TCI Co, Ltd, - 2017 Sustainability Report

1. TCI 2017 Sustainability Report JOIN AND DELIGHT Consumer’s Life 1

2. JOIN AND DELIGHT Consumer’s Life Table of Contents 4. S-GRADE PRECISION CENTER 4.1 Values 4.2 Precision Manufacturing Center – Rock (Panshi) Manufacturing Center 4.3 Precision Manufacturing Center – Golden Hill (Jinshan) Park 5. A POSITIVE, CARING WORKPLACE ECOLOGY 5.1 Respecting Human Rights 5.1.1 Prohibiting Child Labor 5.1.2 Implementation Outcomes 5.2 Employment 5.2.1 Labor Structure 5.2.2 Promotion 5.2.3 Talent Management 5.3 Salaries 5.4 Benefits 5.5 Employee Safety 5.5.1 Environmental Protection and Labor Safety and Health Committee 6. Sustainability and Green Pandora 6.1 Thinking Green 6.2 Green Environment 6.3 Green Products 6.4 Carbon Management 6.4.1 Concrete Results 7. SOLIDARITY AND STRENGTHENING PARTNERSHIPS 7.1 Search for Good Suppliers 7.2 Supplier Management 7.3 Periodic Evaluation for Supplier Management 7.4 Supplier Partnerships 7.5 Client Partnerships 7.5.1 Client Privacy Protection 7.5.2 Brand Owners Satisfaction 8. PARTICIPATION IN COMMUNITY BUILDING 8.1 Joining Hands with the Academic Community: Educational Cooperation 8.2 Joining Hands with the Academic Community: Industry-Academic Cooperation 8.3 Joining Hands with the Community: Embracing the Crowd 8.4 Collaborative Educational Efforts: Science Education for Students Studying in Remote Towns 8.5 Collaborative Public Welfare Efforts: Spreading the Seeds of Public Welfare 9. APPENDIX 9.1 Independent Assurance Opinion Statement 9.2 Global Reporting Initiative (GRI) Indicators █ TCI’s Values and Mission █ A Message from the Chairman █ The TCI Corporate Spirit: Core Corporate Values █ CSR Committee █ Communication with Stakeholders █ Identifying Stakeholders █ Analysis of Major Issues █ Stakeholder Communication Channels 1. INTRODUCTION TO TCI 1.1 Company Overview 1.2 Company History 1.3 Integrated Bioscience Design 1.4 Management Performance 1.5 Global Operation Centers 1.6 External Initiatives and Trade Union and Association Memberships 2.DRIVING FORCE BEHIND CORPORATE GOVERNANCE 2.1 Corporate Governance 2.1.1 Governance Framework 2.1.2 Board of Directors 2.1.3 Audit Committee 2.1.4 Remuneration Committee 2.1.5 Internal Audit Department 2.2 Integrity Management 2.2.1 Valuing Our Customers 2.2.2 Product Responsibility 2.2.3 Respect for the Market Economy 2.2.4 Financial Funding 2.2.5 Observance of Laws and Regulations 2.2.6 Grievance Mechanism 2.3 Risk Management 2.3.1 Business Risk Management 2.3.2 Financial Risk Management 2.3.3 Environmental Risk Management 2.3.4 Crisis and Risk Response Mechanism 3.RESEARCH AND DEVELOPMENT CENTERS AND ACQUISITION OF INTELLECTUAL PROPERTIES 3.1 The Nine Major Labs 3.2 Acquisition of Intellectual Properties 3.3 Achievements 2 2 2

3. JOIN AND DELIGHT Consumer’s Life About This Report Starting from 2018, TCI Co., Ltd. (hereinafter, TCI) will publish an annual Corporate Social Responsibility Report to inform stakeholders regarding the performance of TCI in various areas such as the implementation of company operations and participation in environmen- tal protection and social responsibility. This report also provides files for publication on the company website’s corporate social respon- sibility page, in the hope of mainta Subjects of the Report and TCI’s Mission of Sustainability At TCI, we uphold the principles of trust, innovation, and intelligence in business management. At the core of our operational strategy is a consumer-centric ideology. Just as a planet orbits the Sun, TCI revolves around the consumer. No matter how the world changes, TCI’s consideration for consumers will never waver. TCI works cooperatively with supply chain and brand owners to truly become a part of and improve the lives of consumers. TCI has built nine laboratories for its R&D technologies in food, cosmetics, and skincare prod- ucts to ensure the health of its customers, and the company continues to explore uncharted waters. In terms of environmental protec- tion, TCI, in the face of climate extremes, will introduce energy conservation measures to the air conditioning of its Pingtung factory and is currently applying for the U.S. Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED) certification for its S11 factory and its W1 automated warehouse that is now under construction. TCI also carefully considers effective carbon reduc- tion strategies throughout TCI’s core business chain to reduce the impact of greenhouse gases on the Earth. By publishing this report, we offer transparent disclosure of the company’s financial information and provide non-financial information to TCI stakeholders to provide them with a deeper understanding of our efforts on behalf of the environment, society, and the economy. 3 3 3

4. JOIN AND DELIGHT Consumer’s Life Publication Each year, TCI publishes the Corporate Social Responsibility Report for the previous year. The current version was released in August 2017. Contact Information Contact: Chao Fu-Hong, TCI CSR Committee Phone Number: +886-2-8797-7811 #8636 Address: 8F., No.187, Gangqian Road, Neihu District, Taipei City, Taiwan Website: http://www.tci-bio.com/ Scope This report discloses the performance of TCI Co., Ltd. (hereinafter, TCI) in the areas of economic growth, environmental protection, and social responsibility. The scope of this report includes (1) The company headquarters at 8F., No.187, Gangqian Road, Neihu District, Taipei City (2) The company’ s Panshi No.12 and No.21 factories in Changzhi Township, Pingtung County (S5 Panshi Functional Drink Factory, S9 Panshi Functional Food Factory, S11 Panshi Eco Facial Mask Factory). Principles and Organization This report is compiled in compliance with the 4th version of Global Reporting Initiative (GRI) Guidelines (hereinafter, GRI G4), and is verified through the third-party verification services of SGS Taiwan Ltd. in accordance with the AA1000 Assurance Standard, the accountability principle, the United Nations Sustainable Development Goals (SDGs), and the GRI G4 to ensure compliance with the Core option of GRI G4 and AA1000 Type 1 moderate-level assurance. The verification statement is included in the appendix of this report for reference. 4 4 4

5. JOIN AND DELIGHT Consumer’s Life TCI’s Values and Mission A Message from the Chairman A company’s lifeblood lies in the judicious use of its power, for it is a company’s mission to utilize its resources in an effort to be part of and improve the lives of consumers so as to turn the future of humanity into the here and now. The same applies to the implementa- tion of corporate social responsibility (CSR), which encourages the appropriate application of power rather than empty words. How does TCI implement CSR We approach it from three angles. The first of these is TCI academy, which emphasizes a human-centered approach to the cultivation of talent in three core areas—the biological sciences, the humanities, and the arts—and accomplishes these goals through encouraging a step-by-step process of reading, writing, thinking, and dreaming. The second angle is TCI’s realization of a true value-added cycle, in which discarded materials are recycled and efficient and eco-friendly environmental protection measures and equipment improvements are adopted to increase efficiency and achieve real environ- mental protection. For instance, the use of green energy on a large scale must be carried out in a practical, feasible manner if it is to be effective. The third and last angle is em- ployee care. We sincerely wish to invite our employee’s families and friends into the TCI family and make them proud to be a part of TCI. In doing so, we can spread positive energy through these relationships. These actions may not be reflected in the company’s stock price, but I believe they are most appropriate way in which we can use our power and capabilities. To us, the purpose of CSR is to bring the future to the present with through the judicious and appropriate use of our power and capabilities. VINCENT LIN The Chairman TCI Co., Ltd. 5 5 5

6. JOIN AND DELIGHT Consumer’s Life The TCI Corporate Spirit Core Corporate Values TCI One Think Big and Different Value diversity and inclusion Innovate,Go forward- Make History Passion to Join &Delight consumers Life Focus on team success and honors Always Learning and soliving problems Loyal to customers and scientific results ASAP bring Qulity Quickness and Quotation 6 6 6

7. JOIN AND DELIGHT Consumer’s Life CSR Committee TCI CSR COMMITTEE Commissioner TASK FORCE NATURAL ENVIRONMENT Rock Park Construction & Maintenance of Equipment Dept SOCIAL RELATIONSHIP TECHNOLOGICAL INNOVATION Next lab & Product Design Dept TCI ACADEMY Rock Park Administration Services Dept. PARTNERSHIPS WORK ENVIRONMENT  CORPORATE GOVERNANCE Finance Dept,Internal Audit Dept,Quality Audit Dept.,Intelli- gence Manufacturing Dept International Legal Dept.Hu- man Resources Dept. General Affairs Dept. Labor Safety Management Dept Logistic Management Dept. Marketing Dept. The CSR Committee has a full-time, dedicated chief secretary who is responsible for the overall planning of CSR projects who also serves as the intermediary between the committee and the company. Additionally, nine committee members from various departments are appointed by the chair of the board of directors to serve on the committee and participate in the guidance and decision making process for CSR projects while also providing sufficient resources for their implementation and jointly promoting the system of corporate social responsibility in this company. 7 7 7

8. JOIN AND DELIGHT Consumer’s Life COMMUNICATION w i t h STAKEHOLDERS RESPONSE Major considerations IDENTIFICATION Identifying stakeholders SHORTING Analysis of Issues Information disclosure on all issues Identifying issues of con- cern involving sustainability Verification of major issues 8 8 8

9. JOIN AND DELIGHT Consumer’s Life Identifying Stakeholders in accordance with the AA1000 Stakeholder Engagement Standard, we have identified the stakeholders who have substantial involvement with TCI based on their degree of trust, dependency, responsibility, influence, and diverse perspectives in order to lay a foundation for our goal of sustainable management. These stakeholders include investors, share- holders, clients (both domestic and international), employees, suppliers, contractors, subcontractors, targeted competent authorities, county and city governments, communities near our factories, public associations, academic institutions, Pingtung Agricultural Biotechnology Park, and banks. The information is shown in the table below. Relationship with tci Communication channels Issues of concern Stakeholders •Economic performance •Regulatory compliance •Environmental protection/ energy savings and carbon reductions •Occupational safety and health •Products and services •Social engagement Targeted competent authorities; county/city governments Participation in events and briefings hosted by government departments Government ﹥Establishment of labor-management committee with regular meetings to ensure protection for all employees under collective agreement ﹥Employee evaluation and career development assistance ﹥Implementation of employee training and lectures based on employee needs •Labor-management relations •Talent cultivation •Occupational safety and health •Complaints and reporting •Equality and human rights Full-time employees; contract employees; part-time employees Employee •Products and services •Environmental protection •Innovation and R&D/green manufacturing •Complaints and reporting •Labor-management relations •Supply chain management •Regulatory compliance ﹥Client satisfaction survey ﹥Client audits Client Domestic and international clients ﹥Regular business meetings and performance review reports ﹥Surveys and audit visits ﹥Environmental health and safety briefings •Products and services •Supply chain management •Regulatory compliance •Complaints and reporting Suppliers; contractors; subcontractors Supplier ﹥Annual general meetings ﹥Annual corporate shareholder conferences ﹥Annual financial report updates ﹥Corporate website •Regulatory compliance •Social engagement •Economic performance •Integrity in management •Products and services Shareholder Investors; shareholders Communities near factories; public associations; academic institutions; Pingtung Agricultural Biotechnology Park; banks •Customer health and safety •Products and services •Regulatory compliance •Economic performance •Innovation and R&D •Environmental protection •Social engagement ﹥Donations of money or goods to various charities ﹥Industry-academic cooperation and reviews of research reports on new product development Other 9 9 9

10. JOIN AND DELIGHT Consumer’s Life Issue Description Analysis of Major Issues Business performance Economic performance of business operations; investment profits and losses Besides maintaining important links with stakeholders through smooth day-to-day business interactions, TCI also collects information on global trends in corporate social responsibility related to clients, the industry, seminars, nonprofit organizations, non-governmental organizations, and third-party evaluation institutions. TCI has also gathers and organizes issues of stakeholder concern from the following internal and external sources, and has classified the sustainability issues shown in the table below based on their overall, economic, environmental, social, and product aspects in reference to the G4 sustainability reporting guidelines published by the Global Reporting Initiative (GRI). Managerial Integrity Moral integrity; political contributions Regulatory compliance Status of compliance with company regulations Supply chain relationships; procurement criteria; local procurement/green procurement percentages Supply chain management Compensation; benefits and rewards; forms of employment; employee communication; identification with the company and loyalty Labor-manage- ment relations Employee performance reviews; employee training; organizational learning and development Talent cultivation INTERNAL: TCI business philosophy, TCI technical reports, TCI Industry Weekly, departmental plans and responsibilities, corporate social responsi- bility codes of practice, employee communication channels, departmental contact persons, and stakeholder concerns. As a result of this substantive analysis, the top 15 issues of stakeholder concern were identified as shown in the table below. The analysis identifies a range of areas of concern regarding issues with both a high level of importance to stakeholders and a high level of impact on business opera- tions. Equality and human rights Gender equality; diversity; youth employment Disaster and occupational disease prevention and control; emergency response Occupational safety and health Green manufacturing Energy efficiency and carbon reductions Sustained improvements in resource consumption, recycling, and reuse Energy management; renewable energy; greenhouse gases emissions and reductions EXTERNAL: International trends and regulations, client requests, third-party CSR evaluation organizations, the environmental database management platform, RE100, Harvard Business Review, the Bloomberg ESG Survey, the 2016 Taiwan Corporate Sustainability Awards, the annual Global Views Monthly’s CSR Awards, CommonWealth Magazine’s Corporate Citizen Award, the GRI’s Sustainability Topics for Sectors, and the Global Risks Report 2017 published by the World Economic Forum. Sustained improvements in pollution control, prevention, and management; recycling of resources Environmental protection Social engagement Social welfare activities; community infrastructure; social relations 10 10 10

11. JOIN AND DELIGHT Consumer’s Life 1.Introduction to TCI 1.1Company Overview TCI was founded in 1980. At present, there are more than 800 employees in the organization. With our numerous partners and clients, we have produced many global best-selling products over the past few decades. TCI now produces and sells hundreds of millions supplements in tablet and capsule form, tens of millions of functional beverage bottles, and millions of facial masks, beauty essences, and other products in 50 countries around the world. Each year, we share in and improve the lives of hundreds of millions of people. We are grateful to our customers for the result of our participation and the improve- ments we’ve made, yet are more keenly aware than ever of our responsibility to them. Everyone here at TCI sees the develop- ment of products with improved performance and being a part of and improving consumers’ lives as our most important goals. 1. Established on: August 22, 1980 2. Chairman: Vincent Lin 3. Headquarters: Neihu Technology Park, Taipei City 4. Date of IPO: August, 2011 5. Date of OTC Market Listing: September, 2013 11 11 11

12. JOIN AND DELIGHT Consumer’s Life Year Important events •Ta Chiang Industrial Co., Ltd. was founded in August with a paid-in capital of NT$ 6,000,000; the company initially imported and exported domestic and international products. •Established the biomedicine department •Received the Taiwan Quality Assurance Golden Award 1980 1999 2002 2004 •Established subsidiary company First International Technology Co., Ltd. in November •Company name changed to TCI Co., Ltd. in April •Investment in Shanghai BioTech Co., Ltd. through the subsidiary First International Technology Co., Ltd in September •Capital injection in cash of NT$ 10,000,000 in August; Paid-in capital rose to NT$ 53,800,000 •Acquired ISO 9001 and ISO 22000 certification •Quality assurance center is first in the industry to introduce product traceability and provide details of the product •manufacture processes and specifications •Capital injection in cash of NT$ 10,000,000 in August; Paid-in capital rose to NT$ 63,800,000 •Opened the Taipei supplements factory in Wugu District in April •Acquired patent for skin care agent •Acquired Hazard Analysis and Critical Control Points (HACCP) certification •Approved by the Small Business Innovation Research (SBIR) program of the Department of Industrial Technology, Ministry of Economic Affairs •Opened food packaging facility in Shanghai •Capital injection of NT$ 10,000,000 in April; Paid-in capital rose to NT$ 73,800,000 •Received the 2009 Rising Star Award from the Small and Medium Enterprise Administration, Ministry of Economic Affairs Established Beijing office •Capital injection in cash of NT$ 5,000,000 and capital increase of NT$ 7,380,000 from retained earnings in October; Paid-in capital rose to NT$ 86,180,000 •Acquired good manufacturing practices (GMP) certification for the Taipei supplements factory in Wugu District •Established PABP branch at the Pingtung Agricultural Biotechnology Park in May •Capital injection in cash of NT$ 10,000,000 and capital increase of NT$ 53,820,000 from retained earnings in August; Paid-in capital rose to NT$ 150,000,000 •Official opening of the PABP branch •Selected as model incorporated company by the Taiwan Intellectual Property Management System (TIPS), Institute for Information Industry •Subsidiary company First International Technology Co., Ltd was renamed Taiwan First New Medicine Co., Ltd. in February •Capital increase of NT$ 45,000,000 from retained earnings and NT$ 5,420,000 from issuance of new employee stock options in July; Paid-in capital rose to NT$ 200,420,000 •Established subsidiary company TCI-Gene Inc. in July. •Acquired letter of approval for public offering in August •Established sub-subsidiary company BioScience, Shanghai BioTech Group through Shanghai BioTech Co., Ltd. in September •Acquired ISO 22000:2005 certification for PABP branch in September •Acquired ISO17025:2005-TAF certification for quality assurance lab in October •Acquired GMP certification for PABP branch in October •Capital injection in cash of NT$ 26,000,000 in December; Paid-in capital rose to NT$ 226,420,000 •Registered for listing on the OTC market at the Taipei Exchange in February •Established subsidiary company BioFunction, Shanghai BioTech Group, in May •Capital injection of NT$ 365,000,000 from issuance of new employee stock options in July; Paid-in capital rose to NT$ 230,070,000 •Capital injection of NT$ 67,926,000 from retained earnings in August; Paid-in capital rose to NT$ 297,996,000 •Established BioTech Cosmetics Co., Ltd. through second-tier subsidiary Shanghai BioTech Co., Ltd. in December 2006 2007 2008 2009 2010 2011 2012 12 12 12

13. JOIN AND DELIGHT Consumer’s Life •Established TCI HK LIMITED and GeNext HK LIMITED in January •Signed an industry-academic cooperation agreement with China Medical University in January •Acquired FSSC22000 certification for the Taipei supplement factory in Wugu District in February •Acquired FSSC22000 certification for the PABP branch factory in February •GeNext HK LIMITED was renamed GLUX HK LIMITED in April •Capital injection of NT$ 680,000,000 from issuance of new employee stock options; Paid-in capital rose to NT$ 304,796,000 •Capital injection of NT$ 89,438,000 from retained earnings in August; Paid-in capital rose to NT$ 394,234,000 •Listed on the OTC market at the Taipei Exchange in September Initial capital injection in cash of NT$ 44,570,000 before listing; Paid-in capital rose to NT$ 438,804,000 •Received the 2013 National Award for Outstanding SMEs from the Small and Medium Enterprise Administration, Ministry of Economic Affairs in October 2013 2014 •Signed Memorandum of Cooperation with Daido Pharmaceutical Corporation in April •Received three gold medals, a silver medal, two bronze medals, and a special merit award at the International Exhibition Of Inventions Geneva in April •Production started at the S7 factory of BioTech Cosmetics Co., Ltd. in July •Capital injection of NT$ 65,821,000 from retained earnings and the issuance of 562,000 shares of new employee stock options in August; Paid-in capital rose to NT$ 510,244,000 •Capital injection in cash of NT$ 46,000,000 from private placement in October; Paid-in capital rose to NT$ 556,244,000 •Received two gold medals and two silver medals at the Invention and New Product Exposition (INPEX) in Pittsburgh, Pennsylvania, USA in April •Received 2015 Meiyi Awards in May for Cell Young Snow Lotus Extract, Not Only Mask, and GeNext DNA Testing Kit Capital injection of NT$ 55,624,000 from the issuance of 16,000 shares of new employee stock options in August; Paid-in capital rose to NT$ 612,028,800Construction completed and production started at the second factory of the PABP branch in September •Received a 2015 3rd Potential Taiwan Mittelstand Winner Award from the Ministry of Economic Affairs •GM Vincent Lin received the 2015 Ten Outstanding Young Persons Award in the business, economic, and/or entrepreneurial accomplishment category •Acquired Sedex certification and NSF International’s British Retail Consortium (BRC) certification for the for the S5 Panshi factory, PABP branch •Acquired certifications from three ISO Systems Standards (ISO 9001 Quality Management Systems, ISO14001 Environmental Management Systems, and OHSAS 18001 Occupational Health and Safety Management Systems) for the S7 Jinshan factory •Received the China Personal Care & Cosmetics Innovation Awards 2015 in the category of anti-aging ingredients •Received a bronze medal and a special merit award at the 67th iENA in Nuremberg, Germany •Received the iF Design Award 2015 for the Aquagen 4-pack carrier box •Received the China Personal Care & Cosmetics Innovation Awards 2016 in the category of functional ingredients (sun/radiation protection) for the Cell Young Ice Plant Extract in February •Construction completed at the S8 Jinshan functional food factory for BioFunction, Shanghai BioTech Group in April •Ranked in the top 20% of the 2016 2nd Governance Evaluation of Listed Enterprises and Companies (out of 1,447 listed companies) in April •Ranked 49th in revenue growth rate, 216th in profit margin, and 932nd in revenues in CommonWealth Magazine’s Top 2000 Enterprises Survey in May •Capital injection of NT$ 78,332,000 from retained earnings and the issuance of 329,539 shares of new employee stock options in August; Paid-in capital rose to NT$ 75,370,000 •GM Vincent Lin received the Ernst & Young Entrepreneur of the Year Awards in the category of Smart Innovative Entrepreneur in November •Received two gold medals, two silver medals, and an award of excellence at the 2016 International Exhibition Of Inventions Geneva •Received two gold medals, a silver medal, and a special merit award at the 31st Invention and New Product Exposition in Pittsburgh, USA •Received a gold award, a silver award, and a special award at the 30th World Genius Convention and Education Expo in Tokyo, Japan •Received two gold awards, a silver award, and a special award at the Seoul International Invention Fair 2016 •Received two awards at the 2016 Meiyi Awards •Ranked in the top 20% of the 2017 3rd Governance Evaluation of Listed Enterprises and Companies (out of 1,496 listed companies) in April •tablished the BeautyTech branch of TCI Co., Ltd. in May 2015 2016 13 13 13

14. JOIN AND DELIGHT Consumer’s Life •Received the China Personal Care & Cosmetics Innovation Awards 2016 in the category of functional ingredients (sun/radiation protection) for the Cell Young Ice Plant Extract in February •onstruction completed at the S8 Jinshan functional food factory for BioFunction, Shanghai BioTech Group in April Ranked in the top 20% of the 2016 2nd Governance Evaluation of Listed Enterprises and Companies (out of 1,447 listed companies) in April •Ranked 49th in revenue growth rate, 216th in profit margin, and 932nd in revenues in CommonWealth Magazine’s Top 2000 Enterprises Survey in May •Capital injection of NT$ 78,332,000 from retained earnings and the issuance of 329,539 shares of new employee stock options in August; Paid-in capital rose to NT$ 75,370,000 •GM Vincent Lin received the Ernst & Young Entrepreneur of the Year Awards in the category of Smart Innovative Entrepreneur in November •Received two gold medals, two silver medals, and an award of excellence at the 2016 International Exhibition Of Inventions Geneva •Received two gold medals, a silver medal, and a special merit award at the 31st Invention and New Product Exposition in Pittsburgh, USA •Received a gold award, a silver award, and a special award at the 30th World Genius Convention and Education Expo in Tokyo, Japan Received two gold awards, a silver award, and a special award at the Seoul International Invention Fair 2016 •Received two awards at the 2016 Meiyi Awards •Ranked in the top 20% of the 2017 3rd Governance Evaluation of Listed Enterprises and Companies (out of 1,496 listed companies) in April •Established the BeautyTech branch of TCI Co., Ltd. in May •Capital injection of NT$ 113,432,000 from retained earnings and the issuance of 16,000 shares of new employee stock options in July; Paid-in capital rose to NT$ 870,117,000 •Construction completed at the S11 Panshi Precise iManufacturing factory in October •Received two gold medals, two silver medals, and two special merit awards at the 2017 International Exhibition Of Inventions Geneva •Received a gold medal and three silver medals at the Concours Lépine International Paris 2017 •Received a gold medal and a special award at INPEX in Pittsburgh, USA •Received a gold medal and two silver medals at the 19th Moscow International Inventions and Innovative Technology Salon “Archimedes” 2017 •Received a gold award, a silver award, and a special enterprise award at the 31st World Genius Convention and Education Expo 2017 in Tokyo, Japan •Official opening of the Indonesia office •Establishment of Utah branch •Shanghai Biotech Co., Ltd. received the Most Influential Brand Award at the HNC Expo 2017 •TCI Co., Ltd. received the Annual Outstanding Biotech Gold Award, the most coveted award in the biotechnology industry in Taiwan •Listed in Forbes’ Asia’s 200 Best Under A Billion •Received a 4th Potential Taiwan Mittelstand Winner Award from the Ministry of Economic Affairs •Received ECOCERT COSMOS Organic certification for the Panshi Eco Facial Mask Factory 2017 14 14 14

15. JOIN AND DELIGHT Consumer’s Life 1.3 Integrated Bioscience Design TCI Co., Ltd. is a professional original design manufacturer founded out of care for consumers and built on a foundation of trust, innovation, and intelligence. Through our Integrated Bioscience Design (IBD), we provide clients with a range of services including product planning, marketing, R&D, design, manufacture, quality control, legal affairs, and import/exports. What is Integrate d Bioscience Design (IBD)？ Integrated Bioscience Design is a cross-disciplinary specialty that integrates professional skills and know-how in chemistry, biology, mathematics, industrial engineering, genomic medicine, aesthetics, human factor engineering, applied materials science, and consumer behavior research to meet the needs of consumers. Through the exploration of market solutions to consumer needs in the fields of anti-aging, in vivo environmental protec- tion, postpartum recovery, and health supplements for men, TCI produces high-performance products with state-of-the-art research technologies that can improve consumers’ lives. TCI has so far developed dietary supplements, facial masks, functional drinks, collagen, skincare products, and medical equipment, and we will continue to work toward our primary goal of being a part of and improving the lives of consumers. ™ Scientific Verification of Ingredient Effectiveness IBD arose out of our quest to meet consumer expectations. By expanding R&D investment, academic research, and capital and equipment investment, and through the acquisition of knowledge on the correlation between product and effect, IDB helps increase and improve our partners’ high-performance products through the creation of optimal configurations, and fulfills our mission to be a part of and improve the lives of consumers. TCI has built Synergene, the first product development platform of its kind in the world, through a combination of Integrated Bioscience Design, the development experience gained in 50 countries over the years, and the genetic technologies used in TCI’s product development. The platform supports faster product development and registration, assisting brand clients in their efforts to dominate the international functional food and skincare products market and in the joint creation of top-selling products with TCI. 15 15 15

16. JOIN AND DELIGHT Consumer’s Life IBD Process 1.4 Management Performance 1. Analysis of Achievements in 2017 (1) Financial gains analysis TCI is committed to continually improving its company system, perfecting the operation of its board of directors, and increasing financial transparency so as to uphold the integrity, innovativeness, and wisdom of its business management. In both the Taiwan Stock Exchange Corporation and the Taipei Exchange Corporate Governance Evaluations of TWSE-listed and TPEx-listed Companies, TCI was rated in the top 20% of the 1,500 listed companies for three straight years, from 2015 to 2017. Unit: NT$ 1000 TCI Consolidated Income Statement Account Name 2017 2016 Increase/Decrease Com- pared to the Previous Period Difference% Operating Income 4,072,168 3,109,676 962,492 31% Operating Cost 2,417,769 1,817,163 600,606 33% Gross Profit 1,654,399 1,292,513 292,513 292,513 Operating Expenses 774,949 669,738 105,211 16% Net Profit 879,450 622,775 256,675 41% Non-operating income and expenditures 11,041 12,267 (1,226) (10)% Net Profit before Tax 890,491 635,042 255,449 40% Income Tax 169,667 121,495 48,172 40% Net Profit after Tax 720,824 513,547 207,277 40% 16 16 16

17. JOIN AND DELIGHT Consumer’s Life Stakeholder Communication Channels The TCI CSR Committee is responsible for gathering and organizing the information necessary for handling and responding to issues of concern to stakeholders, then disseminating it to the appropriate departments or task forces for further response. TCI has established multiple, clear communication channels to ensure that the company is aware of the expectations of its stakeholders, and delivers stakeholder feedback to the responsible units and senior management. This feedback serves as an important reference for the drafting and planning of operational policies and corporate social responsibility activities, and also as a reference for the compilation of the corporate social responsibility report of the following year. TCI’s corporate website, the Market Observation Post System, public email address, annual corporate report, annual corporate shareholders conference, annual general meeting, Facebook account, TCI Industry Weekly, technical manuals, exhibitions, almanac, and corporate social responsibility report are all routine communication channels. Stakeholders can obtain important information about TCI from its corporate website or the Market Observation Post System, and contact TCI through its public email address or Facebook at any time. Stakeholders can also peruse the annual corporate report published and this year’s first corporate social responsibility report to learn more about TCI’s business and non-business performance. For performance related to specific issues, please refer to the pertinent section. Corporate social responsibility mailbox http://www.tci-bio.com/ provided to stakeholders for feedback. 17 17 17

18. JOIN AND DELIGHT Consumer’s Life Name of Department/Center 1. President’s primary staff 2. Operational strategy support, policy planning, and coordination of company affairs and human resources 3. Command, coordination, and management of production lines to ensure that company operational objectives are achieved and the needs of customers are met 4. Departmental coordination and provision of timely support to facilitate smooth production 5. Quality Audit Department: subordinate to the President Office; planning, execution, and supervision of internal quality audits; matters related to factory certification 6. Strategic Procurement Department and Marketing Department: subordinate to the President Office; acquisition and management of important raw materials and marketing strategies. President Office 1. Management of company income and expenditures, financial planning and analysis, fundraising, making invest- ment decisions; management of capital 2. Management of share operations, board of director and shareholder meetings Finance Department 1. Design and development of new products 2. Product improvement 3. Production of samples to meet customer product requirements 4. Product efficacy verification 5. Product quality verification 6. Patent application filings 7. Review of sample specifications 8. Search for and development of new materials 9. Research and development of new product formulations, specifications, functions, and performance Research & Design Center 1. Personnel management, general affairs, and legal affairs 2. Management of employee resignations, recruitment, and appointment; salary calculation 3. Planning and coordination of personnel training 4. Procurement of office materials 5. Management of employee’s Labor Insurance and National Health Insurance 6. Planning and establishment of management rules and regulations 7. Management of employee benefits 8. Implementation of employee performance evaluation plans 9. Employee attendance evaluations 10. Travel schedule planning and cost review 11. Company property coding and management 12. Management of company documents 13. Contract reviews 14. Collection and compilation of cosmetic and food regulations Administration Service Center 18 18 18

19. JOIN AND DELIGHT Consumer’s Life Management achievements (1) Strategies for sustained and stable growth TCI will continue to seek stable growth this year. Expanding the business and strength- ening R&D and Precision iManufacturing will continue to be business strategy objec- tives to strengthen the company’s core competitiveness. (2) Expansion of business deployment and fully-linked network marketing with the goal of multiplying sales To achieve its sales growth target for 2018, TCI has developed three major policy directives in business deployment, including: a. Expansion of the business department to further market devel- opment TCI will continue to increase the number of personnel in the business department this year to service local markets. The six original operating regions will be subdivided into 26 operating areas. New branches will be set up in Germany, the UK, Italy, Spain, Turkey, Brazil, and India to stay close to local customers and expand the market. b. Fully-linked network marketing and business mobilization Strategies aimed at customer behavior will be implemented through online marketing, TCI’s Industry Weekly, trade show information, video value-added services, technology and product marketing publications, and regular company news releases, to increase customer connectivity and reliance. In addition, in response to the company’s expan- sion, apps will be developed to facilitate more effective management and immediate follow-up on business opportunities. c. Expansion of global trade and consolidation of biological resources Besides continuing to seek customers through the first-line brands in each market, TCI will adopt local thinking and offer local services to assess niche materials and technol- ogies or equipment in the global market, and will develop bilateral trade to increase the company’s global market share and build growth momentum for 2018 to achieve the target of multiplying sales around the world. (3) Strengthening R&D deployment: Consolidation of R&D capa- bilities in the academic sector and expansion of IBD applications in daily life a. Overall revenue went up from NT$3.110 billion in 2016 to NT$4.072 billion in 2017 for an increase of 31%, indicating continued sales growth in the various regions. b. In 2017, the mainland Chi- nese market grew by 32% to NT$2.6 billion compared to 2016, while sales in Europe and the US reached NT$500 mil- lion, a 125% increase that accounted for 12% of total revenues. In Taiwan, sales also increased, by 35%. c. The gross profit in 2017 was 40%, which was slightly lower than the 41.6% gross profit of 2016, mainly because the new green facial mask plant did not begin produc- tion until the fourth quarter and the initial utilization rate was low. d. The net profit after tax climbed from 16.5% in 2016 to 17.8% in 2017. Operating expenses went up 16%, but the ratio of operating expenses to overall sales dropped from 22% to 19%, an indication that the added expenses led to positive results. e. Earnings per share were NT$8.23, an increase of 37% compared to the figure of NT$6 (Note 1) in 2015. Note 1: The figure was the result of retrospective adjustment of transfer of surplus to capital. 2. Management Plans for 2018 In 2018, TCI will continue to maintain its commitment to its core corporate values: to apply Integrated Bioscience Design (IBD) to the development of high-performance products that meet the needs of consumers and continue to be a part of and to improve the lives of consumers and to achieve its goal of globalization. TCI will continue to work hard in to maintain the support and meet the expectations of its customers. 19 19 19

20. JOIN AND DELIGHT Consumer’s Life 1.5 Global Operation Centers a. Nine major labs: To increase TCI’s R&D capabilities and deployment, five new labs have been set up, increasing the number of labs to nine: Next Lab, H&M Lab, MIA Lab, QODM Lab, EVE Lab, 17025 Lab, Gene Lab, ATP Lab, and Eagle Eye Lab. Through the joint efforts of these nine labs, the more effective transfer of R&D capabilities can be carried out to facilitate the development of products that meet the needs of consumers. b. TCI Academy: TCI Academy will apply corporate power to propel development in remote townships in Pingtung and in the biotechnology industry to enhance Taiwan’s international status. Eighteen outstanding local and foreign experts and scholars have been recruited as TCI Academy academicians to help promote the biotechnology industry and meet the Academy’s goals of setting up biotechnology R&D models, promoting the study of biotechnology, and using biotechnology research results to develop innovative applications. It is hoped that the participation of these academicians will promote the study of biotech- nology and that the impact of their work will enhance the status of Taiwan in the global biotechnology industry. c. Innovative biotechnology research applications will extend IBD applications in daily life. Healthy biscuits, chocolate, gummy candy, ice cream, etc. can be produced. Foods and health can be integrated to win the confidence of consumers and TCI will be another step closer to its objective of becoming a part of and improving the lives of consumers. (4) Production through fully-linked networks: To reduce costs, improve flexibility and increase individual productivity In 2018, TCI will build fully-linked network production systems in Panshi Park and Jinshan Park. An MES will be installed to enhance precision in manufactur- ing. The functions of the system include automatic warehousing and manage- ment, product order management, formula control, electronic weighing and material preparation, batch control, production equipment data collection, real-time control of key production parameters, lab equipment consolidation, quality control during production processes, and production traceability. Use of fully-linked network production systems can reduce waste and defect rates to bring up cost effectiveness, increase the flexibility of production lines, step up automation to promote individual productivity, and make stricter quality control and quality traceability possible. The plant will be able to collect data from mass production. In the future, smart preventive maintenance can be carried out to improve the utilization rate of the production lines. Taipei [TCI Taipei Headquarters] [TCI-Gene INC.] [E.V.E Lab] [Next Lab] [ATP Lab] Beijing [Beijin Office] Shanghai [BioScience, Shanghai BioTech Group] Utah [TCI BioTech, LLC] Jinshan Taichung [Next Lab] [H&M Lab] [MIA Lab] [Sun Yat-sen University] Precise iManufacturing-Golden Hill Park [S7 Sheet Mask Factory Golden Hill] [S8 Functional Drink Factory Golden Hill] Guangzhou Pintung Precise iManufacturing-Rock Park [Guangzhou Office] [S5 Functional Drink Factory] [S9 Functional Food Factory] [S11 Sheet Mask Factory] [Q-ODM Lab] [ISO 17025 Lab] [Eagle Eye Lab] Jakarta [Jakarta Office] 20 20 20

21. JOIN AND DELIGHT Consumer’s Life 1.6 External Initiatives and Trade Union and Association Memberships 1. External initiatives As of the end of 2017, TCI had not signed any economic, environmental protection, or social con- ventions, principles, or initiatives established by international organizations. However, in 2018 TCI joined RE100, a business organization co-founded by the Climate Group and the Carbon Disclo- sure Project (CDP). Enterprises joining the RE100 must publicly commit to achieving the goal of using renewable energy in their global operations within an established timeline. TCI has committed to the use of green power in all of its plants (including S5, S9 and S11) in Panshi Park in Pingtung. 2. Trade union and association memberships As part of its commitment to its core governing principle of becoming part of and improving the lives of its customers, TCI joined 25 trade unions and associations as of the end of 2017 in an effort to promote communication with peer industries. TCI plays an active role in industrial associations and trade unions and shares knowledge and experience through such organizations to gain the best possible under- standing of the latest market developments and changes in supply and demand; TCI also shares technological information with other businesses with the goal of making contributions that will enrich the entire biotechnology industry. ASSOCIATION National Association of Young Entrepreneurs Chinese Innovation & Invention Society Taiwan Halal Integrity Development Association Taiwan Listed company Association Academia-Industry Consortium for Agricultural Biotechnology Park Taiwan Accreditation Foundation Taiwan Health Food Industry Development Association Hazard analysis critical control points Taiwan Chamber Of Commerce & Industry Taiwan Pharmaceutical Manufacturer’s Association Taipei Cosmetic Industry Association National Association of Small & Medium Enterprises National Rock Award Association Importers and Exporters Association of Taipei Taiwan Association for Food Protection,TAFP Chinese Association For Pharmaceutical Agents Taiwan invention Association Chinese Health Food Association Taiwan Association for Food Science and Technology Taiwan Quality Food Association Taiwan Association for Food Science and Technology Taiwan Central Science Park Association Pingdong County Industrial Association Taiwan Sunshine bless Association GS1 Taiwan 21 21 21

22. JOIN AND DELIGHT Consumer’s Life TCI ONE ORGANIZATION CHART High Efficiency Construction Team Secretary of BOD AUDIT COMMITTEE Automated Equipment Team Board of Directors CIM & MES Team CSR COMMITTEE REMUNERATION COMMITTEE Shibuya Team NOMINATING COMMITTEE Resources Integration Services Dept. Section of Int' Government Industry-Academy President Office INTERNAL AUDIT DEPT. Intelligence Manufacturing Dept. Section of Aesthetics & Art INTERNAL AUDIT DEPT. Section of OperationsT raining TCI Academy General Manager Office Execution Team DISCIPLINARY COMMITTEE Implementation Dept. Aurora Park Precise iManufacturing (PiM) Strategic Administration Service Center Research & Design Center Global Business Center Cost Management Center Intelligence Center Golden HillPark Rock Park (H&M Lab.) Human & Microbiome Laboratory & Analysis Laboratory (MIA Lab.) Molecular Identification Intra-corporate Transaction Dept. Information Technology Dept. Strategic Procurement Dept. Registration & Compliance Dept. Administration Services Dept. of Equipment Dept Construction and Maintenance Labor Safety Management Dept. Production Management Dept. Strategic Development Dept. Logistic Management Dept. Business Development Dept. Process Development Dept. Accounting &Tax Dept. Project Management Dept. Internationa Legal Dept. Product Design Dept. Human Resources Dept. Quality Control Dept. Data Analysis Dept. Quality Audit Dept. General Affairs Dept. Marketing Dept. Finance Dept. QODM Lab. E.V.E Lab. Material Lab. Next Lab. Factory Information Technology Team Maintenance of equipment Team Strategic Intellectual Property Team Aroma Therapy Physiology Lab.(ATP Lab.) Facial Masks Development Team Automation Equipment Team Facial Masks Optimization Team Functional Foods Development Team Legal & Regulatory Affairs Team Warehouse Management Team Software Development Team High-Efficacy Formulation Design Team Fermentation process team Process Development Team PreProduction Stabilization team Human Resources Team Production Planning Team Packaging Materials Team Quality Inspection Team Plant Tissue Culture Team Hardware & Network Team Quality Engineering Team General Accounting Team Export-Import Team IBD extraction Team Raw Materials Team Factory Accounting Team System Analysis Team Carbonated Drink Team Leading Technology Force Functional Foods Team General Affairs Team Cost Accounting Team ERP System Team Extraction Team Optimization ISO17025 Functional Drink Team Double Nutri Line Cashier Team Stock Service Team Packaging Line Bio-Cellulose Line Powder Line Plant Stem Team Tablet &Capsule Line Facial Mask Line Liquid Sachet Line 22 22 22

23. JOIN AND DELIGHT Consumer’s Life 2. Driving Force behind Corporate Governance 2.1 Corporate Governance 2.1.1 Governance Framework 1. Departmental Areas of Responsibility Name of Department/Center Area of Responsibility 1. Planning and establishment of auditing policies and procedures, including internal audit regulations, implementa- tion rules, and manuals 2. Proposal of audit plans, execution of periodic audits of departmental operations, audit reports, and follow-up Internal Audit Department Objective assessment of remuneration policies and systems for the company’s directors, supervisors, and managers; recommendations to assist the board of directors in assessing the relationship between the remuneration standards for directors, supervisors, and managers and the company’s performance Remuneration Committee Audit Committee Oversight of accounting and financial reports and assessment of major company assets and issuance of securities Nominating Committee Selection of list of candidates for the board of directors and high-level executive positions Establishment of a comprehensive employee reward and punishment system that reflects the company’s commit- ment to maintaining transparency in giving rewards and punishments to assure that disputes are handled objectively, employees’ rights and interests are protected, and internal management of the company functions well Disciplinary Committee 1. Promotion and implementation of the corporate social responsibility (CSR) system; decisions related to CSR projects and provision of sufficient resources to support execution. 2. Writing, execution, and compilation of CSR reports 3. Facilitating the development of corporate social culture; activity planning 4. Research and recommendations for improvement regarding important issues associated with CSR and sustainable management 5. Experience and actual achievements required in the fields of energy regulations, environmental sustainability, climate change, energy savings and carbon reduction, and social impacts 6. Planning, proposal, presentation, coordination and execution of CSR service projects; progress tracking 7. Compilation of and research into domestic and international CSR sustainable management information and materials 8. Consolidation of existing information from different departments; development of policy guidelines 9. Maintaining connections with and visiting green energy businesses to learn about the latest information and introduce it into TCI CSR Committee 23 23 23

24. JOIN AND DELIGHT Consumer’s Life Name of Department/Center Area of Responsibility 1. Planning and establishment of auditing policies and procedures, including internal audit regulations, implementa- tion rules, and manuals 2. Proposal of audit plans, execution of periodic audits of departmental operations, audit reports, and follow-up Internal Audit Department Objective assessment of remuneration policies and systems for the company’s directors, supervisors, and managers; recommendations to assist the board of directors in assessing the relationship between the remuneration standards for directors, supervisors, and managers and the company’s performance Remuneration Committee Audit Committee Oversight of accounting and financial reports and assessment of major company assets and issuance of securities Nominating Committee Selection of list of candidates for the board of directors and high-level executive positions Establishment of a comprehensive employee reward and punishment system that reflects the company’s commit- ment to maintaining transparency in giving rewards and punishments to assure that disputes are handled objectively, employees’ rights and interests are protected, and internal management of the company functions well Disciplinary Committee 1. Promotion and implementation of the corporate social responsibility (CSR) system; decisions related to CSR projects and provision of sufficient resources to support execution. 2. Writing, execution, and compilation of CSR reports 3. Facilitating the development of corporate social culture; activity planning 4. Research and recommendations for improvement regarding important issues associated with CSR and sustainable management 5. Experience and actual achievements required in the fields of energy regulations, environmental sustainability, climate change, energy savings and carbon reduction, and social impacts 6. Planning, proposal, presentation, coordination and execution of CSR service projects; progress tracking 7. Compilation of and research into domestic and international CSR sustainable management information and materials 8. Consolidation of existing information from different departments; development of policy guidelines 9. Maintaining connections with and visiting green energy businesses to learn about the latest information and introduce it into TCI CSR Committee 24 24 24

25. JOIN AND DELIGHT Consumer’s Life Name of Department/Center 1. Planning and expansion of business operations 2. Review and signing of orders 3. Customer complaint case acceptance, customer visits, and providing for customer needs in a timely manner 4. Participation in domestic and overseas trade fairs 5. Product design 6. Development of marketing plans Global Business Center 1. Planning of production schedules and production management 2. Development of production progress plans and control measures 3. Management and control of production processes 4. Warehousing and transportation of raw materials, semi-finished products, and finished products 5. Equipment automation and improvements to production processes 6. Quality control and testing, incoming materials inspections, process control for production processes (production end and packaging end), finished product inspections, and product acceptance/rejection 7. Analysis of defective products and customer complaints analysis, handling of customer complaints 8. Tracking and handling of product quality anomalies; implementation of corrective measures to prevent recurrences 9. Establishment, implementation, and maintenance of quality systems 10. Handling and execution of measuring apparatus calibrations 11. Provision of assistance in handling customer complaints 12. Quality assurance document management Precise iManufacturing (PiM) Rock Park 1. Planning, procurement, and maintenance of computer software and hardware; creation and storage of backup copies 2. Resolution of phone and electrical equipment problems 3. Design and development of computer programs 4. Production of financial statements 5. Financial analyses 6. Management report production and analysis 7. Account book management and preservation Strategic Intelligence Center 25 25 25

26. JOIN AND DELIGHT Consumer’s Life 2.1.2 Board of Directors As specified in its company charter, the board of directors of TCI is composed of five to nine members elected from among the shareholders with the capacity for civil conduct to serve a term of three years. Board members may serve a second successive term if reelected. At present, seven members have been elected in shareholder meetings, all of whom are male. The directors have rich work experience and professional qualifications in business, legal affairs, finance, account- ing, or company operations. Four are independent directors with specific areas of expertise, selected by the board of directors according to the Regulations Gov- erning Appointment of Independent Directors and Compliance Matters for Public Companies. They are able to offer objective opinions to help the board of direc- tors make decisions that are most advantageous to the company and shareholders. The chairperson is elected from among the members of the board of direc- tors to chair the board of directors in the company and to represent the company externally. The backgrounds, educational credentials, further studies pursued, positions in other companies concurrently held, and meeting attendance of the members of the board of directors are disclosed in the notes in the TCI annual report and on the Market Observation Post System. The duties of the board of directors include oversight to ensure the legitimate management and financial transparency of the company, approval of the appoint- ment, dismissal, and remuneration of senior executives, provision of strategic advice to senior executives in company operations, company’s performance evalua- tions on economic, environmental protection, and social issues, and assessing corporate social responsibility issues presented by each committee or functional unit. The management team is required to report to the board of directors regarding the company’ s operational status or other important issues and provide ref- erential information and opinions when the board of directors makes decisions. The board of directors meets at least once per quarter. In 2017, seven meetings were convened and important resolutions were immediately announced on the Market Observation Post System and the web page for investors on the company website. The directors may provide their statements and answer questions with regard to meeting topics that involve their own interests or those of the stakeholders they represent and are considered likely to jeopardize the interests of the company, but must recuse themselves when related motions are discussed or put to a vote. Under such circumstances, directors also may not vote as a proxy for any other director. The Audit Committee and Remuneration Committee were created under the board of directors to improve oversight and enhance management performance. 26 26 26

27. JOIN AND DELIGHT Consumer’s Life Members of the Board of Directors of TCI Title Name Date of Appointment Office Term 3 years Yongjiang Investment Co., Ltd. Representative: Lin Yongxiang 2017.05.19 Chairperson (director) Yangguang Investment Co., Ltd. Representative: Cai Ruihua 3 years Director 2017.05.19 Director DyDo Group Holdings, Inc. Repre- sentative: Tomiya Takamatsu 3 years 2017.05.19 Independent Director 3 years 2017.05.19 Liao Longyi 3 years Independent Director 2017.05.19 Zhang Shoulu 2017.05.19 3 years Liao Songyuan Independent Director 3 years 2017.05.19 Gao Zhenyi Independent Director 27 27 27

28. JOIN AND DELIGHT Consumer’s Life 2.1.3 Audit Committee Before the board of directors meeting is convened each quarter, the Audit Committee meets to review the implemen- tation of the internal control system of the company and important financial operations and practices, and also to communicate and exchange ideas with independent auditors to assure that company management is under proper oversight and risk management is being conducted appropriately. Through division of labor and its independent stand- point, the members of the audit committee assist the board of directors in executing its supervisory duties, thus increasing the financial reliability and public credibility of the company. The Audit Committee is formed by the inde- pendent directors; at least one of them must specialize in accounting or finance. Each independent director serves a term of three years and may serve second successive term if reelected. Currently the committee has three members. The Audit Committee must meet at least once per quarter. In 2017, five meetings were convened. Members of the TCI Audit Committee Name Title Independent Director Liao Longyi Independent Director Zhang Shoulu Independent Director Liao Songyuan Independent Director Gao Zhenyi 28 28 28

29. JOIN AND DELIGHT Consumer’s Life 2.1.4 Remuneration Committee The Remuneration Committee is responsible for establishing and regularly reviewing policies, systems, standards, and composition of performance evaluations and payroll for directors and managers, as well as assessing and determining directors and managers’ remuneration. The salaries of high-level executives include fixed items: base pay, bonuses, benefits, discretionary bonuses, dividends (cash/shares), shares (restricted stock/treasury stock) and stock options. In principle, fixed items are decided to ensure that TCI keeps up with industry standards. Discretionary items are determined after consideration of company performance and the perfor- mance and contributions of individual senior executives. Evaluation items, targets, and weighted ratios are defined at the beginning of each year based on the internal and external development and operational status of the company with reference also being made to performance and pay standards in the industry. The Remunera- tion Committee reviews the results before presenting them to the board of directors. Once the board of directors gives its approval, the decisions are executed. Cur- rently, there are four members and all of them are independent directors. Members of the Remuneration Committee of TCI At least five years of work experience and the following professional qualifications t least five years of work experience and the following professional qualifications Having held the p o s i t i o n o f l e c t u r e r o r higher in a public or private univer- sity department in the field of business, legal affairs, finance, accounting, or a d i s c i p l i n e needed for com- pany operations Having been a judge, prose- cutor, lawyer or accountant or passed a n a t i o n a l examination and acquired a certificate of expertise in a field needed for company operations Having work experience in business, legal affairs, finance or accounting or in a field related to c o m p a n y operations Number of positions c o n c u r - rently held o n t h e remuner- ation com- mittee of o t h e r p u b l i c c o m p a - nies Requirements Name Status E F G H I J K L Independent Director Liao Longyi 0 Independent Director Zhang Shoulu 1 Independent Director Liao Songyuan 0 Independent Director Gao Zhenyi 0 29 29 29

30. JOIN AND DELIGHT Consumer’s Life 2.1.5 Internal Audit Department 1. The Internal Audit Department is an independent unit directly under the board of directors which sets up and implements internal control systems in accordance with legal requirements. Its responsibilities include overseeing the internal control operations of TCI and subsidiaries, implementing annual audit plans and following up on improvement measures. The audit plans are determined according to identified risk items and must be approved by the board of directors. Special audits may be conducted when deemed necessary. The director of the Internal Audit Department is required to report existing deficiencies or potential risks to management immedi- ately and also report important findings discovered during audits to the board of directors on a regular basis. If necessary, reports can be presented to the chairperson and the Audit Committee at any time. 2. Specifics of internal control and risk management (1) The internal control and internal audit systems have been established in accordance with TCI corporate governance principles to ensure that financial reports are reliable, laws and regulations are observed, and management is efficient and effective. The internal control and internal audit systems are implemented through both internal and external audits in which operating procedures are inspected and results regularly verified to confirm the design of the company’ s internal control system, including the execution and effectiveness of oversight and management of subsidiaries. The internal control statements are produced according to audit working drafts while the results of internal control self-assessment questionnaire surveys by department heads can be used for corroboration. After approval by the board of directors, the statement is presented to the competent authority in due time as statutorily required. (2) Framework of internal control guidelines Legal basis, range of application, objectives and establishment procedures of the internal control system General provisions Design and execution of internal control Elements to be included and control operations, opinions of independent directors to be considered Internal audit objectives and procedures, enforcement rules of internal audits, execution of annual audit plans, audit reports and follow-up reports, levels of audit units, audit executive appointment and dismissal procedures, auditor qualifications Internal audits internal control inspections Self-checks and internal control statements Self-check objectives and procedures, applicable subjects and time points Handling guidelines Purpose and scope of review, review guidelines and procedures, and regulations regarding types of review reports and periods to be covered Projects to be reviewed by accountants Supervision of subsidiaries Management, financial operations, audit management, etc. Supplementary provisions the Securities and Futures Institute to order accountants to review projects and dates of announcement of such regulations 30 30 30

31. JOIN AND DELIGHT Consumer’s Life 2.2 Integrity Management The company policy of integrity management is specified in the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, Corporate Social Re- sponsibility Best Practice Principles for TWSE/TPEx Listed Companies, Code of Ethical Conduct, and Statement of Internal Control. TCI and its subsidiaries are required to abide by the relevant laws and regulations in all business activities, adhere to the highest standard of professional ethics, avoid engaging in unfair competition, fulfill its obligation to paying taxes, fight bribery and corruption, and set up proper management systems to build an environment that is conducive to fair competition. 2.2.1 Valuing our Customers trust creativity intelligence TCI is committed to the principle of trust and focuses on innovation using smart technologies. TCI has long been committed to offering customers and consumers with high-performance products and services. TCI develops high-performance products using an integrated bio-science design process to join with and improve the lives of consumers. 2.2.2 Product Responsibility 1. Production control All TCI products are traceable. TCI uses the SAP (Systems Applications and Products) and ERP (Enterprise Resource Planning) systems to manage materials. Every batch of materials, including finished products, semi-finished products, raw materials, and even packaging materials, is placed under the strictest control. For instance, based on the batch number of one product, it is possible to trace information about the raw materials and suppliers for the batch as well as the inspection records. Conversely, it is also possible to trace all the products in which a given batch of raw materials has been used. 2. Raw materials control Once raw materials enter the incoming goods inspection area of the warehouse at TCI’ s Panshi Park warehouse, warehousing personnel record detailed information about the materials in the warehousing management system (WMS). At this point, the status of the raw materials is indicated as “under inspection” and such materials cannot be moved anywhere. 31 31 31

32. JOIN AND DELIGHT Consumer’s Life Quality assurance personnel then inspect each raw material according to the pre-defined test items in the system. Through the TINS system, inspection results are transmitted to the SAP system which automatically assesses whether the item qualifies in accordance with established inspection standards. The status of materials that pass testing is changed from “under inspection” to “unrestricted,” and the materials are given ‘passed’ labels. Only then can the materials be used for ingredient preparation and batch feeding. 3. Food safety control The company has adopted a quality control and food safety policy that ensures compliance with food safety regulations, improvements to product quality, and assurance of customer satisfaction, so as to produce foods with integrity and conscience and to provide customers and consumers with safe and hygienic food products. TCI con- tinuously works to improve its system to boost customer satisfaction and pursue sustainable management. Food safety teams have been created and team leaders ap- pointed to establish, implement, maintain, and update the quality/food safety system. 4. Product performance control Over the years, TCI has been active in stepping up product research and innovation to offer customers and consumers high-performance healthcare and facial mask products and services. The company values the confidence of customers in our products and is diligent in its efforts to acquire a range of certificates to improve public credibility. Certificate Health Foods Organic Cosmetics TQF (1) General Foods Description of range of certification—capsules, tablets, pow- ders: raw material acceptance inspections, screening, mixing, filling and packaging (1) Top Grade Anka Capsules (2) Omega 3 Deep Sea Fish Oil Softgels (3) Health-preserving Pure Fish Oil Softgels (4) Light Black Carp Fish Oil Softgels (5) Queens Choice (1)Rose Essence Oil (2)Hydration Essence Mask Item (2) Beverages Description of range of certification—drinks: raw material acceptance inspections, concoction, sterilization, filling and packaging (1) 102.8.13~107.8.13 (2) 103.4.30~108.4.30 (3) 103.04.30~108.4.30 (4) 103.4.29~108.4.29 (5) 104.12.18~109.12.18 Acquisition Date/ Expiration Date (The items are as numbered on the right) (1)2017/10/03 (2) 2017/10/03 Note: (1) and (2) are the dates of certificate issu- ance (1)2017/10/16 (2)2017/11/8 32 32 32

33. JOIN AND DELIGHT Consumer’s Life 2.2.3 Respect for the Market Economy TCI is convinced that focusing on consumers to develop products in accord with its entrepreneurial spirit of being a part of and improving the lives of consumers will win the company honor and respect in benign market competition while enhancing quality and efficiency and protecting consumers’ rights and interests; at the same time, it will promote the stability and prosperity of the overall economy. For this reason, and to help maintain healthy market mechanisms and structures, we stead- fastly abide by government regulations for the industry and do not engage in any illegitimate or unfair competition practices. Since 1980, when the company was found- ed, TCI has never been involved in any anticompetitive or antitrust practices or incidents. 2.2.4 Financial Funding In line with the government policy of promoting industrial innovation, improving the industrial environment, and increasing industrial competitiveness, TCI invested a large amount of funds in research and development in 2017. Government Funding Acquired in 2017 Recognized in: Amount Received Received in: Subsidy from the Importers and Exporters Association of Taipei for participation in Vitafoods Asia 2017 in Singapore 30,000 2017 2017 Subsidy from the Importers and Exporters Association for participation in Hi Japan 2017 30,000 2017 2017 Subsidy from the Importers and Exporters Association for participation in Cosmetic 360 in Paris, France 25,000 2017 2017 Subsidy from the Importers and Exporters Association for participation in InterCharm Russia 2016 in Moscow 25,000 2017 2017 Final payment of the 2016 funding from the Agricultural Technology and Research Institute—Quinoa 200,000 2017 2017 Subsidy from the Taiwan Invention Association for participation in the 45th International Exhibition of Inventions, Geneva, Switzerland in 2017 25,000 2017 2017 Subsidy from the Taiwan Invention Association for participation in the Seoul International Invention Fair 2017 16,500 2017 2017 Subsidy from the Taiwan Invention Association for participation in the 32nd Invention and New Product Exposition, Pittsburgh, Pennsylvania, USA 16,900 2017 2017 Subsidy from the Institute for the Information Industry for the Integrated Bioscience Design Project of the Research and Design Center—first payment in 2016 Not yet recognized 1,600,186 2017 Subsidy from the Institute for Information Industry for the Integrated Bioscience Design Project of the Research and Design Center—2017 Not yet recognized 8,187,532 2017 33 33 33

34. JOIN AND DELIGHT Consumer’s Life Research and Development Code Award Patent Portfolio Achievement 2011 – VII International Salon of Inventions and New Technologies – Gold Medal 2011 – International Warsaw Invention Show IWIS 2011 – Gold Medal 1 Bio-Cellulose Mask TW CN JP 2012 – International Innovation and Invention Competition – Silver Medal 2015 – China Beauty Expo Meiyi Award – Outstanding OEM/ODM Vendor 2011 – VII International Salon of Inventions and New Technologies – Silver Medal 2011 – International Warsaw Invention Show IWIS 2011 – Silver Medal 2012 – 26th World Genius Convention – Gold Medal TW CN HK JP US SG 2013 – China Personal Care & Cosmetics Innovation Awards – Best Anti- 2 Cell Young® Snow Lotus MY TH EU Aging Ingredients 2015 – 43rd Geneva International Exhibition of Inventions – Silver Medal 2015 – China Beauty Expo Meiyi Award – Outstanding Anti-Aging Material 3.1.3 MIA Lab Supplier Award 2016 – Seoul International Invention Fair 2016 2015 – China Personal Care & Cosmetics Innovation Awards – Best Anti- The MIA Lab (Molecular Identification & Analysis Laboratory) uses a variety of high-precision instruments and technologies such as GC/MS (gas chromatography-mass spectrometers), LC/MS (liquid chromatogrphy-mass spectrometers), NMR (nuclear magnetic resonance), UPLC (Ultra Performance Liquid Chromatography) to analyze and identify active substances in natural products and microbial metabolites, study their interactions with different human cells, and discover their benefits for different parts of the human body. After the substances are extracted using a variety of extraction methods, they are applied to produce high-performance products. 5 Gomeli® 2012 – International Innovation and Invention Competition IIIC – Silver 3 Cell Young® Hair TW Aging Ingredients 2012 – 15th Moscow International Salon of Industrial Property “Archimedes” – Gold Medal 2012 – Italy International Invention Silver Award – Gold Medal 4 Gomini® TW JP DE FR 2012 – Italy International Invention Silver Award – Special Award 2012 – International Innovation and Invention Competition IIIC – Gold Medal 2012 – Italy International Invention Award – Gold Medal TW CN JP DE Medal 2012 – 2012 Inventeco International Invention Show – Silver Medal 34 34 34 2012 – International Innovation and Invention Competition IIIC – Silver Medal 6 Happy Banana® TW US CN KR JP

35. JOIN AND DELIGHT Consumer’s Life 2.2.5 Since the company was founded, TCI has established internal regulations in accordance with the local laws where each office is situated to guide the actions of staff members, executives, and members of the board of directors. In addition, TCI pays close attention to administrative orders announced by the competent authority, domestic and international laws and regulations, and trends in investment markets to make timely revisions to com- pany regulations in the areas of environmental protection, occupational health and safety, anti-bribery and anti-corruption, fair competition, imports and exports, internal control, information security, intellectual property, and the public interest. TCI did not violate any regulations in Taiwan in 2017. In order to improve the legal knowl- edge of staff members, TCI conducts online and in-class training courses and frequently updates related promotional information on its internal website. In 2017, courses were held on internal regulations related to intellectual property rights, the Civil Code, the Consumer Protection Act, business secret protection, anti-corruption, and patent appli- cations. To improve the service quality of the value chain and fulfill the company’ s social respon- sibility, TCI requests suppliers to abide by international and local laws and regulations when recruiting employees and to act in accordance with the ISO 14001 Environmental Management System and OHSAS 18001 Occupational Health and Safety Management System to create healthy, safe work environments and minimize health and safety threats and harm during business operations and waste disposal. In 2017, TCI’ s headquarters in Taiwan and the Panshi Park office did not violate any local law or regula- tions or undergo any major litigation. 1. Specific practices (1) Prohibition of bribery or acceptance of bribes (2) Prohibition of the provision of illegal political contributions (3) Prohibition of improper donations or sponsorships (4) Prohibition of the provision or acceptance of excessive gifts, entertainment, or other improper benefits (5) Prohibition against leaking confidential information such as commercial or product R&D data to ensure the privacy and security of customer data (6) Prohibition of insider trading (7) Prohibition of deceptive or misleading statements, fraud, or any practices that sabotage the confidence of consumers and harm the rights and interests of consumers (8) The principle of recusal to be observed by directors and managers in matters involving personal conflicts of interest 35 35 35

36. JOIN AND DELIGHT Consumer’s Life 2.2.6 Grievance Mechanism 1. Effective remedies (1) The company promises to keep the identity of whistleblowers confidential to prevent potential retaliation from the relevant organizations or personnel. (2) Unless employees or suppliers are confirmed to be involved in illegal practices, the company will not dismiss, transfer, or otherwise sanction them as a result of complaints filed against them. (3) Special task force members and investigating personnel are strictly obliged to keep any investigation process or content related to incidents confidential. (4) Special task forces are required to record the handling process of incidents in writing, seal and file a report, and save it with personnel information for five years. 2. Methods (1) Internal a. Employees: After a grievance has been brought to the attention of the audit office through the internal mailbox or other channels, it will be reviewed by an inter- departmental committee within three days and the outcome will be presented to the board of directors. b. Executives: After a grievance has been brought to the attention of the audit office through the internal mailbox or other channels, it will be reviewed by an inter- departmental committee within three days and the outcome will be presented to the board of directors. (2) External: Stakeholders a. Grievances may be emailed via the address on the TCI official website: tci@tci-bio.com. b. Grievances may be mailed anonymously to 8F, No. 187, Gangqian Road, Neihu District, Taipei City. c. The International Legal Department will carry out a preliminary investigation for two workdays. If the contents of grievance are confirmed, an interdepartmental committee will be formed to collect evidence and investigate within five days and present the outcome to the board of directors. 3. Actual situation: No grievances were lodged in 2017. 36 36 36

37. JOIN AND DELIGHT Consumer’s Life 2.3 Risk Management TCI conducts risk management through its corporate governance framework and internal control system. Each carries out risk identification in its area of responsibility and works out management strategies and countermeasures with regard to risk prevention, reduction, and transfer. The head of each department is required to review internal and external variables related to business operations (including overall econo- my, industry and technology, customers and market, supply chain, internal personnel, and operating proce- dures) as well as analyze likely impacts on and threats to company operations while presenting the weekly work report in the senior executive meeting held on Tuesdays and Thursdays. If they are deemed potential threats to the operation of the company (i.e., they are judged to be critical risks), then a special task force is immediately organized to prevent and minimize the risk. In addition to the risk management and control measures jointly implemented by departmental managers, the business department, and functional areas, internal risk management and control mechanisms are continuously strengthened to increase the ability to respond to and recover from emergencies. It is hoped that through joint learning, cooperation, and mutual assistance, TCI and its suppliers can improve each other’s abilities to handle different types of risk and cope with rapid changes in the world of business. 2.3.1 Business Risk Management TCI complies with national policies and abides by the Company Act, the Securities and Exchange Act, and the Business Mergers and Acquisitions Act. Internal systems are immediately adjusted in accordance with changes made to laws and regulations to assure the legality of company operations. TCI holds shareholder meetings and investor conferences and produces financial statements, annual reports, and corporate social responsibility reports on a regular basis to increase company information transparency. The compa- ny is also active in pursuing the goal of environmental sustainability and participating in social welfare ac- tivities to fulfill its social responsibility and to give back to society. To protect the rights and interests of em- ployees, customers, and shareholders, and to cope with rapid changes in the information industry, TCI started to make preparations in 2017 to join RE100 in 2018, to seek sustainable development by assessing risks and benefits before adopting new technologies and equipment. It is hoped that TCI can increase the international visibility of its products with superior quality and efficiency and lower production costs. The Cost Management Center was created and placed directly under the President Office to allow professional accountants to apply strict expenditure controls to ensure effective control of operating costs and risks. 37 37 37

38. JOIN AND DELIGHT Consumer’s Life 2.3.2 Financial Risk Management TCI mainly engages in research, design, and OEM operations and makes no high-risk or high-leverage financial investments. Capital investment is conducted after proposals have been presented by the Finance Department and risk has been evaluated by the Audit Committee and the board of directors. Bank loan interest rates are periodically assessed. Moreover, the compa- ny also conducts appropriate financial hedging according to the financial indices (including ROIC, cash reinvestment ratio, and average annual growth rate of corporate internal value) compiled by the Finance Department each quarter and financial data of leading enterprises and corporate peers in the country. As the pace of globalization picks up, TCI customers and brand businesses have become more internationalized and competition in certain markets has also intensified. Negotiations with some customers, with regard to credit period for instance, are necessary in order to obtain long-term orders, and the Finance Department transfers such risk to insurance companies for accounts receivable. So far, TCI has found insurance companies willing to cooperate. In addition to including customers likely to entail risks as part of insurance policies, the company also takes insurance on transactions with customers with good potential to stimulate placement of orders and the strategy appears quite successful. 2.3.3 Environmental Risk Management 1. Response to climate change impacts TCI is deeply aware of global temperature rises and droughts triggered by climate change. Besides affecting normal operations and the productivity of enterprises, these climate anomalies cause damage to property and threaten the health and safety of workers. TCI has begun to work on issues related to corporate sustainable de- velopment and believes that enterprises must work with every link of the entire supply chain to improve the ability to cope with and solve the problems brought by cli- mate change. In addition to its Integrated Bioscience Design, TCI has adopted agricultural waste utilization, a circular economy model, eco-design in its factories, greenhouse gas inventories and energy-saving and carbon reduction programs (see the section of Sustainability & Green Energy Pandora in this report for details) to conduct carbon management. After completing preparations in 2017, TCI joined RE100 in 2018. RE100 is a business organization co-founded by the Climate Group and the Carbon Disclosure Project. Enterprises joining the organization are required to publicly commit to achieving the goal of using only renewable energy in all of their global operations within an es- tablished timeline. TCI will disclose how the company manages issues associated with environmental impacts from climate change on its company website (http://ww- w.tci-bio.com/Home/Environment) to offer such information to customers and related interest groups for reference and will also use the information to assess the physical and regulatory risks and potential opportunities associated with carbon management. 38 38 38

39. JOIN AND DELIGHT Consumer’s Life Risk Impact or influence Potential Opportunity Reference is made to (1) Regulations on greenhouse gas reduction in different coun- tries (2) Regulations on energy taxes in different countries (3) Regulations on the preven- tion of environmental pollution in different countries (4) Regulations on green prod- ucts and certification items in different countries (1) Increased expenditures on ener- gy-saving design upgrades in factories (2) Improvements to biodegradable and reusable packaging material specifications (3) Adjustments to costs required for production and logistics work and pro- cesses throughout the entire supply chain (1) Continuous promotion of energy sav- ings, carbon reduction, and waste reduc- tion to lower long-term operating costs and environmental impacts (2) With ecofriendly products being a market trend, introduction of green design gives products a competitive edge and leads to development of innovative products and applications that conform with the concept of being part of and improving the lives of consumers Regulatory Aspect (1) Direct impacts from abnor- mal weather, including heat waves, floods, droughts, typhoons, etc. (2) Indirect impacts from abnor- mal weather, including energy cost increases, drastic ecosys- tem changes, etc. (1) Shortages of materials and other negative effects as a result of climate change (2) Supply chain disruptions, productivity reductions, production suspensions, and other financial impacts (3) Overall corporate management cost increases as a result of acquisition of control equipment and adoption of pre- ventive measures (1) In-depth risk evaluation of factory loca- tions and improvements to controls on use of internal resources (2) Optimal design for environmental pro- tection based on relevant environmental safety regulations, cooperation with the local competent authorities and industrial resources to jointly develop short-term contingency measures, and the effective use of limited resources based on actual need. Physical Aspect 2.3.4 Crisis and Risk Response Mechanisms To ensure that the company’ s three plants in Pingtung Agricultural Biotechnology Park in Changzhi Township (S5, S9, and S11) are able to respond and take appropriate measures quickly in times of emergency or in case of accidents (including fires, earthquakes, typhoons, power outages, explosions, machine malfunctions, food poison- ing, and other public security incidents likely to cause loss of lives and property, and environmental pollution or other emergencies that may render the company unable to resume operations immediately) and resume normal operating procedures in a way that prevents or minimizes environmental impacts, protects employee safety, and reduces property damage to the company and customers, TCI conducts regular training and industrial security drills to evaluate and control emergencies and accidents resulting from natural disasters or human factors. In 2017, no casualties or property damage occurred in the headquarters of TCI and it plants in Pingtung as a result of natural disasters or man-made factors (including terrorist attacks and labor-management disputes). 39 39 39

40. JOIN AND DELIGHT Consumer’s Life 3. Research and Development Centers and Acquisition of Intellectual Properties 3.1 The Nine Major Labs MIA LAB GENE LAB ATP LAB E.V.E LAB ATP LAB H&M LAB ISO 17025 LAB Q-ODM LAB EAGLE EYE LAB 40 40 40

41. JOIN AND DELIGHT Consumer’s Life 3.1.1 NEXT Lab Next Lab works on innovative, forward-looking R&D by consolidating ad- vanced technologies from the academic sector to repeatedly create new op- portunities for research and development. We have plant stem cell technol- ogy to apply tissue culturing and stem cell mass production processes to rare and precious herbs to increase product activity and ensure stable qual- ity in health care materials. We have also adopted microemulsion coating techniques to solve the problem of water solubility of oil-soluble substances to increase product applicability. By adopting rigorous development tech- niques and acquiring patents around the globe, we continue to research and innovate to solve potential problems, meet the future needs of customers, and create a better life experience. 41 41 41

42. JOIN AND DELIGHT Consumer’s Life 3.1.2 H&M Lab The H&M Lab (Human & Microbiome Laboratory) focuses primarily on the establishment of a functional microorganism culture bank. Through screen- ing and functional development of probiotics, the lab endeavors to identify microbiota regulation models that are beneficial to consumers’ health to improve the life of consumers. PREBIOTICS PROBIOTICS PROBIOGENICS BIOGENICS 42 42 42

43. JOIN AND DELIGHT Consumer’s Life 3.1.5 ISO17025 Lab The ISO17025 Lab is recognized by TAF and has received ISO17025 certification. Equipped with a GC-MS (gas chromotography-mass spectrometer) and an LC-MS (liquid chromotogrphy-mass spec- trometer), the lab applies state-of-the-art methods and mecha- nisms to control product quality and ensure that every batch of products performs as promised. Our “100% worry-free” product traceability system is the first in the industry. It specifies the product performance and test values of every substance measured, from raw materials to the finished product. The more than three hundred test items include three major preservatives, seven major microbes, nine major heavy metals and 105 agricultural chemical residues. The information is included with the products to givecustomers and consumers peace of mind. 43 43 43

44. JOIN AND DELIGHT Consumer’s Life 3.1.6 QODM Lab The QODM Lab turns the formulas and ingenuity of the product design department into finished products and ensures smooth mass production through synchronization of production and product per- fection. The best approaches to achieve smooth and optimal pro- duction are researched and established as soon as sample produc- tion is completed. Quality, speed, and economy of scale are achieved through consistency testing and food taste tests, skin testing for facial masks, and scientific analysis of dermatological parameters. 44 44 44

45. JOIN AND DELIGHT Consumer’s Life 3.1.7 Gene Lab The Gene Lab has successfully developed a high throughput cell-scanning platform to identify the specific functions of materials. The lab runs experiments to clarify the interactions between active ingredients and gene clusters. In addition, we have developed a new genetic materials and an analytics platform to create the lab’ s G2 genetic testing system, which is able to predict illnesses by screening for 58 chronic diseases including diabetes, high blood pressure, hyperlipidermia, obesity, and other diseases caused by metabolic diorders as well as 14 major types of cancer. Other achievements include the R1 chip and the B1 test, which assist in understanding the condition of the body through dynamic gene tracking and physiological protein testing. Using these two approaches, we can develop personalized genetic health management plans. 45 45 45

46. JOIN AND DELIGHT Consumer’s Life 3.1.8 Eagle Eye Lab The speed and quality of manual inspections can no longer meet production needs when high-speed automatic pro- duction equipment is used. The Eagle Eye Lab develops precision monitoring equipment that monitors production lines using visual identification and detection technology and generates Cloud data to ensure product quality. 46 46 46

47. JOIN AND DELIGHT Consumer’s Life 3.1.9 ATP Lab The ATP Lab (Aromatherapy Physiology Lab) mainly focuses on research into interaction between aromas and the physiological performance of the human body. Cell experiments and genetic test- ing are conducted using an analytics platform to observe the performance of mRNA in the blood and protein activity in the human body after the use of aromas in order to identify the optimal qual- ity of aroma in the product. A TCI aroma database has been established with the resulting scientif- ic data to help develop the unique formula and fragrance of each healthcare product. 47 47 47

48. JOIN AND DELIGHT Consumer’s Life 3.2 Acquisition of Intellectual Properties In order to boost the competitiveness of its products, TCI conducts a market assessment for each IBD raw material to understand the consumer market and the future develop- ment potential of the product. The company also conducts a comprehensive evaluation of issues associated with patents, trademarks, copyrights, and fair trade to work out global strategies, maximize protection of its intellectual property, and ensure that no infringement of the rights of competitors will occur when the products of TCI or TCI customers are released on the market. As of Dec. 31, 2017, TCI had filed 383 patent applications and had been awarded 219 patents in Taiwan, the US, China, Hong Kong, Japan, Germany, France, India, and Singapore. In terms of trademark acquistion, as of Dec. 31, 2017, IBD materials representing 513 trademarks in Taiwan, China, the US, Hong Kong, Singapore, Malaysia and Japan have been sold around the globe to top tier brand manufacturers. 48 48 48

49. JOIN AND DELIGHT Consumer’s Life 1. Number of patent applications filed 2. Number of patents awarded 45 40 80 35 70 30 60 TAIWAN TAIWAN 25 50 CHINA CHINA 20 40 OTHER COUNTRIES IN ASIA OTHER COUNTRIES IN ASIA 15 30 NORTH AMERICA NORTH AMERICA 10 20 EUROPE EUROPE 5 10 0 0 Patents awarded in: Before2012 2013 2014 2015 2016 Before 2012 2013 2014 2015 2016 2017 3. Number of trademarks under which TCI products are sold 35 30 25 20 15 10 5 0 其他 TW CN 49 49 49

50. JOIN AND DELIGHT Consumer’s Life 3.3 Achievements Research and Development Code Award Patent Portfolio Achievement 2011 – VII International Salon of Inventions and New Technologies – Gold Medal 2011 – International Warsaw Invention Show IWIS 2011 – Gold Medal 1 Bio-Cellulose Mask TW CN JP 2012 – International Innovation and Invention Competition – Silver Medal 2015 – China Beauty Expo Meiyi Award – Outstanding OEM/ODM Vendor 2011 – VII International Salon of Inventions and New Technologies – Silver Medal 2011 – International Warsaw Invention Show IWIS 2011 – Silver Medal 2012 – 26th World Genius Convention – Gold Medal TW CN HK JP US SG 2013 – China Personal Care & Cosmetics Innovation Awards – Best Anti- 2 Cell Young® Snow Lotus MY TH EU Aging Ingredients 2015 – 43rd Geneva International Exhibition of Inventions – Silver Medal 2015 – China Beauty Expo Meiyi Award – Outstanding Anti-Aging Material Supplier Award 2016 – Seoul International Invention Fair 2016 2015 – China Personal Care & Cosmetics Innovation Awards – Best Anti- 3 Cell Young® Hair TW Aging Ingredients 2012 – 15th Moscow International Salon of Industrial Property “Archimedes” – Gold Medal 2012 – Italy International Invention Silver Award – Gold Medal 4 Gomini® TW JP DE FR 2012 – Italy International Invention Silver Award – Special Award 2012 – International Innovation and Invention Competition IIIC – Gold Medal 50 50 50