Altek - Interim / Quarterly Report 2016

ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

SEPTEMBER 30, 2016 AND 2015

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR 16000104 (In Thousands of New Taiwan Dollars)

To Altek Corporation

We have reviewed the accompanying consolidated balance sheets of Altek Corporation and subsidiaries as of September 30, 2016 and 2015, and the related consolidated statements of comprehensive income for the three-month and nine-month periods then ended, as well as the consolidated statements of changes in equity and of cash flows for the nine-month periods then ended. 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 “ Engagements to Review Financial Statements” in the Republic of China. A review consists primarily of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in the Republic of China, 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 explained in Note 4(3), we did not review the financial statements of certain insignificant consolidated subsidiaries, which statements reflect total assets of $3,535,360 and $2,637,543, constituting 24% and 17% of the consolidated total assets, and total liabilities of $654,723 and $559,102, constituting 11% and 9% of the consolidated total liabilities as of September 30, 2016 and 2015, respectively, and total comprehensive income (loss) of $70,551, ($18,723), $84,196 and $31,686, constituting 24%, 13%, 17% and 29% of the absolute values of the consolidated total comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2016 and 2015, respectively. 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 method investments in these investee companies had book values amounting to $128,245 and

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$166,269 as of September 30, 2016 and 2015, respectively, and the related investment loss amounted to $0, $5,655, $0 and $10,739 for the three-month and nine-month periods then ended. 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 preceding 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” and International Accounting Standard 34 “Interim Financial Reporting”, as endorsed by the Financial Supervisory Commission.

PricewaterhouseCoopers, Taiwan Hsinchu, Taiwan Republic of China

November 8, 2016

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)

(The consolidated balance sheets as of September 30, 2016 and 2015 are reviewed, not audited)

Assets	Notes	September 30, 2016 AMOUNT % `$` `4,722,222` `32` `852,938` `6` `882` `-` `2,321,777` `16` `16,678` `-` `2,767` `-` `1,329,583` `9` `237,213` `1` `24,296` `-` `9,508,356` `64` `156,218` `1` `128,245` `1` `4,761,283` `32` `94,449` `1` `63,919` `-` `82,274` `1` `5,286,388` `36` `$` `14,794,744` `100`	December 31, 2015 AMOUNT % `$` `5,741,973` `37` `427,531` `3` `17,264` `-` `2,251,748` `15` `21,199` `-` `2,061` `-` `1,061,419` `7` `115,452` `1` `10,869` `-` `9,649,516` `63` `143,995` `1` `138,206` `1` `5,211,143` `34` `93,713` `1` `71,834` `-` `91,771` `-` `5,750,662` `37` `$` `15,400,178` `100`	September 30, 2015
		AMOUNT `$` `4,722,222` `852,938` `882` `2,321,777` `16,678` `2,767` `1,329,583` `237,213` `24,296` `9,508,356` `156,218` `128,245` `4,761,283` `94,449` `63,919` `82,274` `5,286,388` `$` `14,794,744`	AMOUNT `$` `5,741,973` `427,531` `17,264` `2,251,748` `21,199` `2,061` `1,061,419` `115,452` `10,869` `9,649,516` `143,995` `138,206` `5,211,143` `93,713` `71,834` `91,771` `5,750,662` `$` `15,400,178`	AMOUNT % `$` `4,556,284` `29` `334,690` `2` `41,917` `-` `3,128,592` `20` `24,577` `-` `3,678` `-` `1,407,172` `9` `183,447` `1` `17,556` `-` `9,697,913` `61` `166,225` `1` `166,269` `1` `5,393,723` `34` `97,880` `1` `88,112` `1` `84,304` `1` `5,996,513` `39` `$` `15,694,426` `100`
Current assets 1100 Cash and cash equivalents 1110 Current financial assets at fair value through profit or loss 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories, net 1410 Prepayments 1470 Other current assets 11XX Current Assets Non-current assets 1543 Non-current financial assets at cost 1550 Investments accounted for using equity method 1600 Property, plant and equipment, net 1780 Intangible assets, net 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets	6(1) 6(2) 6(3) 6(4) 6(5) 6(6) 6(7) 6(8) 6(9)

(Continued)

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of September 30, 2016 and 2015 are reviewed, not audited)

					September 30, 2016	September 30, 2016			December 31, 2015	December 31, 2015			September 30, 2015	September 30, 2015
	Liabilities and Equity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(10)		`$`	`2,225,000`	`15`		`$`	`1,730,000`	`11`		`$`	`1,550,000`	`10`
2150	Notes payable				`2,010`		`-`		`-`		`-`		`-`	`-`
2170	Accounts payable				`2,118,755`	`15`			`2,422,069`	`16`			`2,278,308`	`15`
2200	Other payables				`711,799`		`5`		`510,923`		`3`		`847,057`	`5`
2230	Current income tax liabilities				`41,871`		`-`		`62,273`		`1`		`74,712`	`-`
2250	Provisions for liabilities -	6(13)
	current				`28,285`		`-`		`36,998`		`-`		`48,419`	`-`
2300	Other current liabilities				`195,039`		`1`		`355,698`		`2`		`460,758`	`3`
21XX	Current Liabilities				`5,322,759`	`36`			`5,117,961`	`33`			`5,259,254`	`33`
	Non-current liabilities
2550	Provisions for liabilities -	6(13)
	noncurrent				`116,178`		`1`		`98,880`		`1`		`127,058`	`1`
2570	Deferred income tax liabilities				`423,433`		`3`		`528,141`		`3`		`557,772`	`4`
2600	Other non-current liabilities				`29,672`		`-`		`26,344`		`-`		`22,058`	`-`
25XX	Non-current liabilities				`569,283`		`4`		`653,365`		`4`		`706,888`	`5`
2XXX	Total Liabilities				`5,892,042`	`40`			`5,771,326`	`37`			`5,966,142`	`38`
	Equity attributable to owners of
	parent
	Share capital	6(14)
3110	Common stock				`2,739,788`	`18`			`2,726,938`	`18`			`2,702,538`	`17`
	Capital surplus	6(15)
3200	Capital surplus				`1,862,914`	`13`			`1,975,772`	`13`			`1,933,766`	`12`
	Retained earnings	6(16)
3310	Legal reserve				`1,374,374`		`9`		`1,347,010`		`9`		`1,347,010`	`9`
3320	Special reserve				`142,456`		`1`		`142,456`		`1`		`142,456`	`1`
3350	Unappropriated retained
	earnings				`2,851,391`	`19`			`3,047,283`	`20`			`3,042,189`	`19`
	Other equity interest	6(17)
3400	Other equity interest		`(`		`63,567)`		`-`		`414,647`		`2`		`586,457`	`4`
3500	Treasury stocks	6(14)	`(`		`129,393) (`		`1) (`		`129,393)(`		`1) (`		`33,255)`	`-`
31XX	Equity attributable to
	owners of the parent				`8,777,963`	`59`			`9,524,713`	`62`			`9,721,161`	`62`
36XX	Non-controlling interest				`124,739`		`1`		`104,139`		`1`		`7,123`	`-`
3XXX	Total equity				`8,902,702`	`60`			`9,628,852`	`63`			`9,728,284`	`62`
	Significant contingent liabilities	9
	and unrecognised contract
	commitments
3X2X	Total liabilities and equity			`$`	`14,794,744`	`100`		`$`	`15,400,178`	`100`		`$`	`15,694,426`	`100`

The accompanying notes are an integral part of these consolidated financial statements. See review report of independent accountants dated November 8, 2016.

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

(UNAUDITED)

					For the three-month period	For the three-month period	For the three-month period	For the three-month period			For the nine-month period	For the nine-month period	For the nine-month period	For the nine-month period
					ended September 30						ended September 30
					2016			2015			2016			2015
	Items	Notes			AMOUNT	%	AMOUNT		%		AMOUNT	%		AMOUNT	%
4000	Sales revenue			`$`	`2,924,158`	`100`	`$ 3,796,163`		`100`	`$`	`8,138,234`	`100`	`$`	`9,399,546`	`100`
5000	Operating costs	6(21)(22)	`(`		`2,467,183) (`	`84) (`	`3,271,941 ) (`		`86) (`		`7,101,054) (`	`87) (`		`8,226,897) (`	`87)`
5900	Net operating margin				`456,975`	`16`		`524,222`	`14`		`1,037,180`	`13`		`1,172,649`	`13`
	Operating expenses	6(21)(22)
6100	Selling expenses		`(`		`32,923) (`	`1) (`		`18,849 )`	`- (`		`66,074) (`	`1) (`		`48,798) (`	`1)`
6200	General & administrative
	expenses		`(`		`158,708) (`	`5) (`		`67,492 ) (`	`2) (`		`276,576) (`	`4) (`		`168,979) (`	`2)`
6300	Research and development
	expenses		`(`		`248,463) (`	`9) (`		`263,202 ) (`	`7) (`		`756,454) (`	`9) (`		`759,319) (`	`8)`
6000	Total operating expenses		`(`		`440,094) (`	`15) (`		`349,543 ) (`	`9) (`		`1,099,104) (`	`14) (`		`977,096) (`	`11)`
6900	Operating profit (loss)				`16,881`	`1`		`174,679`	`5 (`		`61,924) (`	`1)`		`195,553`	`2`
	Non-operating income and
	expenses
7010	Other income	6(18)			`29,563`	`1`		`21,058`	`-`		`66,514`	`1`		`76,904`	`1`
7020	Other gains and losses	6(19)			`4,196`	`-`		`8,563`	`-`		`24,281`	`- (`		`282)`	`-`
7050	Finance costs	6(20)	`(`		`6,343)`	`- (`		`5,217 )`	`- (`		`19,223)`	`- (`		`14,802)`	`-`
7060	Share of loss of associates and	6(6)
	joint ventures accounted for
	under equity method				`-`	`- (`		`5,655 )`	`-`		`-`	`- (`		`10,739)`	`-`
7000	Total non-operating
	income and expenses				`27,416`	`1`		`18,749`	`-`		`71,572`	`1`		`51,081`	`1`
7900	Profit before income tax				`44,297`	`2`		`193,428`	`5`		`9,648`	`-`		`246,634`	`3`
7950	Income tax expense	6(23)	`(`		`15,623) (`	`1)`		`3,619`	`- (`		`20,960)`	`- (`		`6,080)`	`-`
8200	Profit for the period			`$`	`28,674`	`1`	`$`	`197,047`	`5 ($`		`11,312)`	`-`	`$`	`240,554`	`3`
	Other comprehensive income
8361	Currency translation
	differences of foreign
	operations		`($`		`291,594) (`	`10)`	`$`	`357,004`	`10 ($`		`557,638) (`	`7)`	`$`	`127,551`	`1`
8370	Share of other comprehensive
	income (loss) of associates and
	joint ventures accounted for
	uner equity method		`(`		`4,856)`	`-`		`3,773`	`- (`		`10,219)`	`- (`		`1,540)`	`-`
8399	Income tax relating to the	6(23)
	components of other
	comprehensive income				`50,286`	`2 (`		`61,332 ) (`	`2)`		`96,359`	`1 (`		`21,422)`	`-`
8360	Components of other
	comprehensive income
	(loss) that will be
	reclassified to profit or loss		`(`		`246,164) (`	`8)`		`299,445`	`8 (`		`471,498) (`	`6)`		`104,589`	`1`
8300	Total other comprehensive
	income (loss) for the period		`($`		`246,164) (`	`8)`	`$`	`299,445`	`8 ($`		`471,498) (`	`6)`	`$`	`104,589`	`1`
8500	Total comprehensive income
	(loss) for the period		`($`		`217,490) (`	`7)`	`$`	`496,492`	`13 ($`		`482,810) (`	`6)`	`$`	`345,143`	`4`
	Profit (loss), attributable to:
8610	Owners of the parent			`$`	`12,113`	`-`	`$`	`196,782`	`5 ($`		`34,388)`	`-`	`$`	`239,880`	`3`
8620	Non-controlling interest				`16,561`	`1`		`265`	`-`		`23,076`	`-`		`674`	`-`
	Profit (loss) for the period			`$`	`28,674`	`1`	`$`	`197,047`	`5 ($`		`11,312)`	`-`	`$`	`240,554`	`3`
	Comprehensive (loss) income
	attributable to:
8710	Owners of the parent		`($`		`233,402) (`	`8)`	`$`	`496,227`	`13 ($`		`504,846) (`	`6)`	`$`	`344,469`	`4`
8720	Non-controlling interest				`15,912`	`1`		`265`	`-`		`22,036`	`-`		`674`	`-`
	Total comprehensive income
	(loss) for the period		`($`		`217,490) (`	`7)`	`$`	`496,492`	`13 ($`		`482,810) (`	`6)`	`$`	`345,143`	`4`
		6(24)
9750	Basic (loss) earnings per
	share			`$`		`0.05`	`$`		`0.73 ($`			`0.13)`	`$`		`0.89`
		6(24)
9850	Diluted (loss) earnings per
	share			`$`		`0.05`	`$`		`0.73 ($`			`0.13)`	`$`		`0.88`

The accompanying notes are an integral part of these consolidated financial statements. See review report of independent accountants dated November 8, 2016.

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ALTEK CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2016 AND 2015 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(UNAUDITED)

N	Notes					Equityatt	ributable to owners of	th	eparent	eparent	eparent				Total equity
			Common stock	Capital surplus		Retained Earnings			Other equity interest			Treasurystocks	Total
					Legal reserve	Special reserve	Unappropriated retained earnings		Currency translation differences of foreign operations		Other equity - others
	6(16) 6(15)(16) 6(12)(15)(17) 6(16) 6(16) 6(15)(16) 6(12)(15)(17) 6(12)(15)(17) 6(27) 6(16) 6(17)	`$ 2,701,358` `-` `-` `1,180` `-` `-` `-` `$ 2,702,538` `$ 2,726,938` `-` `-` `-` `15,600` `(` `2,750 )` `-` `-` `-` `-` `$ 2,739,788`		`$ 2,063,551` `-` `(` `135,127 )` `5,342` `-` `-` `-` `$ 1,933,766` `$ 1,975,772` `-` `(` `134,140 )` `236` `25,713` `(` `4,620 )` `(` `47 )` `-` `-` `-` `$ 1,862,914`	`$ 1,319,477` `27,533` `-` `-` `-` `-` `-` `$ 1,347,010` `$ 1,347,010` `27,364` `-` `-` `-` `-` `-` `-` `-` `-` `$ 1,374,374`	`$` `142,456` `-` `-` `-` `-` `-` `-` `$` `142,456` `$` `142,456` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `142,456`	`$` `2,964,969` `(` `27,533` `)` `(` `135,127` `)` `-` `-` `239,880` `-` `$` `3,042,189` `$` `3,047,283` `(` `27,364` `)` `(` `134,140` `)` `-` `-` `-` `-` `(` `34,388` `)` `-` `-` `$` `2,851,391`	`$` `481,868` `-` `-` `-` `-` `-` `104,589` `$` `586,457` `$` `477,768` `-` `-` `-` `-` `-` `-` `-` `(` `470,458 )` `-` `$` `7,310`		`$` `-` `-` `-` `-` `-` `-` `-` `$` `-` `($` `63,121 )` `-` `-` `26,187` `(` `41,313 )` `7,370` `-` `-` `-` `-` `($` `70,877 )`		`$` `-` `-` `-` `-` `(` `33,255 )` `-` `-` `($` `33,255 )` `($` `129,393 )` `-` `-` `-` `-` `-` `-` `-` `-` `-` `($` `129,393 )`	`$ 9,673,679` `-` `(` `270,254 )` `6,522` `(` `33,255 )` `239,880` `104,589` `$ 9,721,161` `$ 9,524,713` `-` `(` `268,280 )` `26,423` `-` `-` `(` `47 )` `(` `34,388 )` `(` `470,458 )` `-` `$ 8,777,963`	`$` `6,449` `-` `-` `-` `-` `674` `-` `$` `7,123` `$` `104,139` `-` `-` `-` `-` `-` `47` `23,076` `(` `1,040 )` `(` `1,483 )` `$` `124,739`	`$` `9,680,128` `-` `(` `270,254 )` `6,522` `(` `33,255 )` `240,554` `104,589` `$` `9,728,284` `$` `9,628,852` `-` `(` `268,280 )` `26,423` `-` `-` `-` `(` `11,312 )` `(` `471,498 )` `(` `1,483 )` `$` `8,902,702`
N

The accompanying notes are an integral part of these consolidated financial statements. See review report of independent accountants dated November 8, 2016.

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ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation

Amortisation

Provision for doubtful accounts

Net gain on financial assets at fair value through profit or loss

Interest expense

Interest income

Cash dividends income
Share-based payment compensation cost

Share of loss of associates and joint ventures accounted for under
equity method
Gain on disposal of property, plant and equipment

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss - current
Notes receivable
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Notes payable
Accounts payable
Other payables
Provisions for liabilities
Other current liabilities
Other non-current liabilities
Cash outflow generated from operations
Interest received
Cash dividends received
Interest paid
Income tax paid
Net cash flows used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at cost
Proceeds from capital reduction of financial assets at cost
Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and equipment
Increase in intangible assets

Decrease in deposits-out
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings

Increase (decrease) in deposits-in
Employee stock options exercised
Payment to acquire treasury stocks

Changes in non-controlling interest

Net cash flows from financing activities
Effect of exchange rate
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period For the nine-month periods
ended September 30
Notes
2016
2015
$
9,648 $
246,634
6(7)(21)
261,217
311,605
6(8)(21)
11,307
11,581
6(3)
9,189
-
6(2)(19)
(
1,360 ) (
1,754 )
6(20)
19,223
14,802
6(18)
(
39,888 ) (
37,957 )
(
610 ) (
267 )
6(12)
26,423
2,451
-
10,739
6(19)
(
3,189 ) (
3,469 )
(
424,046 )
28,585
16,692
31,135
(
136,767 ) (
756,591 )
(
3,141 ) (
2,643 )
(
356,127 ) (
224,660 )
(
132,655 )
13,077
(
13,979 ) (
13,333 )
2,010
-
(
163,208 ) (
642,054 )
(
6,213 ) (
4,588 )
8,585 (
9,087 )
(
156,077 )
25,953
392
353
(
1,072,574 ) (
999,488 )
46,667
36,422
610
267
(
19,032 ) (
14,715 )
(
41,972 ) (
53,941 )
(
1,086,301 ) (
1,031,455 )
(
14,800 ) (
20,374 )
-
5,806
6(26)
(
91,138 ) (
46,657 )
20,317
3,469
6(26)
(
6,356 ) (
8,839 )
6,624
1,293
(
85,353 ) (
65,302 )
6(10)
495,000
140,000
3,574 (
6,002 )
-
4,071
6(14)
- (
33,255 )
6(27)
(
1,483 )
-
497,091
104,814
(
345,188 )
106,377
(
1,019,751 ) (
885,566 )
6(1)
5,741,973
5,441,850
6(1)
$
4,722,222 $
4,556,284

The accompanying notes are an integral part of these consolidated financial statements. See review report of independent accountants dated November 8, 2016.

~7~

ALTEK CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016 AND 2015

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

(Unaudited)

1. HISTORY AND ORGANIZATION

Altek Corporation (the “Company”) was incorporated as a 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, and related export and import trade.

The Company was listed in the Taiwan Stock Exchange on December 24, 2002, as approved by the TaiTz (91) Letter No. 024976 of the former Securities and Futures Commission, Ministry of Finance, R.O.C., dated September 27, 2002.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on November 8, 2016.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRSs”) as endorsed by the Financial Supervisory Commission (“FSC”)

None.

~8~

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2017:

==> picture [477 x 48] intentionally omitted <==

----- Start of picture text -----

Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
----- End of picture text -----

New Standards,Interpretations andAmendments	StandardsBoard
Investment entities: applying the consolidation exception (amendments	January 1, 2016
to IFRS 10, IFRS 12 and IAS 28)
Accounting for acquisition of interests in joint operations	January 1, 2016
(amendments to IFRS 11)
IFRS 14, 'Regulatory deferral accounts'	January 1, 2016
Disclosure initiative (amendments to IAS 1)	January 1, 2016
Clarification of acceptable methods of depreciation and amortisation	January 1, 2016
(amendments to IAS 16 and IAS 38)
Agriculture: bearer plants (amendments to IAS 16 and IAS 41)	January 1, 2016
Defined benefit plans: employee contributions (amendments to IAS	July 1, 2014
19R)
Equity method in separate financial statements (amendments to IAS 27)	January 1, 2016
Recoverable amount disclosures for non-financial assets (amendments	January 1, 2014
to IAS 36)
Novation of derivatives and continuation of hedge accounting	January 1, 2014
(amendments to IAS 39)
IFRIC 21, ‘Levies’	January 1, 2014
Improvements to IFRSs 2010-2012	July 1, 2014
Improvements to IFRSs 2011-2013	July 1, 2014
Improvements to IFRSs 2012-2014	January 1, 2016

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and operating result based on the Group’s assessment. The quantitative impact will be disclosed when the assessment is complete.

Amendments to IAS 36, ‘Recoverable amount disclosures for non-financial assets’

The amendments remove the requirement to disclose recoverable amount when a cash generating unit (CGU) contains goodwill but there has been no impairment. When a material impairment loss has been recognised or reversed for an individual asset, including goodwill, or a CGU, it is required to disclose the recoverable amount of the asset or CGU. If the recoverable amount is fair value less costs of disposal, it is required to disclose the level of the fair value hierarchy, the valuation techniques(s) used and key assumptions.

~9~

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

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs endorsed by the FSC effective from 2017:

endorsed by the FSC effective from 2017:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Classification and measurement of share-based payment transactions (amendments to IFRS 2) Applying IFRS 9 ‘Financial instruments’ with IFRS 4 ‘Insurance contracts’ (amendments to IFRS 4) IFRS 9, ‘Financial instruments' Sale or contribution of assets between an investor and its associate or joint venture (amendments to IFRS 10 and IAS 28) IFRS 15, ‘Revenue from contracts with customers' Clarifications to IFRS 15, ‘Revenue from contracts with customers' (amendments to IFRS 15) IFRS 16, 'Leases' Disclosure initiative (amendments to IAS 7) Recognition of deferred tax assets for unrealised losses (amendments to IAS 12)	January 1, 2018 January 1, 2018 January 1, 2018 To be determined by International Accounting Standards Board January 1, 2018 January 1, 2018 January 1, 2019 January 1, 2017 January 1, 2017

endorsed by the FSC effective from 2017:

New Standards,Interpretations andAmendments

Effective date by
International Accounting
StandardsBoard

Classification and measurement of share-based payment transactions
(amendments to IFRS 2)
Applying IFRS 9 ‘Financial instruments’ with IFRS 4 ‘Insurance
contracts’ (amendments to IFRS 4)
IFRS 9, ‘Financial instruments'
Sale or contribution of assets between an investor and its associate or
joint venture (amendments to IFRS 10 and IAS 28)
IFRS 15, ‘Revenue from contracts with customers'
Clarifications to IFRS 15, ‘Revenue from contracts with customers'
(amendments to IFRS 15)
IFRS 16, 'Leases'
Disclosure initiative (amendments to IAS 7)
Recognition of deferred tax assets for unrealised losses (amendments to
IAS 12)

January 1, 2018
January 1, 2018
January 1, 2018
To be determined by
International Accounting
Standards Board
January 1, 2018
January 1, 2018
January 1, 2019
January 1, 2017
January 1, 2017

A. Amendments to IFRS 2, ‘Classification and measurement of share-based payment transactions’

The amendment clarifies that the fair value of a cash-settled award is determined on a basis consistent with that used for equity-settled awards. The amendment also clarifies the accounting for modifications that change an award from cash-settled to equity-settled. Besides, the amendment introduces an exception that will require an award to be treated as if it was wholly equity-settled, where an employer is obliged to withhold an amount for the employee’s tax obligation associated with a share-based payment and pay that amount to the tax authority.

B. Amendments to IFRS 4, ‘Applying IFRS 9 Financial instruments with IFRS 4 Insurance contracts’ To address the concerns about the different effective dates of IFRS 9, ‘Financial instruments’, and the forthcoming new standard IFRS 4, ‘Insurance contract’, which may result in different bases for measuring assets and liabilities, this amendment allows insurers who meet specific requirements as set out in IFRS 4, ‘Insurance contract’ to adopt temporary exemption from IFRS 9, ‘Financial instruments’, or to use overlay approach under IFRS 9, ‘Financial instruments’ alternatively.

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C. IFRS 9, ‘Financial instruments’
(a) Classification of debt instruments is driven by the entity’s business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset measured at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.
(b) The impairment losses of debt instruments are assessed using an ‘expected credit loss’ approach. An entity assesses at each balance sheet date whether there has been a significant increase in credit risk on that instrument since initial recognition to recognise 12-month expected credit losses (‘ECL’) or lifetime ECL (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment would be calculated on the book value of net carrying amount (i.e. net of credit allowance).
D. IFRS 15 "Revenue from contracts with customers"
IFRS 15 "Revenue from contracts with customers" replaces IAS 11 "Construction contracts", IAS 18 "Revenue" and relevant interpretations. According to IFRS 15, revenue is recognised when a customer obtains control of promised goods or services. A customer obtains control of goods or services when a customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset.
The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps:
Step1: Identify contracts with customer
Step 2: Identify separate performance obligations in the contract(s)

Step 3: Determine the transaction price

Step 4: Allocate the transaction price.

Step 5: Recognise revenue when the performance obligation is satisfied.

Further, IFRS 15 includes a set of comprehensive disclosure requirements that requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Under IFRS 15, depending on the nature of licences, they are either (1) a promise to provide a right to access to an entity’s intellectual property as it exists throughout the licence period, or (2) a promise to provide a right to use an entity’s intellectual property as it exists at the point in time when the licence is granted.

~11~

Licences that meet all of the following criteria provide access to an entity’s intellectual property, and revenue is recognised based on the performance obligation's progress towards completion:

the contract requires, or the customer reasonably expects, that the entity will undertake activities that significantly affect the intellectual property to which the customer has rights;
the rights granted by the licence directly expose the customer to any positive or negative effects of the entity’s activities identified above; and
those activities do not result in the transfer of a good or service to the customer as those activities occur.

If licences cannot meet all criteria listed above, the entity provides a right to use the entity's intellectual property. Revenue shall be recognised at the point in time at which the licence is granted to the customer.

E. Amendments to IFRS 15, ' Clarifications to Revenue from Contracts with Customers' The amendments clarify how to identify a performance obligation (the promise to transfer a good or a service to a customer) in a contract; determine whether a company is a principal (the provider of a good or service) or an agent (responsible for arranging for the good or service to be provided); and determine whether the revenue from granting a licence should be recognised at a point in time or over time. In addition to the clarifications, the amendments include two additional reliefs to reduce cost and complexity for a company when it first applies the new Standard.
F. IFRS 16, 'Leases'

IFRS 16, 'Leases', replaces IAS 17, 'Leases' and related interpretations and SICs. The standard requires lessees to recognise a 'right-of-use asset' and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.

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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. The consolidated financial statements of the Group have been prepared in accordance with the “Rules Governing the Preparation of Financial Statements by Securities Issuers” and IAS 34, ‘Interim Financial Reporting’ as endorsed by the FSC.
B. The consolidated financial statements should be read along with the consolidated financial statements for the year ended December 31, 2015.

(2) Basis of preparation

A. Except for the following items, the 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 less present value of defined benefit obligation.
B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accountung Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “ IFRSs ” ) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement 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:
Basis for preparation of consolidated financial statements is consistent with the consolidated financial statements for the year ended December 31, 2015.
B. Subsidiaries included in the consolidated financial statements:

~13~

Name of Investor	Name of Subsidiaries	Main Business Activities		Ownership (%)		Note
			September 30,2016	December 31,2015	September 30,2015
Altek Corporation " " " " " Altek International Investment Co., Ltd. " " Note 3 Note 3 Note 3 Note 3 Note 3 Note 4	Altek International Investment Co., Ltd. Altek Japan Corporation Altek Investment Co., Ltd. Altek Autotronics Corporation Altek Biotechnology Corporation Altek International Holding (BVI) Co.,Ltd. Altek Lab Inc. Altek Optical (Cayman) Co., Ltd. Altek Semiconductor (Cayman) Co., Ltd. Altek (Kunshan) Co., Ltd. Altek EMS (Kunshan) Co., Ltd. Altek Imaging Technology (Shanghai) Limited Altek Precision (Kunshan) Co., Ltd. Altek Trading (Shanghai) Limited Altek Biotechnology Corporation	Investments and general business operations Sales and design of optical instruments Investments Research design, manufacture and sales of car electronic components Research and development, manufacture and sales of biotechnology Investments and general business operations Design service Investments and general business operations Investments and general business operations Manufacture and sales of digital still camera and its accessories Manufacture and sales of related engineering services Manufacture and sales of optical components Manufacture and sales of digital camera parts Wholesale, import and export of related electronic and their associated accessories Research and development, manufacture and sales of biotechnology	100% 100% 100% 100% - 100% 100% 100% 71.43% 100% 100% - 100% 100% 100%	100% 100% 100% 99.59% 100% - 100% 100% 71.43% 100% 100% - 100% 100% -	100% 100% 100% 98.02% 100% - 100% 100% 100% 100% 100% 100% 100% 100% -	Note 7 Note 7 Note 1 Note 7 Note 6 Note 7 Note 6 Note 7 Note 7 Note 7 Note 2 Note 7 Note 7 Note 5 Note 7 Note 7 Note 7 Note 6 Note 7

~14~

Name of Investor	Name of Subsidiaries	Main Business Activities		Ownership (%)		Note
			September 30,2016	December 31,2015	September 30,2015
Altek Semiconductor (Cayman) Co., Ltd. Altek Trading (Shanghai) Limited Note 3	Altek Semiconductor Corporation Beijing Altek Image Communication Technology Co., Ltd. Altek Optical Technology (Kunshan) Co., Ltd.	Research design and sales of ASIC Sales of electronic and their related accessories Manufacture and sales of related electronic services and its accessories and optical components	100% - 100%	100% - 100%	100% 100% 100%	Note 7 Note 5 Note 7 Note 7

Note 1: Ownership increased due to subsidiary’s continuing repurchase of shares of Altek Autotronics Corporation.

Note 2: The Group did not participate in the subsidiary’s capital increase, thus, the share ownership decreased.

Note 3: Invested by Leading Tech. Co., Ltd., Toptek Investment Cayman Co., Ltd., Altek Imaging Technology (Cayman) Co., Ltd., Altek Trading (Cayman) Co., Ltd.,

Altek Optical Technology (Cayman) Co., Ltd. , which are wholly owned by Altek International Investment Co., Ltd.

Note 4: Invested by Altek Biotechnology Holding (Cayman) Co., Ltd., which is wholly owned by Altek International Holding (BVI) Co., Ltd.

Note 5: Altek Imaging Technology (Shanghai) Limited and Beijing Altek Image Communication Technology Co., Ltd. have completed the liquidation in the fourth quarter of 2015. Note 6: In June 2016, the Group’s investment structure transfer the share holding of Altek Biotechnology Corporation to be owned by Altek Biotechnology Holding (Cayman) Co., Ltd. , which is a subsidiary of Altek International Holding (BVI) Co., Ltd.

Note 7: As the subsidiaries do not meet the definition of significant subsidiaries, their financial statements as of September 30, 2016 and 2015 were not reviewed by independent accountants.

~15~

C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.

(4) Employee benefits

Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation 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. Also, the related information is disclosed accordingly.

(5) Income tax

The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

5. CRITICAL ACCOUNTING 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. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies: None.

(2) Critical accounting estimates and assumptions:

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 obsolete inventories 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, 2016, the carrying amount of inventories was $1,329,583.

~16~

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand Checking accounts and demand deposits Time deposits Total	September30,2016 1,570 $ 114,624 4,606,028 4,722,222 $	December31,2015 1,139 $ 282,049 5,458,785 5,741,973 $	September30,2015
			1,308 $ 199,138 4,355,838
			4,556,284 $

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

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

Items Current items: Financial assets held for trading Valuation adjustment Total	September30,2016 849,079 $ 3,859 852,938 $	December31,2015 September30,2015 425,032 $ 332,432 $ 2,499 2,258 427,531 $ 334,690 $

The Group recognized net gain of $549 and $417 for the three-month periods ended September 30, 2016 and 2015, respectively, and net gain (loss) of $1,835 and ($11,578) for the nine-month periods ended September 30, 2016 and 2015, respectively.

(3) Accounts receivable

Accounts receivable
	September30,2016			December31,2015	September30,2015
Accounts receivable		2,331,361 $		2,252,282 $		$	3,128,629
Less: allowance for bad debts	(	9,584)	(	534)	(		37)
		2,321,777 $		2,251,748 $		$	3,128,592
A. The credit quality of accounts receivable that were neither past due					nor		impaired was in
following categories based	on the Group’s Credit Quality Control Policy:
		September30,2016		December31,2015	September30,2015
Group 1		2,291,659 $		2,156,195 $		$	3,101,452
Group 2		19,301		91,433			22,508
		2,310,960 $		2,247,628 $		$	3,123,960

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:

Note:

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

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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	September30,2016 2,120 $ 4,585 4,112 10,817 $	December31,2015 565 $ 3,312 243 4,120 $	September30,2015
			1,648 $ 2,984 -
			4,632 $

The above ageing analysis was based on past due date.

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

At January 1 Provision for impairment Effects of foreign exchange At September 30 At January 1 / September 30		2016
	Individualprovision - $	Group provision 37 $

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

(4) Inventories

nventories
Raw materials Work-in-process Finished goods Total Raw materials Work-in-process Finished goods Total	September30,2016		Bookvalue 734,152 $ 268,397 327,034 1,329,583 $
	Allowance for Cost valuation loss 830,204 $ 96,052) ($ 294,460 26,063) ( 381,208 54,174) ( 1,505,872 $ 176,289) ($ Allowance for Cost valuation loss 586,514 $ 125,289) ($ 145,078 25,569) ( 591,776 111,091) ( 1,323,368 $ 261,949) ($ December31,2015
		Allowance for valuation loss 125,289) ($ 25,569) ( 111,091) ( 261,949) ($	Bookvalue 461,225 $ 119,509 480,685 1,061,419 $

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September 30, 2015

	September30,2015
Raw materials Work-in-process Finished goods Total	Allowance for Cost valuation loss 830,339 $ 116,122) ($ 227,050 20,229) ( 539,639 53,505) ( 1,597,028 $ 189,856) ($	Bookvalue
		714,217 $ 206,821 486,134
		1,407,172 $

The cost of inventories recognised as expense for the periods:

			For the three-month	For the three-month	For the three-month		For the three-month	For the three-month
			period ended					period ended
			September		30,2016		September30,2015
Cost of goods sold		$			2,471,188		$	3,255,702
(Reversal of) loss on decline in market		(			4,005)			16,239
Total		$			2,467,183		$	3,271,941
			For the nine-month				For the nine-month
			period ended					period ended
			September30,2016				September30,2015
Cost of goods sold		$			6,967,354		$	8,206,659
Loss on decline in market value					133,700			20,238
Total		$			7,101,054		$	8,226,897
Financial assets measured at cost
Items	September		30,2016	December		31,	2015	September30,2015
Non-current items:
Unlisted stocks	$		168,814	$		156,591		256,258 $
Less: Accumulated impairment	(		12,596)	(		12,596)		90,033) (
Total	$		156,218	$		143,995		166,225 $

(5) Financial assets measured at cost

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. Financial assets measured at cost – Pac-line Opportunity Fund has completed the liquidation on December 23, 2015. The Company recognised disposal of financial assets at Pac-line Opportunity Fund’s carrying amount of $21,647. The actual amount recovered was $32,480 and gain on disposal of investments of $10,833 was recognised.
C. No impairment loss was recognized for the financial assets measured at cost for the three-month and nine-month periods ended September 30, 2016 and 2015.

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D. As of September 30, 2016, December 31, 2015 and September 30, 2015, no financial assets measured at cost held by the Group were pledged to others.

(6) Investments accounted for under the equity method

	September	30,2016		31,2015	September	30,2015
JinJing Optical Technology Co.,	$	44,028	$	44,028	$	48,358
Ltd.
Phoenix Optical (Shanghai) Co.,
Ltd.		141,459		151,420		154,712
		185,487		195,448		203,070
Less: accumulated impairment
loss	(	57,242)	(	57,242)	(	36,801)
	$	128,245	$	138,206	$	166,269

The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below:

As of September 30, 2016, December 31, 2015 and September 30, 2015, the carrying amount of the Group’s individually immaterial associates amounted to $128,245, $138,206 and $166,269, respectively.

respectively.
		For the nine-month		For the nine-month
		period ended		period ended
		September30,2016		September30,2015
Loss for the period from	($	85,481)	($	62,734)
continuing operations
Other comprehensive loss-net
of tax	(	1,762)	(	11,329)
Total comprehensive loss	($	87,243)	($	74,063)

~20~

(7) Property, plant and equipment

At January 1, 2016 Cost Accumulated depreciation For the nine-month period ended September 30, 2016 Opening net book amount Additions Disposals Reclassifications Depreciation charge Net exchange differences Closing net book amount At September 30, 2016 Cost Accumulated depreciation	Land Buildings Machinery Test equipment 1,042,216 $ 3,717,659 $ 1,868,136 $ 201,217 $ - 584,318) ( 1,063,689) ( 177,229) ( 1,042,216 $ 3,133,341 $ 804,447 $ 23,988 $ 1,042,216 $ 3,133,341 $ 804,447 $ 23,988 $ - 131 380 9,543 - - 16,165) ( - - - - 3,006 - 69,884) ( 98,715) ( 11,653) ( - 143,295) ( 51,620) ( 1,222) ( 1,042,216 $ 2,920,293 $ 638,327 $ 23,662 $ 1,042,216 $ 3,545,283 $ 1,449,397 $ 203,046 $ - 624,990) ( 811,070) ( 179,384) ( 1,042,216 $ 2,920,293 $ 638,327 $ 23,662 $

~21~

At January 1, 2015 Cost Accumulated depreciation For the nine-month period ended September 30, 2015 Opening net book amount Additions Reclassifications Depreciation charge Net exchange differences Closing net book amount At September 30, 2015 Cost Accumulated depreciation	Land Buildings Machinery Test equipment 1,042,216 $ 3,774,021 $ 1,914,467 $ 221,421 $ - 496,859) ( 920,394) ( 178,466) ( 1,042,216 $ 3,277,162 $ 994,073 $ 42,955 $ 1,042,216 $ 3,277,162 $ 994,073 $ 42,955 $ - - 128 2,112 - - 240 - - 71,668) ( 131,013) ( 17,238) ( - 2,771) ( 444 122) ( 1,042,216 $ 3,202,723 $ 863,872 $ 27,707 $ 1,042,216 $ 3,771,506 $ 1,896,311 $ 219,062 $ - 568,783) ( 1,032,439) ( 191,355) ( 1,042,216 $ 3,202,723 $ 863,872 $ 27,707 $

For the nine-month periods ended September 30, 2016 and 2015, there was no capitalisation of borrowing interests attributable to the property, plant and equipment and the Group did not pledge any fixed asset as collateral.

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(8) Intangible assets

A. Details of amortisation on intangible assets are as follows: B.The Group has no intangible assets pledged to others. Long-term prepaid rents ( shown as‘Other non-current assets’) 2016 2015 At January 1 Cost 130,369 $ 138,662 $ Accumulated amortisation and impairment 36,656) ( 35,215) ( 93,713 $ 103,447 $ For the nine-month period ended September 30 Opening net book amount 93,713 $ 103,447 $ Additions 15,423 2,676 Amortisation charge 10,557) ( 10,808) ( Net exchange differences 4,130) ( 2,565 Closing net book amount 94,449 $ 97,880 $ At September 30 Cost 127,426 $ 131,695 $ Accumulated amortisation and impairment 32,977) ( 33,815) ( 94,449 $ 97,880 $ For the three-month period For the three-month period ended September30,2016 ended September30,2015 Operating costs 1,396 $ 1,926 $ Operating expense 2,037 1,764 3,433 $ 3,690 $ For the nine-month period For the nine-month period ended September30,2016 ended September30,2015 Operating costs 4,497 $ 5,767 $ Operating expense 6,060 5,041 10,557 $ 10,808 $ September30,2016 December31,2015 September30,2015 Land-use right 35,521 $ 39,003 $ 40,131 $	A. Details of amortisation on intangible assets are as follows: B.The Group has no intangible assets pledged to others. Long-term prepaid rents ( shown as‘Other non-current assets’) 2016 2015 At January 1 Cost 130,369 $ 138,662 $ Accumulated amortisation and impairment 36,656) ( 35,215) ( 93,713 $ 103,447 $ For the nine-month period ended September 30 Opening net book amount 93,713 $ 103,447 $ Additions 15,423 2,676 Amortisation charge 10,557) ( 10,808) ( Net exchange differences 4,130) ( 2,565 Closing net book amount 94,449 $ 97,880 $ At September 30 Cost 127,426 $ 131,695 $ Accumulated amortisation and impairment 32,977) ( 33,815) ( 94,449 $ 97,880 $ For the three-month period For the three-month period ended September30,2016 ended September30,2015 Operating costs 1,396 $ 1,926 $ Operating expense 2,037 1,764 3,433 $ 3,690 $ For the nine-month period For the nine-month period ended September30,2016 ended September30,2015 Operating costs 4,497 $ 5,767 $ Operating expense 6,060 5,041 10,557 $ 10,808 $ September30,2016 December31,2015 September30,2015 Land-use right 35,521 $ 39,003 $ 40,131 $	A. Details of amortisation on intangible assets are as follows: B.The Group has no intangible assets pledged to others. Long-term prepaid rents ( shown as‘Other non-current assets’) 2016 2015 At January 1 Cost 130,369 $ 138,662 $ Accumulated amortisation and impairment 36,656) ( 35,215) ( 93,713 $ 103,447 $ For the nine-month period ended September 30 Opening net book amount 93,713 $ 103,447 $ Additions 15,423 2,676 Amortisation charge 10,557) ( 10,808) ( Net exchange differences 4,130) ( 2,565 Closing net book amount 94,449 $ 97,880 $ At September 30 Cost 127,426 $ 131,695 $ Accumulated amortisation and impairment 32,977) ( 33,815) ( 94,449 $ 97,880 $ For the three-month period For the three-month period ended September30,2016 ended September30,2015 Operating costs 1,396 $ 1,926 $ Operating expense 2,037 1,764 3,433 $ 3,690 $ For the nine-month period For the nine-month period ended September30,2016 ended September30,2015 Operating costs 4,497 $ 5,767 $ Operating expense 6,060 5,041 10,557 $ 10,808 $ September30,2016 December31,2015 September30,2015 Land-use right 35,521 $ 39,003 $ 40,131 $
Land-use right	September30,2016 35,521 $
		40,131 $

B.The Group has no intangible assets pledged to others. (9) Long-term prepaid rents ( shown as ‘Other non-current assets’)

The Group recognized amortisation expenses for the three-month periods ended September 30, 2016 and 2015 amounting to $242 and $259, and for the nine-month periods ended September 30, 2016 and 2015 amounting to $750 and $774, respectively.

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(10) Short-term borrowings

Short-term borrowings
Type ofborrowings Bank borrowings Unsecured borrowings Type ofborrowings Bank borrowings Unsecured borrowings Type of borrowings Bank borrowings Unsecured borrowings	September30,2016 2,225,000 $ December31,2015 1,730,000 $ September30,2015 1,550,000 $	Interestraterange 1.12%~1.25% Interestraterange 1.14%~1.3% Interest rate range 1.21%~1.30%	Collateral
			None Collateral
			None Collateral
			None

(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) For the aforementioned pension plan, the Group recognized pension costs of $6 and $356 for the three-month periods ended September 30, 2016 and 2015, and of $404 and $362 for the nine-month periods ended September 30, 2016 and 2015, respectively.
(c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2017 amounts to $12.
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 and 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, 2016 and 2015, the Group had recognized pension costs of $8,834 and $8,868, and for the nine-month periods ended September 30, 2016 and 2015, the Group had recognized pension costs of $27,636 and $26,537, respectively, under the above pension scheme.

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  - (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 recognized pension costs of $7,214 and $13,291 for the three-month periods ended September 30, 2016 and 2015, respectively, and of $27,859 and $37,634 and for the ninemonth periods ended September 30, 2016 and 2015, respectively.

(12) Share-based payment
A.As of September 30, 2016 and 2015, the Company’s share-based payment arrangements were as follows:

follows:
Type ofarrangement	Grant date	Quantity granted	Contract period	Vesting conditions
Employee stock options " " " First time issuance of restricted shares to employees " "	June 13, 2008 October 31, 2008 October 28, 2011 March 21, 2012 November 13, 2015 March 18, 2016 May 5, 2016	8,000 1,000 3,000 3,000 2,440 1,190 370	9.6 years 9.2 years 9.2 years 8.9 yesrs 3 years 3 years 3 years	Note 1 Note 1 Note 1 Note 1 Note 2`、`Note 3 Note 2`、`Note 3 Note 2`、`Note 3

Note 1: 2 years’ service vest 40%, 3 years’ service vest 70%, 4 years’ service vest 100%. Note 2: The restricted shares were issued at no consideration to the Company’s existing employees whose service years have reached 2 years and 3 years and who achieved the performance requirement. The vested ratio is 50% and 50%, respectively. If employees who are entitled to receive restricted stocks do not meet the vesting conditions, the Company will redeem at no consideration and retire those shares.
Note 3: The stocks and dividends distributed to employees during the vesting period shall be given by the Company at no consideration. Employees are not required to return the stocks and dividends if they resign during the vesting period.

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B.Details of the share-based payment arrangements are as follows:
a) For the nine-month periods ended September 30, 2016 and 2015, the information on the share options and the weighted number of average exercise price of compensation plan employee stock options are as follows:

Options outstanding at beginning of the period Optical expired Options exercised 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 September 30,2016	For the nine-month period September 30,2016	For the nine-month period September 30,2015	For the nine-month period September 30,2015
		No. of options	Weighted-average exercise price (in dollars)(Note)	No. of options	Weighted-average exercise price (in dollars)(Note)
		5,155 - - 5,155 5,155 -	32.80 $ - - 31.30 31.30	6,561 1,288) ( 118) ( 5,155 3,637 -	33.60 $ - 34.50 32.80 32.60

Note: The exercise price of stock options was adjusted based on the cash dividends, stock dividends and cash capital reduction per share distributed.
b) No stock options were exercised during the three-month periods ended September 30, 2016 and 2015 and nine-month period ended September 30, 2016. The weighted-average stock price of stock options at exercise dates for the nine-month period ended September 30, 2015 amounted to $37.48 (in dollars).
c) The expiry date and exercise price of stock options outstanding at balance sheet date are as follows:

follows:
Issue date approved	Expirydate	September 30,2016		December	Exercise price (in dollars) (Note) $ 32.00 26.80 33.20 33.00 31,2015	September	30,2015
		No. of shares (in thousands) 1,400 30 2,320 1,405	Exercise price (in dollars) (Note) $ 30.60 25.60 31.70 31.50	No. of shares (in thousands) 1,400 30 2,320 1,405		No. of shares (in thousands) 1,400 30 2,320 1,405	Exercise price (in dollars) (Note)
June 13, 2008 October 31, 2008 October 28, 2011 March 21, 2012	December 31, 2017 December 31, 2017 December 31, 2020 December 31, 2020						$ 32.00 26.80 33.20 33.00

Note: The exercise price of stock options was adjusted based on the cash dividends, stock dividends and cash capital reduction per share distributed.

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d) The fair value of stock options granted is measured using the Black-Scholes option-pricing model. Relevant information is as follows:

Type of arrangement	Grant date	Stock price (in dollars)	Exercise price (Note) (in dollars)	Expected price volatility	Expected option life	Expected dividends	Risk- free interest rate	Fair value per unit (in dollars)
Employee stock options " " "	June 13, 2008 October 31, 2008 October 28, 2011 March 21, 2012	$ 45.50 32.60 30.65 27.85	$ 30.60 25.60 31.70 31.50	24.45% 22.11% 30.27% 33.54%	6 years 6 years 5 years 4.9 years	1.5% 1.5% 1.4% 1.4%	2.40% 1.88% 1.18% 1.08%	10.56 6.54 7.42 7.35

Note : The exercise price of stock options was adjusted based on the cash dividends, stock dividends and cash capital reduction per share distributed.
C.Restricted shares to employees:
(1)The information on restricted shares to employees is as follows:

stricted shares to employees: The information on restricted shares to employees	is as follows:
		For the nine-month period
		ended September 30, 2016
		(shareinthousands)
Outstanding beginning balance		2,440
Shares granted		1,560
Restricted shares forfeited-retired	(	190)
Restricted shares forfeited-not retired	(	85)
Outstanding ending balance		3,725

(2) As of September 30, 2016, the Company collected 275,000 shares of restricted shares because certain employees did not meet the vesting condition. Among those collected back shares, 190,000 shares were used for capital reduction. The capital reduction effective date was on August 12, 2016 as resolved by the Board of Directors, and the change of registration has been completed.

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

	For the three-month period	For the three-month period
	endedSeptember30,2016	endedSeptember30,2015
Equity-settled	8,557 $	712 $
	For the nine-month period	For the nine-month period
	endedSeptember30,2016	endedSeptember30,2015
Equity-settled	26,423 $	2,451 $

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(13) Provisions

At January 1, 2016 Additional provisions Used (reversed) during the period At September 30, 2016 September30,2016 Current 28,285 $ Non-current 116,178 $	Warranty 135,878 $ 28,292 19,707) ( 144,463 $ December31,2015 September30,2015 36,998 $ 48,419 $ 98,880 $ 127,058 $

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

As of September 30, 2016, the Company’s authorized capital was $5,000,000, consisting of 500,000 thousand shares of ordinary stock, and the paid-in capital was $2,740,638 (Including redeemed but not yet retired amounted to $850) with a par value of $10 (in dollars) per share.

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

		(Expressed in	(Expressed in	thousands of	shares)
		2016		2015
At January 1		268,280		270,136
Employee stock options exercised		-			118
Issuance of restricted stocks		1,560			-
Retired restricted shares to employees that
did not meet the vesting conditions	(	190)			-
Redeemed restricted shares to employees that
did not meet the vesting conditions	(	85)			-
Purchase of treasury shares		-	(		981)
At September 30		269,565		269,273

B. Treasury shares

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

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	September 30, 2016
	(in thousands of shares)
	Number
	ofshares Bookvalue

		Number
Sharesheld by	Reason for reacquisition	ofshares		Bookvalue
Altek Corporation	Repurchase shares under the
	R.O.C. Company Law section
	186 and the Enterprises
	Mergers and Acquisitions
	Act section 12	981	$	33,255
Altek Corporation	To be reissued to employees	3,433		96,138
		4,414	$	129,393
		December	31,	2015
		(in thousands of		shares)
		Number
Sharesheld by	Reason for reacquisition	ofshares		Bookvalue

		Number
Sharesheld by	Reason for reacquisition	ofshares			Bookvalue
Altek Corporation	Repurchase shares under the
	R.O.C. Company Law section
	186 and the Enterprises
	Mergers and Acquisitions
	Act section 12		981	$	33,255
Altek Corporation	To be reissued to employees	3,433			96,138
		4,414		$	129,393
		September		30,	2015
		(inthousands of			shares)
		Number
Sharesheld by	Reason for reacquisition	ofshares			Bookvalue
Altek Corporation	Repurchase shares under the
	R.O.C. Company Law section
	187 and the Enterprises
	Mergers and Acquisitions
	Act section 12		981	$	33,255

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.
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.

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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.
C. For the nine-month period ended September 30, 2015, the Company issued 118 thousand shares for employee stock options exercised and the registration for issuance had been completed.
D. Under the Enterprise Merger and Acquisition Act, in consideration of business strategies and division of services to increase competitiveness and operational performance, the Company decided to spin-off its medical electronics segment amounting to $400,000 to swap for common shares of Altek Biotechnology Corporation at $10 per share and obtained 40 million shares. The split was resolved by the shareholders on June 2, 2015. On September 8, 2015, the Board of Directors resolved to set the spin-off date as January 4, 2016. Below are assets of the segment spun off.

spun off.
Asset Cash Other prepaid expenses Property, plant and equipment	January4,2016
	399,272 $ 501 227
	400,000 $

E. The Board of Directors’ meeting on April 20, 2015 and the stockholders’ meeting on June 2, 2015 adopted a resolution to issue employee restricted ordinary shares amounting to 4,000 thousands shares to be issued once or by installments within one year from the receiving date of the effectiveness notification from the authorities. The shares are subscribed at no cost to employees. The employee restricted ordinary shares issued are subject to certain transfer restrictions before their vesting conditions are met. Other than these restrictions, the rights and obligations of these shares issued are the same as other issued ordinary shares.

(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.

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		Share premium	Share premium	Employee stock options	Difference between proceeds from disposal of subsidiary and bookvalue	Restricted shares to employees Total 40,992 $ 1,975,772 $ - 236 - 134,140) ( 25,713 25,713 4,620) ( 4,620) ( - 47) ( 62,085 $ 1,862,914 $ Restricted shares to employees Total - $ 2,063,551 $ - 2,451 - 2,891 - 135,127) ( - $ 1,933,766 $
				52,493 $ 236 - - - - 52,729 $ Employee stock options
		Share premium
$ ( $		2,012,075 - 3,758 135,127) 1,880,706	50,518 $ 2,451 867) ( - 52,102 $		958 $ - - -	- $ - - - - $
	$				958 $

(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 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.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in

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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 exceeds 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 2015 and 2014 earnings had been resolved at the stockholders’ meeting on June 17, 2016 and June 2, 2015, respectively. Details are summarized below:

Legal reserve Cash dividends	Dividends per share Amount (in NT dollars) 27,364 $ - 134,140 0.5 161,504 $ 2015	2014	2014
	Amount 27,364 $ 134,140 161,504 $	Amount 27,533 $ 135,127 162,660 $	Dividends per share (in NT dollars)
			- 0.5

The additional paid-in capital was returned to stockholders as resolved at the stockholders’ meeting on June 17, 2016 and on June 2, 2015, the shareholders resolved to return capital surplus amounting to $134,140 (approximately $0.5 per share) and $135,127 (approximately $0.5 per share) to shareholders in the nature of a capital contribution. The appropriation of 2015 and 2014 earnings were the same as that approved by the Board of Directors on March 18, 2016 and April 20, 2015 respectively.

F. For information relating to employees’ compensation and directors’ and supervisors’ remuneration, please refer to Note 6(22).

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(17) Other equity items

Other equity items
		Foreign currency		Unearned
	translation adjustment			compensation			Total
At January 1, 2016	$	477,768	($	63,121)		$	414,647
Currency translation differences:
Group	(	461,976)		-	(		461,976)
Associates	(	8,482)		-	(		8,482)
Issuance of restricted shares		-	(	41,313)	(		41,313)
to employees
Retirement of restricted shares		-		7,370			7,370
to employees
Share-based payment transactions		-		26,187			26,187
At September 30, 2016	$	7,310	($	70,877)	($		63,567)
		Foreign currency		Unearned
	translation adjustment			compensation			Total
At January 1, 2015	$	481,868	$	-	$		481,868
Currency translation differences:
Group		105,867		-			105,867
Associates	(	1,278)		-	(		1,278)
At September 30, 2015	$	586,457	$	-	$		586,457

(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 September30,2016 - $ 610 10,803 16 18,134 29,563 $	For the three-month period ended September30,2015
		- $ 267 12,429 17 8,345
		21,058 $

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Rental revenue Dividend income Interest income: Interest income from bank deposits Others Other income - others (Note) Total	For the nine-month period ended September30,2016 - $ 610 39,843 45 26,016 66,514 $	For the nine-month period ended September30,2015
		5,822 $ 267 37,907 50 32,858
		76,904 $

Note: The Company was allotted shares and warrants of Kodak US, due to the property distribution plan of Kodak US. The Company recognized this transaction as other income for the ninemonth period ended September 30, 2015.

(19) Other gains and losses

(19)	month period ended September 30, 2015. Other gains and losses
(20)	Finance costs For the three-month period For the three-month period ended September30,2016 ended September30,2015 Net gain on financial assets at fair value through profit or loss 549 $ 417 $ Net currency exchange gains 3,756 5,081 Gain (losses) on disposal of property, plant and equipment 56) ( 3,469 Other expenses 53) ( 404) ( Total 4,196 $ 8,563 $ For the nine-month period For the nine-month period ended September30,2016 ended September30,2015 Net gain (losses) on financial assets at fair value through profit or loss 1,835 $ 11,578) ($ Net currency exchange gains 19,310 8,312 Gain on disposal of property, plant and equipment 3,189 3,469 Other expenses 53) ( 485) ( Total 24,281 $ 282) ($ For the three-month period For the three-month period ended September30,2016 ended September30,2015 Interest expense: Bank borrowings 6,343 $ 5,217 $	For the three-month period ended September30,2015
		For the three-month period ended September30,2015
		5,217 $

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(21) (22)	Expenses by nature Employee benefit expenses Interest expense: Bank borrowings Employee benefit expenses Depreciation charges on property, plant and equipment Amortisation charges on intangible assets Total Employee benefit expenses 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 September30,2016 19,223 $ For the three-month period ended September30,2016 328,035 $ 81,747 3,433 413,215 $ For the nine-month period ended September30,2016 1,085,438 $ 261,217 10,557 1,357,212 $ For the three-month period ended September30,2016 272,718 $ 8,557 17,498 16,054 13,208 328,035 $	For the nine-month period ended September30,2015 14,802 $ For the three-month period ended September30,2015 442,129 $ 112,219 3,690 558,038 $ For the nine-month period ended September30,2015 1,229,871 $ 311,605 10,808 1,552,284 $ For the three-month period ended September30,2015 384,044 $ 712 20,266 22,515 14,592 442,129 $	For the nine-month period ended September30,2015 14,802 $ For the three-month period ended September30,2015 442,129 $ 112,219 3,690 558,038 $ For the nine-month period ended September30,2015 1,229,871 $ 311,605 10,808 1,552,284 $ For the three-month period ended September30,2015 384,044 $ 712 20,266 22,515 14,592 442,129 $

				384,044 $ 712 20,266 22,515 14,592
				442,129 $

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Wages and salaries Employee stock options Labor and health insurance fees Pension costs Other personnel expenses Total	For the nine-month period ended September30,2016 908,080 $ 26,423 55,226 55,899 39,810 1,085,438 $	For the nine-month period ended September30,2015
		1,060,307 $ 2,451 59,855 64,533 42,725
		1,229,871 $

A. According to the Articles of Incorporation of the Company, when distributing earnings, the Company shall distribute compensation to the employees and pay remuneration to the directors and supervisors that account for 10% to 20% and no higher than 2%, respectively, of profit of the current period distributable. If a company has accumulated deficit, earnings should be channeled to cover losses. Employees’ compensation can be distributed in the form of shares or in cash. Employees of subsidiaries that the Company holds more than 50% shareholding are entitled to receive aforementioned stock or cash.
Abovementioned distributable profit of the current period refers to the pre-tax profit before deduction of employees’ compensation and directors’ and supervisors’ remuneration. A company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributed as employees’ compensation and directors’ and supervisors’ remuneration; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.
B. For the three-month and nine-month periods ended September 30, 2016 and 2015, employees’ compensation was accrued at $0, $33,834, $0 and $39,673, respectively; directors’ and supervisors’ remuneration was accrued at $0, $4,511, $0 and $5,290, respectively. The aforementioned amounts were recognized in salary expenses.
Employees ’ compensation and directors ’ and supervisors ’ remuneration of 2015 as resolved by the meeting of board of directors were in agreement with those amounts recognised in the 2015 financial statements.
Information about the appropriation of employees’ bonus and directors’ and supervisors’ remuneration by the Company as proposed by the Board of Directors and resolved by the stockholders will be posted in the “ Market Observation Post System ” at the website of the Taiwan Stock Exchange.

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(23) Income tax

A. Income tax expense (benefit)
a) Components of income tax expense (benefit):

me tax come tax expense (benefit) Components of income tax expense	(benefit):	(benefit):
	For the three-month period		For the three-month period
	endedSeptember30,2016		endedSeptember30,2015
Current tax:
Current tax on profits for the period	$	5,530		$	46,724
Adjustments in respect of prior
years	(	2)			-
Total current tax		5,528			46,724
Deferred tax:
Origination and reversal of
temporary differences		10,095	(		50,343)
Total deferred tax		10,095	(		50,343)
Income tax expense (benefit)	$	15,623	($		3,619)
	For the nine-month period		For the nine-month period
	endedSeptember30,2016		endedSeptember30,2015
Current tax:
Current tax on profits for the period	$	37,419		$	70,318
Adjustments in respect of prior
years	(	16,024)	(		7,344)
Total current tax		21,395			62,974
Deferred tax:
Origination and reversal of
temporary differences	(	435)	(		56,894)
Total deferred tax	(	435)	(		56,894)
Income tax expense	$	20,960		$	6,080

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

For the three-month period ended September30,2016 Translation differences of foreign operations 50,286) ($ For the nine-month period ended September30,2016 Translation differences of foreign operations 96,359) ($	For the three-month period ended September30,2015
	61,332 $
	For the nine-month period ended September30,2015
	21,422 $

B. As of September 30, 2016, the Company’s income tax returns through 2014 have been assessed and approved by the Tax Authority.

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C. Unappropriated retained earnings:

September 30, 2016 December 31, 2015 September 30, 2015 Earnings generated in and after 1998 $ 2,851,391 $ 3,047,283 $ 3,042,189

D. As of September 30, 2016, December 31, 2015 and September 30, 2015, the balance of the imputation tax credit account was $260,845, $260,906 and $258,843, respectively. The creditable tax rate is estimated to be 9.04% for the year ended December 31, 2015 and was 9.24% for the year ended December 31, 2014.

(24) Earnings (loss) per share

Earnings (loss) 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 Restricted stock 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 Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	For the three-monthperiod endedSeptember30,2016
	Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (share in thousands) (in dollars) 12,113 $ 265,840 0.05 $ 12,113 $ - 501 12,113 $ 266,341 0.05 $ For the three-monthperiod endedSeptember30,2015		Earnings per share (in dollars)
			0.05 $
			0.05 $
	Amount after tax 196,782 $ 196,782 $ - 196,782 $	Weighted average number of ordinary shares outstanding (share in thousands) 269,870 1,267 271,137	Earnings per share (in dollars)
			0.73 $
			0.73 $

~38~

		For the nine-monthperiod endedSeptember30,2016	For the nine-monthperiod endedSeptember30,2016	For the nine-monthperiod endedSeptember30,2016	For the nine-monthperiod endedSeptember30,2016
			Weighted average number of
			ordinary shares outstanding		Loss per share
	Amount	after tax	(share in thousands)		(in dollars)
Basic losses per share
Loss attributable to ordinary
shareholders of the parent	($	34,388)	265,840	($	0.13)

For the nine-month period ended September 30, 2016, the Group’s employee stock options, restricted shares and employees’ reward have anti-dilution effect.

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 stock options Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	For the nine-monthperiod endedSeptember30,2015	For the nine-monthperiod endedSeptember30,2015
	Weighted average number of ordinary shares outstanding Amount after tax (share in thousands) 239,880 $ 270,087 239,880 $ - 4 - 1,267 239,880 $ 271,358	Earnings per share (in dollars)
		0.89 $
		0.88 $

(25) Operating leases

The Group leases office buildings for operational needs under non-cancellable operating lease agreements. These lease terms are between 2016 and 2027. Most of the lease agreements are renewable at the market price at the end of the lease period. The future aggregate minimum lease payments receivable under non-cancellable operating leases are as follows:

Not more than 1 year More than 1 year but not more than 5 years Over 5 years	September30,2016 10,628 $ 19,224 23,102 52,954 $	December31,2015 16,963 $ 22,285 25,874 65,122 $	September30,2015
			18,566 $ 16,664 26,798
			62,028 $

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(26) Supplemental cash flow information

A. Investing activities with partial cash payments

		For the nine-month period	For the nine-month period		For the nine-month period	For the nine-month period
	ended		September30,2016	ended September30,2015
Acquisitions of property, plant, and
equipment		$	31,570		$	104,535
Add:property and equipment and
construction billings payable at
beginning of period			61,027			8,332
Less: property and equipment and
construction billings payable at end
of period	(		1,459)	(		66,210)
Cash paid		$	91,138		$	46,657
		For the nine-month period			For the nine-month period
	ended		September30,2016	ended September30,2015
Acquisitions of intangible assets		$	15,423		$	2,676
Add: Payable at beginning of period			-			6,163
Less: Payable at end of period	(		9,067)			-
Cash paid		$	6,356		$	8,839
Financing activities with no cash flow	effects
		For the nine-month period			For the nine-month period
	ended		September30,2016	ended September30,2015
Cash dividend declared	$		134,140	$		135,127
Additional paid-in capital returned
to stockholders			134,140			135,127
	$		268,280	$		270,254

B. Financing activities with no cash flow effects

(27) Transactions with non-controlling interest

For the nine-month period ended September 30, 2016, the Group acquired an additional 0.41% shares of its subsidiary –Altek Autotronics Corporation for a total cash consideration of $1,483. This transaction resulted in a decrease in the non-controlling interest by $1,436 and a decrease in the equity attributable to owners of the parent by $47. The effect of the change in ownership interests in Altek Autotronics Corporation on the equity attributable to owners of the parent for the ninemonth period ended September 30, 2016 is shown below:

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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 nine-month	For the nine-month
		period ended
	September30,2016
	$	1,436
(		1,483)
($		47)

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 endedSeptember30,2016 7,137 $ 162 3,013 10,312 $ For the nine-month period endedSeptember30,2016 25,966 $ 512 6,053 32,531 $	For the three-month period endedSeptember30,2015
		8,322 $ 216 256
		8,794 $
		For the nine-month period endedSeptember30,2015
		25,721 $ 648 802
		27,171 $

8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

Contingencies

a) The GUC (General Unsecured Creditor Trustee) of Eastman Kodak Company (hereunder ‘Kodak’) filed a lawsuit against the Company in the United States Bankruptcy Court for the Southern District of New York, asserting certain payments in 49.2 million transactions prior to Kodak’s bankruptcy were out of ordinary course of business. The Company vigorously disputed GUC’s claim, and insists that the transactions had always been made in the ordinary course of business with Kodak. According to the press release, GUC has sued over 700 of Kodak’s suppliers, trying to require marginal

~41~

settlement fees from the suppliers, as it is a regular ploy of US bankruptcy lawyers in bankruptcy cases. For the protection of shareholders’ interests, the Company did not accept GUC’s settlement proposal. The GUC’s assertion has now been heard by the court, and this incident did not have a significantly impact on the Company’s business and financial performance.

b) On December 22, 2015, the Company filed a civil complaint against HTC Corporation with the Taiwan Taipei District Court, alleging HTC Corporation’s default in relation to the agreed upon Manufacturing and Supply Agreement and claiming damage of USD 11,126 thousand against HTC Corporation. As of November 8, 2016, the case is still under trial.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENT 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).
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

~42~

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 transactions denominated in the relevant foreign currencies.
iv. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

September 30, 2016

Foreign Currency Amount (In thousands)	Exchange Rate	Book Value (NTD)	SensitivityAnalysis	SensitivityAnalysis	SensitivityAnalysis
			Extent of Variation	Effect on Profit or (Loss)	Effect on Other Comprehensive Income(Loss)
USD 88,696 USD 66,684 USD 4,089 USD 85,164 USD 54,628	31.360 6.6778 31.360 31.360 6.6778	2,781,507 $ 2,091,210 128,245 $ 2,670,743 $ 1,713,134	1% 1% 1% 1% 1%	27,815 $ 20,912 - $ 26,707) ($ 17,131) (	- $ - 1,282 $ - $ -

~43~

December 31, 2015

==> picture [445 x 258] intentionally omitted <==

----- Start of picture text -----

Sensitivity Analysis
Effect on
Foreign Currency Effect on Other
Amount Exchange Book Value Extent of Profit or Comprehensive
(In thousands) Rate (NTD) Variation (Loss) Income (Loss)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD USD 100,781 32.825 $ 3,308,136 1% $ 33,081 $ -
USD:RMB USD 80,924 6.4936 2,656,330 1% 26,563 -
Non-monetary items
USD:NTD USD 4,210 32.825 $ 138,206 1% $ - $ 1,382
Financial liabilities
Monetary items
USD:NTD USD 92,778 32.825 $ 3,045,438 1% ($ 30,454) $ -
USD:RMB USD 67,843 6.4936 2,226,946 1% ( 22,269) -
----- End of picture text -----

	September30,2015	September30,2015	September30,2015	September30,2015
Foreign Currency Amount Exchange (In thousands) Rate USD 117,752 32.870 USD 70,808 6.3613 USD 5,058 32.870 USD 109,928 32.870 USD 67,474 6.3613	Book Value (NTD)	SensitivityAnalysis
		Extent of Variation	Effect on Profit or (Loss)	Effect on Other Comprehensive Income(Loss)
	3,870,511 $ 2,327,459 166,269 $ 3,613,350 $ 2,217,870	1% 1% 1% 1% 1%	38,705 $ 23,275 - $ 36,133) ($ 22,179) (	- $ - 1,663 $ - $ -

v.Total exchange gain, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the three-month and ninemonth periods ended September 30, 2016 and 2015 amounted to $3,756, $5,081, $19,310 and $8,312, respectively.

~44~

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 raised short-term borrowings at fixed rates during the nine-month periods ended September 30, 2016 and 2015, 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 analyzing 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 utilization 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 for the ninemonth periods ended September 30, 2016 and 2015.
iii. The individual analysis of financial assets that had been impaired is provided in the statement for each type of financial asset in Note 6.
iv. The credit quality information of financial assets that are neither past due nor impaired or past due and not impaired is provided in the statement in Note 6(3).
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, and compliance with internal balance sheet ratio targets.
ii. Surplus cash held by the operating entities over and above the 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, choosing instruments with appropriate maturities or sufficient liquidity to provide

~45~

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, 2016 Short-term borrowings Notes payable Accounts payable Other payables Guarantee deposits recevied	Less than 1year 2,225,000 $ 2,010 2,118,755 711,799 -	Over 1year
		- $ - - 9,512

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2015 Short-term borrowings Accounts payable Other payables Guarantee deposits recevied Non-derivative financial liabilities: September 30, 2015 Short-term borrowings Accounts payable Other payables Guarantee deposits received	Less than 1year 1,730,000 $ 2,422,069 510,923 - Less than 1year 1,550,000 $ 2,278,308 847,057 -	Over 1year
		- $ - - 6,576 Over 1year
		- $ - - 6,670

(3) Fair value estimation

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed beneficiary certificates, on-the-run derivative instruments with quoted market prices is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset

~46~

or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.
B. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at September 30, 2016 , December 31, 2015 and September 30, 2015 is as follows:

September 30, 2016 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificate December 31, 2015 Assets Recurring fair value measurements Financial assets at fair value though profit or loss Beneficiary certificate September 30, 2015 Assets Recurring fair value measurements Financial assets at fair value though profit or loss Beneficary certificate	Level 1 852,938 $ Level 1 427,531 $ Level 1 334,690 $	Level 2 - $ Level 2 - $ Level 2 - $	Level3 - $ Level3 - $ Level3 - $	Total
				852,938 $
				Total
				427,531 $
				Total
				334,690 $

C. The methods and assumptions the Group used to measure fair value are as follows:

The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Open-end fund Market quoted price Net asset value

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

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

~47~

C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) : Please refer to table 1.
D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company’s paid-in capital: None.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 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: Please refer to table 2.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more:
Please refer to table 3.
I. Trading in derivative financial instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Please refer to table 4.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China ): Please refer to table 5.

(3) Information on investments in Mainland China

A. The related information of investments in Mainland China: Please refer to table 6.
B. Significant transactions, either directly or indirectly throught a third area, with investee companies in the Mainland Area:

For the significant purchases, sales, accounts payable and accounts receivable transactions between the Company and the investee companies in Mainland China through its subsidiaries, please refer to tables 2 and 4.

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) Information about segment profit or loss, assets and liabilities

None.

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Altek Corporation and subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

September 30, 2016

			September 30, 2016
Table 1 Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As ofSeptember30,2016 Expressed in thousands of NTD (Except as otherwise indicated)
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Altek Corporation " " Altek (Kunshan) Co., Ltd. " Altek Investment Co., Ltd. Altek Autotronics Corporation Altek Semiconductor Corporation Altek Biotechnology Corporation	Gianta Co., Ltd. - Common stock Yung Li Investments Inc. - Common stock Hua-chuang Automobile Information Technical Center Co., Ltd. - Common stock Guangdong Kingding Optical Technology Co., Ltd. CPEC Huachuang Private Equity (Kunshan) Enterprise (Limited Partnership) Money Market Fund Money Market Fund Money Market Fund Money Market Fund	Director None None None None None None None None	Financial assets carried at cost - non-current " " " " Financial assets at fair value through profit or loss-current " " "	762,876 1,999,355 10,000,000 1,200,000 N/A 427,807 25,379,243 4,957,475 20,675,712	10,312 $ 13,947 93,450 5,636 32,873 6,833 334,718 83,080 428,307	14.55% 4.84% 2.00% 6.45% (Note) N/A N/A N/A N/A	10,312 $ 13,947 93,450 5,636 32,873 6,833 334,718 83,080 428,307

Note : 1% of CPEC Huachuang Private Equity (Kunshan) Enterprise (Limited Partnership)’s capital contribution.

Table 1, Page 1

Altek Corporation and subsidiaries

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

For the nine-month period ended September 30, 2016

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Altek Corporation " Altek International Investment Co., Ltd. Altek Autotronics Corporation Altek Semiconductor Corporation Altek Biotechnology Corporation Altek Trading (Shanghai) Limited	Altek International Investment Co., Ltd. Altek Semiconductor Corporation Altek (Kunshan) Co., Ltd. Altek International Investment Co., Ltd. " " Altek (Kunshan) Co., Ltd.	Parent and affiliated company " " " " " "	Purchases Purchases Purchases Purchases Purchases Purchases Purchases	2,056,625 $ 206,468 3,085,002 218,541 265,933 518,909 661,670	90% 9% 100% 99% 19% 100% 91%	Net 120 days Net 75 days " " " " "	Approximately the same price with third parties " " " " " "	Note " " " " " "	1,616,886) ($ 127,612) ( 1,023,319) ( 77,463) ( 220,372) ( 214,302) ( 88,757) (	92% 8% 96% 99% 35% 100% 75%

Note: The payment term with third parties was net 60~120 days.

Table 2, Page 1

Altek Corporation and subsidiaries

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

September 30, 2016

Table 3 Creditor	Counterparty	Relationship with the counterparty	Balance as atSeptember30,2016	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Altek International Investment Co., Ltd. " " Altek (Kunshan) Co., Ltd.	Altek Corporation Altek Semiconductor Corporation Altek Biotechnology Corporation Alteck International Investment Co., Ltd.	Parent company Parent company Parent company Parent company	1,616,886 $ 220,372 214,302 1,023,319	1.46 4.43 3.15 6.07	- $ - - -	N/A N/A N/A N/A	118,004 $ - 63,960 379,021	- $ - - -

Table 3, Page 1

Altek Corporation and subsidiaries

Table 4

Significant inter-company transactions during the reporting periods

For the nine-month period ended September 30, 2016

Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction

					Transaction
Companyname	Counterparty	Relationship (Note 1)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 2)
Altek Corporation " " " Altek International Investment Co., Ltd. " Altek Autotronics Corporation " Altek Semiconductor Corporation " Altek Biotechnology Corporation " Altek Trading (Shanghai) Limited "	Altek International Investment Co., Ltd. " Altek Semiconductor Corporation " Altek (Kunshan) Co., Ltd. " Altek International Investment Co., Ltd. " " " " " Altek (Kunshan) Co., Ltd. "	(1) (1) (1) (1) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3)	Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable	2,056,625 $ 1,616,886 206,468 127,612 3,085,002 1,023,319 218,541 77,463 265,933 220,372 518,909 214,302 661,670 88,757	Net 120 days " Net 75 days " " " " " " " " " " "	25% 11% 3% 1% 38% 7% 3% 1% 3% 1% 6% 1% 8% 1%

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.

Note 3: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

Table 4, Page 1

Altek Corporation and subsidiaries

Information on investees

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

For the nine-month period ended September 30, 2016

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares he	ld as at September	30,2016	Net profit (loss) of the investee for the nine-month period ended September 30,2016	Investment income(loss) recognised by the Company for the nine-month period ended September 30,2016	Footnote
				Balance as at September 30, 2016	Balance as at December 31, 2015	Number of shares	Ownership (%)	Book value
Altek Corporation " " " " " Altek International Investment Co., Ltd. " Altek Semiconductor (Cayman) Co., Ltd. Altek Biotechnology Holding (Cayman) Co., Ltd.	Altek International Investment Co., Ltd. Altek Japan Corporation Altek Investment Co., Ltd. Altek Autotronics Corporation Altek Biotechnology Corporation Altek International Holdomg (BVI) Co, Ltd. Altek Lab Inc. JinJing Optical Technology Co., ltd. Altek Semiconductor Corporation Altek Biotechnology Corporation	British Virgin Islands Japan Republic of China Republic of China Republic of China British Virgin Islands U.S.A. Samoa Republic of China Republic of China	Investment and general business operations Sale and design of optical instruments Investment Research design, manufacture and sales of car electronic components Research and development, manufacture and sales of biotechnology Investment and general business operations Design service Investment and general business operations Research design and sales of ASIC Research and development, manufacture and sales of biotechnology	3,033,618 $ 2,869 50,000 184,080 - 415,376 115,397 109,760 200,000 415,376	3,033,618 $ 2,869 50,000 182,597 1,000 - 115,397 109,760 200,000 -	92,726,249 1,000 5,000,000 21,775,200 - 12,865,921 11,311,875 3,500,000 20,000,000 40,100,000	100% 100% 100% 100% - 100% 100% 23.33% 100% 100%	8,986,352 $ 13,655 26,216 345,257 - 423,623 60,090 - 295,459 423,623	97,630) ($ 292 59) ( 7,153 22,667 7,069) ( 671 85,010) ( 81,045 22,667	97,630) ($ 292 59) ( 7,182 29,736 7,069) ( 671 - 57,939 7,069) (	Note 1 Note 3 Note 3 Note 2 Note 3

Note 1: Ownership (%) on Altek Autotronics Corporation held by Altek Corporation and Altek Investment Co., Ltd. are 90.73% and 9.27%, respectively. Note 2: Common stock of 9,311,875 shares and preferred stock of 2,000,000 shares.

Note 3: In June 2016, The share holding of Altek Biotechnology Corporation was changed to be owned by Altek Biotechnology Holding (Cayman) Co., Ltd. , which is a subsidiary of Altek International Holding (BVI) Co., Ltd.

Table 5, Page 1

Altek Corporation and subsidiaries

Information on investments in Mainland China

For the nine-month period ended September 30, 2016

Table 6

Expressed in thousands of NTD

(Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-incapital	Investment method `（`Note1`）`	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2016	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine-month period ended September30,2016	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine-month period ended September30,2016	Accumulated amount of remittance from Taiwan toMainland China as of September30,2016	Net profit (loss) of investee for the nine- month period ended September30,2016	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the nine-month period ended September30,2016	Book value of investments in Mainland China as of September 30,2016	Accumulated amount of investment income remitted back to Taiwan as of September30,2016
					Remitted to Mainland China	Remitted back to Taiwan
Altek (Kunshan) Co., Ltd. (Note 2) Altek EMS (Kunshan) Co., Ltd. (Note 3) Altek Trading (Shanghai) Limited Kinko Optical (Suzhou) Co., Ltd. Phoenix Optical (Shanghai) Co., Ltd. Altek Precision (Kunshan) Co., Ltd. Altek Optical Technology (Kunshan) Co., Ltd.	Manufacture and sale of digital still cameras and its accessories Manufacture and sale of related engineering services 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 Design, manufacture and sales of digital camera parts Manufacture and sales of digital camera and its accessories and optical components	1,555,456 $ 156,800 266,560 470,400 496,209 432,768 470,400	2 2 2 2 2 2 2	1,411,200 $ 284,843 266,560 109,760 277,989 432,768 470,400	- $ - - - - - -	- $ - - - - - -	1,411,200 $ 284,843 266,560 109,760 277,989 432,768 470,400	94,135) ($ 12,981 ( 9,865) ( 82,442) ( 471) ( 2,009) 390	100% 100% 100% 23.33% 40% 100% 100%	94,135) ($ 12,981 ( 9,865) - - ( 2,009) 390	3,813,910 $ 774,431 287,663 - 128,245 156,429 141,602	- $ - - - - - -

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1)Directly invest in a company in Mainland China.

(2)Through investing in an existing company in the third area,which then investeed in the investee in Mainland China.

(3)Others.

Note 2: Including retained earnings capitalized of US$4,600 (In thousand of US dollars).

Note 3: Including retained earnings capitalized of US$3,600 (In thousand of US dollars).

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as ofSeptember30,2016	Investment amount approved by the Investment CommissionoftheMinistry of EconomicAffairs (MOEA)	Ceiling on investments in Mainland China imposed by theInvestment Commissionof MOEA
Altek Corporation	3,294,049 $	4,483,037 $	- $

Note:According to “REGULATIONS COVERNING THE APPROVAL OF INVESTMENT OR TECHNICAL 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.

Table 6, Page 1

AI assistant

Altek — Interim / Quarterly Report 2016

52290_rns_2016-11-15_5a062695-a299-4479-b863-19daa74fdd89.pdf

ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

To Altek Corporation

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 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016 AND 2015

1. HISTORY AND ORGANIZATION

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(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

(4) Employee benefits

(5) Income tax

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

(2) Critical accounting estimates and assumptions:

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

(3) Accounts receivable

(5) Financial assets measured at cost

(7) Property, plant and equipment

(8) Intangible assets

(10) Short-term borrowings

(11) Pensions

(13) Provisions

(14) Share capital

B. Treasury shares

(15) Capital surplus

(16) Retained earnings

(17) Other equity items

(18) Other income

(19) Other gains and losses

(23) Income tax

C. Unappropriated retained earnings:

(24) Earnings (loss) per share

(25) Operating leases

(26) Supplemental cash flow information

A. Investing activities with partial cash payments

(27) Transactions with non-controlling interest

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

Contingencies

10. SIGNIFICANT DISASTER LOSS

11. SIGNIFICANT EVENT AFTER THE BALANCE SHEET DATE

12. OTHERS

(2) Financial instruments

Foreign exchange risk

September 30, 2016

Interest rate risk

(3) Fair value estimation

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

(2) Information on investees

(3) Information on investments in Mainland China

14. SEGMENT INFORMATION

(1) General information

(2) Measurement of segment information

(3) Information about segment profit or loss, assets and liabilities

Altek Corporation and subsidiaries

Altek Corporation and subsidiaries

Table 2

Altek Corporation and subsidiaries

Expressed in thousands of NTD

Altek Interim / Quarterly Report 2016