Sunspring Metal Corporation

Transcription

1 Stock Code: 2062 Sunspring Metal Corporation Annual General Shareholders Meeting Minutes 2017 Date: April 12, 2017 (Wednesday) DISCLAIMER THIS IS A TRANSLATION OF THE MINUTES FOR THE 2015 ANNUAL GENERAL SHAREHOLDERS MEETING (THE MINUTES ) OF SUNSPRING METAL CORPORATION (THE COMPANY ). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE MINUTES SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN. 1

2 Time: SUNSPRING METAL CORPORATION 2017 ANNUAL GENERAL SHAREHOLDERS MEETING MINTUES (Translation) 9:00 am, April 12 th, 2017 (Wednesday) Venue: 4F No.610 Sec. 4 Taiwan Boulevard Taichung Taiwan, R.O.C. (Taichung Windsor Hotel) Attendants:Total shares represented by shareholders and proxy present 90,250,212 shares (including exercised by way of electronic transmission 17,056,108 shares) is 55.16% of total outstanding shares of SSM 163,586,916 shares Chairman:Yang, Ching-Chi Minute Recorder:Huang, Yai - Hui I. Chairman announced commencement II. Opening remarks by the chairman (omitted) III. Report items: A business report Detail: 2016 business report (please refer to attachment 1) B audit committee review report Detail: 2016 audit committee review report (please refer to attachment 2) C. Execution of the 2016 employee and directors compensation plan Item Persons awarded Amount of payment per board resolution Amount of actual payments Units: 000 NTD Payment method Compensation to employees Employees 57,228 57,228 cash Compensation to directors Directors 0 0 Total 57,228 57,228 D. Execution of issuance of the 2014,2015 and 2016 new restricted employee shares (please refer to attachment 3) E. Amendments to the Procedures for Acquisition or Disposal of Assets (please refer to attachment 4) F. Other report items:none IV. Ratification items Item 1 (proposed by the Board of Directors) Proposal: Ratification of the 2016 consolidated and individual financial statements Explanation: A. The Company s 2016 consolidated and individual financial statements have been audited by Ms. Amy Jiang and Mr. Ted Cheng of Deloitte Taiwan. B. Pursuant to Article 228 of the Company Act, the Company compiled with the following reports: 1. Business report (please refer to attachment 1) 2. Consolidated financial statements (please refer to attachment 5) 2

3 3. Individual financial statements (please refer to attachment 6) C. The attached reports and financial statements have been reviewed by the audit committee and are hereby submitted for adoption. Voting Results:Shares represented at the time of voting:90,249,212 Voting Results* % of the total represented share present Votes in favor: 86,394,696 votes (13,741,592 votes) 95.73% Votes against: 60,366 votes ( 60,366 votes) 0.07% Votes abstained: 3,794,150 votes ( 3,254,150 votes) 4.20% Votes invalid: 0 votes 0.00% *including votes casted electronically (numbers in brackets) RESOLVED, that the above proposal be and hereby was approved as proposed. Item 2 (proposed by the Board of Directors) Proposal: Ratification of the proposal for distribution of 2016 earnings Explanation: A. Proposal for distribution of 2016 earnings listed below SUNSPRING METAL CORPORATION Earnings Distribution Table Year Ended December 31,2016 Unit: NT$ net profit after tax 746,050,355 Minus: legal reserve (10%) 74,605, earnings for distribution 671,445,319 Plus: undistributed earnings of previous year 1,103,898,111 Minus: defined actuarial gains and losses of the year 5,161,447 Earnings for distribution until the end of ,770,181,983 Distribution items: Cash dividends to shareholders(nt$1/ per share) 163,000,000 Undistributed earnings at the end of the year 1,607,181,983 Note: If due to changes in regulation or in his best judgement, a change is required in the current shares outstanding and dividend yield, the Company requests the shareholders to authorize the chairman to adjust the distribution as needed. Chairman: Yang Ching Chi Manager: Yang Ching Chi Accountant: Wu Yung Fu B. Due to a revision of Article 66-9 of the Income Tax law, undistributed earnings are subject to taxation, of which a 10% tax rate is applied to undistributed earnings. Shareholders eligible to apply tax credits shall calculate cumulated undistributed earnings after 1998 with the most recent years applied first. In accordance to the Ministry of Finance announcement letter No issued on April 30th, 1998, the earnings should be individually recognized, and priority given to the latest years undistributed earnings. 3

4 C. After adoption by the shareholders meeting, the chairman is authorized by the board to determine the record date and payable date for distribution of dividends. Questions raised by the shareholders: Refer to the contents of the Earnings Distribution Table, certain shareholders, which account number is 9125, raised the questions. (Responses by the Chairman and the management) Voting Results:Shares represented at the time of voting:90,249,212 Voting Results* % of the total represented share present Votes in favor: 86,173,626 votes (13,520,522 votes) 95.48% Votes against: 281,436 votes ( 281,436 votes) 0.32% Votes abstained: 3,794,150 votes ( 3,254,150 votes) 4.20% Votes invalid: 0 votes 0.00% *including votes casted electronically (numbers in brackets) RESOLVED, that the above proposal be and hereby was approved as proposed. V. Discussion items Item 1 (proposed by the Board of Directors) Proposal: Discussion of amendments to the Procedures for Acquisition or Disposal of Assets Explanation: To meet the operational needs of the Company, and to be in compliance with the amendments of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies announced by the FSC in its announcement letter No on Feb. 9, 2017, we propose to amend certain articles within the Company's "Procedures for Acquisitions or Disposal of Assets". Please refer to attachment 7 for the pre and post-amendment comparison chart. Voting Results:Shares represented at the time of voting:90,249,212 Voting Results* % of the total represented share present Votes in favor: 86,391,696 votes (13,738,592 votes) 95.73% Votes against: 60,366 votes ( 60,366 votes) 0.07% Votes abstained: 3,794,150 votes ( 3,257,150 votes) 4.20% Votes invalid: 0 votes 0.00% *including votes casted electronically (numbers in brackets) RESOLVED, that the above proposal be and hereby was approved as proposed. 4

5 VI. Questions and motions (Questions raised by the shareholder number 9125, 20309, and the management s responses were omitted) VII. Adjournment :Meeting Ended at 10:13 a.m. This minutes of the 2016 Annual General Shareholders' Meeting stated the meeting and the shareholders' statements briefly. The content, the process and the shareholders' statements of the meeting shall be referred to audio and video conference records. 5

6 Attachment 1 Sunspring Metal Corporation 2016 Business Report A. Performance of operations in 2016 In response to the structural shifts in the Chinese labor market, production efficiency has been impacted for our Company. Sunspring Metal Corporation introduced increased automation and improved our processing capabilities, with the expectation of maintaining stable production levels and reducing the reliance on labor and improving our market competitiveness. Sales volumes decreased 4.74% in 2016, with consolidated revenues achieving NT$6.2 billion, down 8.58% from Operating profits achieved NT$826 million, up 12.91% YoY, and pre-tax profits achieved NT$967 million, up 19.53%. B. Financial Budget The Company s 2016 financial budget is listed below Subject Units: 000 NTD Budget(A) Result (B) Difference(B-A) Units: NT$ 000 Amount % Amount % Amount % Net sales 7,734, ,195, (1,539,633) (19.90) Operating costs 6,049, ,616, (1,433,052) (23.69) Gross profit 1,685, ,578, (106,581) (6.32) Operating expenses 895, , (142,976) (15.97) Operating income 789, , , Non-operating expenses & (14,624) (0.19) 140, ,416 1, income Income before income tax 775, , , Income tax expense 164, , , Consolidated net income 610, , , EPS(NT$)

7 C. Operation and profitability analysis 1. The Company continued to engage in new product development, optimizing manufacturing plans and improving our production capabilities through the introduction of increased automation. However, under a competitive market condition, sales volumes still decreased 4.74%. Due to the depreciation of the RMB against the US$, which lowered our contracted prices, a decrease of consolidated revenues by 8.58% from 2015 was reported consolidated gross profit margin increased by 10.83% from Favorable exchange rate movements, changing product mix, and efficiency gains contributed to the cost reduction and improved profitability. 3. Consolidated operating expenses decreased NT$ million from This decrease was mainly due to the reduction of headcount. 4. Net consolidated non-operating expenses and income increased NT$ million from 2015, primarily due to the appreciation of NT$, this resulted in foreign currency exchange net gains increasing. 5. Consolidated income tax expenses in 2016 increased NT$37.64 million from This is due to the increase of pre-tax profits and undistributed earnings. D. Status of Research and Development: The Company s R&D performance in 2016 is as follows: 1. Number of developed tooling casts ( only for zinc die-casting tool, brass casting tool and hydro forming tool, excluding brass forging tool, bending tool, stamping tool and sand core tool):243 sets. 2. New finish development: 3 finishes. 3. New manufacturing technology development:continue to introduce the integrated cell automation. Chairman: Yang Ching Chi Manager: Yang Ching Chi Accountant: Wu Yung Fu 7

8 Sunspring Metal Corporation Audit Committee Review Report Attachment financial statements through the agreement by the audit committee and resolution of the board of directors was audited by the CPA firm Deloitte Touche Tohmatsu Limited and an audit report relating to the Financial Statement was issued. The Company s 2016 Business Report which were prepared by the board of directors and earnings distribution proposal have been reviewed and determined to be correct and accurate by the audit committee of Sunspring Metal Corporation. In accordance with Article 219 of the Company Act, I hereby submit this report. Sunspring Metal Corporation 2017 Annual Shareholders Meeting Sunspring Metal Corporation Audit Committee Convener: Chen Yu Cheng February 23,

9 Item Year Execution of issuance of the 2014,2015 and 2016 new restricted employee shares Issued Shares 471, , ,000 Cancelled shares 119,808 31,935 0 Vested shares Shares Outstanding 351, , ,000 Issue price Free distribution, par value NT$10/per share Free distribution, par value NT$10/per share Free distribution, par value NT$10/per share Record date (grant date) Class and number Total 29 persons. of persons Director equivalent or above positions. awarded Feb. 25, 2015 March 14, 2016 Feb. 17, 2017 Total 29 persons. Director equivalent or above positions on the duty for completed 6 months until grant day. 1.Vesting Conditions 1.Vesting Conditions 1.Vesting Conditions 1.1.The eligible employee has been working for the company for two years since the date when the shares are granted 1.1.The eligible employee has been working for the company for two years since the date when the shares are granted Attachment 3 Total 24 persons. Director equivalent or above positions on the duty for completed 6 months until grant day. 1.1.The eligible employee has been working for the company for two years since the date when the shares are granted 1.2. Evaluation period extends across 2015 and Evaluation period extends across 2016 and Evaluation period extends across 2017 and Average EPS during the evaluation period exceeds the Company s basic EPS goal of NT$ Average EPS during the evaluation period exceeds the Company s basic EPS goal of NT$ Average EPS during the evaluation period exceeds the Company s basic EPS goal of NT$4.5 Vested conditions 2. Vested ratio = (Average EPS during the evaluation period-the Company s basic EPS goal of NT$4) / (The Company s long term motivating EPS goal of NT$7.5- basic EPS goal of NT$4), capped at 100% 2.1. Vested ratio is rounded off after the second decimal place, and the ratio, if below (including) 0%, is considered 0% 2. Vested ratio = (Average EPS during the evaluation period-the Company s basic EPS goal of NT$4.5) / (The Company s long term motivating EPS goal of NT$5.5- basic EPS goal of NT$4.5), capped at 100% 2.1. Vested ratio is rounded off after the second decimal place, and the ratio, if below (including) 0%, is considered 0% 2. Vested ratio = (Average EPS during the evaluation period-the Company s basic EPS goal of NT$4.5) / (The Company s long term motivating EPS goal of NT$5.5-basic EPS goal of NT$4.5), capped at 100% 2.1. Vested ratio is rounded off after the second decimal place, and the ratio, if below (including) 0%, is considered 0% 2.2. Vested shares=shares granted x Vested ratio 2.2. Vested shares=shares granted x Vested ratio 2.2. Vested shares=shares granted x Vested ratio 2.3. Vested shares are round numbers, any decimal place will be rounded off Vested shares are round numbers, any decimal place will be rounded off Vested shares are round numbers, any decimal place will be rounded off. 9

10 Attachment 4 Sunspring Metal Corporation Comparison between the original and amendments to the "Corporate Social Responsibility Best Practice Principles" Original Version Amended Version Reason 4.Authority: This principle was amended by Knowledge Management Center 5.5. When the board of directors executes its corporate social responsibility, it shall include the following items: none 4.Authority: This principle was amended by the Policy Operations Department 5.5 When the board of directors of listed company executes its corporate social responsibility, the benefits of interested parties shall be fully considered and it shall include the following items: the Company weighed and considered the provided products, services and the characteristics of industries to choose the adequate fair and reasonable manner for clients and consumers and to develop the strategy and specific implementation measures. The fair and reasonable manner referred to the preceding paragraph is as follows: contracts for upholding reciprocity and fairness and integrity acceptance of customers appointment, paying good attention and doing one s duty Advertisement must not be exaggerated To ensure products or services provided are suitable for clients and consumers Full explanation of material information for the products or services provided and disclosures of risks the remuneration system of sales is developed in consideration of the achievement of sales target and the benefits to clients and consumers The complaint access for clients or consumers is unhindered, and the Company shall respond accordingly. Amendment to cooperate with the adjustment of the Company organization To cooperate with the official letter No on July 28, 2016 announced by the TWSE, we propose to amend articles within the Company's " Corporate Social Responsibility Best Practice Principles for listed companies". Same as above 10

11 Original Version Amended Version Reason The Company shall evaluate the Company s impact on the community and appropriately employ manpower locally, to enhance community recognition. The Company shall attend and participate in relevant activities held by the community development and community education civic organizations, charitable organizations and local government agencies through business activities, in-kind donations, corporate volunteer service or other public service professional services to facilitate community development Skilled professionals shall be properly qualified and professional licenses obtained The Company shall evaluate the Company s impact on the community and appropriately employ manpower locally to enhance the community recognition. The Company shall invest resources into organizations that address social or environmental issues through business models including equity investment, business activities, in-kind donations, corporate volunteer service or other public service professional services or attend the relevant activities held by community development and community education of civic organizations, charitable organizations and local government agencies to facilitate community development. Same as above 11

12 Attachment 5 INDEPENDENT AUDITORS REPORT (Omitted, unqualified-standard opinion with two key audit matters) 12

13 SUNSPRING METAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars, Except Par Value) December 31, 2016 December 31, 2015 ASSETS Amount % Amount % CURRENT ASSETS Cash and cash equivalents $ 670,209 6 $ 385,629 4 Notes receivable Trade receivables 1,341, ,511, Other receivables 24,698-37,094 - Inventories 1,177, ,274, Other current assets 397, ,423 2 Total current assets 3,611, ,441, NON-CURRENT ASSETS Held-to-maturity financial assets - non-current 5,519-5,519 - Property, plant and equipment 7,566, ,807, Investment properties 324, ,937 3 Intangible assets 131, ,401 1 Deferred tax assets 25,317-25,881 - Prepayments for business facilities 55, ,769 9 Refundable deposits 2,765-2,791 - Net defined benefit asset Long-term prepayments for lease 27,369-30,566 - Other financial assets- non-current 50,448-63,924 1 Other non-current assets 52, ,764 1 Total non-current assets 8,243, ,291, TOTAL $ 11,854, $ 9,732, LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term bank borrowings $ 1,154, $ 1,094, Short-term bills payable 89, Derivative financial liabilities for hedging - current ,718 - Trade payables 403, ,958 5 Other payables 609, ,849 4 Current tax liabilities 131, ,055 1 Provisions - current 64, ,098 1 Current portion of long-term bank borrowings ,000 2 Other current liabilities 16,691-6,811 - Total current liabilities 2,470, ,371, NON-CURRENT LIABILITIES Long-term bank borrowings 3,880, ,160, Deferred tax liabilities ,399 1 Net defined benefit liabilities Guarantee deposits received 9,300-7,800 - Total non-current liabilities 3,890, ,223, Total liabilities 6,360, ,594, EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT Common stock - at par value of $10 each 1,635, ,634, Capital surplus 1,324, ,324, Retained earnings Legal reserve 627, ,935 6 Special reserve 80, ,152 1 Unappropriated earnings 1,844, ,329, Other equity (18,435) - 205,416 2 Total equity attributable to owners of the Company 5,493, ,137, NON-CONTROLLING INTERESTS (121) Total equity 5,493, ,137, TOTAL $ 11,854, $ 9,732, (With Deloitte & Touche auditors report dated February 23, 2017) 13

14 SUNSPRING METAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) Year Ended December Amount % Amount % NET OPERATING REVENUE $ 6,195, $ 6,776, OPERATING COSTS 4,616, ,218, GROSS PROFIT 1,578, ,557, OPERATING EXPENSES Selling and marketing expenses 182, ,381 4 General and administrative expenses 513, ,004 7 Research and development expenses 56, ,698 1 Total operating expenses 752, , PROFIT FROM OPERATIONS 826, , NON-OPERATING INCOME AND EXPENSES Interest income 2,532-19,167 - Other income 76, ,254 - Foreign currency exchange gain 121, ,339 1 Interest expenses (16,607) - (16,551) - Other expenses (43,413) (1) (16,959) - Total non-operating income and expenses 140, ,250 1 PROFIT BEFORE INCOME TAX 967, , INCOME TAX EXPENSE 223, ,382 3 NET PROFIT FOR THE YEAR 744, ,667 9 OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit obligation (6,219) - (4,725) - Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations (288,327) (5) (18,679) - The effective portion of losses on hedging instruments in a cash flow hedge 15,851 - (15,851) - Income tax expense related to items that may be reclassified subsequently 47, ,984 - (Continued) 14

15 SUNSPRING METAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) Year Ended December Amount % Amount % Other comprehensive income for the year, net of income tax (231,593) (4) (35,271) - TOTAL COMPREHENSIVE INCOME FOR THE YEAR $ 512,478 8 $ 588,396 9 Net income (Loss) attributable to: Shareholders of the parent $ 746, $ 623,667 9 Noncontrolling interests (1,979) $ 744, $ 623,667 9 Total comprehensive ncome (Loss) attributable to: Shareholders of the parent $ 514,457 8 $ 588,396 9 Noncontrolling interests (1,979) $ 512,478 8 $ 588,396 9 EARNINGS PER SHARE Basic $ 4.58 $ 3.83 Diluted $ 4.52 $ 3.81 (With Deloitte & Touche auditors report dated February 23, 2017) (Concluded) 15

16 SUNSPRING METAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars, Except Dividends Per Share) Retained Earnings Exchange Differences on Common Stock Capital Surplus Legal Reserve Special Reserve Unappropriated Earnings Translating Foreign Operations Cash Flow Hedges Employee Unearned Benefit Total Noncontrolling Interests Total Equity BALANCE, JANUARY 1, 2015 $ 1,630,000 $ 1,321,841 $ 502,719 $ 80,152 $ 1,208,576 $ 240,304 $ - $ - $ 4,983,592 $ - $ 4,983,592 Appropriation of 2014 earnings Legal reserve ,216 - ( 62,216 ) Cash dividends - NT$2.68 per share ( 436,840 ) ( 436,840 ) - ( 436,840 ) ,216 - ( 499,056 ) ( 436,840 ) - ( 436,840 ) Net profit for the year ended December 31, , , ,667 Other comprehensive income (loss) for the year ended December 31, ( 3,922 ) ( 15,498 ) ( 15,851 ) - ( 35,271) - ( 35,271) Total comprehensive income for the year ended December 31, ,745 ( 15,498 ) ( 15,851 ) - 588, ,396 Share-based payment transaction 4,046 2, ( 3,539 ) 2,764-2,764 BALANCE, DECEMBER 31, ,634,046 1,324, ,935 80,152 1,329, ,806 ( 15,851 ) ( 3,539 ) 5,137,912-5,137,912 Appropriation of 2015 earnings Legal reserve ,367 - ( 62,367 ) Cash dividends - NT$1 per share ( 163,000 ) ( 163,000 ) - ( 163,000 ) ,367 - ( 225,367 ) ( 163,000 ) - ( 163,000 ) Net profit for the year ended December 31, , ,050 ( 1,979 ) 744,071 Other comprehensive income (loss) for the year ended December 31, ( 5,161 ) ( 242,283 ) 15,851 - ( 231,593 ) - ( 231,593 ) Total comprehensive income for the year ended December 31, ,889 ( 242,283) 15, ,457 ( 1,979 ) 512,478 Increase in noncontrolling interests - 1, ,642 1,858 3,500 Share-based payment transaction 1,823 ( 1,582 ) ,581 2,822-2,822 BALANCE, DECEMBER 31, 2016 $ 1,635,869 $ 1,324,158 $ 627,302 $ 80,152 $ 1,844,787 ( $ 17,477 ) $ - ( $ 958 ) $ 5,493,833 ( $ 121 ) $ 5,493,712 (With Deloitte & Touche auditor s report dated February 23, 2017) 16

17 SUNSPRING METAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) Year Ended December CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax $ 967,093 $ 809,049 Adjustments for : Depreciation expenses 337, ,744 Amortization expenses 25,278 12,735 Provision (reversal of provision) for bad debt expense (1,993) 10,983 Loss (gain) on fair value change of financial assets designated as at fair value through profit (1,620) 1,620 Interest expenses 16,607 16,551 Interest income (2,532) (19,167) Compensation cost of share-based payment transaction 2,822 2,764 Loss on disposal of property, plant and equipment (2,247) 6,245 Impairment loss recognized on non-financial assets 39,964 28,718 Gain on foreign currency exchange 19,253 (164) Recognition of provisions (5,734) 23,651 Net changes in operating assets and liabilities Decrease in notes receivable Decrease (increase) in trade receivables 98,489 (148,426) Decrease in other receivables 36,216 30,855 Increase in inventories (18,820) (308,482) Increase in other current assets (181,626) (141,100) Increase (decrease) in trade payables (42,236) 168,415 Increase (decrease) in other payables 26,736 (19,016) Increase in other current liabilities 9,973 2,252 Decrease in accrued pension liabilities (6,685) (4,569) Cash generated from operations 1,316, ,659 Interest received 1,758 24,312 Interest paid (15,123) (16,815) Income tax paid (174,498) (198,797) Net cash generated from operating activities 1,128, ,359 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of held-to-maturity financial assets - (5,519) Acquisition of property, plant and equipment (2,502,375) (2,413,552) Proceeds from disposal of property, plant and equipment 122,424 7,315 Increase in refundable deposits (186) 13,102 Acquisition of intangible assets (34,853) (49,370) Acquisition of investment properties (2,364) (274,339) Increase in other non-current financial assets 13,063 (64,498) Increase in other non-current assets (14,789) 4,637 Increase in prepayments for business facilities 103,533 (749,997) Net cash used in investing activities (2,315,547) (3,532,221) (Continued) 17

18 SUNSPRING METAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) Year Ended December CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term bank borrowings (7,021) (221,448) Proceeds from short-term bills payable 89,949 - Proceeds from long-term bank borrowings 4,268,000 2,160,500 Repayment of long-term bank borrowings (2,748,000) (750,000) Refund of guarantee deposits received 1,500 6,600 Cash dividends (163,000) (436,840) Increase in noncontrolling interests 3,500 - Net cash generated from (used in) financing activities 1,444, ,812 EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES 26,855 (23,393) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 284,580 (2,209,443) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 385,629 2,595,072 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 670,209 $ 385,629 (With Deloitte & Touche auditors report dated February 23, 2017) (Concluded) 18

19 Attachment 6 INDEPENDENT AUDITORS REPORT (Omitted, unqualified-standard opinion with two key audit matters) 19

20 SUNSPRING METAL CORPORATION BALANCE SHEETS (In Thousands of New Taiwan Dollars, Except Per Value) December 31, 2016 December 31, 2015 ASSETS Amount % Amount % CURRENT ASSETS Cash and cash equivalents $ 301,761 2 $ 93,980 1 Notes receivable Trade receivables 1,171, ,324, Trade receivables - related parties 49,191-28,821 - Other receivables 36,571-26,937 - Inventories 415, ,589 5 Other current assets 180, ,603 1 Total current assets 2,155, ,066, NON-CURRENT ASSETS Held-to-maturity financial assets - non-current 5,519-5,519 - Investments accounted for using equity method 4,710, ,678, Property, plant and equipment 5,710, ,624, Investment properties 324, ,937 3 Intangible assets 45,397-33,587 - Deferred tax assets 21,307-24,553 - Prepayments for business facilities 68, ,277 8 Refundable deposits Net defined benefit asset Other financial assets- non-current 28,133-39,696 1 Other non-current assets 18,867-13,949 - Total non-current assets 10,933, ,576, TOTAL $ 13,089, $ 10,642, LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term bank borrowings $ 1,154,750 9 $ 1,094, Short-term bills payable 89, ,718 Derivative financial liabilities for hedging - current ,718 - Trade payables 113, ,831 1 Trade payables - related parties 1,154, ,643, Other payables 1,033, ,862 1 Current tax liabilities 90, ,892 1 Provisions - current 64,442-68,994 1 Current portion of long-term bank borrowings , ,643,993 Other current liabilities 3,964-3,607 - Total current liabilities 3,704, ,289, NON-CURRENT LIABILITIES Long-term bank borrowings 3,880, ,160, Deferred tax liabilities ,794 1 Net defined benefit liabilities Guarantee deposits received 9,300-7,800 - Credit balance on carrying values of Investment accounted for using equity method Total non-current liabilities 3,890, ,215, Total liabilities 7,595, ,504, EQUITY Common stock - at par value of $10 each 1,635, ,634, Capital surplus 1,324, ,324, Retained earnings Legal reserve 627, ,935 5 Special reserve 80, ,152 1 Unappropriated earnings 1,844, ,329, Other equity (18,435) - 205,416 2 Total equity 5,493, ,137, TOTAL $ 13,089, $ 10,642, (With Deloitte & Touche auditors report dated February 23, 2017) 20

21 SUNSPRING METAL CORPORATION STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) Year Ended December Amount % Amount % NET OPERATING REVENUE $ 5,530, $ 5,982, OPERATING COSTS 4,598, ,135, GROSS PROFIT 932, , REALIZED (UNREALIZED) GAIN ON TRANSACTIONS WITH SUBSIDIARIES 3,244 - (1,756) - REALIZED GROSS PROFIT 935, , OPERATING EXPENSES Selling and marketing expenses 169, ,863 4 General and administrative expenses 254, ,685 3 Research and development expenses 6,648-24,751 - Total operating expenses 430, ,299 7 PROFIT FROM OPERATIONS 504, ,774 7 NON-OPERATING INCOME AND EXPENSES Interest income 488-8,282 - Other income 56, ,776 - Foreign currency exchange gain 74, ,503 1 Share of profits of subsidiaries 298, ,645 5 Interest expenses (17,001) - (16,551) - Other expenses (32,898) - (28,925) (1) Total non-operating income and expenses 380, ,730 5 PROFIT BEFORE INCOME TAX 884, , INCOME TAX EXPENSE 138, ,837 1 NET PROFIT FOR THE YEAR 746, , OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit obligation (6,219) - (4,725) - Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations (288,327) (5) (18,679) (1) (Continued) 21

22 SUNSPRING METAL CORPORATION STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) Year Ended December Amount % Amount % Share of other comprehensive loss of subsidiaries 15,851 - (15,851) - Income tax expense related to items that may be reclassified subsequently 47, ,984 - Other comprehensive income (loss) for the year, net of income tax (231,593) (4) (35,271) (1) TOTAL COMPREHENSIVE INCOME FOR THE YEAR $ 514,457 9 $ 588, EARNINGS PER SHARE Basic $ 4.58 $ 3.83 Diluted $ 4.52 $ 3.81 (With Deloitte & Touche auditors report dated February 23, 2017) (Concluded) 22

23 SUNSPRING METAL CORPORATION STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars, Except Dividends Per Share) Retained Earnings Exchange Differences on Common Stock Capital surplus Legal Reserve Special Reserve Unappropriated Earnings Translating Foreign Operations Cash Flow Hedges Employee Unearned Benefit Total Equity BALANCE, JANUARY 1, 2015 $ 1,630,000 $ 1,321,841 $ 502,719 $ 80,152 $ 1,208,576 $ 240,304 $ - $ - $ 4,983,592 Appropriation of 2014 earnings Legal reserve ,216 - ( 62,216 ) Cash dividends - NT$2.68 per share ( 436,840 ) ( 436,840 ) ,216 - ( 499,056 ) ( 436,840 ) Net profit for the year ended December 31, , ,667 Other comprehensive income (loss) for the year ended December 31, ( 3,922 ) ( 15,498 ) ( 15,851 ) - ( 35,271 ) Total comprehensive income for the year ended December 31, ,745 ( 15,498 ) ( 15,851 ) - 588,396 Share-based payment transaction 4,046 2, ( 3,539 ) 2,764 BALANCE, DECEMBER 31, ,634,046 1,324, ,935 80,152 1,329, ,806 ( 15,851 ) ( 3,539 ) 5,137,912 Appropriation of 2015 earnings Legal reserve ,367 - ( 62,367 ) Cash dividends - NT$1 per share ( 163,000 ) ( 163,000 ) ,367 - ( 225,367 ) ( 163,000 ) Net profit for the year ended December 31, , ,050 Other comprehensive income (loss) for the year ended December 31, ( 5,161 ) ( 242,283 ) 15,851 - ( 231,593 ) Total comprehensive income for the year ended December 31, ,889 ( 242,283 ) 15, ,457 Increase in noncontrolling interests - 1, ,642 Share-based payment transaction 1,823 ( 1,582 ) ,581 2,822 BALANCE, DECEMBER 31, 2016 $ 1,635,869 $ 1,324,158 $ 627,302 $ 80,152 $ 1,844,787 ( $ 17,477 ) $ - ( $ 958 ) $ 5,493,833 (With Deloitte & Touche auditor s report dated February 23, 2017) 23

24 SUNSPRING METAL CORPORATION STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) Year Ended December CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax $ 884,545 $ 707,504 Adjustments for : Depreciation expenses 71,602 18,187 Amortization expenses 13,560 4,795 Provisions for bad debt expense (2,038) 10,338 Loss (gain) on fair value change of financial assets designated as at fair value through profit (20,718) 20,718 Interest expenses 17,001 16,551 Interest income (488) (8,282) Compensation cost of share-based payment transaction 2,823 2,764 Share of profits of subsidiaries (298,846) (275,645) Gain on disposal of property, plant and equipment (5,970) - Impairment loss recognized on non-financial assets 9,562 11,945 Unrealized (realized) gain on transactions with subsidiaries (3,244) 1,756 Gain on foreign currency exchange 15,319 42,696 Recognition of provisions (2,849) 22,849 Changes in operating assets and liabilities Decrease in notes receivable Decrease (increase) in trade receivables 166,596 (217,891) Decrease (increase) in other receivables (5,489) 53,633 Decrease (increase) in inventories 51,196 (123,830) Increase in other current assets (73,671) (36,232) Increase (decrease) in trade payables (467,248) 840,410 Increase in other payables 778,720 6,945 Increase in other current liabilities 357 1,719 Decrease in accrued pension liabilities (6,685) (4,569) Cash generated from (used in) operations 1,124,205 1,096,362 Interest received ,215 Interest paid (15,123) (16,815) Income tax paid (97,777) (106,349) Net cash generated from operating activities 1,011, ,413 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of held-to-maturity financial assets - (5,519) Acquisition of investments accounted for using equity method - (6,500) Acquisition of property, plant and equipment (2,375,340) (1,967,278) Proceeds from disposal of property, plant and equipment 98,934 - Increase (decrease) in refundable deposits (202) 14,544 Acquisition of investment properties (23,342) (33,684) Acquisition of investment properties (2,364) (274,339) Increase in other non-current financial assets 11,563 (39,696) Increase in other non-current assets (6,946) 13,895 Increase in prepayments for business facilities 75,760 (819,195) Net cash used in investing activities (2,221,937) (3,117,772) (Continued) 24

25 SUNSPRING METAL CORPORATION STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) Year Ended December CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term bank borrowings (7,021) (221,448) Proceeds from short-term bills payable 89,949 - Proceeds from long-term bank borrowings 4,268,000 2,160,500 Repayment of long-term bank borrowings (2,748,000) (750,000) Refund of guarantee deposits received 1,500 6,600 Cash dividends (163,000) (436,840) Net cash generated from financing activities 1,441, ,812 EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES (23,549) (442) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 207,781 (1,374,989) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 93,980 1,468,969 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 301,761 $ 93,980 (With Deloitte & Touche auditors report dated February 23, 2017) (Concluded) 25

26 Attachment 7 Sunspring Metal Corporation Comparison between the original and amendments to the "Procedures for Acquisition and Disposal of Assets" Original version Amended version Reason The full text which refers to the financial management center are modified to the Finance Department Related to the acquisition of real properties, each department which has business requirements must draft an assessment report of Acquisition and Disposal of Assets to specify the target and purpose for real properties. The report will be transferred to the Finance management center for review and assessment based on the transaction terms. If the assessment is feasible, the budget of capital expenditure will be compiled and the finance department of financial management center in conjunction with assistance from the knowledge management center will be responsible for execution. When disposing of Assets, the Finance department shall propose the assessment report of Acquisition and Disposal of Assets to elaborate the disposal reasons and disposal method etc., and submit the report to the general manager(ceo). After approval from the CEO, the finance department will execute the disposal with assistance from the knowledge management center In acquiring or disposing of real property or equipment where the transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, the company, unless transacting with a government institution, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall be handled according to section 5.4. assets appraisal procedures Acquisition and Disposal of real properties or equipment shall refer to the present value of the announcement, the assessed value, the actual transaction Related to the acquisition of real properties, each department which has business requirements must draft an assessment report of Acquisition and Disposal of Assets to specify the target and purpose for real properties. The report will be transferred to the Finance department for review and assessment based on the transaction terms. If the assessment is feasible, the budget of capital expenditure will be compiled and submitted to the general manager (CEO) for approval, then executed by the Finance department. When disposing of Assets, the Finance department shall propose an assessment report of the Acquisition and Disposal of Assets to elaborate the disposal reasons and disposal method etc., and submit the report to the general manager(ceo) for approval. The Finance department is responsible for implementation In acquiring or disposing of real property or equipment where the transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, the company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall be handled according to section 5.4. assets appraisal procedures Acquisition and Disposal of real properties or equipment shall refer to the present value of the announcement, the assessed value, the actual transaction To align with the adjustment to the company s organizational structure To align with the adjustment to the company s organizational structure Amendments based on the revised regulations Regulations Governing the Acquisition and Disposal of Assets by Public Companies announced by FSC on Feb. 9, 2017 (No ). Same as above. 26

27 Original version Amended version Reason price of actual real properties or price of actual real properties or equipment, depreciation of assets and equipment, depreciation of assets and other relevant agreed conditions. If the other relevant agreed conditions. If the transaction amount reaches 20 percent transaction amount reaches 20 percent of the company's paid-in capital or of the company's paid-in capital or NT$300 million or more, the company, NT$300 million or more, the company, unless transacting with a government unless transacting with a government institution, engaging others to build on its agency, engaging others to build on its own land, engaging others to build on own land, engaging others to build on rented land, or acquiring or disposing of rented land, or acquiring or disposing of equipment for business use, shall obtain equipment for business use, shall obtain an appraisal report prior to the date of an appraisal report prior to the date of occurrence of the event from a occurrence of the event from a professional appraiser and set professional appraiser and set transaction terms in line with the transaction terms in line with the appraisal. appraisal Procedure of public announcements The public announcements for Acquisition and Disposal of Assets shall be handled according to the following regulations: Where any of the following circumstances occurs with respect to the following article, a public announcement of relevant information shall be made on the information reporting website designated by the FSC within 2 days commencing immediately from the date of occurrence of the event: Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company s total assets or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription Or redemption of domestic money market funds Merger, demerger, acquisition or transfer of shares Where an asset transaction other than any of those referred to in the preceding three subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$ The procedure of public announcements The public announcements for Acquisition and Disposal of Assets shall be handled according to the following regulations: Where any of the following circumstances occurs with respect to the following article, a public announcement of relevant information shall be made on the information reporting website designated by the FSC within 2 days commencing immediately from the date of occurrence of the event: Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company s total assets or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription Or repurchase of domestic money market funds issued by Securities Investment Trust Enterprises Merger, demerger, acquisition or transfer of shares (move to ) Same as above. Deferred article numbers. 27

28 Original version Amended version Reason million; provided, this shall not apply to the following circumstances: Trading of government bonds Trading of bonds under repurchase/resale agreements, or subscription or redemption of domestic money market funds where the type of asset acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party, and the transaction amount is less than NT$500 million Where land is acquired under an arrangement on engaging others to build on the company s own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the company expects to invest in the transaction is less than NT$500 million. (moved to ) (moved to ) where the type of asset acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party, and the transaction amount reaches one of the following regulations: under the situation that paid-in capital is less than NT$10 billion, the transaction amount is more than NT$ 500 million under the situation that paid-in capital is more than NT$10 billion, the transaction amount is more than NT$1 billion Where land is acquired under an arrangement on engaging others to build on the company s own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the company expects to invest in the transaction is less than NT$500 million. (original ) (original ) (original ) Where an asset transaction other than any of those referred to in the preceding three subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: Trading of government bonds Trading of bonds under repurchase/resale agreements, or subscription or repurchase of 28

29 Original version Amended version Reason The amount of transactions referred in shall be calculated as follows. "Within the preceding year" refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these regulations need not be counted toward the transaction amount In acquiring or disposing of real property or equipment where the transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, the company, unless transacting with a government institution, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall comply with the following regulations: Where a public company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a government institution, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF The amount of transactions referred in , , and shall be calculated according to section "Within the preceding year" refers to the year preceding the date of occurrence of the current transaction. Obtaining an appraisal report from appraiser or obtaining the opinion from accountants in accordance with these Regulations need not be counted toward the domestic money market funds issued by Securities Investment Trust Enterprises Amendment article numbers. The amount of transactions referred from to shall be calculated as follows. "Within the preceding year" refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Regulations need not be counted toward the transaction amount Amendment based on the In acquiring or disposing of real property revised regulations or equipment where the transaction Procedures for Acquiring or amount reaches 20 percent of the Disposing of Assets company's paid-in capital or NT$300 promulgated by FSC on Feb. million or more, the company, unless 9, 2017 (Ref ). transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall comply with the following regulations: Where a public company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a government institution, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF The amount of transactions referred in , , and shall be calculated according to section "Within the preceding year" refers to the year preceding the date of occurrence of the current transaction. Obtaining an appraisal report from appraiser or obtaining the opinion from accountants in accordance with these Regulations need not be counted toward the same as above Amendment of article numbers. based on