Young Optics Inc Annual General Shareholder Meeting Minutes

Transcription

1 Young Optics Inc Annual General Shareholder Meeting Minutes (This translated document is prepared in accordance with the Chinese version and is for reference only. In the event of any inconsistency between the English version and the Chinese version, the Chinese version shall prevail) Time.. 9:00 a.m., June 10 (Wednesday), Place.. No.2, Zhanye 1st Rd., East Dist., Hsinchu City 300, Taiwan R.O.C. (The Allied Association for Science Park Industries) Attendants.. Total outstanding shares: 114,059,785 shares, Total shares represented by shareholders present in person or by proxy: 71,305,126 shares.percentage of shares held by shareholders present in person or by proxy: 62.51%. Chairman.. Frank C.S. Juang Recorder.. Genie Liu I. Commencement of the Meeting:The aggregate shareholding of the shareholders present constituted a quorum. The Chairman called the meeting to order. II. Chairman s Statement (omitted) III. Report Items Annual Business Report (attached as Attachment 1) 2. Audit Committee's Report(attached as Attachment 2) 3. The execution of issuance of new shares.( refer to the handbook). The above report items were acknowledged. IV. Ratification Items 1. Ratification of 2014 Annual Business Report and Financial Statements. (Proposed by the Board of Directors) (1) The Company s 2014 financial statements have been audited by Ernst & Young. (2) Please refer to attachment 1 and 3 for 2014 Business Report and financial statements. (3) The proposal is submitted for ratification. Resolution: The proposal has been approved. There were 71,305,126 shares represented at the time of voting, which 69,285,126 shares voted for the proposal; 0 shares voted against the proposal ; 2,020,000 shares voted abstained the proposal. 2. Ratification of the Proposal for the Distribution of 2014 Earnings. (Proposed by the Board of Directors) (1) The earnings distribution proposal has been prepared and attached below in accordance with the Articles of Incorporation and the Company Act. (2) After approval by the annual general shareholders meeting, the chairman of Board of Directors would be authorized to set a record date and ex-dividend base date for dividends distribution. (3) Should the company s capital position changes in the future, requiring adjustments in the cash distribution ratio, the Board of Directors shall be authorized to manage this matter. -1-

2 (4) The proposal is submitted for ratification. Resolution.. The proposal has been approved. There were 71,305,126 shares represented at the time of voting, which 69,285,126 shares voted for the proposal; 0 shares voted against the proposal ; 2,020,000 shares voted abstained the proposal. Young Optics Inc Earnings Distribution Proposal Unit:NTD Amount Item Subtotal Total Total Undistributed Earnings at beginning of period 456,694,792 Subtract : Actuarial Loss on Defined Benefit Plans 3,753,260 Sub-total 452,941,532 Net Income of ,718,143 Subtract : Appropriated for Legal Reserve 19,271, s Earnings Available for Distribution 173,446,329 Earnings Available for Distribution (Cumulative) 626,387,861 Distribution Item Cash Dividends to Shareholders (NTD1.48per share) 168,808,482 Undistributed Earnings at end of period 457,579,379 Note 1:It is proposed to distribute NT$ 31,224,408 for employee cash bonus and NT$0 for employee stock bonus shares. This proposal is the same with the original expense estimate. Note 2:Cash dividend shall be issued to the rounded-down full NT dollar. After which, the remaining amount will be allocated by decimal digit from large to small and account number from the front to rear to meet the total cash dividend. Note 3:Cash dividend to shareholders is calculated based on the outstanding shares of April 24, 2015, 114,059,785 shares. Note 4:The profit from the most recent year should be distributed with priority. Chairman: Frank C.S. Juang President : Claude Shyu Accounting Officer: Cynthia Chang -2-

3 V. Discussion and Election Items 1. Proposal for issuance new shares through cash capital increase. (Proposed by the Board of Directors) (1) In order to support the fund needs for future operation of Company, it is proposed that the shareholders meeting authorizes the Board of Directors based on the Company s needs and market conditions to issue new common shares for cash capital increase within the limited of 45,000,000 shares (collectively and/or individually offerings). (2) The principals of fund raising A. If the Company issues new common shares for cash capital increase, the shares have par values of NT$ 10 and issue at a premium. In addition, 15% shall be set aside for subscription by employees as per Article 267 of the Company Act. B. According to Article 28-1 of the Securities and Exchange Act, the remaining share should be offered in public will issue by public subscription or book building. The percentage of public offers shall be as follows: a. Public Subscription approach: (i) 10% will be allocated to the public and the remaining 75% of the shares shall be subscribed by the existing shareholders based on their shareholding percentage on the record date for subscription. Existing Shareholders themselves should together into whole shares subscribed if any shares remain unsubscribed. (ii) In case the existing shareholders or employees of the Company waive their rights or any shares remain unsubscribed, the Chairman is authorized to contact specific persons to subscribe to the remaining shares. (iii) According to Article 6 of the Chinese Securities Association Rules of Self Regulation to be Followed by Underwriters in Advising an Offering and Issuance of Securities by Securities Issuers (abbreviated to the self-regulatory rules ), the issue price may not be less than 70% of the simple arithmetic average of the closing prices of the common shares either one, three or five business days prior to the pricing date, after deducting bonus shares from dividends). It is proposed that the Board should be authorized to negotiate with the lead manager and determine the actual issue price based on the above-described price range and the overall situation of public subscription. b. Book Building approach: (i) Except that 15% of the newly issued shares shall be reserved for subscription by employees of this Company, the remaining 85% of the newly issued shares shall be allocated to the public by way of book-building with the approval at the shareholders' meeting pursuant to Article 28-1 of the Securities and Exchange Act. (ii) In case the employees waive their rights or any shares remain unsubscribed, the Chairman is authorized to contact specific persons to subscribe to the remaining shares. In accordance with Article 40 of the -3-

4 Chinese Securities Association Regulations for Underwriting and Resale of Securities by Securities Firms, existing shareholders still have the rights to participate book building. (iii) According to Article 7 of the self-regulatory rules, the issue price may not be less than 90% of the simple arithmetic average of the closing prices of the common shares either one, three or five business days prior to the pricing date, after deducting bonus shares from dividends. It is proposed that the Board should be authorized to negotiate with the lead manager and determine the actual issue price based on the above-described price range and the overall situation of book-building. (3) It is proposed to the shareholders meeting for authorizing the Board of Directors to determine the details of the issuance of new shares through cash capital increase, including the number of shares to be issued, the offering plan, the underwriter approach, the projected items, the projected schedule for the use of proceeds, the projected results and any matters not provided herein, and based on the Company s needs and market conditions to issue shares collectively and/or individually offerings. It is also proposed to shareholders for authorizing the Board of Directors with full rights to follow-up and/or handles any adjustment, revisions and/or amendments which may be triggered by the amendment of law, the opinion or comments of the authority, and/or then market conditions. (4) The proposal is submitted for ratification. Resolution.. The proposal has been approved. There were 71,305,126 shares represented at the time of voting, which 67,898,748 shares voted for the proposal; 1,386,378 shares voted against the proposal ; 2,020,000 shares voted abstained the proposal. 2. Proposal for the Company s Election of Directors. (Proposed by the Board of Directors) (1) The tenure of the 5th term of Directors will expire on June 12, The 6th term of Directors will be elected at this Annual General Shareholders' Meeting. (2) According to Article 17 of the company s Articles of Incorporation, the Company shall have five (5) to seven (7) directors to be elected at the shareholders meeting and the Board of Directors is authorized to approve the number of directors. It is proposed to elect seven Directors including three independent directors. (3) The Independent Directors shall be elected according to the candidate nomination system and procedures. The list of candidates has been approved by the Board of Directors on April 24, 2015 as follows: -4-

5 Name Han-Ping D. Shieh Frank Hong Sonic Wu Ph.D. in Electrical & MS in International Computer Education Business, Chinese Engineering, Carnegie Culture University Mellon University Experience Holding Shares Professor of Photonics Department and Display Institute, National Chiao Tung University Senior Vice President of Corporate Banking Department, Capital Securities Corporation Ph.D. in International Business, National Taiwan University Assistant Professor of Management College, Yuan Ze University (4) The tenure of newly elected directors shell be three years commence on June 10, 2015 and expired on June 9, (5) Please vote. Election Results.. Title Name Votes Received Director Director Director Director Coretronic Corp. legal representative Jing-Zhou Huang Coretronic Corp. legal representative Zong-Liang Wu Tsen Ming Investment Corp. legal representative Fu-Ming Chuang Chung Tsen Investment Corp. legal representative Cing-Si Jung 114,582, ,806, ,792,324 98,148,160 Independent Director Independent Director Independent Director Han-Ping Shieh 2,625,507 Yong-Pei Hong 2,625,507 Hsiang-Hsun Wu 2,625, Proposal to release the newly-elected Directors and their Representatives from non-competition restrictions. (Proposed by the Board of Directors) (1) According to Article of the Company Act, a director who does anything for himself/herself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval. -5-

6 (2) The newly-elected Directors or their representatives who may participate in the operations of another company that engages in the same or similar business scope as the Company, hereby proposed to request the shareholders approval to release the newly-elected directors from the non-competition restrictions under the premise that doesn t impair the interest of the company. (3) The proposal is submitted for ratification. Resolution.. The proposal has been approved. There were 71,305,126 shares represented at the time of voting, which 68,358,748 shares voted for the proposal; 926,378 shares voted against the proposal ; 2,020,000 shares voted abstained the proposal. VI. Motions.. None. VII. Meeting Adjournment.. 9:26 am. -6-

7 Young Optics Inc Annual Business Report Attachment 1 For the fiscal year of 2014, Young Optics Inc. has reported consolidated sales revenue of NT$5,006 million. Net operating income was reported at NT$202 million, profit before tax was NT$280 million and net Income was NT$193 million. Total comprehensive income was reported at NT$330 million and the basic EPS was NT$1.69 per common share. In the year of 2014, we have gained ground in the areas of technology, product design, customers adjustment and development. However, due to the development schedule delay of ultra-short throw engine, under-expected sales revenue and strong competition from image optics components market, consolidated sales revenue was reported at NT$5,006 million, representing a 4.82% decrease as compared to the same period in Due to the increased revenue of new products development and lean production efficiency, gross margin has reached 26.75%, compared with 25.76% of the previous year. In terms of research and innovation, through teamwork and collaboration of R&D department, we have shown the following achievements: 1. Successfully developed the ultra-precision machining and measuring technology of the die core of free-form surface mirror. 2. Successfully developed 3X optical zoom lens image processing algorithms by dual lens. 3. Successfully developed 16M fixed focus wide-angle (FOV145 ) motion camera module. 4. Successfully developed 150 lm automotive head-up display projectors. 5. Successfully developed 720P autofocus Pico projection module. Looking into the future, Young Optics Inc. will aim to implement the following strategies: (1) to build the professional equipment maintenance team in the whole planet, lean product development and design verification process, to integrate the quality program of supply chain and to improve customer service delivery systems, so that the quality of products and services can meet and exceed customer expectations; (2) to lean into the key -7-

8 technology of car support system based on the core technical capabilities of optical design and plastic injection; (3) to integrate non-projection technology to innovate consumer demand and user experience based on the existing position in image and projection industry; (4) to maximize existing product lines, to plow deeply in the middle part of the niche market and to permeate the high-end niche products. (5) In response to the global shortage of labor and the rising trend of labor costs, to enhance the technical capabilities and automation degree of the optical components manufacturing process through the integration of computer aided manufacturing system, and to build competitive advantage and cost barriers for application modules with superior design technology of optical components. Moreover, we will gather the consensus to the maximum of all employees, through the teamwork, positive innovating attitude and execution, to pursue the best interests of all shareholders and employees. Sincerely, Chairman: Frank C.S. Juang President: Claude Shyu Accounting: Cynthia Chang -8-

9 Attachment 2 Audit Committee s Report To: 2015 General Annual Shareholders Meeting of Young Optics Inc. The Board of Directors of the Company has delivered the 2014 business report, the financial statements and the proposed 2014 earnings distribution. The aforesaid 2014 financial statements of the Company and the consolidated financial statements had been audited by Ernst & Young. The Audit Committee has examined the above statements and found nothing out of order and thus prepared this report in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act for your ratification. Young Optics Inc. Chairman of the Audit Committee:Henry Lin Date: April 24,

10 Attachment 3 AUDIT REPORT OF INDEPENDENT ACCOUNTANTS English Translation of a Report Originally Issued in Chinese To Young Optics Inc. We have audited the accompanying parent company only balance sheets of Young Optics Inc. as of December 31, 2014 and 2013, the related parent company only statements of comprehensive income, statements of changes in equity and cash flows for the years ended December 31, 2014 and These parent company only financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these parent company only financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the Republic of China and Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of other independent auditors provide a reasonable basis for our opinion. In our opinion, the parent company only financial statements referred to above present fairly, in all material respects, the financial position of Young Optics Inc. as of December 31, 2014 and 2013, and the results of its operations and cash flows for the years ended December 31, 2014 and 2013, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers. ERNST & YOUNG Taiwan Republic of China January 30, 2015 Notice to Readers The accompanying financial statements are intended only to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China. -10-

11 English Translation of Parent Company Only Financial Statements Originally Issued in Chinese YOUNG OPTICS INC. PARENT COMPANY ONLY BALANCE SHEETS December 31, 2014 and December 31, 2013 (Expressed in thousands of New Taiwan Dollars) ASSETS December 31, 2014 % December 31, 2013 % LIABILITIES AND EQUITY December 31, 2014 % December 31, 2013 % Current assets Current liabilities Cash and cash equivalents $258,422 4 $254,105 4 Short-term loans $675, $575, Accounts receivable, net 411, ,274 4 Accounts payable 127, ,873 2 Accounts receivable-related parties, net 208, ,007 1 Accounts payable-related parties 444, ,122 9 Other receivables 8,220-8,099 - Other payables 366, ,738 7 Other receivable-related parties 25, ,313 2 Other payables-related parties 2,085-5,085 - Current tax assets Current tax liabilities Inventories, net 135, ,677 2 Provisions-current 21,324-21,807 - Prepayments 5,433-4,245 - Advance receipts 46, ,091 - Other current assets 49, ,824 1 Other current liabilities 8,053-16,317 - Total current assets 1,103, , Total current liabilities 1,690, ,622, Non-current assets Non-current liabilities Investments accounted for using the equity method 2,607, ,633, Deferred tax liabilities 75, ,692 1 Property, plant and equipment 1,915, ,954, Accrued pension liabilities 21, ,411 1 Investment property, net 208, ,745 5 Guarantee deposits 7,499-8,882 - Intangible assets 14,104-16,859 - Total non-current liabilities 104, ,985 2 Deferred tax assets 14,553-23,716 1 Total liabilities 1,795, ,751, Refundable deposits Equity Other assets-others 21,782-21,768 - Capital Total non-current assets 4,783, ,914, Common stock 1,140, ,140, Capital surplus 1,647, ,647, Retained earnings Legal reserve 389, ,780 6 Special reserve 82, ,686 2 Unappropriated earnings 645, , Total retained earnings 1,118, ,143, Other equity 184, ,565 1 Total equity 4,090, ,975, Total assets $5,886, $5,727, Total liabilities and equity $5,886, $5,727,

12 English Translation of Parent Company Only Financial Statements Originally Issued in Chinese YOUNG OPTICS INC. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2014 and 2013 (Expressed in thousands of New Taiwan Dollars, except for earnings per share) Description 2014 % 2013 % Net sales $3,100, $2,953, Operating costs (2,189,507) (71) (2,216,708) (75) Gross profit 911, , Unrealized intercompany profit (6,350) - (5,191) - Realized intercompany profit 5,191-14,161 - Gross profit, net 909, , Operating expenses Sales and marketing expenses (101,754) (3) (111,850) (4) General and administrative expenses (297,157) (9) (310,545) (11) Research and development expenses (580,336) (19) (508,693) (17) Total operating expenses (979,247) (31) (931,088) (32) Net other operating income and expenses Operating losses (69,302) (2) (185,818) (7) Non-operating income and expenses Other income 87, ,291 3 Other gains and losses (6,034) - (12,048) - Finance costs (8,298) - (6,445) - Share of profit of subsidiaries, associates and joint ventures 207, , Total non-operating income and expenses 280, , Net income before income tax 211, ,031 9 Income tax expense (18,392) (1) (33,093) (1) Net income 192, ,938 8 Other comprehensive income (loss) Exchange differences resulting from translating the financial statements of foreign operations 140, ,727 4 Actuarial gain (loss) on defined benefit plans (4,522) - 3,835 - Income tax related to components of other comprehensive income (651) - Other comprehensive income, net of tax 137, ,911 4 Total comprehensive income $329, $354, Basic Earnings Per Share (in New Taiwan Dollars) $ 1.69 $ 2.09 Diluted Earnings Per Share (in New Taiwan Dollars) $ 1.68 $

13 English Translation of Parent Company Only Financial Statements Originally Issued in Chinese YOUNG OPTICS INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2014 and 2013 (Expressed in thousands of New Taiwan Dollars) Retained earnings Unappropriat ed earnings Other equity Exchange differences resulting from translating the financial statements of foreign operations Description Common stock Legal surplus Capital surplus Total equity Balance as of January 1, 2013 $1,140,598 $1,647,625 $322,381 $82,686 $735,824 $(69,162) $3,859,952 Legal reserve ,399 - (43,399) - - Cash dividends (239,526) - (239,526) Special reserve Net income in , ,938 Other comprehensive income in , , ,911 Total comprehensive income , , ,849 Balance as of Dcecember 31, 2013 $1,140,598 $1,647,625 $365,780 $82,686 $695,021 $43,565 $3,975,275 Balance as of January 1, 2014 $1,140,598 $1,647,625 $365,780 $82,686 $695,021 $43,565 $3,975,275 Legal reserve ,894 - (23,894) - - Cash dividends (214,432) - (214,432) Net income in , ,718 Other comprehensive income in (3,753) 140, ,018 Total comprehensive income , , ,736 Balance as of Dcecember 31, 2014 $1,140,598 $1,647,625 $389,674 $82,686 $645,660 $184,336 $4,090,

14 Description English Translation of Parent Company Only Financial Statements Originally Issued in Chinese YOUNG OPTICS INC. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended Dcecember 31, 2014 and 2013 (Expressed in thousands of New Taiwan Dollars) Description Cash flows from operating activities : Cash flows from investing activities : Net income before tax $211,110 $272,031 Proceeds from disposal of property, plant and equipment 1, Adjustments for : Acquisition of property, plant and equipment (90,717) (74,266) Profit or loss items : Proceeds from capital reduction for using the equity method 110,935 - Bad debt expenses (reversal) 301 (72) Acquisition of intangible assets (8,828) (20,443) Depreciation (including investment property) 180, ,368 Decrease in refundable deposits Share of profit of subsidiaries, associates and joint venture (207,191) (387,051) Increase in other assets-others (14) (14) Unrealized intercompany profit 6,350 5,191 Net cash provided by (used in) investing activities 12,574 (94,628) Realized intercompany profit (5,191) (14,161) Amortization 11,543 11,299 Interest expenses 8,298 6,445 Interest income (770) (486) Unrealized gain on disposal of property, plant and equipment Cash flows from financing activities : Gain on disposal of property, plant and equipment (1,120) - Increase (decreased) in short-term loans 100,000 (42,504) Changes in operating assets and liabilities: Decrease in guarantee deposits (1,383) (3,541) Notes receivable (increased) decreased (183,259) 284,592 Cash dividends (214,432) (239,526) Accounts receivable-related parties (increased) decreased (160,862) 267,534 Net cash used in financing activities (115,815) (285,571) Other receivables (increased) decreased (127) 2,412 Net increase in cash and cash equivalents 4, ,708 Other receivables-related parties decreased (increased) 73,106 (73,821) Cash and cash equivalents at beginning of the period 254, ,397 Inventories (increased) decreased (30,083) 46,556 Cash and cash equivalents at end of the period $258,422 $254,105 Prepayments (increased) decreased (1,188) 14,595 Other current assets-others decreased 15,943 10,237 Accounts payable increased (decreased) 36,381 (88,038) Accounts payable-related parties decreased (52,309) (114,272) Other payables (decreased) increased (18,930) 35,447 Other payables-related parties decreased (3,000) (27,657) Other current liabilities decreased (8,264) (1,772) Advance receipts increased (decreased) 18,946 (40,613) Accrued pension liabilities decreased (19,937) (2,190) Provisions-current decreased (483) (16,672) Cash generated from operations (130,406) 360,902 Interest received Dividend received 261, ,484 Interest paid (7,638) (6,621) Income tax paid (16,624) (7,345) Net cash provided by operating activities 107, ,

15 To Young Optics Inc. AUDIT REPORT OF INDEPENDENT ACCOUNTANTS English Translation of a Report Originally Issued in Chinese We have audited the accompanying consolidated balance sheets of Young Optics Inc. and subsidiaries as of December 31, 2014 and 2013, the related consolidated statements of comprehensive income, consolidated statements of changes in equity and cash flows for the years ended December 31, 2014 and These consolidated financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the Republic of China and Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, which require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall consolidated financial statement presentation. We believe that our audits and the reports of other independent auditors provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Young Optics Inc. as of December 31, 2014 and 2013, and the consolidated results of their operations and their cash flows for the years ended December 31, 2014 and 2013, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee which are endorsed by Financial Supervisory Commission of the Republic of China. We have audited and expressed a modified unqualified opinion on the parent company only financial statements of Young Optics Inc. for the years ended December 31, 2014 and ERNST & YOUNG Taiwan Republic of China January 30, 2015 Notice to Readers The accompanying consolidated financial statements are intended only to present the consolidated financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China. -15-

16 ASSETS December 31, 2014 % English Translation of Consolidated Financial Statements Originally Issued in Chinese YOUNG OPTICS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2014 and December 31, 2013 (Expressed in thousands of New Taiwan Dollars) December 31, 2013 % LIABILITIES AND EQUITY December 31, 2014 % December 31, 2013 % Current assets Current liabilities Cash and cash equivalents $1,847, $1,792, Short-term loans $675, $575, Financial assets at fair value through profit or loss-current - - 4,470 - Financial liabilities at fair value through profit or loss-current 4, Notes receivable, net 112, ,831 3 Accounts payable 464, ,436 9 Accounts receivable, net 597, ,193 6 Accounts payable-related parties 55, ,346 1 Accounts receivable-related parties, net 280, ,865 4 Other payables 524, ,892 9 Other receivables 16,754-12,681 - Other payables-related parties 10,206-21,527 - Current tax assets 11,585-11,263 - Current tax liabilities 18,170-22,267 - Inventories, net 508, ,737 9 Provisions-current 25, ,305 1 Prepayments 18,492-24,994 1 Advance receipts 72, ,659 1 Other current assets 67, ,350 1 Other current liabilities 8,324-20,409 - Total current assets 3,460, ,193, Total current liabilities 1,858, ,814, Non-current assets Non-current liabilities Property, plant and equipment 2,296, ,368, Deferred tax liabilities 75, ,807 1 Investment property, net 208, ,745 4 Accrued pension liabilities 21,996-37,411 1 Intangible assets 29, ,907 1 Guarantee deposits 8,427-9,721 - Deferred tax assets 21, ,914 1 Total non-current liabilities 105, ,939 2 Refundable deposits 15,011-12,117 - Total liabilities 1,964, ,944, Other assets-others 21,782-21,768 - Total non-current assets 2,593, ,726, Equity attributable to shareholders of the parent Capital Common stock 1,140, ,140, Capital surplus 1,647, ,647, Retained earnings Legal reserve 389, ,780 6 Special reserve 82, ,686 1 Unappropriated earnings 645, , Total retained earnings 1,118, ,143, Other equity 184, ,565 1 Non-controlling interests Total equity 4,090, ,975, Total assets $6,054, $5,920, Total liabilities and equity $6,054, $5,920,

17 English Translation of Consolidated Financial Statements Originally Issued in Chinese YOUNG OPTICS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2014 and 2013 (Expressed in thousands of New Taiwan Dollars, except for earnings per share) Description 2014 % 2013 % Net sales $5,005, $5,258, Operating costs (3,666,431) (73) (3,904,401) (74) Gross profit 1,339, ,354, Operating expenses Sales and marketing expenses (126,349) (3) (148,219) (3) General and administrative expenses (383,397) (8) (391,674) (7) Research and development expenses (627,908) (12) (531,699) (10) Total operating expenses (1,137,654) (23) (1,071,592) (20) Net other operating income and expenses Operating income 201, ,948 6 Non-operating income and expenses Other income 107, ,134 1 Other gains and losses (18,511) - (13,835) - Finance costs (10,524) - (6,445) - Total non-operating income and expenses 78, ,854 1 Net income before income tax 280, ,802 7 Income tax expense (87,308) (2) (111,864) (2) Net income 192, ,938 5 Other comprehensive income (loss) Exchange differences resulting from translating the financial statements of foreign operations 140, ,727 2 Actuarial gain (loss) on defined benefit plans (4,522) - 3,835 - Income tax related to components of other comprehensive income (651) - Other comprehensive income, net of tax 137, ,911 2 Total comprehensive income $329,736 7 $354,849 7 Net income attributable to : Shareholders of the parent $192,718 $238,938 Non-controlling interests $- $- Total comprehensive income attributable to : Shareholders of the parent $329,736 $354,849 Non-controlling interests $- $- Basic Earnings Per Share (in New Taiwan Dollars) $ Diluted Earnings Per Share (in New Taiwan Dollars) $1.68 $

18 English Translation of Consolidated Financial Statements Originally Issued in Chinese YOUNG OPTICS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2014 and 2013 (Expressed in thousands of New Taiwan Dollars) Balance as of January 1, 2013 Description Equity attributable to shareholders of the parent Retained earnings Other equity Exchange differences resulting from translating the financial Common stock Capital surplus Legal reserve Special reserve Unappropriate d earnings statements of foreign operations Total Noncontrolling interests Total equity $1,140,598 $1,647,625 $322,381 $82,686 $735,824 $(69,162) $3,859,952 $- $3,859,952 Legal reserve ,399 - (43,399) Cash dividends (239,526) - (239,526) - (239,526) Net income in , , ,938 Other comprehensive income in , , , ,911 Total comprehensive income , , , ,849 Decrease in non-controlling interests Balance as of Dcecember 31, 2013 $1,140,598 $1,647,625 $365,780 $82,686 $695,021 $43,565 $3,975,275 $- $3,975,275 Balance as of January 1, 2014 $1,140,598 $1,647,625 $365,780 $82,686 $695,021 $43,565 $3,975,275 $- $3,975,275 Legal reserve ,894 - (23,894) Cash dividends (214,432) - (214,432) - (214,432) Net income in , , ,718 Other comprehensive income in (3,753) 140, , ,018 Total comprehensive income , , , ,736 Decrease in non-controlling interests Balance as of Dcecember 31, 2014 $1,140,598 $1,647,625 $389,674 $82,686 $645,660 $184,336 $4,090,579 $- $4,090,

19 Description English Translation of Consolidated Financial Statements Originally Issued in Chinese YOUNG OPTICS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2014 and 2013 (Expressed in thousands of New Taiwan Dollars) Description Cash flows from operating activities : Cash flows from investing activities : Net income before tax $280,026 $350,802 Proceeds from disposal of property, plant and equipment 1, Adjustments for: Acquisition of property, plant and equipment (118,240) (201,246) Profit or loss items : Acquisition of intangible assets (10,302) (21,752) Bad debt expenses (reversal) 322 (28) Increase in refundable deposits (2,894) (5,926) Depreciation (including investment property) 246, ,085 Increase in other assets-others (14) (14) Amortization 13,239 13,157 Net cash used in investing activities (130,229) (228,473) Interest expense 10,524 6,445 Interest income (42,898) (27,278) Net loss (gain) of financial assets and liabilities at fair value through profit or loss 7,489 (4,407) Cash flows from financing activities : Loss (gain) on disposal of property, plant and equipment 585 (334) Increase (decrease) in short-term loans 100,000 (42,504) Transfer of property, plant and equipment to expense 1,902 - Decrease in guarantee deposits (1,294) (3,957) Changes in operating assets and liabilities: Cash dividends (214,432) (239,526) Notes receivable decreased 81,780 10,661 Net cash used in financing activities (115,726) (285,987) Accounts receivable (increased) decreased (249,198) 401,949 Effect of exchange rate changes on cash and cash equivalents 121,146 92,800 Accounts receivable-related parties (increased) decreased (56,700) 226,679 Net increase in cash and cash equivalents 55, ,113 Other receivables decreased 61 2,944 Cash and cash equivalents at beginning of the period 1,792,123 1,074,010 Other receivables-related parties decreased Cash and cash equivalents at end of the period $1,847,927 $1,792,123 Inventories (increased) decreased (4,830) 172,181 Prepayments decreased 6,502 15,793 Other current assets-others decreased 10,618 7,496 Accounts payable decreased (50,679) (94,722) Accounts payable-related parties increased (decreased) 42 (69,579) Other payables (decreased) increased (1,787) 17,575 Other payables-related parties (decreased) increased (11,321) 8,478 Other current liabilities (decreased) increased (12,085) 1,987 Advance receipts increased (decreased) 38,438 (34,347) Accrued pension liabilities decreased (19,937) (2,190) Provisions-current decreased (5,072) (14,788) Cash generated from operations 243,034 1,223,673 Interest received 38,764 25,337 Interest paid (9,864) (6,621) Income tax paid (91,321) (102,616) Net cash provided by operating activities 180,613 1,139,