ABILITY ENTERPRISE CO., LTD.

2018 ANNUAL SHAREHOLDERS’ MEETING MEETING AGENDA

JUN. 11, 2018

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....................................................................... 1 I. Meeting Procedures ............................................................................ 2 II. Meeting Agenda 1. Report Items ........................................................................... 3 2. Proposed Resolutions ............................................................. 7 3. Extempore Motions ................................................................ 8 4. Meeting Adjournment ............................................................ 8 III. Attachments 1. 2017 Business Report ............................................................. 9 2. CPAs’ Auditing Reports and 2017 Financial Statements..... 12 3. Earning Distribution Table ................................................... 37 IV. Appendix 1. Rules and Procedures of the Shareholders' Meeting ........... 38 2. Articles of Incorporation ...................................................... 44 3. Shareholding of Directors .................................................... 54 4. Influence from free allocation of shares on Company's business performance, earnings per share, and shareholders' return on investment ............................................................. 56

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I. Meeting Procedures

ABILITY ENTERPRISE CO., LTD

2018 Annual Shareholders’ Meeting Meeting Procedures

Calling the Meeting to Order

2. Chairman's Address

Report Items
Proposed Resolutions
Extempore Motions

6. Meeting Ajournment

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II. Meeting Agenda

ABILITY ENTERPRISE CO., LTD 2018 Annual Shareholders’ Meeting Meeting Procedures

Time: 9:00 a.m., June 11, 2018 (Monday)

Venue: Lecture Hall of the Industrial Commercial Development & Investment Promotion Committee, New Taipei City (2F.-2, No.1, Wuquan 1st Rd., Xinzhuang Dist., New Taipei City 242, Taiwan, R.O.C.)

Announcement of Meeting (Reporting Attendance Shares) Chairman's Address

1. Report Items:

Proposal 1: The Company's 2017 Business Report

Proposal 2: The Audit Committee's Report on the 2017 Financial Statement

Proposal 3: The 2017 Endorsement and Guarantee Records

Proposal 4: The 2017 Employees’ and Directors’ Remuneration Distribution

Proposal 5: Other Reports

2. Proposed Resolutions:

Proposal 1: The 2017 Business Reports and Financial Statements, submitted for Recognition

Proposal 2: The 2017 Earning Distribution, submitted for recognition

3. Extempore Motions

4. Meeting Ajournment

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1. Report Items

Proposal 1: The 2017 Business Report

Note: Please refer to Attachment I.

Proposal 2: The Audit Committee's Review Report on the Company's 2017 Financial Statements

Note:

ABILITY ENTERPRISE CO., LTD

The Audit Committee's Review Report

The Board of Directors has issued the Company 2017 business reports, financial statements (including consolidated and individual financial statements) and earning distribution motion, of which the financial statements were verified by PricewaterhouseCoopers Taiwan (PwC Taiwan), and an audit report was issued. The above-mentioned business reports, financial statements, and earning distribution motion have been reviewed by the Audit Committee in accordance with the law, and it is considered to be of no inconsistency. To comply with the Article 14-4 of the Securities Exchange Act and the Article 219 of the Company Act, the reports have been properly issued. Please verify and confirm.

To

ABILITY ENTERPRISE CO., LTD

2018 Annual Shareholders' Meeting

Audit Committee Convener:

March 16, 2018

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Proposal 3: The 2017 Endorsement and Guarantee Records

Note: Endorsement and Guarantee Balance Report Ended on December 31, 2017:

As of December 31, 2017, the Company's Endorsement and Guarantee of the Affiliate Enterprises is as follows:

Unit: NT$1,000

		Unit:	NT$1,000
Item Object	Ending Endorsement and Guarantee Balance	Guaranteed by Property of Endorsement and Guarantee Amount	Total
VIEWQUEST TECHNOLOGIES (BVI)INC.	647,850	0	647,850
ACTION PIONEER INTERNATIONAL LTD.	115,256	0	115,256
Total	763,106	0	763,106

As of December 31, 2017, the Company’s endorsement and guarantee balance was NT$763,106,000. According to the Company’s “Procedures of Endorsement and Guarantee,” the endorsement and guarantee ceiling was NT$4,258,671,000. The maximum amount of endorsement and guarantee for a single affiliate enterprise was NT$4,258,671,000. For both, the total amount did not exceed the prescribed limit.

The subsidiary, E-Pin Optical Industry Co., Ltd. (hereinafter abbreviated as “E-Pin”) as of December 31, 2017, and the endorsement and guarantee of affiliate enterprises is as follows:

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Unit: NT$1,000 Item Object Ending Endorsement and Guarantee Balance Guaranteed by Property of Endorsement and Guarantee Amount Total Zhongshan Shanxin Accurate IndustryCo.,Ltd. 22,773 0 22,773 Total 22,773 0 22,773	Unit: NT$1,000 Item Object Ending Endorsement and Guarantee Balance Guaranteed by Property of Endorsement and Guarantee Amount Total Zhongshan Shanxin Accurate IndustryCo.,Ltd. 22,773 0 22,773 Total 22,773 0 22,773	Unit: NT$1,000 Item Object Ending Endorsement and Guarantee Balance Guaranteed by Property of Endorsement and Guarantee Amount Total Zhongshan Shanxin Accurate IndustryCo.,Ltd. 22,773 0 22,773 Total 22,773 0 22,773	Unit: NT$1,000 Item Object Ending Endorsement and Guarantee Balance Guaranteed by Property of Endorsement and Guarantee Amount Total Zhongshan Shanxin Accurate IndustryCo.,Ltd. 22,773 0 22,773 Total 22,773 0 22,773
Item Object	Ending Endorsement and Guarantee Balance	Guaranteed by Property of Endorsement and Guarantee Amount	Total
Zhongshan Shanxin Accurate IndustryCo.,Ltd.	22,773	0	22,773
Total	22,773	0	22,773

As of December 31, 2017, E-Pin’s endorsement and “Procedures of Endorsement and Guarantee,” the endorsement and guarantee ceiling was NT$69,988,000. The maximum amount of endorsement and guarantee for a single affiliate enterprise was NT$69,988,000. For both, the total amount did not exceed the prescribed limit.

Proposal 4: The 2017 Employees’ and Directors’ Remuneration

Distribution

Note : According to the Company’s articles of Incorporate's allocative ratio and the Company’s profitability of 2017, the Company’s salary compensation committee and the Board of Directors approved the distribution of 2017 employees’ compensation in cash by NT$19,517,626 and the directors' compensation by NT$3,659,555. There is no difference between the aforementioned distribution amount and the estimated amount for 2017.

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Proposal 5: Other Reports

Note: Handling of shareholders' proposal of the annual shareholders’ meeting's:

According to Article 172-1 of the Incorporation Act, a shareholder who holds 1% or more of the Company's issued shares may submit a written motion of annual shareholders’ meeting to the Company, but it shall limits to 300 words for each item.
The Company's 2018 annual shareholders’ meeting accepts applications for shareholders. The period is from March 28, 2018 to April 9, 2018, and has been publicly announced at Market Observation Post System.
The Company did not receive any proposals from shareholders.

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2. Proposed Resolutions

Proposal 1: (submitted by the Board of Directors)

Cause: The Company’s 2017 business reports and financial statements were submitted for recognition.

Note: 1. The Company's 2017 business reports and financial statements (including consolidated and individual financial statements) were approved by the Board of Directors, among which the financial statements were audited by PwC Taiwan's CPA, Hsu Sheng-Chung and Audrey Tseng. Inspection reports shall be also presented.
For the above-mentioned business reports, accountants' auditing reports, and financial statements, please refer to Attachments 1 and 2 from page 9 to 36 of this handbook.

Resolution:

Proposal 2: (submitted by the Board of Directors)

Cause: The Company's 2017 earning distribution was submitted for recognition.

Note: 1. The Company's 2017 surplus earning distribution form was approved by the Board of Directors and submitted to the shareholders' meeting for recognition.
For the earning distribution form, please refer to Attachment 3.

Resolution:

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3. Extempore Motions

4. Meeting Ajournment

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III. Attachments

【 Attachment 1 】

ABILITY ENTERPRISE CO., LTD. 2018 BUSINESS REPORT

Thank you to join Ability’s 2018 Annual Shareholders’ Meeting. Deeply appreciate your support. Hereby, Ability Business Report of 2018 and our future plan shall be presented as following:

Recently, the booming development of smart phone and various personal mobile devices drives the drastically speedy growth of image industry in diversified application. It satisfies the amusement of visual image application of audio and video in everybody’s daily life, from which derivative business chances are created, such as image taken and then be shared in social media, transformation of real scene to virtual reality, flat image upgraded to three dimension image, and upload video to live broadcasting. The application trend indicates Optical science is not limited in image taken; it already creates the value, analysis and application of image data. Ability has been continually developing the optical images technique with our research sources and resulted in the products of digital camera, sports cam, 360 degree cam, supervision cam, wearing cam.

In 2017, our consolidated revenue is of NT$11,201,600,000 which is 1.78% growth in comparing with 2017 revenue. Profit after tax is NT$217,663,000 with EPS 0.77 per common share.

In order to earn profit for shareholders and employees, Ability aggressively optimizes our management & cost structure and transform business field. Accordingly, with the strong support of our integration on optical, mechanical & electronic technique and our image resolution technique, Ability continuously expand the product application, build the competitive component supply chain, diversify product range, enforce our core value, and create new business models.

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I. Business Performance Unit: NT$1,000

Business Performance	Unit: NT$1,000	Unit: NT$1,000
ITEM	2017
	CONSOLIDATE	INDENPENDENT
OPERATING REVENUE	11,201,600	9,959,455
OPERATING PROFIT	1,416,172	1,059,880
OPERATING EXPENSE	1,351,319	1,045,973
OPERATING PROFIT	64,853	13,907
N E T P R O F I T B E F O R E T A X	228,281	220,793

II. Analysis of Financial Income and Profitability

Unit: NT$1,000

Analysis of Fi	nancial Income and Profit	nancial Income and Profit	ability Unit: NT$1,000	ability Unit: NT$1,000
Item	Year		2017
			CONSOLIDATE	INDEPENDENT
Financial Income a n d E x p e n s e	OPERATING REVENUE		11,201,600	9,959,455
	O P E R AT I N G G R O S S P R O F I T		1,416,172	1,059,880
	CURRENT NET INCOME		206,938	217,663
P r o f i t A n a l y s i s	RETURN ON	ASSETS (%)	1.63	1.77
	RETURNON	EQUITY(%)	2.40	2.59
	R A T I O O N CAPITAL (%)	OPERATIN P R O F I T	2.30	0.49
		N E T P R O F I T B E F O R E T A X	8.08	7.82
	ＮET PROFIT MARGIN(%)		1.84	2.19
	EPS(NT$)		0.77	0.77

III. Research Development

The mobile devices development is fast and new. In realizing the

rising competition, Ability’s product plan and RD policy shall meet the different market demanding. Except the basic term of high resolution

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image, high ratio optical zoom, motion image quality, and high speed of image processing, Ability has input certain resources on the development of lens image taken on cam module, hardware and image algorithm for software & APP. New application and features of wireless sharing & live broadcasting result in our products of 360 degree cam, VR and AR. In future, you will see we utilize the advantage in the vertical integration on optical lens development, wireless communication technique and cooperation of supply chain to develop the products of security, auto and mechanical vision. More than that, we shall invest more resources to research and develop the techniques of system application requiring image modules.

Deeply appreciate the strong and sincere support from all the shareholders during Ability’s transformation.

CEO : Tseng, Ming Jen CFO: Lin, Hung Tien

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【 Attachment 2 】

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR17000378

To the Board of Directors and Shareholders of Ability Enterprise Co., Ltd. and subsidiaries

Opinion

We have audited the accompanying consolidated balance sheets of Ability Enterprise Co., Ltd. and subsidiaries (the “Group”) as at December 31, 2017 and 2016, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2017 and 2016, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion

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thereon, we do not provide a separate opinion on these matters.

Assessment of inventory valuation

Description

Refer to Note 4(12) for accounting policies on inventory valuation, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on inventory valuation, and Note 6(6) for details of inventory. As of December 31, 2017, the balances of inventory and allowance for inventory valuation loss were NT$1,744,310 thousand and NT$242,916 thousand, respectively.

The Group is primarily engaged in the manufacture and sales of digital camera, optical products and other related parts and components. As technology changes rapidly, the life cycles of electronic products are short, and prices are easily influenced by fluctuation in market price, there is higher risk of incurring inventory valuation losses or obsolescence. For regular inventories, the Company recognises inventories at the lower of cost and net realisable value; for inventories which were separately identified as obsolete and damaged, the Company recognises loss through net realisable value; for inventories age over a certain period, the Company recognises loss for obsolete and slow-moving inventories. An allowance for inventory valuation loss mainly arise from inventories aged over a certain period and separately identified obsolete inventory. As the amount of inventory is material, inventory items are numerous, and the net realisable value of obsolete and damaged inventories is subject to management judgement, we consider the assessment of the allowance for inventory valuation loss a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Ascertained whether the policies on allowance for inventory valuation losses were reasonable and consistently applied in all the periods.
Checked the appropriateness of the logic of inventory aging report system which was used by management to ensure whether the inventories age over a certain period had been included in the report.
Obtained an understanding on the classification rules of aging range in the inventory aging report. Sample tested inventories in order to confirm whether the aging of inventories was classified appropriately.
Discussed with management the estimated net realisable value of separately identified obsolete and damaged inventories, obtained and corroborated against supporting documents and

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recalculated the allowance provision.

Impairment assessment of property, plant and equipment

Description

Refer to Note 4(14) for accounting policies on property, plant and equipment, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on property, plant and equipment impairment, and Note 6(9) for details of property, plant and equipment. As of December 31, 2017, the balance of property, plant and equipment was NT$3,989,763 thousand.

The Group has purchased molds and machinery equipment to manufacture digital camera, optical products and other related parts and components. Due to the changes in market demand and the enhancement of smartphone function, the retirement rate for certain products would accelerate which would result to the decrease in the future cash flow and recoverable amount. As the amount of property, plant and equipment is material, and the assumptions used for impairment assessment are complex, easily affected by market fluctuation, and subject to management judgment, we consider the impairment assessment of property, plant and equipment a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the impairment assessment of property, plant and equipment:

Assessed the appropriateness of property, plant and equipment impairment calculation logic to check whether the calculation was appropriate.
Checked the reasonableness of assumptions used with respect to revenue growth rate and discount rate to ensure whether those were consistent with economic and industry forecasts.

Other matter – Scope of the audit

We did not audit the financial statements of a wholly-owned consolidated subsidiary and investments accounted for using equity method that are included in the financial statements, which statements reflect total assets (including investments accounted for using equity method) of NT$4,020 thousand and NT$3,066 thousand, constituting 0.03% and 0.02% of consolidated total assets as of December 31, 2017 and 2016, respectively, and the related share of profit (loss) of association and joint ventures accounted for under equity method was NT$954 thousand and (NT$2,817) thousand, constituting 0.21% and 1.70% of consolidated total comprehensive income (loss) for the years then ended,

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respectively. Those financial statements were audited by other independent accountants whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on the audit reports of the other independent accountants.

Other matter – Parent company only financial reports

We have audited and expressed an unmodified opinion on the parent company only financial statements of Ability Enterprise Co., Ltd. and subsidiaries as at and for the years ended December 31, 2017 and 2016.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material

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misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Hsu, Sheng-Chung

Audrey Tseng

For and on behalf of PricewaterhouseCoopers, Taiwan March 16, 2018

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Assets	December 31, 2017 AMOUNT % � �� �� � � �� � �� �� �� �� �� � �� �� �� � �� � �� � �� �� �� � �� � �� � �� � �� �� � �� ��	December 31, 2016	December 31, 2016
	AMOUNT � �� � �� �� �� �� �� �� �� �� �� �� �� �� �� �� � ��	AMOUNT � �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� � ��	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1125 Available-for-sale financial assets - current 1170 Accounts receivable, net 130X Inventory 1470 Other current assets 11XX Total current assets Non-current assets 1523 Available-for-sale financial assets - non-current 1543 Financial assets carried at cost - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1760 Investment property - net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			�� � � �� �� �
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(Continued)

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ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

LiabilitiesandEquity	Notes 6(12) 7 6(13) 6(16) 6(14) 6(17) 6(18) 6(19) 6(20) 6(15)	December 31, 2017 December 31, 2016 AMOUNT % AMOUNT % � �� � � �� � �� �� �� �� �� � �� � �� � �� � �� � �� � �� �� �� �� �� � �� � �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� � � � �� �� �� �� �� �� �� �� � �� �� � �� �� �� �� �� � �� � �� �� �� �� � �� �� � �� ��
		AMOUNT � �� �� �� �� �� �� �� �� �� �� �� �� �� �� � �� �� �� � ��
Current liabilities 2100 Short-term borrowings 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2600 Other non-current liabilities 2XXX Total liabilities Equity Equity attributable to owners of parent Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity 3X2X Total liabilities and equity

The accompanying notes are an integral part of these consolidated financial statements.

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ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Items	Year ended December 31 2017 2016 Notes AMOUNT % AMOUNT % 6(21) and 7 � �� �� � �� �� 6(6)(24) and 7 � �� �� �� �� �� �� �� �� 6(24) � �� �� �� �� � �� �� �� �� � �� �� �� �� � �� �� �� �� �� � �� � 6(22) �� � �� � 6(23) �� � �� � � �� �� �� � 6(8) �� �� �� � �� � �� � �� � �� � 6(25) � �� �� �� �� � �� � � �� �
4000 Sales revenue 5000 Operating costs 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit/(loss) of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year

Items

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2017
2016
Notes
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(Continued)

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ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Items	Year ended December 31 2017 2016 Notes AMOUNT % AMOUNT % 6(14) � �� � � �� � � �� �� �� � �� � �� � � �� �� �� �� 6(3) �� �� �� � �� �� �� �� � �� �� �� �� � �� � � �� � � �� � � �� � � �� � �� � � �� � � �� � � �� � � �� � � �� � �� � � �� � � �� � 6(26) � �� � �� � �� � ��
Other comprehensive income 8311 Other comprehensive income, before tax, actuarial gains (losses) on defined benefit plans 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8362 Unrealised gain (loss) on valuation of available-for-sale financial assets 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8300 Other comprehensive income (loss) for the year 8500 Total comprehensive income for the year Profit (loss) attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive income (loss) attributable to: 8710 Owners of the parent 8720 Non-controlling interest Earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share

Items

Year ended December 31
2017
2016
Notes
AMOUNT
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�
��
�
�
��
�
�
��
�
6(26)
�
��
�
��
�
��
�
��

Other comprehensive income
8311
Other comprehensive income,
before tax, actuarial gains
(losses) on defined benefit
plans
8349
Income tax related to
components of other
comprehensive income that
will not be reclassified to
profit or loss
8310
Components of other
comprehensive income
that will not be
reclassified to profit or
loss
8361
Financial statements
translation differences of
foreign operations
8362
Unrealised gain (loss) on
valuation of available-for-sale
financial assets
8360
Components of other
comprehensive income
(loss) that will be
reclassified to profit or
loss
8300
Other comprehensive income
(loss) for the year
8500
Total comprehensive income
for the year
Profit (loss) attributable to:
8610
Owners of the parent
8620
Non-controlling interest
Comprehensive income (loss)
attributable to:
8710
Owners of the parent
8720
Non-controlling interest
Earnings per share
9750
Basic earnings per share
9850
Diluted earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

-21-

											Total equity		��		�	��		��		�		��		�	��		��	��		��		�	�	��		��		��		�	��		��	��
																�											�							�
										Non-controllin	g interest		� ��		�	�		�		�		�		�	��		��	� ��		� ��		�	�	�		�		�		�	��		��	� ��
																											�														�		�
											Total		��		�	��		��		�		��		�	��		��	��		��		�	�	��		��		��		�	��		��	��
																�											�							�
											Treasury stocks		�� ��		�	�		�		�		�		��	�		�	�� ��		�� ��		�	�	�		�		�		��	�		�	� �
ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016	(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)	Equity attributable to owners of the parent	Capital Retained Earnings	Financial	statements	Total capital translation	Advance surplus, Unappropriated differences of	Share capital - receipts for additional retained foreign	common stock share capital paid-in capital Legal reserve Special reserve earnings operations		�� � �� �� �� � � �� � ��		� � � �� � � �� �	� � � � � � �� �		� � � � � �� ��		�� � �� � � � � �		� � � �� � � � ��		� �� � �� � � � �	� � � � � �� �		� � � � � �� � ��	�� � � �� �� � � �� �� ��		�� � � �� �� � � �� �� ��		� � � �� � � �� �	� � � � �� � �� �	� � � � � � �� �		� � � � � � �� ��		� � �� � � � �		� �� � �� � � � �	� � � � � �� �		� � � � � �� ��	�� � � �� �� � �� �� � ��	The accompanying notes are an integral part of these consolidated financial statements.
											Notes			6(19)			6(15)		6(15)				6(15)								6(19)				6(15)				6(15)
												2016	Balance at January 1, 2016	Appropriations of 2015 earnings:	Legal reserve	Cash dividends	Compensation cost of share-based	payment	Capitalisation of employee stock	options	Adjustments to changes in vested	number of restricled stock	Redemption of employee restricted	stock	Profit for 2016	Other comprehensive income (loss) for	2016	Balance at December 31, 2016	2017	Balance at January 1, 2017	Appropriations of 2016 earnings:	Legal reserve	Special reserve	Cash dividends	Compensation cost of share-based	payment	Adjustments to changes in vested	number of restricled stock	Redemption of employee restricted	stock	Profit for 2017	Other comprehensive income (loss) for	2017	Balance at December 31, 2017

-22-

ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Income and expenses having no effect on cash flows
Gain on reversal of allowance for bad debts
Depreciation
Amortisation
Compensation cost of share-based payment
(Gain) loss on valuation of financial assets and
liabilities
Gain on disposal of property, plant, equipment and
investment property
Gain on reversal
Share of profit or loss of associates and joint ventures
accounted for under equity method
Interest expense
Interest income
Compensation income
Dividend income
Grants revenue
Changes in assets/liabilities relating to operating activities
Changes in operating assets
Accounts receivable, net
Inventories
Other current assets
Net changes in liabilities relating to operating activities
Accounts payable
Other payables
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest reveived
Dividends received
Income tax paid
Interest paid
Net cash flows from operating activities

Notes
2017
2016
�
��
�
��
6(5)
�
��
��
6(24)
��
��
6(24)
��
��
6(15)
��
��
6(2)
�
��
��
�
��
��
6(23)
�
�
��
6(8)
�
��
��
��
��
6(22)
�
��
��
6(23)
�
��
�
6(22)
�
��
��
6(23)
�
�
��
��
��
�
��
��
�
��
��
�
��
��
��
�
��
�
��
��
�
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��
��
��
��
��
��
��
�
��
��
�
��
��
��
��

(Continued)

-23-

ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in other current assets
Proceeds from disposal of current financial assets at fair
value through profit or loss
Acquisition of financial assets measured at cost
Proceeds from disposal of property, plant and equipment
Acquisition of property, plant and equipment
Acquisition of intangible assets
Decrease in other non-current assets
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term loans
(Decrease) increase in other non-current liabilities
Payment of cash dividends
Redemption of employee restricted stock
Net cash flows used in financing activities
Net effect of changes in foreign currency exchange rates
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Notes
2017
2016
��
��
�
��
6(2)
��
�
6(4)
�
��
�
��
��
6(27)
�
��
��
�
��
��
��
��
�
��
��
��
�
��
�
��
��
6(19)
�
��
��
6(15)
�
��
��
�
��
��
�
��
��
�
��
��
��
��
�
��
�
��

The accompanying notes are an integral part of these consolidated financial statements.

-24-

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Ability Enterprise Co., Ltd.

Opinion

We have audited the accompanying balance sheets of Ability Enterprise Co., Ltd. (the Company) as at December 31, 2017 and 2016, and the related statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2017 and 2016, and its financial performance and its cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

-25-

Assessment of inventory valuation

Description

Refer to Note 4(11) for accounting policies on inventory valuation, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on inventory valuation, and Note 6(6) for details of inventory. As of December 31, 2017, the balances of inventory and allowance for inventory valuation loss were NT$2,932 thousand and NT$907 thousand, respectively. As of December 31, 2017, the balances of inventory and allowance for inventory valuation loss in the consolidated financial statements were NT$1,744,310 thousand and NT$242,916 thousand, respectively.

The Company is primarily engaged in the manufacture and sales of digital camera, optical products and other related parts and components from subsidiaries. As technology changes rapidly, the life cycles of electronic products are short, and prices are easily influenced by fluctuations in market price, there is higher risk of incurring inventory valuation losses or obsolescence. For regular inventories, the Company recognises inventories at the lower of cost and net realisable value; for inventories which were separately identified as obsolete and damaged, the Company recognises loss to reduce cost to net realisable value; for inventories age over a certain period, the Company recognises loss for obsolete and slow-moving inventories. An allowance for inventory valuation loss mainly arises from inventories aged over a certain period and separately identified obsolete inventory. As the amount of inventory is material, inventory items are numerous, and the net realisable value of obsolete and damaged inventories is subject to management judgement, we consider the assessment of the allowance for inventory valuation loss a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:
Ascertained whether the policies on allowance for inventory valuation losses are reasonable and consistently applied in all the periods.
Checked the appropriateness of the logic of inventory aging report system which was used by management to ensure whether the inventories age over a certain period had been included in the report.
Obtained an understanding on the classification rules of aging range in the inventory aging report. Sample tested inventories in order to confirm whether the aging of inventories was classified appropriately.

-26-

Discussed with management the estimated net realisable value of separately identified obsolete and damaged inventories, obtained and corroborated against supporting documents and recalculated the allowance provision.

Impairment assessment of property, plant and equipment

Description

Refer to Note 4(13) for accounting policies on property, plant and equipment, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on property, plant and equipment impairment, and Note 6(8), Note 6(9) for details of property, plant and equipment. As of December 31, 2017, the balance of property, plant and equipment was NT$2,756,242 thousand. As of December 31, 2017, the balance of property, plant and equipment in the consolidated financial statements was NT$3,989,763 thousand.

The Company has purchased molds and machinery equipment to manufacture digital camera, optical products and other related parts and components. Due to the changes in market demand and the enhancement of smartphone function, the lifespan of consumer electronic products is getting shorter which would result to a decrease in the future cash flows and recoverable amount. As the amount of property, plant and equipment is material, and the assumptions used for impairment assessment are complex, easily affected by market fluctuation, and subject to management judgment, we consider the impairment assessment of property, plant and equipment a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the impairment assessment of property, plant and equipment:

Assessed the appropriateness of property, plant and equipment impairment calculation logic to check whether the calculation was appropriate.
Checked the reasonableness of assumptions used with respect to revenue growth rate and discount rate to ensure whether those were consistent with economic and industry forecasts.

Other matter – Scope of the audit

We did not audit the financial statements of a wholly-owned subsidiary and investments accounted for using equity method that are included in the financial statements, which statements reflect total assets

-27-

(including investments accounted for using equity method) of NT$4,020 thousand and NT$3,066 thousand, constituting 0.03% and 0.02% of consolidated total assets as of December 31, 2017 and 2016, and the related share of profit (loss) of associates and joint ventures accounted for under equity method was NT$954 thousand and (NT$2,817) thousand, constituting 0.21% and 2.14% of consolidated total comprehensive income (loss) for the years then ended, respectively. Those financial statements were audited by other independent accountants whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on the audit reports of the other independent accountants.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

-28-

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

A. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
E. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

-29-

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Hsu, Sheng-Chung

Audrey Tseng

For and on behalf of PricewaterhouseCoopers, Taiwan March 16, 2018

The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

-30-

ABILITY ENTERPRISE CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars)

Assets	December31,2016	December31,2016
	AMOUNT � �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� � ��	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1170 Accounts receivable, net 130X Inventory 1470 Other current assets 11XX Total current assets Non-current assets 1523 Available-for-sale financial assets - non-current 1543 Financial assets carried at cost - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1760 Investment property - net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets		�� � �� � �
		��
		� � �� �� � � � �
		��
		��

-31-

ABILITY ENTERPRISE CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	Notes 7 6(10) 6(13) 6(11) 6(14) 6(15) 6(16) 6(12)	December31,2017 December31,2016 AMOUNT % AMOUNT % � �� �� � �� �� �� � �� � �� � �� � �� � �� � �� � �� � �� �� �� �� �� � �� � �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� � � � �� �� �� �� �� �� �� �� � �� �� � �� �� �� �� � �� �� � �� ��
		AMOUNT � �� �� �� �� �� �� �� �� �� �� �� �� �� �� � �� � ��
Current liabilities 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2250 Provisions - current 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2600 Other non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity 3X2X Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

-32-

ABILITY ENTERPRISE CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

Items	YearendedDecember31 2017 2016 Notes AMOUNT % AMOUNT % 6(17) and 7 � �� �� � �� �� 6(6)(20) and 7 � �� �� �� �� �� �� �� �� 6(20) � �� �� �� �� � �� �� �� �� � �� �� �� �� � �� �� �� �� �� � � �� �� 6(18) �� � �� � 6(19) �� � �� � � �� � � �� � 6(7) �� � �� � �� � �� � �� � �� � 6(21) � �� � � �� � � �� � � �� � 6(11) � �� � � �� � �� � � �� � 6(21) � �� � � �� � �� � �� � � �� �� �� �� 6(3) �� � � �� �� �� � �� � �� � � �� �� � �� � �� �� �� � �� � � �� � 6(22) � �� � �� � �� � ��
4000 Sales revenue 5000 Operating costs 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating profit (loss) Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of associates and joint ventures accounted for using equity method, net 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gain on remeasurements of defined benefit plan 8330 Share of other comprehensive income (loss) of subsidiaries and associates 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8362 Unrealised gain (loss) on valuation of available-for-sale financial assets 8380 Share of other comprehensive income of subsidiaries and associates 8360 Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income (loss) for the year 8500 Total comprehensive income for the year Earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share

Items

YearendedDecember31
2017
2016
Notes
AMOUNT
%
AMOUNT
%
6(17) and 7
�
��
��
�
��
��
6(6)(20) and 7
�
��
��
��
��
��
��
��
��
6(20)
�
��
��
��
��
�
��
��
��
��
�
��
��
��
��
�
��
��
��
��
��
�
�
��
��
6(18)
��
�
��
�
6(19)
��
�
��
�
�
��
�
�
��
�
6(7)
��
�
��
�
��
�
��
�
��
�
��
�
6(21)
�
��
�
�
��
�
�
��
�
�
��
�
6(11)
�
��
�
�
��
�
��
�
�
��
�
6(21)
�
��
�
�
��
�
��
�
��
�
�
��
��
��
��
6(3)
��
�
�
��
��
��
�
��
�
��
�
�
��
��
�
��
�
��
��
��
�
��
�
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6(22)
�
��
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��
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��

4000
Sales revenue
5000
Operating costs
5950
Net operating margin
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6000
Total operating expenses
6900
Operating profit (loss)
Non-operating income and expenses
7010
Other income
7020
Other gains and losses
7050
Finance costs
7070
Share of profit of associates and joint
ventures accounted for using equity
method, net
7000
Total non-operating income and
expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year
Other comprehensive income
Components of other comprehensive
income that will not be reclassified to
profit or loss
8311
Gain on remeasurements of defined
benefit plan
8330
Share of other comprehensive
income (loss) of subsidiaries and
associates
8349
Income tax related to components of
other comprehensive income that
will not be reclassified to profit or
loss
8310
Components of other
comprehensive income that will
not be reclassified to profit or
loss
Components of other comprehensive
income that will be reclassified to
profit or loss
8361
Financial statements translation
differences of foreign operations
8362
Unrealised gain (loss) on valuation
of available-for-sale financial assets
8380
Share of other comprehensive
income of subsidiaries and associates
8360
Components of other
comprehensive income that will
be reclassified to profit or loss
8300
Other comprehensive income (loss)
for the year
8500
Total comprehensive income for the
year
Earnings per share
9750
Basic earnings per share
9850
Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

-33-

										Total equity		��		�	��		��	�		��	�	��		��	��		��		�	�	��		��		��	�	��		��	��
												�													�		�													�
															�									�							�
										Treasury stocks		�� ��		�	�		�	�		�	��	�		�	�� ��		�� ��		�	�	�		�		�	��	�		�	� �
									Other equity -	others		�� ��		�	�		��	�		��	�	�		�	�� ��		�� ��		�	�	�		��		�	�	�		�	� �
				Other equity interest		Unrealised gain	or loss on	available-for-	sale financial	assets		�� ��		�	�		�	�		�	�	�		� ��	�� ��		�� ��		�	�	�		�		�	�	�		��	� ��
					Financial	statements	translation	differences of	foreign	operations		� ��		�	�		�	�		�	�	�		� ��	� ��		� ��		�	�	�		�		�	�	�		� ��	�� ��
ABILITY ENTERPRISE CO., LTD.	PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY	FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016	(Expressed in thousands of New Taiwan dollars)	Retained Earnings			Total capital	surplus,	additional paid- Unappropriated	in capital Legal reserve Special reserve retained earnings		� �� � �� � � � ��		� �� � � ��	� � � � ��		� � � ��	� � � �		� �� � � �	�� � � �	� � � ��		� � � ��	� �� � �� � � � ��		� �� � �� � � � ��		� �� � � ��	� � �� � ��	� � � � ��		� � � � ��		�� � � �	�� � � �	� � � ��		� � � ��	� �� � �� � �� � ��
								Advance	receipts for	share capital		��		�	�		�	��		�	�	�		�	�		�		�	�	�		�		�	�	�		�	�
				Capital					Share capital -	common stock		� �� �		�	�		�	�� �		�	� ��	�		�	� �� �		� �� �		�	�	�		�		�	� ��	�		�	� �� �
										Notes			6(16)			6(12)					6(12)							6(16)				6(12)				6(12)
											2016	Balance at January 1, 2016	Appropriations of 2015 earnings	Legal reserve	Cash dividends	Compensation cost of share-based	payment	Capitalisation of employee stock options	Adjustments to changes in vested number	of restricted stock	Redemption of employee restricted stock	Profit for 2016	Other comprehensive income (loss) for	2016	Balance at December 31, 2016	2017	Balance at January 1, 2017	Appropriations of 2016 earnings	Legal reserve	Special reserve	Cash dividends	Compensation cost of share-based	payment	Adjustments to changes in vested number	of restricted stock	Redemption of employee restricted stock	Profit for 2017	Other comprehensive income (loss) for	2017	Balance at December 31, 2017

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ABILITY ENTERPRISE CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Bad debts expense (gain on reversal of allowance)
Depreciation
Amortisation
Gain on reversal of land and buildings
Compensation cost of share-based payment
(Gain) loss on valuation of financial assets and
liabilities
Gain on disposal of property, plant and equipment and
investment property
Share of profit or loss of associates and joint ventures
accounted for under equity method
Interest expense
Interest income
Dividend income
Compensation revenue
Grants revenue
Changes in operating assets and liabilities
Changes in operating assets
Accounts receivable, net
Inventories
Other current assets
Changes in operating liabilities
Accounts payable
Other payables
Provisions
Other current liabilities
Other non-current liabilities
Cash (outflow) inflow generated from operations
Interest reveived
Dividends received
Income tax paid
Interest paid
Net cash flows (used in) from operating activities

Notes
2017
2016
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��
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6(5)
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6(20)
��
��
6(20)
��
��
6(19)
�
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6(12)
��
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6(2)
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6(7)
�
��
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��
��
6(18)
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��
6(18)
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��
��
6(19)
�
��
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6(19)
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(Continued)

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ABILITY ENTERPRISE CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of current financial assets at fair
value through profit or loss
Acquisition of financial assets measured at cost
Proceeds from capital reduction of investments accounted
for using equity method
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Decrease in other non-current assets
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in other non-current liabilities
Redemption of employee restricted stock
Payment of cash dividends
Net cash flows used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Notes
2017
2016
�
��
�
�
�
��
�
6(7)
��
��
6(23)
�
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��
��
��
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6(12)
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6(16)
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The accompanying notes are an integral part of these parent company only financial statements.

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【 Attachment 3 】

ABILITY ENTERPRISE CO., LTD 2017 Earning Distribution Table

	Unit: NT$1,000
Item	Amount
Initial Undistributed Earnings	$2,021,890,309
Add: Retained Earnings Adjustments for 2017	3,276,286
Add: Net Profit After Tax of This Year	217,662,863
Less: StatutorySurplus Reserve	(21,766,286)
Add: Turnaround Special Surplus Reserve	101,661,670
Distributable netprofit	$2,322,724,842
Distributable items:
Cash Dividends of Shareholders – NT$0.8per Share(Note 1)	225,891,978
Unappropriated retained earnings	$2,096,832,864

Note 1: The cash dividends of shareholders is NT$0.8 per share, which is proposed to the shareholders’ meeting for approval, and will cause shareholders' interest rate to change and to be needed modification when the amount of outstanding shares is affected by the purchase of the Company's shares and other factors prior to the record date.The Board of Directors' resolution delegates the chairman of the board to handle it.
Note 2: This allocative item is preferentially allocated from 2017 earnings.
Note 3: In this cash dividends distribution case, after the resolution of the shareholders' meeting, the Board of Directors' resolution delegates the chairman of the board to set a record date and payment date.

Chairman: Tseng, Ming Jen Manager: Tseng, Ming Jen Chief Accountant: Lin, Hung Tien

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IV. Appendices 【 Appendix 1 】

ABILITY ENTERPRISE CO., LTD Rules of Procedures of the Shareholders' Meeting

Article 1 The shareholders’ meeting of the Company shall, in addition to those stipulated in the decrees, follow these rules.
Article 2 The term "shareholders" as mentioned in these rules refers to the agents entrusted by the shareholders themselves and the shareholders, who sign by the attendance cards submitted by attendant shareholders (or agents).
The amount of attending shares is calculated based on the submitted attendance cards.
Article 3 The attendance and voting of the shareholders' meeting shall be calculated on the basis of shares.
Article 4 The place where the Company's shareholders' meeting is convened shall be at the Company or where is convenient for shareholders to attend and suitable for the convening of the shareholders' meeting. The meeting may not begin earlier than 9 a.m. or later than 3 p.m.
Article 5 If the shareholders’ meeting is convened by the Board of Directors, the chairman of the board shall act as chairman. If the chairman of the board takes leave or is unable to exercise the power for some reason, then the vice chairman of the board shall act as chairman of the board. If there is no vice chairman of the board or the vice chairman of the board takes leave or is unable to exercise the power for some reason, then one of the directors appointed by the chairman of the board shall act as vice chairman of the board; if there is no designated director, the directors shall elect one of them to act as vice chairman of the board.

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If the shareholders' meeting is convened by other conveners other than the Board of Directors, the convener shall act as chairman; if there are two conveners or more, one of them shall be elected to act as chairman.

Article 6 The Company may designate the appointed lawyer, accountant or related personnel to attend the shareholders' meeting.
Meeting personnel handling shareholders’ meetings should wear identification cards or badges.
Article 7 The Company shall record or videotape the process of shareholders' meeting for at least one year.
Article 8 At the time of the meeting, the chairman shall immediately call to order. However, if there is no attendant shareholder representing more than half of the total of issued shares, the chairman shall announce a delay of the meeting. The delay is limited to twice, and the total delay time must not exceed one hour. If the delay is the second time and the attendant shareholder is still insufficient ,and the attendant shareholders representing the total of issued shares is one third or more, it may be deemed as a false resolution in accordance with Paragraph 1 of Article 175 of the Company Act.
Before the end of the current meeting, if the number of the attendant shareholders representing more than half of the total of issued shares, the chairman may create a false resolution to re-invite the meeting to vote according to Article 174 of the Company Act.
Article 9 If the shareholders' meeting is convened by the Board of Directors, the agenda shall be set by the Board of Directors. The meeting shall be conducted in accordance with the scheduled agenda, and may not be changed without the resolution of the shareholders' meeting.

If the shareholders' meeting is convened by other conveners

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other than the Board of Directors, the provisions of the preceding paragraph shall apply.

The chairman must not announce the adjournment of meeting without a resolution to do so before the agenda of the preceding two paragraphs is completed (including extempore motions).

When the shareholders’ meeting was held, if the chairman violated the rules of procedures and announced adjournment of meeting, more than half of the attendant shareholders' voting rights with consent may elect one to act as chairman and continue the meeting.

After the adjourment of meeting, shareholders must not elect another chairman to continue the meeting at the original site or another site.

Article 10 Before attendant shareholders make a speech, they have to fill in a statement slip specifying the gist of speech, the shareholder's account number (or attendance card number) and the name of the account. The chairman shall set the order of speech.

Attendant shareholders who present a statement slip without making a speech is considered as no statement. If the content of the speech is not consistent with the record on the statement slip, the content of the speech shall serve as the norm.

When an attendant shareholder make a speech, other shareholders may not interfere with the speech except with the consent of the chairman and the speaking shareholder. The chairman shall stop violators.

Article 11 Unless with the chairman's consent, each shareholder of the same motion shall make a speech no more than two times and no more than five minutes at a time.
If a speaking shareholder violates the provisions of the

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preceding paragraph or the content of speech exceeds the scope of issues, the chairman may stop the speech.

When a shareholder speaks, other shareholders may not intervene except with the consent of the chairman and the speaking shareholder. The chairman shall stop violators.

Violators who do not obey the three preceding paragraphs where the chairman is responsible for are subject to the Paragraph 2 of Article 19.

Article 12 When a legal person is entrusted to attend the shareholders' meeting, the legal person may only designate one person to attend.
When an institutional shareholder appoints two or more representatives to attend the shareholders' meeting, the same motion may only be delivered by one person.
Article 13 After the attendant shareholder's speech, the chairman may reply in person or designate relevant personnel to reply.
Article 14 When the chairman thinks the discussion of the motion has achieved the level of voting, he or she may announce the termination of discussion and put it to voting.
Article 15 The scrutineers and ballot counters for the voting on motion shall be designated by the chairman. However, the scrutineers shall be a shareholder.
The results of the vote shall be reported on the spot and be recorded.
Article 16 During the meeting, the chairman may consider the time and declare a break. If an air alert happens during the meeting, the meeting shall be suspended. Attendees shall be evacuated separately and continue to attend the meeting one hour after the alarm is clear.
If an assembly fails to end, it may be postponed or renewed in

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accordance with Article 182 of the Company Act.

Article 17 The voting on motion shall, except as otherwise provided in the Company Act and the articles of association, be represented by attendant shareholders representing more than half of the total of issued shares, with more than half of the attendant shareholders' voting rights with consent.

When the motion is voted, no objection after consulting the chairman is regarded as approval. Its effect is the same as that of voting.

Shareholders have one voting right per share.

At each shareholders' meeting, shareholders must issue a power of attorney issued by the Company, specifying the scope of authorization, entrusting the agent to attend the shareholders' meeting.

Except for the trust business or a share agency approved by the securities regulator, when a person is entrusted by two or more shareholders at the same time, its proxy voting rights shall not exceed 3% of the total voting rights of issued shares, and when it exceeds, the excess voting rights will not be calculated.

A shareholder shall issue a power of attorney and limit the assignee to be one person. It shall be delivered to the Company 5 days before the shareholders' meeting. When the power of attorney has a duplicate, the first one delivered shall serve as the norm. However, if the declaration revokes the previous assignee, it does not apply.

Article 18 When there is an amendment or alternative to the same motion, the chairman incorporates the original case and set the order of voting. If one of the cases has been passed, other motions will be considered veto and no one shall vote again.

Article 19 The chairman shall direct the pickets (or security guards) to

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help maintain the order of the venue.

When pickets (or security guards) are present to assist in maintaining order, they should wear armbands with the word “picket”.

Shareholders should obey the command of the chairman, pickets or security guards on maintaining the order. For people who impede the meeting and keep their own course in spite of repeated admonitions, the chairman or pickets (or security guards) should expel them.

Article 20 The matters not regulated in these rules shall be handled in accordance with the Company Act, the rules governing the use of power of attorney where public entities attending shareholders' meeting, the rules governing the shareholders' meeting of the public entities, the Company's articles of association, and other relevant regulations of laws.

Article 21 The Rules shall be implemented after the resolution is made at the shareholders' meeting; the same procedure shall apply to their amendments.

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【 Appendix 2 】

ABILITY ENTERPRISE CO., LTD Articles of Incorporation

Chapter 1 General

Article 1: The Company is incorporated in accordance with the Company Act and is named as ABILITY ENTERPRISE CO., LTD.

【 Chinese Name: 佳能企業股份有限公司】

Article 2: The Company's business is as follows:

CB01010 Machinery and Equipment Manufacturing Industry
CB01020 Office Machine Manufacturing Industry
CC01060 Wired Communications Machinery and Equipment Manufacturing Industry
CC01070 Wireless Communications Machinery and Equipment Manufacturing Industry
CC01080 Electronic Components Manufacturing Industry
CC01110 Computers and Its Peripheral Equipment Manufacturing Industry
CC01120 Data Storage Media Manufacturing and Duplicating Industry
CE01030 Optical Instrument Manufacturing Industry
CE01990 Other Optical and Sophisticated Equipment Manufacturing Industry
E605010 Computer Equipment Installation Industry
E701010 Telecommunications Engineering Industry
F113020 Electrical Wholesale Industry
F113030 Sophisticated Instruments Wholesale Industry
F113050 Computers and Office Machinery and

Equipment Wholesale Industry

F113070 Telecommunications Equipment Wholesale Industry
F114030 Automobile and Motorcycle Parts Equipment Wholesale Industry
F116010 Photographic Equipment Wholesale Industry
F118010 Information Software Wholesale Industry

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F119010 Electronic Materials Wholesale Industry
F213010 Electric Appliance Retail Industry
F213040 Sophisticated Instrument Retail Industry
F213060 Telecommunications Equipment Retail Industry
F218010 Information Software Retail Industry
F219010 Electronic Materials Retail Industry
F401010 International Trade Industry
F401021 Telecommunications Control RF Equipment Input Industry
F601010 Intellectual Property Rights Industry
I301010 Information Software Service Industry
I301020 Data Processing Service Industry
I301030 Electronic Information Supply Service Industry
ZZ99999 Except for licensing operations, operations not prohibited or restricted by laws are allowed.
Article 3: The Company can externally guarantee the same businesses or affiliate enterprises after the Board of Directors' approval.
Article 4: The Company's base is in New Taipei City and, if necessary, may set up, change or abolish the branch offices domestically and overseas after the Board of Directors' resolution.
Article 5: The Company's way of announcement shall be subject to Article 28 of the Company Act.

Chapter 2 Shares

Article 6: The Company's total capital is set at NT$8 billion which is divided into 800 million shares, with the value of NT$10 per share. The Board of Directors is authorized to issue them at different times. The total of capital in the preceding paragraph reserves 50 million shares for employees to employ stock rights in stock rights evidence, special shares with stock rights, or corporate bonds with stock rights.
Article 6-1: After the consent of shareholders' meeting of attendant shareholders representing more than half of the total of issued shares and two-thirds or more of attendant shareholders' voting rights, the Company may transfer to employees at an average price lower than the actual

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purchase of shares, or to issue employee stock rights evidence at a subscription price lower than the market price.

Article 7: The transfer, inheritance, bestowal, pledge, loss, damage and other stock affairs of shares shall be handled in accordance with the Company Act and the stock guidelines of public stock entities.
Article 8: The Company's stock is registered and is signed and sealed by three or more directors. It is issued after being legally signed and assured.
The Company's issued shares may be free from printing, but they should be registered at centralized securities depository enterprise.
Article 9: Renaming transfer ownership of the shares shall be suspended within 60 days before the convening of annual shareholders’ meeting and within 30 days prior to the convening of provisional shareholders' meeting, or within 5 days before the base date of the Company's decision to distribute dividends and bonuses or other benefits.
Article 10: When the Company issues new shares, except for issuance of bonus shares, it shall retain 10% to 15% the total of originally issued new shares taken over by the Company's employees. The shares taken by employees may not be transferred within a certain period according to the resolution of the Board of Directors. The maximum period must not exceed two years.
Article 11: The Company's total external re-investment is not limited by the provisions of Article 13 of the Company Act and is authorized to the Board of Directors for execution.

Chapter 3 Shareholders' Meeting

Article 12: The annual shareholders’ meeting is divided into two types: annual meeting and extraordinary meeting. The annual meeting is held once a year and is convened by the Board of Directors within six months after the end of each fiscal year. However, this does not apply if there is a legitimate cause which is reported to the regulator for approval. The

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extraordinary meeting is convened according to the law when necessary.

Article 13: All shareholders shall be notified of the convening of annual shareholders’ meeting 30 days in advance, and be notified of the convening of provisional shareholders' meeting 15 days in advance.
Article 14: When shareholders are unable to attend the shareholders' meeting for some reason, they should issue a power of attorney issued by the Company to specify the scope of authorization, and be signed or sealed. An agent shall be entrusted for attendance. The power of attorney shall be delivered to the Company 5 days before the meeting. A shareholder shall issue a power of attorney and limit the assignee to be one person. When the power of attorney has a duplicate, the first one delivered shall serve as the norm. However, if the declaration revokes the previous assignee, it does not apply. Except for the trust business or a share agency approved by the securities regulator, when a person is entrusted by two or more shareholders at the same time, its proxy voting rights shall not exceed 3% of the total voting rights of issued shares, and when it exceeds, the excess voting rights will not be calculated.
Article 15: The Company's shareholders have one voting right per share. However, if the Company has any matter related to the provisions of Article 179, there is no voting right.
Article 16: In addition to the shareholders' meeting's resolution stipulated in the decrees, there shall be attendant shareholders representing more than half of the total of issued shares and more than half of the attendant shareholders' voting rights with consent.
Article 17: If the shareholders' meeting is convened by the Board of Directors, the chairman of the board shall be the chairman. If the chairman of the board takes leave or is unable to exercise the power for some reason, then the vice chairman of the

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board shall act as chairman of the board. If the vice chairman of the board also takes leave or is unable to exercise the power for some reason, then one of the directors appointed by the chairman of the board shall sit in; if there is no designated director, the directors shall elect one of them to sit in. If the shareholders' meeting is convened by other conveners other than the Board of Directors, the convener shall act as chairman; if there are two conveners or more, one of them shall be elected to act as chairman.

Article 18: The resolutions of the shareholders' meeting shall be made into minutes and signed or sealed by the chairman. The minutes shall be distributed to all shareholders within 20 days after the meeting.
The distribution of the minutes of the preceding paragraph shall be handled in accordance with the Company's regulations. The shareholders' meeting's minutes shall record the meeting's year, month, date, venue, the name of the chairman, and the method of resolution, and shall record the gist of proceedings and its results. The minutes shall be kept forever during the Company's existence. The attendant shareholders' visitor's book and the power of attorney for deputy attendance shall be kept for at least one year.

Chapter 4 Directors

Article 19: The Company has 7 to 9 directors, whose tenure is three years and may be re-elected for consecutive terms. The election of directors is subject to the candidate nomination system of Article 192-1 of the Company Act. The relevant matters concerning the acceptance methods and announcements of nominations for director candidates are governed by the relevant laws and regulations of the Company Act and the Securities Exchange Act.

The number of Independent Director in the preceding paragraph shall not be less than two and shall not be less than one fifth of the number of directors. Independent Director's professional qualifications, shareholding, part-time restrictions,

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recognition of independence, nomination methods and selection methods, and other matters to be followed shall be handled in accordance with the Company Act and relevant regulations of the securities regulator.

Article 20: The Board of Directors organized by directors shall have twothirds or more directors present and consent of more than half of attendant directors to elect one chairman of the board among themselves. The chairman of the board shall represent the company externally, and there may be a vice chairman of the board who is elected in the same manner. The chairman of the board is the chairman of the shareholders' meeting and the Board of Directors who executes all the Company's matters in accordance with decrees, constitutions, resolutions of shareholders' meeting and the Board of Directors.
Article 21: If the chairman of the board takes leave or is unable to exercise the power for some reason, then the vice chairman of the board shall act as chairman of the board. If the vice chairman of the board takes leave or is unable to exercise the power for some reason, then one of the directors appointed by the chairman of the board shall sit in; if there is no designated director, the directors shall elect one of them to sit in.
Directors should attend the Board of Directors in person. Directors who fail to attend the meeting may entrust other directors to sit in. The agent of the preceding paragraph is limited to one person.
The convening of the Company's Board of Directors shall state the particulars of matters and notify all the directors 7 days in advance. However, when there is an emergency, the Board of Directors shall be convened any time. Directors may be notified of the convening of the Company's Board of Directors in writing, or via e-mail or fax.
Article 22: The Board of Directors may resolve to offer the director reasonable fares or other allowances.
The Company may purchase liability insurance for directors within the scope of implementation during the tenure according to the law.

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Article 23: Directors have one voting right per share. In addition to the Board of Directors' resolution stipulated in the decrees, there shall be more than half of attendant directors and more than half of attendant directors' consent to execute.
Article 24: The resolutions of the Board of Directors shall be made into minutes, be signed and sealed by the chairman, and be distributed to all directors within 15 days after the meeting. The minutes shall record the gist of proceedings and its results. The minutes, attendant directors' visitor's book, and the power of attorney for deputy attendance shall be kept at the Company.
Article 25: If the director's tenure expires and it is too late for re-election, his or her duties shall be extended until the re-elected director takes office.
Article 26: The Company has established the audit committee in accordance with the provisions of Securities Exchange Act since 2016. The audit committee consists of all Independent Directors. One of them acts as convener and at least one of them specializes in accounting or finance. The responsibilities, organization rules, exercise of power, and other matters should be complied with of the audit committee shall be handled in accordance with the Company Act and relevant regulations of the securities regulator.

Chapter 5 Managers

Article 27: The Company may have a manager, whose appointment, dismissal, and remuneration shall be governed by the provisions of Article 29 of the Company Act.

Chapter 6 Accounting

Article 28: The Company's fiscal year is from January 1 of each year to December 31 of the same year. The Company's Board of Directors shall make the following forms and submit them to annual shareholders’ meeting for recognition according to the law at the end of each fiscal year.
(1) Business Reports

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(2) Financial Statements
(3) Motions of Surplus Earning Distribution or Provision for Losses
Article 28-1: If the Company's final accounting of revenue and expenditure is profitable, the remunerations of employees, directors shall be allocated as follows. However, if the Company still has accumulated losses, it shall reserve the profits in advance and make up for the losses, and then allocate:
The employees' compensation is not less than 8% and not more than 15%. The objects offered employees' compensation in cash or shares have to meet certain requirements of subsidiaries. The relevant measures are authorized to the Board of Directors to regulate.
The directors' remuneration is not more than 1.5%.
The aforementioned profits refer to the profits before that pretax profit deducts dispatched employees' compensation and directors' and monitors' compensation.
Article 29: If the Company's general annual report has surpluses, in addition to paying taxes in accordance with the law, shall make up for past losses and allocate 10% of statutory surplus reserves based on the balance. However, if statutory surplus reserves have reached the total capital, this limit does not apply. If necessary, after the allocation or turnaround special surplus reserve according to the regulations, the rest incorporates initial undistributed earnings as shareholders' cumulative distributed earnings.The Board of Directors may propose earnings allocation motion and report it to shareholders' meeting for resolution.
Article 29-1: The implementation of the Company's dividend policy requires consideration of the Company's future capital budget planning, meeting the needs of shareholders for cash inflow, and ensuring market competitiveness, etc., in which the cash dividends should be no less than 10% of the total of shareholders' dividends. Its method of distribution is handled according to Article 29.

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Chapter 7 Supplementary Provisions

Article 30: The matters not specified in the articles of association shall be handled in accordance with the provisions of the Company Act and other relevant regulations.
Article 31: The company's articles of association and office rules shall be determined by the Board of Directors separately. The same shall apply to amendment.
Article 32: The Articles of Incorporation was established on May 10, 1965. The first amendment was made on October 26, 1966. The second amendment was made on December 1, 1966. The third amendment was made on July 6, 1969.
The fourth amendment was made on March 1, 1971. The fifth amendment was made on August 5, 1972. The sixth amendment was made on May 14, 1973. The seventh amendment was made on July 1, 1976. The eighth amendment was made on March 11, 1979. The ninth amendment was made on February 8, 1984. The tenth amendment was made on September 1, 1986. The eleventh amendment was made on December 1, 1986. The twelfth amendment was made on March 2, 1987. The thirteenth amendment was made on January 28, 1988. The fourteenth amendment was made on July 20, 1988. The fifteenth amendment was made on August 15, 1989. The sixteenth amendment was made on September 5, 1989. The seventeenth amendment was made on May 7, 1990. The eighteenth amendment was made on October 19, 1990. The nineteenth amendment was made on August 20, 1991. The twentieth amendment was made on June 15, 1992. The twenty-first amendment was made on July 11, 1992. The twenty-second amendment was made on March 4, 1993. The twenty-third amendment was made on May 8, 1993.

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The twenty-fourth amendment was made on May 9, 1994. The twenty-fifth amendment was made on May 23, 1995. The twenty-sixth amendment was made on May 6, 1996. The twenty-seventh amendment was made on May 8, 1997. The twenty-eighth amendment was made on May 26, 1998. The twenty-ninth amendment was made on May 24, 1999. The thirtieth amendment was made on May 15, 2000. The thirty-first amendment was made on May 31, 2001. The thirty-second amendment was made on May 27, 2002. The thirty-third amendment was made on August 23, 2002. The thirty-fourth amendment was made on April 30, 2003. The thirty-fifth amendment was made on June 13, 2005. The thirty-sixth amendment was made on June 12, 2006. The thirty-seventh amendment was made on June 13, 2008. The thirty-eighth amendment was made on June 16, 2009. The thirty-ninth amendment was made on June 17, 2010. The fortieth amendment was made on June 17, 2011. The forty-first amendment was made on June 22, 2012. The forty-second amendment was made on June 21, 2013. The forty-third amendment was made on June 17, 2014. The forty-fourth amendment was made on June 23, 2015. The forty-fifth amendment was made on June 29, 2016. The forty-sixth amendment was made on June 23, 2017.

ABILITY ENTERPRISE CO., LTD

Chairman: Tseng, Ming Jen

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Book Closure Date of Shareholders' List Record of Amount of Shares Held	At-the- time Issued%	0.43	0.58	0.58	1.47	1.47
	Amount of Shares	1,209,093	1,650,000		4,138,544
Shares Held During Election	At-the-time Issued%	0.36	0.08		0.10
	Amount of Shares	1,029,129	225,000		288,544
Tenure		Three Years	Three Years	Three Years	Three Years	Three Years
Appointmen t Date		2016.06.29	2016.06.29		2016.06.29
Name		Tseng, Ming Jen	Representative of Giant Quan Investment (stock) Co., Ltd.: Tsay, Wen Bin	Representative of Giant Quan Investment (stock) Co., Ltd.: Chou, Cheng Wei	Representative of AVY Precision Technology INC.: Tong, Chun Jen	Representative of AVY Precision Technology INC.: Huang, Li An
Title		Chairman o f t h e B o a r d	D i r e c t o r	D i r e c t o r	D i r e c t o r	D i r e c t o r

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Book Closure Date of Shareholders' List Record of Amount of Shares Held	At-the- time Issued%	1.92	0.00	0.00	0.00	4.40
	Amount of Shares	5,433,757	0.00	0.00	0.00	12,431,394
Shares Held During Election	At-the-time Issued%	1.12	0.00	0.00	0.00	1.66
	Amount of Shares	3,163,799	0.00	0.00	0.00	4,706,472
Tenure		Three Years	Three	Three	Three	i T o t a l o f A l l D i r e c t o r s
Appointmen t Date		2016.06.29	2016.06.29	2016.06.29	2016.06.29
Name		Representative of Ling Xu Investment (stock) company: Chan,Wen Hsiung	Lam,Tai Seng	Chen, Kuo Hong	Lu, Chien Min
Title		D i r e c t o r	Independent	Independent	i Independent

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【 Appendix 4 】

1. Influence from free allocation of shares on Company's business performance, earnings per share, and shareholder’s return on investment:

Not applicable due to the fact that the Company does not issue bonus shares for this year.

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AI assistant

ABILITY — Annual Report 2018

52039_rns_2018-06-29_dd117314-8459-421b-be4f-4db7117707ad.pdf

ABILITY ENTERPRISE CO., LTD.

2018 ANNUAL SHAREHOLDERS’ MEETING MEETING AGENDA

Table of Contents

I. Meeting Procedures

ABILITY ENTERPRISE CO., LTD

2018 Annual Shareholders’ Meeting Meeting Procedures

2. Chairman's Address

6. Meeting Ajournment

II. Meeting Agenda

ABILITY ENTERPRISE CO., LTD 2018 Annual Shareholders’ Meeting Meeting Procedures

1. Report Items:

2. Proposed Resolutions:

3. Extempore Motions

4. Meeting Ajournment

1. Report Items

Proposal 1: The 2017 Business Report

Proposal 2: The Audit Committee's Review Report on the Company's 2017 Financial Statements

Note:

ABILITY ENTERPRISE CO., LTD

The Audit Committee's Review Report

To

ABILITY ENTERPRISE CO., LTD

2018 Annual Shareholders' Meeting

Audit Committee Convener:

Proposal 3: The 2017 Endorsement and Guarantee Records

Proposal 4: The 2017 Employees’ and Directors’ Remuneration

Distribution

Proposal 5: Other Reports

2. Proposed Resolutions

Proposal 1: (submitted by the Board of Directors)

Cause: The Company’s 2017 business reports and financial statements were submitted for recognition.

Resolution:

Proposal 2: (submitted by the Board of Directors)

Cause: The Company's 2017 earning distribution was submitted for recognition.

Resolution:

3. Extempore Motions

4. Meeting Ajournment

III. Attachments

【 Attachment 1 】

ABILITY ENTERPRISE CO., LTD. 2018 BUSINESS REPORT

II. Analysis of Financial Income and Profitability

III. Research Development

【 Attachment 2 】

Opinion

Basis for opinion

Key audit matters

thereon, we do not provide a separate opinion on these matters.

Assessment of inventory valuation

Description

How our audit addressed the matter

recalculated the allowance provision.

Impairment assessment of property, plant and equipment

Description

How our audit addressed the matter

Other matter – Scope of the audit

Other matter – Parent company only financial reports

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements

Audrey Tseng

ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

ABILITY ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

Opinion

Basis for opinion

Key audit matters

Assessment of inventory valuation

Description

How our audit addressed the matter

Impairment assessment of property, plant and equipment

Description

How our audit addressed the matter

Other matter – Scope of the audit

Responsibilities of management and those charged with governance for the financial statements

ABILITY Annual Report 2018