Altek - Interim / Quarterly Report 2013

ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS SEPTEMBER 30, 2013 AND 2012

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR13000071

To the Board of Directors and Stockholders of Altek Corporation

We have reviewed the accompanying consolidated balance sheets of Altek Corporation and subsidiaries as of September 30, 2013 and 2012, December 31, 2012, and January 1, 2012, the related consolidated statements of comprehensive income for the three-month periods ended September 30, 2013 and 2012, the nine-month periods ended September 30, 2013 and 2012, and the consolidated statements of changes in stockholders’ equity and of cash flows for the nine-month periods ended September 30, 2013 and 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express a conclusion on these financial statements based on our reviews.

Except as discussed in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 36 “Review of Financial Statements” in the Republic of China. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical procedures to financial data, and making inquiries of Company personnel responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

As described in Note 4, except for the financial statements of its major subsidiary-Altek International Investment Co., Ltd. and its subsidiary-Altek (Kunshan) Co., Ltd., which were consolidated based on their reviewed financial statements, other subsidiaries were consolidated based on their unreviewed financial statements as of and for the nine-month periods ended September 30, 2013 and 2012. Total assets of these unreviewed subsidiaries amounted to $2,752,322 and $2,606,456, representing 16% and 14% of the consolidated total assets, as of September 30, 2013 and 2012, respectively, with total net operating revenues amounting to $849,488, representing 13% of the consolidated net operating revenues for the three-month period ended September 30, 2013 ； and total net operating revenues for the three-month period ended September 30, 2012 represented less than 10% of the consolidated net operating revenues; with total net operating revenues amounting to $3,791,968, representing 25% of

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the consolidated net operating revenues for the nine-month period ended September 30, 2013; and total net operating revenues for the nine-month period ended September 30, 2012 represented less than 10% of the consolidated net operating revenues. In addition, as described in Note 6(6) to the consolidated financial statements, the financial statements of investments accounted for under the equity method were not reviewed by independent accountants. Equity investments in these companies amounted to $333,774 and $368,628 as of September 30, 2013 and 2012, respectively, and the related investment loss amounted to $15,648 and $7,082 for the three-month periods ended September 30, 2013 and 2012, respectively; and the related investment loss amounted to $32,812 and $18,128 for the nine-month periods ended September 30, 2013 and 2012, respectively. These amounts were based solely on their unreviewed financial statements.

Based on our reviews, except for the effect of such adjustments, if any, as might have been determined to be necessary had the financial statements of certain subsidiaries and investee companies been reviewed by independent accountants as described in the third paragraph, we are not aware of any material modifications that should be made to the consolidated financial statements referred to in the first paragraph in order for them to be in conformity with the “Rules Governing the Preparation of Financial Statements by Securities Issuers”, IAS 34 “Interim Financial Reporting” and IFRS 1 “First-time Adoption of International Financial Reporting Standards” recognized by the Financial Supervisory Commission R.O.C.

PricewaterhouseCoopers, Taiwan

Hsinchu, Taiwan Republic of China

November 4, 2013

------------------------------------------------------------------------------------------------------------------------------------------------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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ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

Assets	Notes	September 30, 2013 AMOUNT % $ 3,336,335 20 356,649 2 6,680 - 4,306,233 26 90,207 1 3,063 - 1,566,439 9 207,403 1 12,397 - 9,885,406 59 236,180 1 333,774 2 5,758,600 34 114,073 1 286,686 2 88,066 1 6,817,379 41 $ 16,702,785 100 $ 600,000 4 - - 3,470,731 21 - - 735,891 4 33,509 - 142,392 1 680,103 4 5,662,626 34 (Continued)	December 31, 2012 AMOUNT % $ 4,698,800 29 428,282 3 - - 2,883,695 18 25,176 - 27,411 - 1,715,321 10 228,957 1 4,391 - 10,012,033 61 235,953 1 351,419 2 5,297,892 33 73,079 - 367,473 2 79,870 1 6,405,686 39 $ 16,417,719 100 $ - - 40 - 3,144,953 19 97 - 1,230,200 7 81,373 1 152,537 1 702,245 4 5,311,445 32	September 30, 2012 AMOUNT % $ 5,589,317 30 205,662 1 - - 3,651,318 20 33,382 - - - 2,321,104 13 245,495 1 16,591 - 12,062,869 65 235,952 1 368,628 2 5,252,108 29 75,959 - 395,133 2 80,962 1 6,408,742 35 $ 18,471,611 100 $ 520,000 3 129 - 4,530,372 25 95 - 1,149,513 6 63,712 - 198,072 1 731,383 4 7,193,276 39	January 1, 2012	January 1, 2012
		AMOUNT $ 3,336,335 356,649 6,680 4,306,233 90,207 3,063 1,566,439 207,403 12,397 9,885,406 236,180 333,774 5,758,600 114,073 286,686 88,066 6,817,379 $ 16,702,785 $ 600,000 - 3,470,731 - 735,891 33,509 142,392 680,103 5,662,626 (Continued)	AMOUNT $ 4,698,800 428,282 - 2,883,695 25,176 27,411 1,715,321 228,957 4,391 10,012,033 235,953 351,419 5,297,892 73,079 367,473 79,870 6,405,686 $ 16,417,719 $ - 40 3,144,953 97 1,230,200 81,373 152,537 702,245 5,311,445	AMOUNT $ 5,589,317 205,662 - 3,651,318 33,382 - 2,321,104 245,495 16,591 12,062,869 235,952 368,628 5,252,108 75,959 395,133 80,962 6,408,742 $ 18,471,611 $ 520,000 129 4,530,372 95 1,149,513 63,712 198,072 731,383 7,193,276	AMOUNT $ 6,303,846 497,652 9 3,415,357 19,195 - 2,047,877 296,694 15,983 12,596,613 236,174 417,111 5,297,001 84,835 372,867 83,973 6,491,961 $ 19,088,574 $ - 957 5,186,498 14,826 1,155,796 54,630 181,057 614,363 7,208,127	%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Notes receivable, net Accounts receivable, net Other receivables Current income tax assets Inventories Prepayments Other current assets Current Assets Non-current assets Financial assets carried at cost - noncurrent Investments accounted for under the equity method Property, plant and equipment Intangible assets Deferred income tax assets Other non-current assets Non-current assets Total assets Liabilities and Equity	6(1) 6(2) 6(4) 6(5) 6(3) 6(6) 6(7) 6(8) 6(9) 6(10) 7 6(13)					33 3 - 18 - - 11 2 -
						67
						1 2 28 - 2 -
						33
						100
						- - 27 - 6 - 1 3
Current liabilities Short-term borrowings Notes payable Accounts payable Accounts payable - related parties Other payables Current income tax liabilities Provisions for liabilities - current Other current liabilities Current Liabilities
						37

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

						September 30, 2013	September 30, 2013			December 31, 2012	December 31, 2012			September 30, 2012	September 30, 2012			January 1, 2012
	Liabilities andEquity		Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Non-current liabilities
2550	Provisions for liabilities - noncurrent	6(13)			$	116,982		1	$	142,454		1	$	209,783		1	$	105,751	1
2570	Deferred income tax liabilities					742,307		4		783,237		5		847,159		5		929,135	5
2600	Other non-current liabilities	6(11)				27,562		-		28,188		-		25,704		-		38,880	-
25XX	Non-current liabilities					886,851		5		953,879		6		1,082,646		6		1,073,766	6
2XXX	Total Liabilities					6,549,477	39			6,265,324	38			8,275,922	45			8,281,893	43
	Equity attributable to owners of parent
	Share capital	6(14)
3110	Common stock					3,902,653	23			3,961,013	24			3,961,013	21			3,955,214	21
	Capital surplus	6(15)
3200	Capital surplus					2,025,620	12			2,377,444	15			2,378,187	13			2,354,615	12
	Retained earnings	6(16)
3310	Legal reserve					1,319,477		8		1,291,466		8		1,291,466		7		1,272,282	7
3320	Special reserve					339,267		2		-		-		-		-		488,347	3
3350	Unappropriated retained earnings					3,078,742	19			3,621,302	22			3,612,165	20			3,450,925	18
	Other equity interest
3400	Other equity	6(17)		(		79,107)		- (		340,799)(		2)(		310,381)(		2)		-	-
3500	Treasury stocks	6(14)		(		440,573)(		3)(		768,094)(		5)(		736,761)(		4)(		714,702)(	4)
31XX	Equity attributable to owners of the parent					10,146,079	61			10,142,332	62			10,195,689	55			10,806,681	57
36XX	Non-controlling interest					7,229		-		10,063		-		-		-		-	-
3XXX	Total equity					10,153,308	61			10,152,395	62			10,195,689	55			10,806,681	57
	Significant contingent liabilities and unrecognised	9
	contract commitments
	Total liabilities and equity				$	16,702,785	100		$	16,417,719	100		$	18,471,611	100		$	19,088,574	100

The accompanying notes are an integral part of these consolidated financial statements. See review report of independent accountants dated November 4, 2013.

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ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts) (UNAUDITED)

					Forthe three-month	Forthe three-month	period	period	ended September30				Forthenine-month	Forthenine-month	period	period	ended September30
					2013				2012				2013				2012
		Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%			AMOUNT	%
4000	Sales revenue			$	6,333,611	100		$	6,209,543	100		$	15,201,446	100		$	19,630,710	100
5000	Operating costs	6(21)(22) and 7	(		5,978,809) (	94)(			5,754,939)(	93) (			14,271,291)(	94) (			18,220,272) (	93)
5900	Net operating margin				354,802		6		454,604		7		930,155		6		1,410,438		7
	Operating expenses	6(21)(22)
6100	Selling expenses		(		25,918)		- (		27,561)		- (		86,136)		- (		90,174)		-
6200	General & administrative expenses		(		49,720) (		1) (		69,200) (		1) (		157,077) (		1) (		215,060) (		1)
6300	Research and development expenses		(		221,458) (		4)(		302,189)(		5) (		685,085)(		5) (		935,411) (		5)
6000	Total operating expenses		(		297,096) (		5)(		398,950)(		6) (		928,298)(		6) (		1,240,645) (		6)
6900	Operating profit				57,706		1		55,654		1		1,857		-		169,793		1
	Non-operating income and expenses
7010	Other income	6(18)			21,618		-		39,290		-		64,349		-		125,518		1
7020	Other gains and losses	6(19)			6,584		-		8,335		-		12,849		-		26,840		-
7050	Finance costs	6(20)	(		2,779)		- (		434)		- (		7,946)		- (		434)		-
7060	Share of profit/(loss) of associates and joint ventures accounted for
	under equity method		(		15,648)		- (		7,082)		- (		32,812)		- (		18,128)		-
7000	Total non-operating income and expenses				9,775		-		40,109		-		36,440		-		133,796		1
7900	Profit before income tax				67,481		1		95,763		1		38,297		-		303,589		2
7950	Income tax expense	6(23)	(		5,778)		- (		11,685)		- (		6,291)		- (		46,703) (		1)
8200	Profit for the period			$	61,703		1	$	84,078		1	$	32,006		-	$	256,886		1
	Other comprehensive income
8310	Cumulative translation differences of foreign operations		($		119,153) (		2) ($		207,258) (		3)	$	299,707		2 ($		357,115) (		2)
8370	Share of other comprehensive income of associates and joint ventures
	accounted for under equity method				2,710		- (		8,694)		-		15,584		- (		16,838)		-
8399	Income tax relating to the components of other comprehensive income	6(23)			19,795		-		36,712		- (		53,599)		-		63,572		1
8300	Total other comprehensive (loss) income for the period		($		96,648) (		2)($		179,240)(		3)	$	261,692		2 ($		310,381) (		1)
8500	Total comprehensive income (loss) for the period		($		34,945) (		1)($		95,162)(		2)	$	293,698		2 ($		53,495)		-
	Profits attributable to:
8610	Owners of the parent			$	61,262		1	$	84,078		1	$	30,770		-	$	256,886		1
8620	Non-controlling interest				441		-		-		-		1,236		-		-		-
	Profit for the period			$	61,703		1	$	84,078		1	$	32,006		-	$	256,886		1
	Comprehensive income (loss) attributable to:
8710	Owners of the parent		($		35,386) (		1) ($		95,162) (		2)	$	292,462		2 ($		53,495)		-
8720	Non-controlling interest				441		-		-		-		1,236		-		-		-
	Total comprehensive income (loss) for the period		($		34,945) (		1)($		95,162)(		2)	$	293,698		2 ($		53,495)		-
	Basic earnings per share	6(24)
9750	Total basic earnings per share			$		0.16		$		0.22		$		0.08		$		0.68
	Diluted earnings per share	6(24)
9850	Total diluted earnings per share			$		0.16		$		0.22		$		0.08		$		0.68

The accompanying notes are an integral part of these consolidated financial statements. See review report of independent accountants dated November 4, 2013.

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ALTEK CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

					Equityattributable to owners of theparent	Equityattributable to owners of theparent	Equityattributable to owners of theparent				Non-controlling interest	Total equity
	Common stock		Additional paid-in capital		Retained Earnings			Cumulative translation differences of foreign operations	Treasurystocks	Total
				Legal reserve	Special reserve	Unappropriated retained earnings
$ 3,955,214 - - - 5,799 - - - - $ 3,961,013 $ 3,961,013 - - - - ( 58,360 ) - - - $ 3,902,653		$ 2,354,615 - - - 7,953 15,619 - - - $ 2,378,187 $ 2,377,444 - - ( 335,701 ) 11,565 ( 28,499 ) - - 811 $ 2,025,620		$ 1,272,282 19,184 - - - - - - - $ 1,291,466 $ 1,291,466 28,011 - - - - - - - $ 1,319,477	$ 488,347 - ( 488,347 ) - - - - - - $ - $ - - 339,267 - - - - - - $ 339,267	$ 3,450,925 ( 19,184 ) 488,347 ( 564,809 ) - - - 256,886 - $ 3,612,165 $ 3,621,302 ( 28,011 ) ( 339,267 ) ( 37,300 ) ( 61,564 ) ( 107,188 ) 30,770 - - $ 3,078,742	$ - - - - - - - - ( 310,381 ) ($ 310,381 ) ($ 340,799 ) - - - - - - 261,692 - ($ 79,107 )		($ 714,702 ) - - - - - ( 22,059 ) - - ($ 736,761 ) ($ 768,094 ) - - - 133,474 194,047 - - - ($ 440,573 )	$ 10,806,681 - - ( 564,809 ) 13,752 15,619 ( 22,059 ) 256,886 ( 310,381 ) $ 10,195,689 $ 10,142,332 - - ( 373,001 ) 83,475 - 30,770 261,692 811 $ 10,146,079	$ - - - - - - - - - $ - $ 10,063 - - - - - 1,236 - ( 4,070 ) $ 7,229	$ 10,806,681 - - ( 564,809 ) 13,752 15,619 ( 22,059 ) 256,886 ( 310,381 ) $ 10,195,689 $ 10,152,395 - - ( 373,001 ) 83,475 - 32,006 261,692 ( 3,259 ) $ 10,153,308

The accompanying notes are an integral part of these consolidated financial statements. See review report of independent accountants dated November 4, 2013.

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

			Forthenine-monthperiod ended	Forthenine-monthperiod ended	September30
			2013		2012
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the period		$	38,297	$	303,589
Adjustments to reconcile profit before tax to net cash used in
operating activities
Income and expenses having no effect on cash flows
Depreciation			239,505		210,627
Amortisation			11,208		10,518
Provision for doubtful accounts			-		17,061
Net gains on financial assets at fair value through profit or loss	(		7,385 )	(	2,581 )
Interest expense			7,946		434
Interest income	(		47,681 )	(	96,532 )
Cash dividend income	(		534 )	(	477 )
Share-based payment compensation cost			14,310		15,619
Adjustment due to change of investees' equity under the equity
method			32,812		18,128
Gain on disposal of property, plant and equipment	(		491 )	(	389 )
Fixed asset reclassified to expenses			-		520
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Financial assets at fair value through profit or loss - current			79,018		294,571
Notes receivable, net	(		6,680 )		9
Accounts receivable, net	(		1,422,538 )	(	253,022 )
Other receivables	(		66,031 )	(	10,300 )
Inventories			148,882	(	273,227 )
Prepayments			26,023		51,358
Other current assets	(		8,006 )	(	608 )
Net changes in liabilities relating to operating activities
Notes payable	(		40 )	(	828 )
Accounts payable			325,778	(	656,126 )
Accounts payable - related parties	(		97 )	(	14,731 )
Other payables	(		444,045 )		61,198
Provisions for liabilities	(		35,617 )		121,047
Other current liabilities	(		22,142 )		117,020
Other non-current liabilities	(		626)		992
Cash used in operations	(		1,138,134 )	(	86,130 )
Interest received			48,681		92,645
Cash dividend received			534		14,432
Interest paid	(		7,789 )	(	169 )
Income tax paid	(		43,550)	(	78,292)
Net cash used in operating activities	(		1,140,258)	(	57,514)

(Continued)

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

			Forthenine-monthperiod ended	Forthenine-monthperiod ended	September30
			2013		2012
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment	($		639,813 )	($	378,663 )
Proceeds from disposal of property, plant and equipment			2,336		7,908
Increase in intangible assets	(		43,139 )	(	3,116 )
(Increase) decrease in deposits-out	(		7,350 )		733
Net cash used in investing activities	(		687,966 )	(	373,138 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings			600,000		520,000
Decrease in deposits-in			-	(	14,168 )
Employee stock options exercised			-		13,752
Proceeds from employees' purchase of treasury stock			69,165		-
Payments of cash dividends	(		373,001 )	(	564,809 )
Changes in non-controlling interest	(		3,259 )		-
Net cash provided by (used in) financing activities			292,905	(	45,225 )
Effect of exchange rate			172,854	(	238,652 )
Net decrease in cash and cash equivalents	(		1,362,465 )	(	714,529 )
Cash and cash equivalents at beginning of period			4,698,800		6,303,846
Cash and cash equivalents at end of period		$	3,336,335	$	5,589,317

The accompanying notes are an integral part of these consolidated financial statements. See review report of independent accountants dated November 4, 2013.

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ALTEK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of New Taiwan dollars, unless stated otherwise) (UNAUDITED)

1. HISTORY AND ORGANIZATION

Altek Corporation (the “Company”) was incorporated as company limited by shares under the provisions of the Company Law of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the development, manufacturing and sale of digital image technology application, related export and import trade.

The Company was listed in the Taiwan Stock Exchange on December 24, 2002, as approved by the Tai-Tz (91) Letter No. 024976 of the former Securities and Futures Commission, Ministry of Finance, R.O.C., dated September 27, 2002.
THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION
These consolidated financial statements were proposed for issuance by the Board of Directors on November 4, 2013.
APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) Not applicable as it is the first-time adoption of IFRSs by the Group this year.
(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group
- IFRS 9, ‘Financial Instruments’: Classification and measurement of financial instruments
- A.The International Accounting Standards Board (“IASB”) published IFRS 9, ‘Financial Instruments’, in November, 2009, which will take effect on January 1, 2015 with early application permitted. Although the FSC has endorsed IFRS 9, FSC does not permit early application of IFRS 9 when IFRSs are adopted in R.O.C. in 2013. Instead, enterprises should apply International Accounting Standard No. 39 (“IAS 39”), ‘Financial Instruments: Recognition and Measurement’ reissued in 2009.
- B.IFRS 9 was issued as the first step to replace IAS 39. IFRS 9 outlines the new classification and measurement requirements for financial instruments, which might affect the accounting treatments for financial instruments of the Group.
- C.The Group has not evaluated the overall effect of the IFRS 9 adoption; however, the Group considers there is no significant effect based on preliminary evaluation.

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(3) IFRSs issued by IASB but not yet endorsed by the FSC

A.The following are the new standards and amendments issued by IASB that are effective but not yet endorsed by the FSC. The assessments on practical application of the new standards, interpretations and amendments regulated by the FSC are as follows:

New standards, interpretations and amendments	Major content	Effective date
Limited exemption from comparative IFRS 7 disclosures for first-time adopters (amendment to IFRS 1)	The amendment gives first-time adopters of IFRSs a choice of the transition provisions of IFRS 7, ‘Financial Instruments: Disclosures’, not to disclose the comparative information.	July 1, 2010
2010 improvements to IFRSs	Amendments to IFRS 1, IFRS 3, IFRS 7, IAS 1, IAS 34 and IFRIC 13.	January 1, 2011
IFRS 9 Financial instruments: Classification and measurement of financial liabilities	IFRS 9 requires gains and losses on financial liabilities designated as at fair value through profit or loss to be split into the amount of change in the fair value that is attributable to changes in the credit risk of the liability, which shall be presented in other comprehensive income, and cannot be reclassified to profit or loss when derecognising the liabilities. The new guidance allows the recognition of the full amount of change in the fair value in the profit or loss only if there is reasonable evidence showing on initial recognition that the recognition of changes in the liability's credit risk in other comprehensive income would create a significant accounting mismatch (inconsistency) in profit or loss. (That determination is made on initial recognition and is not reassessed.)	January 1, 2015
Disclosures - transfers of financial assets (Amendment to IFRS 7)	The amendment enhances disclosures in quantity and nature for all transferred financial assets that are not derecognised and for any continuing involvement in a transferred asset, existing at the reporting date.	July, 1, 2011
Severe hyperinflation and removal of fixed dates for the first-time adopters (amendment to IFRS 1)	When an entity’s date of transition to IFRSs is on, or after, the functional currency normalisation date, the entity may elect to measure all assets and liabilities acquired before the functional currency normalisation date at fair value on the date of transition to IFRSs. First-time adopters shall apply the derecognition requirements in IAS 39, ‘ Financial Instruments: Recognition and Measurement’, prospectively from the date of transition to IFRSs, and they are allowed not to retrospectively recognise related gains on the date of transition to IFRSs.	July 1, 2011

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New standards, interpretations and amendments	Major content	Effective date
Deferred tax: recovery of underlying assets (amendment to IAS 12)	The amendment gives a rebuttable presumption that the carrying amount of investment properties measured at fair value is recovered entirely by sale, unless there exists any evidence that could refute this presumption. The amendment also replaces SIC 21, ‘Income Taxes—Recovery of Revalued Non-Depreciable Assets’.	January 1, 2012
IFRS 10 Consolidated Financial Statements	The standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where it is difficult to assess.	January 1, 2013
IFRS 11 Joint Arrangements	When deciding the types of joint arrangements-joint operations and joint ventures, the entity should assess the contract rights and obligations instead of the legal form only. The standard also prohibits the proportional consolidation for joint ventures.	January 1, 2013
IFRS 12 Disclosure of Interests in Other Entities	The standard requires the disclosure of interests in other entities including subsidiaries, joint arrangements, associates and unconsolidated structured entities.	January 1, 2013
IAS 27 Separate Financial Statements (as amended in 2011)	The standard removes the requirements of consolidated financial statements from IAS 27 and those requirements are addressed in IFRS 10,‘Consolidated Financial Statements’.	January 1, 2013
IAS 28 Investments in Associates and Joint Ventures (as amended in 2011)	As consequential amendments resulting from the issuance of IFRS 11 , ‘Joint Arrangements’, IAS 28 (revised) sets out the requirements for the application of the equity method when accounting for investments in joint ventures.	January 1, 2013
IFRS 13 Fair Value Measurement	IFRS 13 aims to improve consistency and reduce complexity by providing a definition of fair value and a single resource of fair value measurement and disclosure requirements for use across IFRSs. It does not require fair value measurements in addition to those already required or permitted by other IFRSs.	January 1, 2013

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New standards, interpretations and amendments	Major content	Effective date
Amendment to IAS 19 Employee benefits (as amended in 2011)	The amendment requires actuarial gains and losses in respect of post-employment benefits to be recognized immediately in other comprehensive income when they arise. The previous option to defer these gains or losses using the corridor method is no longer permitted. Other amendments relate to the recognition of unvested past service cost in profit or loss and the introduction of the net interest method. The net interest, which replace interest cost and expected return on plan assets, shall be determined by multiplying the net defined benefit liability (asset) by the discount rate. The return of plan assets, excluding net interest, is recognized in comprehensive income.	January 1, 2013
Presentation of Items of Other Comprehensive Income (Amendment to IAS 1)	The amendments require the section of profit or loss and other comprehensive income to be presented. The main change resulting from these amendments is a requirement for entities to group items presented in ‘other requirement for entities to group items presented in ‘other comprehensive income’ on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments).	July 1, 2012
IFRIC 20 Stripping costs in the production phase of a surface mine	During the development phase of the mine (before production begins), stripping costs are usually capitalised as part of the depreciable cost of building, developing and constructing the mine. To the extent that the benefit from the stripping activity is realised in the form of inventory produced, the entity shall account for the costs of that stripping activity in accordance with the principles of IAS 2 ‘ Inventories’.	January 1, 2013
Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7)	The amendment requires disclosures to include quantification information that will enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements.	January 1, 2013
Offsetting Financial Assets and Financial Liabilities (Amendment to IAS 32)	These amendments are to clarify criterion that an entity ‘currently has a legally enforceable right to set off the recognized amounts’ and criterion that an entity ‘intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously’ for offsetting financial assets and financial liabilities on the balance sheet.	January 1, 2014

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New standards, interpretations and amendments	Major content	Effective date
Mandatory effective date and transition disclosures (Amendment to IFRS 7 and IFRS 9)	The mandatory effective date has been postponed to January 1, 2015.	January 1, 2015
Government loans (Amendment to IFRS 1)	The exemption for the first-time adopters to elect not to apply for the requirements in IFRS 9 ‘Financial instruments’ and IFRS 20 ‘ Accounting for Government Grants and Disclosure of Government Assistance’ for the government loans occurred prior to the date of transition to IFRSs.	January 1, 2013
2009-2010 improvements to IFRSs	Amendments to IFRS 1 and IAS 1, IAS 16, IAS 32 and IAS 34.	January 1, 2013
Consolidated Financial statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12)	The amendment clarifies that the date of initial application is the first day of the annual period in which IFRS 10, 11 and 12 is adopted.	Janaury 1, 2013
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)	The amendments define ‘Investment Entities’ and their characteristics. The parent company that meets the definition of investment entities should measure its subsidiaries using fair value through profit of loss instead of consolidating them.	January 1, 2014
IFRIC 21 Levies	The interpretation addresses the accounting for levies imposed by governments in accordance with legislation (other than income tax). A liability to pay a levy shall be recognized in accordance with IAS 37,‘Provisions, Contingent Liabilities and Contingent Assets’.	January 1, 2014
Recoverable amount disclosures for non-financial assets (Amendments to IAS 36)	The amendments remove the requirement to disclose recoverable amount when a cash generating unit (CGU) contains goodwill or intangible assets with indefinite useful lives that were not impaired.	January 1, 2014
Novation of derivatives and continuation of hedge accounting (Amendments to IAS 39)	Under the amendments there would be no need to discontinue hedge accounting if a hedging derivative was novated, provided certain criteria are met.	January 1, 2014

The Group is assessing the potential impact of the new standards and amendments above and has not yet been able to reliably estimate their impact on the consolidated financial statements.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

A.These consolidated financial statements are the first interim consolidated financial statements as of September 30, 2013 and 2012, prepared by the Group in accordance with the “Rules Governing the Preparation of Financial Statements by Securities Issuers”, IAS 34, ‘Interim Financial Reporting’, and IFRS 1, ‘First-time Adoption of International Financial Reporting Standards’, as endorsed by the FSC.
B.In the preparation of the balance sheet as of January 1, 2012, the Group has adjusted the amounts that were reported in the consolidated financial statements in accordance with previous R.O.C. GAAP. Please refer to Note 15 for the impact of transitioning from R.O.C. GAAP to the International Financial Reporting Standards, International Accounting Standards, and Interpretations/bulletins as endorsed by the FSC (collectively referred herein as the “IFRSs”) on the Group’s financial position, operating results and cash flows.

(2) Basis of preparation

A.Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
b) Defined benefit liabilities recognised based on the net amount of pension fund assets plus unrecognised prior period’s service cost and unrecognised actuarial losses, and less unrecognised actuarial gains and present value of defined benefit obligation.
B.The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A.Basis for preparation of consolidated financial statements:
a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies. In general, control is presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. The existence and effect of potential voting rights that are currently exercisable or convertible have been considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.

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They are de-consolidated from the date that control ceases.

b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
c) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.
d) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

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B.Subsidiaries included in the consolidated financial statements:

Name of Investor	Name of Subsidiaries	Main Business Activities	September 30, 2013 December 31, 2012 September 30, 2012 January 1, 2012 Note Ownership (%)
Altek Corporation " " " Altek International Investment Co., Ltd. " " " " " " " Leading Tech. Co., Ltd. Toptek Investment Cayman Co., Ltd.	Altek International Investment Co., Ltd. Altek Japan Corporation Altek Investment Co., Ltd. Altek Autotronics Corporation Altek Lab Inc. Leading Tech. Co., Ltd. Toptek Investment Cayman Co., Ltd. Altek Imaging Technology (Cayman) Co., Ltd. Altek Optical (Cayman) Co., Ltd. Altek Trading (Cayman) Co., Ltd. Altek Semiconductor (Cayman) Co., Ltd. Altek Optical Technology (Cayman) Co., Ltd. Altek (Kunshan) Co., ltd. Altek EMS (Kunshan) Co., Ltd.	Investments and general business operations Sales and design of digital camera and its optical instruments Investments Research design, manufacture and sales of car electronic components Design and sales of engineering and optical components Investments and general business operations " " Investments and general business operations " " " Manufacture and sales of digital still camera and its accessories SMT processing and related engineering services	100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 97.66% 96.29% 100% 100% Note 1 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

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Name of Investor	Name of Subsidiaries	Main Business Activities	September 30,2013 December 31,2012 September 30,2012 January1,2012 Note Ownership (%)
Altek Imaging Technology (Cayman) Co., Ltd. " Altek Trading (Cayman) Co., Ltd. Altek Semiconductor (Cayman) Co., Ltd. Altek Trading (Shanghai) Limited Altek Optical Technology (Cayman) Co., Ltd.	Altek Imaging Technology (Shanghai) Limited Altek Precision (Kunshan) Co., Ltd. Altek Trading (Shanghai) Limited Altek Semiconductor Corporation Beijing Altek Image Communication Technology Co., Ltd. Altek Optical Technology (Kunshan) Co., Ltd.	Manufacture and sales of optical components Design, manufacture and sales of digital camera parts Wholesale, import and export of digital cameras, digital video cameras and their associated accessories Research design and sales of ASIC Sales of digital camera, handheld device and their related accessories Manufacture and sales of digital camera and its accessories and optical components	100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Note 1: The non-controlling interest was acquired through employees’s subscriptions of Altek Autotronics Corporation.

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C.Subsidiaries not included in the consolidated financial statements: None.
D.Adjustments for subsidiaries with different balance sheet dates: None.
E.Nature and extent of the restrictions on fund remittance from subsidiaries to the parent company: None.

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

A.Foreign currency transactions and balances
a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.
b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss as part of the fair value gain or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
d) All foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within ‘other gains and losses’.
B.Translation of foreign operations
a) The operating results and financial position of all the group entities, affiliate companies and jointly controlled entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

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ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
iii. All resulting exchange differences are recognised in other comprehensive income.
b) When a foreign operation is partially disposed of or sold to the affiliate companies and jointly controlled entities, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. However even if the Group still retains partial interest in the former foreign subsidiary, associate or jointly controlled entity after losing control of the former foreign subsidiary, losing significant influence over the former foreign associate, or losing joint control of the former jointly controlled entity, such transactions should be accounted for as disposal of all interest in these foreign operations.
c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even if the Group still retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.
d) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

(5) Classification of current and non-current items

A.Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
b) Assets held mainly for trading purposes;
c) Assets that are expected to be realised within twelve months from the balance sheet date;
d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
B.Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
a) Liabilities that are expected to be paid off within the normal operating cycle;
b) Liabilities arising mainly from trading activities;
c) Liabilities that are to be paid off within twelve months from the balance sheet date;
d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its

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classification.

(6) Financial assets at fair value through profit or loss

A.Financial assets at fair value through profit or loss are financial assets held for trading or financial assets designated as at fair value through profit or loss on initial recognition. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as financial assets held for trading unless they are designated as hedges. Financial assets that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition:
- a) Hybrid contracts; or
- b) They eliminate or significantly reduce a measurement or recognition inconsistency; or
- c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy.
B.On a regular way purchase or sale basis, financial assets held for trading are recognised and derecognised using settlement date accounting.
C.Financial assets at fair value through profit or loss are initially recognised at fair value. Related transaction costs are expensed in profit or loss. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognised in profit or loss.
(7) Accounts receivable
Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. Accounts receivable are initially recognized at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. However, for the short-term accounts receivable which bear no interest, the Group subsequently measures it at invoice amount, considering the discounting effects would not be significant.

(8) Impairment of financial assets

A.The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
B.The criteria that the Group uses to determine whether there is objective evidence of an impairment loss is as follows:
a) Significant financial difficulty of the issuer or debtor;
b) A breach of contract, such as a default or delinquency in interest or principal payments;
c) The Group, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider;
d) It becomes probable that the borrower will enter bankruptcy or other financial reorganisation;

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e) The disappearance of an active market for that financial asset because of financial difficulties;
f) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group;
g) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; or
h) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
C.When the Group assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made according to the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognised in profit or loss. Impairment loss recognised for this category shall not be reversed subsequently. Impairment loss is recognised by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(9) Derecognition of financial assets

The Group derecognises a financial asset when one of the following conditions is met:

A. The contractual rights to receive cash flows from the financial asset expire.
B.The contractual rights to receive cash flows from the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.
C.The Group neither retains nor transfers substantially all risks and rewards of ownership of the financial asset; however, it has not retained control of the financial asset.

(10) Lease receivables/ leases (lessor)

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.
(11) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

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(12) Investments accounted for under the equity method / associates
A.Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost. The Group’s investments in associates include goodwill identified on acquisition, net of any accumulated impairment loss arising through subsequent assessments.
B.The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred statutory/constructive obligations or made payments on behalf of the associate.
C.When changes in an associate’s equity that are not recognised in profit or loss or other comprehensive income of the associate and such changes not affecting the Group’s ownership percentage of the associate, the Group recognises the Group’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.
D.Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
E.In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
F.Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.
G.When the Group disposes its investment in an associate, if it loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it still retains significant influence over this associate,

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then the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

H.When the Group disposes its investment in an associate, if it loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it still retains significant influence over this associate, then the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

(13) Property, plant and equipment

A.Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B.Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C.Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives.
D The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

The estimated useful lives of property, plant and equipment are as follows:

Buildings 3 years ~ 40 years Machinery 3 years ~ 10 years Test equipment 1 year ~ 10 years Other equipment 1 year ~ 11 years

(14) Intangible assets

Intangible assets consist of software costs and are amortised on a straight-line basis over its estimated useful life of 2 to 3 years.

(15) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist, the impairment

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loss shall be reversed to the extent of the loss previously recognised in profit or loss. However, impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.

(16) Borrowings

A.Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
B.Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
(17) Notes and accounts payable
Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognised initially at fair value and subsequently measured at amortized cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at the innitial invoice amount as effect of the discounting is immaterial.
(18) Provisions for other liabilities
Provisions (including warranties and decommissioning) are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

(19) Employee benefits

A.Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expenses in that period when the employees render service.
B.Pensions
a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expenses when

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they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

b) Defined benefit plans
- i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised past-service costs. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.
- ii. Actuarial gains and losses arising on defined benefit plans are recognised in other comprehensive income in the period in which the arise.
- iii. Past service costs are recognised immediately in profit or loss if vested immediately; if not, the past service costs are amortised on a straight-line basis over the vesting period.
- iv. Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. And, the related information is disclosed accordingly.
C.Termination benefits
Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognises termination benefits when it is demonstrably committed to a termination, when it has a detailed formal plan to terminate the employment of current employees and when it can no longer withdraw the plan. In the case of an offer made by the Group to encourage voluntary termination of employment, the termination benefits are recognised as expenses only when it is probable that the employees are expected to accept the offer and the number of the employees taking the offer can be reliably estimated. Benefits falling due more than 12 months after balance sheet date are discounted to their present value.
D.Employees’ bonus and directors’ and supervisors’ remuneration
Employees’ bonus and directors’ and supervisors’ remuneration are recognised as expenses and

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liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. However, if the accrued amounts for employees’ bonus and directors’ and supervisors’ remuneration are different from the actual distributed amounts as resolved by the stockholders at their stockholders’ meeting subsequently, the differences should be recognised based on the accounting for changes in estimates. The Group calculates the number of shares of employees’ stock bonus based on the fair value per share at the previous day of the stockholders’ meeting held in the year following the financial reporting year, and after taking into account the effects of ex-rights and ex-dividends.

- (20) Employee share based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. And ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.

(21) Income tax

A.The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.
B.The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C.Deferred income tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not

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reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

D.Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred income tax assets are reassessed.
E.Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.
F.Tax preference given for expenditures incurred on acquisitions of equipment or technology, research and development, employees’ training and equity investments is recorded using the income tax credits accounting.

(22) Share capital

A.Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B.When the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. When such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.
(23) Dividends
Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares the effective date of new shares issuance.

(24) Revenue recognition

A.Sales of goods
a) The Group manufactures and sells digital image technology application products. Revenue is measured at the fair value of the consideration received or receivable taking into account value-added tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Group’s activities. Revenue arising from the sales of goods is recognised when the Group has delivered the goods to the customer, the amount of sales

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revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.

b) The Group offers customers volume discounts and right of return for defective products. The Group estimates such discounts and returns based on historical experience. Provisions for such liabilities are recorded when the sales are recognised. The volume discounts are estimated based on the anticipated annual sales quantities.
B.Sales of services

The Group provides technology services. Revenue from delivering services is recognised under the percentage-of-completion method when the outcome of services provided can be estimated reliably. The stage of completion of a service contract is measured by the percentage of the actual services performed as of the financial reporting date to the total services to be performed. If the outcome of a service contract cannot be estimated reliably, contract revenue should be recognised only to the extent that contract costs incurred are likely to be recoverable.

C.A sale agreement comprising of multiple components

A sale agreement offered by the Group might comprise of multiple components, including sale of goods and subsequent repair services, etc. If a sale agreement comprises of multiple identifiable components, the fair value of the consideration received or receivable in respect of the sale agreement shall be allocated between those components based on the relative fair value of each component. The amount of proceeds allocated to each component is recognised as revenue in profit or loss following the revenue recognition criteria applied to each component. The fair value of each component is determined by its market value when it is sold separately.

(25) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

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5. CRITICALACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Judgements and estimates are continually evaluated and adjusted based on historical experience and other factors. The above information is addressed below:
(1) Critical judgements in applying the Group’s accounting policies: None.
(2) Critical accounting estimates and assumptions:
The Group makes estimates and assumptions based on the expectation of future events that are believed to be reasonable under the circumstances at the end of the reporting period. The resulting accounting estimates might be different from the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:
A.Revenue recognition
- In principle, sales revenues are recognised when the earning process is completed. The Group estimates discounts and returns based on historical results and other known factors. Provisions for such liabilities are recorded as a deduction item to sales revenues when the sales are recognised. The Group reassesses the reasonableness of estimates of discounts and returns periodically.
B.Impairment assessment of tangible and intangible assets (excluding goodwill)
- The Group assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industry characteristics. Any changes of economic circumstances or estimates due to the change of Group strategy might cause material impairment on assets in the future.
C.Impairment assessment of investments accounted for under the equity method The Group assesses the impairment of an investment accounted for under the equity method as soon as there any indication that it might have been impaired and its carrying amount cannot be recoverable. The Group assesses the recoverable amounts of an investment accounted for under the equity method based on the present value of expected cash dividends receivable from the investee and expected future cash flows from the disposal of the investee, and analyzes the reasonableness of related assumptions.
D.Realisability of deferred income tax assets
- Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilised. Assessment of the realisability of deferred income tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, tax exempt duration, available tax credits, tax planning, etc.

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Any variations in global economic environment, industry environment, and laws and regulations might cause material adjustments to deferred income tax assets.

As of September 30, 2013, the Group recognised deferred income tax assets amounting to $286,686.

E.Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory comsumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As of September 30, 2013, the carrying amount of inventories was $1,566,439.

F.Calculation of accrued pension obligations

When calculating the present value of defined pension obligations, the Group must apply judgements and estimates to determine the actuarial assumptions on balance sheet date, including discount rates and expected rate of return on plan assets. Any changes in these assumptions could significantly impact the carrying amount of defined pension obligations.

As of September 30, 2013, the carrying amount of accrued pension obligations was $19,200.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash

TAILS OF SIGNIFICANT ACCOUNTS Cash
Cash on hand Checking accounts and demand deposits Time deposits Cash on hand Checking accounts and demand deposits Time deposits	September30,2013 1,040 $ 340,994 2,994,301 3,336,335 $ September30,2012 1,211 $ 493,044 5,095,062 5,589,317 $	December31,2012
		1,007 $ 302,325 4,395,468
		4,698,800 $
		January1,2012
		948 $ 400,741 5,902,157
		6,303,846 $

A.The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. The Group’s maximum exposure to credit risk at balance sheet date is the carrying amount of all cash and cash equivalents.

B.The Group has no cash and cash equivalents pledged to others.

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(2) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or	loss
Items Current items: Financial assets held for trading Valuation adjustment of financial assets held for trading Total Items Current items: Financial assets held for trading Valuation adjustment of financial assets held for trading Total	September 30,2013 345,470 $ 11,179 356,649 $ September 30,2012 203,444 $ 2,218 205,662 $	December 31,2012
		423,073 $ 5,209
		428,282 $
		January1,2012
		497,634 $ 18
		497,652 $

The Group recognised net gain of $2,866 and $725 for the three-month periods ended September 30, 2013 and 2012, respectively, and net gain of $7,385 and $2,581 for the nine-month periods ended September 30, 2013 and 2012, respectively.

(3) Financial assets measured at cost

Financial assets measured at cost
Items		September 30,2013		December 31,2012
Non-current items:
Unlisted stocks	$	300,963	$	300,736
Less: Accumulated impairment - financial
assets measured at cost	(	64,783)	(	64,783)
Total	$	236,180	$	235,953
Items		September 30,2012		January1,2012
Non-current items:
Unlisted stocks	$	300,735	$	300,957
Less: Accumulated impairment - financial
assets measured at cost	(	64,783)	(	64,783)
Total	$	235,952	$	236,174

A.As the Group’s investment in unlisted stocks are not traded in an active market, and no sufficient industry information of companies similar to these stocks financial information can be obtained, the fair value of the investment in unlisted stocks cannot be measured reliably. The Group classified those stocks as ‘financial assets measured at cost’.
B.As of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012, no financial assets measured at cost held by the Group were pledged to others.

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(4) Accounts receivable

ccounts receivable
			September 30,2013		December 31,2012
Accounts receivable	$		4,958,908	$	3,536,370
Less:allowance for bad debts	(		652,675)	(	652,675)
		$	4,306,233	$	2,883,695
			September 30,2012		January1,2012
Accounts receivable	$		4,303,993	$	4,050,971
Less:allowance for bad debts	(		652,675)	(	635,614)
		$	3,651,318	$	3,415,357

A.The credit quality of accounts receivable that were neither past due nor impaired was in the following categories based on the Group’s Credit Quality Control Policy:

Group 1 Group 2 Group 1 Group 2	September 30,2013 4,262,444 $ 16,843 4,279,287 $ September 30,2012 3,633,444 $ 12,997 3,646,441 $	December 31,2012
		2,856,464 $ 14,440
		2,870,904 $
		January1,2012
		2,997,130 $ 283,831
		3,280,961 $

Note:

Group 1: Including domestic and foreign listed companies and their affiliated companies. Group 2: Others.

B.The ageing analysis of accounts receivable that were past due but not impaired is as follows:

Up to 30 days 31 to 90 days 91 to 180 days Over 181 days Up to 30 days 31 to 90 days 91 to 180 days Over 181 days	September 30,2013 25,887 $ 178 654 227 26,946 $ September 30,2012 129 $ 859 3,889 - 4,877 $	December 31,2012
		10,382 $ 1,052 289 1,068
		12,791 $
		January1,2012
		126,559 $ 2,546 3,394 1,897
		134,396 $

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C.Movements on the Group’s provision for impairment of accounts receivable are as follows:

Individualprovision At January 1 / September 30 652,675 $ Individualprovision At January 1 635,614 $ Provision for impairment 17,061 At September 30 652,675 $		2013
		Group provision - $ 2012	Total
			652,675 $

		Group provision - $ - - $	Total
			635,614 $ 17,061
			652,675 $

D.The maximum exposure to credit risk at September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012 was the carrying amount of each class of accounts receivable.

E.The Group does not hold any collateral as security.

(5) Inventories

nventories
Raw materials Work in process Finished goods Total Raw materials Work in process Finished goods Total Raw materials Work in process Finished goods Total		September 30,2013
	Cost 906,753 $ 281,160 552,877 1,740,790 $	Allowance for valuation loss 110,360) ($ 27,067) ( 36,924) ( 174,351) ($ December 31,2012	Book value 796,393 $ 254,093 515,953 1,566,439 $
	Cost 753,204 $ 333,103 838,484 1,924,791 $		Book value 612,812 $ 306,142 796,367 1,715,321 $
	Cost 1,068,168 $ 479,412 988,089 2,535,669 $		Book value 923,554 $ 457,057 940,493 2,321,104 $

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Raw materials Work in process Finished goods Total			January1,2012
		Cost 1,180,729 $ 528,597 660,812 2,370,138 $	Allowance for valuation loss 175,214) ($ 83,551) ( 63,496) ( 322,261) ($	Book value 1,005,515 $ 445,046 597,316 2,047,877 $

The cost of inventories recognised as expense for the three-month periods ended September 30, 2013 and 2012 was $5,978,809 and $5,754,939, and for the nine-month periods ended September 30, 2013 and 2012 was $14,271,291 and $18,220,272, respectively, including the amount of ($30,104), $12,987, ($10,983) and $38,771, respectively, that the Group wrote down from cost to net realizable value accounted for as ‘cost of goods sold’ or that the Group reversed from a previous inventory write-down and accounted for as reduction of ‘cost of goods sold’.

(6) Investments accounted for under the equity method

			September 30,2013	September 30,2013	September 30,2013		December 31,2012	December 31,2012
JinJing Optical Technology	Co., Ltd.		$		56,896	$		54,332
Phoenix Optical (Shanghai)	Co., Ltd.				300,465			320,674
					357,361			375,006
Less:accumulated impairment loss			(		23,587)	(		23,587)
			$		333,774	$		351,419
			September30,2012				January1,2012
JinJing Optical Technology	Co., Ltd.		$		52,035	$		57,295
Phoenix Optical (Shanghai)	Co., Ltd.				340,180			383,403
					392,215			440,698
Less:accumulated impairment loss			(		23,587)	(		23,587)
			$		368,628	$		417,111
- The financial information	of the Group’s		principal associates is summarised below:
	Assets	Liabilities			Revenue Profit/(Loss)			% interest held
September 30, 2013 $	1,428,949	$	444,533	$	869,046 ($		79,841)	note
December 31, 2012 $	1,474,010	$	451,496					note
September 30, 2012 $	1,593,438	$	534,588	$	1,308,704 ($		56,762)	note
January 1, 2012 $	1,839,269	$	643,640					note

Note: The shareholding ratio to the JinJing Optical Technology Co., Ltd. and Phoenix Optical (Shanghai) Co., Ltd. was 23.33% and 40%, respectively.

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(7) Property, plant and equipment

At January 1, 2013 Cost Accumulated depreciation and impairment Nine-month period ended September 30, 2013 Opening net book amount Additions Disposals Reclassifications Depreciation charge Net exchange differences Closing net book amount At September 30, 2013 Cost Accumulated depreciation and impairment	Land Buildings 1,042,216 $ 3,441,708 $ - 280,986) ( 1,042,216 $ 3,160,722 $ 1,042,216 $ 3,160,722 $ - 55,879 - - - 13,300 - 67,985) ( - 80,219 1,042,216 $ 3,242,135 $ 1,042,216 $ 3,599,639 $ - 357,504) ( 1,042,216 $ 3,242,135 $	Machinery	Test equipment
		1,727,766 $ 1,053,271) ( 674,495 $ 674,495 $ 447,413 1,559) ( 88,567 86,065) ( 30,252 1,153,103 $ 2,336,724 $ 1,183,621) ( 1,153,103 $	193,969 $ 118,059) ( 75,910 $ 75,910 $ 5,301 6) ( 584 20,495) ( 1,844 63,138 $ 200,512 $ 137,374) ( 63,138 $

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At January 1, 2012 Cost Accumulated depreciation and impairment Nine-month period ended September 30, 2012 Opening net book amount Additions Disposals Reclassifications Depreciation charge Net exchange differences Closing net book amount At September 30, 2012 Cost Accumulated depreciation and impairment	Land Buildings 1,042,216 $ 3,487,894 $ - 199,025) ( 1,042,216 $ 3,288,869 $ 1,042,216 $ 3,288,869 $ - 3,671 - - - 1,549 - 66,684) ( - 77,944) ( 1,042,216 $ 3,149,461 $ 1,042,216 $ 3,408,303 $ - 258,842) ( 1,042,216 $ 3,149,461 $	Machinery	Test equipment
		1,506,120 $ 1,004,668) ( 501,452 $ 501,452 $ 149,407 1,341) ( 126,529 55,905) ( 23,290) ( 696,852 $ 1,731,387 $ 1,034,535) ( 696,852 $	172,683 $ 99,925) ( 72,758 $ 72,758 $ 30,726 1,103) ( 2,495 21,512) ( 1,623) ( 81,741 $ 192,833 $ 111,092) ( 81,741 $

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(8) Intangible assets

		2013		2012
At January 1
Cost	$	87,038	$	146,495
Accumulated amortisation and impairment	(	13,959)	(	61,660)
	$	73,079	$	84,835
Nine-month period ended September 30
Opening net book amount	$	73,079	$	84,835
Additions		49,877		3,116
Reclassifications		92		159
Amortisation charge	(	10,481)	(	9,803)
Net exchange differences		1,506	(	2,348)
Closing net book amount	$	114,073	$	75,959
At September 30
Cost	$	131,244	$	147,117
Accumulated amortisation and impairment	(	17,171)	(	71,158)
	$	114,073	$	75,959

The Group has no intangible assets pledged to others.

(9) Long-term prepaid rents ( shown as ‘Other non-current assets’)

Land-use right Land-use right	September 30,2013 39,303 $ September 30,2012 38,689 $	December 31,2012
		38,457 $
		January1,2012
		40,967 $

The Group recognized amortization expenses for the three-month periods ended September 30, 2013 and 2012 amounting to $246 and $239, and for the nine-month periods ended September 30, 2013 and 2012 amounting to $727 and $715, respectively.

(10) Short-term borrowings

hort-term borrowings
Type of borrowings Bank borrowings Unsecured borrowings Type of borrowings Bank borrowings Unsecured borrowings	September 30,2013 600,000 $ September 30,2012 520,000 $	Interest rate range 1.24%~1.30% Interest rate range 1.30%~1.32%	Collateral
			None Collateral
			None

The Group had no short-term borrowings during the following periods: December 31, 2012, and January 1, 2012.

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(11) Pensions

A.
a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.
b) The amounts recognised in the balance sheet are determined as follows:

			December 31,2012		January1,2012
Present value of funded obligations		$	65,167	$	61,904
Fair value of plan assets	(		45,967)	(	45,554)
			19,200		16,350
Present value of unfunded obligations			-		-
Unrecognised actuarial losses/(gains)			-		-
Unrecognised past service cost			-		-
Net liability in the balance sheet		$	19,200	$	16,350

c) The Group recognised pension expenses in the statement of comprehensive income for the three-month periods ended September 30, 2013 and 2012 amounting to $0 and $6, and for the nine-month periods ended September 30, 2013 and 2012 amounting to $0 and $1,001, respectively.
d) As of December 31, 2012, the cumulative actuarial losses/(gains) recognised in other comprehensive income was $17,202.

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e) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. The constitution of fair value of plan assets as of September 30, 2013 and 2012 is given in the Annual Labor Retirement Fund Utilisation Report published by the government. Expected return on plan assets was a projection of overall return for the obligations period, which was estimated based on historical returns and by reference to the status of Labor Retirement Fund utilisation by the Labor Pension Fund Supervisory Committee and taking into account the effect that the Fund’s minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks.

f) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases Expected return on plan assets Turnover rate (Note) Early retirement rate (Note)		2012		2011
		1.50% 3.00% 1.50% 0%~0.24% 0.001%~0.99%		1.75% 3.00% 1.75% 0%~0.24% 0.001%~0.99%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with 2012 Taiwan Standard Ordinary Experience Mortality Table. Note : Age range as the assessment of segment.

g) Historical information of experience adjustments was as follows:

Note : Age range as the assessment of segment. Historical information of experience adjustments was as follows:
Present value of defined benefit obligation Fair value of plan assets Surplus/(deficit) in the plan Experience adjustments on plan liabilities Experience adjustments on plan assets	2012
	65,167) ($ 45,967 19,200) ($ 645) ($ 393) ($

h) Expected contributions to the defined benefit pension plans of the Group within one year from September 30, 2013 are $12.

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B.

  - a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. For the three-month periods ended September 30, 2013 and 2012, the Group had recognized pension costs of $8,598 and $9,819 , and for the nine-month periods ended September 30, 2013 and 2012, the Group had recognized pension costs of $26,315 and $30,388, respectively, under the above pension scheme.

  - b) The subsidiaries provided defined contribution plans for its employees. Pursuant to local regulations, such employees and the subsidiaries each make contributions based on a certain percentage based of the salaries and wages to the pension funds. The subsidiaries had recognised pension costs of $15,696 and $17,299 for the three-month periods ended September 30, 2013 and 2012, respectively, and of $44,698 and $56,346 for the nine-month periods ended September 30, 2013 and 2012, respectively.

(12) Share-based payment
A.As of September 30, 2013 and 2012, the Company’s share-based payment arrangements were as follows:

follows:
Type ofarrangement	Grant date	Quantity granted	Contract period	Vesting conditions
Employee stock options " " " " Treasury stock transferred to employees at the sixth time Treasury stock transferred to employees at the seventh time Treasury stock transferred to employees at the eighth time	June 13, 2008 October 31, 2008 March 23, 2009 October 28, 2011 March 21, 2012 December 28, 2012 March 15, 2013 April 9, 2013	8,000 1,000 3,000 3,000 3,000 986 2,196 1,818	9.6 years 9.2 years 8.8 years 9.2 years 8.9 years - - -	Note Note Note Note Note Vested immediately Vested immediately Vested immediately

Note: 2 years’ service vest 40%, 3 years’ service vest 70%, 4 years’ service vest 100%.

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B.Details of the share-based payment arrangements are as follows:

Options outstanding at beginning of the period Options granted Distribution of stock dividends / adjustments for number of shares granted for one unit of option Options forfeited Options exercised Options expired Options outstanding at end of the period Options exercisable at end of the period Approved and not yet issued options at the end of the period	For the nine-month period ended September 30,2013	For the nine-month period ended September 30,2013	For the nine-month period ended September 30,2012	For the nine-month period ended September 30,2012
	No. of options	Weighted-average exercise price (in dollars)	No. of options	Weighted-average exercise price (in dollars)
	16,008 - - 300) ( - - 15,708 10,108 -	24.00 $ - - - - - 22.60 21.80	13,788 3,000 - - 580) ( - 16,208 9,062 -	25.80 $ 25.40 - - 23.70 - 24.00 23.60

C.The weighted-average stock price of stock options at exercise dates for the nine-month periods ended September 30, 2013 and 2012 was $18.22 and $21.93(in dollars), respectively.
D.The expiry date and exercise price of stock options outstanding at balance sheet date are as follows:

follows:
Issue date approved	Expirydate	September 30,2013	December 31,2012
		No. of shares Exercise price (in thousands) (in dollars) 8,000 $ 23.20 1,000 19.40 3,000 18.30 3,000 24.10 3,000 23.90	No. of shares Exercise price (in thousands) (in dollars) 8,000 $ 24.60 1,000 20.60 3,000 19.40 3,000 25.60 3,000 25.40
June 13, 2008 October 31, 2008 March 23, 2009 October 28, 2011 March 21, 2012	December 31, 2017 December 31, 2017 December 31, 2017 December 31, 2020 December 31, 2020

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Issue date approved	Expirydate	September 30,2012	January1,2012
		No. of shares Exercise price (in thousands) (in dollars) 8,000 $ 24.60 1,000 20.60 3,000 19.40 3,000 25.60 3,000 25.40	No. of shares Exercise price (in thousands) (in dollars) 8,000 $ 26.90 1,000 22.60 3,000 21.20 3,000 28.00 - -
June 13, 2008 October 31, 2008 March 23, 2009 October 28, 2011 March 21, 2012	December 31, 2017 December 31, 2017 December 31, 2017 December 31, 2020 December 31, 2020

E.The fair value of stock options granted after January 1, 2008 is measured using the Black-Scholes option-pricing model. Relevant information is as follows:

Type of arrangement	Grant date	Stock price	Exercise price (Note 1)	Expected price volatility	Expected option life	Expected dividends	Risk-free interest rate	Fair value per unit
Employee stock options " " " " Treasury stock transferred to employees at the sixth time Treasury stock transferred to employees at the seventh time Treasury stock transferred to employees at the eighth time	June 13, 2008 October 31, 2008 March 23, 2009 October 28, 2011 March 21, 2012 December 28, 2012 March 15, 2013 April 9,2013	$45.50 32.60 30.90 30.65 27.85 17.05 18.05 17.75	$ 23.20 19.40 18.30 24.10 23.90 17.23 17.23 17.23	24.45% 22.11% 22.63% 30.27% 33.54% - - -	6 years 6 years 6 years 5 years 4.9 years - - -	1.5% 1.5% 1.5% 1.4% 1.4% - - -	2.40% 1.88% 0.96% 1.18% 1.08% - - -	10.56 6.54 5.73 7.42 7.35 Note 2 Note 2 Note 2

Note 1: The exercise price of stock options was adjusted based on the cash dividends and stock dividends per share distributed.
Note 2: Given that the exercise was close to the grant date, the fair value per unit was estimated using the intrinsic value method.

~42~

F.Expenses incurred on share-based payment transactions are shown below:

Provisions for other liabilities Equity-settled Cash-settled Total Equity-settled Cash-settled Total At January 1, 2013 Additional (reserved) provisions Used during the period Exchange differences At September 30, 2013 Current Non-current Current Non-current	For the three-month period ended September 30,2013 For the three-month period ended September 30,2012 3,563 $ 4,523 $ - - 3,563 $ 4,523 $ For the nine-month period ended September 30,2013 For the nine-month period ended September 30,2012 14,310 $ 15,619 $ - - 14,310 $ 15,619 $ Warranty 294,991 $ 4,328) ( 31,828) ( 539 259,374 $ September 30,2013 December 31,2012 142,392 $ 152,537 $ 116,982 $ 142,454 $ September 30,2012 January1,2012 198,072 $ 181,057 $ 209,783 $ 105,751 $
	$ $

Provisions for other liabilities
Equity-settled
Cash-settled
Total
Equity-settled
Cash-settled
Total
At January 1, 2013
Additional (reserved) provisions
Used during the period
Exchange differences
At September 30, 2013
Current
Non-current
Current
Non-current

For the three-month period
ended September 30,2013
For the three-month period
ended September 30,2012
3,563
$ 4,523
$ -
-
3,563
$ 4,523
$ For the nine-month period
ended September 30,2013
For the nine-month period
ended September 30,2012
14,310
$ 15,619
$ -
-
14,310
$ 15,619
$ Warranty
294,991
$ 4,328)
(
31,828)
(
539
259,374
$ September 30,2013
December 31,2012
142,392
$ 152,537
$ 116,982
$ 142,454
$ September 30,2012
January1,2012
198,072
$ 181,057
$ 209,783
$ 105,751
$

$ $

(13) Provisions for other liabilities

The Group gives warranties on digital image technology application products sold. Provision for warranty is estimated based on historical warranty data of digital image technology application products.

(14) Share capital

A.As of September 30, 2013, the Company’s authorized capital was $5,000,000, consisting of 500,000 thousand shares of ordinary stock (including 30,000 thousand shares reserved for stock options), and the paid-in capital was $3,902,653 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

Movements in the number of the Company’s ordinary shares outstanding are as follows:

~43~

At January 1 Employee stock options exercised Purchase of treasury shares At September 30		For the nine-month period ended September 30, 2013 (in thousands of shares)	For the nine-month period ended September 30, 2012 (in thousands of shares)
		373,001 4,014 - 377,015	376,435 580 1,250) ( 375,765

B.Treasury shares
a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

Shares held by	September 30, 2013 (in thousands of shares)	September 30, 2013 (in thousands of shares)
	Number of shares Book Value 13,250 440,573 $ December 31, 2012 (in thousands of shares)
Altek Corporation Shares held by
	Number of shares Book Value 23,100 768,094 $ September 30, 2012 (in thousands of shares)
Altek Corporation Sharesheld by
	Number ofshares BookValue 20,336 736,761 $ January 1, 2012 (in thousands of shares)
Altek Corporation Shares held by
	Number of shares 19,086	Book Value 714,702 $
Altek Corporation

b) Pursuant to the R.O.C. Securities and Exchange Law, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.

~44~

c) Pursuant to the R.O.C. Securities and Exchange Law, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.
d) Pursuant to the R.O.C. Securities and Exchange Law, treasury shares should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.
e) The cancellation of treasury shares was approved by the Board of Directors’ resolution on August 5, 2013, amounting to $194,047 consisting of 5,836 thousand shares. The capital reduction date is on September 2, 2013, and the registration for cancellation of treasury shares had been completed.

(15) Capital surplus

Pursuant to the R.O.C. Company Law, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

he legal reserve is insufficient.
At January 1, 2013 Employee stock options exercised Capital surplus used to issue cash to shareholders Cancellation of treasury shares Difference between acquisition of equity interest in a subsidiary and its carrying amount At September 30, 2013	Share premium	Treasury share transactions		Employee restricted shares		Difference between proceeds from disposal of subsidiary and book value	Amount
	2,267,949 $ - 335,701) ( 28,469) ( - 1,903,779 $		- $ - - - - - $	109,495 $ 11,565 - 30) ( - 121,030 $		- $ - - - 811 811 $	2,377,444 $ 11,565 335,701) ( 28,499) ( 811 2,025,620 $

~45~

Retained earnings Share premium At January 1, 2012 2,253,964 $ Employee stock options exercised 12,461 At September 30, 2012 2,266,425 $ At January 1 Profit for the period Appropriation of earnings Share-based payment transactions Cancellation of treasury shares At September 30		Share premium	Treasury share transactions	Treasury share transactions		Employee restricted shares		Difference between proceeds from disposal of subsidiary and book value		Amount
				$				$
				$				$

(16) Retained earnings
A. According to the Company’s Articles of Incorporation, the annual earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. Special reserve shall be set aside in accordance with the rules set forth in the Securities and Exchange Law, and remaining amount shall be distributed in the following order:
- (a) allocating 10% to 20% as employees’ bonus;
- (b)allocating 2% as directors’ and supervisors’ remuneration; and
- (c)distributing the remaining amount as common stockholders’ dividends in accordance with the resolution adopted by the Board of Directors and approved at the stockholders’ meeting.
B. The amount of dividends appropriated is based on the Company’s current year’s net income and prior years’ retained earnings, taking into account the Company’s financial structure and future operating plans. The distribution ratio of cash dividends to stock dividends is based on the Company’s funding status, diluted earnings per share and other factors. According to the dividend policy adopted by the Board of Directors, cash dividends shall account for at least 20% of the total dividends distributed. Dividends appropriation shall be resolved by the stockholders at the stockholders’ meeting.

~46~

C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the balance of the reserve excess of 25% of the Company’s paid-in capital.
D.
a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.
E. The appropriation of 2012 earnings had been resolved at the stockholders’ meeting on June 24, 2013 and the appropriation of 2011 earnings had been resolved at the stockholders’ meeting on June 13, 2012. Details are summarized below:

Legal reserve Special reserve Cash dividends	Dividends per share Dividends per share Amount (in NT dollars) Amount (in NT dollars) 28,011 $ - 19,184 $ - 196,811 - 488,347) ( - 37,300 Around $0.1 564,809 Around $1.5 262,122 $ 95,646 $ 2012 earnings 2011 earnings	2011 earnings	2011 earnings
	Amount 28,011 $ 196,811 37,300 262,122 $		Dividends per share (in NT dollars)
			- - Around $1.5

The appropriation of 2012 earnings was the same as that approved by the Board of Directors on March 18, 2013.

The 2012 directors’ and supervisors’ remuneration and employees’ cash bonus as appropriated during the stockholders’ meeting on June 24, 2013 were $1,106 and $8,292, respectively, and appropriated $335,701 (around $0.9 per share) of the additional paid-in capital to stockholders. The 2011 directors’ and supervisors’ remuneration and employees’ cash bonus as appropriated during the stockholders’ meeting on June 13, 2012 were $13,220 and $99,151, respectively.

~47~

F. The estimated amounts of employees’ bonus were $4,154 and $11,351 and the estimated amounts of directors’ and supervisors’ remuneration were $554 and $1,513 for the three-month periods ended September 30, 2013 and 2012, respectively; the estimated amounts of employees’ bonus were $4,154 and $34,680 and the estimated amounts of directors’ and supervisors’ remuneration were $554 and $4,624 for the nine-month periods ended September 30, 2013 and 2012, respectively, and were recognized as operating costs or operating expenses. Information on the appropriation of the Company’s earnings as resolved by the Board of Directors and approved by the stockholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.
(17) Other equity items

Other equity items
		For the nine-month		For the nine-month
		period ended		period ended
		September30,2013		September30,2012
At January 1	($	340,799)	$	-
Currency translation differences:
Group		248,757	(	296,405)
Associates		12,935	(	13,976)
At September 30	($	79,107)	($	310,381)

(18) Other income

Other income
Rental revenue Dividend income Interest income: Interest income from bank deposits Others Other income - others Total	For the three-month period ended September 30,2013 $ 5,140 534 15,871 25 48 $ 21,618	For the three-month period ended September 30,2012
		$ 6,335 477 31,851 25 602
		$ 39,290

~48~

Rental revenue Dividend income Interest income: Interest income from bank deposits Others Other income - others Total	For the nine-month period ended September 30,2013 $ 15,417 534 47,604 77 717 $ 64,349	For the nine-month period ended September 30,2012
		$ 22,753 477 96,458 74 5,756
		$ 125,518

(19) Other gains and losses

(19) Other gains and losses
(20) Finance costs For the three-month period ended September 30,2013 Net gains on financial assets at fair value through profit or loss 2,866 $ Net currency exchange gains 3,631 Gains on disposal of property, plant and equipment 90 Other expenses 3) ( Total 6,584 $ For the nine-month period ended September 30,2013 Net gains on financial assets at fair value through profit or loss 7,385 $ Net currency exchange gains 5,602 Gains on disposal of property, plant and equipment 491 Other expenses 629) ( Total 12,849 $ For the three-month period ended September30,2013 Interest expense: Bank borrowings 2,779 $	For the three-month period ended September 30,2012
	725 $ 7,606 5 1) (
	8,335 $
	For the nine-month period ended September 30,2012
	2,581 $ 23,944 389 74) (
	26,840 $
	For the three-month period ended September30,2012 434 $

~49~

(21) Expenses by nature (22) Employee expense Interest expense: Bank borrowings Employee expense Depreciation charges on property, plant and equipment Amortisation charges on intangible assets Total Employee expense Depreciation charges on property, plant and equipment Amortisation charges on intangible assets Total Wages and salaries Employee stock options Labor and health insurance fees Pension costs Other personnel expenses Total	For the nine-month period ended September30,2013 7,946 $ For the three-month period ended September30,2013 470,138 $ 84,478 4,926 559,542 $ For the nine-month period ended September30,2013 1,415,072 $ 239,505 10,481 1,665,058 $ For the three-month period ended September30,2013 400,397 $ 3,563 20,928 24,294 20,956 470,138 $	For the nine-month period ended September30,2012
		434 $
		For the three-month period ended September30,2012
		577,898 $ 74,822 2,927
		655,647 $
		For the nine-month period ended September30,2012
		1,734,785 $ 210,627 9,803
		1,955,215 $
		For the three-month period ended September30,2012
		493,951 $ 4,523 23,595 27,124 28,705
		577,898 $

~50~

Wages and salaries Employee stock options Labor and health insurance fees Pension costs Other personnel expenses Total	For the nine-month period ended September30,2013 1,201,270 $ 14,310 65,028 71,013 63,451 1,415,072 $	For the nine-month period ended September30,2012
		1,474,278 $ 15,619 74,048 87,735 83,105
		1,734,785 $

(23) Income tax

A.Income tax expense

a) Components of income tax expense:

me tax come tax expense Components of income tax expense:	$	1,415,072	$	1,734,785
		For the three-month		For the three-month
		period ended		period ended
		September 30,2013		September 30,2012
Current tax:
Current tax on profits for the period	($	917)	$	22,091
Adjustments in respect of prior years		1,940		1,815
Total current tax		1,023		23,906
Deferred tax:
Origination and reversal of temporary
differences		4,755	(	12,221)
Impact of change in tax rate		-		-
Total deferred tax		4,755	(	12,221)
Income tax expense	$	5,778	$	11,685
		For the nine-month		For the nine-month
		period ended		period ended
		September 30,2013		September 30,2012
Current tax:
Current tax on profits for the period	$	24,504	$	72,565
Adjustments in respect of prior years	(	6,328)		16,623
Total current tax		18,176		89,188
Deferred tax:
Origination and reversal of temporary
differences	(	11,885)	(	42,485)
Impact of change in tax rate		-		-
Total deferred tax	(	11,885)	(	42,485)
Income tax expense	$	6,291	$	46,703

~51~

b) The income tax charged / (credited) to equity during the period is as follows:

For the three-month period ended September 30,2013 Translation differences of foreign operations 19,795 $ For the nine-month period ended September 30,2013 Translation differences of foreign operations 53,599) ($	For the three-month period ended September 30,2012
	36,712 $
	For the nine-month period ended September 30,2012
	63,572 $

B.The relationship between tax expense and accounting profit is shown below:

		For the nine-month		For the nine-month
		period ended		period ended
		September30,2013		September30,2012
Tax on pretax income at statutory tax rate	$	16,561	$	107,222
Temporary differences		15,173	(	10,400)
Estimated 10% corporate income tax on
unappropriated earnings		1,052		11,820
Adjustment of income tax expense in
prior years	(	6,328)		16,623
Changes in reassessment of deferred tax
assets	(	11,885)	(	42,485)
Tax effect of tax-exempt income	(	1,700)	(	3,400)
Tax effect of minimum tax		-		93
Increase in investment tax credit	(	6,582)	(	32,770)
Income tax expense	$	6,291	$	46,703

C.As of September 30, 2013, the Company’s income tax returns through 2010 have been assessed and approved by the Tax Authority.

D.Unappropriated retained earnings:

Earnings generated in and after 1998

September 30,2013 3,078,742 $ September 30,2012 3,612,165 $	December 31,2012
	3,621,302 $
	January1,2012
	3,450,925 $

~52~

E.As of September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012, the balance of the imputation tax credit account was $226,009, $224,006, $223,469 and $192,419, respectively. The creditable tax rate was estimated to be 7.34% for 2013 and was 7.03% for 2012.

(24) Earnings per share

2012. Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profits attributable to ordinary shareholders of the parent Diluted earnings per share Profits attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ bonus Profits attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	For the three-monthperiod ended September 30,2013
	Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (share in thousands) (in dollars) 61,262 $ 377,015 0.16 $ 61,262 $ - - 161 61,262 $ 377,176 0.16 $ For the nine-monthperiod ended September 30,2013		Earnings per share (in dollars)
			0.16 $
			0.16 $
	Amount after tax 30,770 $ 30,770 $ - 30,770 $	Weighted average number of ordinary shares outstanding (share in thousands) 375,854 - 404 376,258	Earnings per share (in dollars)
			0.08 $
			0.08 $

~53~

For the three-month period ended September 30, 2012

	For the three-monthperiod ended September 30,2012	For the three-monthperiod ended September 30,2012	r 30,2012
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employee stock options Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employee stock options Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (share in thousands) (in dollars) 84,078 $ 376,939 0.22 $ 84,078 $ - - 122 - 1,987 84,078 $ 379,048 0.22 $ For the nine-monthperiod ended September 30,2012		Earnings per share (in dollars)
			0.22 $
			0.22 $
	Amount after tax 256,886 $ 256,886 $ - - 256,886 $	Weighted average number of ordinary shares outstanding (share in thousands) 376,809 - 122 1,987 378,918	Earnings per share (in dollars)
			0.68 $
			0.68 $

(25) Transactions with non-controlling interest

Acquisition of additional equity interest in a subsidiary

For the nine-month period ended September 30, 2013, the Group acquired an additional 1.37% － shares of its subsidiary Altek Autotronics Corporation for a total cash consideration of $3,259. This transaction resulted in a decrease in the non-controlling interest by $4,070 and an increase in the equity attributable to owners of the parent by $811. The effect of change in ownership interests

~54~

in Altek Autotronics Corporation on the equity attributable to owners of the parent for the three-month period ended September 30, 2013, and for the nine-month period ended September 30, 2013 are shown below:

Carrying amount of non-controlling interest acquired Consideration paid to non-controlling interest Capital surplus -difference between proceeds on acquisition of or disposal of equity interest in a subsidiary and its carrying amount	For the three-month period ended September 30,2013	For the nine-month period ended September 30,2013
	1,494 $ 1,067) ( 427 $	4,070 $ 3,259) ( 811 $

(26) Operating leases

The Group acquired a Taipei building for operating use at the end of 2013. However, since this building is still under a certain unexpired lease agreement, the Company continuously leases the building to the lessee. Contingent rents of $7,964, $7,880, $23,891 and $29,343 were recognised for these leases in profit or loss for the three-month periods ended September 30, 2013 and 2012, and for the nine-month periods ended September 30, 2013 and 2012, respectively. The future aggregate minimum lease payments receivable under non-cancellable operating leases are as follows:

2013 2014 2015 2012 2013	September 30,2013 8,362 $ 29,825 14,912 53,099 $ September 30,2012 8,362 $ 18,535 26,897 $	December 31,2012
		33,447 $ 29,825 14,912
		78,184 $
		January1,2012 24,260 $ 3,622 27,882 $

~55~

(27) Non-cash transactions

Investing activies partially paid by cash:

Investing activies partially paid by cash:
Acquisitions of property, plant, and equipment Add:property and equipment and construction billings payable at end of period Less: property and equipment and construction billings payable at end of period Cash paid	For the nine-month period ended September30,2013	For the nine-month period ended September30,2012
	582,655 $ 83,597 26,439) ( 639,813 $	288,858 $ 151,403 61,598) ( 378,663 $

(28) Seasonality of operations

Due to seasonal factors, in general, the revenue and profit would be higher in the second half of the year than in the first half of the year.

7. RELATED PARTY TRANSACTIONS

(1) Significant transactions and balances with related parties:

No significant related party transactions.

(2) Key management compensation

No significant related party transactions. Key management compensation
Salaries and other short-term employee benefits Post-employment benefits Share-based payments Total Salaries and other short-term employee benefits Post-employment benefits Share-based payments Total	For the three-month period ended September 30,2013	For the three-month period ended September 30,2012
	5,987 $ 135 593 6,715 $ For the nine-month period ended September 30,2013	7,947 $ 189 1,080 9,216 $ For the nine-month period ended September 30,2012
	17,931 $ 405 2,537 20,873 $	23,019 $ 567 3,731 27,317 $

~56~

8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) Contingencies

Kodak US has filed a civil lawsuit against the Company in the New York District Court on January 12, 2012 (herein referred to as the “Lawsuit”) due to a royalty dispute. The Lawsuit is not a patent infringement litigation. The Company is currently trying to negotiate with Kodak US to settle the Lawsuit out-of-court. The court already issued an initial summary judgement of contract interpretation regarding the royalty exemption. The court has ordered further case schedule and the Lawsuit is still ongoing as of the release date of the financial statements authorized by the Board of Directors. Because litigation is inherently unpredictable, the Company is unable to accurately predict the ultimate outcome and the outcome could have a potential adverse effect on the business and financial condition.

(2) Commitments

For details on operating lease agreements, please refer to Note 6(26).

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure. The Group may adjust the amount of dividends, return capital or issue new shares to achieve the optimal capital structure.

(2) Financial instruments

A. Fair value information of financial instruments

The carrying amounts of financial instruments (including cash and cash equivalents, notes receivable, accounts receivable, other receivables, refundable deposits (shown as non-current assets), short-term borrowings, notes payable, accounts payable, other payables, and guarantee deposits received (shown as non-current liabilities)) are approximate to their fair value. The fair value information of financial instruments measured at fair value is provided in Note 12(3).

~57~

B.Financial risk management policies

a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial position and financial performance.
b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units, as well as provides written principles for overall risk management and policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
C.Significant financial risks and degrees of financial risks a) Market risk

Foreign exchange risk

i.The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the USD. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.
ii.Management has set up a policy to require that group companies hedge their entire foreign exchange risk exposure with Group treasury. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.
iii.The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group’s foreign operations is managed primarily through borrowings denominated in the relevant foreign currencies.
iv.The Group’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD; other certain subsidiaries’ functional currency: USD and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

~58~

			September 30,2013	September 30,2013	September 30,2013	September 30,2013	September 30,2013	September 30,2013
Foreign Currency Amount (Inthousands)		Exchange Rate	BookValue		SensitivityAnalysis
			(NTD)		Extent of Variation	Effect on Profit or Loss		Effect on Other Comprehensive income
USD 116,319 29.570 3,439,553 $ 1% 34,396 $ - $ USD 121,702 6.1480 3,598,728 1% 35,987 - USD 11,288 29.570 333,786 $ USD 142,504 29.570 4,213,843 $ 1% 42,138 $ - $ USD 134,295 6.1480 3,971,103 1% 39,711 - Book Value Foreign Currency Amount (In thousands) Exchange Rate (NTD) USD 151,968 29.040 4,413,151 $ USD 105,786 6.2854 3,072,025 USD 12,101 29.040 351,419 $ USD 184,530 29.040 5,358,751 $ USD 114,342 6.2854 3,320,492 December 31,2012		29.570 6.1480 29.570 29.570 6.1480	3,439,553 $ 1% 3,598,728 1% 333,786 $ 4,213,843 $ 1% 3,971,103 1% December 31,2012			34,396 $ 35,987 42,138 $ 39,711		- $ - - $ -
	Foreign Currency Amount (In thousands)			Exchange Rate			Book Value
							(NTD)
	USD 151,968 USD 105,786 USD 12,101 USD 184,530 USD 114,342			29.040 6.2854 29.040 29.040 6.2854			4,413,151 $ 3,072,025 351,419 $ 5,358,751 $ 3,320,492

~59~

September 30, 2012 Book Value Sensitivity Analysis

Foreign Currency Amount (In thousands)	Foreign Currency Amount (In thousands)	Exchange Rate	(NTD)	(NTD)	Effect on Profit or Loss
USD 170,457 29.295 4,993,538 $ 1% 49,935 $ - $ USD 127,522 6.3410 3,735,757 1% 37,358 - USD 12,583 29.295 368,619 $ USD 174,443 29.295 5,110,308 $ 1% 51,103 $ - $ USD 156,478 6.3410 4,584,023 1% 45,840 - BookValue Foreign Currency Amount (In thousands) Exchange Rate (NTD) USD 188,356 30.275 5,702,478 $ USD 95,528 6.3009 2,892,110 USD 13,777 30.275 417,111 $ USD 200,803 30.275 6,079,311 $ USD 135,196 6.3009 4,093,059 January1,2012		29.295 6.3410 29.295 29.295 6.3410	4,993,538 $ 1% 3,735,757 1% 368,619 $ 5,110,308 $ 1% 4,584,023 1% January1,2012		49,935 $ 37,358 51,103 $ 45,840
	Foreign Currency Amount (In thousands)			Exchange Rate
	USD 188,356 USD 95,528 USD 13,777 USD 200,803 USD 135,196			30.275 6.3009 30.275 30.275 6.3009

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Interest rate risk

Interest risk arises from the changes of market interest rate causing fluctuation in financial instruments’ fair value or cash received and paid in the future.

The Group is exposed mainly to floating interest rate borrowings; however, the Group raised short-term borrowings at fixed rates durning the first three quarters of 2013, and thus had no significant cash flow interest rate risk.

Price risk

The Group is exposed to price risk because of investments held by the Group. The Group sets limits to control the transaction volume and stop-loss amount to reduce it’s market risk.

b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings, the utilisation of credit limits is regularly monitored. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions.
ii No credit limits were exceeded during the reporting periods, and management does not expect any significant losses from non-performance by these counterparties.
iii.The individual analysis of financial assets that had been impaired is provided in the statement for each type of financial assets in Note 6.
iv.The credit quality information of financial assets that are neither past due nor impaired is provided in the statement in Note 6(4).
c) Liquidity risk
i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, compliance with internal balance sheet ratio targets.
ii. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in interest bearing current accounts, time deposits and marketable securities,

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choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.
iii. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

Non-derivative financial liabilities:
September 30, 2013 Short-term borrowings Accounts payable Other payables Guarantee deposits received Non-derivative financial liabilities: December 31, 2012 Notes payable Accounts payable Other payables Guarantee deposits received Non-derivative financial liabilities: September 30, 2012 Short-term borrowings Notes payable Accounts payable Other payables Guarantee deposits received Non-derivative financial liabilities: January 1, 2012 Notes payable Accounts payable Other payables Guarantee deposits received	Less than 1year	Over 1year
	600,000 $ 3,470,731 735,891 906 Less than 1year	- $ - - 7,456 Over 1year
	40 $ 3,145,050 1,230,200 8,362 Less than 1year	- $ - - - Over 1year
	520,000 $ 129 4,530,467 1,149,513 7,456 Less than 1year	- $ - - - 906 Over 1year
	957 $ 5,201,324 1,155,796 22,530	- $ - - -

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(3) Fair value estimation

A. The table below analyses financial instruments measured at fair value, by valuation method. The different levels have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Level 3: Inputs for the assets or liabilities that are not based on observable market data. The following table presents the Group’s financial assets and liabilities that are measured at fair value at September 30, 2013, December 31, 2012, September 30, 2012 and January 1, 2012.

2012.
September 30, 2013 Financial assets: Financial assets at fair value through profit or loss Beneficiary Certificate December 31, 2012 Financial assets: Financial assets at fair value through profit or loss Beneficiary Certificate September 30, 2012 Financial assets: Financial assets at fair value through profit or loss Beneficiary Certificate January 1, 2012 Financial assets: Financial assets at fair value through profit or loss Beneficiary Certificate	Level 1 356,649 $ Level 1 428,282 $ Level 1 205,662 $ Level 1 497,652 $	Level 2 - $ Level 2 - $ Level 2 - $ Level 2 - $	Level3 - $ Level 3 - $ Level 3 - $ Level3 - $	Total
				356,649 $
				Total
				428,282 $
				Total
				205,662 $
				Total
				497,652 $

B. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.

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Instruments included in level 1 comprise primarily equity instruments classified as financial assets at fair value through profit or loss or available-for-sale financial assets.

(Blank below)

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13. SUPPLEMENTARY DISCLOSURES

The following information was expressed in thousand of New Taiwan dollars, unless stated otherwise. The foreign currency amounts of gain or loss was translated into New Taiwan dollars using the exchange rate of 1:29.7311, remaining foreign currency amounts was translated using the exchange rate of 1:29.57.

(1) Significant transactions information

The details are as follows:

A. Loans to others: None.

B. Provision of endorsements and guarantees to others: None.

C. Holding of marketable securities at the end of the period:

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As ofSeptember30,2013	As ofSeptember30,2013
				Number of shares $ 94,333,839 1,000 5,000,000 17,750,000 381,438 15,488,000 30 10,000,000	Book value 10,241,569 7,812 23,096 283,361 10,311 102,693 23,954 93,450	Ownership (%) 100% 100% 100% 88.75% 14.98% 7.06% 4.84% 2%	Market value
Altek Corporation " " " " " " "	Altek International Investment Co., Ltd. - Common stock Altek Japan Corporation - Common stock Altek Investment Co., Ltd. - Common stock Altek Autotronics Corporation - Common stock Gianta Co., Ltd. - Common stock Pac-line Opportunity Fund - Common stock Yung Li Investments Inc. - Common stock Hua-chuang Automobile Information Technical Center Co., Ltd. - Common stock	Subsidiary accounted for under the equity method " " " Director Supervisor None "	Long-term equity investments accounted for under the equity method " " " Financial assets carried at cost - non-current " " "				$ 10,241,569 7,812 23,096 283,361 10,311 102,693 23,954 93,450

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Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As ofSeptember30,2013	As ofSeptember30,2013
				Number of shares Bookvalue 3,124 $ 98,113 11,311,875 (Note 1) 51,038 3,500,000 33,309 N/A 3,957,885 " 843,839 " 51,304 " 199,479 " 296,144 " 300,465 20,000,000 122,242 N/A 325,536 " 5,772 " ( 3,312) 304,793 4,797		Ownership (%) Marketvalue N/A $ 98,113 100% 51,038 23.33% 33,309 100% 3,957,885 100% 843,839 100% 51,304 100% 199,479 100% 296,144 40% 300,465 100% 122,242 100% 325,536 (Note 2) 5,772 100% ( 3,312) N/A 4,797	Marketvalue
Altek International Investment Co., Ltd. " " Leading Tech Co., Ltd. Toptek Investment Cayman Co., Ltd. Altek Imaging Technology (Cayman) Co., Ltd. " Altek Trading (Cayman) Co., Ltd. Altek Optical (Cayman) Co., Ltd. Altek Semiconductor (Cayman) Co., Ltd. Altek Optical Technology (Cayman) Co., Ltd. Altek (Kunshan) Co., Ltd. Altek Trading (Shanghai) Co., Ltd. Altek Investment Co., Ltd.	Money Market Fund Altek Lab Inc. - Common stock and preferred stock JinJing Optical Technology Co., Ltd. - Common stock Altek (Kunshan) Co., Ltd. Altek EMS (Kunshan) Co., Ltd. Altek Imaging Technology (Shanghai) Limited Altek Precision (Kunshan) Co., Ltd. Altek Trading (Shanghai) Co., Ltd. Phoenix Optical (Shanghai) Co., Ltd. Altek Semiconductor Corporation Altek Optical Technology (Kunshan) Co., Ltd. Guangdong Kingding Optical Machine Co., Ltd. Beijing Altek Image Communication Technology Co., Ltd. Money Market Fund	None Subsidiary accounted for under the equity method " " " " " " " " " None Subsidiary accounted for under the equity method None	Financial assets at fair value through profit or loss-current Long-term equity investments accounted for under the equity method " " " " " " " " " Financial assets carried at cost - non-current Long-term equity investments accounted for under the equity method Financial assets at fair value through profit or loss-current

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Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account Financial assets carried at cost - non-current Financial assets at fair value through profit or loss-current "		As of September 30,2013	As of September 30,2013
				Number of shares 1,781,000 16,668,724 2,226,828	Book value $ 18,339 208,781 44,944	Ownership (%) 8.91% N/A N/A	Market value
Altek Investment Co., Ltd. Altek Autotronics Corporation Altek Semiconductor Corporation	Altek Autotronics Corporation Money Market Fund Money Market Fund	Affiliated company None "					$ 18,339 208,781 44,944

Note 1: Including common stock of 9,311,875 shares and preferred stock of 2,000,000 shares.

Note 2: 8% of Guangdong kingding Optical Machine Co.,Ltd.’s capital contribution.

D. Aggregate purchases or sales of the same securities reaching NT$100 million or 20% of paid-in capital or more: None.

E. Acquisition of real estate reaching NT$100 million or 20% of paid-in capital or more: None.

F. Disposal of real estate reaching NT$100 million or 20% of paid-in capital or more: None.

G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more:

Purchaser/Seller	Counterparty	Relationship with the counterparty		Transaction	Transaction	Percentage of total Credit Credit notes / accounts term Unitprice term Balance receivable(payable) Net 120 days Approximately the same price with third parties Note ($ 4,170,060) 99% " " " 4,170,060 99% Net 75 days " " ( 609,625) 86% " " " 609,625 27% Differences in transaction terms Notes / accounts compared to thirdpartytransactions receivable(payable)	Notes / accounts receivable(payable)	Notes / accounts receivable(payable)
			Purchases (sales) Amount Purchases $ 7,597,944 Sales ( 7,597,944) Purchases 7,651,305 Sales ( 7,651,305)		Percentages of total purchases(sales) 100% 98% 99% 69%			Percentage of total notes / accounts receivable(payable)
Altek Corporation Altek International Investment Co., Ltd. Altek International Investment Co., Ltd. Altek (Kunshan) Co., Ltd.	Altek International Investment Co., Ltd. Altek Corporation Altek (Kunshan) Co., Ltd. Altek International Investment Co., Ltd.	Affiliated enterprise Parent company Affiliated enterprise Parent company						99% 99% 86% 27%

Note: The payment term with third parties was net 60~120 days, the collection term with third parties was net 45~90 days.

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H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more:

Creditor	Counterparty	Relationship with the counterparty	Balance as at September 30,2013	Turnover rate 3.11	Amount Action taken $ - N/A Overdue receivables	Amount collected subsequent to the balance sheet date $ 1,193,634	Allowance for doubtful accounts
					Amount $ -
Altek International Investment Co., Ltd.	Altek Corporation	Parent company	$ 4,170,060				$ -

I. Derivative financial instruments undertaken during the nine-month period ended September 30, 2013: None.

J. Significant inter-company transactions during the nine-month period ended September 30, 2013:

Company name Altek Corporation " Altek International Investment Co., Ltd. " " Altek (Kunshan) Co., Ltd.	Counterparty	Relationship (Note 1)			Transaction
			General ledger account Purchases Accounts payable Sales Accounts receivable Purchases Sales	Amount 7,597,944 $ 4,171,060 7,597,944 4,170,060 7,651,305 7,651,305	Transaction terms Net 120 days " " " Net 75 days "	Percentage of consolidated total operating revenues or total assets (Note 2)
	Altek International Investment Co., Ltd. " Altek Corporation " Altek (Kunshan) Co., Ltd. Altek International Investment Co., Ltd.	1 1 2 2 3 3				50% 25% 50% 25% 50% 50%

Note 1: Relationship between transaction and counterparty is classified into the following categories:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 2: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to

consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

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(2) Information on investees

Investor	Investee	Location	Main business activities	Balance as at Balance as at September 30,2013 January1,2013 $ 3,086,363 $ 3,086,363 2,869 2,869 50,000 50,000 177,500 177,500 108,818 108,818 103,495 103,495 1,330,650 1,330,650 265,627 265,627 Initial investment amount	Shares held	Net profit (loss) of Investment income (loss) the investee for the recognised by the Company Ownership nine-month period for the nine-month period (%) Book value ended September 30,2013 ended September 30,2013 100% $ 10,241,569 ($ 252,404) ($ 241,285) 100% 7,812 2,010 2,010 100% 23,096 ( 39) ( 39) 88.75% 283,361 37,692 36,456 100% 51,038 803 803 23.33% 33,309 1,308 357 100% 3,957,885 7,195 7,195 100% 843,839 1,278 1,278 as at September 30,2013	Footnote
				Balance as at September 30,2013 $ 3,086,363 2,869 50,000 177,500 108,818 103,495 1,330,650 265,627	Number of Shares 94,333,839 1,000 5,000,000 17,750,000 11,311,875 3,500,000 - -	Ownership (%) 100% 100% 100% 88.75% 100% 23.33% 100% 100%
Altek Corporation " " " Altek International Investment Co., Ltd. " Leading Tech. Co., Ltd. Toptek Investment Cayman Co., Ltd.	Altek International Investment Co., Ltd. Altek Japan Corporation Altek Investment Co., Ltd. Altek Autotronics Corporation Altek Lab Inc. JinJing Optical Technology Co., ltd. Altek (Kunshan) Co., Ltd. Altek EMS (Kunshan) Co., ltd.	British Virgin Islands Japan Republic of China Republic of China U.S.A. Samoa Mainland China Mainland China	Investment and general business operations Sale and design of digital cameras and its optical instruments Investment Research design, manufacture and sales of car electronic components Design and sale of engineering and optical components Investment and general business operations Manufacture and sale of digital cameras and its accessories SMT processing and related engineering services				Note 1 Note 2

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Investor	Investee	Location	Main business activities	Balance as at Balance as at September30,2013 January1,2013 $ 85,753 $ 85,753 408,066 408,066 251,345 251,345 262,108 262,108 443,550 443,550 200,000 200,000 30,309 30,309 443,550 354,840 Initial investment amount	Shares held	Net profit (loss) of Investment income (loss) the investee for the recognised by the Company Ownership nine-month period for the nine-month period (%) Book value ended September 30,2013 ended September 30,2013 100% $ 51,304 $ 505 $ 505 100% 199,479 ( 60,949) ( 60,949) 100% 296,144 ( 7,938) ( 7,938) 40% 300,465 ( 81,166) ( 33,150) 100% 319,711 ( 16,709) ( 16,709) 100% 122,242 ( 60,473) ( 60,473) 100% ( 3,312) ( 297) ( 297) 100% 325,536 ( 80,839) ( 80,839) as at September 30,2013	Footnote
				Balance as at September30,2013 $ 85,753 408,066 251,345 262,108 443,550 200,000 30,309 443,550	Number of Shares - - - - - 20,000,000 - -
Altek Imaging Technology (Cayman) Co., Ltd. Altek Imaging Technology (Cayman) Co., Ltd. Altek Trading (Cayman) Co., Ltd. Altek Optical (Cayman) Co., Ltd. JinJing Optical Technology Co., Ltd. Altek Semiconductor (Cayman) Co., Ltd. Altek Trading (Shanghai) Limited Altek Optical Technology (Cayman) Co., Ltd.	Altek Imaging Technology (Shanghai) Limited Altek Precision (kunshan) Co., Ltd. Altek Trading (Shanghai) Limited Phoenix Optical (Shanghai) Co., Ltd. Kinko Optical (Suzhou) Co., Ltd. Altek Semiconductor Corporation Beijing Altek Image Communication Technology Co., Ltd. Altek Optical Technology (Kunshan) Co., Ltd.	Mainland China Mainland China Mainland China Mainland China Mainland China Republic of China Mainland China Mainland China	Manufacture and sale of digital still cameras or related optical components Design, manufacture and sales of digital camera parts Wholesale, import and export of digital cameras, digital video cameras and their associated accessories Manufacturing and marketing of digital cameras and its key components photo sensor and optoelectronic equipment Manufacture and sale of optical components Research design and sales of ASIC Sales of digital camera, cell phone and related accessories and supporting products Manufacturing and sales of digital camera and its accessories and optical components

Note 1: The difference is the adjustment of unrealized gain or loss from the upstream inter-company transactions between subsidiaries. Note 2: Common stock of 9,311,875 shares and preferred stock of 2,000,000 shares.

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(3) Information on investments in Mainland China

A.The related information of investments in Mainland China are as follows:

Investee in Mainland China	Main business activities	Paid-in Capital	Investment Method (Note1)	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2013	Amount remitted from China / Amount remitt the nine-monthperiod en	Remitted back toTaiwan $ - - - - - - - Taiwan to Mainland ed back to Taiwan for ded September 30,2013	Accumulated amount of remittance from Taiwan to Mainland China as of September30,2013 $ 1,330,650 268,584 85,753 251,345 103,495 262,108 -	Ownership Investment income Book value of Accumulated amount held by (loss) recognised investments of investment the Company by the Company for the in Mainland income remitted back (direct or nine-month period ended China as of to Taiwan as of indirect) September30,2013 September30,2013 September30,2013 100% $ 7,195 $ 3,957,885 $ - 100% 1,278 843,839 - 100% 505 51,304 - 100% ( 7,938) 296,144 - 23.33% ( 3,898) 53,481 - 40% ( 33,150) 300,465 - 100% ( 297) ( 3,312) -	Accumulated amount of investment income remitted back to Taiwan as of September30,2013
					Remitted to Mainland China $ - - - - - - -
Altek (Kunshan) Co., Ltd. (Note 2) Altek EMS (Kunshan) Co., Ltd. (Note 3) Altek Imaging Technology (Shanghai) Limited Altek Trading (Shanghai) Limited Kinko Optical (Suzhou) Co., Ltd. Phoenix Optical (Shanghai) Co., Ltd. Beijing Altek Image Communication Technology Co., Ltd.	Manufacture and sale of digital still cameras and its accessories SMT processing and related engineering services Manufacture and sale of optical components Wholesale, import and export of digital cameras, digital video cameras and their associated accessories Manufacture and sale of optical components Manufacturing and marketing of digital cameras and its key components, photo sensor and optoelectronic equipment Sales of digital camera, cell phone and related accessories and supporting products	$ 1,466,672 147,850 85,753 251,345 443,550 467,886 30,309	1 1 1 1 1 1 1	$ 1,330,650 268,584 85,753 251,345 103,495 262,108 -

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Investee in Mainland China	Main business activities	Paid-in Capital	Investment Method(Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2013	the nine-monthperiod en Amount remitted from China / Amount remitt	Remitted back to Taiwan $ - - ded September 30,2013 Taiwan to Mainland ed back to Taiwan for	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2013 $ 408,066 443,550	Ownership Investment income held by (loss) recognised the Company by the Company for the (direct or nine-month period ended indirect) September 30,2013 100% ($ 60,949) 100% ( 80,839)	Book value of investments in Mainland China as of September 30,2013 $ 199,479 325,536	Accumulated amount of investment income remitted back to Taiwan as of September 30,2013
					Remitted to Mainland China $ - 88,710
Altek Precision (Kunshan) Co., Ltd. Altek Optical Technology (Kunshan) Co., Ltd.	Design, manufacture and sales of digital camera parts Manufacture and sales of digital camera and its accessories and optical components	$ 408,066 443,550	1 1	$ 408,066 354,840						- -

Note 1: Indirect investment in PRC through existing companies located in the third area.

Note 2: Including retained earnings capitalized of US$4,600.

Note 3: Including retained earnings capitalized of US$3,600.

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2013	Investment amount approved by the Investment Commission of the Ministryof Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed bythe Investment Commission of MOEA(note)
Altek Corporation	$ 3,153,552	$ 4,227,150	$ -

Note: According to “REGULATIONS GOVERNING THE APPROVAL OF INVESTMENT OR TECHNICAL COOPERATION IN MAINLAND CHINA” on August 29, 2008, Altek Corporation obtained the approval from the Industrial Development Bureau of Ministry of Economics Affairs issued to Headquarters, so there is no need to compute the ceiling amount of the Company.

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B. Significant transactions with the direct and indirect investments in Mainland China (the amount are the figures prior to eliminating the purchase and sales transactions between the Company and the investee companies in China through its subsidiaries (the middlemen) in other countries). (a) Purchases:
i. The Company’s net purchases from Altek International Investment Co., Ltd. (“AII”), which indirectly invested in a Mainland China company, are as follows.

Altek International Investment Co., Ltd.	For the nine-month period ended September 30,2013	For the nine-month period ended September 30,2013
	Amount	Percentage of netpurchases
	$ 7,687,775	100%

ii. AII’s net purchases from Altek (Kunshan) Co., Ltd., which was AII’s indirect investee in Mainland China.

Altek (Kunshan) Co., Ltd.	For the nine-month period ended September 30,2013	For the nine-month period ended September 30,2013
	Amount	Percentage of netpurchases
	$ 7,678,320	95%

(b) Accounts payable:
i. The Company’s accounts payable to AII (Note)

ii. AII’s accounts payable to Altek (Kunshan) Co., Ltd. Altek International Investment Co., Ltd. Altek (Kunshan) Co., Ltd.	September 30,2013	September 30,2013
	Amount	Percentage of accountspayable
		99%
	Amount	Percentage of net purchases
	$ 489,079	83%

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(c) Sales:

i. The Company’s net sales to the consolidated subsidiaries in third countries
- For nine-month period ended September 30, 2013, the net sales to the consolidated subsidiaries in third countries was $31,227, which was less than 10% of the total amount of net sales.
ii. The consolidated subsidiaries in third countries’ net sales to investee in Mainland China For nine-month period ended September 30, 2013, the consolidated subsidiaries in third countries’ net sales to investee in Mainland China was $397,935, which were was less than 10% of the total amount of net sales.
(d) Accounts receivable (Note) :
As of September 30, 2013, the consolidated subsidiaries in third countries’ accounts receivable from investee in Mainland China was $0, which was less than 10% of the total amount of accounts receivable.
Note: The balance was offset by accounts receivable or accounts payable.

14. SEGMENT INFORMATION

(1) General information

The Group mainly operates in one segment. The chief operating decision-maker reviews the Group’s reporting to assess performance and allocate resources. The Group mainly has a single reportable segment.

(2) Measurement of segment information

The Group has a single reportable segment. The revenue from external customers, the related gain or loss, and the assets correspond with the consolidated revenue, consolidated operating income, and consolidated assets.

(3) Reconciliation for segment income (loss):None

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15. INITIALAPPLICATION OF IFRSs

These consolidated financial statements are the first third-quarter consolidated financial statements prepared by the Group in accordance with the IFRSs. The Group has adjusted the amounts as appropriate that are reported in the previous R.O.C. GAAP consolidated financial statements to those amounts that should be presented under IFRSs in the preparation of the opening IFRS balance sheet. Information about exemptions elected by the Group, exceptions to the retrospective application of IFRSs in relation to initial application of IFRSs, and how it affects the Group’s financial position, operating results and cash flows in transition from R.O.C. GAAP to the IFRSs is set out below:
(1) Exemptions elected by the Group
Please refer to the consolidated financial statements as of and for the six-month period ended June 30, 2013 for the related information.
(2) Except for accounting estimates, derecognition of financial assets and non controlling interest to which exceptions to the retrospective application of IFRSs specified in IFRS 1 are not applied as they have no relation with the Group, other exceptions to the retrospective application are set out below:
Please refer to the consolidated financial statements as of and for the six-month period ended June 30, 2013 for the related information.
(3) Requirement to reconcile from R.O.C. GAAP to IFRSs at the time of initial application
IFRS 1 requires that an entity should prepare reconciliations for equity, comprehensive income and cash flows for the comparative periods. The Group’s initial application of IFRSs has no significant effect on cash flows from operating activities, investing activities and financing activities. Reconciliations for equity and comprehensive income for the comparative periods as to transition from R.O.C. GAAP to IFRSs is shown below:
A.Reconciliation for equity on January 1, 2012 and December 31, 2012:
- Please refer to the consolidated financial statements as of and for the six-month period ended June 30, 2013 for the related information.

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B.Reconciliation for equity on September 30, 2012:

Cash and cash equivalents Financial assets at fair value through profit or loss - current Accounts receivable Other receivables Deferred income tax assets-current Inventories Prepayments Other current assets Total current assets Financial assets measured at cost - noncurrent Investments accounted for under equity method Property, plant and equipment Intangible assets Deferred income tax assets Other non-current assets Total non-current assets Total assets Current assets Non-current assets	R.O.C. GAAP 5,589,317 $ 205,662 3,651,318 33,382 308,542 2,321,104 245,495 16,591 12,371,411 235,952 368,628 5,252,108 75,959 45,310 80,962 6,058,919 18,430,330 $	Effect of transition from R.O.C. GAAP to IFRSs - $ - - - 308,542) ( - - - 308,542) ( - - - - 349,823 - 349,823 41,281 $	IFRSs 5,589,317 $ 205,662 3,651,318 33,382 - 2,321,104 245,495 16,591 12,062,869 235,952 368,628 5,252,108 75,959 395,133 80,962 6,408,742 18,471,611 $	Remark
				(1) (1)

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Effect of transition from R.O.C. GAAP

		R.O.C. GAAP		to IFRSs		IFRSs	Remark
Current liabilities
Short-term borrowings	$	520,000	$	-	$	520,000
Notes payable		129		-		129
Accounts payable		4,530,372		-		4,530,372
Accounts payable-related parties		95		-		95
Other payables		1,149,513		-		1,149,513
Current income tax liabilities		63,712		-		63,712
Provisions for liabilities - current		198,072		-		198,072
Other current liabilities		731,383		-		731,383
Total current liabilities		7,193,276		-		7,193,276
Non-current liabilities
Accrued pension liabilities		2,624		14,718		17,342	(2)
Provisions for liabilities - noncurrent		209,783		-		209,783
Deferred income tax liabilities		805,878		41,281		847,159	(1)
Other non-current liabilities		8,362		-		8,362
Total non-current liabilities		1,026,647		55,999		1,082,646
Total Liabilities		8,219,923		55,999		8,275,922
Equity attributable to owners of
the parent
Share capital
Common stock		3,961,013		-		3,961,013
Capital surplus		2,391,374	(	13,187)		2,378,187	(3)
Retained earnings
Legal reserve		1,291,466		-		1,291,466
Unappropriated retained earnings		3,469,709		142,456		3,612,165	(2)(3)(4)
Other equity-cumulative
translation adjustments	(	166,394)	(	143,987)	(	310,381)	(4)
Treasury shares	(	736,761)		-	(	736,761)
Total equity		10,210,407	(	14,718)		10,195,689
Total liabilities and equity	$	18,430,330	$	41,281	$	18,471,611

Explanation for adjustments:

(i) In accordance with current accounting standards in the R.O.C., a deferred tax asset or liability should, according to the classification of its related asset or liability, be classified as current or noncurrent. However, a deferred tax asset or liability that is not related to an asset or liability for financial reporting should be classified as current or noncurrent according to the expected time period to realize or settle a deferred tax asset or liability. However, under IAS 1, “Presentation of Financial Statements”, an entity should not classify a deferred tax asset or liability as current. Accordingly, the Company will reclassify the account “deferred income tax assets” from current to non-current on transition date.

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(ii) The discount rate used to calculate pensions shall be determined with reference to the factors specified in R.O.C. SFAS 18, paragraph 23. However, IAS 19, “Employee Benefits”, requires an entity to determine the rate used to discount employee benefits with reference to market yields on high quality corporate bonds that match the currency at the end day of the reporting period and duration of its pension plan; when there is no deep market in corporate bonds, an entity is required to use market yields on government bonds (at the end day of the reporting period) instead. Additionally, in accordance with current accounting standards in the R.O.C., the unrecognised transitional net benefit obligation should be amortised on a straight-line basis over the average remaining service period of employees still in service and expected to receive benefits. However, in accordance with IAS 19, “Employee Benefits”, the unrecognised transitional net benefit obligation should be recognised as an expense immediately at the date of adoption. Due to the above difference and in order to eliminate the difference in employee benefits upon adoption of IFRS, the Company increased the accrued pension liabilities by $14,718, and simultaneously reduced retained earnings by $14,718 on transition date.
(iii) In accordance with current accounting standards in the R.O.C., if an investee company issues new shares and original shareholders do not purchase or acquire new shares proportionately, but the investor company does not lose its significant influence over the investee company, the investment percentage, and therefore the equity in net assets for the investment that an investor company has invested, will be changed. Such difference shall be used to adjust the ‘Additional paid-in capital’ and the ‘Long-term equity investments’ accounts. However, in accordance with IAS 28, “Investments in Associates”, increase in investment percentage is accounted for as an acquisition of investment; while, decrease in investment percentage is accounted for as a disposal of investment and any related disposal gain or loss is recognised. Accordingly, the Company reduced the additional paid-in capital from investee under the equity method by $13,187 and simultaneously increased the retained earnings by $13,187 on transition date.
(iv) The Group elected to use the exemption of the cumulative translation differences relating to the investment in a foreign operation. The subsequent changes in foreign exchange rate are treated in accordance with IAS 21, “Effects of Changes in Foreign Exchange Rates”. Therefore, the Group decreased the cumulative translation differences and increased retained earnings both by $143,987.
C. Reconciliation for comprehensive income for the year ended December 31, 2012:
Please refer to the consolidated financial statements as of and for the six-month period ended June 30, 2013 for the related information.

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D.Reconciliation for comprehensive income for the nine-month period ended September 30, 2012:

Effect of transition from R.O.C. GAAP

		Effect of transition from R.O.C. GAAP
R.O.C. GAAP Operating revenue 19,630,710 $ Operating costs 18,220,272) ( Gross profit 1,410,438 Operating expenses Selling expenses 90,174) ( General & administrative expenses 215,060) ( Research and development expenses 935,411) ( Total operating expenses 1,240,645) ( Operating profit 169,793 Non-operating income and expenses Other income 125,518 Other gains and losses 26,840 Finance costs 434) ( Share of (loss)/profit of associates and joint ventures accounted for under equity method 18,128) ( Total non-operating income and expenses 133,796 Profit before income tax 303,589 Income tax expense 46,703) ( Profit for the period 256,886 Other comprehensive income (loss) Currency translation differences 357,115) ( Share of other comprehensive income of associates and joint ventures accounted for under equity method 16,838) ( Income tax relating to the components of other comprehensive income 63,572 Other comprehensive loss for the period, net of tax 310,381) ( Total comprehensive income for the period 53,495) ($		to IFRSs IFRSs - 19,630,710 $ - 18,220,272) ( - 1,410,438 - 90,174) ( - 215,060) ( - 935,411) ( - 1,240,645) ( - 169,793 - 125,518 - 26,840 - 434) ( - 18,128) ( - 133,796 - 303,589 - 46,703) ( - 256,886 - 357,115) ( - 16,838) ( - 63,572 - 310,381) ( - 53,495) ($	Remark

Explanation for adjustments: No significant differences.

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E.Reconciliation for comprehensive income for the three-month period ended September 30, 2012:

Effect of transition from R.O.C. GAAP

		Effect of transition from R.O.C. GAAP
R.O.C. GAAP Operating revenue 6,209,543 $ Operating costs 5,754,939) ( Gross profit 454,604 Operating expenses Selling expenses 27,561) ( General & administrative expenses 69,200) ( Research and development expenses 302,189) ( Total operating expenses 398,950) ( Operating profit 55,654 Non-operating income and expenses Other income 39,290 Other gains and losses 8,335 Finance costs 434) ( Share of (loss)/profit of associates and joint ventures accounted for under equity method 7,082) ( Total non-operating income and expenses 40,109 Profit before income tax 95,763 Income tax expense 11,685) ( Profit for the period 84,078 Other comprehensive income Currency translation differences 207,258) ( Share of other comprehensive income of associates and joint ventures accounted for under equity method 8,694) ( Income tax relating to the components of other comprehensive income 36,712 Other comprehensive income for the period, net of tax 179,240) ( Total comprehensive income for the period 95,162) ($		to IFRSs IFRSs - 6,209,543 $ - 5,754,939) ( - 454,604 - 27,561) ( - 69,200) ( - 302,189) ( - 398,950) ( - 55,654 - 39,290 - 8,335 - 434) ( - 7,082) ( - 40,109 - 95,763 - 11,685) ( - 84,078 - 207,258) ( - 8,694) ( - 36,712 - 179,240) ( - 95,162) ($	Remark

Explanation for adjustments: No significant differences.

F.Major adjustments for the consolidated statement of cash flows for the nine-month period ended September 30, 2012:

There are no significant effect and please refer to the consolidated financial statements as of and for the six-month period ended June 30, 2013 for the related information.

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G.The accounting policies and selection of exemptions applied in these interim consolidated financial statements may be different from those applied in the first year-end IFRSs consolidated financial statements due to the issuance of related regulations by regulatory authorities, changes in economic environment, or changes in the evaluation of the impact of application of accounting policies and exemptions by the Group.

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AI assistant

Altek — Interim / Quarterly Report 2013

52290_rns_2013-11-13_99816283-f266-4409-9369-7a5aa8dc03bc.pdf

ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

ALTEK CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

ALTEK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. HISTORY AND ORGANIZATION

(3) IFRSs issued by IASB but not yet endorsed by the FSC

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

B.Subsidiaries included in the consolidated financial statements:

(4) Foreign currency translation

(5) Classification of current and non-current items

(6) Financial assets at fair value through profit or loss

(8) Impairment of financial assets

(9) Derecognition of financial assets

(10) Lease receivables/ leases (lessor)

(13) Property, plant and equipment

(14) Intangible assets

(15) Impairment of non-financial assets

(16) Borrowings

(19) Employee benefits

- (20) Employee share based payment

(21) Income tax

(22) Share capital

(24) Revenue recognition

5. CRITICALACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash

(2) Financial assets at fair value through profit or loss

(3) Financial assets measured at cost

(4) Accounts receivable

(5) Inventories

(6) Investments accounted for under the equity method

(7) Property, plant and equipment

(8) Intangible assets

(9) Long-term prepaid rents ( shown as ‘Other non-current assets’)

(10) Short-term borrowings

(11) Pensions

B.

B.Details of the share-based payment arrangements are as follows:

(13) Provisions for other liabilities

(14) Share capital

(15) Capital surplus

(19) Other gains and losses

(23) Income tax

(24) Earnings per share

(26) Operating leases

(27) Non-cash transactions

(28) Seasonality of operations

7. RELATED PARTY TRANSACTIONS

(1) Significant transactions and balances with related parties:

(2) Key management compensation

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) Contingencies

(2) Commitments

10. SIGNIFICANT DISASTER LOSS

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

12. OTHERS

(1) Capital risk management

(2) Financial instruments

Foreign exchange risk

Interest rate risk

Price risk

Non-derivative financial liabilities:

(3) Fair value estimation

Altek Interim / Quarterly Report 2013