Altek - Interim / Quarterly Report 2017

ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

JUNE 30, 2017 AND 2016

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR 17000022 (In Thousands of New Taiwan Dollars)

To Altek Corporation

We have reviewed the accompanying consolidated balance sheets of Altek Corporation and subsidiaries as of June 30, 2017 and 2016, and the related consolidated statements of comprehensive income for the three-month and six-month periods then ended, as well as the consolidated statements of changes in equity and of cash flows for the six-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 $3,159,904 and $3,728,862, constituting 21% and 25% of the consolidated total assets, and total liabilities of $522,080 and $691,675, constituting 9% and 12% of the consolidated total liabilities as of June 30, 2016 and 2017, respectively, and total comprehensive income (loss) of $29,285, $27,967, $54,124, and $13,645, constituting 12%, 38%, 7% and 18% of the absolute values of the consolidated total comprehensive income (loss) for the three-month and six-month periods ended June 30, 2017 and 2016, 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 $0 and $132,947 as of June 30, 2017 and 2016,

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respectively, and the related investment loss both amounted to $0 for the three-month and six-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.

Li, Tien-Yi

[Lin, Yu-Kuan ]

For and on behalf of PricewaterhouseCoopers, Taiwan

August 11, 2017

------------------------------------------------------------------------------------------------------------------------------------------------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 June 30, 2017 and 2016 are reviewed, not audited)

				June30,2017			December31,2016	December31,2016		June30,2016
	Assets	Notes		AMOUNT	%		AMOUNT	%		AMOUNT	%
	Current assets
1100	Cash and cash equivalents	6(1)	`$`	`5,931,012`	`41 $`		`4,849,989`	`32 $`		`5,135,704`	`35`
1110	Current financial assets at fair	6(2)
	value through profit or loss			`610,425`		`4`	`693,709`		`5`	`811,789`	`5`
1150	Notes receivable, net			`-`		`-`	`349`		`-`	`3,056`	`-`
1170	Accounts receivable, net	6(3)		`1,930,717`	`13`		`2,783,145`	`18`		`1,917,943`	`13`
1200	Other receivables			`21,600`		`-`	`19,943`		`-`	`12,348`	`-`
1220	Current income tax assets			`4,223`		`-`	`3,628`		`-`	`1,353`	`-`
130X	Inventories, net	6(4)		`1,124,767`		`8`	`1,470,971`	`10`		`1,238,316`	`8`
1410	Prepayments			`187,838`		`1`	`210,016`		`1`	`230,798`	`2`
1470	Other current assets			`23,911`		`-`	`19,772`		`-`	`30,695`	`-`
11XX	Current Assets			`9,834,493`	`67`		`10,051,522`	`66`		`9,382,002`	`63`
	Non-current assets
1543	Non-current financial assets at	6(5)
	cost			`160,005`		`1`	`147,834`		`1`	`143,018`	`1`
1550	Investments accounted for	6(6)
	using equity method			`-`		`-`	`126,757`		`1`	`132,947`	`1`
1600	Property, plant and equipment,	6(7)
	net			`4,293,964`	`29`		`4,657,848`	`31`		`4,924,372`	`33`
1760	Investment property, net	6(8)		`198,246`		`1`	`-`		`-`	`-`	`-`
1780	Intangible assets, net	6(9)		`83,229`		`1`	`92,917`		`1`	`100,313`	`1`
1840	Deferred income tax assets			`104,216`		`1`	`69,782`		`-`	`62,283`	`-`
1900	Other non-current assets	6(10)		`67,286`		`-`	`80,472`		`-`	`84,021`	`1`
15XX	Non-current assets			`4,906,946`	`33`		`5,175,610`	`34`		`5,446,954`	`37`
1XXX	Total assets		`$`	`14,741,439`	`100 $`		`15,227,132`	`100 $`		`14,828,956`	`100`

(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 June 30, 2017 and 2016 are reviewed, not audited)

					June30,2017				December31,2016	December31,2016			June30,2016
	Liabilities and Equity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(11)		`$`	`2,158,000`	`15`		`$`	`2,415,000`	`16`		`$`	`2,205,000`	`16`
2170	Accounts payable				`1,643,882`	`11`			`2,417,239`	`16`			`1,904,322`	`13`
2200	Other payables				`619,721`		`4`		`445,206`		`3`		`720,927`		`5`
2230	Current income tax liabilities				`44,995`		`-`		`79,253`		`1`		`43,915`		`-`
2250	Provisions for liabilities -	6(14)
	current				`46,028`		`-`		`52,247`		`-`		`34,578`		`-`
2300	Other current liabilities				`621,926`		`4`		`204,924`		`1`		`207,311`		`1`
21XX	Current Liabilities				`5,134,552`	`34`			`5,613,869`	`37`			`5,116,053`	`35`
	Non-current liabilities
2550	Provisions for liabilities -	6(14)
	noncurrent				`84,230`		`1`		`121,819`		`1`		`112,301`		`1`
2570	Deferred income tax liabilities				`411,664`		`3`		`442,112`		`3`		`461,988`		`3`
2600	Other non-current liabilities				`29,445`		`-`		`16,339`		`-`		`26,979`		`-`
25XX	Non-current liabilities				`525,339`		`4`		`580,270`		`4`		`601,268`		`4`
2XXX	Total Liabilities				`5,659,891`	`38`			`6,194,139`	`41`			`5,717,321`	`39`
	Equity attributable to owners of
	parent
	Share capital	6(15)
3110	Common stock				`2,739,088`	`19`			`2,739,788`	`18`			`2,742,538`	`18`
	Capital surplus	6(16)
3200	Capital surplus				`2,112,898`	`14`			`1,862,914`	`12`			`1,867,534`	`13`
	Retained earnings	6(17)
3310	Legal reserve				`1,379,754`		`9`		`1,374,374`		`9`		`1,374,374`		`9`
3320	Special reserve				`142,456`		`1`		`142,456`		`1`		`142,456`		`1`
3350	Unappropriated retained
	earnings				`2,739,678`	`19`			`2,946,092`	`19`			`2,839,278`	`19`
	Other equity interest	6(18)
3400	Other equity interest		`(`		`315,186) (`		`2) (`		`25,521)`		`-`		`166,021`		`1`
3500	Treasury stocks	6(15)	`(`		`129,393) (`		`1) (`		`129,393)(`		`1) (`		`129,393) (`		`1)`
31XX	Equity attributable to
	owners of the parent				`8,669,295`	`59`			`8,910,710`	`58`			`9,002,808`	`60`
36XX	Non-controlling interest	6(27)			`412,253`		`3`		`122,283`		`1`		`108,827`		`1`
3XXX	Total equity				`9,081,548`	`62`			`9,032,993`	`59`			`9,111,635`	`61`
	Significant contingent liabilities	9
	and unrecognised contract
	commitments
3X2X	Total liabilities and equity			`$`	`14,741,439`	`100`		`$`	`15,227,132`	`100`		`$`	`14,828,956`	`100`

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

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

(UNAUDITED)

					Three months ended June 30	Three months ended June 30	Three months ended June 30	Three months ended June 30			Six months ended June 30	Six months ended June 30	Six months ended June 30	Six months ended June 30
					2017			2016			2017			2016
	Items	Notes			AMOUNT	%	AMOUNT		%		AMOUNT	%	AMOUNT		%
4000	Sales revenue	6(19)		`$`	`2,473,042`	`100`	`$`	`2,789,236`	`100`	`$`	`5,134,149`	`100`	`$`	`5,214,076`	`100`
5000	Operating costs	6(23)(24)	`(`		`2,132,324) (`	`86) (`		`2,460,414 ) (`	`88) (`		`4,392,165) (`	`86) (`		`4,633,871) (`	`89)`
5900	Net operating margin				`340,718`	`14`		`328,822`	`12`		`741,984`	`14`		`580,205`	`11`
	Operating expenses	6(23)(24)
6100	Selling expenses		`(`		`17,901) (`	`1) (`		`15,029 ) (`	`1) (`		`36,571) (`	`1) (`		`33,151) (`	`1)`
6200	General & administrative
	expenses		`(`		`84,327) (`	`3) (`		`57,568 ) (`	`2) (`		`175,553) (`	`3) (`		`117,868) (`	`2)`
6300	Research and development
	expenses		`(`		`239,235) (`	`10) (`		`257,745 ) (`	`9) (`		`483,279) (`	`9) (`		`507,991) (`	`10)`
6000	Total operating expenses		`(`		`341,463) (`	`14) (`		`330,342 ) (`	`12) (`		`695,403) (`	`13) (`		`659,010) (`	`13)`
6900	Operating profit (loss)		`(`		`745)`	`- (`		`1,520 )`	`-`		`46,581`	`1 (`		`78,805) (`	`2)`
	Non-operating income and
	expenses
7010	Other income	6(20)			`26,760`	`1`		`18,087`	`1`		`45,113`	`-`		`36,951`	`1`
7020	Other gains and losses	6(21)	`(`		`24,554) (`	`1)`		`14,561`	`- (`		`51,843) (`	`1)`		`20,085`	`-`
7050	Finance costs	6(22)	`(`		`6,656)`	`- (`		`6,440 )`	`- (`		`13,550)`	`- (`		`12,880)`	`-`
7000	Total non-operating
	income and expenses		`(`		`4,450)`	`-`		`26,208`	`1 (`		`20,280) (`	`1)`		`44,156`	`1`
7900	Profit (loss) before income tax		`(`		`5,195)`	`-`		`24,688`	`1`		`26,301`	`- (`		`34,649) (`	`1)`
7950	Income tax expense	6(25)	`(`		`9,740) (`	`1) (`		`10,466 )`	`- (`		`16,106)`	`- (`		`5,337)`	`-`
8200	Profit (loss) for the period		`($`		`14,935) (`	`1)`	`$`	`14,222`	`1`	`$`	`10,195`	`- ($`		`39,986) (`	`1)`
	Other comprehensive income
	Components of other
	comprehensive income that will
	be reclassified to profit or loss
8361	Currency translation
	differences of foreign
	operations			`$`	`122,316`	`5 ($`		`114,606 ) (`	`5) ($`		`372,520) (`	`7) ($`		`266,044) (`	`5)`
8370	Share of other comprehensive
	income (loss) of associates and
	joint ventures accounted for
	uner equity method				`8,676`	`- (`		`3,272 )`	`-`		`1,520`	`- (`		`5,363)`	`-`
8399	Income tax relating to the	6(25)
	components of other
	comprehensive income		`(`		`21,500)`	`-`		`20,050`	`1`		`63,699`	`1`		`46,073`	`1`
8360	Components of other
	comprehensive income
	(loss) that will be
	reclassified to profit or loss				`109,492`	`5 (`		`97,828 ) (`	`4) (`		`307,301) (`	`6) (`		`225,334) (`	`4)`
8300	Total other comprehensive
	income (loss) for the period			`$`	`109,492`	`5 ($`		`97,828 ) (`	`4) ($`		`307,301) (`	`6) ($`		`225,334) (`	`4)`
8500	Total comprehensive income
	(loss) for the period			`$`	`94,557`	`4 ($`		`83,606 ) (`	`3) ($`		`297,106) (`	`6) ($`		`265,320) (`	`5)`
	Profit (loss), attributable to:
8610	Owners of the parent		`($`		`16,575) (`	`1)`	`$`	`1,081`	`-`	`$`	`14,562`	`- ($`		`46,501) (`	`1)`
8620	Non-controlling interest				`1,640`	`-`		`13,141`	`1 (`		`4,367)`	`-`		`6,515`	`-`
	Profit (loss) for the period		`($`		`14,935) (`	`1)`	`$`	`14,222`	`1`	`$`	`10,195`	`- ($`		`39,986) (`	`1)`
	Comprehensive (loss) income
	attributable to:
8710	Owners of the parent			`$`	`88,399`	`4 ($`		`96,811 ) (`	`3) ($`		`296,436) (`	`6) ($`		`271,444) (`	`5)`
8720	Non-controlling interest				`6,158`	`-`		`13,205`	`- (`		`670)`	`-`		`6,124`	`-`
	Total comprehensive income
	(loss) for the period			`$`	`94,557`	`4 ($`		`83,606 ) (`	`3) ($`		`297,106) (`	`6) ($`		`265,320) (`	`5)`
		6(26)
9750	Basic (loss) earnings per
	share		`($`			`0.06)`	`$`		`0.01`	`$`		`0.05 ($`			`0.17)`
		6(26)
9850	Diluted (loss) earnings per
	share		`($`			`0.06)`	`$`		`0.01`	`$`		`0.05 ($`			`0.17)`

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

~5~

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

F	Notes					Equity att	ributable to owners of	the parent	the parent			Non-controlling interest	Total equity
			Common stock	Capital surplus		Retained Earnings		Other equityinterest		Treasury stocks	Total
					Legal reserve	Special reserve	Unappropriated retained earnings	Currency translation differences of foreign operations	Other equity - others
	6(17) 6(16)(17) 6(13)(16)(18) 6(13)(16)(18) 6(27) 6(18) 6(17) 6(17) 6(13)(16)(18) 6(13)(16)(18) 6(27) 6(18)	`$ 2,726,938` `-` `-` `-` `15,600` `-` `-` `-` `-` `$ 2,742,538` `$ 2,739,788` `-` `-` `-` `(` `700 )` `-` `-` `-` `-` `$ 2,739,088`		`$ 1,975,772` `-` `(` `134,140 )` `236` `25,713` `(` `47 )` `-` `-` `-` `$ 1,867,534` `$ 1,862,914` `-` `-` `-` `(` `1,176 )` `251,160` `-` `-` `-` `$ 2,112,898`	`$ 1,347,010` `27,364` `-` `-` `-` `-` `-` `-` `-` `$ 1,374,374` `$ 1,374,374` `5,380` `-` `-` `-` `-` `-` `-` `-` `$ 1,379,754`	`$` `142,456` `-` `-` `-` `-` `-` `-` `-` `-` `$` `142,456` `$` `142,456` `-` `-` `-` `-` `-` `-` `-` `-` `$` `142,456`	`$` `3,047,283` `(` `27,364` `)` `(` `134,140` `)` `-` `-` `-` `(` `46,501` `)` `-` `-` `$` `2,839,278` `$` `2,946,092` `(` `5,380` `)` `(` `215,596` `)` `-` `-` `-` `14,562` `-` `-` `$` `2,739,678`	`$` `477,768` `-` `-` `-` `-` `-` `-` `(` `224,943 )` `-` `$` `252,825` `$` `35,009` `-` `-` `-` `-` `-` `-` `(` `310,998 )` `-` `($` `275,989 )`	`($` `63,121 )` `-` `-` `17,630` `(` `41,313 )` `-` `-` `-` `-` `($` `86,804 )` `($` `60,530 )` `-` `-` `19,457` `1,876` `-` `-` `-` `-` `($` `39,197 )`	`($` `129,393 )` `-` `-` `-` `-` `-` `-` `-` `-` `($` `129,393 )` `($` `129,393 )` `-` `-` `-` `-` `-` `-` `-` `-` `($` `129,393 )`	`$ 9,524,713` `-` `(` `268,280 )` `17,866` `-` `(` `47 )` `(` `46,501 )` `(` `224,943 )` `-` `$ 9,002,808` `$ 8,910,710` `-` `(` `215,596 )` `19,457` `-` `251,160` `14,562` `(` `310,998 )` `-` `$ 8,669,295`	`$` `104,139` `-` `-` `-` `-` `47` `6,515` `(` `391 )` `(` `1,483 )` `$` `108,827` `$` `122,283` `-` `-` `-` `-` `(` `251,160 )` `(` `4,367 )` `3,697` `541,800` `$` `412,253`	`$` `9,628,852` `-` `(` `268,280 )` `17,866` `-` `-` `(` `39,986 )` `(` `225,334 )` `(` `1,483 )` `$` `9,111,635` `$` `9,032,993` `-` `(` `215,596 )` `19,457` `-` `-` `10,195` `(` `307,301 )` `541,800` `$` `9,081,548`
F

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

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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 (loss) 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

Share-based payment compensation cost

Loss on disposal of investment

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
Accounts payable
Other payables
Provisions for liabilities
Other current liabilities
Other non-current liabilities
Cash inflow (outflow) generated from operations
Interest received
Interest paid
Income tax paid
Net cash flows from (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at cost
Loss on disposal of accounted for under the equity method
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 from (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings

Increase in guarantee deposits received
Changes in non-controlling interest

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

Cash and cash equivalents at end of period Six-monthperiod ended June 30
Notes
2017
2016
$
26,301 ($
34,649 )
6(7)(8)(23)
143,901
179,470
6(9)(10)(23)
7,255
7,632
6(3)
(
538 )
1,980
1,137 (
914 )
6(22)
13,550
12,880
6(20)
(
33,032 ) (
29,069 )
6(13)(24)
19,457
17,866
6(21)
4,226
-
6(21)
(
39 ) (
3,245 )
82,147 (
383,344 )
346
14,773
810,224
307,975
1,173
4,815
296,199 (
220,841 )
18,515 (
118,395 )
(
4,606 ) (
20,050 )
(
700,770 ) (
456,643 )
(
29,552 ) (
4,209 )
(
43,808 )
11,001
415,770 (
148,860 )
146
392
1,028,002 (
861,435 )
29,766
32,663
(
13,782 ) (
12,930 )
(
51,854 ) (
33,350 )
992,132 (
875,052 )
(
13,399 )
-
123,572
-
6(29)
(
72,974 ) (
74,945 )
7,698
20,679
6(29)
(
6,016 ) (
6,366 )
11,347
6,517
50,228 (
54,115 )
6(11)
(
257,000 )
475,000
13,268
502
6(27)
541,800 (
1,483 )
298,068
474,019
(
259,405 ) (
151,121 )
1,081,023 (
606,269 )
6(1)
4,849,989
5,741,973
6(1)
$
5,931,012 $
5,135,704

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

~7~

ALTEK CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2017 AND 2016

(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 August 11, 2017.

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”) New standards, interpretations and amendments endorsed by the FSC effective from 2017 are as follows:

follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Investment entities: applying the consolidation exception (amendments to IFRS 10, IFRS 12 and IAS 28) Accounting for acquisition of interests in joint operations (amendments to IFRS 11) IFRS 14, ‘Regulatory deferral accounts’ Disclosure initiative (amendments to IAS 1) Clarification of acceptable methods of depreciation and amortisation (amendments to IAS 16 and IAS 38) Agriculture: bearer plants (amendments to IAS 16 and IAS 41) Defined benefit plans: employee contributions (amendments to IAS 19) Equity method in separate financial statements (amendments to IAS 27) Recoverable amount disclosures for non-financial assets (amendments to IAS 36)	January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 July 1, 2014 January 1, 2016 January 1, 2014

follows:

New Standards,Interpretations andAmendments

Effective date by
International Accounting
StandardsBoard

Investment entities: applying the consolidation exception (amendments
to IFRS 10, IFRS 12 and IAS 28)
Accounting for acquisition of interests in joint operations
(amendments to IFRS 11)
IFRS 14, ‘Regulatory deferral accounts’
Disclosure initiative (amendments to IAS 1)
Clarification of acceptable methods of depreciation and amortisation
(amendments to IAS 16 and IAS 38)
Agriculture: bearer plants (amendments to IAS 16 and IAS 41)
Defined benefit plans: employee contributions (amendments to IAS 19)
Equity method in separate financial statements (amendments to IAS
27)
Recoverable amount disclosures for non-financial assets (amendments
to IAS 36)

January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
July 1, 2014
January 1, 2016
January 1, 2014

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New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Novation of derivatives and continuation of hedge accounting (amendments to IAS 39) IFRIC 21, ‘Levies’ Improvements to IFRSs 2010-2012 Improvements to IFRSs 2011-2013 Improvements to IFRSs 2012-2014	January 1, 2014 January 1, 2014 July 1, 2014 July 1, 2014 January 1, 2016

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. (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 2018 are as follows:

follows:
New Standards,Interpretations andAmendments Classification and measurement of share-based payment transactions (amendmentsto IFRS 2) Applying IFRS 9 ‘Financial instruments’ with IFRS 4 ‘Insurance contracts’(amendments to IFRS 4) IFRS 9, ‘Financial instruments’ IFRS 15, ‘Revenue from contracts with customers’ Clarifications to IFRS 15, ‘Revenue from contracts with customers’ (amendments to IFRS 15) Disclosure initiative (amendments to IAS 7) Recognition of deferred tax assets for unrealised losses (amendments to IAS 12) Transfers of investment property (amendments to IAS 40) IFRIC 22, ‘Foreign currency transactions and advance consideration’ Annual improvements to IFRSs 2014-2016 cycle- Amendments to IFRS 1, ‘First-time adoption of International Financial Reporting Standards’ Annual improvements to IFRSs 2014-2016 cycle- Amendments to IFRS 12, ‘Disclosure of interests in other entities’ Annual improvements to IFRSs 2014-2016 cycle- Amendments to IAS 28, ‘Investments in associates and joint ventures’	Effective date by International Accounting StandardsBoard
	January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2017 January 1, 2017 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2017 January 1, 2018

follows:

New Standards,Interpretations andAmendments
Classification and measurement of share-based payment transactions
(amendmentsto IFRS 2)
Applying IFRS 9 ‘Financial instruments’ with IFRS 4 ‘Insurance
contracts’(amendments to IFRS 4)
IFRS 9, ‘Financial instruments’
IFRS 15, ‘Revenue from contracts with customers’
Clarifications to IFRS 15, ‘Revenue from contracts with customers’
(amendments to IFRS 15)
Disclosure initiative (amendments to IAS 7)
Recognition of deferred tax assets for unrealised losses (amendments to
IAS 12)
Transfers of investment property (amendments to IAS 40)
IFRIC 22, ‘Foreign currency transactions and advance consideration’
Annual improvements to IFRSs 2014-2016 cycle- Amendments to
IFRS 1, ‘First-time adoption of International Financial Reporting
Standards’
Annual improvements to IFRSs 2014-2016 cycle- Amendments to
IFRS 12, ‘Disclosure of interests in other entities’
Annual improvements to IFRSs 2014-2016 cycle- Amendments to IAS
28, ‘Investments in associates and joint ventures’

Effective date by
International Accounting
StandardsBoard

January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2017
January 1, 2017
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2017
January 1, 2018

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

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A. 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 or lifetime expected credit losses (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). The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component.
B. 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:
Step 1: 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

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when the licence is granted.

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.

C. Amendments to IFRS 15, ‘Clarifications to IFRS 15 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.

(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 are as follows:

IFRSs issued by IASB but not yet endorsed by the FSC New standards, interpretations and amendments issued by IASB but not endorsed by the FSC are as follows:	yet included in the IFR
New Standards,Interpretations andAmendments	International Accounting StandardsBoard
Sale or contribution of assets between an investor and its associate or joint venture(amendments to IFRS 10 and IAS 28) IFRS 16, ‘Leases’ IFRS 17, ‘Insurance contracts’ IFRIC 23, ‘Uncertainty over income tax treatments’	To be determined by International Accounting Standards January 1, 2019 January 1, 2021 January 1, 2019

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

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types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.

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 together with the 2016 consolidated financial statements.

(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 Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FCS (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 2016 consolidated financial statements.
B. Subsidiaries included in the consolidated financial statements:

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Name of Investor	Name of Subsidiaries	Main Business Activities		Ownership (%)		Note
			June 30,2017	December 31,2016	June 30,2016
Altek Corporation Altek International Investment Co., Ltd. Investments and general business operations 100 " Altek Japan Corporation Sales and design of optical instruments 100 " Altek Investment Co., Ltd. Investments 100 " Altek Autotronics Corporation Research design, manufacture and sales of car electronic components - " Altek International Holding (BVI) Co.,Ltd. Investments and general business operations 100 Altek International Investment Co., Ltd. Altek Lab Inc. Design service 100 " Altek Optical (Cayman) Co., Ltd. Investments and general business operations 100 " Altek Semiconductor (Cayman) Co., Ltd. Investments and general business operations 56.82 Note 2 Altek (Kunshan) Co., Ltd. Manufacture and sales of digital still camera and its accessories 100 Note 2 Altek EMS (Kunshan) Co., Ltd. Manufacture and sales of related engineering services 100 Note 2 Altek Precision (Kunshan) Co., Ltd. Manufacture and sales of digital camera parts 100 Note 2 Altek Trading (Shanghai) Limited Wholesale, import and export of related electronic and their associated accessories 100 Note 3 Altek Biotechnology Corporation Research and development, manufacture and sales of biotechnology 100 Altek Semiconductor (Cayman) Co., Ltd. Altek Semiconductor Corporation Research design and sales of ASIC 100 " Altek Semiconductor (Shanghai) Co., Ltd. Imaging technologies, electronic software and hardware development, IC design and development, technology service, and wholesale, import and export of related products. 100 Note 2 Altek Optical Technology (Kunshan) Co., Ltd. Manufacture and sales of related electronic services and its accessories and optical components 100 Note 1: The Group did not participate in the subsidiary’s capital increase, thus, the share ownership was decreased. Note 2: 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.				100 100 100 100 100 100 100 71.43 100 100 100 100 100 100 - 100	100 100 100 100 100 100 100 71.43 100 100 100 100 100 100 - 100	- Note 7 Note 7 Note 6 Note 7 Note 4 Note 7 Note 7 Note 7 Note 1 Note 7 - Note 7 Note 7 Note 7 Note 4 Note 7 Note 7 Note 5 Note 7 Note 7

Note 3: Invested by Altek Biotechnology Holding (Cayman) Co., Ltd., which is wholly owned by Altek International Holding (BVI) Co., Ltd.

Note 4: In June 2016, the Group’s investment restructuring transferred the share holding of Altek Biotechnology Corporation to Altek Biotechnology Holding (Cayman) Co., Ltd. , which is a subsidiary of Altek International Holding (BVI) Co., Ltd.

Note 5: It was invested by Altek Semiconductor (Cayman) Co., Ltd. and was incorporated in January 2017. Note 6: On June 30, 2017, Altek Corporation consummated a short-form merger with Altek Autotronics Corporation and the former is the surviving company. Note 7: As the subsidiaries do not meet the definition of significant subsidiaries, their financial statements as of June 30, 2017 and 2016 were not reviewed by independent accountants.� Only Altek Autotronics Corporation and Altek Biotechnology Corporation's financial statements as of June 30, 2017 were reviewed by independent accountants.

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C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. 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 June 30, 2017, the carrying amount of inventories was $1,124,767.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand Checking accounts and demand Time deposits Total	June30,2017 December31,2016 1,140 $ 1,319 $ 168,048 123,931 5,761,824 4,724,739 5,931,012 $ 4,849,989 $	June30,2016
		1,436 $ 293,793 4,840,475
		5,135,704 $

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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	June30,2017 December31,2016 608,302 $ 690,449 $ 2,123 3,260 610,425 $ 693,709 $	June30,2016
		808,376 $ 3,413
		811,789 $

The Group recognized net gain of $633 and $588 for the three-month periods ended June 30, 2017 and 2016, respectively, and net gain of $1,168 and $1,286 for the six-month periods ended June 30, 2017 and 2016, respectively.

(3) Accounts receivable

2017 and 2016, respectively. Accounts receivable
		June	30,2017	December31,2016			June	30,2016
Accounts receivable		$	1,939,559	$	2,792,622		$	1,920,389
Less: allowance for bad debts	(		8,842)	(	9,477)	(		2,446)
		$	1,930,717	$	2,783,145		$	1,917,943

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

Group 1 Group 2	June 30,2017 December31,2016 1,854,539 $ 2,734,047 $ 65,762 36,239 1,920,301 $ 2,770,286 $	June 30,2016
		1,888,100 $ 16,604
		1,904,704 $

Note:

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

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

Up to 30 days 31 to 90 days 91 to 180 days Over 181 days	June30,2017 December31,2016 2,245 $ 1,647 $ 174 6,291 2,044 - 5,953 4,921 10,416 $ 12,859 $	June30,2016
		6,813 $ 6,094 332 -
		13,239 $

The above ageing analysis was based on past due date.

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C. Movements in the provision for impairment of accounts receivable are as follows:

Individualprovision At January 1 9,477 $ Reversal for impairment 538) ( Effects of foreign exchange 97) ( At June 30 8,842 $		2017

						2016
	Individual		provision			Group provision			Total
At January 1		$	-		$	534		$		534
Provision for (reversal of)			2,514	(		534)				1,980
impairment
Effects of foreign exchange	(		68)			-	(			68)
At June 30		$	2,446		$	-		$		2,446

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 Raw materials Work-in-process Finished goods Total		June 30,2017
	Allowance for Cost valuation loss 762,352 $ 51,487) ($ 173,101 17,103) ( 273,873 15,969) ( 1,209,326 $ 84,559) ($ December31,2016		Bookvalue
			710,865 $ 155,998 257,904
			1,124,767 $

	Allowance for Cost valuation loss 828,083 $ 59,076) ($ 203,734 24,153) ( 559,346 36,963) ( 1,591,163 $ 120,192) ($ June 30,2016		Bookvalue
			769,007 $ 179,581 522,383
			1,470,971 $

	Allowance for Cost valuation loss 660,522 $ 88,324) ($ 207,709 22,988) ( 541,734 60,337) ( 1,409,965 $ 171,649) ($		Bookvalue
			572,198 $ 184,721 481,397
			1,238,316 $

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The cost of inventories recognised as expense for the periods:

		For the three-month period	For the three-month period	For the three-month period	For the three-month period	For the three-month period	For the three-month period
			ended June 30,	2017	ended	June 30,2016
Cost of goods sold		$	2,145,577		$		2,417,031
(Reversal of) loss on decline in market
value	(			13,253)			43,383
Total		$	2,132,324		$		2,460,414
		For the six-month period			For the	six-month period
			ended June 30,	2017	ended	June 30,2016
Cost of goods sold		$	4,444,724		$		4,496,166
(Reversal of) loss on decline in market
value	(			52,559)			137,705
Total		$	4,392,165		$		4,633,871
Financial assets measured at cost
Items		June30,2017		December	31,2016	June30,2016
Non-current items:
Unlisted stocks		$	172,601	$	160,430	$	155,614
Less: Accumulated impairment		(	12,596)	(	12,596)	(	12,596)
Total		$	160,005	$	147,834	$	143,018

(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. No impairment loss was recognized for the financial assets measured at cost for the three-month and six-month periods ended June 30, 2017 and 2016.
C. As of June 30, 2017, December 31, 2016 and June 30, 2016, no financial assets measured at cost held by the Group were pledged to others.

(6) Investments accounted for under the equity method

		30,2017	December	31,2016		30,2016
JinJing Optical Technology Co., Ltd.	$	44,028	$	44,028	$	44,028
Phoenix Optical (Shanghai) Co., Ltd.		-		139,971		146,161
		44,028		183,999		190,189
Less: accumulated impairment loss	(	44,028)	(	57,242)	(	57,242)
	$	-	$	126,757	$	132,947

A. On May 8, 2017, Phoenix Optical (Shanghai) Co., Ltd. has completed its liquidation.

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B. 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 June 30, 2017, December 31, 2016 and June 30, 2016, the carrying amount of the Group’s individually immaterial associates amounted to $0, $126,757 and $132,947, respectively.

	For the six-month period	For the six-month period		For the six-month period
		endedJune30,2017		endedJune30,2016
Loss for the period from continuing	($	15,909)	($	53,722)
operations
Other comprehensive income (loss)
-net of tax		1,676	(	298)
Total comprehensive loss	($	14,233)	($	54,020)

(Blank below)

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(7) Property, plant and equipment

At January 1, 2017 Cost Accumulated depreciation For the six-month period ended June 30, 2017 Opening net book amount Additions Disposals Reclassifications Depreciation charge Net exchange differences Closing net book amount At June 30, 2017 Cost Accumulated depreciation	Land 1,042,216 $ - 1,042,216 $ 1,042,216 $ - - - - - 1,042,216 $ 1,042,216 $ - 1,042,216 $	Buildings and structures Machinery Test equipment 3,522,603 $ 1,443,305 $ 199,899 $ 643,506) ( 840,003) ( 178,950) ( 2,879,097 $ 603,302 $ 20,949 $ 2,879,097 $ 603,302 $ 20,949 $ 300 57 347 - 6,846) ( 184) ( 199,062) ( - - 43,205) ( 55,881) ( 5,723) ( 62,581) ( 20,912) ( 362) ( 2,574,549 $ 519,720 $ 15,027 $ 3,209,968 $ 1,370,225 $ 178,565 $ 635,419) ( 850,505) ( 163,538) ( 2,574,549 $ 519,720 $ 15,027 $		Construction in progress and prepayment for equipment Others Total 29,043 $ 678,217 $ 6,915,283 $ - 594,976) ( 2,257,435) ( 29,043 $ 83,241 $ 4,657,848 $ 29,043 $ 83,241 $ 4,657,848 $ 63,743 7,396 71,843 - 629) ( 7,659) ( - - 199,062) ( - 38,276) ( 143,085) ( 1 2,067) ( 85,921) ( 92,787 $ 49,665 $ 4,293,964 $ 92,787 $ 584,351 $ 6,478,112 $ - 534,686) ( 2,184,148) ( 92,787 $ 49,665 $ 4,293,964 $

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At January 1, 2016 Cost Accumulated depreciation For the six-month period ended June 30, 2016 Opening net book amount Additions Disposals Reclassifications Depreciation charge Net exchange differences Closing net book amount At June 30, 2016 Cost Accumulated depreciation	Land 1,042,216 $ - 1,042,216 $ 1,042,216 $ - - - - - 1,042,216 $ 1,042,216 $ - 1,042,216 $	Buildings and structures Machinery Test equipment 3,717,659 $ 1,868,136 $ 201,217 $ 584,318) ( 1,063,689) ( 177,229) ( 3,133,341 $ 804,447 $ 23,988 $ 3,133,341 $ 804,447 $ 23,988 $ 131 308 8,633 - 16,453) ( - - - 3,006 47,086) ( 69,441) ( 7,949) ( 75,186) ( 27,311) ( 704) ( 3,011,200 $ 691,550 $ 26,974 $ 3,627,486 $ 1,500,762 $ 206,885 $ 616,286) ( 809,212) ( 179,911) ( 3,011,200 $ 691,550 $ 26,974 $

For the six-month periods ended June 30, 2017 and 2016, 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) Investment property Buildings and structures

stment property-Buildings and structures
	For the six-month period		For the six-month period
		ended June 30,2017	ended June 30,2016
At January 1
Cost	$	-	$	-
Accumulated depreciation		-		-
	$	-	$	-
For the six-month period ended June 30
Opening net book amount	$	-	$	-
Reclassifications		199,062		-
Depreciation charge	(	816)		-
Closing net book amount	$	198,246	$	-
At June 30
Cost	$	236,711	$	-
Accumulated depreciation	(	38,465)		-
	$	198,246	$	-

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period

Direct operating expenses arising from the investment property that did not generate rental income during the period

For the six-month period	For the six-month period	For the six-month period	For the six-month period
ended June	30,2017	ended June 30,2016
$	4,241	$	-

$	950	$	-
$	-	$	-

B. As at June 30, 2017, the fair value of investment property held by the Group amounted to $886,343. The fair value was valuated with the technique that is widely adopted by market participants by referring to substantiating evidence such as transaction price of similar property.
C. There was no capitalisation of borrowing interests attributable to investment property.
D. The Group did not pledge any investment property as collateral

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(9) Intangible assets

Intangible assets
		For the six-month period		For the six-month period
		ended June 30,	2017		ended June 30,2016
At January 1
Cost		$	129,020	$	130,369
Accumulated amortisation	(		36,103)	(	36,656)
		$	92,917	$	93,713
For the six-month periods ended June 30
Opening net book amount		$	92,917	$	93,713
Additions			1,444		15,433
Amortisation charge	(		6,802)	(	7,124)
Net exchange differences	(		4,330)	(	1,709)
Closing net book amount		$	83,229	$	100,313
At June 30
Cost		$	125,258	$	130,723
Accumulated amortisation	(		42,029)	(	30,410)
		$	83,229	$	100,313
A. Details of amortisation on	intangible assets are as follows:
	For the three-month period For the three-month period
	endedJune30,2017			endedJune30,2016
Operating costs	$	1,298 $			1,653
Operating expense		2,093			1,867
	$	3,391 $			3,520
	For the six-month period For				the six-month period
	endedJuen30,2017			endedJuen30,2016
Operating costs	$	2,636 $			3,101
Operating expense		4,166			4,023
	$	6,802 $			7,124

Operating costs 2,636 $ $ Operating expense 4,166 6,802 $ $	3,101 4,023 7,124
B. The Group has no intangible assets pledged to others. (10)Long-term prepaid rents ( shown as‘Other non-current assets’) June 30,2017 December31,2016 Land-use right 33,283 $ 34,929 $	June 30,2016
	37,061 $

The Group recognized amortisation expenses for the three-month periods ended June 30, 2017 and 2016 amounting to $224 and $250, and for the six-month periods ended June 30, 2017 and 2016 amounting to $453 and $508, respectively.

~22~

(11) Short-term borrowings

Short-term borrowings
Type ofborrowings Bank borrowings Unsecured borrowings Type of borrowings Bank borrowings Unsecured borrowings Type of borrowings Bank borrowings Unsecured borrowings	June 30,2017 2,158,000 $ December31,2016 2,415,000 $ June30,2016 2,205,000 $	Interestraterange 1% ~ 1.19% Interest rate range 1.1%~1.2% Interest rate range 1.04%~1.25%	Collateral
			None Collateral
			None Collateral
			None

(12) 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 $145 and $3 for the three-month periods ended June 30, 2017 and 2016, and of $148 and $398 for the sixmonth periods ended June 30, 2017 and 2016, respectively.
(c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2018 amounts to $0.
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 June 30, 2017 and 2016, the Group had recognized pension costs of $8,334 and $9,349, and for the six-month periods ended June 30, 2017 and 2016, the Group had recognized pension costs of $16,714 and $18,802, respectively, under the above pension scheme.

~23~

(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 $6,828 and $9,175 for the three-month periods ended June 30, 2017 and 2016, respectively, and of $13,825 and $20,645 and for the six-month periods ended June 30, 2017 and 2016, respectively.

(13) Share-based payment

A. As of June 30, 2017 and 2016, 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.

~24~

B. Details of the share-based payment arrangements are as follows:
a) For the six-month periods ended June 30, 2017 and 2016, the information on the share options and the weighted number of average exercise price of compensation plan employee stock options are as follows:

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 six-month period ended June 30,2017		For the six-month period ended June 30,2016
	No. of options	Weighted-average exercise price (in dollars)(Note)	No. of options	Weighted-average exercise price (in dollars)(Note)
	5,155 1,512) ( - 3,643 3,643 -	31.30 $ - - 31.30 31.30	5,155 - - 5,155 5,155 -	32.80 $ - - 32.80 32.80

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 June 30, 2017 and 2016 and six-month periods ended June 30, 2017and 2016.
c) The expiry date and exercise price of stock options outstanding at balance sheet date are as follows:

follows:
Issue date approved	Expirydate	June 30,2017		December	31,2016	June 30,2016
		No. of shares (in thousands) 1,100 30 1,420 1,093	Exercise price (in dollars) (Note) $ 30.6 25.6 31.7 31.5	No. of shares (in thousands) 1,400 30 2,320 1,405	Exercise price (in dollars) (Note) $ 30.6 25.6 31.7 31.5	No. of shares (in thousands) 1,400 30 2,320 1,405	Exercise price (in dollars) (Note) $ 32.0 26.8 33.2 33.0
June 13, 2008 October 31, 2008 October 28, 2011 March 21, 2012	December 31, 2017 December 31, 2017 December 31, 2020 December 31, 2020

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

~25~

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	30.6 $ 25.6 31.7 31.5	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:
(a)The information on restricted shares to employees is as follows:

dividends and cash capital reduction per share distributed. stricted shares to employees: The information on restricted shares to employees is as follows:
For the six-month period ended June 30, 2017 (shareinthousands) Outstanding beginning balance 3,725 Shares granted - Restricted shares forfeited-retired 70) ( Outstanding ending balance 3,655	For the six-month period ended June 30, 2016 (shareinthousands)
	2,440 1,560 -
	4,000

(b) As of June 30, 2017, the Company collected 70 thousand shares of restricted shares because certain employees did not meet the vesting condition. The capital reduction effective date was on March 27, 2017 as resolved by the Board of Directors.

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

For the three-month period For the three-month period ended June 30, 2017 ended June 30, 2016 Equity-settled $ 10,152 $ 10,819 For the six-month period For the six-month period ended June 30, 2017 ended June 30, 2016 Equity-settled $ 19,457 $ 17,866

~26~

(14) Provisions

Provisions
At January 1, 2017 Additional provisions Used (reversed) during the period At June 30, 2017 Current Non-current	Warranty 174,066 $ 23,269 67,077 ( 130,258 $ June30,2017 December31,2016 June30,2016 46,028 $ 52,247 $ 34,578 $ 84,230 $ 121,819 $ 112,301 $	Warranty
			174,066 23,269 67,077
		$	130,258
			June30,2016
			34,578 $
			112,301 $

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.

(15) Share capital

As of June 30, 2017, the Company’s authorized capital was $5,000,000, consisting of 500,000 thousand shares of ordinary stock, and the paid-in capital was $2,739,088 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 thousands of shares)

(Expressed in	thousands of shares
2017 At January 1 269,565 Issuance of restricted stocks - Retired restricted shares to employees that did not meet the vesting conditions 70) ( At June 30 269,495	2016
	268,280 1,560 -
	269,840

B. Treasury shares

a) As of June 30, 2017, December 31, 2016 and June 30, 2016, the reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

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

~27~

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.
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. 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 $

(16) 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.

~28~

At January 1, 2017 Subsidiaries' capital increase not participated proportionately to the original shareholding ratio Retirement of employee restricted At June 30, 2017		Share premium		Employee stock options		Difference between proceeds from disposal of subsidiary and bookvalue		Changes in ownership interests in subsidiaries	Restricted shares to employees Total 62,085 $ 1,862,914 $ - 251,160 1,176) ( 1,176) ( 60,909 $ 2,112,898 $	Total
		1,746,566 $ - - 1,746,566 $		52,729 $ - - 52,729 $		1,534 $ - - 1,534 $		- $ 251,160 - 251,160 $
										2,112,898 $

At January 1, 2016 Employee stock options expense Cash dividends from capital Issuance of restricted shares to employees Acquisition of ownership interests in subsidiaries At June 30, 2016	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 - 47) ( 66,705 $ 1,867,534 $
	1,880,706 $ - 134,140) ( - - 1,746,566 $		52,493 $ 236 - - - 52,729 $	1,581 $ - - - 47) ( 1,534 $

(17) 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.

~29~

C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the balance of the reserve 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 2016 and 2015 earnings had been resolved at the stockholders’ meeting on June 16, 2017 and June 17, 2016, respectively. Details are summarized below:

Legal reserve Cash dividends	Dividends per share Amount (in NT dollars) 5,380 $ 215,596 0.8 $ 220,976 $ 2016	2015	2015
	Amount 5,380 $ 215,596 220,976 $	Amount 27,364 $ 134,140 161,504 $	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, the shareholders resolved to return capital surplus amounting to $134,140 (approximately $0.5 per share) to shareholders in the nature of a capital contribution. The appropriation of 2016 and 2015 earnings were the same as that approved by the Board of Directors on March 27, 2017 and March 18, 2016, respectively.

F. For the information relating to employees’ compensation and directors’ and supervisors’ remuneration, please refer to Note 6(24).

~30~

(18) Other equity items

Other equity items
		Foreign currency		Unearned
		translationadjustment		compensation				Total
At January 1, 2017		$	35,009	($	60,530)	($		25,521)
Currency translation differences:
Group	(		312,260)		-	(		312,260)
Associates			1,262		-			1,262
Retirement of restricted shares			-		1,876			1,876
to employees
Share-based payment			-		19,457			19,457
At June 30, 2017	($		275,989)	($	39,197)	($		315,186)
		Foreign currency		Unearned
		translationadjustment		compensation				Total
At January 1, 2016		$	477,768	($	63,121)		$	414,647
Currency translation differences:
Group	(		220,491)		-	(		220,491)
Associates	(		4,452)		-	(		4,452)
Issuance of restricted shares			-	(	41,313)	(		41,313)
to employees
Share-based payment			-		17,630			17,630
At June 30, 2016		$	252,825	($	86,804)		$	166,021
Operating revenue
		For	the three-month period		For the three-month period
			ended June 30,	2017	ended June			30,2016
Sales revenue		$	2,403,302		$			2,702,686
Service revenue				11,686				76,602
Other revenue				58,054				9,948
Total		$	2,473,042		$			2,789,236
		For the six-month period			For the	six-month period
			ended June 30,	2017	ended June			30,2016
Sales revenue		$	4,980,872		$			4,961,436
Service revenue				59,468				234,562
Other revenue				93,809				18,078
Total		$	5,134,149		$			5,214,076

(19) Operating revenue

~31~

(20) Other income

Other income
	For		the three-month period	For	the three-month period
			ended June 30, 2017		ended June 30, 2016
Interest income:
Interest income from bank deposits		$	16,856	$	15,932
Others			15		14
Rental revenue			4,241		-
Other income - others			5,648		2,141
Total		$	26,760	$	18,087
		For the six-month period		For the six-month period
			ended June 30,2017		ended June 30,2016
Interest income:
Interest income from bank deposits		$	33,004	$	29,040
Others			28		29
Rental revenue			4,241		-
Other income - others			7,840		7,882
Total		$	45,113	$	36,951
Other gains and losses
	For		the three-month period	For	the three-month period
			ended June 30,2017		ended June 30,2016
Net gain on financial assets at
fair value through profit or loss		$	633	$	588
Net currency exchange (losses) gains	(		19,654)		10,728
Gain (losses) on disposal of property, plant and equipment	(		357)		3,245
Loss on disposal of investment	(		4,226)		-
Other expenses	(		950)		-
Total	($		24,554)	$	14,561
		For the six-month period		For the six-month period
			ended June 30,2017		ended June 30,2016
Net gain on financial assets at
fair value through profit or loss		$	1,168	$	1,286
Net currency exchange (losses) gains	(		47,848)		15,554
Gain on disposal of property, plant and equipment			39		3,245
Loss on disposal of investment	(		4,226)		-
Other expenses	(		976)		-
Total	($		51,843)	$	20,085

(21) Other gains and losses

~32~

(22) Finance costs

(23)
(24)

Expenses by nature
Employee benefit expenses
For the three-month period For the three-month period
ended June 30,2017
ended June 30,2016
Interest expense:
Bank borrowings
6,656
$ 6,440
$ For the six-month period
For the six-month period
ended June 30,2017
ended June 30,2016
Interest expense:
Bank borrowings
13,550
$ 12,880
$ For the three-month period For the three-month period
endedJune30,2017
endedJune30,2016
Employee benefit expenses
320,698
$ 372,427
$ Depreciation
69,851
88,186
Amortisation charges on intangible
assets
3,391
3,520
Total
393,940
$ 464,133
$ For the six-month period
For the six-month period
endedJune30,2017
endedJune30,2016
Employee benefit expenses
648,695
$ 757,403
$ Depreciation
143,901
179,470
Amortisation charges on intangible
assets
6,802
7,124
Total
799,398
$ 943,997
$ For the three-month period For the three-month period
ended June 30,2017
ended June 30,2016
Wages and salaries
269,422
$ 311,850
$ Employee stock options
10,152
10,819
Labor and health insurance fees
15,277
18,113
Pension costs
15,307
18,527
Other personnel expenses
10,540
13,118
Total
320,698
$ 372,427
$

~33~

Wages and salaries Employee stock options Labor and health insurance fees Pension costs Other personnel expenses Total	For the six-month period ended June 30,2017 546,148 $ 19,457 31,103 30,687 21,300 648,695 $	For the six-month period ended June 30,2016
		635,362 $ 17,866 37,728 39,845 26,602
		757,403 $

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 that account for 10% to 20% and no higher than 2%, respectively, of distributable profit of the current period. 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’ 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’ remuneration; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.
Before the establishment of the Audit Committee of the Company, the remuneration of the supervisors and the directors shall be pay no higher than 2% of distributable profit of the current period.
B. For the three-month and six-month periods ended June 30, 2017 and 2016, employees’ compensation was accrued (reversed) at $(3,046), $0, $3,649 and $0, respectively; directors’ and supervisors’ remuneration was accrued (reversed) at $(407), $0, $486 and $0, respectively. The aforementioned amounts were recognized in salary expenses.
C. The 2016 employees’ cash bonus and directors’ and supervisors’ remuneration as appropriated during the stockholders’ meeting on June 16, 2017 were $13,383 and $1,784, respectively. Employees’ bonus and directors’ and supervisors’ remuneration for 2016 as resolved by the stockholders were in agreement with those amounts recognized in the 2016 financial statements.

~34~

(25) Income tax

A. Income tax expense

a) Components of income tax expense:

me tax come tax expense Components of income tax expense:
	For		the three-month period	For		the three-month period
			endedJune30,2017			endedJune30,2016
Current tax:
Current tax on profits for the period		$	13,562		$	18,296
Adjustments in respect of prior
years	(		3,150)	(		16,180)
Total current tax			10,412			2,116
Deferred tax:
Origination and reversal of
temporary differences	(		672)			8,350
Total deferred tax	(		672)			8,350
Income tax expense		$	9,740		$	10,466
	For the six-month period			For the six-month period
			endedJune30,2017			endedJune30,2016
Current tax:
Current tax on profits for the period		$	20,529		$	31,889
Adjustments in respect of prior
years	(		3,239)	(		16,022)
Total current tax			17,290			15,867
Deferred tax:
Origination and reversal of
temporary differences	(		1,184)	(		10,530)
Total deferred tax	(		1,184)	(		10,530)
Income tax expense		$	16,106		$	5,337
The income tax charged to equity during			the period is as follows:
	For		the three-month period	For		the three-month period
			endedJune30,2017			endedJune30,2016
Translation differences of foreign
operations		$	21,500	($		20,050)
	For the six-month period			For the six-month period
			endedJune30,2017			endedJune30,2016
Translation differences of foreign
operations	($		63,699)	($		46,073)

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

B. As of June 30, 2017, the Company’s income tax returns through 2014 have been assessed and approved by the Tax Authority.

~35~

C. Unappropriated retained earnings:

June 30, 2017 December 31, 2016 June 30, 2016 Earnings generated in and after 1998 $ 2,739,678 $ 2,946,092 $ 2,839,278

D. As of June 30, 2017, December 31, 2016 and June 30, 2016, the balance of the imputation tax credit account was $290,614, $279,476 and $275,445, respectively. The creditable tax rate is estimated to be 9.81% for the year ended December 31, 2017 and was estimated to be 9.86% for the year ended December 31, 2016.

(26) Earnings (losses) per share

Earnings (losses) per share
		For the three-monthperiod endedJune		30,	2017
			Weighted average number of
			ordinary shares outstanding	Losses per share
	Amount	after tax	(share in thousands)		(in dollars)
Basic losses per share
Loss attributable to ordinary
shareholders of the parent	($	16,575)	265,840	($	0.06)

For the three-month period ended June 30, 2017, the Group’s stock options, restricted the right of new employee shares and reward employees have anti-dilution effect. Thus, no diluted losses per share is calculated.

For the three-monthperiod endedJune30,2016	For the three-monthperiod endedJune30,2016	For the three-monthperiod endedJune30,2016
Amount after tax 1,081 $ 1,081 $ 1,081 $	Weighted average number of ordinary shares outstanding (share in thousands) 265,840 264 266,104	Earnings per share (in dollars)
		0.01 $
		0.01 $

~36~

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Restricted shares to employees Employees' bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic losses per share Loss attributable to ordinary shareholders of the parent	Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (share in thousands) (in dollars) 14,562 $ 265,840 0.05 $ 14,562 $ 2,060 400 14,562 $ 268,300 0.05 $ For the six-monthperiod endedJune30,2017 Weighted average number of ordinary shares outstanding Loss per share Amount after tax (share in thousands) (in dollars) 46,501) ($ 265,840 0.17) ($ For the six-monthperiod endedJune30,2016
	Amount after tax 14,562 $ 14,562 $ 14,562 $ Amount after tax 46,501) ($ For the

Basic earnings per share
Profit attributable to ordinary
shareholders of the parent
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent
Restricted shares to employees
Employees' bonus
Profit attributable to ordinary
shareholders of the parent
plus assumed conversion of
all dilutive potential ordinary
shares
Basic losses per share
Loss attributable to ordinary
shareholders of the parent

Weighted average number of
ordinary shares outstanding
Earnings per share
Amount after tax
(share in thousands)
(in dollars)
14,562
$ 265,840
0.05
$ 14,562
$ 2,060
400
14,562
$ 268,300
0.05
$ For the six-monthperiod endedJune30,2017
Weighted average number of
ordinary shares outstanding
Loss per share
Amount after tax
(share in thousands)
(in dollars)
46,501)
($ 265,840
0.17)
($ For the six-monthperiod endedJune30,2016

Amount after tax
14,562
$ 14,562
$ 14,562
$ Amount after tax
46,501)
($ For the

For the six-month period ended June 30, 2016, the Group’s stock options, restricted the right of new employee shares and reward employees have anti-dilution effect. Thus, no diluted losses per share is calculated.

(27) Transactions with non-controlling interest

A. Acquisition of additional equity interest in a subsidiary

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

~37~

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 six-month period ended June 30,2016
	1,436 $ 1,483) ( 47) ($

B. The Group did not acquire share increase raised by a subsidiary proportionally to its interest to the second-tier subsidiary.

Grandson Altek Semiconductor (Cayman) Co., Ltd., a second-tier subsidiary of the Group, increased capital by issuing new shares on June 9, 2017. The Group did not acquire shares proportionally to its interest. As a result, the Group decreased its share interest to 14.61%. The transaction increased non-controlling interest by $541,800 and decreased the equity attributable to owners of parent by $290,640. The effect of changes in interests in Altek Semiconductor (Cayman) Co., Ltd. on the equity attributable to owners of the parent as of 2017 is shown below:

Cash Carrying amount of non-controlling interest decrease Capital surplus-Changes in ownership interests in subsidiaries	For the six-month period endedJune30,2017
	541,800 $ 290,640) ( 251,160 $

(28) Operating leases

The Group leased part of the Taipei office building with operating leases. Contingent rents of $4,241 and $4,241 were recognized for these leases in profit or loss for the three-month and sixmonth periods ended June 30, 2017, respectively. 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	June 30,2017 December31,2016 28,921 $ - $ 53,021 - 81,942 $ - $	June 30,2016
		- $ -
		- $

~38~

The Group leases office buildings for operational needs under non-cancellable operating lease agreements. These lease terms are between 2017 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	June30,2017 December31,2016 3,696 $ 7,289 $ 14,785 14,785 20,330 22,178 38,811 $ 44,252 $	June30,2016
		12,850 $ 20,436 24,026
		57,312 $

(29) Supplemental cash flow information

A. Investing activities with partial cash payments

	For the six-month period	For the six-month period	For the six-month period	For the six-month period	For the six-month period	For the six-month period
			ended June 30,2017			ended June 30,2016
Acquisitions of property, plant, and
equipment		$	71,843		$	17,084
Add:property and equipment and
construction billings payable at
beginning of period			6,848			61,027
Less: property and equipment and
construction billings payable at end
of period	(		5,717)	(		3,166)
Cash paid		$	72,974		$	74,945
	For the six-month period			For the six-month period
			ended June 30,2017			ended June 30,2016
Acquisitions of intangible assets		$	1,444		$	15,433
Add: Payable at beginning of period			9,067			-
Less: Payable at end of period	(		4,495)	(		9,067)
Cash paid		$	6,016		$	6,366
Financing activities with no cash flow	effects
	For the six-month period			For the six-month period
			ended June 30,2017			ended June 30,2016
Declare cash dividends		$	215,596		$	134,140
Capital surplus used to issue cash
to shareholders			-			134,140
		$	215,596		$	268,280

B. Financing activities with no cash flow effects

~39~

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship: None.

(2) Significant transactions and balances with related parties:

No significant related party transactions.

(3) 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 endedJune30,2017 6,455 $ 190 2,440 9,085 $ For the six-month period endedJune30,2017 13,279 $ 298 5,204 18,781 $	For the three-month period endedJune30,2016
		7,520 $ 162 3,040
		10,722 $
		For the six-month period endedJune30,2016
		18,829 $ 350 3,040
		22,219 $

8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

Contingencies

(1) 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. After discussion, the GUC agreed to withdraw its claim on August 24, 2016, so the suit was dismissed. The Company neither needs to refund nor to make any payment to the GUC.
(2) 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 August 11, 2017, the case is still under trial.

10. SIGNIFICANT DISASTER LOSS

None.

~40~

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, 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 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.

~41~

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:

		June 30,	2017	2017	2017
Foreign Currency Amount (In thousands)	Exchange Rate	Book Value (NTD)	SensitivityAnalysis
			Extent of Variation	Effect on Profit or (Loss)	Effect on Other Comprehensive Income(Loss)
72,364 USD 67,573 USD 66,363 USD 45,914 USD	30.420 6.7744 30.420 6.7744	2,201,313 $ 2,055,571 2,018,762 $ 1,396,704	1% 1% 1% 1%	22,013 $ 20,556 20,188) ($ 13,967) (	- $ - - $ -

~42~

December 31, 2016

Foreign Currency Amount (In thousands) USD 102,320 USD 75,336 USD 3,930 USD 94,101 USD 61,696	Exchange Rate	Book Value (NTD)	Effect on Effect on Other Extent of Profit or Comprehensive Variation (Loss) Income(Loss) 1% 32,998 $ - $ 1% 24,296 - 1% - $ 1,268 $ 1% 30,348) ($ - $ 1% 19,897) ( - SensitivityAnalysis 2016	Effect on Effect on Other Extent of Profit or Comprehensive Variation (Loss) Income(Loss) 1% 32,998 $ - $ 1% 24,296 - 1% - $ 1,268 $ 1% 30,348) ($ - $ 1% 19,897) ( - SensitivityAnalysis 2016	Effect on Effect on Other Extent of Profit or Comprehensive Variation (Loss) Income(Loss) 1% 32,998 $ - $ 1% 24,296 - 1% - $ 1,268 $ 1% 30,348) ($ - $ 1% 19,897) ( - SensitivityAnalysis 2016
	32.25 6.937 32.25 32.25 6.937	3,299,820 $ 2,429,586 126,757 $ 3,034,757 $ 1,989,696 June30,	1% 1% 1% 1% 1% 2016	32,998 $ 24,296 - $ 30,348) ($ 19,897) (	- $ - 1,268 $ - $ -
Foreign Currency Amount (In thousands)	Exchange Rate	Book Value (NTD)	SensitivityAnalysis
			Extent of Variation	Effect on Profit or (Loss)	Effect on Other Comprehensive Income(Loss)
USD 86,462 USD 53,767 USD 4,119 USD 82,444 USD 46,567	32.275 6.6312 32.275 32.275 6.6312	2,790,561 $ 1,735,330 132,947 $ 2,660,880 $ 1,502,950	1% 1% 1% 1% 1%	27,906 $ 17,353 - $ 26,609) ($ 15,030) (	- $ - 1,329 $ - $ -

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 sixmonth periods ended June 30, 2017 and 2016 amounted to ($19,654), $10,728, ($47,848) and $15,554, respectively.

Interest rate risk

~43~

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 six-month periods ended June 30, 2017 and 2016, 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 sixmonth periods ended June 30, 2017 and 2016.
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 sufficient head-room as determined by the above-mentioned forecasts.

~44~

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:
June 30, 2017 Short-term borrowings Accounts payable Other payables Guarantee deposits recevied Non-derivative financial liabilities: December 31, 2016 Short-term borrowings Accounts payable Other payables Guarantee deposits recevied	Less than 1year 2,158,000 $ 1,643,882 619,721 - Less than 1year 2,415,000 $ 2,417,239 445,206 -	Over 1year
		- $ - - 23,054 Over 1year
		- $ - - 10,094

Non-derivative financial liabilities: June 30, 2016 Short-term borrowings Accounts payable Other payables Guarantee deposits recevied	Less than 1year 2,205,000 $ 1,904,322 720,927	Over 1year
		- $ - - 6,818

(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 or liability, either directly or indirectly.

~45~

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 June 30, 2017, December 31, 2016 and June 30, 2016 is as follows:

June 30, 2017 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificate December 31,2016 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificate June 30, 2016 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificate	Level 1 610,425 $ Level 1 693,709 $ Level 1 811,789 $	Level 2 - $ Level 2 - $ Level 2 - $	Level3 - $ Level3 - $ Level3 - $	Total
				610,425 $
				Total
				693,709 $
				Total
				811,789 $

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:

Market quoted price

Open-end fund Net asset value

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) : Please refer to table 1.

~46~

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 through 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.

~47~

Altek Corporation and subsidiaries

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

June 30, 2017

			June 30, 2017
Table 1 Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As ofJune	30,2017 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 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	Director 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 1,199,613 10,000,000 1,200,000 N/A 2,487,654 6,302,032 24,165,693	10,312 $ 5,950 93,450 5,389 44,904 39,823 99,256 471,346	14.55% 4.84% 2.00% 6.45% (Note) N/A N/A N/A	10,312 $ 5,950 93,450 5,389 44,904 39,823 99,256 471,346

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 six-month period ended June 30, 2017

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 Semiconductor Corporation Altek Biotechnology Corporation Altek (Kunshan) Co., Ltd. Altek Trading (Shanghai) Limited "	Altek International Investment Co., Ltd. Altek (Kunshan) Co., Ltd. Altek International Investment Co., Ltd. " " " Altek (Kunshan) Co., Ltd.	Parent and affiliated company " " The same ultimate parent company Parent and affiliated company " The same ultimate parent company	Purchases Purchases Purchases Purchases Purchases Purchases Purchases	1,892,974 $ 3,529,860 441,129 267,952 112,211 373,390 169,918	97% 100% 67% 100% 3% 59% 27%	Net 120 days Net 75 days " " " " "	Approximately the same price with third parties " " " " " "	Note " " " " " "	1,351,343) ($ 1,524,190) ( 333,562) ( 222,211) ( - 77,032) ( 13,429) (	96% 98% 92% 100% 0% 59% 10%

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

June 30, 2017

			June 30, 2017
Table 3 Creditor	Counterparty	Relationship with the counterparty	Balance as atJune30,2017	Turnover rate	Overdue receivables		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 The same ultimate parent company Parent company	1,351,343 $ 333,562 222,211 1,524,190	1.96 3.56 2.73 4.65	- $ - - -	N/A N/A N/A N/A	395,057 $ 116,322 63,683 817,010	- $ - - -

Table 3, Page 1

Altek Corporation and subsidiaries

Table 4

Significant inter-company transactions during the reporting periods

For the six-month period ended June 30, 2017

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 Semiconductor Corporation " Altek Biotechnology Corporation " Altek (Kunshan) Co., Ltd. " Altek Trading (Shanghai) Limited " " "	Altek International Investment Co., Ltd. " Altek (Kunshan) Co., Ltd. " Altek International Investment Co., Ltd. " " " " " " " Altek (Kunshan) Co., Ltd. "	(1) (1) (3) (3) (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	1,892,974 $ 1,351,343 3,529,860 1,524,190 441,129 333,562 267,952 222,211 112,211 - 373,390 77,032 169,918 13,429	Net 120 days " Net 75 days " " " " " " " " " " "	37% 9% 69% 10% 9% 2% 5% 2% 2% 0% 7% 1% 3% 0%

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 six-month period ended June 30, 2017

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares	held as at June 30,2017	held as at June 30,2017	Net profit (loss) of the investee for the six-month period ended June 30,2017	Investment income(loss) recognised by the Company for the six-month period ended June 30,2017	Footnote
				Balance as at June 30, 2017	Balance as at December 31, 2016	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 International Holding (BVI) Co, Ltd. Altek Lab Inc. JinJing Optical Technology Co., ltd. Altek Semiconductor (Cayman) Co., Ltd. Altek Semiconductor Corporation Altek Biotechnology Corporation	British Virgin Islands Japan Republic of China Republic of China British Virgin Islands U.S.A. Samoa Cayman Islands 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 Investment and general business operations Design service Investment and general business operations Investment and general business operations Research design and sales of ASIC Research and development, manufacture and sales of biotechnology	2,910,046 $ 2,869 50,000 - 415,376 111,938 106,470 186,999 200,000 415,376	3,033,618 $ 2,869 50,000 184,080 415,376 111,938 106,470 186,999 200,000 415,376	88,662,059 1,000 5,000,000 - 12,865,921 11,311,875 3,500,000 20,000,000 20,000,000 40,100,000	100% 100% 100% - 100% 100% 23.33% 56.82% 100% 100%	8,916,048 $ 11,222 39,865 - 447,100 59,514 - 539,041 359,960 447,100	37,247 $ 429) ( 4,722 92) ( 13,751 979 15,909) ( 18,297) ( 17,776) ( 13,751	37,247 $ 429) ( 82) ( 92) ( 13,751 56 - 13,930) ( 13,761) ( 13,751	Note 1 Note 3 Note 2 Note 3

Note 1: On June 30, 2017, Altek Corporation consummated a short-form merger with Altek Autotronics Corporation and the former is the surviving company.

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 six-month period ended June 30, 2017

Table 6

Expressed in thousands of NTD

(Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method `（`Note 1`）`	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2017	Amount remitte Mainland C remitted back the six-monthperiod	d from Taiwan to hina/Amount to Taiwan for ended June 30,2017	Accumulated amount of remittance from Taiwan toMainland China as of June 30,2017	Net profit (loss) of investee for the six-month period ended June 30,2017	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the six-month period ended June 30,2017	Book value of investments in Mainland China as of June 30,2017	Accumulated amount of investment income remitted back to Taiwan as of June 30,2017
					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. Altek Semiconductor (Shanghai) 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 Imaging technologies, electronic software and hardware development, IC design and development, technology service, and wholesale, import and export of related products.	1,508,832 $ 152,100 258,570 456,300 481,336 419,796 456,300 15,210	2 2 2 2 2 2 2 2	1,368,900 $ 276,305 258,570 106,470 269,656 419,796 456,300 -	- $ - - - - - - -	- $ - - - ( 123,572) - - -	1,368,900 $ 276,305 258,570 106,470 146,084 419,796 456,300 -	42,835 $ 1,424 24,264 ( 13,851) - ( 2,410) ( 5,208) 2,149) (	100% 100% 100% 23.33% - 100% 100% 56.82%	42,835 $ 1,424 24,264 - - ( 2,410) ( 5,208) 1,123) (	3,772,443 $ 751,176 294,737 - - 148,893 130,725 13,384	- $ - - - - - - -

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). Note 4: On May 8, 2017, Phoenix Optical (Shanghai) Co., Ltd. has completed liquidation.

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of June 30,2017	Investment amount approved by the Investment Commission of the Ministryof Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed bythe Investment Commission of MOEA
Altek Corporation	3,032,425 $	3,095,052 $	- $

Note:According to “REGULATIONS GOVERNING 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 2017

52290_rns_2017-11-14_89f58d69-aacf-42a9-a42e-6c05b2a732bb.pdf

ALTEK CORPORATION AND SUBSIDIARIES

To Altek Corporation

Li, Tien-Yi

[Lin, Yu-Kuan ]

August 11, 2017

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 AND SUBSIDIARIES 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

JUNE 30, 2017 AND 2016

1. HISTORY AND ORGANIZATION

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

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

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

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

(3) Accounts receivable

(4) Inventories

The cost of inventories recognised as expense for the periods:

(5) Financial assets measured at cost

(6) Investments accounted for under the equity method

(7) Property, plant and equipment

- (8) Investment property Buildings and structures

(9) Intangible assets

(11) Short-term borrowings

(12) Pensions

(13) Share-based payment

(14) Provisions

(15) Share capital

B. Treasury shares

(16) Capital surplus

(17) Retained earnings

(18) Other equity items

(19) Operating revenue

(20) Other income

(22) Finance costs

(25) Income tax

A. Income tax expense

C. Unappropriated retained earnings:

(26) Earnings (losses) per share

(27) Transactions with non-controlling interest

(28) Operating leases

(29) Supplemental cash flow information

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship: None.

(3) 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

(1) Capital risk management

(2) Financial instruments

Foreign exchange 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

Altek Interim / Quarterly Report 2017