EVEREST TEXTILE CO., LTD

2020 Annual General Shareholders’ Meeting Date：Monday, 15 June 2020

Time：9：00 a.m. Taipei time

Place：No. 261 Nanmen Road, Tainan City(The Conference Hall on 1F of the Labor Recreational Center)

Meeting Agenda

Call the meeting to order

Chairperson takes chair

Chairperson remarks

Reporting Items

1、2019 Business Report

2、2019 Financial Statements

3、The Audit Committee’s review report on 2019 Business Report and

Financial Statements

4、To report amendments on the “Best Practice Principles of Ethical Corporate

Management” for Everest Textile CO.,LTD

Approval Items

1、To accept 2019 business report and financial statements

2、To approve the proposal for distribution of 2019 profits

Discussion Items

1、To amend the Articles of Incorporation of Everest Textile CO.,LTD

2、To amend the company bylaw of “Meeting Rules of Stockholders” of

Everest Textile CO., LTD

Extemporary Motions

Meeting adjourned

Contents

Reporting Items

1. 2019 Business Report .............................................................................................. 1

2. 2019 Financial Statements ....................................................................................... 6

3. The Audit Committee’s review report on 2019 Business Report and

Financial Statements .............................................................................................. 31

4. To report amendments on the “Best Practice Principles of Ethical

Corporate Management” for Everest Textile CO., LTD ....................................... 32

Approval Items

1. To accept 2019 business report and financial statements ...................................... 36

2. To approve the proposal for distribution of 2019 profits ...................................... 37

Discussion Items

1. To amend the Articles of Incorporation of Everest Textile CO., LTD .................. 38

2. To amend the company bylaw of “Meeting Rules of Stockholders” of

Everest Textile CO., LTD ...................................................................................... 40

Extemporary Motions

Rules and Bylaws

Articles of Incorporation of Everest Textile CO., LTD ................................................. 43

Meeting Rules of Stockholders for Everest Textile CO., LTD ..................................... 49

Appendix

Current Shareholding of Directors................................................................................. 53

Impact of the Stock Dividend Distribution on Operating Results, EPS and

Shareholders’ Return on Investment ............................................................................. 53

Reporting items

1. 2019 Business Report

A、Foreword

Global economic growth in 2019 stayed in a low situation, mainly due to the slowdown in

economic growth in the United States and China, weak economic performance in emerging

markets, the continued continuation of the US-China trade war; But the Fed in response to the

global economic slowdown, not only to stop the original start of the interest rate hike cycle, in

early March 2020 in response to the global spread of the new coronavirus pneumonia

epidemic(COVID-19), the financial markets of various countries experienced intense shocks,

prompting the Federal Reserve on March 16 to cut interest rates by another 4 yards to 0% to

0.25%, the market forecast of zero interest rates in the United States, which is showing the

Fed's economic prospects deepening doubts. In the domestic boom part, although benefiting

from the US-China trade turnover effect, Taiwan has so far been barred from entering two

neighboring regional trade agreements: CPTPP and RCEP. Taiwan enterprises are highly

dependent on the U.S. and European markets, will be highly challenged by china, Japan and

South Korea and other rivals.

Everest Textile looks into the future, will strengthen vertical integration of upstream and

downstream supply chain. In the face of the COVID-19 outbreak, it has a major impact on the

world's major industrial supply chains. It affects February start rate of Everest Textile

Shanghai plant due to work start date deferred and personnel self-isolation and other policies.

Since the whole plant appropriate plan on resuming work, in March Shanghai plant was back

in fully normalized production. However, due to the rapid spread of COVID-19 from China to

Italy, Iran, and even Europe, Americas etc, the main brand customer markets have been

affected, resulting in the stagnation of the consumer market, the global economy has a huge

impact. Everest Textile in Asia, the Americas, Africa, respectively set up fabric factory and

garment factory, has been through the brand customer inspection plant, with a large number of

orders. Ethiopia and Haiti have zero tariff advantages, can quickly elastic in response to the

scheduling of production areas and production capacity supply, short-chain decentralized

production, will be the best partner of global brand customers. In response to major changes in

the global economy, Everest Textile will invest prudently and conservatively, expand refined

production and increase productivity to reduce operating costs and focus on cash flow in

response to the challenges of global deflation;

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B、Operating Results

Everest Textile consolidated revenue in 2019 was TWD 8.86 billion, down 5.76% from 2018.

Net loss was TWD272 million, and EPS was -0.56, mainly from profit to loss Department in

the face of low-cost competition in Southeast Asia, the decline in revenue led to a decrease in

gross margin, operating expenses rate also due to support the expansion of overseas three

factories increased operations, and overseas three new plants in the initial stage of operation,

the marketing system is still weak, orders are insufficient, capacity efficiency has yet to be

improved, so the overall operating performance did not meet the target. However, with the

overseas new three factories have entered the production operation stage, the company to

develop a human development strategy, the use of multi-leap ingress, expand sales and

research and development related personnel, actively develop and receive orders, expand new

market development, and establish a new operating model of e-commerce platform, in

response to this wave of global economic crisis.

C、2019 Goals and Future Prospects

Looking ahead to 2020, the increasing conflict of US-China trade war, oil war caused by

Saudi Arabia and Russia, as well as the spread of the COVID-19 around the world, will affect

the uncertainty and direction of the global economic. Countries of the world locked economy,

has caused the decline of GDP and consumer market stagnation, governments reducing

interest rates, tax cuts and subsidies. How quickly the outbreak of COVID-19 can be

controlled, there is still a great deal of uncertainty. Global economic growth is expected to

remain weak in 2020. Everest Textile is in the face of this wave of outbreaks caused by highly

uncertain market and competition. Only in the spirit of focus on the innovative energy of

research and development, strengthen the production of the industry, reduce the strength of the

operating costs, and maintain the strength and cash. We need to be very cautious in the face of

this severe global financial crisis. By the U.S.-China trade war and COVID-19 transfer effect,

government industrial transformation policy, smart and efficient computing and other

emerging technology continued to spread, Everest Textile uphold the spirit of "Smart Everest

and Sustainable Innovation", with "Humanities x Science" research and development strategy,

combined with trends and cooperation with brand customers, with the global layout of

one-stop full-value innovation services, and constantly provide multi-functional, sustainable

environmental protection fabrics and related garment innovative products and integration

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services. Make good use of existing core technology alliances with different industries,

transition to industrial textiles, choose to match different materials and Everest Textile long

fiber, short fiber, knitting elasticity and special finishing fit technology, and increase the use

of cross-industry market fabrics. In 2020, we will expand its production, combining with the

Global Apparel Research Center to provide ODM creative design services from fabric to

garment, and inject new growth momentum into the six factories around the world.

Growth Momentum One: From Athleisure (Sports Leisure) Products To Lifestyle

Products

Based on market trends as the main axis, Everest Textile extends from functional fabrics to

life-oriented product design, understanding the needs of consumers "clothing", and then

develop more about work, leisure, yoga, jogging ... such as multi-functional products. Its

product plan is as follows:

1. Ever Dura-Fila:

Emphasize the same level of wear-resistant features as Cordura products, and with elastic

functions, not only wear comfortable and environmentally friendly non-fluorine water-dial

function, but also be suitable for all-weather wear, protecting human safety and protecting the

earth's sustainability.

2. Ever E-2000 (Eco-made):

With environmentally friendly materials for the idea, coupled with the macro-far false

technology, emphasizing the T-400 mechanical bullet has excellent elastic response rate, and

has a soft imitation cotton feel of the touch, and also be suitable for the four seasons to wear.

Its imitation fur special feel, suitable for the upper body and lower body fabric, which is

Everest’s popular commodity.

3. Eever woven fleece-long pile :

The use of Everest Textile yarn dyeing technology, redefine soft shell products, with a

fashionable and popular appearance, plus four-sided elastic design and the back of the tissue

plush warm. It is suitable for autumn and winter season, different from the existing fit cloth

species. It attracts the eyes of consumers, which is the main innovation products of Everest

Textile.

Growth Momentum II: Transforming to Industrials Textiles

In 2016-2020, the consumption of fiber for industrial textiles (including vehicles, marine,

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construction, medical and health and sports) will exceed the consumption of clothing textiles.

Industrial textiles have become high-tech and many intellectual property rights as the main

competitive industry. Everest Textile uses technology platforms to import smart and flame

retardant materials, integrating existing fabric design and post-processing core technologies,

jumping into new areas of knowledge to enter the market, and develop products such as Ever

FR Work, MedWear, Ever Film and more items. The plan will be based on expanding

partnerships with ecosystems, jointly developing new product services and new business

models, and actively participating in the promotion.

Growth Momentum III: Garment production in Ethiopian Plant and Haiti Plant is

gradually in mass production orders

In the face of the US-China trade war and the outbreak of COVID-19, resulting in the

reconstruction of global supply chain. The regional economy will temporarily replace the

global mechanism of the situation. Everest Textile & Apparel integration of the global six

factories geographical and its regional economic advantages can work together with third

parties, to localize the regional supply chain to break the impact of COVID-19; Everest

Textile with high-functional series of environmental protection products, integrated global

layout advantages, can provide global customers to respond quickly to market demand, turn

the crisis into a turning point, and create irreplaceable value:

1、Increase capacity efficiency and expand cost advantages: Create smart garment factories, by

using automated production lines, de-skills to multiply efficiency, expand the production

capacity of the cable plant and the Haitian plant to reduce production costs, and provide

customer advantage costs and services.

2、Combined with the expansion of fabric business to garment services and orders, the period

to make self-use cloth to more than 50%, the integration of the main sub-material

development and design of the printing team, the development of a series of sample clothing

and masks, protective clothing, to provide customers with higher value, increase the profits of

garments.

3、Making good use of zero-tariff advantages, expanding the European, American Japanese,

and Thailand market: In the post-globalization time, we have layout of the world close to the

market. By using of North Carolina and three Asian fabric factories, with Haiti and Ethiopia

garment factories to Europe, USA and Japan zero tariff advantage, expanding the fabric and

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garment market.

D、In conclusion

In 2019, after a turbulent global political and economic situation, the operating performance

failed to meet the targets, coupled with the high investment and operating costs of the new

three plants: US dyeing plant, Ethiopian garment factory, and Haitian garment factory. In the

beginning of 2020 we are facing the situation of COVID-19 spreading around the world, oil

war between Saudi Arabia and Russia, causing the 2020 global economic and financial

prospects are unclear. The global climate is not optimistic. Everest Textile in line with its

consistent mission and values, careful assessment, positive to face the challenges of this

global change. The six global factories develop various contingency strategies, in addition to

the past few years completed the “Moon Shooting 5+5 Global Layout Plan”, the construction

of industrial 4.0 smart factory, AI to improve the efficiency and quality of the process, and

began to implement the global talent leap strategy, emphasizing the talent cultivation and

expansion of sales and research and development team, the future of the foundation of

competitive revenue. In addition to continuing to enhance self-competitiveness with four

forces, such as "innovation, wisdom, sustainability, and fine strength", we also actively

communicate with professionals in the same industry, actively recruit talents, and build the

foundation of Everest Group's sustainable growth with high-quality talent.

In 2020 based on the forward-looking global layout and continuous self-breakthrough of the

leaping thinking, in addition to reducing operational risks and more implementation of

sustainable management, Everest global six plants will strengthen the joint during the time in

the US-China trade war and COVID-19 caused by the international large plant transfer effect.

Global customers will be more understanding of Everest global layout of the integration

advantages. The use of the Group's high-quality human and global resources, continue to

refine product research and development and customer service, so that the Group leaps and

bounds, sustainable operation and growth, and always with "2020 Everest to win the year" as

the idea, Everest not only becomes a customer priority for long-term partners but also a

shareholders, the national community appreciate the benchmark enterprise.

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2. 2019 Financial Statements

The 2019 independent auditors’ reports and financial statements by Deloitte & Touche are

attached as follows. (The 2019 financial report can be downloaded at

http://mops.twse.com.tw )

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

Everest Textile CO., LTD

Opinion

We have audited the accompanying consolidated financial statements of Oriental Union

Chemical Corporation and its subsidiaries (the “Group”), which comprise the consolidated

balance sheets as of December 31, 2019 and 2018, 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, based on the results of this auditors’ report and other independent auditors’

report (see the section of other matter), the accompanying consolidated financial statements

present fairly, in all material respects, the consolidated financial position of the Group as of

December 31, 2019 and 2018, and its consolidated financial performance and its consolidated

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 (“FSC”) of the Republic of China (“ROC”).

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 ROC. 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 ROC, 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 refer to the most important matters for the exami nation of

the 2019-year consolidated financial reports of the Company and its subsidiary

in accordance with the professional judgment of the accountant. Such matters

- 7 -

have been addressed in the process of examining the consolidated financial

reports as a whole and in the formation of the review opinion, and we do not

express opinion on such matters separately.

The key audit matters of the 2019-year consolidated financial report of the

Company and its subsidiary are as follows:

As stated in the inventory of the consolidated financial report note 4(6), the impairment of the

inventory of the note 5(2) and the inventory of the note 9, the amount of inventory of the

company and its subsidiaries as at 31 December 2019, was NT$4,747,726, accounting for

35% of the total consolidated assets. The inventory is measured by low cost and net realized

value, when the net realized value of inventory is lower than the cost, it is necessary to

mention the inventory price decline and sluggish loss, its assessment involves the

management of significant judgment, and the inventory book amount is significant for the

overall consolidated financial report, because the inventory net realizable value assessment is

considered as a key audit matter.

The inspection procedures for the reasonableness of the net realizable value of inventory are

as follows:

1、 Understand and evaluate the design and implementation of the inventory internal control

system, including the correctness of inventory age.

2、 Assess the year-end inventory age status, and test the accuracy of the inventory age area.

3、 Verify the reasonableness of calculating the net realizable value.

Other Matter

Included in the subsidiaries of the consolidated financial reporting, 2019 the financial

statements of Everest Textile (Thailand) Co. LTD, Everest Apparel (Ethiopia) S.C., Everest

Apparel (Haiti) S.A., Everest America (Holding) Inc., Everest Development USA LLC, and

Everest Textile USA LLC., and 2018 Everest (Thailand) Co., Ltd. and Everest Textile USA

LLC are audited by other certificated public accountants. The total assets of the subsidiary of

December 31, 2019 and 2018 were $3,984,859,000 and $2,944,592, respectively, accounting

for 29% and 24% of the total combined assets, the net consolidated operating income for the

period from January first to 31th December, 2019 and 2018 were $1,187,582,000 and

$1,202,571, respectively, representing 13% of the net consolidated operating income.

We have also audited the parent company only financial statements of Everest Textile CO.,

LTD as of and for the years ended December 31, 2019 and 2018 on which we have issued an

unmodified report.

- 8 -

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 FSC of the ROC, 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.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial

statements as a whole are free from material misstatement, whether due to fraud or error, and

to issue an 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 ROC 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 the auditing standards generally accepted in the ROC,

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.

- 9 -

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 consolidated 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 to communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence,

and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those

matters that were of most significance in the audit of the consolidated financial statements for

- 10 -

the year ended December 31, 2019 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 Jiz-hen

Li and Li-yuan Guo.

Deloitte & Touche

Tainan, Taiwan

Republic of China

March 19, 2020

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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 ROC and not those of any other

jurisdictions. The standards, procedures and practices to audit such consolidated financial

statements are those generally applied in the ROC.

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 ROC. 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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Everest Text i le Co . , Ltd . and subsid iar ies

Consol idated balance sheet

December 31 , 2019 and 2018

( In Thousands of New Taiwan Dol lars)

December 31, 2019 December 31, 2018

Code Assets Amount ％ Amount ％

CURRENT ASSETS

1100 Cash and cash equivalents $ 185,145 2 $ 132,349 1

1120 Financial assets at fair value through profit or loss 86,548 1 70,555 1

1150 Notes receivable 9,330 - 31,298 -

1170 Trade receivable 1,122,197 8 1,155,638 9

1200 Other receivables 46,275 - 39,120 1

1220 Current income tax assets 5,755 - 2,760 -

130X Inventories 4,747,726 35 4,504,495 36

1470 Other current assets 163,508 1 139,448 1

11XX Total current assets 6,366,484 47 6,075,663 49

NON-CURRENT ASSETS

1517 Financial assets at fair value through other comprehensive income 6,960 - 6,960 -

1600 Property, plant and equipment 6,302,525 47 6,132,633 49

1755 Right-of-use assets 657,623 5 - -

1840 Deferred tax assets 126,508 1 123,706 1

1990 Other non-current assets 55,842 - 149,410 1

15XX Total non-current assets 7,149,458 53 6,412,709 51

1XXX TOTAL $ 13,515,942 100 $ 12,488,372 100

Code LIABILITIES AND EQUITY

CURRENT LIABILITIES

2100 Short-term borrowings $ 2,711,074 20 $ 2,000,982 16

2110 Short-term bills payable 799,378 6 1,279,107 10

2130 Current contract liabilities 18,551 - 14,863 -

2150 Notes payable 52,073 1 84,128 1

2160 Notes payable to related parties 6,516 - 30,144 -

2170 Trade payable 569,138 4 657,415 5

2180 Trade payable to related parties 49,040 - 73,777 1

2219 Other payables 410,956 3 533,068 4

2220 Other payables to related parties 56,064 1 45,475 1

2230 Current tax liabilities 43,848 - 46,545 1

2280 Lease liabilities 94,044 1 - -

2322 Current portion of long-term borrowings 726,667 5 1,411,667 11

2399 Other current liabilities 29,921 - 24,636 -

21XX Total current liabilities 5,567,270 41 6,201,807 50

NON-CURRENT LIABILITIES

2540 Long-term borrowings 2,265,833 17 896,667 7

2570 Deferred tax liabilities 169,777 1 171,428 1

2580 Lease liabilities 609,650 5 - -

2640 Net defined benefit liabilities 60,048 - 59,822 1

2645 Guarantee deposits 825 - 700 -

2670 Other non-current liabilities 2,406 - - -

25XX Total non-current liabilities 3,108,539 23 1,128,617 9

2XXX Total liabilities 8,675,809 64 7,330,424 59

EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION

3110 Common stock 5,098,341 38 4,998,374 40

3200 Capital surplus 99,644 1 99,644 1

Retained earnings

3310 Legal reserve 174,022 1 158,285 1

3320 Special reserve 83,073 1 80,182 1

3350 Unappropriated earnings ( 215,234 ) ( 2 ) 200,977 1

3300 Total retained earnings 41,861 - 439,444 3

3400 Other equity ( 66,888 ) ( 1 ) ( 46,686 ) -

3500 Treasury stock ( 332,836 ) ( 2 ) ( 332,836 ) ( 3 )

31XX Total owners of the corporation interests 4,840,122 36 5,157,940 41

36XX NON-CONTROLLING INTERESTS 11 - 8 -

3XXX Total equity 4,840,133 36 5,157,948 41

TOTAL $ 13,515,942 100 $ 12,488,372 100

The accompanying no tes are an in tegral par t o f the conso l idated f inancial s ta tements .

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Everest Texti le Co. , Ltd. and subsidiar ies

Consol idated statements of comprehensive income

For the years ended December 31 , 2019 and 2018

( In Thousands of New Taiwan Dollars , Except Earnings Per Share)

2019 2018 code Amount ％ Amount ％

4000 Operating revenue $ 8,863,627 100 $ 9,405,379 100

5000 Cost of goods sold 7,477,722 85 7,715,556 82

5900 Gross (loss) profit 1,385,905 15 1,689,823 18

Operating expenses 6100 S. and M. expenses 646,788 7 707,089 7 6200 G. and A. expenses 512,126 6 472,193 5 6300 R. and D. expenses 263,083 3 267,616 3 6450 Expected credit loss

reversed 5,434 - 5,913 - 6000 Total operating

expenses 1,427,431 16 1,452,811 15

6500 Other gains and losses, net ( 114 ) - 565 -

6900 (Loss) profit from operations ( 41,640 ) ( 1 ) 237,577 3

Non-operating income and expenses

7010 Other income 59,188 1 50,253 - 7020 Other expenses ( 52,658 ) ( 1 ) 74,161 1 7510 Interest expense ( 116,693 ) ( 1 ) ( 85,552 ) ( 1 ) 7000 Total non-operating income

and expenses ( 110,163 ) ( 1 ) 38,862 -

7900 (Loss) profit before income tax ( 151,803 ) ( 2 ) 276,439 3

7950 Income tax (benefit) expense 120,153 1 119,082 1

8200 Net (loss) profit for the year ( 271,956 ) ( 3 ) 157,357 2

（Continued）

- 14 -

2019 2018 code Amount ％ Amount ％

Other comprehensive income (loss) 8310 Items that will not be reclassified

subsequently to profit or loss: 8311 Premeasurement of defined benefit

plans ( $ 32,071 ) - ( $ 33,517 ) - 8316 Unrealized gain on investments in

equity instruments designated as at fair value through other comprehensive income 15,993 - 4,792 -

8349 Income tax relating to items that will not be reclassified subsequently to profit or loss 6,414 - 15,992 -

( 9,664 ) - ( 12,733 ) - 8360 Items that may be reclassified

subsequently to profit or loss: 8361 Exchange differences on translating

the financial statement of foreign operations ( 36,195 ) ( 1 ) 26,322 -

8300 Other comprehensive (loss) income for the year, net of income tax ( 45,859 ) ( 1 ) 13,589 -

8500 Total comprehensive (loss) profit for the year ( $ 317,815 ) ( 4 ) $ 170,946 2

8600 Net (loss) profit attributed to: 8610 Owners of the Corporation ( $ 271,959 ) ( 3 ) $ 157,365 2 8620 Non-controlling interests 3 - ( 8 ) -

( $ 271,956 ) ( 3 ) $ 157,357 2

8700 Total comprehensive (loss) income 8710 Owners of the Corporation ( $ 317,818 ) ( 4 ) $ 170,954 2 8720 Non-controlling interests 3 - ( 8 ) -

( $ 317,815 ) ( 4 ) $ 170,946 2

EARNINGS PER SHARE 9710 Basic ( $ 0.56 ) $ 0.33 9810 Diluted ( 0.56 ) 0.33

The accompanying notes are an integral part of the consol idated f inancia l s tatements .

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- 16 -

Everest Textile Co., Ltd. and subsidiaries

Consolidated statements of cash flows

For the years ended December 31, 2019and 2018

(In Thousands of New Taiwan Dollars)

2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss) profit before income tax ( $ 151,803 ) $ 276,439

Adjustments

Depreciation expenses 757,365 574,543

Expected credit loss reversed 5,434 5,913

Interest expense 116,693 85,552

Interest income ( 822 ) ( 813 )

Dividend income ( 4,054 ) ( 4,772 )

Loss (gain) on disposal of property, plant

and equipment 114 ( 565 )

write-downs of inventories 22,518 7,972

Unrealized gain (loss) on foreign currency

exchange 29,072 ( 23,048 )

Changes in operating assets and liabilities

Notes receivable 21,968 14,085

Trade receivable 23,158 173,390

Other receivable ( 7,064 ) 7,401

Inventories ( 254,823 ) ( 440,901 )

Other current assets ( 23,678 ) 7,236

contract liability 3,688 3,199

Notes payable ( 32,055 ) ( 37,711 )

Notes payable to related party ( 23,628 ) ( 16,054 )

Trade payable ( 83,723 ) ( 1,772 )

Trade payable to related party ( 24,737 ) 6,604

Other payable ( 89,568 ) ( 38,768 )

Other payable to related party 10,589 ( 48,299 )

Other current liabilities 2,173 ( 9,573 )

Net defined benefit liabilities ( 31,845 ) ( 62,109 )

Other non-current liabilities 2,406 -

Cash (used in) generated from operations 267,378 477,949

Interest received 809 706

Interest paid ( 111,034 ) ( 83,679 )

Income tax paid ( 125,577 ) ( 65,842 )

Net cash generated from operating

activities 31,576 329,134

（Continued）

- 17 -

2019 2018

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment ( $ 829,818 ) ( $1,042,800 )

Proceeds from disposal of property, plant and

equipment 5,000 2,570

Increase in other assets ( 2,346 ) ( 8,537 )

Decrease in other assets 1,537 11,831

Other dividend received 4,054 4,772

Net cash used in investing activities ( 821,573 ) ( 1,032,164 )

CASH FLOWS FROM FINANCING ACTIVITIES

Increase from short-term borrowings 4,767,349 8,759,935

Decrease from short-term borrowings ( 4,032,244 ) ( 8,899,255 )

Increase from short-term bills payable 6,323,250 6,691,097

Decrease from short-term bills payable ( 6,802,979 ) ( 6,991,382 )

Proceeds from long-term borrowings 2,375,000 1,685,000

Repayments of long-term borrowings ( 1,690,834 ) ( 926,666 )

Increase in guarantee deposits 10,397 2,946

Decrease in guarantee deposits ( 7,049 ) ( 1,700 )

Disposal treasury stock - 130,000

Repayment of the principal portion of lease

liabilities ( 96,983 ) -

Net cash generated from financing

activities 845,907 449,975

EFFECTS OF EXCHANGE RATE CHANGES ON THE

BALANCE OF CASH HELD IN FOREIGN CURRENCIES ( 3,114 ) ( 115 )

NET INCREASE (DECREASE) IN CASH AND CASH

EQUIVALENTS 52,796 ( 253,170 )

CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF THE YEAR 132,349 385,519

CASH AND CASH EQUIVALENTS AT THE END OF THE

YEAR $ 185,145 $ 132,349

The accompanying notes are an integral par t of the consolidate d financial statements.

- 18 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

Everest Textile CO., LTD

Opinion

We have audited the accompanying financial statements of Everest Textile CO., LTD (the

“Corporation”), which comprise the balance sheets as of December 31, 2019 and 2018, 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 (collectively referred to as the “financial statements”).

In our opinion, based on the results of this auditors’ report and other independent auditors’

report (see the section of other matter), the accompanying financial statements present fairly,

in all material respects, the financial position of the Corporation as of December 31, 2019 and

2018, 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 (“ROC”). 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 Corporation in accordance with

The Norm of Professional Ethics for Certified Public Accountant of the ROC, 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, 2019.

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

- 19 -

matters.

The descriptions of the key audit matters of the financial statements for the year ended

December 31, 2019 are as follow:

As stated in the inventory of the note 4 (5) of the individual financial report, the impairment

of the inventory of the note 5 (2) and the inventory of the note 9, the amount of the company

inventory, as of December 31, 2019, is NT$2,976,054, accounting for 28% of the total assets

of the individual. The inventory is measured by low cost and net realizable value, when the

net realizable value of inventory is lower than the cost, it is necessary to mention the inventory

price decline and sluggish loss. Its assessment involves the management of significant

judgment, and the inventory book amount is significant for the overall individual financial

report, because the inventory net realizable value assessment is considered as key audit matter.

The inspection procedures for the reasonableness of the net realisable value of inventory are

as follows:

1、Understand and evaluate the design and implementation of the inventory internal control

system, including the correctness of inventory age.

2、 Assess the year-end inventory age status, and test the accuracy of the inventory age area.

3、Verify the reasonableness of calculating the net realizable value.

Other Matter

The investment subsidiary of the Company's 2019th Annual Individual Financial Report

adopting the Equity Law is audited by other certified public accountants, so the opinions

expressed on the individual financial report, the investment amount and its profit and loss of

the above-mentioned equity method are recognized in the audit report of other certified public

accountants. The amount of investment in the above-mentioned equity method as at 31

December 2019 was NTD 2,018,415 thousands, accounting for 19% of the total assets, and

the comprehensive profit and loss share recognized by the Republic of China as of 1 January

to 31 December 2019 was a loss of NTD 393,363 thousands, accounting for 124% of the total

comprehensive profit and loss.

Responsibilities of Management and Those Charged with Governance for the

Consolidated Financial Statement

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

- 20 -

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

Corporation’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 Corporation 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 Corporation’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 ROC 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 ROC,

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

- 21 -

an opinion on the effectiveness of the Corporation’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 Corporation’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 Corporation 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 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 Corporation to express an opinion on the financial

statements. We are responsible for the direction, supervision, and performance of the

Corporation 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 to communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence,

and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those

matters that were of most significance in the audit of the financial statements for the year

- 22 -

ended December 31, 2019 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 Ms.

Jiz-hen Li and Ms. Li-yuan Guo.

Deloitte & Touche

Tainan, Taiwan

Republic of China

March 19, 2020

- 23 -

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 ROC and not those of any other jurisdictions. The standards,

procedures and practices to audit such financial statements are those generally applied in the

ROC.

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 ROC. 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.

- 24 -

Everes t Text i le Co. , LTD

Balance sheets

December 31 , 2019 and 2018

(In Thousands of New Taiwan Dollars)

December 31, 2019 December 31, 2018

Code ASSETS Amount ％ Amount ％

CURRENT ASSETS

1100 Cash and cash equivalents $ 51,817 - $ 27,175 -

1120 Financial assets at fair value through profit or loss 86,548 1 70,555 1

1150 Notes receivable 5,547 - 19,506 -

1170 Trade receivable 402,707 4 457,358 5

1180 Trade receivable from related parties 268,551 3 294,471 3

1200 Other receivable 42,375 - 36,955 -

1210 Other receivable from related parties 797,574 8 965,620 10

1220 Current income tax assets 1,248 - 2 -

130X Inventories 2,976,054 28 2,783,781 27

1470 Other current assets 21,097 - 27,362 -

11XX Total current assets 4,653,518 44 4,682,785 46

NON-CURRENT ASSETS

1517 Financial assets at fair value through other comprehensive income 6,960 - 6,960 -

1550 Investments accounted for using the equity method 2,952,184 28 2,585,708 25

1600 Property, plant and equipment 2,706,961 26 2,851,269 28

1755 Right-of-use assets 85,376 1 - -

1840 Deferred tax assets 86,319 1 84,521 1

1990 Other non-current assets 66,866 - 62,761 -

15XX Total non-current assets 5,904,666 56 5,591,219 54

1XXX TOTAL $ 10,558,184 100 $ 10,274,004 100

Code LIABILITIES AND EQUITY

CURRENT LIABILITIES

2100 Short-term borrowings $ 1,247,748 12 $ 640,000 6

2110 Short-term bills payable 799,378 7 1,279,107 12

2150 Notes payable 27,611 - 60,003 1

2160 Notes payable to related parties 6,516 - 30,144 -

2170 Trade payable 283,343 3 415,491 4

2180 Trade payable to related parties 157,806 1 58,411 1

2219 Other payable 296,933 3 391,491 4

2220 Other payable to related parties 60,927 1 165,984 2

2230 Current tax liabilities - - 4,993 -

2280 Lease liabilities 35,503 - - -

2322 Current portion of long-term borrowings 606,667 6 1,411,667 14

2399 Other current liabilities 9,115 - 10,156 -

21XX Total current liabilities 3,531,547 33 4,467,447 44

NON-CURRENT LIABILITIES

2540 Long-term borrowings 1,905,833 18 416,667 4

2570 Deferred tax liabilities 169,777 2 171,428 2

2580 Lease liabilities 50,032 - - -

2640 Net defined benefit liabilities 60,048 1 59,822 -

2645 Guarantee deposits 825 - 700 -

25XX Total non-current liabilities 2,186,515 21 648,617 6

2XXX Total liabilities 5,718,062 54 5,116,064 50

EQUITY

Capital

3110 Common stock 5,098,341 48 4,998,374 49

3200 Capital surplus 99,644 1 99,644 1

Retained earnings

3310 Legal reserve 174,022 2 158,285 1

3320 Special reserve 83,073 1 80,182 1

3350 Unappropriated earnings ( 215,234 ) ( 2 ) 200,977 2

3300 Total retained earnings 41,861 1 439,444 4

3400 Other equity ( 66,888 ) ( 1 ) ( 46,686 ) ( 1 )

3500 Treasury stock ( 332,836 ) ( 3 ) ( 332,836 ) ( 3 )

31XX Total equity 4,840,122 46 5,157,940 50

TOTAL $ 10,558,184 100 $ 10,274,004 100

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

- 25 -

Everes t Text i le Co. , LTD

Statements of comprehensive income

For the years ended December 31 , 2019 and 2018

(In Thousands of New Taiwan Dollars , Except Earnings Per Share )

2019 2018

Amount ％ Amount ％

OPERATING REVENUE $ 5,993,003 100 $ 6,610,889 100

OPERATING COSTS 5,164,420 86 5,589,873 84

GROSS PROFIT 828,583 14 1,021,016 16

Unrealized Profits and Losses on

Transactions with Associates ( 3,984 ) - ( 1,067 ) -

Realized Profits and Losses on

Transactions with Associates 1,067 - 1,090 -

Realized Gross Profit 825,666 14 1,021,039 16

OPERATING EXPENSES

Selling and marketing expenses 450,112 8 521,050 8

General and administrative expenses 231,603 4 221,873 4

Research and development expenses 208,319 3 221,505 3

Total operating expenses 890,034 15 964,428 15

Other gains and losses, net 2,873 - - -

(Loss) profit from operations ( 61,495 ) ( 1 ) 56,611 1

NON-OPERATING INCOME AND

EXPENSES

Other income 59,773 1 44,777 1

Other Gain (Loss) ( 649 ) - 68,009 1

Interest expense ( 47,942 ) ( 1 ) ( 42,700 ) ( 1 ) Share of (loss) profit of subsidiaries

accounted for using equity method ( 213,195 ) ( 3 ) 60,361 1

Total non-operating income

and expenses ( 202,013 ) ( 3 ) 130,447 2

（Continued）

- 26 -

2019 2018

Amount ％ Amount ％

PROFIT BEFORE INCOME TAX ( $ 263,508 ) ( 4 ) $ 187,058 3

INCOME TAX (BENEFIT) EXPENSE 8,451 - 29,693 -

NET PROFIT FOR THE YEAR ( 271,959 ) ( 4 ) 157,365 3

OTHER COMPREHENSIVE INCOME

(LOSS) Items that will not be reclassified

subsequently to profit or loss:

Premeasurement of defined

benefit plans ( 32,071 ) - ( 33,517 ) - Unrealized gain on

investments in equity

instruments designated as

at fair value through other

comprehensive income 15,993 - 4,792 - Income tax relating to items

that will not be

reclassified subsequently

to profit or loss 6,414 - 15,992 -

( 9,664 ) - ( 12,733 ) -

Items that may be

reclassified subsequently

to profit or loss:

Exchange differences

on translating the

financial statement

of foreign

operations ( 36,195 ) ( 1 ) 26,322 -

Other comprehensive

income for the year,

net of income tax ( 45,859 ) ( 1 ) 13,589 -

TOTAL COMPREHENSIVE

PROFIT FOR THE YEAR ( $ 317,818 ) ( 5 ) $ 170,954 3

EARNINGS PER SHARE

Basic ( $ 0.56 ) $ 0.33

Diluted ( 0.56 ) 0.33

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

- 27 -

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( $

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) (

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( $

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4,8

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ing

no

tes a

re a

n i

nte

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l p

art

of

the

fin

an

cia

l sta

tem

en

ts.

- 28 -

Everest Textile Co., LTD

Statements of Cash Flows

For the years ended December 31, 2019 and 2018

(In Thousands of New Taiwan Dollars)

2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Profit (Loss) before income tax ( $ 263,508 ) $ 187,058

Adjustments:

Depreciation expenses 323,743 300,072

Interest expense 47,942 42,700

Interest income ( 2,798 ) ( 1,619 )

Dividend income ( 4,054 ) ( 4,772 )

Share of loss (profit) of subsidiaries and accounted

for using equity method 213,195 ( 60,361 )

Write-downs of inventories 10,000 5,000

Unrealized gain on group trade 3,984 1,067

Realized gain on group trade ( 3,940 ) ( 1,090 )

Changes in operating assets and liabilities

Notes receivable 13,959 5,507

Trade receivable 54,651 256,616

Trade receivable to related parties 25,920 ( 2,778 )

Other receivable ( 5,420 ) 3,818

Other receivable to related parties ( 100,142 ) 25,391

Inventories ( 202,273 ) ( 140,326 )

Other current assets 6,265 31,145

Contract liabilities ( 1,737 ) 1,700

Notes payable ( 32,392 ) ( 51,125 )

Notes payable to related parties ( 23,628 ) ( 16,054 )

Trade payable ( 132,148 ) 58,305

Trade payable to related parties 99,395 28,371

Other payable ( 50,308 ) ( 5,706 )

Other payable to related parties 3,075 ( 5,022 )

Other current liabilities 696 ( 3,648 )

Net defined benefit liabilities ( 31,845 ) ( 62,109 )

Cash (used in) generated from operations ( 51,368 ) 592,140

Interest received 2,798 1,621

Interest paid ( 47,443 ) ( 42,507 )

Income tax paid ( 11,725 ) 14,075

Net cash (used in) generated from operating

activities ( 107,738 ) 565,329

（Continued）

- 29 -

2019 2018

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment ( $ 179,402 ) ( $ 163,656 )

Proceeds from disposal of property, plant and

equipment 840 2,202

Increase in other assets ( 1,175 ) ( 795 )

Decrease in other assets 1,531 9,941

Increase other receivable to related parties ( 339,828 ) ( 189,379 )

Decrease other receivable to related parties 608,016 72,200

Dividends received 4,054 4,772

Net cash (used in) generated investing activities 94,036 ( 264,715 )

CASH FLOWS FROM FINANCING ACTIVITIES

Increase of short-term borrowings 3,397,748 6,734,138

Repayments of short-term borrowings ( 2,790,000 ) ( 7,084,138 )

Increase from short-term bills payable 6,323,249 6,691,097

Decrease from short-term bills payable ( 6,802,978 ) ( 6,991,382 )

Proceeds from long-term borrowings 2,375,000 1,205,000

Repayments of long-term borrowings ( 1,690,834 ) ( 926,666 )

Repayment of the principal portion of lease liabilities ( 35,966 ) -

Increase in guarantee deposits 325 1,770

Decrease in guarantee deposits ( 200 ) ( 1,700 )

Decrease other payable to related parties ( 108,000 ) ( 5,000 )

Acquired share of subsidiary ( 630,000 ) -

Net cash generated from (used in) financing

activities 38,344 ( 376,881 )

NET INCREASE IN CASH AND CASH EQUIVALENTS 24,642 ( 76,267 )

CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF THE YEAR 27,175 103,442

CASH AND CASH EQUIVALENTS AT THE END OF THE

YEAR $ 51,817 $ 27,175

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

- 30 -

3. Audit Committee’s review report on the 2019 Business Reportand Financial Statements

To the 2020 General Shareholders’ Meeting of Everest Textile Co., LTD,

In accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the

Company Act, we have examined the Business Report, Financial Statements, and the

Resolution for Allocation of Dividend submitted by Board of Directors for the year ending

2019, which have been audited by independent auditors, Ms. Jiz-hen Li and Ms. Li-yuan Guo

of Deloitte & Touche, and found them in order.

The Convener of the Audit Committee: Zhuang Ying-Zhi

Date: 19 March 2020

- 31 -

4. To report the amendments to the “Best Practice Principles ofEthical Corporate Management” for Everest Textile Co., LTD.

(1) In accordance with the promulgation of Taiwan Stock Exchange Corporation

under Tai-Cheng-Chi-Li-Tze No. 1080008378 dated 23 May 2019, the

company has amended the “Best Practice Principles of Ethical Corporate

Management” in view of the implementation of corporate governance and

enhancement of best practice management mechanism. Please refer to the

following comparison table for details.

- 32 -

“Best Practice Principles of Ethical Corporate Management”

Section Proposed Changes Current Articles

Article 6 (Prevention procedures and rules)

In accordance with the Principles as well

as reference of the international norm or

guideline, the Company shall establish

procedures and rules, which of latter

includes conduct guideline and education

training and the like, to prevent Company

Professionals from conducting business

without prudence and integrity;

meanwhile, specifically identify what

Company Professionals must pay attention

to while conducting business.

(Prevention procedures and rules)

In accordance with the Principles, the

Company shall establish procedures and

rules to prevent Company Professionals

from conducting business without

prudence and integrity; meanwhile,

specifically identify what Company

Professionals must pay attention to while

conducting business.

Article 7 (Commitment and execution)

The Board of Directors and top

management of the Company are

requested to submit a compliance

statement of the Best Practice Principles,

whereas the Best Practice Policy is

enlisted as recruit restrictions for

employee to conform.

The policy of ethical corporate

management with sincerity and integrity

shall be disclosed explicitly in the website

and annual reports of the Company. Board

of Directors and the high-leveled

management shall have strong and

rigorous commitment to the execution of

such policy, and enforce the policy to the

internal management and external

commercial activities.

The information in regard to

aforementioned best practice policy,

statement, commitment and execution is

documented and well preserved.

(Commitment and execution)

The policy of ethical corporate

management with sincerity and integrity

shall be disclosed explicitly in the website

and annual reports of the Company. Board

of Directors and the management shall

have strong and rigorous commitment to

the execution of such policy, and enforce

the policy to the internal management and

external commercial activities.

Article 9 (Ethical commercial activities and

prohibited conduct in unfair competition)

The Company shall act with integrity and

fairness when engaging in a commercial

activity with counterparty in accordance

with applicable competition laws and

regulations, and may not fix prices, make

rigged bids, establish output restrictions or

quotas, or share or divide markets by

(Ethical commercial activities)

The Company shall act with integrity and

fairness when engaging in a commercial

activity with counterparty in accordance

with applicable competition laws and

regulations, and may not fix prices, make

rigged bids, establish output restrictions or

quotas, or share or divide markets by

allocating customers, suppliers, territories,

- 33 -

Section Proposed Changes Current Articles

allocating customers, suppliers, territories,

or lines of commerce.

Prior to engaging in a commercial

transaction, the Company shall take into

consideration the legitimacy and legality

of the counterparty such as agents,

vendors, customers, and other entities, and

their Misconduct record, if any. The

Company shall avoid engaging in business

with counterparty with any record of

Misconducts.

When entering into material contracts with

counterparties, the Company shall include

provisions in such contracts demanding

the compliance of ethical corporate

management policy. And such contracts

shall also include clauses to terminate or

cancel the contracts at any time by the

Company, if Misconducts are performed,

or suspected of being performed, by the

counterparties.

or lines of commerce.

Prior to engaging in a commercial

transaction, the Company shall take into

consideration the legitimacy and legality

of the counterparty such as agents,

vendors, customers, and other entities, and

their Misconduct record, if any. The

Company shall avoid engaging in business

with counterparty with any record of

Misconducts.

When entering into material contracts with

counterparties, the Company shall include

provisions in such contracts demanding

the compliance of ethical corporate

management policy. And such contracts

shall also include clauses to terminate or

cancel the contracts at any time by the

Company, if Misconducts are performed,

or suspected of being performed, by the

counterparties.

Article 15 (Organization and responsibility)

The Company Professionals shall exercise

the due care of good administrators to urge

the Company to prevent Misconducts,

review the results of the preventive

procedures at any time, and continually

make adjustments so as to ensure thorough

implementation of the ethical corporate

management policies.

To fulfill the best practices of the ethical

corporate management, Human Resources

Department of the Company is dedicated

to be in charge of establishing and

enforcing the ethical corporate

management policies and prevention

procedures, and shall report regularly,

once a year at least, to the Board of

Directors.

(Organization and responsibility)

The Company Professionals shall exercise

the due care of good administrators to urge

the Company to prevent Misconducts,

review the results of the preventive

procedures at any time, and continually

make adjustments so as to ensure thorough

implementation of the ethical corporate

management policies.

To fulfill the best practices of the ethical

corporate management, Human Resources

Department of the Company is dedicated

to be in charge of establishing and

enforcing the ethical corporate

management policies and prevention

procedures, and shall report to the Board

of Directors if there is material

misconduct.

Article 20 (Blow-the-whistle, discipline and appeal

system)

For any violation of the Principles being

found, Company Professionals shall

proactively report to the Audit Committee,

Department Heads, Head of Internal

Audit, Human Resources Department, and

other appropriate authorized managers.

(Blow-the-whistle and discipline)

For any violation of the Principles being

found, Company Professionals shall

proactively report to the Audit Committee,

the Management, Head of Internal Audit,

Human Resources Department, and other

appropriate authorized managers. The

Company shall strictly preserve the

- 34 -

Section Proposed Changes Current Articles

The Company shall strictly preserve the

identity of the whistle-blower and the

content of the report.

The Company tolerates no violation. Any

of the Company Professionals obtains, or

intends to obtain, improper Benefits for

oneself or others at the cost of the

Company by using one’s position and

authority shall be dismissed, and

unconditionally indemnify the Company

for all losses, if occurred.

Any of the Company Professionals found

to be in violation of the Principles shall be

disciplined in accordance with the reward

and disciplinary rules of the Company.

Those who as a result of violation are

dismissed by the Company will no longer

be employed again by the Company or its

affiliates, and be reported to the competent

authority or transferred to the juridical

authority for investigation if necessary.

The Company’s “procedure for the best

practice principle of ethical corporate

management and guideline” is established

for the staff of Company to adopt when

conducting business.

identity of the whistle-blower and the

content of the report.

The Company tolerates no violation. Any

of the Company Professionals obtains, or

intends to obtain, improper Benefits for

oneself or others at the cost of the

Company by using one’s position and

authority shall be dismissed, and

unconditionally indemnify the Company

for all losses, if occurred.

Any of the Company Professionals found

to be in violation of the Principles shall be

disciplined in accordance with the reward

and disciplinary rules of the Company.

Those who as a result of violation are

dismissed by the Company will no longer

be employed again by the Company or its

affiliates.

The “procedure for reporting and

discipline the violation of codes of ethics

and the best practice principle” is

established in the Company. Any of

Company Professionals being accused of

violating the Principles may appeal for

remedy via the system.

(2) Please accept the aforesaid report.

- 35 -

Approval items

1. To accept 2019 Business Report and Financial Statements

The Board of Directors proposes and recommends that each shareholder vote FOR the

acceptance of 2019 Business Report and Financial Statements.

Explanatory notes:

(1) Everest Textile Co., LTD’s 2019 Business Report and Financial Statements (including

consolidated balance sheets, consolidated statements of comprehensive income, consolidated

statements of changes in equity, consolidated statements of cash flows, and balance sheets,

statements of comprehensive income, statements of changes in equity, statements of cash

flows, please refer to p7– p30) have been audited by independent auditors, Ms. Jiz-hen Li and

Ms. Li-yuan Guo of Deloitte & Touche, and have been examined and determined to be correct

and accurate by Audit Committee of Everest Textile Co., LTD. We thereby submit this report.

(2) Please accept the aforesaid Business Report and Financial Statements.

- 36 -

2. To approve the proposal for the distribution of 2019 profits

The Board of Directors proposes and recommends that each shareholder vote FOR the

distribution of 2019 profits.

Explanatory notes：

(1) The company's after-tax losses in 2019 are intended to be supplemented by surpluses

from previous years. The allocation is as follows

1. 2019 Net loss after income tax (271,959,817)

2.

Minus： Confirmed reevaluated amount of welfare

plan for retained earnings (25,656,401)

3. 2019 total net loss (297,616,218)

4. Beginning of unappropriated earnings 82,381,813

5. Accumulated losses of current year. (215,234,405)

6. Accumulated losses at the end of year. (215,234,405)

(2) Net loss after-tax of NTD 271,959,817 is planned balance by earnings from previous

years.

(3) In accordance with the Article 27 of Articles of Incorporation the company will not

distribute surplus in 2019 year.

(4) The accumulated losses at the end of the period are NTD 215,234,405.

(5) Please accept the aforesaid proposal.

- 37 -

Discussion Items

1. To amend the Articles of Incorporation of Everest Textile Co., LTD

The Board of Directors proposes and recommends that each shareholder vote FOR the

amendments of the Articles of ncorporation.

Explanatory notes:

(1) Pursuant to the stipulated foundation of legal reserve and the letter issued by the Ministry

of Economic Affairs (Letter Ching-San-Tze No. 10802432410 on 9 January 2020), the

revisions to the company’s Articles of Incorporation is as follows:

Section Proposed Changes Current Articles

Article 27 Apart from paying all its income taxes in

the case where there are profits at the end

of the year, the Company shall make up

for accumulated losses in past years.

Where there is still balance, 10% of the

unappropriated earnings from the yearly

net income coupled with other items

thereof shall be set aside by the Company

as legal reserve. Subject to certain

business conditions under which the

Company may retain a portion, and

distribute to the shareholders the

remainder after deducting special reserve

as required by law together with

undistributed profits from previous years

in proportion to the number of the shares

held by each shareholders as shareholders’

dividend. When there is a share capital

increase, the allocated bonuses of the year

for the new shares shall be dealt with

according to the resolution of the General

Shareholders’ Meeting.

The allocation of dividends shall take into

consideration the changes in the outlook

for the Company's businesses, the lifespan

of the various products or services that

have an impact on future capital needs and

taxation. Dividends shall be distributed at

the ratio as set forth in these Articles of

Incorporation aimed at maintaining the

stability of dividend distributions,

improving the financial structure,

reinvestments, production expansion or

Apart from paying all its income taxes in

the case where there are profits at the end

of the year, the Company shall make up

for accumulated losses in past years.

Where there is still balance, 10% of which

shall be set aside by the Company as legal

reserve. Subject to certain business

conditions under which the Company may

retain a portion, and distribute to the

shareholders the remainder after deducting

special reserve as required by law together

with undistributed profits from previous

years in proportion to the number of the

shares held by each shareholders as

shareholders’ dividend. When there is a

share capital increase, the allocated

bonuses of the year for the new shares

shall be dealt with according to the

resolution of the General Shareholders’

Meeting.

The allocation of dividends shall take into

consideration the changes in the outlook

for the Company's businesses, the lifespan

of the various products or services that

have an impact on future capital needs and

taxation. Dividends shall be distributed at

the ratio as set forth in these Articles of

Incorporation aimed at maintaining the

stability of dividend distributions,

improving the financial structure,

reinvestments, production expansion or

- 38 -

Section Proposed Changes Current Articles

other capital expenditures in which capital

is required. The dividends distributed shall

be no less than 50% of the balance of net

profit after tax and deduction of deficits

offset, legal reserve and special reserve,

and the cash dividends shall be not less

than 10% of the aggregate sum of

dividends and bonus distributed in the

same year.

other capital expenditures in which capital

is required. The dividends distributed shall

be no less than 50% of the balance of net

profit after tax and deduction of deficits

offset, legal reserve and special reserve,

and the cash dividends shall be not less

than 10% of the aggregate sum of

dividends and bonus distributed in the

same year.

Article 29 These Articles of Incorporation came into

effect on January 27, 1988, following the

approval of the General Shareholders’

Meeting and the competent authorities.

Amendments shall also follow suit.

(Omitted)

Twenty-second amendment on June 15,

2020.

These Articles of Incorporation came into

effect on January 7, 1988, following the

approval of the General Shareholders’

Meeting and the competent authorities.

Amendments shall also follow suit.

(Omitted)

Twenty-first amendment on June 14, 2019

(2) Please approve the proposal for the amendment of Everest Textile Co., LTD’s Articles of

Incorporation.

- 39 -

2. To amend the company bylaw of “Meeting Rules of

Stockholders” of Everest Textile Co., LTD

The Board of Directors proposes and recommends that each shareholder vote FOR the

amendments of the Meeting Rules of Stockholders.

Explanatory notes:

(1) Pursuant to the practice implementation and the reference of “Meeting Rules of

Stockholders by Public Companies” of Taiwan Stock Exchange Corporation, the

revisions to the company bylaw of “Meeting Rules of Stockholders of Everest Textile Co.,

LTD” is as follows:

Section Proposed Changes Current Articles

Article 10 For proposal in which discussion has been

concluded or closed, the Chairperson shall

submit it for voting.

No discussion or voting shall proceed for

matters unrelated to the proposal.

The personnel responsible for overseeing

and counting of the votes for resolutions

shall be appointed by the Chairperson. The

person responsible for vote overseeing

shall be of the stockholder status.

For proposal in which discussion has been

concluded or closed, the Chairperson shall

submit it for voting.

No discussion or voting shall proceed for

matters unrelated to the proposal.

The personnel responsible for overseeing

and counting of the votes for resolutions

shall be appointed by the Chairperson with

the consent of the stockholders (or

proxies) attending the meeting. The person

responsible for vote overseeing shall be of

the stockholder status.

Article 11 In regards to the resolution of proposals,

unless otherwise provided for in the

relevant law and regulation or Company’s

Articles of Incorporation, resolution shall

be passed by a majority of the voting

rights represented by the stockholders (or

proxies) attending the meeting.

In regards to the resolution of proposals,

unless otherwise provided for in the

relevant law and regulation or Company’s

Articles of Incorporation, resolution shall

be passed by a majority of the voting

rights represented by the stockholders (or

proxies) attending the meeting.

The proposal for a resolution shall be

deemed approved if no objection raised by

stockholders via electronic vote casting,

and the Chairperson inquires and receives

no objection from stockholders in

attendance. The validity of such approval

has the same effect as if the resolution has

been put to vote.

- 40 -

Section Proposed Changes Current Articles

Proposal shall be put to vote. All

proposals may be put to vote one after the

other by its sequence, or may be put to

vote together and numbers of votes for

each proposal are counted separately.

Whichever way of the voting procedures

shall be decided by the Chairperson

If there are amendments or substitute

proposals for the same proposal, the

sequence of which to be put to vote shall

be decided by the Chairperson. If one of

the two proposals has been approved, the

other shall be deemed rejected and need no

further vote.

The results of voting and election shall be

announced after the vote calculation on the

spot and kept for records.

Should objection of a proposal be raised,

such proposal shall be put to vote. All

proposals may be put to vote one after the

other by its sequence, or may be put to

vote together and numbers of votes for

each proposal are counted separately.

Whichever way of the voting procedures

shall be decided by the Chairperson

If there are amendments or substitute

proposals for the same proposal, the

sequence of which to be put to vote shall

be decided by the Chairperson. If one of

the two proposals has been approved, the

other shall be deemed rejected and need

no further vote.

The results of voting and election shall be

announced after the vote calculation on the

spot and kept for records.

Article 13 Should the force majeure is encountered

during the meeting, the meeting shall be

adjourned under ruling of the Chairman,

who will also announce according to the

circumstances when the meeting shall

resume.

The meeting shall be adjourned if

encountering an air-raid alarm during the

meeting. The meeting shall resume one

hour after the alarm is lifted.

(2) Please approve the proposal for the amendment on the company bylaw of “Meeting Rules

of Stockholders of Everest Textile Co., LTD”.

- 41 -

Extemporary Motions

- 42 -

General Information

Articles of Incorporation of Everest Textile Co., LTD.

Last updated at June 14, 2019

Chapter 1 General Provisions

Article 1 The Company is duly incorporated under the provisions of the Company Act of

the Republic of China, and shall be called: Everest Textile Co., LTD.

Article 2 The Company’s businesses are as follows：

1.C301010 Yarn Spinning Mills

2.C302010 Knit Fabric Mills

3.C305010 Printing, Dyeing, and Finishing Mills

4.F104110 Wholesale of Cloths, Clothes, Shoes, Hat, Umbrella and Apparel,

Clothing Accessories and Other Textile Products

5.F204110 Retail sale of Cloths, Clothes, Shoes, Hat, Umbrella and Apparel,

Clothing Accessories and Other Textile Products

6.F401010 International Trade

7.C306010 Outerwear Knitting Mills

8.F107020 Wholesale of Dyeing Mills and Dyestuff

9.F107170 Wholesale of Industrial Catalyst

10.F107200 Wholesale of Chemistry Raw Material

11.F207020 Retail Sale of Dyeing Mills and Dyestuff

12.F207170 Retail Sale of Industrial Catalyst

13.F207200 Retail sale of Chemistry Raw Material

14.E604010 Machinery Installation Construction

15.F113100 Wholesale of Pollution Controlling Equipment

16.F213100 Retail Sale of Pollution Controlling Equipment

17.C801120 Manmade Fiber Manufacturing

18.H701010 Residence and Buildings Lease Construction and Development

19.H701020 Industrial Factory Buildings Lease Construction and Development

20.H701040 Specialized Field Construction and Development

21.G801010 Warehousing and Storage

22.C805010 Plastic Sheets, Pipes and Tubes Manufacturing

23.C805020 Plastic Sheets & Bags Manufacturing

24.C805060 Plastic Leathers Manufacturing

25.C805070 Strengthened Plastic Products Manufacturing

26.C399990 Other Textile Products Manufacturing

27.EZ05010 Apparatus Installation Construction

- 43 -

28.F107990 Wholesale of Other Chemical Products

29.F113010 Wholesale of Machinery

30.F113030 Wholesale of Precision Instruments

31.F207990 Retail Sale of Other Chemical Products

32.F213040 Retail Sale of Precision Instruments

33.F213080 Retail Sale of Machinery and Equipment

34.H701060 New County and Community Construction and Investment

35.I103060 Management Consulting Services

36.IZ06010 Cargoes Packaging

37.CF01011 Medical Materials and Equipment Manufacturing

38.F108031 Wholesale of Drugs, Medical Goods

39.F401021 Restrained Telecom Radio Frequency Equipment and Materials

Import

40.ZZ99999 All business items that are not prohibited or restricted by law,

except those that are subject to special approval

Article 3 The Company may provide guarantees for third parties in accordance with the

Company bylaw of “Procedures for Endorsements and Guarantees”.

Article 4 Where the Company invests in other companies and becomes a shareholder

with limited liability; its total investment may exceed 40% of its paid-up capital

regardless of the stipulated Article 13 of the Company Act, only subject to

approval of the Board of Directors.

Article 5 The Company is incorporated in Tainan, the Republic of China; the Board of

Directors may by resolution approve the establishment of domestic and

international branches where it deems necessary.

Chapter 2 Share Capital

Article 6 The Company’s total capital shall be NT$5,600,000,000 divided into

560,000,000 shares of NT$10 each. The Board of Directors is authorized to

issue separately the un-issued shares.

Out of the above total capital amount,

Article 7 Shares issued by the Company are not required to be evidenced by share

certificates, provided that they shall be recorded at the Securities Central

Depository Enterprises.

The Company can issue special stock.

In the event of the Company merging with another company, matters relating to

the merger need not be approved by way of a resolution of the special

shareholders meeting.

Article 8 Matters relating to the Company’s shares shall be dealt with according to the

provisions of “Regulations Governing Handling of Stock Affairs by Public

Companies” and the relevant laws and regulations.

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Article 9 Registration of share transfer shall be closed within 60 days prior to General

Shareholders' Meeting, or within 30 days prior to Extraordinary Shareholders'

Meeting or within 5 days prior to the record date on which Company distributes

the dividends or bonuses.

Chapter 3 Shareholders’ Meeting

Article 10 The Shareholders' Meetings shall be General or Extraordinary Shareholders'

Meetings:

1. General Shareholders' Meeting shall be held once a year within 6 months of

the end of the Company's fiscal year.

2. Extraordinary Shareholders' Meeting shall be convened pursuant to the

relevant laws or regulations.

Article 11 Notices of General Shareholders' Meeting shall be in writing and delivered to

the shareholders along with a public notice 30 days before the General

Shareholders' Meeting and 15 days before the Extraordinary Shareholders'

Meeting. The said notices shall specify the date, place and reasons for calling

the shareholders' meeting.

Article 12 Unless otherwise stipulated by the Company Act, a quorum shall be present at

the shareholders' meeting with shareholders representing more than half of the

shares issued by the Company and resolutions at the said assembly shall be

passed if approved by more than half of the shareholders in attendance.

Article 13 Shareholders may by way of power of attorney appoint proxies to attend the

said shareholders' meeting. Except for trust enterprises or share registration

agencies approved by the securities management authorities, when one

shareholder is entrusted by two or more shareholders, the voting right

represented by the said shareholder shall not exceed 3% of the voting rights of

total shares issued. Where it has so exceeded, the voting right in excess shall

not be included.

Unless otherwise stipulated by the Company Act, attendance of shareholder's

proxies shall be in accordance with the provisions of "Regulation Governing

the Use of Proxies For Attendance of Shareholders' Meeting of Public

Companies".

Article 14 Unless otherwise stipulated by the Company Act and the Articles of

Incorporation, shareholders' meeting shall be conducted in accordance with the

Company's regulations for shareholders' meeting.

Article 15 Minutes and resolutions of shareholders' meeting shall be recorded and signed

by or affixed with the seal of the chairman of the meeting. The said minutes

and resolutions shall be kept, together with the register of shareholders'

attendance and the proxies' powers of attorney, in compliance with the law.

Chapter 4 Directors

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Article 16 There shall be 9 to 15 Directors of the Company, who are elected and

appointed from the persons with legal capacity at the shareholders' meeting.

The total shares number of the registered shares of the Company held by all of

the Directors shall be determined according to the provisions of "Rules and

Review Procedures for Director and Supervisor Ownership Ratios at Public

Companies".

3 Independent Directors shall be elected from the list of persons with legal

capacity.

Directors shall be elected by adopting candidate nomination system in

accordance with the Article 192-1 of Company Act. A shareholder shall elect

from the nominees listed in the roster of candidates. The election of

Independent, Non-Independent Directors should be held together, yet with the

elected calculated separately.

Article 16-1 The Audit Committee, which is composed of all the Independent Directors, is

installed in accordance with the Article 14-4 of Securities and Exchange Act, in

charge of the execution of Company Act, Securities and Exchange Act, and

other stipulated functions of Supervisors.

The members of Audit Committee, its functions and other mandates shall

follow the relevant laws and regulations or corporate rules. The organization

regulations will be enacted by Board of Directors.

Article 17 Each term of the Directors’ appointments are for a period of 3 years. Same

Directors may be reappointed following the re-election.

Article 18 The directors organize the board of directors to exercise the powers of the

directors. The directors choose one person as the chairman to represent the

company and one person as the vice chairman. When the chairman of the board

asks for leave or cannot exercise his powers for some reason, the vice chairman

of the board shall act on his behalf.

When the vice chairman also asks for leave or cannot exercise his powers for

some reason, the director appointed by the chairman shall act as his agent.

If not specified, the directors will push each other to represent.

Article 19 The board of directors shall be convened by the chairman of the board of

directors and convened once a quarter. Unless otherwise stipulated by the

company law, more than half of the directors shall attend the meeting. The

resolution shall be agreed by the majority of the directors present. The Minister

may convene an ad hoc meeting at any time.

When directors cannot attend the board of directors in person, they may entrust

other directors to act in accordance with the law. The notice of the convening

of the board of directors may be in writing, email or fax.

Article 20 Deleted

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Article 21 Deleted

Article 22 The company has several general managers, deputy general managers and other

managers, and one audit supervisor. The board of directors shall be attended by

more than half of the directors, and the majority of the directors present shall

agree to appoint or remove them.

Article 23 Chairman shall designate the candidate of an additional post which he deems

necessary and assign his/her tasks.

Article 23-1 The Company shall purchase the liability insurance for Directors and important

staff according to respective business scopes and liabilities pursuant to laws.

Chapter 5 Financial Statements

Article 24 The Company's fiscal year shall commence on the First of January of each year,

and ends on the Thirty-first of December of the same year. The financial

documents and statements shall be inspected.

Article 25 The Board of Directors shall in accordance with law furnish various documents

and statements and submit to the General Shareholders' Meeting for approval.

Article 26 Should the Company have profit for the current year, the proportioned

2%-3.5% of the profit shall be allocated as employees’ bonuses, and less than

2.5% as Directors’ remuneration. However, if the Company has accumulated

losses, the profit shall be prioritized for deficit offset. Employees’ bonuses

could be in form of cash or stocks. The actual ratio, amount, form and number

of stock are to be proposed to the Board of Directors, with over two thirds of

the Directors in attendance, and passed and approved by the majority of

Directors in attendance, prior to reporting to the General Shareholders’ Meeting.

Same shall be applied to the Directors’ remuneration, the ratio and amount will

be approved by the Board prior to the General Shareholders’ Meeting.

Article 27 Apart from paying all its income taxes in the case where there are profits at the

end of the year, the Company shall make up for accumulated losses in past

years. Where there is still balance, 10% of which shall be set aside by the

Company as legal reserve. In respect to certain business conditions, the

Company may retain a portion of the special reserve as required by law

together with undistributed profits from previous years, and distribute evenly

the remainder to the shareholders. When there is a share capital increase, the

allocated bonuses of the year for the new shares shall be dealt with according to

the resolution of the General Shareholders’ Meeting.

The allocation of dividends shall take into consideration the changes in the

outlook for the Company's businesses, the lifespan of the various products or

services that have an impact on future capital needs and taxation. Dividends

shall be distributed at the ratio as set forth in these Articles of Incorporation

aimed at maintaining the stability of dividend distributions, improving the

- 47 -

financial structure, reinvestments, production expansion or other capital

expenditures in which capital is required. The dividends distributed shall be no

less than 50% of the balance of net profit after tax and deduction of deficits

offset, legal reserve and special reserve, and the cash dividends shall be not less

than 10% of the aggregate sum of dividends and bonus distributed in the same

year.

Article 28 All matters not covered herein shall be undertaken in accordance with the

Company Act of the Republic of China and the other relevant law and

regulations.

Article 29 These Articles of Incorporation came into effect on January 27, 1988,

following the approval of the General Shareholders’ Meeting and the

competent authorities. Amendments shall also follow suit.

The twenty-first amendment was made on June 14, 2019..

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Meeting Rules of Stockholders for Oriental Union Chemical Corporation

Last updated by June 12, 2018

Article 1 The stockholders’ meeting of the Company shall be held according to the rules

herein.

Article 2 The location for stockholders’ meeting shall be the Company’s place of business

or a place convenient for attendance by stockholders (or by proxies) that is

suitable for holding such meeting. The meeting shall be held between 9:00AM and

3:00PM.

The stockholders’ meeting notice shall state the registration time, location and

other important information. The aforesaid registration time shall start at least

thirty minutes before the beginning of the meeting. The registration desk shall be

featured with clear instructions and competent staffs.

When convening stockholders’ meeting, the Company shall incorporate electronic

vote casting as one of the alternative ways to cast the vote, and the procedure of

electronic casting shall be stated in the meeting notice. The stockholders who vote

via electronic casting is deemed as presented in person. With respect to

extemporary motions, amendments of the original proposals, and substitute

proposals raised in the stockholders’ meeting, those who vote via electronic

casting shall be considered as abstain.

The stockholders (or by proxies) attending the Meeting shall have attendance card,

sign-in card or other certificate of attendance issued by the Company. The proxy

solicitor shall provide ID document for verification purpose. The stockholders (or

by proxies) attending the meeting shall hand in signed attendance form.

Number of stockholders in attendance shall be calculated based on the number of

attending shares, which equals to the sum of shares shown on the signed attended

forms and the number of voting shares via electronic casting.

The Company may appoint lawyers, accountants or related personnel to attend the

stockholders’ meeting.

The personnel in charge of handling the affaires of the meeting shall wear

identification badge or armband.

For a stockholders’ meeting convened by the Board of Directors, the Chairman of

the Board shall preside at the meeting. If Chairman of the Board is on leave or

unable to exert the rights, the Vice-Chairman of the Board shall preside at the

meeting instead. Should the Vice-Chairman position be vacant, or the

Vice-Chairman is on leave or unable to exert the rights, the Chairman of the Board

shall designate a Director to preside. If no Director is so designated, the Chairman

of the meeting shall be elected by the Board of Directors from among themselves.

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If a Director presides at the meeting including the representative of an institutional

Director, shall be appointed at least 6 months and familiar with the financial

performance and operations of the Company. For a stockholders’ meeting

convened by any other person having the convening right, he/she shall act as the

Chairperson of that meeting; if there are two or more persons having the

convening right, the Chairperson of the meeting shall be elected from among

themselves.

The complete processes of the meeting shall be recorded by voice and video

recorders and all the records shall be kept by the Company for a minimum period

of at least one year. If a shareholder files a lawsuit pursuant to Article 189 of the

Company Act, the video and audio records shall be retained until the conclusion

of the litigation.

Article 3 The Chairperson shall announce the starting of the meeting when the attending

stockholders (or proxies) represent more than half of the total shares issued in

public. If the legal quorum is not present after the designated meeting time, the

Chairperson may announce postponement of the meeting. Such postponement is

limited to two times and the aggregated postponed time shall not exceed one hour.

If quorum is still not present after two postponements but the attending

stockholders (or proxies) represent more than one third of the total shares issued

in public, tentative resolution/s may be passed with respect to ordinary

resolution/s by a majority of those present.

After proceeding with the aforesaid tentative resolutions, the Chairperson may put

the tentative resolutions for re-voting over the meeting if and when the shares

represented by the attending stockholders (or proxies) reached the legal quorum.

Article 4 If the stockholders’ meeting is convened by the Board of Directors, the agenda

shall be designated by the Board. The meeting shall proceed in accordance with

the designated agenda and shall not be amended without resolutions.

If the meeting is convened by person, other than the Board of Directors, having

the convening right, the provision set out in the preceding paragraph shall apply

mutatis mutandis.

Except with stockholders’ resolution, the Chairperson shall not declare

adjournment of the meeting before the first two matters set out in the agendas

(including extemporary motions) are concluded. During the meeting, if the

Chairperson declares adjournment of the meeting in violation of the preceding

rule, a new Chairperson may be elected by a resolution passed by majority of the

attending stockholders to continue the meeting.

When the meeting is adjourned by resolution, the stockholders shall not elect

another Chairperson to continue the meeting at the same location or another

venue.

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Article 5 The stockholders (or proxies) shall complete statement slip setting out the number

of his/her attendance card, name and statement brief before speaking, and the

Chairperson will designate the order in which each person is to speak during the

session.

No statement will be considered to have been made if the stockholder (or proxies)

merely completes the statement slip without speaking at the meeting. If there are

any discrepancies between the content of the statement slip and the speech made,

the statement to be adopted shall be the statement confirmed.

Article 6 Any proposal for the agendas shall be submitted in written form. Except for the

proposals set out in the agenda, any proposal by the stockholders (or proxies) to

amend, substitute or to initiate extemporary motions with respect to the original

proposal shall be seconded by other stockholders (or proxies). The same rule shall

apply to any proposal to amend the agenda and motion to adjourn the meeting.

The shares represented by the proponents and the seconders shall reach 100,000.

Article 7 The explanation of proposal shall be limited to 5 minutes. The statement of

inquiry and reply shall be limited to 3 minutes per person. The time may be

extended for 3 minutes with the Chairperson’s permission.

The Chairperson may restrain stockholders (or proxies) from speaking if the

stockholders (or proxies) speak overtime, speak beyond the allowed frequency or

content of the speech is beyond the scope of the proposal.

When a stockholder (or proxy) is speaking, other stockholder (or proxy) shall not

interrupt without consent of the Chairperson and the speaking stockholder (or

proxy). Any disobedient of the preceding rule shall be prohibited by the

Chairperson. Article 15 of this meeting rule shall apply if the disobedient do not

follow the Chairperson’s instructions.

Article 8 For the same proposal, each person shall not speak more than 2 times.

When a juridical person is commissioned to attend the meeting, only one

representative shall be appointed.

When an institutional stockholder appoints more than two representatives to

attend the meeting, only one representative is allowed to speak.

Article 9 After the attending stockholder (or proxy) voices his opinion, the Chairperson may

reply in person or assign relevant officer to reply.

Over the proposal discussion, the chairperson may conclude the discussion in a

timely manner and where necessary announce discussion is closed.

Article 10 For proposal in which discussion has been concluded or closed, the Chairperson

shall submit it for voting. No discussion or voting shall proceed for matters

unrelated to the proposal.

The personnel responsible for overseeing and counting of the votes for resolutions

shall be appointed by the Chairperson with the consent of the stockholders (or

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proxies).

The person responsible for vote overseeing shall be of the stockholder status.

Article 11 In regards to the resolution of proposals, unless otherwise provided for in the

relevant law and regulation or Company’s Articles of Incorporation, resolution

shall be passed by a majority of the voting rights represented by the stockholders

(or proxies) attending the meeting.

The proposal for a resolution shall be deemed approved if no objection raised by

stockholders via electronic vote casting, and the Chairperson inquires and receives

no objection from stockholders in attendance. The validity of such approval has

the same effect as if the resolution has been put to vote.

Should objection of a proposal be raised, such proposal shall be put to vote. All

proposals may be put to vote one after the other by its sequence, or may be put to

vote together and numbers of votes for each proposal are counted separately.

Whichever way of the voting procedures shall be decided by the Chairperson

If there are amendments or substitute proposals for the same proposal, the

sequence of which to be put to vote shall be decided by the Chairperson. If one of

the two proposals has been approved, the other shall be deemed rejected and need

no further vote.

The results of voting and election shall be announced after the vote calculation on

the spot and kept for records.

Article 12 During the meeting, the Chairperson may at his/her discretion declare time for

break.

Article 13 The meeting shall be adjourned if encountering an air-raid alarm during the

meeting. The meeting shall resume one hour after the alarm is lifted.

Article 14 The Chairperson may maintain the meeting order by instructing the security

guards. The security guards shall wear the armband for identification when

helping maintaining the venue order.

Article 15 The stockholders (or proxies) shall obey the instructions of the Chairperson and

security guards in terms of maintaining the order. The Chairperson or security

guards may exclude the persons disturbing the stockholders’ meeting from the

meeting.

Article 16 For matters not governed by the rules specified herein, shall be governed

according to Company Act, Stock Exchange Law and the other related laws and

regulations.

Article 17 The rules herein take effect after approval at the stockholders’ meeting, the same

apply for any amendments.

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Appendix

1. Current Shareholding of Directors

The list of the 11th term of Board of Directors of Everest Textile Co., LTD

Book closure date: 20 April 2020

Title Name of persons or

companies Representative Shareholdings

Ratio of

shareholding

Representative

Shareholdings Note

Chairman Weiyu Innovation

Investment Co., Ltd. Johnny Hih 222,226 0.04％ 1,156,470

Directors

Yuan Ding Investment

Corporation

Donglas Tong

Hsu

128,618,422 25.23％

0

Wu Kao Shan 195,174

Eric Hu 0

YUE DING INDUSTRY

CO., Ltd. Ching-Lai yeh 1,082,744 0.21％ 1,652,779

Shuo Quan Co., Ltd. Yeh

Shou-Chun 113,806 0.02％ 2,755,093

Yu Yuan Investment Co.,

Ltd.

Lin Haw

Sheng 13,147,509 2.58%

2,883,324

Wang Charles 0

Independent

Directors

Chuang Yin Chi 1,041,106 0.20％

Chen Shiou Chung 0 0 0

Chen Jen Fa 1,041,358 0.20％

The combined

shareholding of all

Directors on the book

closure date

145,267,171 28.49％

The minimum required

combined shareholding of

all Directors by law

16,314,693 3.20％

2. Impact of the Stock Dividend Distribution on Operating Results, EPS

and Shareholders’ Return on Investment

Not applicable.

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