Gwenn Announces Board Resolution to Divide Image Security Business - Rail Division into a Newly Established Wholly-Owned Subsidiary

1. Type of merger (e.g., merger, division, acquisition, or share transfer): Division 2. Date of occurrence: 115/5/12 3. Name of participating companies in the merger (e.g., name of the other party in a merger, the company newly established through division, or the target company in an acquisition or share transfer): (1) Divided company: PChome Electronic Co., Ltd. (hereinafter referred to as "our company") (2) Newly established company receiving the division: RuiTong Technology Co., Ltd. (Tentative name, subject to change by authorization of the Board of Directors; hereinafter referred to as "RuiTong Technology Co.") 4. Counterparty to the transaction (e.g., other party in a merger, company to which assets are divided, or target of acquisition or share transfer): RuiTong Technology Co. 5. Is the counterparty a related party: Yes 6. Relationship between the counterparty and the company (if the company holds XX% or more of the invested company), and explain the reason for selecting the affiliated enterprise or related party as the transaction object and whether it affects shareholder equity: (1) RuiTong Technology Co. is a subsidiary wholly owned by our company after its establishment. (2) This business division is part of an organizational restructuring. The value of the shares held by our company in RuiTong Technology Co. after the division is equal to the business value being divided, and therefore does not affect the equity of our company's shareholders. 7. Purpose and conditions of the merger, including reasons for the merger, consideration terms, and payment timing (Note 7): (1) To implement organizational restructuring and specialization, thereby improving overall business performance and market competitiveness. (2) The provisional division base date is set for June 30, 115. If there is a need to adjust the division base date and related operational schedules, the Chairman is authorized to set it. (3) The business value of the "Image Security Business - Rail Division" to be transferred by our company is estimated at NT$ 21,000,000. Based on a price of NT$ 10 per share, it is expected to acquire 2,100,000 ordinary shares of RuiTong Technology Co. 8. Expected benefits arising from the merger: The company expects to achieve specialization and improve overall business performance and market competitiveness through this organizational restructuring. 9. Impact of the merger on net asset per share and earnings per share: This is a division of the "Image Security Business - Rail Division" to a newly established wholly-owned subsidiary, therefore, it has no impact on the net asset per share and earnings per share of our company's consolidated financial statements. 10. Type of merger consideration and source of funds: Type of merger consideration: Our company will divide the business related to the "Image Security Business - Rail Division" to the newly established wholly-owned subsidiary, RuiTong Technology Co., and acquire ordinary shares issued by RuiTong Technology Co. Source of funds for merger: Not applicable. 11. Share exchange ratio and its calculation basis: (1) Share exchange ratio: The estimated business value to be transferred by our company is NT$ 21,000,000. Based on a price of NT$ 10 per share, it is expected to acquire 2,100,000 ordinary shares of RuiTong Technology Co. (2) Calculation basis: The business value, assets, and liabilities to be transferred, as mentioned above, are calculated based on the book value from Gwenn's financial statements as of December 31, 114, and estimated up to the division base date. However, the actual amount shall be based on the book value as of the division base date, and determined with reference to the fairness opinion issued by an independent expert. 12. Opinion of accountant, lawyer, or securities underwriter on the unreasonableness of this transaction: No 13. Name of accounting firm, law firm, or securities underwriter: Yilong United Certified Public Accountants 14. Name of accountant or lawyer: Hsu Fang-Chu 15. Certificate number of accountant or lawyer's practice: FSC Certificate No. 7072 16. Contents of the independent expert's opinion on the reasonableness of the share exchange ratio, cash or other property distributed to shareholders for this merger (1. Methods, principles, or calculation methods used to determine the public acquisition price and comparison with internationally common market value, cost, and discounted cash flow methods. 2. Comparison of the financial status, profitability, and P/E ratios of the acquired company with listed/OTC peers. 3. If the public acquisition price refers to the appraisal report of an appraisal institution, the content and conclusion of the appraisal report should be explained. 4. If the acquirer's financing repayment plan is secured by the assets or shares of the acquired company or the surviving company after the merger, the impact assessment on the financial and business soundness of the acquired company or the surviving company after the merger should be explained) (Note 7): This accountant proposes to use the net asset value of the assets and liabilities related to the "Image Security Business - Rail Division" as recorded on Gwenn's financial statements as of December 31, 114, as audited by the accountant (however, the actual amount shall be the book value as of the division base date), with an estimated business transfer value of NT$ 21,000,000. RuiTong Technology plans to issue 2,100,000 new ordinary shares (par value NT$ 10 per share) as consideration. As the consideration received is equivalent to the net asset value to be transferred, the share exchange consideration for this division is considered reasonable. 17. Planned completion schedule (Note 7): The provisional division base date is set for June 30, 115. If there is a need to adjust the division base date and related operational schedules, the Chairman is authorized to set it. 18. Matters related to the rights and obligations assumed by the existing or newly established company from the extinguished (or divided) company (Note 2): (1) The business, assets, and liabilities transferred in this division will be summarily assumed by RuiTong Technology Co. according to law from the division base date. If related procedures are required, our company shall cooperate. (2) Except for divisible liabilities that are separate from the company's pre-division debts, RuiTong Technology Co. shall be jointly and severally liable with our company for the company's pre-division debts within the scope of its capital contribution for the business acquired. However, the creditor's right to claim shall be extinguished if not exercised within two years from the division base date. 19. Basic information of participating companies in the merger (Note 3): Not applicable. 20. Matters related to the division (including the estimated value of the business, assets to be transferred to the existing or newly established company; ...