Sporton International Inc.

Transcription

1 Sporton International Inc Shareholders' Meeting Procedures Disclosure of the equity shares owned by shareholders present in the Meeting: I. Call for the meeting II. Opening remark by the Chairperson III. Management Presentation IV. Report Items V. Discussions VI. Motions VII. Meeting Adjourn 1

2 THIS IS A TRANSLATION OF THE PROCEDURES FOR THE 2017 ANNUAL SHAREHOLDERS MEETING OF SPORTON INTERNATIONAL INC. 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 PROCEDURES SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN. 2

3 Sporton International Inc Shareholders Meeting Agenda Time: June 8, 2017 (Thursday) 9:10 a.m. Venue: No. 52, Huaya 1st Rd., Guishan Dist., Taoyuan City 333, (The Audiovisual Hall on 3F of Huaya Laboratory of the Company). I. Opening remark by the Chairperson II. Management Presentation (I) 2016 Business Report (II) Supervisors Audit Report (III) Issuance of the Company s Second unsecured domestic convertible corporate bonds (IV) Allocation of 2016 employee remuneration and remuneration of directors and supervisors (V) Amendment to the "Rules of Procedure for Board of Directors Meetings" III. Report Items (I) Acknowledgment of 2016 Business Report and Financial Statements (II) Acknowledgment of the Proposal for distribution of 2016 profits IV. Discussions (I) Proposal for new share issuance through capitalization of earnings (II) Amendment to the "Articles of Incorporation" (III) Amendment to the "Rules of Procedure for Shareholders Meeting" (IV) Amendment to the "Procedures for the Acquisition or Disposal of Assets" V. Motions VI. Meeting Adjourn 3

4 I. Management Presentation I Business Report Description: 2016 Business Report. For details, please refer to Meeting Agenda Handbook, pp.8~13. II. Supervisors Audit Report Description: Supervisors Audit Report. Please refer to Meeting Agenda Handbook, p.35. III. Issuance of the Company s Second unsecured domestic convertible corporate bonds. Description: To meet our procurement needs in machineries & equipment and ensure sufficient working capital, the Company has issued second unsecured domestic convertible corporate bonds, as permitted by Financial Supervisory Commission, Executive Yuan with Letter Chin-Kuan-Cheng-Fa-Zi dated September 17, The detail of the issuance is summarized as below: Issuance of Corporate Bonds Category of the corporate bonds The Second Domestic Unsecured Convertible Corporate Bonds of Year 2014 Date of issue (handling) October 7, 2014 Par NT$100,000 Issuing Price Issued at 100.8% of the face amount Aggregate total NT$604.8 million Interest rate 0% of par Duration Three (3) years. Date of maturity: October 7, 2017 Price of conversion NT$142.1 Guarantee institution Nil Trustee (Mandatory) The Shanghai Commercial & Savings Bank Ltd. Underwriter KGI Securities Co. Ltd. Certifying Attorney-at-Law Han Chen Attorneys-at-Law Office, Chiu Ya-Wen, Attorney-at-Law Terms of repayment Outstanding principal Other than the bondholders exercise their holdings into common shares in accordance with the Article 10 of the Rules of Procedure of the Conversion or the Company buys back from the underwriter and cancels the bonds, the Company will repay all other outstanding balance in cash to the bondholders at par value upon maturity. NT$15,400,000 (154 sheets of the Bonds) 4

5 Other auxiliary rights The amounts of common shares, overseas deposit receipt certificates (DRC) or other negotiable securities having been converted (or exchanged or subscribed) into common shares as of the Annual Report date The issuance, conversion, exchange or subscription, or the terms of issuance, which could have diluted and impact on existent shareholders The amount of the Convertible Corporate Bonds which had been exercised: NT$584,600,000 in an aggregate total of 3,804,968 common shares. No significant impact so far. IV. Allocation of 2016 employee remuneration and remuneration of directors and supervisors. Description: 1. The present issue is duly handled in accordance with Article and Article 18 of the Company s Articles of Incorporation. 2. The Company s profit, if any (i.e., the net earnings before tax and before the deduction of employees remuneration and the remuneration of directors and supervisors), shall be appropriated 1%~13.5% as the remuneration to employees and up to 2% maximum, as resolved by the board of directors, to directors and supervisors. 3. The Company appropriated NT$ 52,098,785 as remuneration to employees, which includes NT$47,098,785 in cash and NT$5,000,000 in stocks. The number of stocks was calculated at NT$169.5 per share, using the closing price on the day preceding the convene of the board of directors meeting, with a total of 29,498 new shares issued. The remuneration to employees with is less than one share at NT$89 was distributed in cash. The remuneration to directors and supervisors totaled NT$4,500,000 and was distributed in cash. 4. The aforementioned amount represents a NT$500,000 gap in estimated accrual expense and is due to the variance in accrued expense. The variance is recognized expense in 2017 in accordance with the recognition due to the change of accounting estimate. V. Amendment to the "Rules of Procedure for Board of Directors Meetings". Description: In coordination with the requirements set forth under "Rules of Procedure for Board of Directors Meetings for Public Company", the Company is amended to partially modified Rules of Procedure for Board of Directors Meetings. For details of the contents and cross-reference of the modification, please refer to Meeting Agenda Handbook, pp. 36~37. 5

6 II. Proposals Motion I: The Company s 2016 Business Report and Financial Statements are submitted for acknowledgement. Description: (I) (II) The Company s consolidated balance sheet, income statement, cash flows statement, changes in equity of 2016 were duly resolved during the board of directors meeting on February 22, 2017 and were further duly audited by Certified Public Accountants Yu Hung-Pin and Chiu Ming-Yu of Deloitte Touche LLP and are submitted hereby for acknowledgement. For details of 2016 Business Report and the Certified Public Accountants Audit Report and Financial Statements, please refer to Meeting Agenda Handbook pp. 8~34. Motion II: The Proposal for distribution of 2016 profits is submitted for acknowledgement. Descriptions: (I) The proposed distribution of 2016 profits was duly resolved in the board of directors meeting convened on April 26, The distribution of 2016 profits is summarized below: Sporton International Inc Earnings Allocation Table Fiscal 2016 Items Unit: NT$ Amount Unappropriated retained earnings, beginning 294, 941, 377 Actuarial gains on defined benefit plans Unappropriated retained earnings, as adjusted, beginning 3, 773, , 714, 424 Add: Net profit of , 367, 559 Less: legal reserve 2016 (688, 367, 559) *10% ( 68, 836, 756 ) Less: Special reserve ( 40, 742, 783 ) Retained earnings available for distributions as of December 31, , 502, 444 Amount of earning allocation Dividend to shareholders Stock dividend NT$0.1 (90, 410, 418*0.1) (9, 041, 040) Cash dividend NT$6.1 (90, 410, 418*6.1) (551, 503, 550) Unappropriated retained earnings, ending 316, 957, 854 President: Huang Wen-Liang CEO: Huang Wen-Liang Accountant Manager: Pan Feng-Wen Footnotes: 1. Preferential allocation of earnings The term dividend to shareholders as set forth herein denotes dividend and bonus to shareholders. 2. The Company will proceed with the registry exactly in accordance with the requirements of the Ministry of Economic Affairs. 3. If the Company has profit during the current fiscal year, it shall be allocated first to pay taxes, 6

7 followed by covering accumulated losses, if any, and then to appropriate 10% legal reserve and then to recognize or reverse special reserve in accordance with the regulations. The remaining profits and the retain earning can be used as the current year profit distribution and shall be discussed during the board of directors meeting and propose the distribution of profit to the shareholders meeting in according to the Act 2 of the Company s Dividend Policy. The Company s dividend policy is determined in the aspects of its financial, business and operation status. The Company is currently experiencing growth. In order to maintain the Company s expansion plan as well as its perpetual operation and growth, the Company has adopted the dividend policy by distributing no less than 40% of the current year allocable earnings, cash or stock dividend. Among the distribution, the cash dividend shall not be lower than 10% of total shareholders dividends. The distribution of earning is in compliance with the Company s Articles of Incorporation. 4. As of December 31, 2016, the capital reserve available for earning allocation amounted to NT$788,264,532, and will not be allocated. 5. The shareholder s dividend is NT$560,544,590 with cash dividend of NT$6.1 share and stock dividend of NT$0.1 per share (round up to the nearest whole number of New Taiwan Dollar). The aforementioned dividend to shareholders ratio is calculated based on the outstanding shares of 90,410,418 as of April 10, If the Company experiences capital changes subsequently and affects the number of shares entitled to participation in dividend allocation and, in turn, leads to a change in the dividend allocation to shareholders ratio, the shareholders meeting fully authorize the Board of Directors to make any adequate adjustments. 6. In accordance with Letter Chin-Kuan-Cheng-Chiao-Zi of Financial Supervisory Commission, Executive Yuan dated October 2, 2014 and in coordination with the underwriting, the Company s cash dividend shall be allocated to the whole number of New Taiwan Dollar (The fraction below one New Taiwan Dollar shall be discarded in full). The aggregate total of the odd fractions below one New Taiwan Dollar will be recognized as other revenues. (II) The present issue is hereby duly submitted for acknowledgement. III. Discussions Proposal I: Proposal for new share issuance through capitalization of earnings. Please resolve the decision as appropriate. Description: 1. For the further development of company business, the management plans to withdraw from distributable earnings to issue dividends stocks of NT$9,041,040 (904,104 shares). 2. The new shares issued bear the same rights & obligations as the exiting shares. There will be no physical stock certifications and book-entry transfer is recorded. After the approval of the competent authority, the new shares will be distributed on a record date determined by the Board based on the shareholders record on the date set forth. Ten (10) dividend stocks is warranted for every thousand shares. The odd shares shall be allocated in cash instead (to be calculated down to whole number of New Taiwan Dollar). The chairman will inquire targeted individuals to subscribe the shares at face value. 3. The aggregate total amount of the shares allocated with earnings remains unchanged. The amount to be allocated per share varies pursuant to the number of outstanding shares as of the record date. The board of directors is authorized with full power to resolve the amount of the dividend shares. The ratio of shares to be allocated shares shall be adjusted based on the number of substantial outstanding shares as of the record date. 7

8 Proposal II: Amendment to the "Articles of Incorporation". Please resolve the decision as appropriate. Description: Due to the candidate nomination system to elect the Company s directors and supervisors, the Company is amended to partially modified "Articles of Incorporation". The contents of Articles of Incorporation before and after amendment are enumerated below: Article Post-amendment contents Pre-amendment contents Remarks Article 12 The Company shall have five to seven directors and three supervisors. The directors and supervisors shall be elected by the shareholders meeting among the slate of director and supervisor candidates. The term of office is three years, and they may continue in office if re-elected. The aggregate The Company shall have five to seven directors and three supervisors. The directors and supervisors shall be elected by the shareholders meeting among the slate of director and supervisor candidates. The term of office is three years, and they In coordination with the candidate nomination system to be adopted for election of directors and supervisors. shareholding percentages of the entire bodies of directors and supervisors shall not be less than certain percentage of the Company s outstanding shares. The aforementioned percentage may continue in office if re-elected. The aggregate shareholding percentages of the entire bodies of directors and supervisors shall not be less than shares and rules of regulations shall comply with the regulations prescribed by the securities supervisory authorities. certain percentage of the Company s outstanding shares. The aforementioned percentage shares and rules of regulations The Company s directors and shall comply with the regulations supervisors shall be duly elected prescribed by the securities under the candidate nomination supervisory authorities. system as set forth under Articles and of the Company The Company may set up Act, to be duly elected by the independent directors. Among shareholders meeting from the the number of the director seats list of directors and supervisors. mentioned above, the number of The Company may set up independent directors shall not be independent directors. Among below the minimum of two and the number of the director seats shall not be below one-fifth of mentioned above, the number of the total number of director seats. independent directors shall not be The directors and supervisors below the minimum of two nor shall be duly elected in candidate below one-fifth of the total nomination system. The 8

9 number of director seats. The qualification requirements, qualification requirements, number of shares held, restriction number of shares held, restriction on moonlighting, method of on moonlighting, method of nomination and election and nomination and election and other issues to be complied with other issues to be complied with of independent directors shall be of independent directors shall be duly handled in accordance with duly handled in accordance with the requirements promulgated by the requirements promulgated by the securities supervisory the securities supervisory authorities. authorities. Article 21 These Articles of The Articles of Incorporation Addition of Incorporation were duly enacted were duly enacted on April 24, the date of on April 24, 1997, ( omitted); 1997 (. omitted) and duly the latest duly amended on June 3, 2016 as amended on June 3, 2016 as the amendment. the 20 th amendment and latest 20 th amendment. amended on June 8, 2017 as the 21 st amendment. Proposal III: Amendment to the "Rules of Procedure for Shareholders Meeting". Please resolve the decision as appropriate. Descriptions: Where electronic voting is to be adopted for the2017 shareholders' meeting, the contents of the "Rules of Procedure for Shareholders Meeting" should be amended accordingly. For details of the contents before and after amendment in comparison, please refer to Meeting Agenda Handbook, pp. 43. IV. Proposal: Resolution to the "Procedures for the Acquisition or Disposal of Assets". Please resolve the decision as appropriate. Descriptions: Exactly pursuant to Regulations Governing the Acquisition and Disposal of Assets by Public Companies promulgated by Financial Supervisory Commission with its Letter Chin-Kuan-Cheng-Fa-Zi dated February 9, 2017, the Board is proposed to amend the Company s "Procedures for the Acquisition or Disposal of Assets" to comply with statutory requirements by law. For details of the contents before and after amendment in comparison, please refer to Meeting Agenda Handbook, pp.46~48. IV. Motions V. Meeting Adjourn 9