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 14 (Tuesday), 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: 69,301,791 shares.percentage of shares held by shareholders present in person or by proxy: 60.75%. Chairman.. Jing-Zhou Huang 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. Discussion Item (Proposed by the Board of Directors) The Amendments to the Articles of Incorporation. (1) It is proposed to amend the Articles of Incorporation according to the Company Act and the company's business needs. (2) Comparison Table for the Amendment of the Articles of Incorporation is attached as Attachment 1. (3) Please resolve. Resolution: The proposal was approved after voting. There were 69,301,791 shares represented at the time of voting, which 67,997,173 shares approval votes; 0 shares disapproval votes ; 1,304,618 shares abstention votes/no votes. 0 shares invalid votes. IV. Report Items Annual Business Report (attached as Attachment 2) 2. Audit Committee's Report (attached as Attachment 3) 3. The Distribution of Compensation for Employee in 2015 ( refer to the handbook). 4. The execution of issuance of new shares ( refer to the handbook). The above report items were acknowledged. V. Ratification Items 1. (Proposed by the Board of Directors) Ratification of 2015 Annual Business Report and Financial Statements. (1) The Company s 2015 financial statements have been audited by Ernst & Young. (2) Please refer to attachment 2 and 4 for 2015 Business Report and financial statements. (3) The proposal is submitted for ratification. -1-

2 Resolution: The proposal was approved after voting. There were 69,301,791 shares represented at the time of voting, which 67,997,173 shares approval votes; 0 shares disapproval votes ; 1,304,618 shares abstention votes/no votes. 0 shares invalid votes. 2. (Proposed by the Board of Directors) Ratification of the Proposal for the Distribution of 2015 Earnings. (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)It is proposed that the Board of Directors be authorized to make relevant adjustment, if any, based on the total number of shares outstanding are changed on the recode date. (4) The proposal is submitted for ratification. Resolution: The proposal was approved after voting. There were 69,301,791 shares represented at the time of voting, which 67,997,173 shares approval votes; 0 shares disapproval votes ; 1,304,618 shares abstention votes/no votes. 0 shares invalid votes. Young Optics Inc Earnings Distribution Proposal Amount Item Subtotal Total Unit:NTD Total Undistributed Earnings at beginning of period 457,579,379 Add: Remeasurement of defined benefit 7,548,020 Sub-total 465,127,399 Net Income of ,665,460 Subtract : Appropriated for Legal Reserve 12,866, s Earnings Available for Distribution 115,798,914 Earnings Available for Distribution (Cumulative) 580,926,313 Distribution Item Cash Dividends to Shareholders (NTD0.56 per share) 63,873,480 Undistributed Earnings at end of period 517,052,833 Note 1:The cash dividend shall be rounded-down till NT dollar. After which, the remained dividend will be allocated by amount from large to small and -2-

3 account number from the front to rear to meet the total cash dividend. Note 2:Cash dividend to shareholders is calculated based on the outstanding shares of April 25, 2016, 114,059,785 shares. Note 3:The profit from the most recent year should be distributed with priority. Chairman: Jing-Zhou Huang President : Claude Shyu Accounting Officer: Cynthia Chang VI. Motions.. None. VII. Meeting Adjournment.. 9:18 am. -3-

4 YOUNG OPTICS INC. Comparison Table for the Amendment of the Articles of Incorporation Attachment 1 Article 7 (Omitted) Current Provisions Proposed Amendments Article 7 (Omitted) In the event that the Corporation intends to issue employees share subscription warrants or transfer the bought-back shares to employees whose exercise price or transfer price is lower than the limit of the Law, it shall be adopted in a resolution of shareholders meeting. Article 17-2 Compensation of Directors and Supervisors of the Corporation shall be determined through discussion of the Board of directors by referring to the compensation levels of the industry inside and outside this country. Article 26 Compensation of Directors and Supervisors of the Corporation shall be determined through discussion of the Board of directors by referring to the compensation levels of the industry inside and outside this country. Article 27 When allocating the net profits ( if any) for each fiscal year, the Corporation shall first pay taxes and dues, offset its losses in previous years, and set aside a legal capital reserve at ten percent (10%) of the profits left over, until the accumulated legal capital reserve has equaled the total capital of the Corporation; then set aside special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge. Any balance left over shall be allocated according to the following principles: (1) Bonus to Employees between fifteen percent (15%) to twenty percent (20%). Article 26 In the case that the annual final accounts audit results in surplus, it shall set aside no less than 10% as employee compensation. However, if the Corporation has accumulated losses, it shall be deducted accumulated losses at first. Employee compensation may be in shares or cash, with recipients being the payroll employees of the Corporation or the subsidiaries with certain specific requirements. Article 27 When allocating the net profits (if any) for each fiscal year, the Corporation shall first pay taxes and dues, offset its losses in previous years, and set aside a legal capital reserve at ten percent (10%) of the profits left over, until the accumulated legal capital reserve has equaled the total capital of the Corporation; then set aside or rotate special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge. Any balance left over added the unallocated surplus from the prior year shell be the shareholder s dividend and bonus. The Board of Directors shall draft a proposal to distribute the -4-

5 (2) The remainder shall be shareholders dividends and allocated after a part of all of the remainder is provided as special surplus reserve. All or part of bonuses to the employees and shareholders may be allocated by means of issuing new shares. (Omitted) Article 28 The bonus mentioned in Article 27 may be distributed to the employees of the Corporation and the controlled companies according to the Approach of Employees Bonus and shares which approved by the Board of Directors. Employees referred to the preceding paragraph are defined as the employment relationship in the Civil Code; the controlled companies are defined as companies in Article of the Company Act. Article 31 (Omitted), the ninth amendment on June 13, surplus, which shall be approved at the shareholders meeting. (Omitted) Article 28 Deleted Article 31 (Omitted), the ninth amendment on June 13, 2012, the tenth amendment on June 14,

6 Young Optics Inc Annual Business Report Attachment 2 For the fiscal year of 2015, Young Optics Inc. has reported consolidated sales revenue of NT$4,460 million. Net operating income was reported at NT$99 million, profit before tax was NT$174 million and net Income was NT$128 million. Total comprehensive income was reported at NT$94 million and the basic EPS was NT$1.13 per common share. In the year of 2015, Due to the lower customer demand, consolidated sales revenue was reported at NT$4,460 million, representing a 10.89% decrease as compared to the same period in Due to the product-mix improvements, gross margin has reached 27.50%, compared with 26.75% 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 Bi-conic Molding lens. 2. Successfully developed HUD Combiner. 3. Successfully developed projection display control unit of HUD. 4. Successfully developed high output 405nm UV curing 1080P 3D printer engine. 5. Successfully developed slim rear projection engine with auto-color management. Looking into the future, Young Optics Inc. will aim to implementing 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 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, -6-

7 through the teamwork, positive innovating attitude and execution, to pursue the best interests of all shareholders and employees. Sincerely, Chairman: Jing-Zhou Huang President : Claude Shyu Accounting Officer: Cynthia Chang -7-

8 Attachment 3 Audit Committee s Report To: 2016 General Annual Shareholders Meeting of Young Optics Inc. The Board of Directors of the Company has delivered the 2015 business report, the financial statements and the proposed 2015 earnings distribution. The aforesaid 2015 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:Han-Ping Shieh Date: April 25,

9 AUDIT REPORT OF INDEPENDENT ACCOUNTANTS Attachment 4 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, 2015 and 2014, the related parent company only statements of comprehensive income, statements of changes in equity and cash flows for the years ended December 31, 2015 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, 2015 and 2014, and the results of its operations and cash flows for the years ended December 31, 2015 and 2014, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers. ERNST & YOUNG Taiwan Republic of China February 16, 2016 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. -9-

10 English Translation of Parent Company Only Financial Statements Originally Issued in Chinese YOUNG OPTICS INC. PARENT COMPANY ONLY BALANCE SHEETS December 31, 2015 and December 31, 2014 (Expressed in thousands of New Taiwan Dollars) ASSETS December 31, 2015 % December 31, 2014 % LIABILITIES AND EQUITY December 31, 2015 % December 31, 2014 % Current assets Current liabilities Cash and cash equivalents $217,265 4 $258,422 4 Short-term loans $500,000 9 $675, Notes receivable, net 1, Accounts payable 95, ,254 2 Accounts receivable, net 376, ,232 7 Accounts payable-related parties 311, ,813 8 Accounts receivable-related parties, net 82, ,869 4 Other payables 331, ,321 6 Other receivables 5,940-8,220 - Other payables-related parties 18,714-2,085 - Other receivable-related parties 25, ,207 1 Current tax liabilities Current tax assets Provisions-current 24, ,324 - Inventories, net 131, ,760 2 Advance receipts 9,435-46,037 1 Prepayments 5,591-5,433 - Other current liabilities 7,135-8,053 - Other current assets 53, ,881 1 Total current liabilities 1,298, ,690, Total current assets 901, ,103, Non-current liabilities Non-current assets Deferred tax liabilities 44, ,338 1 Investments accounted for using the equity method 2,449, ,607, Net defined benefit liabilities, noncurrent 10,056-21,996 1 Property, plant and equipment 1,777, ,915, Guarantee deposits 7,499-7,499 - Investment property, net 200, ,669 4 Total non-current liabilities 62, ,833 2 Intangible assets 8,576-14,104 - Total liabilities 1,360, ,795, Deferred tax assets 13,742-14,553 - Equity Refundable deposits Capital Other financial assets 21,797-21,782 - Common stock 1,140, ,140, Other noncurrent assets-others 4, Capital surplus 1,647, ,647, Total non-current assets 4,476, ,783, Retained earnings Legal reserve 408, ,674 7 Special reserve 82, ,686 1 Unappropriated earnings 593, , Total retained earnings 1,085, ,118, Other equity 142, ,336 3 Total equity 4,016, ,090, Total assets $5,377, $5,886, Total liabilities and equity $5,377, $5,886,

11 Description 2015 % 2014 % Net sales $3,177, $3,100, Operating costs (2,323,608) (73) (2,189,507) (71) Gross profit 853, , Unrealized intercompany profit (3,505) - (6,350) - Realized intercompany profit 6,350-5,191 - Gross profit, net 856, , Operating expenses 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, 2015 and 2014 (Expressed in thousands of New Taiwan Dollars, except for earnings per share) Sales and marketing expenses (102,951) (3) (101,754) (3) General and administrative expenses (305,395) (10) (297,157) (9) Research and development expenses (554,527) (17) (580,336) (19) Total operating expenses (962,873) (30) (979,247) (31) Operating losses (106,159) (3) (69,302) (2) Non-operating income and expenses Other income 69, ,553 3 Other gains and losses (4,737) - (6,034) - Finance costs (5,746) - (8,298) - Share of profit of subsidiaries, associates and joint ventures 174, ,191 6 Total non-operating income and expenses 233, ,412 9 Net income before income tax 126, ,110 7 Income tax expense (benefit) 1,720 - (18,392) (1) Net income 128, ,718 6 Other comprehensive income (loss) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit obligations 9,094 - (4,522) - Income tax benefit (expense) related to items that will not be reclassified subsequently (1,546) Items that may be reclassified subsequently to profit or loss Exchange differences resulting from translating the financial statements of foreign operations (41,586) (1) 140,771 5 Income tax benefit (expense) related to items that may be reclassified subsequently Other comprehensive income (loss), net of tax (34,038) (1) 137,018 5 Total comprehensive income $94,627 3 $329, Basic Earnings Per Share (in New Taiwan Dollars) $ 1.13 $ 1.69 Diluted Earnings Per Share (in New Taiwan Dollars) $ 1.12 $

12 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, 2015 and 2014 (Expressed in thousands of New Taiwan Dollars) Retained earnings Other equity Exchange differences resulting from translating the financial statements of foreign operations Capital Special Unappropriated Common stock surplus Legal reserve reserve earnings Total equity $1,140,598 $1,647,625 $365,780 $82,686 $695,021 $43,565 $3,975,275 Description Balance as of January 1, 2014 Appropriation and distribution of 2013 retained earnings 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 December 31, 2014 $1,140,598 $1,647,625 $389,674 $82,686 $645,660 $184,336 $4,090,579 Balance as of January 1, 2015 $1,140,598 $1,647,625 $389,674 $82,686 $645,660 $184,336 $4,090,579 Appropriation and distribution of 2014 retained earnings Legal reserve ,272 - (19,272) - - Cash dividends (168,808) - (168,808) Net income in , ,665 Other comprehensive income in ,548 (41,586) (34,038) Total comprehensive income ,213 (41,586) 94,627 Balance as of December 31, 2015 $1,140,598 $1,647,625 $408,946 $82,686 $593,793 $142,750 $4,016,

13 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 December 31, 2015 and 2014 (Expressed in thousands of New Taiwan Dollars) Description Cash flows from operating activities : Cash flows from investing activities : Net income before tax $126,945 $211,110 Proceeds from disposal of property, plant and equipment 1,324 1,120 Adjustments for : Acquisition of property, plant and equipment (27,899) (90,717) Profit or loss items : Proceeds from capital reduction for using the equity method - 110,935 Bad debt (reversal) expenses (301) 301 Acquisition of intangible assets (4,316) (8,828) Depreciation (including investment property) 182, ,186 Decrease in refundable deposits Share of profit of subsidiaries, associates and joint venture (174,040) (207,191) Increase in other financial assets (15) (14) Unrealized intercompany profit 3,505 6,350 Increase in other noncurrent-others (4,140) - Realized intercompany profit (6,350) (5,191) Net cash provided by (used in) investing activities (34,940) 12,574 Amortization 9,844 11,543 Interest expenses 5,746 8,298 Interest income (812) (770) (Realized) unrealized gain on disposal of property, plant and equipment (28) 143 Gain on disposal of property, plant and equipment (931) (1,120) Cash flows from financing activities : Changes in operating assets and liabilities: Increase (decreased) in short-term loans (175,000) 100,000 Notes receivable increased (1,616) - Decrease in guarantee deposits - (1,383) Accounts receivable decreased (increased) 34,925 (183,259) Cash dividends (168,808) (214,432) Accounts receivable-related parties decreased (increased) 126,124 (160,862) Net cash used in financing activities (343,808) (115,815) Other receivables decreased (increased) 2,278 (127) Net (decrease) increase in cash and cash equivalents (41,157) 4,316 Other receivables-related parties (increased) decreased (514) 73,106 Cash and cash equivalents at beginning of the period 258, ,105 Inventories decreased (increased) 3,903 (30,083) Cash and cash equivalents at end of the period $217,265 $258,421 Prepayments increased (158) (1,188) Other current assets-others (increased) decreased (3,785) 15,943 Accounts payable (decreased) increased (31,697) 36,381 Accounts payable-related parties decreased (132,823) (52,309) Other payables decreased (42,570) (18,930) Other payables-related parties increased (decreased) 16,629 (3,000) Other current liabilities decreased (918) (8,264) Advance receipts (decreased) increased (36,602) 18,946 Net defined benefit liability decreased (2,846) (19,937) Provisions-current increased (decreased) 3,073 (483) Cash generated from operations 79,014 (130,407) Interest received Dividend received 293, ,451 Interest paid (6,618) (7,638) Income tax paid (29,285) (16,624) Net cash provided by operating activities 337, ,

14 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, 2015 and 2014, the related consolidated statements of comprehensive income, consolidated statements of changes in equity and cash flows for the years ended December 31, 2015 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, 2015 and 2014, and the consolidated results of their operations and their cash flows for the years ended December 31, 2015 and 2014, 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, 2015 and ERNST & YOUNG Taiwan Republic of China February 16, 2016 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. -14-

15 ASSETS December 31, 2015 % English Translation of Consolidated Financial Statements Originally Issued in Chinese YOUNG OPTICS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2015 and December 31, 2014 (Expressed in thousands of New Taiwan Dollars) December 31, 2014 % LIABILITIES AND EQUITY December 31, 2015 % December 31, 2014 % Current assets Current liabilities Cash and cash equivalents $1,754, $1,847, Short-term loans $500,000 9 $675, Notes receivable, net 106, ,051 2 Financial liabilities at fair value through profit or loss-current - - 4,286 - Accounts receivable, net 428, , Accounts payable 404, ,757 8 Accounts receivable-related parties, net 172, ,565 5 Accounts payable-related parties 3,282-55,388 1 Other receivables 23, ,754 - Other payables 455, ,295 9 Current tax assets ,585 - Other payables-related parties 13,559-10,206 - Inventories, net 542, ,567 8 Current tax liabilities 17,942-18,170 - Prepayments 19,235-18,492 - Provisions-current 28, ,761 1 Other current assets 78, ,732 1 Advance receipts 20, ,097 1 Total current assets 3,126, ,460, Other current liabilities 8,269-8,324 - Total current liabilities 1,452, ,858, Non-current assets Property, plant and equipment 2,112, ,296, Non-current liabilities Investment property, net 200, ,669 3 Deferred tax liabilities 44, ,338 1 Intangible assets 24, ,814 1 Net defined benefit liabilities, noncurrent 10,056-21,996 - Deferred tax assets 20,997-21,808 1 Guarantee deposits 7,852-8,427 - Refundable deposits 20,430-15,011 - Total non-current liabilities 62, ,761 1 Other financial assets 21,797-21,782 - Total liabilities 1,514, ,964, Other noncurrent assets-others 4, Total non-current assets 2,404, ,593, Equity attributable to shareholders of the parent Capital Common stock 1,140, ,140, Capital surplus 1,647, ,647, Retained earnings Legal reserve 408, ,674 7 Special reserve 82, ,686 1 Unappropriated earnings 593, , Total retained earnings 1,085, ,118, Other equity 142, ,336 3 Non-controlling interests Total equity 4,016, ,090, Total assets $5,531, $6,054, Total liabilities and equity $5,531, $6,054,

16 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, 2015 and 2014 (Expressed in thousands of New Taiwan Dollars, except for earnings per share) Description 2015 % 2014 % Net sales $4,460, $5,005, Operating costs (3,233,836) (72) (3,666,431) (73) Gross profit 1,226, ,339, Operating expenses Sales and marketing expenses (127,296) (3) (126,349) (3) General and administrative expenses (383,980) (9) (383,397) (8) Research and development expenses (616,573) (14) (627,908) (12) Total operating expenses (1,127,849) (26) (1,137,654) (23) Operating income 98, ,518 4 Non-operating income and expenses Other income 76, ,543 2 Other gains and losses 4,408 - (18,511) - Finance costs (5,748) - (10,524) - Total non-operating income and expenses 75, ,508 2 Net income before income tax 174, ,026 6 Income tax expense (45,876) (1) (87,308) (2) Net income 128, ,718 4 Other comprehensive income (loss) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit obligations 9,094 - (4,522) - Income tax benefit (expense) related to items that will not be reclassified subsequently (1,546) Items that may be reclassified subsequently to profit or loss Exchange differences resulting from translating the financial statements of foreign operations (41,581) (1) 140,771 3 Income tax benefit (expense) related to items that may be reclassified subsequently Other comprehensive income (loss), net of tax (34,033) (1) 137,018 3 Total comprehensive income $94,434 2 $329,736 7 Net income attributable to : Shareholders of the parent $128,665 $192,718 Non-controlling interests $(198) $- Total comprehensive income attributable to : Shareholders of the parent $94,627 $329,736 Non-controlling interests $(193) $- Basic Earnings Per Share (in New Taiwan Dollars) $ Diluted Earnings Per Share (in New Taiwan Dollars) $1.12 $

17 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, 2015 and 2014 (Expressed in thousands of New Taiwan Dollars) Balance as of January 1, 2014 Appropriation and distribution of 2013 retained earnings Equity attributable to shareholders of the parent Retained earnings Other equity Exchange differences resulting from translating the financial Description Common stock Capital surplus Legal reserve Special reserve Unappropriated earnings statements of foreign operations Total Noncontrolling interests Total equity $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 December 31, 2014 $1,140,598 $1,647,625 $389,674 $82,686 $645,660 $184,336 $4,090,579 $- $4,090,579 Balance as of January 1, 2015 $1,140,598 $1,647,625 $389,674 $82,686 $645,660 $184,336 $4,090,579 $- $4,090,579 Appropriation and distribution of 2014 retained earnings Legal reserve ,272 - (19,272) Cash dividends (168,808) - (168,808) - (168,808) Net income in , ,665 (198) 128,467 Other comprehensive income in ,548 (41,586) (34,038) 5 (34,033) Total comprehensive income ,213 (41,586) 94,627 (193) 94,434 Decrease in non-controlling interests Balance as of December 31, 2015 $1,140,598 $1,647,625 $408,946 $82,686 $593,793 $142,750 $4,016,398 $25 $4,016,

18 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, 2015 and 2014 (Expressed in thousands of New Taiwan Dollars) Description Cash flows from operating activities : Cash flows from investing activities : Net income before tax $174,343 $280,026 Proceeds from disposal of property, plant and equipment 1,544 1,221 Adjustments for: Acquisition of property, plant and equipment (52,288) (118,240) Profit or loss items : Acquisition of intangible assets (5,768) (10,302) Bad debt (reversal) expenses (366) 322 Increase in refundable deposits (5,419) (2,894) Depreciation (including investment property) 242, ,013 Increase in other financial assets (15) (14) Amortization 11,659 13,239 Increase in other noncurrent assets-others (4,140) - Interest expense 5,748 10,524 Net cash used in investing activities (66,086) (130,229) Interest income (32,831) (42,898) Net loss (gain) of financial assets and liabilities at fair value through profit or loss (4,857) 7,489 Loss (gain) on disposal of property, plant and equipment (854) 585 Cash flows from financing activities : Transfer of property, plant and equipment to expense 723 1,902 (Decrease) increase in short-term loans (175,000) 100,000 Changes in operating assets and liabilities: Decrease in guarantee deposits (575) (1,294) Notes receivable decreased 5,137 81,780 Cash dividends (168,808) (214,432) Accounts receivable decreased (increased) 168,779 (249,198) Increase in noncontrolling interests Accounts receivable-related parties decreased (increased) 107,928 (56,700) Net cash used in financing activities (344,165) (115,726) Other receivables (increased) decreased (11,573) 61 Effect of exchange rate changes on cash and cash equivalents (42,766) 121,146 Inventories increased (33,850) (4,830) Net (decrease) increase in cash and cash equivalents (93,403) 55,804 Prepayments (increased) decreased (743) 6,502 Cash and cash equivalents at beginning of the period 1,847,927 1,792,123 Other current assets-others (increased) decreased (10,607) 10,618 Cash and cash equivalents at end of the period $1,754,524 $1,847,927 Accounts payable decreased (59,922) (50,679) Accounts payable-related parties (decreased) increased (52,106) 42 Other payables decreased (66,530) (1,787) Other payables-related parties increased (decreased) 3,353 (11,321) Other current liabilities decreased (55) (12,085) Advance receipts (decreased) increased (51,148) 38,438 Net defined benefit liability decreased (2,846) (19,937) Provisions-current increased (decreased) 2,524 (5,072) Cash generated from operations 394, ,034 Interest received 37,900 38,764 Interest paid (6,620) (9,864) Income tax paid (66,375) (91,321) Net cash provided by operating activities 359, ,