018 ) (1,248,722 ) 70,511,478
Effect of retrospective application (Note 3) - - - - - - - - - - - 279,769 279,769 - (298,266 ) 18,497 - (279,769 ) - -
BALANCE AT JANUARY 1, 2018 AS RESTATED 2,350,867 23,508,670 9,372,488 7,462,138 400,329 49,019 276,782 10,015,194 27,575,950 11,786,967 1,338,878 10,373,522 23,499,367 (2,528,893 ) (298,266 ) - 3,372 (2,823,787 ) (1,248,722 ) 70,511,478
Appropriation of 2017 earnings
Legal reserve - - - - - - - - - 262,933 - (262,933 ) - - - - - - - -
Special reserve - - - - - - - - - - 1,367,076 (1,367,076 ) - - - - - - - -
Cash dividends - 4.1% - - - - - - - - - - - (963,855 ) (963,855 ) - - - - - - (963,855 ) Distribution of cash dividends from capital surplus - - (5,900,676 ) - - - - - (5,900,676 ) - - - - - - - - - - (5,900,676 )
Changes in percentage of ownership interests in subsidiaries - - - - - (1,810 ) - - (1,810 ) - - 39,722 39,722 - (39,722 ) - - (39,722 ) - (1,810 )
Changes in capital surplus from investments in associates
accounted for using the equity method - - - - - - (5,415 ) - (5,415 ) - - - - - - - - - - (5,415 )
Changes in capital surplus from cash dividends of the
Company paid to subsidiaries - - - - 77,368 - - - 77,368 - - - - - - - - - - 77,368
Disposal of investments in equity instruments designated as FVTOCI - - - - - - - - - - - 3,460 3,460 - (3,460 ) - - (3,460 ) - -
Disposal of investments accounted for using the equity method - - - - - - - - - - - - - 4,078 - - - 4,078 - 4,078
Net profit for the year ended December 31, 2018 - - - - - - - - - - - 7,956,838 7,956,838 - - - - - - 7,956,838
Other comprehensive income (loss) for the year ended
December 31, 2018, net of income tax - - - - - - - - - - - 9,469 9,469 (255,048 ) (108,013 ) - (658 ) (363,719 ) - (354,250 )
Total comprehensive income (loss) for the year ended
December 31, 2018 - - - - - - - - - - - 7,966,307 7,966,307 (255,048 ) (108,013 ) - (658 ) (363,719 ) - 7,602,588
BALANCE AT DECEMBER 31, 2018 2,350,867 $ 23,508,670 $ 3,471,812 $ 7,462,138 $ 477,697 $ 47,209 $ 271,367 $ 10,015,194 $ 21,745,417 $ 12,049,900 $ 2,705,954 $ 15,789,147 $ 30,545,001 $ (2,779,863 ) $ (449,461 ) $ - $ 2,714 $ (3,226,610 ) $ (1,248,722 ) $ 71,323,756
The accompanying notes are an integral part of the financial statements.
1
Attachment 3-4
LITE-ON TECHNOLOGY CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax $ 8,629,197 $ 1,419,606
Adjustments for:
Depreciation expenses 598,560 662,204
Amortization expenses 280,321 385,326
Expected credit loss recognized on trade receivables 5,847 -
Impairment loss reversed on trade receivables - (12,190)
Net loss (gain) on fair value change of financial assets designated as
at FVTPL (175,715) 94,466
Finance costs 450,762 386,589
Interest income (67,046) (83,785)
Dividend income (6,599) (6,968)
Share of profit of subsidiaries and associates (10,463,878) (2,119,142)
Net gain on disposal of property, plant and equipment (28,258) (28,385)
Net gain on disposal of available-for-sale financial assets - (49,598)
Net gain on disposal of investments accounted for using the equity
method (86,603) (101,449)
Impairment loss recognized on financial assets - 10,662
Impairment loss recognized on non-financial assets 3,439,561 4,822,143
Unrealized gain on the transactions with subsidiaries and associates 113,044 -
Realized gain on the transactions with subsidiaries and associates - (143,082)
Unrealized net loss (gain) on foreign currency exchange 278,612 (208,823)
Recognition of provisions 406,941 144,788
Changes in operating assets and liabilities
Financial instruments held for trading - 62,935
Contract assets (629,585) -
Notes receivable 233 (192)
Trade receivables 235,654 (255,314)
Trade receivables from related parties 851,172 2,721,891
Other receivables (473,608) (163,349)
Other receivables from related parties (158,826) 134,691
Inventories (1,906,311) 1,568,443
Prepayments (72,372) (28,248)
Notes payable 1,941 628
Trade payables (41,675) (1,366,169)
Trade payables to related parties 6,702,480 (3,728,529)
Other payables 2,223,433 (174,543)
Other payables to related parties (28,012) (78,424)
Provisions (270,937) (286,927)
Advance receipts (557,720) 6,517
Net defined benefit liabilities (45,565) 25,330
Cash generated from operations 9,205,048 3,611,102
Interest received 67,652 93,142
Dividends received 6,599 6,968
(Continued)
2
LITE-ON TECHNOLOGY CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
2018 2017
Interest paid $ (437,433) $ (378,097)
Income tax paid (219,506) (862,359)
Net cash generated from operating activities 8,622,360 2,470,756
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at FVTOCI (18,713) -
Acquisition of financial assets at amortized costs (4,693) -
Acquisition of available-for-sale financial assets - (15,110)
Proceeds from sale of available-for-sale financial assets - 298,632
Proceeds from sale of debt investments with no active market - 6,360
Acquisition of investments accounted for using the equity method (1,350,950) (7,286,445)
Proceeds from disposal of investments accounted for using the equity
method 8,439 195,899
Increase in prepaid investments - (1,624,770)
Proceeds from capital reduction of investments accounted for using the
equity method - 35,261
Acquisition of property, plant and equipment (1,485,369) (656,183)
Proceeds from disposal of property, plant and equipment 103,268 33,510
Decrease in refundable deposits 6,353 11,793
Acquisition of intangible assets (130,933) (192,711)
Proceeds from disposal of intangible assets 378,438 -
Increase in other non-current assets - (71)
Decrease in other non-current assets 8 -
Dividends received from subsidiaries and associates 309,030 18,153,782
Net cash generated from (used in) investing activities (2,185,122) 8,959,947
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings - 7,164,540
Repayments of short-term borrowings (26,825) -
Repayments of long-term borrowings - (12,000,000)
Refund of guarantee deposits received (39) (3,643)
Cash dividends (6,864,531) (6,864,532)
Net cash used in financing activities (6,891,395) (11,703,635)
NET DECREASE IN CASH AND CASH EQUIVALENTS (454,157) (272,932)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR 7,536,265 7,809,197
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 7,082,108 $ 7,536,265
The accompanying notes are an integral part of the financial statements. (Concluded)
3
Attachment 4
AUDIT COMMITTEE REPORT
To: Shareholders’ Annual General Meeting for Year 2019, Lite-On Technology Corporation
The Board of Directors has prepared and submitted to the undersigned, Audit Committee of Lite-On
Technology Corporation the 2018 Business Report, Financial Statements and the proposal of
distribution of earnings. The Financial Statements have been duly audited by Certified Public
Accountants Meng-Chieh Chiu and Tsai-Cheng Tsai of Deloitte Touche Tohmatsu International
Taiwan. The above Business Report, Financial Statements and the proposal of distribution of earnings
have been examined and determined to be correct by the undersigned. This Report is duly submitted in
accordance with Article 14-4 of Securities and Exchange Law and Article 219 of the Company Law.
The Audit Committee, Chairman:
Mr. Albert Hsueh February 26 2019
4
Attachment 5
Lite-On Technology Corporation Comparison Table of Amendments to the Regulation and Procedure for Board of
Directors Meetings
AFTER Amendment BEFORE Amendment Description
Article 1 To establish a strong governance
system and sound supervisory
capabilities for Lite-On Technology
Corporation's board of directors and
to strengthen management
capabilities, assist the directors in
the performance of their duties,
and improve the performance
of the board of directors. these
Rules are adopted pursuant to Article
2 of the Regulations Governing
Procedure for Board of Directors
Meetings of Public Companies.
Article 1 To establish a strong governance
system and sound supervisory capabilities
for Lite-On Technology Corporation's board
of directors and to strengthen management
capabilities, these Rules are adopted
pursuant to Article 2 of the Regulations
Governing Procedure for Board of Directors
Meetings of Public Companies.
Amendments
pursuant to add the
Company's
requirements for
processing related
demands of the
directors
Article 2 With respect to the board of directors
meetings ("board meetings") of
Lite-On Technology Corporation, the
main agenda items, working
procedures, required content of
meeting minutes, public
announcements, and other compliance
requirements and the Company's
requirements for processing
related demands of the
directors shall be handled in
accordance with the provisions
of these Rules unless otherwise
specified in laws or the Articles
of Incorporation.
Article 2 With respect to the board of directors
meetings ("board meetings") of Lite-On
Technology Corporation, the main agenda
items, working procedures, required content
of meeting minutes, public announcements,
and other compliance requirements shall be
handled in accordance with the provisions of
these Rules.
Article 3 The board of directors shall meet at
least quarterly.
A notice of the reasons for convening a
board meeting shall be given to each
director 7 days before the meeting is
convened. In emergency
circumstances, however, a board
meeting may be called on shorter
notice.
The notice to be given under the
preceding paragraph may be effected
by means of electronic transmission
Article 3 The board of directors shall meet at
least quarterly.
A notice of the reasons for convening a
board meeting shall be given to each
director 7 days before the meeting is
convened. In emergency
circumstances, however, a board
meeting may be called on shorter
notice.
The notice to be given under the
preceding paragraph may be effected
by means of electronic transmission
5
with the prior consent of the recipients.
All matters set forth under Article 12,
Paragraph 1 of these Rules shall be
specified in the notice of the reasons
for convening a board meeting. None
of those matters may be raised by an
extraordinary motion except in the
case of an emergency or for other
legitimate reason.
The Company's directors shall
obtain suitable and updated
information with formats and
quality that allow directors to
make informed decisions and
perform their duties as directors.
with the prior consent of the recipients.
All matters set forth under Article 12,
Paragraph 1 of these Rules shall be
specified in the notice of the reasons
for convening a board meeting. None
of those matters may be raised by an
extraordinary motion except in the
case of an emergency or for other
legitimate reason.
Article 4 The designated unit responsible for
the board meetings of Lite-On
Technology Corporation shall be the
Secretariat of the Board.
The Secretariat of the Board shall draft
agenda items and prepare sufficient
meeting materials, and shall deliver
them together with the notice of the
meeting.
A director who is of the opinion that
the meeting materials provided are
insufficient may request their
supplementation by the unit
responsible for board meetings. The
unit shall provide materials
within two days. If a director is of
the opinion that materials concerning
any proposal are insufficient, the
deliberation of such proposal may be
postponed by a resolution of the board
of directors.
Article 4 The designated unit responsible for
the board meetings of Lite-On Technology
Corporation shall be the Secretariat of the
Board.
The Secretariat of the Board shall draft
agenda items and prepare sufficient
meeting materials, and shall deliver
them together with the notice of the
meeting.
A director who is of the opinion that
the meeting materials provided are
insufficient may request their
supplementation by the unit
responsible for board meetings. If a
director is of the opinion that materials
concerning any proposal are
insufficient, the deliberation of such
proposal may be postponed by a
resolution of the board of directors.
Article 7 Board meetings shall be convened
and chaired by the chairperson of the board if the chairperson convened the
meeting. A majority of directors may
also specify proposals and reasons in
writing and request the chairperson
to convene a meeting of the board of
directors.
If the chairman of the board of
directors fails to convene a
meeting of board of directors
within 15 days after the filing
Article 7 Board meetings shall be convened
and chaired by the chairperson of the board.
However, with respect to the first meeting of
each newly elected board of directors, it
shall be called and chaired by the director
that received votes representing the largest
portion of voting rights at the shareholders
meeting in which the directors were elected;
if two or more directors are so entitled to
convene the meeting, they shall select from
among themselves one director to serve as
Amendments
pursuant to the
provisions of
Article 203 and
203-1 of the
Company Act
6
of the request under the
preceding paragraph, a majority
of the directors may convene a
meeting of board of directors
on their own. However, with respect to the first
meeting of each newly elected board
of directors, it shall be called within
15 days of the election and
chaired by the director that received
votes representing the largest portion
of voting rights at the shareholders
meeting in which the directors were
elected; if two or more directors are so
entitled to convene the meeting, they
shall select from among themselves
one director to serve as chair.
In case the director elect
receiving the a ballot
representing the largest number
of votes fails to convene the
meeting of the board of
directors within the time limit
set out in the preceding
paragraph, then the majority or
more of the directors elect may
convene the meeting on their
own.
When the chairperson of the board is
on leave or for any reason unable to
exercise the powers of chairperson, the
vice chairperson shall act in place of
the chairperson; if the vice chairperson
is also on leave or for any reason
unable to exercise the powers of vice
chairperson, the chairperson shall
appoint one of the directors to act. If
no such designation is made by the
chairperson, the directors shall select
one person from among themselves to
serve as chair.
chair.
When the chairperson of the board is
on leave or for any reason unable to
exercise the powers of chairperson, the
vice chairperson shall act in place of
the chairperson; if the vice chairperson
is also on leave or for any reason
unable to exercise the powers of vice
chairperson, the chairperson shall
appoint one of the directors to act. If
no such designation is made by the
chairperson, the directors shall select
one person from among themselves to
serve as chair.
Article 15 If a director or a juristic person that
the director represents is an interested party
in relation to an agenda item, the director
shall state the important aspects of the
interested party relationship at the respective
meeting. When the relationship is likely to
prejudice the interest of Lite-On Technology
Corporation, that director may not
participate in discussion or voting on that
agenda item and shall recuse him or herself
Article 15 If a director or a juristic person that
the director represents is an interested party
in relation to an agenda item, the director
shall state the important aspects of the
interested party relationship at the respective
meeting. When the relationship is likely to
prejudice the interest of Lite-On Technology
Corporation, that director may not
participate in discussion or voting on that
agenda item and shall recuse him or herself
Amendments
pursuant to the
provisions of
Article 206 of the
Company Act
7
from the discussion or the voting on the
item, and may not exercise voting rights as
proxy for another director.
Where the spouse, a blood
relative within the second
degree of kinship of a director,
or any company which has a
controlling or subordinate
relation with a director has
interests in the matters under
discussion in the meeting of the
preceding paragraph, such
director shall be deemed to have
a personal interest in the matter.
Where a director is prohibited by the
preceding two paragraphs from
exercising voting rights with respect to
a resolution at a board meeting, the
provisions of Article 180, Paragraph 2
of the Company Act apply mutatis
mutandis in accordance with Article
206, Paragraph 34 of the same Act.
from the discussion or the voting on the
item, and may not exercise voting rights as
proxy for another director.
Where a director is prohibited by the
preceding paragraph from exercising
voting rights with respect to a
resolution at a board meeting, the
provisions of Article 180, Paragraph 2
of the Company Act apply mutatis
mutandis in accordance with Article
206, Paragraph 3 of the same Act.
Article 18 All directors of the
Company shall be provided with
access to assistance from the
corporate governance officer to
ensure the compliance of board
meeting procedures and all
applicable laws and rules and ensure
good communication of information
between board members and
between board members and
management units.
- Amendments
pursuant to add the
Company's
requirements for
processing related
demands of the
directors
Article 19 The Company has
established a corporate governance
officer who takes charge of
processing requirements of the
directors and completes tasks within
seven days based on the principle of
effective assistance for directors in
the performance of their duties.
- Amendments
pursuant to add the
Company's
requirements for
processing related
demands of the
directors
Article 20 These Rules shall be adopted by the
approval of meeting of the board of
directors and shall be reported to the
shareholders’ meeting. Any future
amendment may be adopted with a
resolution of the board of directors.
Article 18 These Rules shall be adopted by the
approval of meeting of the board of
directors and shall be reported to the
shareholders’ meeting. Any future
amendment may be adopted with a
resolution of the board of directors.
Update the Article
number
8
Article 21 These Rules were implemented on
January 1, 2007.
Article 19 These Rules were implemented on
January 1, 2007.
Update the Article
number
Article 22 These Rules were established on
November 24, 2006.
The first amendment was made on April 25,
2007 and implemented by the 7th board of
directors on June 21, 2007.
The second amendment was made on April 7,
2008 and implemented on April 7, 2008.
The third amendment was made on April 28,
2010 and implemented on April 28, 2010.
The fourth amendment was made on October
24, 2012 and implemented on October 24,
2012.
The fifth amendment was made on October
30, 2017 and implemented on October 30,
2017.
The 6th amendment was on April 26,
2019 and the amended rules entered
into force on April 26, 2019.
Article 20 These Rules were established on
November 24, 2006.
The first amendment was made on April 25,
2007 and implemented by the 7th board of
directors on June 21, 2007.
The second amendment was made on April 7,
2008 and implemented on April 7, 2008.
The third amendment was made on April 28,
2010 and implemented on April 28, 2010.
The fourth amendment was made on October
24, 2012 and implemented on October 24,
2012.
The fifth amendment was made on October
30, 2017 and implemented on October 30,
2017.
Add new date of
amendment
9
Lite-On Technology Corporation Attachment 6
Statement of Earnings Appropriation
Year 2018
Amount (NT$)
Unallocated earnings, beginning of year
Add: cumulative effect of the initial application
Adjusted unallocated earnings, beginning of year
Add: adjustments on equity method investments
Add: adjustments on re-measurement on define
benefit plans recognized in retained earnings
Add: cumulative unrealized gain on investments in
equity instruments designated as at FVTOCI was
transferred directly to retained earnings due to
disposal.
Adjusted unallocated earnings
7,499,888,591
279,768,597
7,779,657,188
41,109,640
8,081,619
3,459,902
7,832,308,349
Add: Net profit 7,956,838,274
Less: Legal reserve (10%)
Less: Special reserve
(795,683,827)
(682,813,923)
Distributable earnings 14,310,648,873
Distribution:
(1) Cash dividends: (NT$2.92/per share) (6,864,531,733)
Unallocated earnings, end of year 7,446,117,140
Remarks:
1. The Company elects to apply IFRS 9 retrospectively with the cumulative effect of the initial
application of this standard recognized in retained earnings, an increase of $279,768,597, on
January 1, 2018.
2. Under the Integrated Income Tax System (Imputation Tax System), upon calculating the
deductible tax in accordance with Article 66-6 of the Income Tax Act, earnings of 1998 and
thereafter should be distributed first. When unallocated earnings on which 5% surtax is levied in
accordance with Article 66-9 of the Income Tax Act is calculated, earnings of the latest year
should be distributed first as required under Tai-Cai-Shui No. 871941343 of the Ministry of
Finance dated April 30, 1998.
3. Special reserve is appropriated in accordance with Article 41 paragraph 1 of Securities and
Exchange Act and Financial-Supervisory-Securities, No. 1010012865 of the Financial Supervisory
Commission dated April 6, 2012 and No. 1010047490 of the Financial Supervisory Commission
dated November 21, 2012.
10
Attachment 7
Lite-On Technology Corporation
Comparison Table of Articles of Incorporation
(The table below compares the Amended Articles and Original Articles)
Amended
Article No. Amended Article
Original
Article No. Original Article Note
Article III The Company is headquartered in Taipei
City and may have branches set elsewhere
at home and abroad as resolved by the
Board of Directors.
The Company may invest outward with
the total amount of investment free of
restrictions as set forth in Article 13 of the
Company Law.
The Company may act as a guarantor
when required for business operations
and follow Operational Procedures for
Endorsements/Guarantees of the
Company.
Article XXX The Company is headquartered
in Taipei City and may have
branches set elsewhere at home
and abroad as resolved by the
Board of Directors.
The Company may invest
outward with the total amount
of investment free of restrictions
as set forth in Article 13 of the
Company Law.
The Company may act as a
guarantor externally as required
for business.
⚫ Wording
adjustment
Article V For the shares issued by the Company, the
Company may be exempted from printing
share certificates but shall have the shares
so issued duly registered with the
centralized securities depository
enterprise and follow the regulations of
that enterprise.
Article V The Company’s shares are
registered ones, which shall be
duly signed and sealed by a
minimum of three directors and
issued after duly authenticated
by the competent authority or
the issuance registry entity
approved by the competent
authority. For the shares issued
by the Company, the Company
may be exempted from printing
share certificates but shall have
the shares so issued duly
registered with the centralized
securities depository enterprise.
⚫ The
Company is
a listed
company
with
non-physical
stock,
therefore,
the initial
part are
deleted
⚫ Wording
adjustment
to later part
Article
XXIII
The Company shall allocate the following
compensation from the profit of each
fiscal year (The “profit” means “profit
before income tax and employees’ and
directors’ compensation"), however, the
Company shall have reserved a sufficient
amount from such profit to offset its
accumulated losses (including
unappropriated earnings adjustment if
any):
Article XXIII The Company shall allocate the
following compensation from
the profit of each fiscal year (The
“profit” means “profit before
income tax and employees’ and
directors’ compensation"),
however, the Company shall
have reserved a sufficient
amount from such profit to
offset its accumulated losses
⚫ In
accordance
with the
amendment
of Article
235-1 of the
Company
Act that the
Company
may
11
Amended
Article No. Amended Article
Original
Article No. Original Article Note
1. Employees’ compensation:no less
than 1%
2. Directors’ compensation:no more
than 1.5%
The employees’ compensation under the
preceding paragraph will be distributed by
shares or cash. The employees of parents
or subsidiaries of the Company meeting
certain specific requirements may also be
entitled to such compensation. The Board
of Directors is authorized with full powers
to determine the terms and methods of
appropriation and the Directors’
compensation may only be distributed by
cash.
The Company shall, upon a resolution of
the Board of Directors, distribute
employees' and director’s compensation
in the preceding two paragraphs, and
report to the shareholders’ meeting for
such distribution. While the Company
distributes surplus earnings at the close of
each quarter in accordance with the
Article 24 paragraph 5, the Company shall
estimate and reserve the employees’
compensation and directors’
compensation according to the preceding
paragraph. If the Company has
accumulated losses, the Company shall
estimate and reserve the accumulated
losses to be made up first before
estimating and reserving the employees’
compensation and directors’
compensation.
Qualification requirement of employees in
the preceding second paragraph shall
comply with the provisions otherwise
prescribed by the competent authority in
charge of securities affairs.
(including unappropriated
earnings adjustment if any):
1. Employees’ compensation:
no less than 1%
2. Directors’ compensation:no
more than 1.5%
The employees’ compensation
under the preceding paragraph
will be distributed by shares or
cash. The employees of the
Company’s subsidiaries may
also be entitled to such
compensation. The Board of
Directors is authorized with full
powers to determine the terms
and methods of appropriation.
The Directors’ compensation
under the preceding paragraph
may only be distributed by cash.
The Company shall, upon a
resolution of the Board of
Directors, distribute employees'
and director’s compensation in
the preceding two paragraphs,
and report to the shareholders’
meeting for such distribution.
distribute
employee
bonus in
two-way for
the
controlling
and
subordinate
companies.
Therefore,
amending
second
paragraph
and adding
fourth
paragraph
⚫ In
accordance
with the
amendment
of Article
228-1 of the
Company
Act that the
surplus
earning
distribution
or loss
off-setting
proposal of
the
Company
may be
proposed at
the close of
each quarter
or each half
fiscal year.
Therefore,
the later part
of third
paragraph
are added
Article
XXIV
If there is net profit after tax upon the
final settlement of account of each fiscal
year, the Company shall first to offset any
previous accumulated losses (including
unappropriated earnings adjustment if
any) and set aside a legal reserve at 10% of
the net profits, unless the accumulated
Article XXIV If there is net profit after tax
upon the final settlement of
account of each fiscal year, the
Company shall first to offset any
previous accumulated losses
(including unappropriated
earnings adjustment if any) and
⚫ In
accordance
with the
amendment
of Article
228-1 and
240 of the
12
Amended
Article No. Amended Article
Original
Article No. Original Article Note
legal reserve amounts reach to the total
capital of the Company; then set aside
special reserve in accordance with
relevant laws or regulations or as
requested by the authorities in charge.
The remaining net profit, plus the
beginning unappropriated earnings
(including adjustment of unappropriated
earnings if any), shall be distributed into
dividends to shareholders according to the
distribution plan proposed by the Board
of Directors and submitted to the
shareholders’ meeting for approval.
Where the Company distributes preceding
surplus earning, legal reserve and capital
reserve in the form of cash, such
distribution is authorized to be made after
a resolution has been adopted by a
majority vote at a meeting of the board of
directors attended by two-thirds of the
total number of directors; and in addition
thereto a report of such distribution shall
be submitted to the shareholders’
meeting; if such distribution is in the form
of new shares to be issued, it shall be
approved by shareholders meetings
according to the regulations.
In consideration of business development
plan, investing environment, demand for
funds, global competiveness and the
shareholders’ interest, the Dividend Policy
of the Company is the distribution to
shareholders with the appropriation of the
amount which shall be no less than 70% of
the net profit after income tax under the
circumstance that there is no cumulated
loss in prior years. The distribution may
be executed in cash dividend and/or share
dividend, and the cash dividend shall be
no less than 90% of the total distributed
dividends.
In case there are no earnings for
distribution in a certain year, or the
earnings of a certain year are significantly
less than the earnings actually distributed
by the Company in the previous year, or
considering the financial, business or
operational factors of the Company, the
Company may allocate a portion or all of
its reserves for distribution in accordance
set aside a legal reserve at 10%
of the net profits, unless the
accumulated legal reserve is
equal to the total capital of the
Company; then set aside special
reserve in accordance with
relevant laws or regulations or
as requested by the authorities
in charge. The remaining net
profit, plus the beginning
unappropriated earnings
(including adjustment of
unappropriated earnings if any),
shall be distributed into
dividends to shareholders
according to the distribution
plan proposed by the Board of
Directors and submitted to the
shareholders’ meeting for
approval.
In consideration of business
development plan, investing
environment, demand for funds,
global competiveness and the
shareholders’ interest, the
Dividend Policy of the Company
is the distribution to
shareholders with the
appropriation of the amount
which shall be no less than 70%
of the net profit after income tax
under the circumstance that
there is no cumulated loss in
prior years. The distribution
may be executed in cash
dividend and/or share dividend,
and the cash dividend shall be
no less than 90% of the total
distributed dividends.
In case there are no earnings for
distribution in a certain year, or
the earnings of a certain year are
significantly less than the
earnings actually distributed by
the Company in the previous
year, or considering the
financial, business or
operational factors of the
Company, the Company may
allocate a portion or all of its
Company
Act, adding
second and
fourth
paragraphs
regarding
the surplus
earning
distribution
or loss
off-setting
proposal of
the
Company
may be
proposed at
the close of
each quarter
or each half
fiscal year
and the
meeting of
the board of
directors is
authorized
to approve
cash
dividends
13
Amended
Article No. Amended Article
Original
Article No. Original Article Note
with relevant laws or regulations or the
orders of the authorities in charge.
The Company may distribute the surplus
earnings or off-set losses at the close of
each quarter in accordance with the
Company Act. While distributing surplus
earning, the Company shall estimate and
reserve the taxes and duties to be paid, the
losses to be covered, the legal reserve to
be set aside, and the special surplus
reserve to be raised or revolved. Where
such legal reserve amounts reach to the
total paid-in capital, this provision shall
not apply. If the Company distribute
surplus earning in the form of cash, it
shall be approved by a meeting of the
board of directors; if such surplus earning
is distributed in the form of new shares to
be issued, it shall be approved by
shareholders meetings according to the
regulations.
reserves for distribution in
accordance with relevant laws or
regulations or the orders of the
authorities in charge.
Article
XXIV-1
Qualification requirements of employees
entitled to receive treasury shares, share
subscription warrant, new shares and
restricted stock issued by the Company
may include the employees of parents or
subsidiaries of the Company meeting
certain specific requirements.
Qualification requirement of employees in
the preceding paragraph shall comply
with the provisions otherwise prescribed
by the competent authority in charge of
securities affairs.
⚫ New article
added
⚫ Adding
employee
reward
mechanism
in
accordance
with the
amendment
of Article
167-1、167-2
and 267 of
the
Company
Act.
Therefore,
adding
Article
XXIV-1 to
retain
flexibility
Article
XXVI
(Delete) Article XXVI The Taiwan Depository &
Clearing Corporation (TDCC)
may request that the Company
consolidate the shares to issue
large denomination share
certificates.
⚫ The
Company
issues
non-physical
stocks,
therefore
14
Amended
Article No. Amended Article
Original
Article No. Original Article Note
deleting this
Article
Article
XXIX
The Articles were duly stipulated on
March 13, 1989.
The Articles were duly amended on March
20, 1990 as the 1st amendment.
The Articles were duly amended on May
11, 1991 as the 2nd amendment.
The Articles were duly amended on May
20, 1992 as the 3rd amendment.
The Articles were duly amended on June
27, 1992 as the 4th amendment.
The Articles were duly amended on June
21, 1993 as the 5th amendment.
The Articles were duly amended on
December 18, 1993 as the 6th
amendment.
The Articles were duly amended on May
30, 1995 as the 7th amendment.
The Articles were duly amended on April
2, 1996 as the 8th amendment.
The Articles were duly amended on May
6, 1997 as the 9th amendment.
The Articles were duly amended on May
19, 1998 as the 10th amendment.
The Articles were duly amended on June
21, 1999 as the 11th amendment.
The Articles were duly amended on May
31, 2000 as the 12th amendment.
The Articles were duly amended on April
19, 2001 as the 13th amendment.
The Articles were duly amended on May
21, 2002 as the 14th amendment.
The Articles were duly amended on
August 5, 2002 as the 15th amendment.
The Articles were duly amended on May
13, 2003 as the 16th amendment.
The Articles were duly amended on June
15, 2004 as the 17th amendment.
The Articles were duly amended on June
14, 2005 as the 18th amendment.
The Articles were duly amended on June
21, 2006 as the 19th amendment.
The Articles were duly amended on June
21, 2007 as the 20th amendment.
The Articles were duly amended on June
Article XXIX The Articles were duly stipulated
on March 13, 1989.
The Articles were duly amended
on March 20, 1990 as the 1st
amendment.
The Articles were duly amended
on May 11, 1991 as the 2nd
amendment.
The Articles were duly amended
on May 20, 1992 as the 3rd
amendment.
The Articles were duly amended
on June 27, 1992 as the 4th
amendment.
The Articles were duly amended
on June 21, 1993 as the 5th
amendment.
The Articles were duly amended
on December 18, 1993 as the 6th
amendment.
The Articles were duly amended
on May 30, 1995 as the 7th
amendment.
The Articles were duly amended
on April 2, 1996 as the 8th
amendment.
The Articles were duly amended
on May 6, 1997 as the 9th
amendment.
The Articles were duly amended
on May 19, 1998 as the 10th
amendment.
The Articles were duly amended
on June 21, 1999 as the 11th
amendment.
The Articles were duly amended
on May 31, 2000 as the 12th
amendment.
The Articles were duly amended
on April 19, 2001 as the 13th
amendment.
The Articles were duly amended
on May 21, 2002 as the 14th
amendment.
The Articles were duly amended
⚫ Adding the
date for the
29th
amendment
15
Amended
Article No. Amended Article
Original
Article No. Original Article Note
25, 2008 as the 21st amendment.
The Articles were duly amended on June
15, 2010 as the 22nd amendment.
The Articles were duly amended on June
19, 2012 as the 23rd amendment.
The Articles were duly amended on June
19, 2013 as the 24rd amendment.
The Articles were duly amended on June
19, 2014 as the 25th amendment.
The Articles were duly amended on June
24, 2016 as the 26th amendment.
The Articles were duly amended on June
22, 2017 as the 27th amendment.
The Articles were duly amended on June
22, 2018 as the 28th amendment.
The Articles were duly amended on June
21, 2019, 2019 as the 29th amendment
on August 5, 2002 as the 15th
amendment.
The Articles were duly amended
on May 13, 2003 as the 16th
amendment.
The Articles were duly amended
on June 15, 2004 as the 17th
amendment.
The Articles were duly amended
on June 14, 2005 as the 18th
amendment.
The Articles were duly amended
on June 21, 2006 as the 19th
amendment.
The Articles were duly amended
on June 21, 2007 as the 20th
amendment.
The Articles were duly amended
on June 25, 2008 as the 21st
amendment.
The Articles were duly amended
on June 15, 2010 as the 22nd
amendment.
The Articles were duly amended
on June 19, 2012 as the 23rd
amendment.
The Articles were duly amended
on June 19, 2013 as the 24rd
amendment.
The Articles were duly amended
on June 19, 2014 as the 25th
amendment.
The Articles were duly amended
on June 24, 2016 as the 26th
amendment.
The Articles were duly amended
on June 22, 2017 as the 27th
amendment.
The Articles were duly amended
on June 22, 2018 as the 28th
amendment.
16
Attachment 8 Lite-On Technology Corporation
Comparative Table of Procedures for the Acquisition and Disposal of Assets
(The table below compares the Amended Articles and Original Articles.)
Amended Article Original Article Note
2.Scope of Application & Domain of
Applications
2.1 Scope of Application
2.1.2 Real property (including land, houses
and buildings, investment property, and
construction enterprise inventory) and
equipment.
2.1.5 Right-of-use assets.
2.1.6 Claims of financial institutions
(including receivables, bills purchased
and discounted, loans, and overdue
receivables).
2.1.7 Derivatives.
2.1.8 Assets acquired or disposed of in
connection with mergers,
demergers,acquisitions,or transfer or shares
in accordance with law.
2.1.9 Other major assets.
2.Scope of Application & Domain of
Applications
2.1 Scope of Application
2.1.2 Real property (including land,
houses and buildings, investment
property, rights to use land, and
construction enterprise inventory) and
equipment.
NA
2.1.5 Claims of financial institutions
(including receivables, bills purchased
and discounted, loans, and overdue
receivables).
2.1.6 Derivatives.
2.1.7 Assets acquired or disposed of in
connection with mergers,
demergers,acquisitions,or transfer or
shares in accordance with law.
2.1.8 Other major assets.
1.To move 2.1.2
rights to use land
to 2.1.5
specification.
2. To add 2.1.5
Right-of-use
assets accordance
with revision of
regulation.
3.To move
2.1.5~2.1.8 to
2.1.6~2.1.9
3.1 Financial Derivatives: Derivatives as
defined in this procedure shall refer to
Forward contracts, options contracts,
futures contracts, leverage contracts,
and swap contracts, whose value is
derived from a specified interest rate
,financial instrument price,commodity
price, foreign exchange rates, index of
price or rates , credit rating or credit
index, or other variable;or hybrid
contracts combining the above
contracts;or hybrid contracts or
structured products containing
embedded derivatives. The term
"forward contracts" does not include
insurance contracts, performance
contracts, after-sales service contracts,
long-term leasing contracts, or
3.1 Financial Derivatives: Derivatives as
defined in this procedure shall refer to
Forward contracts, options contracts,
futures contracts, leverage contracts,
and swap contracts, and compound
contracts combining the above
products, whose value is derived from
assets, interest rates, foreign exchange
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.
3.1 To
amend ”Financial
Derivatives
definition
accordance with
revision of
regulation.
17
Amended Article Original Article Note
long-term purchase (sales) contracts.
3.2 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
Business Mergers 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 therefore (hereinafter
"transfer of shares") under Article 156-3
of the Company Act.
3.3 Related party or subsidiary: As defined
in the Regulations Governing the
Preparation of Financial Reports by
Securities Issuers.
3.4 Professional appraisers: Refers to a real
property appraiser or other person duly
authorized by law to engage in the value
appraisal of real property or equipment.
Professional appraisers and their
officers, certified public accounts,
attorneys, and securities underwriters
that provide the Company with
appraisal reports, certified public
3.2 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
Business Mergers 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 therefore (hereinafter
"transfer of shares") under Article 156,
paragraph 8 of the Company Act.
3.3 Related party or subsidiary: As
defined in the Regulations Governing
the Preparation of Financial Reports
by Securities Issuers. Professional
appraisers, certified public
accountants, lawyers or security
underwriters who issue the appraisal
reports, accountant’s reports, and
statement of the legal counsel or
security underwriters in favor of the
Company shall not be concerned with
any of the parties involved in the trade.
3.4 Professional appraisers: Refers to a real
property appraiser or other person duly
authorized by law to engage in the
value appraisal of real property or
equipment.
3.2 To amend
accordance with
revision of
regulation.
3.3 To move
Professional
appraisers,etcdesc
ription to 3.4.
3.3 To move
Professional
18
Amended Article Original Article Note
accountant's opinions, attorney's
opinions, or underwriter's opinions shall
meet the following requirements:
3.4.1 May not have previously received a
final and unappealable sentence to
imprisonment for 1 year or longer for a
violation of the Act, the Company Act,
the Banking Act of The Republic of
China, the Insurance Act, the Financial
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 already passed since
completion of service of the sentence,
since expiration of the period of a
suspended sentence, or since a pardon
was received.
3.4.2 May not be a related party or de facto
related party of any party to the
transaction.
3.4.3 If the company is required to obtain
appraisal reports from two or more
professional appraisers, the different
professional appraisers or appraisal
officers may not be related parties or de
facto related parties of each other.
3.4.4 When issuing an appraisal report or
opinion, the personnel referred to in the
3.4 paragraph shall comply with the
following:
3.4.4.1 Prior to accepting a case, they shall
prudently assess their own professional
capabilities, practical experience, and
independence.
3.4.4.2 When examining a case, they shall
appropriately plan and execute adequate
working procedures, in order to produce
a conclusion and use the conclusion as
NA
NA
NA
NA
NA
appraisers,etcdesc
ription to 3.4.
To add
3.4.1~3.4.3&3.4.4
~3.4.4.4
accordance with
revision of
regulation.
19
Amended Article Original Article Note
the basis for issuing the report or
opinion. The related working
procedures, data collected, and
conclusion shall be fully and accurately
specified in the case working papers.
3.4.4.3 They shall undertake an
item-by-item evaluation of the
comprehensiveness, accuracy, and
reasonableness of the sources of data
used, the parameters, and the
information, as the basis for issuance of
the appraisal report or the opinion.
3.4.4.4 They shall issue a statement
attesting to the professional competence
and independence of the personnel who
prepared the report or opinion, and that
they have evaluated and found that the
information used is reasonable and
accurate, and that they have complied
with applicable laws and regulations.
3.7 Securities exchange: "Domestic
securities exchange" refers to the
Taiwan Stock Exchange Corporation;
"foreign securities exchange" refers to
any organized securities exchange
market that is regulated by the
competent securities authorities of the
jurisdiction where it is located.
3.8 Over-the-counter venue ("OTC venue",
"OTC"): "Domestic OTC venue" refers
to a venue for OTC trading provided by
a securities firm in accordance with the
Regulations Governing Securities
Trading on the Taipei Exchange;
"foreign OTC venue" refers to a venue
at a financial institution that is regulated
by the foreign competent authority and
that is permitted to conduct securities
business.
NA
NA
NA
NA
NA
20
Amended Article Original Article Note
To add 3.7~3.8
accordance with
revision of
regulation.
4. Limits on the investments of realty not
for business use or right-of-use assets
thereof and marketable securities
the Company and respective subsidiary
may acquire the aforementioned assets
in accordance with the following limits:
The
Compa
ny
Inves
tment
holdi
ng
Com
pany
Other
subsid
iaries
Realty not
for
business
use or
right-of
-use
assets
thereof
15% of
net
worth
5% of the net
worth of
parent
Investmen
t of
marketabl
e
securities
150%
of the
net
worth
100%
of the
net
worth
of
subsi
diary
10%
of the
net
worth
of
parent
Amount
of
investmen
t on
individual
security
50% of
the net
worth
100%
of the
net
worth
of
subsi
diary
5% of
the net
worth
of
parent
4. Limits on the investments of realty not
for business use and marketable
securities
the Company and respective
subsidiary may acquire the
aforementioned assets in accordance
with the following limits:
The
Compa
ny
Inves
tment
holdi
ng
Com
pany
Other
subsid
iaries
Realty not
for
business
use
15% of
net
worth
5% of the net
worth of
parent
Investmen
t of
marketabl
e
securities
150%
of the
net
worth
100%
of the
net
worth
of
subsi
diary
10%
of the
net
worth
of
parent
Amount
of
investmen
t on
individual
security
50% of
the net
worth
100%
of the
net
worth
of
subsi
diary
5% of
the net
worth
of
parent
To amend
accordance with
revision of
regulation.
6. Acquisition or disposal of realty ,
equipment or right-of-use assets
thereof
6.1 Evaluation and Operation Process
Process
The Company may buy or sell realty
, equipment or right-of- use assets
thereof in accordance with the
regulations governing the Property,
6. Acquisition or disposal of realty or
equipment
6.1 Evaluation and Operation Process
The Company may buy or sell
realty and equipment in accordance
with the regulations governing the
Property, Plant and Equipment
cycle under the Company’s internal
6&6.1&6.2.2&6.3
To add
right-of-use assets
thereof
accordance with
revision of
regulation.
21
Amended Article Original Article Note
Plant and Equipment cycle under the
Company’s internal control system.
6.2.2 For the acquisition or disposition of
right-of-use assets and equipment, the
respective department shall make an
inquiry, compare the offer, negotiate on
the price or submit to bidding. The limit
shall be based on the line of authority.
6.3 In acquiring or disposing of real
property , equipment , or right-
of-use assets thereof where the
transaction amount reaches 20
percent of the Company's paid-in
capital or NT$300 million or more,
the Company, unless transacting
with a domestic government agency,
engaging others to build on its own
land, engaging others to build on
rented land, or acquiring or
disposing of equipment or
right-of-use assets thereof held 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:
6.3.1 Where due to special circumstances it
is necessary to give a limited price,
specified price, or special price as a
reference basis for the transaction price,
the transaction shall be submitted for
approval in advance by the board of
directors, the same procedure shall also
be followed whenever there is any
subsequent changes to the terms and
conditions of the transaction.
control system.
6.2.2 For the acquisition or disposition of
equipment, the respective department
shall make an inquiry, compare the
offer, negotiate on the price or submit
to bidding. The limit shall be based on
the line of authority.
6.3 In acquiring or disposing of real
property or equipment where the
transaction amount reaches 20
percent of the Company'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 of equipment 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:
6.3.1 Where due to special circumstances
it is necessary to give a limited price,
specified price, or special price as a
reference 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 the transaction.
6.3.1 To amend
accordance with
revision of
regulation.
22
Amended Article Original Article Note
7. The Acquisition or Disposition of
memberships or Intangible Assets or
right-of-use assets thereof
7.1 Evaluation and Operation Process
The Company may buy or sell
memberships or intangible assets or
right-of-use assets thereof with the
presentation of relevant appraisal reports
and carried out in accordance with the
line of authority of the Company and the
following procedure.
7.2.1 In acquiring or disposing of
memberships, the respective department
shall consult the fair market price for
determining the terms and conditions of
the deal and the price. An analysis report
for such purpose shall be compiled and
submitted for the Group CEO’s
approval. If the amount of transaction
falls below NT$3 million, it shall be
submitted for approval by the board
chairman and presented to the nearest
board session for recognition. For
transaction values exceeding NT$3
million, submit for the approval from
the board in advance.
7.2.2 In acquiring or disposing of intangible
assets or right-of-use assets thereof, the
respective department shall consult the
appraisal reports issued by professional
appraisers or the fair market price for
determining the terms and conditions of
the deal and the price. An analysis
report for such purpose shall be
compiled and submitted for approval by
the board chairman. If the transaction
amount falls below NT$20 million,
submit for the board chairman’s
7. The Acquisition or Disposition of
memberships or Intangible Assets
7.1 Evaluation and Operation process
The Company may buy or sell
memberships or intangible assets with
the presentation of relevant appraisal
reports and carried out in accordance
with the line of authority of the
Company and the following procedure.
7.2.1 In acquiring or disposing of
memberships, the respective
department shall consult the fair
market price for determining the terms
and conditions of the deal and the
price. An analysis report for such
purpose shall be compiled and
submitted for the Group CEO’s
approval. If the amount of transaction
falls below 1% of the Company’s paid
in capital or NT$3 million, it shall be
submitted for approval by the board
chairman and presented to the nearest
board session for recognition. For
transaction values exceeding NT$3
million, submit for the approval from
the board in advance.
7.2.2 In acquiring or disposing of
intangible assets, the respective
department shall consult the appraisal
reports issued by professional
appraisers or the fair market price for
determining the terms and conditions
of the deal and the price. An analysis
report for such purpose shall be
compiled and submitted for approval
by the board chairman. If the
transaction amount falls below 10% of
the Company’s paid in capital or
7&7.1&7.2.2&7.3
To add
right-of-use assets
thereof
accordance with
revision of
regulation.
7.2.1&7.2.2 To
amend
accordance with
revision of
regulation.
23
Amended Article Original Article Note
approval and present to the nearest
board session for recognition. For
transaction values exceeding NT$20
million, submit for the approval of the
board in advance.
7.3 The Company acquires or disposes of
memberships or intangible assets or
right-of-use assets thereof and the
transaction amount reaches 20 percent
or more of paid-in capital or NT$300
million or more, except in transactions
with a domestic government agency, 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.
NT$20 million, submit for the board
chairman’s approval and present to the
nearest board session for recognition.
For transaction values exceeding
NT$20 million, submit for the
approval of the board in advance.
7.3 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, except in
transactions with a government
agency, 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.
9.2 Evaluation and Operation Process
The Company intends to acquire or
dispose of real property or right of- use
assets thereof from or to a related party,
or when it intends to acquire or dispose
of assets other than real property or right
of- use assets thereof 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
domestic government bonds or bonds
under repurchase and resale agreements,
or subscription or redemption of money
market funds issued by domestic
securities investment trust enterprises
(SITE), the Company may not proceed
to enter into a transaction contract or
9.2 Evaluation and Operation Process
The Company intends to acquire or
dispose of real property from or to a
related party, or when it intends to
acquire 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,
except in trading of government bonds
or bonds under repurchase and resale
agreements, or subscription or
redemption of money market funds
issued by domestic securities
investment trust enterprises (SITE),
the Company may not proceed to enter
into a transaction contract or make a
payment until the following matters
9.2 To add
right-of-use assets
thereof
accordance with
revision of
regulation
24
Amended Article Original Article Note
make a payment until the following
matters have been and approved by the
audit committee and resolved by the
board of directors:
9.2.3With respect to the acquisition of real
property or right of- use assets thereof
from a related party, information
regarding appraisal of the
reasonableness of the preliminary
transaction terms in accordance with
section 9.3.
9.2.7 Restrictive covenants and other
important stipulations associated with
the transaction.
With respect to the types of transactions
listed below , when to be conducted
between the Company and its parent or
subsidiaries , or between its subsidiaries
in which it directly or indirectly holds
100 percent of the issued shares or
authorized capital, the Company's board
of directors may delegate the board
chairman to decide such matters when
the transaction is within a certain
amount and have the decisions
subsequently submitted to and ratified
by the next board of directors meeting:
1.Acquisition or disposal of equipment
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.
Where the position of independent director
has been created in accordance with the
provisions of the Act, when a matter is
submitted for discussion by the board of
directors pursuant to the preceding
paragraph, the board of directors shall
take into full consideration each
have been and approved by the audit
committee and resolved by the board
of directors:
9.2.3With respect to the acquisition of real
property from a related party,
information regarding appraisal of the
reasonableness of the preliminary
transaction terms in accordance with
section 9.3.
9.2.7 Restrictive covenants and other
important stipulations associated with
the transaction.
With respect to the acquisition or disposal
of business-use equipment between the
Company and its parent or
subsidiaries, the Company's board of
directors may delegate the board
chairman to decide such matters when
the transaction is within a certain
amount and have the decisions
subsequently submitted to and ratified
by the next board of directors meeting.
Where the position of independent director
has been created in accordance with
the provisions of the Act, when a
matter is submitted for discussion by
the board of directors pursuant to the
preceding paragraph, the board of
9.2.3 To add
right-of-use assets
thereof
accordance with
revision of
regulation.
9.2.7 To amend
accordance with
revision of
regulation.
25
Amended Article Original Article Note
independent director's opinions. If an
independent director objects to or
expresses reservations about any matter,
it shall be recorded in the minutes of the
board of directors meeting.
Where an audit committee has been
established shall first be approved by
more than half of all audit committee
members and then submitted to the
board of directors for a resolution. If
approval of more than half of all audit
committee members as required is not
obtained, the procedures may be
implemented if approved by more than
two-thirds of all directors, and the
resolution of the audit committee shall
be recorded in the minutes of the board
of directors meeting. The terms "all
audit committee members" and "all
directors" shall be counted as the actual
number of persons currently holding
those positions.
directors shall take into full
consideration each independent
director's opinions. If an independent
director objects to or expresses
reservations about any matter, it shall
be recorded in the minutes of the board
of directors meeting.
Where an audit committee has been
established in accordance with the
provisions of the Act, the matters
which requires recognition by the
supervisors shall first be approved by
more than half of all audit committee
members and then submitted to the
board of directors for a resolution. If
approval of more than half of all audit
committee members as required is not
obtained, the procedures may be
implemented if approved by more than
two-thirds of all directors, and the
resolution of the audit committee shall
be recorded in the minutes of the board
of directors meeting. The terms "all
audit committee members" and "all
directors" shall be counted as the
actual number of persons currently
holding those positions.
Since audit
committee was
established,delete
related regulation
of supervisors.
9.3.1 The Company that acquires real
property or right-of-use assets thereof
from a related party shall evaluate the
reasonableness of the transaction costs
by the following means:
Where land and structures thereupon are
combined as a single property purchased
or leased in one transaction, the
transaction costs for the land and the
structures may be separately appraised
in accordance with either of the means
listed in section 9.3.1.1 and 9.3.1.2.
9.3.1 The Company that acquires real
property from a related party shall
evaluate the reasonableness of the
transaction costs by the following
means:
Where land and structures thereupon are
combined as a single property
purchased in one transaction, the
transaction costs for the land and the
structures may be separately appraised
in accordance with either of the means
9.3.1&9.3.1.2.1&
9.3.1.2.2 To add
right-of-use assets
thereof
accordance with
revision of
regulation.
26
Amended Article Original Article Note
The Company that acquires real property or
right-of-use assets thereof from a related
party and appraises the cost of the real
property or right-of-use assets thereof in
accordance with first two paragraphs
shall also engage a CPA to check the
appraisal and render a specific opinion.
Where the Company acquires real property
or right-of-use assets thereof from a
related party and one of the following
circumstances exists, the acquisition
shall be conducted in accordance with
section 9.2 and do not apply the first
three paragraphs:
9.3.1.2.1 The related party acquired the real
property or right-of-use assets
thereof through inheritance or as a
gift.
9.3.1.2.2 More than 5 years will have
elapsed from the time the related
party signed the contract to obtain
the real property or right-of-use
assets thereof to the signing date for
the current transaction.
9.3.1.2.4 The real property right-of-use
assets for business use are acquired
by the Company with its parent or
subsidiaries, or by its subsidiaries in
which it directly or indirectly holds
100 percent of the issued shares or
authorized capital.
9.3.2.1.2 Completed transactions by
unrelated parties within the
preceding year involving other
floors of the same property or
neighboring or closely valued
parcels of land, where the land
area and transaction terms are
similar after calculation of
reasonable price discrepancies in
listed in section 9.3.1.1 and 9.3.1.2.
The Company that acquires real property
from a related party and appraises the
cost of the real property in accordance
with 9.3.1.1 and 9.3.1.2 shall also
engage a CPA to check the appraisal
and render a specific opinion.
Where the Company acquires real property
from a related party and one of the
following circumstances exists, the
acquisition shall be conducted in
accordance with section 9.2 and do not
apply the paragraph 1~3 of the section
9.3.1.1 and section 9.3.1.2:
9.3.1.2.1 The related party acquired the real
property through inheritance or as
a gift.
9.3.1.2.2 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.
NA
9.3.2.1.2 Completed transactions by
unrelated parties within the
preceding year involving other
floors of the same property or
neighboring or closely valued
parcels of land, where the land
9.3.1.2.4 To
amend
accordance with
revision of
regulation.
9.3.2.1.2 To
amend
accordance with
revision of
regulation.
27
Amended Article Original Article Note
floor or area land prices in
accordance with standard property
market sale or leasing practices.
NA
9.3.2.2 Where the Company acquiring real
property, or obtaining real
property right-of-use assets
through leasing , from a related
party provides evidence that the
terms of the transaction are similar
to the terms of completed
transactions involving neighboring
or closely valued parcels of land
of a similar size by unrelated
parties within the preceding year.
9.3.2.3 Completed transactions involving
neighboring or closely valued
parcels of land in the preceding
paragraph in principle refers to
parcels 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; transactions involving
similarly sized parcels in principle
refers to transactions completed by
unrelated parties for parcels with a
land area of no less than 50 percent
of the property in the planned
transaction; within the preceding
area and transaction terms are
similar after calculation of
reasonable price discrepancies in
floor or area land prices in
accordance with standard
property market sale practices.
9.3.2.1.3 Completed leasing transactions
by unrelated parties for other
floors of the same property from
within the preceding year, where
the transaction terms are similar
after calculation of reasonable
price discrepancies among floors
in accordance with standard
property leasing market
practices.
9.3.2.2 Where the Company acquiring
real property from a related party
provides evidence that the terms
of the transaction are similar to
the terms of transactions
completed for the acquisition of
neighboring or closely valued
parcels of land of a similar size
by unrelated parties within the
preceding year.
9.3.2.3 Completed transactions for
neighboring or closely valued
parcels of land in the
preceding paragraph in
principle refers to parcels 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 for similarly sized
9.3.2.1.3 To
delete accordance
with revision of
regulation.
9.3.2.2 To amend
accordance with
revision of
regulation.
9.3.2.3 To amend
accordance with
revision of
regulation.
28
Amended Article Original Article Note
year refers to the year preceding the
date of occurrence of the
acquisition of the real property or
obtainment of the right-of-use
assets thereof.
9.3.3 Where the Company acquires real
property or right-of-use assets
thereof from a related party and
the results of appraisals conducted
in accordance with section 9.3.1
and section 9.3.2 are uniformly
lower than the transaction price,
the following steps shall be taken:
9.3.3.1 A special reserve shall be set aside
in accordance with Article 41,
paragraph 1 of the Act against the
difference between the real property
or right-of-use assets thereof
transaction price and the appraised
cost, and may not be distributed or
used for capital increase or issuance
of bonus shares. Where the
Company uses the equity method to
account for its investment in
another company, then the special
reserve called for under Article 41,
paragraph of the Act shall be set
aside pro rata in a proportion
consistent with the share of public
company's equity stake in the other
company.
parcels in principle refers to
transactions completed by
unrelated parties for parcels
with a land area of no less
than 50 percent of the
property in the planned
transaction; within the
preceding year refers to the
year preceding the date of
occurrence of the acquisition
of the real property.
9.3.3 Where the Company acquires real
property from a related party and
the results of appraisals
conducted in accordance with
section 9.3.1 and section 9.3.2
are uniformly lower than the
transaction price, the following
steps shall be taken:
9.3.3.1 A special reserve shall be set
aside in accordance with
Article 41, paragraph 1 of the
Act against the difference
between the real property
transaction price and the
appraised cost, and may not
be distributed or used for
capital increase or issuance
of bonus shares. Where the
Company uses the equity
method to account for its
investment in another
company, then the special
reserve called for under
Article 41, paragraph of the
Act shall be set aside pro rata
in a proportion consistent
9.3.3 To amend
accordance with
revision of
regulation.
9.3.3.1 To amend
accordance with
revision of
regulation.
29
Amended Article Original Article Note
with the share of public
company's equity stake in the
other company.
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 or leased at
a premium, or they have been disposed of,
or the leasing contract has been terminatd,
or adequate compensation has been made,
or the status quo ante has been restored, or
there is other evidence confirming that
there was nothing unreasonable about the
transaction, and the FSC has given its
consent.
When the Company obtains real property or
right-of-use assets thereof 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 arms length transaction.
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 other evidence 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 arms length
transaction.
To amend
accordance with
revision of
regulation.
11.1.3.1 Hedge Trade:
A. Qualify for hedge accounting:
Booking the transaction with hedge
accounting principle when it follows the
hedge IFRS standards.
11.1.3.1 Hedge Trade:
A. Qualify for hedge accounting:
Booking the transaction with hedge
accounting principle when it follows
the hedge accounting standards(Note
1)
(Note 1) “Hedge accounting” is
defined in accordance with the R.O.C.
Statement of Financial Accounting
Standards (SFAS) No. 34 before
December 31, 2012 and then in
accordance with the International
Accounting Standard 39 since January
1, 2013.
To amend
accordance with
IFRS.
11.1.5.1 Hedge Trade:
A.Access the efficiency of hedging:
In order to apply to hedge
accounting, the hedge is expected to
11.1.5.1 Hedge Trade:
A.Access the efficiency of hedging: In
order to apply to hedge accounting, the
hedge is expected to be highly
To amend
accordance with
IFRS.
30
Amended Article Original Article Note
be highly effective in achieving
offsetting changes in fair value or
cash flows attributable to the hedged
risk.
effective (80%~125%) in achieving
offsetting changes in fair value or cash
flows attributable to the hedged risk.
11.5.3.1 The board shall appoint the head of
internal audit to conduct an audit on the
supervision of derivative trade and the
suitability of the internal control
procedure in accordance with this
procedure and the “Implementation
Procedure of Internal Audit” for
compliance. If any discrepancy is
discovered, request the top officer of the
Financial Division to take necessary
measures and immediately report to the
board and the audit committee.
11.6 Internal Audit System
All internal auditors shall be fully aware
of the suitability of the internal control
of financial derivative trade regularly in
accordance with this procedure and the
“Implementation Procedure of Internal
Audit”, and shall base on the audit
findings from the trading department on
compliance and the analysis of the
transaction cycle to prepare an audit
report. Where materiality may be
discovered, notify the audit committee
in writing.
11.5.3.1 The board shall appoint the head
of internal audit to conduct an audit on
the supervision of derivative trade and
the suitability of the internal control
procedure in accordance with this
procedure and the “Implementation
Procedure of Internal Audit” for
compliance. If any discrepancy is
discovered, request the top officer of
the Financial Division to take
necessary measures and immediately
report to the board and the audit
committee.
11.6 Internal Audit System
All internal auditors shall be fully
aware of the suitability of the internal
control of financial derivative trade
regularly in accordance with this
procedure and the “Implementation
Procedure of Internal Audit”, and shall
base on the audit findings from the
trading department on compliance and
the analysis of the transaction cycle to
prepare an audit report. Where
materiality may be discovered, notify
the audit committee in writing.
11.5.3.1&11.6 To
amend in
Chinese
version,English
version no change
for same
translation.
E.Where any of the companies participating
in a merger, demerger, acquisition, or
transfer of another company's shares is
neither listed on an exchange nor has its
shares traded on an OTC market, the
Company(s) so listed or traded shall sign an
agreement with such company whereby the
latter is required to abide by the provisions
of section 12.2.A~12.2.D.
E.Where any of the companies
participating in a merger, demerger,
acquisition, or transfer of another
company's shares is neither listed on
an exchange nor has its shares traded
on an OTC market, the Company(s) so
listed or traded shall sign an agreement
with such company whereby the latter
is required to abide by the provisions
of section 12.2.C and 12.2.D.
To amend article
name.
31
Amended Article Original Article Note
13. Enforcement, Punishment and Reward
Investment and Finance are the
departments in charge of the execution
of securities investments. Users and
relevant departments shall be in charge
of the acquisition or disposition of
realty, equipment , or right-of-use
assets thereof and other assets.
Relevant personnel who defy this
procedure shall be liable for
punishment in accordance with the
“Regulation for Reward and
Punishment” or other related
regulations.
13. Enforcement, Punishment and Reward
Investment and Finance are the
departments in charge of the
execution of securities investments.
Users and relevant departments shall
be in charge of the acquisition or
disposition of realty and equipment.
Relevant personnel who defy this
procedure shall be liable for
punishment in accordance with the
“Regulation for Reward and
Punishment” or other related
regulations.
To amend
accordance with
revision of
regulation.
14.1 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 or
right-of-use assets thereof from or to a
related party where 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; provided, this shall not
apply to trading of domestic government
bonds or bonds under repurchase and
resale agreements, or subscription or
redemption of money market funds
issued by domestic securities investment
trust enterprises (SITE).
14.3 Losses from derivatives trading
reaching the limits on aggregate losses
or losses on individual contracts set
out in the procedures adopted by the
Company.
14.4 Where equipment or right-of-use
assets thereof for business use are
acquired or disposed of , and
furthermore the transaction
counterparty is not a related party, and
14.1 Acquisition or disposal of real
property from or to a related party, or
acquisition or disposal of assets other
than real property from or to a related
party where 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; provided, this shall
not apply to trading of government
bonds or bonds under repurchase and
resale agreements, or subscription or
redemption of money market funds
issued by domestic securities
investment trust enterprises (SITE).
14.3 Losses from derivatives trading
reaching the limits on aggregate
losses or losses on individual
contracts set out in the procedures
adopted by the Company.
14.4 Where the type of asset acquired or
disposed is equipment for business
use, the trading counterparty is not a
related party, and the transaction
14.1&14.3&&14.
4&14.5&14.6.1&
14.6.2&14.7.3&1
4.8 To amend
accordance with
revision of
regulation.
32
Amended Article Original Article Note
the transaction amount meets any of
the following criteria:
14.5 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 furthermore the transaction
counterparty is not a related party, and
the amount the Company expects to
invest in the transaction reaches
NT$500 million.
14.6 Where an asset transaction other than
any of those referred to Section 14.1 to
14.5, a disposal 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:
14.6.1Trading of domestic
government bonds
14.6.2 Investment is taken as a profession
and conduct trade of marketable
securities in stock exchanges or
OTC markets, or subscription of
ordinary corporate bonds or general
bank debentures without equity
characteristics (excluding
subordinated debt)that are offered
and issued in the primary market, or
subscription or redemption of
securities investment trust funds of
futurs trust funds,or subdcription by
a securities firm of securities as
necessitated by its undertaking
amount meets any of the following
criteria:
14.5 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 the amount the
Company expects to invest in the
transaction reaches NT$500 million.
14.6 Where an asset transaction other
than any of those referred to Section
14.1 to 14.5, a disposal 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:
14.6.1Trading of government bonds
14.6.2 Investment is taken as a
profession and conduct trade of
marketable securities in
domestic or overseas stock
exchanges or OTC markets, or
subscription by investment
professionals of ordinary
corporate bonds or of general
bank debentures without equity
characteristics that are offered
and issued in the domestic
primary market, or subscription
by a securities firm of
securities as necessitated by its
undertaking business or as an
33
Amended Article Original Article Note
business or as an advisory
recommending securities firm for
an emerging stock company, in
accordance with relevant
regulations.
14.7.3 The cumulative transaction amount
of acquisitions and
disposals(cumulative acquisitions
and disposals,respectively)of real
property or right-of-use assets
thereof within the same
development project within the
preceding year.
14.8 “Within the precding year” as used in
the preceding paragraph refers to the
year preceding the date of occurrence of
the current transaction.Items duly
announced in accordance with these
Regulations need not be counted toward
the transaction amount.the Company
shall compile monthly reports on the
status of derivatives trding engaged in up
to the end of the preceding month by 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
each month.When the Company at the
time of public announcement makes an
error or omission in an item required by
regulations to be publicly announced and
so is required to correct it, all the items
shall be again publicly announced and
reported in their entirety within two days
counting inclusively from the date of
knowing of such error or omission.the
Company acquiring or disposing of
assets shall keep all relevant
contracts,meeting minutes,log
advisory recommending
securities firm for an emerging
stock company, in
accordance with relevant
regulations.
14.7.3 The amount of the same
development project accumulated
from disposition or acquisition
(counted separately) in one year.
14.8 One year shall be defined as the
period from the day of transaction
to calendar year in retrospect.
Transactions already announced
under the “Criteria for The
Acquisition or Disposition of
Assets by Public Companies”
shall not be included. the
Company shall report to the FSC
the status of derivative trade
conducted by the Company and its
subsidiaries which are not public
company in the country of the
month in the required format to
the required website by the 10th
day of the next month. When the
company at the time of public
announcement makes an error or
omission in an item required by
regulations to be publicly
announced and so is required to
correct it, all the items shall be
again publicly announced and
reported in their entirety within
two days counting inclusively
from the date of knowing of such
error or omission. The Company
shall retain related contracts,
34
Amended Article Original Article Note
books,appraisal reports and
CPA,attorney, and securities underwriter
opinions at the company,where they
shall be retained for five years except
where another act provides otherwise.
meeting minutes, record books,
appraisal reports, statements of
opinions expressed by public
auditors, lawyers and/or security
underwriters in its office for five
years unless otherwise required by
law.
17.The paid-in capital or total assets of the
Company shall be the standard
applicable to a subsidiary referred to in
the preceding paragraph in determining
whether, relative to paid-in capital or
total assets,it reaches a threshold
requiring public announcement and
regulatory filing under section 14.
17. The paid-in capital or total assets of
the Company shall be the standard for
determining whether or not a
subsidiary referred to in the preceding
paragraph is subject to section
14requiring 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.
To amend
accordance with
revision of
regulation.
20.The Measures were established on Feb
6th, 2003.
The First Amendment was made on
June 14th, 2005.
The Second Amendment was made on
June 21st, 2006.
The Thrid Amendment was made on June
21st, 2007.
The Fourth Amendment was made on
June 19nd, 2012.
The Fifth Amendment was made on June
19nd, 2014.
The Sixth Amendment was made on June
22nd, 2017.
The Seventh Amendment was made on
June 21st, 2019.
NA Addition of date
of amendment
35
Lite-On Technology Corporation Attachment 9
“Regulations Governing Loaning of Funds and Making of Endorsements/guarantees”
Contents before and after Amendment in Comparison
Contents after Amendment Contents before Amendment Explanation
1.1 Purpose
This Regulations Governing Loaning of
Funds and Making Endorsements/
Guarantees (“the Regulation” hereinafter)
are based on the " Regulations Governing
Loaning of Funds and Making
Endorsements/ Guarantees by Public
Companies" promulgated by the
Financial Supervisory Commission. All
loaning and endorsements/ guarantees by
the Company must be carried out in
accordance with this Regulation, unless
otherwise stipulated in the Financial law.
1.1 Purpose
This Regulations Governing Loaning of
Funds and Making Endorsements/
Guarantees (“the Regulation” hereinafter)
are based on the " Regulations Governing
Loaning of Funds and Making
Endorsements/ Guarantees by Public
Companies" promulgated by the Financial
Supervisory Commission. All loaning and
endorsements/ guarantees by the Company
must be carried out in accordance with this
Regulation, unless otherwise stipulated in
the law.
Duly
amended in
accordance
with the
law.
1.2 Loaned Party and Conditions
A borrower of the company shall meet one of the
following eligibility conditions:
1.2.1 Having inter-company or inter-firm business
transaction with the company; or
1.2.2 Being a subsidiary of the company where the
company holds more than 50% of its common
shares directly or indirectly, and a subsidiary of
the company where the company holds less than
50% of its common shares directly or indirectly
but have significant influence on the subsidiary,
and where an inter-company or inter-firm
short-term financing facility is necessary; or
1.2.3 In addition to the previous 2 items, Being a
company or proprietor who has good credit record
and is in need of short-term facility as a fund for
the purchase of materials, as short-term facility
leverage, as capital spending or as working capital
The term "short-term" as used in the preceding
paragraph means one year.
1.2 Loaned Party and Conditions
A borrower of the company shall meet one
of the following eligibility
conditions:
1.2.1 Having inter-company or inter-firm
business transaction with the
company; or
1.2.2 Being a subsidiary of the company
where the company holds more than
50% of its common shares directly
or indirectly, and where an
inter-company or inter-firm
short-term financing facility is
necessary; or
1.2.3 In addition to the previous 2 items,
Being a company or proprietor who
has good credit record and is in need
of short-term facility as a fund for
the purchase of materials, as
short-term facility leverage, as
capital spending or as working
capital
The term "short-term" as used in the
preceding paragraph means one year.
1. Duly
amended in
accordance
with the
operation
needs and
the law
36
2.2.4 In financing between the company’s
100% directly or indirectly owned foreign
subsidiaries, or the company’s 100% directly or
indirectly owned foreign subsidiaries finance to
the company, the aggregate amount of loans and
the maximum amount permitted to such a
company will not be subject to the limitation of
40% of the net worth of the lender as stated in the
most recent financial statement, but still needs to
establish a lending limit.
2.2.4 In financing between the
company’s 100% directly or indirectly
owned foreign subsidiaries, the aggregate
amount of loans and the maximum amount
permitted to such a company will not be
subject to the limitation of 40% of the net
worth of the lender as stated in the most
recent financial statement, but still needs to
establish a lending limit.
Duly
amended in
accordance
with the
law.
2.2.5 If the company processed the loans and
breach the regulation of 1.2 and 2.2, in accordance
with clause sixth set in the " Regulations
Governing Loaning of Funds and Making of
Endorsements/Guarantees by Public Companies”,
the chairman of the company shall be jointly and
severally liable to the borrower, and if the
company is injured, it shall also be liable for
damages."
N/A Duly
amended in
accordance
with the
law. (Newly
added)
2.6.2 In case of endorsements / guarantees by
the Company to a firm where the Company holds
over 50% of the voting power either directly or
indirectly, or by the firm directly or indirectly
holds more than 50% of the voting shares of the
Company. (1.3.2.2 and 1.3.2.3) or endorsements /
guarantees with companies where the Company
holds over 90% of the voting power either directly
or indirectly (1.3.2.4), the total amount of
individual endorsements / guarantees shall not
exceed 10% of the net worth shown through the
Company’s latest financial statements.
2.6.2 In case of endorsements /
guarantees by the Company to a firm
where the Company holds over 50% of the
voting power either directly or indirectly
(1.3.2.2 and 1.3.2.3) or endorsements /
guarantees with companies where the
Company holds over 90% of the voting
power either directly or indirectly
(1.3.2.4), the total amount of individual
endorsements / guarantees shall not exceed
10% of the net worth shown through the
Company’s latest financial statements.
1. Duly
amended in
accordance
with the
operation
needs and
the law
2.6.3 The total amount of individual
endorsements/guarantees granted by the Company
to a single company or among the Company and
companies where the Company holds over 90% of
the voting power either directly or indirectly shall
not exceed 10% of the net worth shown through
the Company’s latest term financial statements.
Where the Company grants endorsements /
guarantees to a corporation where the Company
maintains a business relationship, unless otherwise
prescribed in other Regulations, the amount of
individual endorsements / guarantees shall be
confined to the total amount of business
transaction accumulated over the past twelve
months and shall not exceed 10% of the net worth
shown through the Company’s latest financial
statements.
2.6.3 The total amount of individual
endorsements/guarantees granted by the
Company to a single company or among
the Company and companies where the
Company holds over 90% of the voting
power either directly or indirectly shall not
exceed 10% of the net worth shown
through the Company’s latest term
financial statements. Where the
Company grants endorsements / guarantees
to a corporation where the Company
maintains a business relationship, unless
otherwise prescribed in other Regulations,
the amount of individual endorsements /
guarantees shall be confined to the total
amount of business transaction
accumulated over the past twelve months
and shall not exceed 5% of the paid-in
capital of the guaranteed beneficiary.
Duly
amended in
accordance
with the
law.
37
3.2.3 The Company shall notify the Independent
Director in writing of any major irregularities, and
shall also send to the independent Director the
improvement plan stipulated in the breach of
governing loaning of funds and making of
endorsements/guarantees
N/A Duly
amended in
accordance
with the
law. (Newly
added)
5.2 Date of occurrence” in these Regulations
means the date of contract signing, date of
payment, dates of boards of directors resolutions,
or other date that can confirm the counterparty and
monetary amount of the loaning of funds and
endorsements/guarantees, whichever date is
earlier. The company whose loans reach one of the
following levels shall announce and report such
event within two days commencing immediately
from the date of occurrence.
5.2 Date of occurrence” in these
Regulations means the date of contract
signing, date of payment, dates of boards
of directors resolutions, or other date that
can confirm the counterparty and monetary
amount of the transaction, whichever date
is earlier. The company whose loans reach
one of the following levels shall announce
and report such event within two days
commencing immediately from the date of
occurrence.
Duly
amended in
accordance
with the
law.
5.2.2.3 The aggregate balance of
endorsements/guarantees by the Company and its
subsidiaries for a single enterprise reaches NT$10
million or more and the aggregate amount of all
endorsements/guarantees for, book value of the
equity method long term investment, and balance
of loans to, such enterprise reaches 30 percent or
more of the Company's net worth as stated in its
latest financial statement.
5.2.2.3 The aggregate balance of
endorsements/guarantees by the Company
and its subsidiaries for a single enterprise
reaches NT$10 million or more and the
aggregate amount of all
endorsements/guarantees for, investment of
a long-term nature in, and balance of loans
to, such enterprise reaches 30 percent or
more of the Company's net worth as stated
in its latest financial statement.
Duly
amended in
accordance
with the
law.
6 Announcement of implementation and
amendment
6.1 This Regulation should be approved by the
Board of Directors, and then forwarded to
Supervisors and recognized in shareholders’
meeting before implementation.
Amendments to this Regulation should be
approved by more than half of the members
of the Audit Committee, and forwarded to the
Board of Directors for its resolution. If the
approval from more than half of the Audit
Committee’s members is not obtained, the
amendments may be approved by more than
two-thirds of all the Directors, but the Audit
Committee’s resolution should be recorded in
the Board of Directors’ meeting minutes.
The Amendments should be implemented
only after they are approved by the Board of
Directors and then recognized in
shareholders’ meeting; where any director
expresses dissent and it is contained in the
minutes or a written statement, the company
shall submit the dissenting opinion to the
audit committee and for discussion by the
6 Announcement of implementation
and amendment
6.1 This Regulation should be approved by
the Board of Directors, and then
forwarded to Supervisors and
recognized in shareholders’ meeting
before implementation.
Amendments to this Regulation should
be approved by more than half of the
members of the Audit Committee, and
forwarded to the Board of Directors for
its resolution. If the approval from more
than half of the Audit Committee’s
members is not obtained, the
amendments may be approved by more
than two-thirds of all the Directors, but
the Audit Committee’s resolution
should be recorded in the Board of
Directors’ meeting minutes.
The Amendments should be
implemented only after they are
approved by the Board of Directors and
then recognized in shareholders’
meeting.
Duly
amended in
accordance
with the
law.
38
shareholders' meeting.
The aforementioned members of the Audit
Committee and Directors refer to those who
are incumbent.
The aforementioned members of the
Audit Committee and Directors refer to
those who are incumbent.
6.2 Where the members of the BoD may have
different opinions assent or dissent to the
amendment of this regulation, their opinions shall
be duly observed and stated in the resolution of
the BoD.
6.2 Where the members of the BoD may
have different opinions for or against
making this regulation or any amendment
thereafter, their opinions shall be duly
observed and stated in the resolution of the
BoD.
Duly
amended in
accordance
with the
law.
7
The Measures were established on May 13, 2003.
The First Amendment was made on June 15, 2004.
The Second Amendment was made on June 21, 2006.
The Third Amendment was made on June 21, 2007.
The Fourth Amendment was made on June 22, 2009.
The Fifth Amendment was made on June 15, 2010.
The Sixth Amendment was made on June 19, 2012.
The Seventh Amendment was made on June 19, 2013.
The Eighth Amendment was made on June 24, 2015.
The Ninth Amendment was made on June 22, 2017.
The Tenth Amendment was made on June 21, 2019.
7
The Measures were established on May 13th, 2003.
The First Amendment was made on June 15th, 2004.
The Second Amendment was made on June 21st, 2006.
The Third Amendment was made on June 21st, 2007.
The Fourth Amendment was made on June 22nd, 2009.
The Fifth Amendment was made on June 15nd, 2010.
The Sixth Amendment was made on June 19nd, 2012.
The Seventh Amendment was made on June 19nd, 2013.
The Eighth Amendment was made on June 24nd, 2015.
The Ninth Amendment was made on June 22nd, 2017.
Addition of
date of
amendment
39
Attachment 10
Lite-On Technology Corporation Comparison Table of Amendments to the Rules Governing the Election of
Directors AFTER Amendment BEFORE Amendment Description
Article 1 The cumulative voting method shall be
used for election of Lite-On Technology
Corporation's directors. Each share will
have voting rights in number equal to the
directors to be elected, and may be cast
for a single candidate or split among
multiple candidates. Shareholder numbers
or attendance card numbers printed on the
ballots may be used instead of recording
the names of voting shareholders.
The overall composition of the board of
directors shall be taken into consideration
in the selection of the Company's
directors. The composition of the board of
directors shall be determined by taking
diversity into consideration and
formulating an appropriate policy on
diversity based on Lite-On Technology
Corporation's business operations,
operating dynamics, and development
needs. It is advisable that the policy
include, without being limited to, the
following two general standards:
A. Basic requirements and values:
Gender, age, nationality, race or
ethnicity, and culture.
B. Professional knowledge and skills: A
professional background (e.g., law,
accounting, industry, finance,
marketing, or technology),
professional skills, and industry
experience.
Each board member shall have the
necessary knowledge, skill, and
experience to perform his/her duties. The
abilities that must be present in the board
as a whole are as follows:
A. Ability to make sound business
judgments.
B. Ability to perform accounting and
financial analysis.
C. Ability to manage a business.
D. Ability to handle crisis management.
E. Knowledge of the industry.
Article 2 The cumulative voting method shall be
used for election of Lite-On Technology
Corporation's directors. Each share will
have voting rights in number equal to the
directors to be elected, and may be cast
for a single candidate or split among
multiple candidates. Shareholder numbers
or attendance card numbers printed on the
ballots may be used instead of recording
the names of voting shareholders.
The overall composition of the board of
directors shall be taken into consideration
in the selection of the Company's
directors. The composition of the board of
directors shall be determined by taking
diversity into consideration and
formulating an appropriate policy on
diversity based on Lite-On Technology
Corporation's business operations,
operating dynamics, and development
needs. It is advisable that the policy
include, without being limited to, the
following two general standards:
C. Basic requirements and values:
Gender, age, nationality, and culture.
D. Professional knowledge and skills: A
professional background (e.g., law,
accounting, industry, finance,
marketing, or technology),
professional skills, and industry
experience.
Each board member shall have the
necessary knowledge, skill, and
experience to perform his/her duties. The
abilities that must be present in the board
as a whole are as follows:
I. Ability to make sound business
judgments.
J. Ability to perform accounting and
financial analysis.
K. Ability to manage a business.
L. Ability to handle crisis management.
M. Knowledge of the industry.
N. An international market perspective.
Amendments
pursuant to
strength the
board diversity
40
F. An international market perspective.
G. Leadership ability.
H. Decision-making ability.
O. Leadership ability.
P. Decision-making ability.
Article 4
During the two years before being elected
or during the term of office, independent
directors of Lite-On Technology
Corporation may not have been or be any
of the following:
A. An employee of Lite-On
Technology Corporation or any
of its affiliates.
B. A director or supervisor of
Lite-On Technology
Corporation or any of its
affiliates. Exception shall apply
to independent directors
established by Lite-On
Technology Corporation or its
subsidiary pursuant to the
Securities and Exchange Act or
local laws and regulations.
C. A natural-person shareholder
who holds shares, together with
those held by the person's
spouse, minor children, or held
by the person under others'
names, in an aggregate amount
of one percent or more of the
total number of issued shares of
Lite-On Technology
Corporation, or ranks among
the ten largest natural-person
shareholders.
D. Personnel listed in Subparagraph 2 and 3 and a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship of the managerial officer of the Company or affiliate company.
E. A director, supervisor, or
employee of a corporate
shareholder that directly holds
five percent or more of the total
number of issued shares of
Lite-On Technology
Corporation or of a corporate
Article 4
During the two years before being elected
or during the term of office, independent
directors of Lite-On Technology
Corporation may not have been or be any
of the following:
A. An employee of Lite-On
Technology Corporation or any
of its affiliates.
B. A director or supervisor of
Lite-On Technology
Corporation or any of its
affiliates. Exception shall apply
to independent directors
established by Lite-On
Technology Corporation or its
subsidiary pursuant to the
Securities and Exchange Act or
local laws and regulations.
C. A natural-person shareholder
who holds shares, together with
those held by the person's
spouse, minor children, or held
by the person under others'
names, in an aggregate amount
of one percent or more of the
total number of issued shares of
Lite-On Technology
Corporation, or ranks among
the ten largest natural-person
shareholders.
D. A spouse, relative within the
second degree of kinship, or
lineal relative within the third
degree of kinship, of any of the
persons in the preceding three
subparagraphs.
E. A director, supervisor, or
employee of a corporate
shareholder that directly holds
five percent or more of the total
number of issued shares of
Lite-On Technology
Corporation or of a corporate
shareholder that ranks among
the top five in shareholdings.
Amendments
pursuant to the
Regulations
Governing
Appointment of
Independent
Directors and
Compliance
Matters for
Public
Companies.
41
shareholder that ranks among
the top five in shareholdings.
F. A director, supervisor, officer,
or shareholder holding five
percent or more of the shares,
of a specified company or
institution that has a financial or
business relationship with
Lite-On Technology
Corporation.
A professional individual who,
provides auditing services for
the Company or to any affiliate
of the company, or an owner,
partner, director, supervisor, or
officer of a sole proprietorship,
partnership, company, or
institution that, provides
commercial, legal, financial,
accounting services or
consultation to the company or
to any affiliate of the company,
or a spouse thereof that received
cumulative compensation
totaling over NT$500,000 within
two years. However, this
excludes members of the
Remuneration Committee who
exercise power in accordance
with the Regulations Governing
Appointment of Independent
Directors and Compliance
Matters for Public Companies.
The requirement of the preceding
paragraph in relation to "during the two
years before being elected" does not
apply where an independent director of
Lite-On Technology Corporation has
served as an independent director of
Lite-On Technology Corporation or any
of its affiliates, or of a specified company
or institution that has a financial or
business relationship with Lite-On
Technology Corporation, as stated in
subparagraph 2 or 6 of the preceding
paragraph, but is currently no longer in
that position.
A. The term "specified company or
institution" as used in
paragraph 1, subparagraph 6,
means a company or institution
that has one of the following
relationships with the
F. A director, supervisor, officer,
or shareholder holding five
percent or more of the shares,
of a specified company or
institution that has a financial or
business relationship with
Lite-On Technology
Corporation.
G. A professional individual who,
or an owner, partner, director,
supervisor, or officer of a sole
proprietorship, partnership,
company, or institution that,
provides commercial, legal,
financial, accounting services or
consultation to the company or
to any affiliate of the company,
or a spouse thereof. However,
this excludes members of the
Remuneration Committee who
exercise power in accordance
with the Regulations Governing
Appointment of Independent
Directors and Compliance
Matters for Public Companies.
The requirement of the preceding
paragraph in relation to "during the two
years before being elected" does not
apply where an independent director of
Lite-On Technology Corporation has
served as an independent director of
Lite-On Technology Corporation or any
of its affiliates, or of a specified company
or institution that has a financial or
business relationship with Lite-On
Technology Corporation, as stated in
subparagraph 2 or 6 of the preceding
paragraph, but is currently no longer in
that position.
E. The term "specified company or
institution" as used in
paragraph 1, subparagraph 6,
means a company or institution
that has one of the following
relationships with the
Company: It holds 20 percent
or more and no more than 50
percent of the total number of
issued shares of Lite-On
Technology Corporation.
F. It holds shares, together with
those held by any of its
directors, supervisors, and
42
Company: It holds 20 percent
or more and no more than 50
percent of the total number of
issued shares of Lite-On
Technology Corporation.
B. It holds shares, together with
those held by any of its
directors, supervisors, and
shareholders holding more than
10 percent of the total number
of shares, in an aggregate total
of 30 percent or more of the
total number of issued shares of
the Company, and there is a
record of financial or business
transactions between it and the
Company. The shareholdings of
any of the aforesaid persons
include the shares held by the
spouse or any minor child of
the person or by the person
under others' names.
C. It and its group companies are
the source of 30 percent or
more of the operating revenue
of the Company.
D. It and its group companies are
the source of 50 percent or
more of the total volume or
total purchase amount of
principal raw materials (those
that account for 30 percent or
more of total procurement
costs, and are indispensable and
key raw materials in product
manufacturing) or principal
products (those accounting for
30 percent or more of total
operating revenue) of the
Company.
For the purposes of the preceding
paragraph, the terms "subsidiary" and
"group" shall have the meanings as
determined under International Financial
Reporting Standards 10.
No independent director may
concurrently serve as an independent
director of more than three other public
companies.
shareholders holding more than
10 percent of the total number
of shares, in an aggregate total
of 30 percent or more of the
total number of issued shares of
the Company, and there is a
record of financial or business
transactions between it and the
Company. The shareholdings of
any of the aforesaid persons
include the shares held by the
spouse or any minor child of
the person or by the person
under others' names.
G. It and its group companies are
the source of 30 percent or
more of the operating revenue
of the Company.
H. It and its group companies are
the source of 50 percent or
more of the total volume or
total purchase amount of
principal raw materials (those
that account for 30 percent or
more of total procurement
costs, and are indispensable and
key raw materials in product
manufacturing) or principal
products (those accounting for
30 percent or more of total
operating revenue) of the
Company.
For the purposes of the preceding
paragraph, the terms "subsidiary" and
"group" shall have the meanings as
determined under International Financial
Reporting Standards 10.
No independent director may
concurrently serve as an independent
director of more than three other public
companies.
Article 5
The election of directors (including
Article 5
The election of directors (including
Amendments
pursuant to the
43
independent directors) of Lite-On
Technology Corporation is subject to the
provisions of Article 192-1 of the
Company Act in that a candidate
nomination system shall be adopted, that
such system shall be expressly stated in
the Articles of Incorporation of the
Lite-On Technology Corporation, and
that shareholders shall elect directors
(including independent directors) from
among the those listed in the slate of
director candidates. Regarding review of
director (and independent director)
candidate qualifications, education,
experience, circumstances in Article 30 of
the Company Act exists, documentary
proof of other qualifications cannot be
additionally listed without completing the
appropriate procedures. Review results
shall be presented to the shareholders as a
basis for the consideration and election of
suitable directors (including independent
directors).
Where the number of independent
directors falls below the minimum
specified in the proviso under Article
14-2, Paragraph 1 of the Securities and
Exchange Act and fails to satisfy the
provisions in the Taiwan Stock Exchange
Corporation Rules Governing Review of
Securities Listings, a by-election shall be
held at the next shareholders’ meeting. In
the event that all the independent
directors have been discharged, an
extraordinary shareholders’ meeting shall
be convened to hold a by-election within
sixty days from the date of such
occurrence.
Lite-On Technology Corporation shall
prior to the book closure date before the
convening of the shareholders' meeting,
publish a notice specifying a period for
receiving nominations of director
(including independent director)
candidates, the number of directors
(including independent directors) to be
elected, the place for receiving such
nominations, and other necessary matters;
the period for receiving nominations shall
be not less than 10 days.
Lite-On Technology Corporation may
present a slate of director (including
independent director) candidates
independent directors) of Lite-On
Technology Corporation is subject to the
provisions of Article 192-1 of the
Company Act in that a candidate
nomination system shall be adopted, that
such system shall be expressly stated in
the Articles of Incorporation of the
Lite-On Technology Corporation, and
that shareholders shall elect directors
(including independent directors) from
among the those listed in the slate of
director candidates. Regarding review of
director (and independent director)
candidate qualifications, education,
experience, circumstances in Article 30 of
the Company Act exists, documentary
proof of other qualifications cannot be
additionally listed without completing the
appropriate procedures. Review results
shall be presented to the shareholders as a
basis for the consideration and election of
suitable directors (including independent
directors).
Where the number of independent
directors falls below the minimum
specified in the proviso under Article
14-2, Paragraph 1 of the Securities and
Exchange Act and fails to satisfy the
provisions in the Taiwan Stock Exchange
Corporation Rules Governing Review of
Securities Listings, a by-election shall be
held at the next shareholders’ meeting. In
the event that all the independent
directors have been discharged, an
extraordinary shareholders’ meeting shall
be convened to hold a by-election within
sixty days from the date of such
occurrence.
Lite-On Technology Corporation shall
prior to the book closure date before the
convening of the shareholders' meeting,
publish a notice specifying a period for
receiving nominations of director
(including independent director)
candidates, the number of directors
(including independent directors) to be
elected, the place for receiving such
nominations, and other necessary matters;
the period for receiving nominations shall
be not less than 10 days.
Lite-On Technology Corporation may
present a slate of director (including
independent director) candidates
provisions of
Article 192-1 of
the Company
Act and the
Regulations
Governing
Appointment of
Independent
Directors and
Compliance
Matters for
Public
Companies.
44
nominated by the methods set out below,
and, upon evaluation by the board of
directors that all candidates so nominated
are qualified director (including
independent director) candidates, submit
it to the shareholders' meeting for
elections:
A. A shareholder holding one
percent or more of the total
number of issued shares may
present a slate of director
(including independent director)
candidates in writing to the
Company; the number of
nominees may not exceed the
number of directors (including
independent directors) to be
elected.
B. The board of directors presents
a slate of director (including
independent director)
candidates; the number of
nominees may not exceed the
number of directors (including
independent directors) to be
elected.
C. Otherwise as designated by the
competent authority.
When providing a recommended slate of
candidates under the preceding
paragraph, a shareholder or the board of
directors shall specify include in the
documentation attached thereto each
nominee's name, educational
background, work experience, a written
undertaking indicating the nominee's
consent to serve as a director (or
independent director) if elected as such, a
written statement that none of the
circumstances in Article 30 of the
Company Act exists, and other relevant
documentary proof. independent director
nominees in the preceding paragraph and
provide documents specified in Article 3,
Paragraph 1 and Article 4 regarding
qualifications of the nominees and other
certification documents
If independent directors are nominated,
the board of directors, or other person
having the authority to call a
shareholders' meeting, shall review the
qualifications of each director (including
independent director) nominee; except
nominated by the methods set out below,
and, upon evaluation by the board of
directors that all candidates so nominated
are qualified director (including
independent director) candidates, submit
it to the shareholders' meeting for
elections:
A. A shareholder holding one
percent or more of the total
number of issued shares may
present a slate of director
(including independent director)
candidates in writing to the
Company; the number of
nominees may not exceed the
number of directors (including
independent directors) to be
elected.
B. The board of directors presents
a slate of director (including
independent director)
candidates; the number of
nominees may not exceed the
number of directors (including
independent directors) to be
elected.
C. Otherwise as designated by the
competent authority.
When providing a recommended slate of
candidates under the preceding
paragraph, a shareholder or the board of
directors shall include in the
documentation attached thereto each
nominee's name, educational
background, work experience, a written
undertaking indicating the nominee's
consent to serve as a director (or
independent director) if elected as such, a
written statement that none of the
circumstances in Article 30 of the
Company Act exists, and other relevant
documentary proof.
The board of directors, or other person
having the authority to call a
shareholders' meeting, shall review the
qualifications of each director (including
independent director) nominee; except
under any of the following
circumstances, all qualified nominees
shall be included in the slate of director
(including independent director)
candidates:
45
under any of the following
circumstances, all qualified nominees
shall be included in the slate of director
(including independent director)
candidates:
A. Where the nominating
shareholder submits the
nomination at a time not within
the published period for
receiving nominations.
B. Where the shareholding of the
nominating shareholder is less
than one percent at the time of
book closure by the Company
under Article 165, paragraph 2
or 3 of the Company Act.
C. Where the number of nominees
exceeds the number of directors
(including independent
directors) to be elected.
D. Where the nominating
shareholder fails to specify the
name, education, and
experience of the nominee.
E. Where the relevant
documentary proof for
independent directors required
under the preceding paragraph
is not attached.
If an independent director candidate
included by the Company under the
provisions of the preceding paragraph
has already served as an independent
director of the Company for three
consecutive terms or more, Lite-On
Technology Corporation shall publicly
disclose, together with the slate of
candidates the review results under the
preceding paragraph, the reasons why the
candidate is nominated again for the
independent directorship, and present the
aforementioned reasons to the
shareholders at the time of the election at
the shareholders’ meeting.
The process of reviewing director
(including independent director)
nominees in the preceding paragraph
shall be recorded, and the records shall
be retained for a minimum of one year.
However, in situations where a
shareholder makes a litigious claim
against the director (including
independent director) election process,
A. Where the nominating
shareholder submits the
nomination at a time not within
the published period for
receiving nominations.
B. Where the shareholding of the
nominating shareholder is less
than one percent at the time of
book closure by the Company
under Article 165, paragraph 2
or 3 of the Company Act.
C. Where the number of nominees
exceeds the number of directors
(including independent
directors) to be elected.
D. Where the relevant
documentary proof required
under the preceding paragraph
is not attached.
If an independent director candidate
included by the Company under the
provisions of the preceding paragraph
has already served as an independent
director of the Company for three
consecutive terms or more, Lite-On
Technology Corporation shall publicly
disclose, together with the review results
under the preceding paragraph, the
reasons why the candidate is nominated
again for the independent directorship,
and present the aforementioned reasons
to the shareholders at the time of the
election at the shareholders’ meeting.
The process of reviewing director
(including independent director)
nominees in the preceding paragraph
shall be recorded, and the records shall
be retained for a minimum of one year.
However, in situations where a
shareholder makes a litigious claim
against the director (including
independent director) election process,
the records shall be retained until the
litigation is concluded.
The Company shall announce the slate of
director (including independent director)
candidates and their education and
experience as well as the number of
shares held by each candidate at least 40
days prior to the upcoming shareholders’
meeting or 25 days prior to the upcoming
extraordinary shareholders’ meeting,
inform the nominating shareholders of
46
the records shall be retained until the
litigation is concluded.
The Company shall announce the slate of
director (including independent director)
candidates and their education and
experience as well as the number of
shares held by each candidate at least 40
days prior to the upcoming shareholders’
meeting or 25 days prior to the upcoming
extraordinary shareholders’ meeting,
inform the nominating shareholders of
the review results, and, where applicable,
provide detailed reasons for not
including nominees on the slate of
director (including independent director)
candidates.
A spousal relationship or a familial
relationship within the second degree of
kinship may not exist among more than
half of the directors on the board.
the review results, and, where applicable,
provide detailed reasons for not
including nominees on the slate of
director (including independent director)
candidates.
A spousal relationship or a familial
relationship within the second degree of
kinship may not exist among more than
half of the directors on the board.
Article 6
Independent and non-independent
directors shall be elected at the same time,
but the numbers of independent or
non-independent directors to be elected
shall be calculated separately. A candidate
to whom the ballots cast represent a
prevailing number of votes shall be
deemed an independent or
non-independent director elect. When two
or more persons receive the same number
of votes, thus exceeding the specified
number of positions, they shall draw lots
to determine the winner, with the chair
drawing lots on behalf of any person not
in attendance.
If the outcome shows that none of the
independent directors candidates with the
highest numbers of votes has accounting
or financial expertise, those candidates
with accounting or financial expertise
shall have their votes counted separately
and one seat shall be awarded to the
candidate with the highest number of
Article 6
Independent and non-independent
directors shall be elected at the same time,
but the numbers of independent or
non-independent directors to be elected
shall be calculated separately. A candidate
to whom the ballots cast represent a
prevailing number of votes shall be
deemed an independent or
non-independent director elect. When two
or more persons receive the same number
of votes, thus exceeding the specified
number of positions, they shall draw lots
to determine the winner, with the chair
drawing lots on behalf of any person not
in attendance.
If the outcome shows that none of the
independent directors candidates with the
highest numbers of votes has accounting
or financial expertise, those candidates
with accounting or financial expertise
shall have their votes counted separately
and one seat shall be awarded to the
candidate with the highest number of
Amendments
pursuant to the
Regulations
Governing
Appointment of
Independent
Directors and
Compliance
Matters for
Public
Companies.
47
votes. The remaining positions shall be
filled as described in the preceding
paragraph.
If an independent director elected at a
shareholders’ meeting is required to be
dismissed ipso facto during the term of
office for reason of a violation of Article
3 or 4 herein, it is prohibited to change
the status of the person from independent
director to non-independent director. A
non-independent director elected at a
shareholders’ meeting likewise may not
be arbitrarily changed from a
non-independent director to an
independent director during the term of
office.
votes. The remaining positions shall be
filled as described in the preceding
paragraph.
If an independent director elected at a
shareholders’ meeting is required to be
dismissed during the term of office for
reason of a violation of Article 3 or 4
herein, it is prohibited to change the status
of the person from independent director to
non-independent director. A
non-independent director elected at a
shareholders’ meeting likewise may not
be arbitrarily changed from a
non-independent director to an
independent director during the term of
office.
Article 17
The rules were established on March 13,
1989.
The first amendment was made on May
19, 1998.
The second amendment was made on
May 21, 2002.
The third amendment was made on June
21, 2007.
The fourth amendment was made on June
19, 2012.
The fifth amendment was made on June
19, 2013.
The sixth amendment was made on June
24, 2015.
The seventh amendment was made on
June 24, 2016.
The eighth amendment was made on June
22XX, 2018.
The 9th amendment was on June 21,
2019.
Article 17
The rules were established on March 13,
1989.
The first amendment was made on May
19, 1998.
The second amendment was made on
May 21, 2002.
The third amendment was made on June
21, 2007.
The fourth amendment was made on June
19, 2012.
The fifth amendment was made on June
19, 2013.
The sixth amendment was made on June
24, 2015.
The seventh amendment was made on
June 24, 2016.
The eighth amendment was made on June
22XX, 2018.
Add new date of
amendment
48
Lite-On Technology Corporation Attachment 11 Details of Discussion of release of directors from non-competition restrictions:
No Position Name Release of Directors from non-competition restrictions
1 Director Raymond
Soong
◼ Chairman of Lite-On Semiconductor Corp.,
DIODES,INC, Lite-On Semi (Wuxi) Co., Ltd.,
Lite-On Semi Electronics (Wuxi) Co., Ltd. and G-Pro
Electronics (SH) Co., Ltd.
◼ Chairman, representative of Silitech Technology
Corp., Co-tech Copper Foil Corporation and
SUZHOU LITE-ON STORAGE CO., LTD.
◼ Director of DYNA International Holding Co.,Ltd.,
DYNA International Co. Ltd, Lite-On Semiconductor
(HK) LTD and On-Bright Electronics Incorporated
◼ Director, representative of Silitech (Hong Kong)
Holding Ltd., Silitech Technology (Su Zhou) Ltd.,
Xurong Electroinc (Shenzhen) Co., Ltd., Silitech
(BVI) Holding Ltd., Silitech (Bermuda) Holding Ltd.,
Silitech Technology Corp. Ltd., Silitech Technology
Corp. Sdn. Bhd. and SKYLA CORPORATION
2 Director Warren Chen
◼ Director of Lite-On Semiconductor Corp., Lite-On
Japan Ltd., KBW-LITEON Jordan Private
Shareholding Limited and KBW-LEOTEK Jordan
Private Shareholding Limited
◼ Director, representative of Philips & Lite-On Digital
Solutions Corporation, Silitech Technology Corp.,
Silitech (BVI) Holding Ltd., Silitech (Bermuda)
Holding Ltd., Silitech Technology Corp. Ltd.,
Silitech Technology Corp. Sdn. Bhd., Silitech (Hong
Kong) Holding Ltd., Silitech Technology (Su Zhou)
Ltd., Xurong Electroinc (Shenzhen) Co., Ltd.,
SKYLA CORPORATION, SUZHOU LITE-ON
STORAGE CO., LTD.
3 Director Tom Soong
◼ Vice Chairman of KBW-LITEON Jordan Private
Shareholding Limited, KBW-LEOTEK Jordan
Private Shareholding Limited and LEOTEK, PSC
◼ Director of Co-tech Copper Foil Corporation
4 Director Keh-Shew Lu
◼ Director of Lorenz Co., Ltd. and Diodes Incorporated
◼ Director, representative of Nuvoton Technology
Corp.
◼ President and CEO of Diodes Incorporated
5 Director CH Chen
◼ Chairman, representative of Lite-On Semiconductor
(Philippines)
◼ Vice Chairman of DIODES, INC. and Lite-On
Semiconductor Corp.
◼ Director of Smart Power Holding Group Co.Ltd.,
G-Pro Electronics (SH) Co., Ltd., DYNA
International Holding Co., Ltd., DYNA International
49
Co., Ltd., Lite-On Semi (Wuxi) Co., Ltd., Lite-On
Semi Electronics (Wuxi) Co., Ltd., Lite-On
Semiconductor (HK) LTD and Smart Power Holding
Group Co. Ltd.
◼ Director, representative of Kwong Lung Enterprise
Co, Ltd.
6 Independent
Director Albert Hsueh
◼ Independent Director of , Yuanta Financial Holding
Co., Ltd. and Yuanta Bank, Walsin Lihwa Corp. and
TTY Biopharmaceutial Manufacturers Association
7 Independent
Director Harvey Chang
◼ Chairman of TVBS, Via On Demand and IC
Broadcasting Co., Ltd.
8 Independent
Director Edward Yang
◼ iD Ventures America, LLC Partner
◼ Chairman of GVT Fund
◼ Director of Sifotonics Technologies, Bandwidth 10
and Neurostim OAB
9 Independent
Director Mike Yang
◼ Chairman of Quanta Cloud Technology Japan Inc.
◼ Director & President of QCT Korea Inc.
◼ Senior Vice President of Quanta Computer Inc.
Cloud Computing Business Unit
◼ President of Quanta Cloud Technology Inc.,
Cloud-Tech (Chongqing) Technology Co., Ltd. and
QCT LLC President
◼ Managing Director of Quanta Cloud Technology
Germany GmbH and QCG Computer GmbH
50
Lite-On Technology Corporation Appendix 1
Rules and Procedures of Shareholders’ Meeting
1. To establish a strong governance system and sound supervisory capabilities for this Company's
shareholders meetings, and to strengthen management capabilities, these Rules are adopted pursuant
to Article 5 of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed
Companies.
2. The rules of procedures for this Corporation's shareholders meetings, except as otherwise provided by
law, regulation, or the articles of incorporation, shall be as provided in these Rules.
3. Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be
convened by the board of directors.
This Corporation shall prepare electronic versions of the shareholders meeting notice and proxy forms,
and the origins of and explanatory materials relating to all proposals, including proposals for
ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and
upload them to the Market Observation Post System (MOPS) before 30 days before the date of a
regular shareholders meeting or before 15 days before the date of a special shareholders meeting. This
Corporation shall prepare electronic versions of the shareholders meeting agenda and supplemental
meeting materials and upload them to the MOPS before 21 days before the date of the regular
shareholders meeting or before 15 days before the date of the special shareholders meeting. In
addition, before 15 days before the date of the shareholders meeting, this Corporation shall also have
prepared the shareholders meeting agenda and supplemental meeting materials and made them
available for review by shareholders at any time. The meeting agenda and supplemental materials
shall also be displayed at this Corporation and the professional shareholder services agent designated
thereby as well as being distributed on-site at the meeting place.
The reasons for convening a shareholders meeting shall be specified in the meeting notice and public
announcement. With the consent of the addressee, the meeting notice may be given in electronic form.
Election or dismissal of directors, amendments to the articles of incorporation, the dissolution, merger,
or demerger of the corporation, or any matter under Article 185, paragraph 1 of the Company Act or
Articles 26-1 and 43-6 of the Securities and Exchange Act , or Articles 56-1 and 60-2 of the
Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out in
the notice of the reasons for convening the shareholders meeting. None of the above matters may be
raised by an extraordinary motion.
A shareholder holding 1 percent or more of the total number of issued shares may submit to this
Company for discussion at a regular shareholders meeting pursuant to Article 172-1 of the Company
Act.
4. For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing
the proxy form issued by this Corporation and stating the scope of the proxy's authorization.
A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders
meeting, and shall deliver the proxy form to this Corporation before 5 days before the date of the
shareholders meeting. When duplicate proxy forms are delivered, the one received earliest shall
prevail unless a declaration is made to cancel the previous proxy appointment.
51
After a proxy form has been delivered to this Corporation, if the shareholder intends to attend the
meeting in person or to exercise voting rights by correspondence or electronically, a written notice of
proxy cancellation shall be submitted to this Corporation before 2 business days before the meeting
date. If the cancellation notice is submitted after that time, votes cast at the meeting by the proxy shall
prevail.
5. The venue for a shareholders meeting shall be the premises of this Corporation, or a place easily
accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier
than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of the
independent directors with respect to the place and time of the meeting
6. This Company shall furnish the shareholders meeting notice with the time and venue for signing in.
The aforementioned time for signing in shall be at least 30 minutes before the shareholder meeting
starts. There shall be signs to direct shareholders to proceed to the venue for signing in and personnel
who are suitable in charge.
Shareholders or their proxies (collectively, “shareholders”) shall attend shareholders meetings based
on attendance cards, sign-in cards, or other certificates of attendance. This Corporation may not
arbitrarily add requirements for other documents beyond those showing eligibility to attend presented
by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for
verification. This Corporation shall furnish attending shareholders with the meeting agenda book,
annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there
is an election of directors or supervisors, pre-printed ballots shall also be furnished.
When the government or a juristic person is a shareholder, it may be represented by more than one
representative at a shareholders meeting. When a juristic person is appointed to attend as proxy, it
may designate only one person to represent it in the meeting.
7. If a shareholders meeting is convened by the board of directors, the meeting shall be chaired by the
chairperson of the board. When the chairperson of the board is on leave or for any reason unable to
exercise the powers of the chairperson, the vice chairperson shall act in place of the chairperson; if the
vice chairperson also is on leave or for any reason unable to exercise the powers of the vice
chairperson, the chairperson shall appoint one of the board of directors to act as chair. Where the
chairperson does not make such a designation, the board or the directors shall select from among
themselves one person to serve as chair.
The board of director who serve as chair shall be in his post for more than six months and familiar
with the Company’s financials and operations. The same applies to the director who serve as chair
and who represents a corporation.
It is advisable that shareholders meetings convened by the board of directors be attended by a
majority of the directors, at least one independent director in person, and at least one member of each
functional committee on behalf of the committee. The attendance shall be recorded in the meeting
minutess.
If a shareholders meeting is convened by a party with power to convene but other than the board of
directors, the convening party shall chair the meeting. When there are two or more such convening
52
parties, they shall mutually select a chair from among themselves.
The Company may appoint its attorneys, certified public accountants, or related persons retained by it
to attend a shareholders meeting in a non-voting capacity.
8. This Corporation shall record the proceedings of a shareholders meeting in their entirety in audio or
video and retain the recording for at least 1 year. If, however, a shareholder files a lawsuit pursuant to
Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.
9. Attendance at shareholders meetings shall be calculated based on numbers of shares. The number of
shares in attendance shall be calculated according to the shares indicated by the Notice of attendance
handed in plus the number of shares whose voting rights are exercised by correspondence or
electronically.
The chair shall call the meeting to order at the appointed meeting time. However, when the attending
shareholders do not represent a majority of the total number of issued shares, the chair may announce
a postponement, provided that no more than two such postponements, for a combined total of no more
than 1 hour, may be made. If the quorum is not met after two postponements and the attending
shareholders still represent less than one third of the total number of issued shares, the chair shall
declare the meeting adjourned.
If the quorum is not met after two postponements as referred to in the preceding paragraph, but the
attending shareholders represent one third or more of the total number of issued shares, a tentative
resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act; all shareholders
shall be notified of the tentative resolution and another shareholders meeting shall be convened within
1 month.
When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total
number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders
meeting pursuant to Article 174 of the Company Act.
10. If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the
board of directors. The meeting shall proceed in the order set by the agenda, which may not be
changed without a resolution of the shareholders meeting.
The provisions of the preceding paragraph apply mutatis mutandis to a shareholders meeting
convened by a party with the power to convene that is not the board of directors.
The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting
agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of
the shareholders meeting. If the chair declares the meeting adjourned in violation of the rules of
procedure, the other members of the board of directors shall promptly assist the attending
shareholders in electing a new chair in accordance with statutory procedures, by agreement of a
majority of the votes represented by the attending shareholders, and then continue the meeting.
The chair shall allow ample opportunity during the meeting for explanation and discussion of
proposals and of amendments or extraordinary motions put forward by the shareholders; when the
53
chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may
announce the discussion closed and call for a vote.
11. Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech,
his/her shareholder account number (or attendance card number), and account name. The order in
which shareholders speak will be set by the chair.
A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be
deemed to have not spoken. When the content of the speech does not correspond to the subject given
on the speaker's slip, the spoken content shall prevail.
Except with the consent of the chair, a shareholder may not speak more than twice on the same
proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules
or exceeds the scope of the agenda item, the chair may terminate the speech.
When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they
have sought and obtained the consent of the chair and the shareholder that has the floor; the chair
shall stop any violation.
When a juristic person shareholder appoints two or more representatives to attend a shareholders
meeting, only one of the representatives so appointed may speak on the same proposal.
After an attending shareholder has spoken, the chair may respond in person or direct relevant
personnel to respond.
12. Voting at a shareholders meeting shall be calculated based the number of shares.
With respect to resolutions of shareholders meetings, the number of shares held by a shareholder with
no voting rights shall not be calculated as part of the total number of issued shares.
When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that
such a relationship would prejudice the interests of this Corporation, that shareholder may not vote on
that item, and may not exercise voting rights as proxy for any other shareholder.
The number of shares for which voting rights may not be exercised under the preceding paragraph
shall not be calculated as part of the voting rights represented by attending shareholders.
With the exception of a trust enterprise or a shareholder services agent approved by the competent
securities authority, when one person is concurrently appointed as proxy by two or more shareholders,
the voting rights represented by that proxy may not exceed 3 percent of the voting rights represented
by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that
percentage shall not be included in the calculation.
13. A shareholder shall be entitled to one vote for each share held, except when the shares are restricted
shares or are deemed non-voting shares under Article 179, paragraph 2 of the Company Act.
When this Corporation holds a shareholders meeting, it may allow the shareholders to exercise voting
rights by correspondence or electronic means. When voting rights are exercised by correspondence or
electronic means, the method of exercise shall be established in accordance with the laws and shall be
specified in the shareholders meeting notice. A shareholder exercising voting rights by
correspondence or electronic means will be deemed to have attended the meeting in person, but to
54
have waived his/her rights with respect to the extraordinary motions and amendments to original
proposals of that meeting; it is therefore advisable that this Corporation avoid the submission of
extraordinary motions and amendments to original proposals.
A shareholder intending to exercise voting rights by correspondence or electronic means under the
preceding paragraph shall deliver a written declaration of intent to this Corporation before 2 days
before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the
one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration
of intent.
After a shareholder has exercised voting rights by correspondence or electronic means, in the event
the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to
retract the voting rights already exercised under the preceding paragraph shall be made known to this
Corporation, by the same means by which the voting rights were exercised, before 2 business days
before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the
voting rights already exercised by correspondence or electronic means shall prevail. When a
shareholder has exercised voting rights both by correspondence or electronic means and by appointing
a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall
prevail.
Except as otherwise provided in the Company Act and in this Corporation's articles of incorporation,
the passage of a proposal shall require an affirmative vote of a majority of the voting rights
represented by the attending shareholders.
At the time of a vote, for each proposal, the chair or a person designated by the chair shall first
announce the total number of voting rights represented by the attending shareholders, followed by a
poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for
each proposal, based on the numbers of votes for and against and the number of abstentions, shall be
entered into the MOPS.
At the time of a vote, if no attending shareholder voices an objection following an inquiry by the chair,
the proposal will be deemed approved, with the same effect as approval by vote.
When there is an amendment or an alternative to a proposal, the chair shall present the amended or
alternative proposal together with the original proposal and decide the order in which they will be put
to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and
no further voting shall be required.
Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair,
provided that all monitoring personnel shall be shareholders of this Corporation.
Vote counting shall be conducted in public at the place of the shareholders meeting, and voting results
shall be reported on-site immediately and recorded in writing.
14. The election of directors at a shareholders meeting shall be held in accordance with the applicable
election and appointment rules adopted by this Corporation, and the voting results shall be announced
on-site immediately.
The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures
of the monitoring personnel and kept in proper custody for at least 1 year. If, however, a shareholder
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files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the
conclusion of the litigation.
15. Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes.
The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to
each shareholder within 20 days after the conclusion of the meeting. The meeting minutes shall be
distributed in accordance with the Company v Act.
The meeting minutes shall accurately record the year, month, day, and place of the meeting, the
chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations
and their results, and shall be retained for the duration of the existence of this Corporation.
16. On the day of a shareholders meeting, this Corporation shall compile in the prescribed format a
statistical statement of the number of shares obtained by solicitors through solicitation and the number
of shares represented by proxies, and shall make an express disclosure of the same at the place of the
shareholders meeting.
If matters put to a resolution at a shareholders meeting constitute material information under
applicable laws or regulations, this Corporation shall upload the content of such resolution to the
MOPS within the prescribed time period.
17. At the place of a shareholders meeting, if a shareholder attempts to speak through any device other
than the public address equipment set up by this Corporation, the chair may prevent the shareholder
from so doing.
When a shareholder violates the rules of procedure and defies the chair's correction, obstructing the
proceedings and refusing to heed calls to stop, the chair may direct relevant personnel to escort the
shareholder from the meeting.
18. When a meeting is in progress, the chair may announce a break based on time considerations. If a
force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a
time when, in view of the circumstances, the meeting will be resumed.
If the meeting venue is no longer available for continued use and not all of the items (including
extraordinary motions) on the meeting agenda have been addressed, the shareholders meeting may
adopt a resolution to resume the meeting at another venue.
A resolution may be adopted at a shareholders meeting to defer or resume the meeting within 5 days
in accordance with Article 182 of the Company Act.
19. These Rules, and any amendments hereto, shall be implemented after adoption by shareholders
meetings.
20. The Measures were established on March 13, 1989.
The 1st Amendment was made on May 19, 1998.
The 2nd Amendment was made on May 21, 2002.
The 3rd Amendment was made on June 19, 2013.
The 4th Amendment was made on June 24, 2015.
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Appendix 2
Lite-On Technology Corporation
Articles of Incorporation
Chapter One General Provisions
Article I The Company is duly incorporated in accordance with provisions governing limited
companies under the Company Law in the full name of Lite-On Technology Corporation
(Hereinafter referred to as the “Company”).
Article II The Company shall engage in the following business:
1. C804020 Manufacture of industry-oriented rubber products.
2. C805050 Manufacture of industry-oriented plastic products.
3. CB01010 Manufacture of machinery & equipment
4. CB01020 Business machinery manufacture.
5. CC01010 Electric Power Supply, Electric Transmission and Power Distribution
Machinery Manufacturing
6. CC01030 Manufacture of electrical appliance and audio and visual electronic products.
7. CC01040 Lighting Facilities Manufacturing
8. CC01060 Manufacture of wire communications machinery & equipment.
9. CC01070 Manufacture of wireless communications machinery & equipment.
10. CC01080 Manufacture of electronic parts & components.
11. CC01090 Batteries Manufacturing
12. CC01101 Manufacture of telecommunications controlled frequency RF equipment
manufacture.
13. CC01110 Computers and Computing Peripheral Equipments Manufacturing
14. CC01120 Data storage media manufacture and duplication.
15. CC01990 Electrical Machinery, Supplies Manufacturing
16. CD01030 Manufacture of automobile and automobile parts & components.
17. CD01040 Motor Vehicles and Parts Manufacturing
18. CE01010 Precision Instruments Manufacturing
19. CE01030 Manufacture of Optical instrument.
20. CF01011 Medical Materials and Equipment Manufacturing
21. CH01040 Manufacture of toy.
22. CQ01010 Manufacture of mold.
23. E601010 Electric Appliance Construction
24. E603090 Illumination Equipments Construction
25. E801010 Interior decoration services
26. F106030 Mold wholesale.
27. F108031 Wholesale of Drugs, Medical Goods
28. F109070 Cultural, educational, music and recreational article & instrument wholesale.
29. F111090 Building material wholesale
30. F113010 Machinery wholesale.
31. F113020 Electrical appliance wholesale.
32. F113030 Precise instrument wholesale.
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33. F113050 Computer & business machinery & equipment wholesale.
34. F113070 Telecommunication equipment wholesale.
35. F113110 Wholesale of Batteries
36. F114010 Wholesale of Automobiles
37. F114020 Wholesale of Motorcycles
38. F114030 Automobile, motorcycle parts & accessories wholesale.
39. F118010 Information software wholesale.
40. F119010 Electronic material wholesale.
41. F206030 Mold retail.
42. F209060 Cultural, educational, music and recreational article & instrument retail.
43. F211010 Building material retail.
44. F213010 Electric appliance retail.
45. F213030 Computer & business machinery & equipment retail.
46. F213040 Precise instrument retail.
47. F213060 Telecommunication equipment retail.
48. F213080 Machinery & appliance retail.
49. F213110 Retail Sale of Batteries
50. F214010 Retail Sale of Automobiles
51. F214020 Retail Sale of Motorcycles
52. F214030 Automobile, motorcycle parts & accessories retail.
53. F218010 Information software retail.
54. F219010 Electronic material retail.
55. F401010 International trade.
56. F401021 Import of controlled telecommunication frequency RF equipment.
57. G801010 Warehousing services.
58. H701010 Housing and building development, lease and sales.
59. I102010 Investment consultancy.
60. I103060 Management consultancy.
61. I301010 Information software services.
62. I301020 Data Processing Services
63. I501010 Product design business
64. I503010 Landscaping, interior design business.
65. IC01010 Pharmaceuticals Examining Services
66. IG03010 Energy Technical Services
67. ZZ99999 The Company may, other than those businesses subject to special permission
(franchise), engage in all businesses except those banned or restricted by laws.
Article III The Company is headquartered in Taipei City and may have branches set elsewhere at home
and abroad as resolved by the Board of Directors.
The Company may invest outward with the total amount of investment free of restrictions as
set forth in Article 13 of the Company Law.
The Company may act as a guarantor externally as required for business.
Chapter Two Shares
Article IV The total capital of the Company amounts to Thirty-Five Billion New Taiwan Dollars,
divided into 3.5 billion shares at Ten New Taiwan Dollars par value each. The Board of
Directors is authorized with full powers to issue shares in partial installments. Preferred
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shares may be issued within the total capital. Of the total number of shares aforementioned,
one hundred million shares are reserved to be issued as stock options, preferred shares with
stock options or corporate bonds with stock options ready for exercise of options.
Article IV-1 The Company may issue employee stock options at an issuing price lower than the closing
price of the Company’s common shares on the date of issuance only upon the decision
resolved by two thirds of present shareholders who represent a majority of the total issued
shares in the shareholders’ meeting.
When the Company intends to transfer shares to employees at a price lower than the average
of actual repurchase prices, such transfer shall be duly posed at the latest shareholders’
meeting to be resolved by two thirds of votes in the shareholders’ meeting where present
shareholders represent a majority of the total issued shares.
Article V The Company’s shares are registered ones, which shall be duly signed and sealed by a
minimum of three directors and issued after duly authenticated by the competent authority
or the issuance registry entity approved by the competent authority. For the shares issued by
the Company, the Company may be exempted from printing share certificates but shall have
the shares so issued duly registered with the centralized securities depository enterprise.
Article VI Unless otherwise prescribed in laws, the Company shall manage share transfer, pledge of
rights, register for loss, succession, gift, change in address, report-for-loss and replacement
of registered specimen seals exactly in accordance with the “Regulations Governing Equity
Affairs of Public Companies”.
Article VII No transfer of shares shall be handled within sixty days prior to the regular shareholders’
meeting, or within thirty days prior to a special meeting of shareholders, or within five days
prior to the record (base) date scheduled to distribute dividends, bonuses or other benefits.
Chapter Three Shareholders’ meeting
Article VIII The shareholders' meeting hereof is in two categories: regular meetings and special
meetings. The former is convened once a year within six months from the closing of each
fiscal year and the latter may be duly called whenever necessary.
Article IX A shareholder who is unavailable to attend the shareholders' meeting may duly present a
power of attorney with the form provided by the Company, bearing the scope of the
authorized powers to authorize a proxy to attend on-behalf. The power of attorney shall be
duly used in accordance with applicable laws and ordinances and the rules promulgated by
the competent authority.
Article X The shareholders’ meeting convened by the Board of Directors shall be chaired by the
chairman. During the chairman’s absence or unavailability for performance of duties, the
substitution shall be duly handled in accordance with Article 208 of the Company Law. In
the event that the shareholders’ meeting is convened by a person beyond the Board of
Directors, the shareholders’ meeting shall be chaired by that convener. In case of two or
more conveners, one of them shall be elected to chair the meeting.
Article XI The Company’s shareholders are entitled to one voting right per share, provided that
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shareholders have no voting right for shares held under Article 179 of the Company Law.
Article XII Unless otherwise provided for in applicable laws and regulations, decisions in the
shareholders' meeting shall be resolved by a majority of votes in the meeting where present
shareholders represent a majority of the total issued shares.
Article XIII Minutes of the shareholders' meeting shall be duly recorded to cover the decisions resolved,
to be duly signed or affixed by the chairperson and delivered to all shareholders within
twenty days after the meeting and be distributed to all shareholders of the
company in accordance with Company Law. The minutes shall include the month, date, year,
location, the chairperson’s name, method to resolve a decision, the highlights of
discussion and results thereof. The minutes of the shareholders’ meeting shall be archived
in the Company along with the shareholders’ sign-in book and powers of attorney
presented by proxies according to law.
Chapter Four Directors and Audit Committee
Article XIV The Company has seven to eleven directors, elected in the shareholders’ meeting from the
candidate of disposing capacity, with a three-year tenure of office and eligible for reelection.
Directors shall be duly elected in accordance with Regulations Governing Election of
Directors of the Company.
The aforementioned number of directors shall include a minimum of three independent
directors (including a minimum of one independent director in the expertise of accounting or
finance), and the number of independent directors shall not be less than the minimum of
one-fifth of the total number of director seats. Board of Directors (including independent
directors) are elected in a candidate nomination system set forth in Article 192-1 of the
Company Act. The shareholders’ meeting shall elect the right independent directors out of
the list of candidates. Matters regarding independent directors’ professional qualification
requirements, shareholding, restriction on concurrent post, recognition of independence,
methods of nomination and election, and other matters to be complied with shall be duly
handled in accordance with the requirements promulgated by the competent authority in
charge of securities affairs.
The Company duly establishes the Audit Committee in accordance with Article 14-4 of the
Securities and Exchange Law which shall be duly organized by independent directors in full.
The total number of the Company’s shares held by all directors shall not be less than the
percentage promulgated by the competent authority.
Article XV The Board of Directors is duly organized by directors. By attendance of two thirds of
directors and a majority of votes of attending directors, one chairman shall be duly elected.
In the same manner, one vice chairman shall be elected as necessary. The chairman shall
chair the shareholders’ meeting and Board of Directors meeting internally and represent the
Company externally and preside over all the Company’s business affairs, as assisted by the
Vice Chairman.
Article XVI Where the seats of directors are vacated by one-third, a shareholders’ meeting shall be duly
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held to elect ones supplementary to serve the tenure of office remaining by the predecessors.
Article XVII The Board of Directors shall convene the meeting on a quarterly basis and may convene an
extraordinary meeting whenever the chairman considers it necessary or on the requisition of
two or more directors. Board of Directors meetings shall be convened and chaired by the
chairman in all cases. During the chairman’s absence or unavailability for performance of
duties, the substitution shall be duly handled in accordance with Article 208 of the Company
Law.
Notices for convening meetings may be made in writing or by e-mail or fax. An
extraordinary meeting may be convened at any time in case of an emergency.
The Board of Director meetings may be conducted by video conference. Directors who
participate in the meeting through video conference are deemed to have attended in person.
Article XVIII Unless otherwise provided for in the Company Law, decisions in the Board of Directors
meeting shall be resolved by a majority of votes in the meeting where attending directors
represent a majority of the total number of directors. A director who is unavailable to attend
the board of directors meeting may be represented by another director per Article 205 of the
Company Law.
Article XIX Minutes of a board of directors meeting shall be duly recorded, to be duly signed and
affixed seal by the chairperson and delivered to all directors within twenty days after the
meeting. The minutes shall include the highlights of discussion and results thereof. The
minutes of the board of directors meeting shall be archived in the Company along with the
directors’ sign-in book and powers of attorney presented by proxies according to law.
Article XX Organization, authority of office, rules and procedures of meetings and other matters to be
complied with of the Company’s Audit Committee shall be in conformity with the
requirements of the competent authority.
Article XX-1 Remuneration to directors shall be duly determined by the Board of Directors with reference
to the level of their participation in the business operation and values of their contribution as
well as the level prevalent in fellow firms at home and abroad.
Article XX-2 The Company may purchase liability insurance for directors for the term of their office to
insure them for potential risk in exercise of their duties.
Chapter Five Managers and staff members
Article XXI The Company may, as resolved in the Board of Directors, have a certain number of manages
all of whom shall be duly appointed, discharged and paid in accordance with Article 29 of
the Company Law.
Chapter Six Accounting
Article XXII Upon closing of each fiscal year, the Board of Directors shall prepare the following
documents and submit such documents to the shareholders' meeting for adoption. In case of
other requirements set forth in the Securities and Exchange Law or other laws and
ordinances concerned, such Securities and Exchange Law and other laws and ordinances
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concerned shall govern. 1. Business report; 2. Financial Statements; and 3. Proposals of
profit appropriation or loss coverage.
Article XXIII The Company shall allocate the following compensation from the profit of each fiscal year
(The “profit” means “profit before income tax and employees’ and directors’
compensation"), however, the Company shall have reserved a sufficient amount from such
profit to offset its accumulated losses (including unappropriated earnings adjustment if any):
1.Employees’ compensation:no less than 1%
2.Directors’ compensation:no more than 1.5%
The employees’ compensation under the preceding paragraph will be distributed by shares or
cash. The employees of the Company’s subsidiaries may also be entitled to such
compensation. The Board of Directors is authorized with full powers to determine the terms
and methods of appropriation. The Directors’ compensation under the preceding paragraph
may only be distributed by cash.
The Company shall, upon a resolution of the Board of Directors, distribute employees' and
director’s compensation in the preceding two paragraphs, and report to the shareholders’
meeting for such distribution.
Article XXIV If there is net profit after tax upon the final settlement of account of each fiscal year, the
Company shall first to offset any previous accumulated losses (including unappropriated
earnings adjustment if any) and set aside a legal reserve at 10% of the net profits, unless the
accumulated legal reserve is equal to the total capital of the Company; then set aside special
reserve in accordance with relevant laws or regulations or as requested by the authorities in
charge. The remaining net profit, plus the beginning unappropriated earnings (including
adjustment of unappropriated earnings if any) , shall be distributed into dividends to
shareholders according to the distribution plan proposed by the Board of Directors and
submitted to the shareholders’ meeting for approval.
In consideration of business development plan, investing environment, demand for funds,
global competiveness and the shareholders’ interest, the Dividend Policy of the Company is
the distribution to shareholders with the appropriation of the amount which shall be no less
than 70% of the net profit after income tax under the circumstance that there is no cumulated
loss in prior years. The distribution may be executed in cash dividend and/or share dividend,
and the cash dividend shall be no less than 90% of the total distributed dividends.
In case there are no earnings for distribution in a certain year, or the earnings of a certain year
are significantly less than the earnings actually distributed by the Company in the previous
year, or considering the financial, business or operational factors of the Company, the
Company may allocate a portion or all of its reserves for distribution in accordance with
relevant laws or regulations or the orders of the authorities in charge.
Chapter Seven Bylaws
Article XXIII The Company’s organizational regulations and operational rules shall be separately enacted
by the Board of Directors.
Article XXIV The Taiwan Depository & Clearing Corporation (TDCC) may request that the Company
consolidate the shares to issue large denomination share certificates.
Article XXV Any matters insufficiently provided for in the Articles of Incorporation shall be subject to
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the Company Law and other applicable laws and ordinances.
Article XXVI The Articles of Incorporation and amendment hereof, if any, shall come into enforcement
after being resolved in the shareholders’ meeting, submitted to and approved by the
competent authority.
Article XXVII The Articles were duly stipulated on March 13, 1989.
The Articles were duly amended on March 20, 1990 as the 1st amendment.
The Articles were duly amended on May 11, 1991 as the 2nd amendment.
The Articles were duly amended on May 20, 1992 as the 3rd amendment.
The Articles were duly amended on June 27, 1992 as the 4th amendment.
The Articles were duly amended on June 21, 1993 as the 5th amendment.
The Articles were duly amended on December 18, 1993 as the 6th amendment.
The Articles were duly amended on May 30, 1995 as the 7th amendment.
The Articles were duly amended on April 2, 1996 as the 8th amendment.
The Articles were duly amended on May 6, 1997 as the 9th amendment.
The Articles were duly amended on May 19, 1998 as the 10th amendment.
The Articles were duly amended on June 21, 1999 as the 11th amendment.
The Articles were duly amended on May 31, 2000 as the 12th amendment.
The Articles were duly amended on April 19, 2001 as the 13th amendment.
The Articles were duly amended on May 21, 2002 as the 14th amendment.
The Articles were duly amended on August 5, 2002 as the 15th amendment.
The Articles were duly amended on May 13, 2003 as the 16th amendment.
The Articles were duly amended on June 15, 2004 as the 17th amendment.
The Articles were duly amended on June 14, 2005 as the 18th amendment.
The Articles were duly amended on June 21, 2006 as the 19th amendment.
The Articles were duly amended on June 21, 2007 as the 20th amendment.
The Articles were duly amended on June 25, 2008 as the 21st amendment.
The Articles were duly amended on June 15, 2010 as the 22nd amendment.
The Articles were duly amended on June 19, 2012 as the 23rd amendment.
The Articles were duly amended on June 19, 2013 as the 24rd amendment.
The Articles were duly amended on June 19, 2014 as the 25th amendment.
The Articles were duly amended on June 24, 2015 as the 26th amendment.
The Articles were duly amended on June 22, 2017 as the 27th amendment
The Articles were duly amended on June 22, 2018 as the 28th amendment
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Appendix 3
Lite-On Technology Corporation
Rules Governing the Election of Directors
Article 2
Elections of Lite-On Technology Corporation's independent and non-independent directors shall be conducted
in accordance with these Rules.
Article 3
The cumulative voting method shall be used for election of Lite-On Technology Corporation's directors. Each
share will have voting rights in number equal to the directors to be elected, and may be cast for a single
candidate or split among multiple candidates. Shareholder numbers or attendance card numbers printed on the
ballots may be used instead of recording the names of voting shareholders.
The overall composition of the board of directors shall be taken into consideration in the selection of
the Company's directors. The composition of the board of directors shall be determined by taking
diversity into consideration and formulating an appropriate policy on diversity based on Lite-On
Technology Corporation's business operations, operating dynamics, and development needs. It is
advisable that the policy include, without being limited to, the following two general standards:
E. Basic requirements and values: Gender, age, nationality, and culture.
F. Professional knowledge and skills: A professional background (e.g., law, accounting, industry,
finance, marketing, or technology), professional skills, and industry experience. Each board member shall have the necessary knowledge, skill, and experience to perform his/her duties. The
abilities that must be present in the board as a whole are as follows:
Q. Ability to make sound business judgments.
R. Ability to perform accounting and financial analysis.
S. Ability to manage a business.
T. Ability to handle crisis management.
U. Knowledge of the industry.
V. An international market perspective.
W. Leadership ability.
X. Decision-making ability.
Article 4
The Company’s independent directors must possess one of the following qualifications and have five years or
more of work experience:
A. An instructor or higher in a department of commerce, law, finance, accounting, or other
academic department related to the business needs of the company in a public or private
junior college, college, or university.
B. A judge, public prosecutor, attorney, certified public accountant, or other professional or
technical specialist who has passed a national examination and been awarded a certificate in
a profession necessary for the business of the company.
C. Have work experience in the area of commerce, law, finance, or accounting, or otherwise
necessary for the business of the company...
At least one of the Company's independent directors is required to have accounting or financial
expertise. At least one of the independent directors must be domiciled in the Republic of China to be
able to promptly fulfill supervisory functions.
A person to whom any of the following circumstances applies may not serve as an independent
director, or if already serving in such capacity, shall ipso facto be dismissed:
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A. Any circumstance set out in a subparagraph of Article 30 of the Company Act.
B. The director is a government agency, juristic person, or representative thereof, and was
elected in accordance with Article 27 of the Company Act.
C. Any violation of the independent director qualification requirements set out in the Regulations
Governing Appointment of Independent Directors and Compliance Matters for Public Companies.
Article 5
During the two years before being elected or during the term of office, independent directors of
Lite-On Technology Corporation may not have been or be any of the following:
G. An employee of Lite-On Technology Corporation or any of its affiliates.
H. A director or supervisor of Lite-On Technology Corporation or any of its affiliates.
Exception shall apply to independent directors established by Lite-On Technology
Corporation or its subsidiary pursuant to the Securities and Exchange Act or local laws and
regulations.
I. A natural-person shareholder who holds shares, together with those held by the person's
spouse, minor children, or held by the person under others' names, in an aggregate amount
of one percent or more of the total number of issued shares of Lite-On Technology
Corporation, or ranks among the ten largest natural-person shareholders.
J. A spouse, relative within the second degree of kinship, or lineal relative within the third
degree of kinship, of any of the persons in the preceding three subparagraphs.
K. A director, supervisor, or employee of a corporate shareholder that directly holds five
percent or more of the total number of issued shares of Lite-On Technology Corporation or
of a corporate shareholder that ranks among the top five in shareholdings.
L. A director, supervisor, officer, or shareholder holding five percent or more of the shares, of a
specified company or institution that has a financial or business relationship with Lite-On
Technology Corporation.
M. A professional individual who, or an owner, partner, director, supervisor, or officer of a sole
proprietorship, partnership, company, or institution that, provides commercial, legal,
financial, accounting services or consultation to the company or to any affiliate of the
company, or a spouse thereof. However, this excludes members of the Remuneration
Committee who exercise power in accordance with the Regulations Governing Appointment
of Independent Directors and Compliance Matters for Public Companies.
The requirement of the preceding paragraph in relation to "during the two years before being elected"
does not apply where an independent director of Lite-On Technology Corporation has served as an
independent director of Lite-On Technology Corporation or any of its affiliates, or of a specified
company or institution that has a financial or business relationship with Lite-On Technology
Corporation, as stated in subparagraph 2 or 6 of the preceding paragraph, but is currently no longer in
that position.
I. The term "specified company or institution" as used in paragraph 1, subparagraph 6, means
a company or institution that has one of the following relationships with the Company: It
holds 20 percent or more and no more than 50 percent of the total number of issued shares
of Lite-On Technology Corporation.
J. It holds shares, together with those held by any of its directors, supervisors, and
shareholders holding more than 10 percent of the total number of shares, in an aggregate
total of 30 percent or more of the total number of issued shares of the Company, and there is
a record of financial or business transactions between it and the Company. The
shareholdings of any of the aforesaid persons include the shares held by the spouse or any
minor child of the person or by the person under others' names.
K. It and its group companies are the source of 30 percent or more of the operating revenue of
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the Company.
L. It and its group companies are the source of 50 percent or more of the total volume or total
purchase amount of principal raw materials (those that account for 30 percent or more of
total procurement costs, and are indispensable and key raw materials in product
manufacturing) or principal products (those accounting for 30 percent or more of total
operating revenue) of the Company. For the purposes of the preceding paragraph, the terms "subsidiary" and "group" shall have the meanings as
determined under International Financial Reporting Standards 10.
No independent director may concurrently serve as an independent director of more than three other public
companies.
Article 6
The election of directors (including independent directors) of Lite-On Technology Corporation is
subject to the provisions of Article 192-1 of the Company Act in that a candidate nomination system
shall be adopted, that such system shall be expressly stated in the Articles of Incorporation of the
Lite-On Technology Corporation, and that shareholders shall elect directors (including independent
directors) from among the those listed in the slate of director candidates. Regarding review of director
(and independent director) candidate qualifications, education, experience, circumstances in Article 30
of the Company Act exists, documentary proof of other qualifications cannot be additionally listed
without completing the appropriate procedures. Review results shall be presented to the shareholders
as a basis for the consideration and election of suitable directors (including independent directors).
Where the number of independent directors falls below the minimum specified in the proviso under
Article 14-2, Paragraph 1 of the Securities and Exchange Act and fails to satisfy the provisions in the
Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings, a by-election
shall be held at the next shareholders’ meeting. In the event that all the independent directors have
been discharged, an extraordinary shareholders’ meeting shall be convened to hold a by-election
within sixty days from the date of such occurrence.
Lite-On Technology Corporation shall prior to the book closure date before the convening of the
shareholders' meeting, publish a notice specifying a period for receiving nominations of director
(including independent director) candidates, the number of directors (including independent directors)
to be elected, the place for receiving such nominations, and other necessary matters; the period for
receiving nominations shall be not less than 10 days.
Lite-On Technology Corporation may present a slate of director (including independent director)
candidates nominated by the methods set out below, and, upon evaluation by the board of directors
that all candidates so nominated are qualified director (including independent director) candidates,
submit it to the shareholders' meeting for elections:
D. A shareholder holding one percent or more of the total number of issued shares may present
a slate of director (including independent director) candidates in writing to the Company;
the number of nominees may not exceed the number of directors (including independent
directors) to be elected.
E. The board of directors presents a slate of director (including independent director)
candidates; the number of nominees may not exceed the number of directors (including
independent directors) to be elected.
F. Otherwise as designated by the competent authority.
When providing a recommended slate of candidates under the preceding paragraph, a shareholder or
the board of directors shall include in the documentation attached thereto each nominee's name,
educational background, work experience, a written undertaking indicating the nominee's consent to
serve as a director (or independent director) if elected as such, a written statement that none of the
circumstances in Article 30 of the Company Act exists, and other relevant documentary proof.
The board of directors, or other person having the authority to call a shareholders' meeting, shall
review the qualifications of each director (including independent director) nominee; except under any
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of the following circumstances, all qualified nominees shall be included in the slate of director
(including independent director) candidates:
F. Where the nominating shareholder submits the nomination at a time not within the
published period for receiving nominations.
G. Where the shareholding of the nominating shareholder is less than one percent at the time of
book closure by the Company under Article 165, paragraph 2 or 3 of the Company Act.
H. Where the number of nominees exceeds the number of directors (including independent
directors) to be elected.
I. Where the relevant documentary proof required under the preceding paragraph is not
attached. If an independent director candidate included by the Company under the provisions of the preceding paragraph
has already served as an independent director of the Company for three consecutive terms or more, Lite-On
Technology Corporation shall publicly disclose, together with the review results under the preceding
paragraph, the reasons why the candidate is nominated again for the independent directorship, and present the
aforementioned reasons to the shareholders at the time of the election at the shareholders’ meeting.
The process of reviewing director (including independent director) nominees in the preceding paragraph shall
be recorded, and the records shall be retained for a minimum of one year. However, in situations where a
shareholder makes a litigious claim against the director (including independent director) election process, the
records shall be retained until the litigation is concluded.
The Company shall announce the slate of director (including independent director) candidates and
their education and experience as well as the number of shares held by each candidate at least 40 days
prior to the upcoming shareholders’ meeting or 25 days prior to the upcoming extraordinary
shareholders’ meeting, inform the nominating shareholders of the review results, and, where
applicable, provide detailed reasons for not including nominees on the slate of director (including
independent director) candidates.
A spousal relationship or a familial relationship within the second degree of kinship may not exist among more
than half of the directors on the board.
Article 7
Independent and non-independent directors shall be elected at the same time, but the numbers of independent or
non-independent directors to be elected shall be calculated separately. A candidate to whom the ballots cast
represent a prevailing number of votes shall be deemed an independent or non-independent director elect.
When two or more persons receive the same number of votes, thus exceeding the specified number of positions,
they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in
attendance.
If the outcome shows that none of the independent directors candidates with the highest numbers of votes has
accounting or financial expertise, those candidates with accounting or financial expertise shall have their votes
counted separately and one seat shall be awarded to the candidate with the highest number of votes. The
remaining positions shall be filled as described in the preceding paragraph.
If an independent director elected at a shareholders’ meeting is required to be dismissed during the term of
office for reason of a violation of Article 3 or 4 herein, it is prohibited to change the status of the person from
independent director to non-independent director. A non-independent director elected at a shareholders’
meeting likewise may not be arbitrarily changed from a non-independent director to an independent director
during the term of office.
Article 8
All shareholders listed in Lite-On Technology Corporation's shareholder register have the right to vote.
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Article 9
The ballots will be prepared by the board of directors and numbered by shareholder account number. The
number of votes will also be printed on the ballot of each shareholder.
Article 10
When an election begins, the chair of the shareholders’ meeting shall announce the election and assign several
ballot monitors and tellers to perform respective tasks.
Article 11
Voters shall write a candidate's name in the space marked "Candidate" on their ballots, and specify their
shareholder account number, ID number, or unified business number. If a candidate is an institutional
shareholder, the name of the institution and that of its representative shall be provided as well as institutional
shareholder account number or unified business number.
Article 12 A ballot is invalid under any of the following circumstances:
A. The ballot was not prepared by the Company.
B. A blank ballot is placed in the ballot box.
C. The writing is unclear and indecipherable or has been altered.
D. The candidate's account name (title or name) or shareholder account number (ID number/UBN) is
not provided.
E. The name of the candidate entered in the ballot is identical to that of another shareholder, but no
shareholder account number or ID number/UBN is provided in the ballot to identify such individual.
F. Two or more candidates are named on the same ballot.
G. Other words or marks are entered in addition to the candidate's account name (title or name) or
shareholder account number (ID number/UBN) and the number of voting rights allotted.
H. The candidate whose name is entered in the ballot is a shareholder, but the candidate's account name
and shareholder account number do not conform with those given in the shareholder register, or the
candidate whose name is entered in the ballot is a non-shareholder, and a cross-check shows that the
candidate's name and ID number/UBN do not match.
I. Any other violation of laws and regulations, the Articles of Incorporation, and related rules.
Article 13
The ballot box shall be prepared by the board of directors and inspected by the monitors before ballots are cast.
Article 14
Voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation,
including the list of persons elected as directors (including independent directors) and the numbers of votes
with which they were elected, shall be announced by the chair on the site.
The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the
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monitors and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to
Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.
Article 15
The board of directors shall issue notifications to the persons elected as directors, and have the director elects
sign their consent to appointment.
Article 16
Matters not provided herein shall be subject to the provisions of the Company Act and other applicable laws
and regulations.
Article 17
These Rules shall come into effect upon approval of the shareholders’ meeting. The same applies to all
subsequent amendments.
Article 18
The rules were established on March 13, 1989.
The first amendment was made on May 19, 1998.
The second amendment was made on May 21, 2002.
The third amendment was made on June 21, 2007.
The fourth amendment was made on June 19, 2012.
The fifth amendment was made on June 19, 2013.
The sixth amendment was made on June 24, 2015.
The seventh amendment was made on June 24, 2016.
The eighth amendment was made on June 22XX, 2018.
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Appendix 4
List of Candidates for Directors and Independent Directors
No. Position Shareholder
Account Number
Name No. of Shares
Held Major Educational
Background and Experience
1 Director 1 Raymond Soong 79,302,560 ■ Current Position:
• Chairman, Lite-On Technology Corp., Lite-On Semiconductor Corp. and DIODES,INC.
• Chairman, representative of Silitech Technology Corp., Co-tech Copper Foil Corporation
• Director of On-Bright Electronics Incorporated
■ Educational:
• Honorary PhD in Management, National Chiao Tung University
■ Experience: • Fellow, Industrial
Technology Research Institution
• Chairman & Founder of Lite-On Group/Lite-On Cultural Foundation
• Member of Board of Councilors, the Doctorate College of Technology, South California (USC)
• Chief Engineer, Texas Instruments Taiwan Ltd.
2 Director 130589 Warren Chen 7,349,116 ■ Current Position:
• GCEO of Lite-On Group
• Vice Chairman, representative of Lite-On Technology Corp.
• Director, representative of Lite-On Semiconductor Corp. and Silitech Technology Corp.
• Director of Lite-On Japan Ltd.
■ Educational:
• Chemical Engineering, Chinese Culture
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University ■ Experience:
• GCEO of Lite-On Group and CEO of Lite-On Technology Corp.
• President, Lite-On Electronic Co.
• Manufacturing Super-Intendant, Texas Instrument
3 Director 88 Tom Soong 5,420,287 ■ Current Position:
• Director, representative of Lite-On Technology
• SLA BG CEO of Lite-On Technology Corp
■ Educational:
• University of Southern California/ Electrical Engineering
• NTU EMBA International Business Attendance (NTU-FUDAN EMBA Program)
■ Experience:
• General manager , Lite-on Technology (Shanghai) Co., Ltd.
• Business Group CEO, New Mechanical Competence SBG, Lite-On Technology Corporation
• Representative, Lite-On Technology(China)Inc. Beijing Representative Office
• VP , Lite-On Electronics H.K. Limited and China Bridge Express Trading Co., Ltd.
4 Director 59285 Ta-Sung Investment Co., Ltd. Representative Keh-Shew Lu
47,088,399 ■ Current Position:
• Director, President and CEO of Diodes Incorporated Co., Ltd.
• Director of Lorenz
• Director, representative of Lite-On Technology and Nuvoton Technology Corp.
■ Educational:
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• Bachelor, EE, National Cheng Kung University
• Master, EE, Texas Institute of Technology
• PhD, EE, Texas Institute of Technology
■ Experience:
• Asian Regional President, Senior VP, Texas Instruments
• Director, VArmour Corp. Ltd.
• Chairman, LedEngin
5 Director 59285 Ta-Sung Investment Co., Ltd. Representative
CH Chen
47,088,399 ■ Current Position:
• Vice Chairman, Diodes Incorporated and Lite-On Semiconductor Corp.
• Director, Actron Technology Corporation
• Director, representative of Lite-On Technology Corp. and Kwong Lung Enterprise Co, Ltd.
■ Educational:
• Bachelor, Dept of Mechanical Engineering, National Taiwan University
■ Experience:
• Vice CEO, Texas Instruments Taiwan Ltd.
• Chairman, Co-tech Copper Foil Corporation
• Chairman, On-Bright Electronics Incorporated Co., Ltd.
6 Independent Director
528391 Albert Hsueh 0 ■ Current Position:
• Independent Director of , Lite-On Technology Corp., Yuanta Financial Holding Co., Ltd. and Yuanta Bank, Walsin Lihwa Corp. and TTY Biopharmaceutial Manufacturers Association
■ Educational:
• MBA, Bloomsburg University, Pennsylvania,
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U.S.A.
• Master of Accounting, Soochow University
■ Experience:
• Chairman of PricewaterhouseCoopers Taiwan
• Director, Corporate Governance Association in Taiwan
• Member of the Committee in charge of the examination affairs and qualification screening for professional and technologies, Examination Yuan
• Professor, National Tsinghua University of College of Technology Management
• Professor, National Taiwan University of Science and Technology, School of Management
7 Independent Director
441272 Harvey Chang 0 ■ Current Position:
• Chairman of TVBS, Via On Demand and IC Broadcasting Co., Ltd.
• Independent Director of , Lite-On Technology Corp.
■ Educational:
• MBA, The Wharton School, Pennsylvania State University
• Bachelor, Dept of Geology, National Taiwan University
■ Experience:
• President and CEO, Taiwan Mobile
• Senior VP and CFO, TSMC
• Chairman, China Securities Investment Trust Corp.
• President, China Development Trust Co. Ltd.
• President, Grand Cathay
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Securities
8 Independent Director
435270 Edward Yang 0 ■ Current Position:
• Independent Director of , Lite-On Technology Corp.
• iD Ventures America, LLC Partner
• Chairman, GVT Fund
• Director, Sifotonics Technologies, Bandwidth 10 and Neurostim OAB
■ Educational:
• Stanford Executive Program (SEP), Stanford University
• Master of Science in Electrical Engineering Science, Oregon State University
• Bachelor of Science in Electrical Engineering, National Cheng Kung University
■ Experience:
• Independent Director, FocalTech
• Independent Director, Silicon Storage Technology
• Independent Director, Pericom Semiconductor
• Member of Prospective Technology Steering Committee, Industrial Technology Research Institute
• Member of Strategy Steering Committee, Institute for Information Industry
• Member of Engineering School Consulting Committee, San Jose State University
• Vice President and CTO, Personal Product Group, HP
• Vice President and CTO, Business Product Group, HP
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• President of Singapore Network and Telecommunications System Business Division, HP
9 Independent Director
555968 Mike Yang 0 ■ Current Position:
• Chairman of Quanta Cloud Technology Japan Inc.
• Director & President of QCT Korea Inc.
• Senior Vice President of Quanta Computer Inc. Cloud Computing Business Unit
• President of Quanta Cloud Technology Inc., Cloud-Tech (Chongqing) Technology Co., Ltd. and QCT LLC President
• Managing Director of Quanta Cloud Technology Germany GmbH and QCG Computer GmbH
■ Educational: Arizona State University
Master of Science ■ Experience:
• ADI Corp. Procurement Dept. Associate Vice President
Note:Reasons for the nomination of independent directors who have served for three consecutive
terms
Position Name Reasons for the nomination of independent directors who have served for three consecutive terms
Independent Director
Harvey Chang
The individual specializes in industrial analysis and business management and retains extensive experience in performance management, corporate growth, and investment. The individual
75
will be invaluable to the Company's future investment plans and financial plans.
Edward Yang
The individual retains extensive experience and professional skills in the Company's related industries and proposes forward-looking insights on industrial development. The individual can provide strategic guidance for the Company's new product development and expansion into new markets.
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Appendix 5
Impact of issuance of stock dividends proposed in this shareholders’
meeting upon the Company’s business performance, earning per share
(EPS) and shareholder investment return
(Note1) Only cash dividends and no stock dividends were proposed in the Company’s 2019
shareholder meeting.
(Note2) In accordance with the “Guidelines for Disclosure of the Financial Forecast by
Public Companies”, it is not necessary for the Company to disclose financial forecast
information of 2019. This information related to change of operating performance and pro
forma earnings per share and the PE ratio are not applicable.
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Appendix 6
Lite-On Technology Corporation
The individual and overall shareholding by directors and supervisors as entered in the Register (Roster)
of Shareholders is as follows:
I. In accordance with Article 26 of the Securities and Exchange Act, the Company’s directors shall
at least hold a total of 56,420,808 shares. As of April 23, 2019, the entire directors of the
Company held 187,030,054 shares.
II. The Company has established an Audit Committee; the requirements for shareholding by
supervisors are not applicable.
III. Shares held by Independent Directors are not counted towards the shares held by all directors.
IV. Shareholding facts by all Directors: The record (base) date is the date on which transfer is
suspended, i.e., April 23, 2019.
Position Name Date when
elected
Tenure of
office
Number of shares
held when being
elected
Number of shares
held on the date
when transfer is
suspended
Chairman Raymond Soong 2016.06.24 Three
years 78,908,736 79,302,560
Vice
Chairman
Lite-On Capital Corporation
Representative Warren Chen 2016.06.24
Three
years 15,040,803 15,115,869
Director Ta-Sung Investment Co., Ltd.
2016.06.24 Three
years 46,854,554 47,088,399
Representative Keh-Shew Lu
Director Ta-Sung Investment Co., Ltd.
2016.06.24 Three
years 46,854,554 47,088,399
Representative: Tom Soong
Director Dorcas Investment Co., Ltd
Representative Joseph Lin. 2016.06.24
Three
years 6,019,584 6,049,627
Director
Yuan Pao Development &
Investment Co. Ltd. 2016.06.24 Three
years 39,277,570 39,473,599
Representative CH Chen
Director
Yuan Pao Development &
Investment Co. Ltd. 2016.06.24 Three
years 39,277,570 39,473,599
Representative David Lee
Independent
Director Harvey Chang 2016.06.24
Three
years 0 0
Independent
Director Edward Yang 2016.06.24
Three
years 0 0
Independent
Director Albert Hsueh 2016.06.24
Three
years 0 0
The total of all directors (Note III) 186,101,247 187,030,054