DELTA - Audit Report / Information 2017

DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REPORT OF INDEPENDENT ACCOUNTANTS

December 31, 2017 AND 2016

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

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Delta Electronics, Inc.

Opinion

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

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

Basis for opinion

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

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year 2017. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s consolidated financial statements of the current period are stated as follows:

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Business combination

Description

The Group acquired 51% of Delta Energy Systems (Switzerland) AG (renamed as Delta Electronics (Switzerland) AG ) in the amount of NT$388,940 thousand in April 2017. The value of intangible assets, inclusive of goodwill and identifiable intangible assets – premium on customer relationship, acquired from the merger is significant. The merger was accounted for in accordance with IFRS 3, “Business Combination”. For details of purchase price allocation, please refer to Note 6(33).

As the allocation of goodwill and the fair value of identifiable intangible assets acquired are based on management’s estimation and involves accounting estimations and assumptions, we consider this business combination transaction a key audit matter.

How our audit addressed the matter

We obtained an understanding of the basis and process of purchase price allocation which was estimated by management. We appointed internal appraisers to review the original data and the reasonableness of major assumptions, including growth rate, gross margin, discount rate and fair value calculation model as indicated in the purchase price allocation reports prepared by the appraisers appointed by the Group. Our procedures also included the following:

A. Assessing the setting of parameters of valuation models and calculation formulas;
B. Comparing expected growth rates and gross margin with historical data, economic and industry forecasts; and
C. Comparing the discount rate with the cost of capital assumptions of cash generating units and rate of returns of similar assets.

Impairment assessment of intangible assets

Description

As of December 31, 2017, the recognised goodwill and intangible assets – customer relationship as a result of acquisitions of Cyntec Co., Ltd., Loy Tec electronics GmbH, Eltek AS and Delta Greentech (China) Co., Ltd. amounted to NT$15,844,592 thousand and NT$5,113,030 thousand, constituting 8.37% of consolidated total assets. Please refer to Notes 5(2) and 6(12).

As the balance of goodwill and intangible assets – customer relationship acquired from merger is material, the valuation model adopted in the impairment assessment has

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an impact in determining the recoverable amount which involves the significant accounting estimates and prediction of future cash flows. Thus, we consider the impairment assessment of goodwill and intangible assets – customer relationship a key audit matter.

How our audit addressed the matter

We obtained management’s impairment assessment of goodwill and intangible assets, obtained an understanding of the process in determining the expected future cash flows based on each cash generating unit, and performed the following audit procedures:

A. Assessing whether the valuation models adopted by the Group are reasonable for the industry, environment and the valued assets of the Group;
B. Confirming whether the expected future cash flows adopted in the valuation model are in agreement with the budget provided by the business units; and
C. Assessing the reasonableness of material assumptions, such as expected growth rates, operating margin and discount rates, by:
(a) Checking the setting of parameters of valuation models and calculation formulas;
(b) Comparing the expected growth rate with operating margin with historical data, economic and industrial forecast documents; and
(c) Comparing the discount rate with cost of capital assumptions of cash generating units and rate of returns of similar assets.

`–` Other matter Scope of the Audit

We did not audit the financial statements of wholly-owned consolidated subsidiaries and an investment accounted for under the equity method that are included in the consolidated financial statements. Total assets of the subsidiaries amounted to NT$9,128,719 thousand and NT$5,202,263 thousand, constituting 3.64% and 2.21% of consolidated total assets as of December 31, 2017 and 2016, respectively, and operating revenue was NT$4,218,765 thousand and NT$3,513,380 thousand, constituting 1.89% and 1.64% of consolidated total operating revenue for the years then ended, respectively. The balance of investment accounted for under equity method was NT$7,418,365 thousand and NT$7,084,482 thousand, constituting 2.96% and 3.01% of consolidated total assets as of December 31, 2017 and 2016, respectively, and the share of profit (loss) of associates and joint ventures accounted for using equity method and share of other comprehensive income of associates and joint ventures accounted for using equity method was NT$923,720 thousand and NT$909,301 thousand, constituting 6.79% and 7.07% of consolidated total comprehensive income for the years then ended, respectively. Those financial statements and information disclosed in Note 13 were audited by other independent accountants whose report thereon have been furnished to

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us, and our opinion expressed herein is based solely on the audit reports of the other independent accountants.

Other matter-Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Delta Electronics, Inc. as at and for the years ended December 31, 2017 and 2016.

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

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

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

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

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

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures

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responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2.

3.

4.

5.

6.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated

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

The consolidated financial statements of Delta Electronics, Inc. and subsidiaries as of and for the year ended December 31, 2017 expressed in US dollars are presented solely for the convenience of the reader and were translated from the financial statements expressed in New Taiwan dollars using the exchange rate of $29.76 to US$1.00 at December 31, 2017. This basis of translation is not in accordance with International Financial Reporting Standards, International Accounting Standards, and relevant interpretations and interpretative bulletins that are ratified by the FSC.

Lin, Yu-Kuan Chou, Chien-Hung

for and on behalf of PricewaterhouseCoopers, Taiwan

March 8, 2018

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

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF DOLLARS)

Assets Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Available-for-sale financial assets - current Derivative financial assets for hedging - current Notes receivable, net Accounts receivable, net Accounts receivable - related parties Other receivables Other receivables - related parties Current income tax assets Inventories Prepayments Non-current assets held for sale, net Other current assets Total current assets Non-current assets Available-for-sale financial assets - non-current Financial assets carried at cost - non-current Investments accounted for under equity method Property, plant and equipment Investment property, net Intangible assets Deferred income tax assets Other non-current assets Total non-current assets Total assets	Notes 6(1) 6(2) 6(3) 6(5) 6(6) 7 7 6(8) 6(13) 8 6(3) 6(4) 6(9) 6(10) 6(11) 6(12) 6(30) 6(14) and 8	US Dollars December 31, 2017 $ 1,927,642 3,856 38,364 237 134,760 1,659,382 44,337 24,011 2,358 10,821 1,035,800 58,179 - 23,421 4,963,168 158,604 38,564 283,418 1,489,873 59,691 1,136,883 196,122 92,311 3,455,466 $ 8,418,634	New Taiwan Dollars	New Taiwan Dollars	New Taiwan Dollars
			December 31, 2017 $ 57,366,617 114,748 1,141,700 7,061 4,010,445 49,383,213 1,319,469 714,556 70,181 322,046 30,825,402 1,731,406 - 697,034 147,703,878 4,720,058 1,147,672 8,434,519 44,338,628 1,776,411 33,833,648 5,836,595 2,747,150 102,834,681 $ 250,538,559		December 31, 2016
					$ 55,572,744 56,252 675,817 7,708 3,553,181 46,756,514 1,431,921 717,329 104,580 218,467 25,953,182 2,779,206 15,647 559,150
					138,401,698
					5,926,691 1,113,279 8,319,562 40,558,137 1,924,097 30,918,856 5,334,038 2,618,312
					96,712,972
					$ 235,114,670

(Continued)

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF DOLLARS)

	New Taiwan Dollars	New Taiwan Dollars
	December 31, 2017 $ 17,463,509 9,746 9,792 36,708,824 1,206,197 25,209,483 2,206,019 6,407,577 89,221,147 11,218,936 12,103,399 4,221,603 27,543,938 116,765,085 25,975,433 48,446,318 21,373,388 2,767,749 33,082,224 (7,088,143) 124,556,969 9,216,505 133,773,474 $ 250,538,559	December 31, 2016 $ 12,539,294 219,490 - 37,045,171 468,980 23,275,430 1,572,229 6,143,043 81,263,637 8,513,958 12,386,659 3,941,550 24,842,167 106,105,804 25,975,433 48,442,451 19,493,608 527,556 31,915,572 (2,240,194) 124,114,426 4,894,440 129,008,866 $ 235,114,670
(

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

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

Items Sales revenue Operating costs Gross profit Operating expenses Selling expenses General and administrative expenses Research and development expenses Total operating expenses Operating profit Non-operating income and expenses Other income Other gains and losses Finance costs Share of profit of associates and joint ventures accounted for under equity method Total non-operating income and expenses Profit before income tax Income tax expense Profit for the year	Notes 6(23) and 7 6(8)(24)(28) (29) and 7 6(28)(29) 6(25) 6(26) 6(27) 6(9) 6(30)		US Dollars 2017 $ 7,512,685 (5,470,741) 2,041,944 507,294) 308,807) 561,402) (1,377,503) 664,441 130,528 6,585) 12,731) 24,020 135,232 799,673 169,399) $ 630,274		New Taiwan	New Taiwan

		( ( ( ( ( (

(Continued)

-9-

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

	New Taiwan Dollars 2017 2016 147,085) ($ 3,522) 19,459 - 25,631 (910) 101,995) (4,432) ( 5,716,900) ( 5,583,670) 20,710 ( 1,482,432) 32,270 57,307 87,656 ( 119,472) 522,517 725,208 (5,053,747) (6,403,059) ($ 5,155,742) ($ 6,407,491) $ 13,601,210 $ 12,852,491 $ 18,380,552 $ 18,797,799 $ 376,400 $ 462,183 $ 13,430,608 $ 12,633,666 $ 170,602 $ 218,825 $ 7.08 $ 7.24 $ 7.02 $ 7.17	New Taiwan Dollars 2017 2016 147,085) ($ 3,522) 19,459 - 25,631 (910) 101,995) (4,432) ( 5,716,900) ( 5,583,670) 20,710 ( 1,482,432) 32,270 57,307 87,656 ( 119,472) 522,517 725,208 (5,053,747) (6,403,059) ($ 5,155,742) ($ 6,407,491) $ 13,601,210 $ 12,852,491 $ 18,380,552 $ 18,797,799 $ 376,400 $ 462,183 $ 13,430,608 $ 12,633,666 $ 170,602 $ 218,825 $ 7.08 $ 7.24 $ 7.02 $ 7.17
	2017 147,085) 19,459 25,631 101,995) ( 5,716,900) 20,710 32,270 87,656 522,517 (5,053,747) ($ 5,155,742) $ 13,601,210 $ 18,380,552 $ 376,400 $ 13,430,608 $ 170,602 $ 7.08 $ 7.02
($ (		( ( ( (

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

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF DOLLARS)

Notes						Equityattr	ibutable to owners of	theparent					Non-controlling interest	Non-controlling interest
	S c	hare capital - ommon stock	Capital surplus		Reta	ined earnings			Other equity intere	st		Total
				Legal reserve		Special reserve	Unappropriated retained earnings	Financial statements translation differences of foreign operations	Unrealized gain or loss on available-for- sale financial assets	Hedging instrument gain (loss) on effective hedge of cash flow hedges
6(21) 6(22) 6(21) 6(22)											$ 6,188 - - - - - - 47,565 - -	$ 124,370,187 - - ( 12,987,717 ( 9,692 - ( 12,384 ( 6,164,133 120,366 18,797,799	) ) ) ) ) ) )	$ 5,182,622 - - - - ( 507,007 - ( 243,358 - 462,183
											$53,753	$124,114,426		$ 4,894,440
											$ 53,753 - - - - - 26,784 -	$ 124,114,426 - - ( 12,987,717 ( 348 - ( 4,949,944 18,380,552		$ 4,894,440 - - - 4,151,463 ( 205,798 376,400
											$80,537	$124,556,969		$ 9,216,505

(Continued)

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF DOLLARS)

Notes					Equityattr	Equityattr	ibutable to owners of	ibutable to owners of	theparent						Non-controlling interest	Total equity
	Share capital common stoc	- k	Capital surplus		Retained earnings					Other equity inter	est		Total
				Legal reserve	Special reserve $ 17,727 - 75,275 - - - - $93,002		Unappropriated retained earnings		Financial statements translation differences of foreign operations	Unrealized gain or loss on available-for- sale financial assets $ 42,928) - - - - 695 - $42,233 )	Hedging instrument gain (loss) on effective hedge of cash flow hedges $ 1,805 - - - ( ( - 902 ( - $2,707
6(21) 6(22)	$ 872,830 - - - - - - $872,830			$ 655,027 63,165 - - - - - $718,192		( ( ( ( (	$ 1,072,431 ( 63,165 ) 75,275 ) 436,415 ) 141 ) - 3,427 ) ( 617,626 $1,111,634 (		$ 34,153) ( - - - - 164,497 ) - $198,650 ) (			( ( (	$ 4,170,510 - - 436,415 ) 12 ) 166,327 ) 617,626 $4,185,382	(	$ 164,464 - - - ( ( 139,496 6,914 ) ( 12,648 $309,694	$ 4,334,974 - - 436,415 ) 12 ) 139,496 173,241 ) 630,274 $4,495,076
								(

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

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit before tax for the year
Adjustments to reconcile net income to net cash
generated from operating activities
Income and expenses having no effect on cash flows
Depreciation

Amortisation

Provision for bad debts

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

Interest expense

Interest income

Dividend income

Share-based payment

Share of profit of associates accounted for under the
equity method

Gain on disposal of property, plant and equipment

Gain on disposal of non-current assets held for sale

Gain on disposal of investments

Impairment loss on financial assets

Impairment loss on non-financial assets

Changes in assets/liabilities relating to operating
activities
Net changes in assets relating to operating activities
Financial assets held for trading
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Other receivables - related parties
Inventories
Prepayments
Other current assets
Other non-current assets
Net changes in liabilities relating to operating
activities
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

US Dollars
New Taiwan Dollars
Notes
2017
2017
2016
$ 799,673 $ 23,798,280 $ 24,789,961

6(10)(11)
278,152
8,277,810
7,293,247
6(12)
63,155
1,879,506
1,839,254
6(6)
12,606
375,165
123,086
6(26)
(
8,593 ) (
255,740 )
176,974
6(27)
12,731
378,861
383,647
6(25)
(
21,248 ) (
632,353 ) (
623,297 )
6(25)
(
5,131 ) (
152,687 ) (
136,534 )
6(34)
1,095
32,599
-
6(9)
(
24,020 ) (
714,819 ) (
926,675 )
6(26)
(
3,380 ) (
100,584 ) (
145,171 )
6(26)
(
12,538 ) (
373,138 )
-
6(26)
(
11,360 ) (
338,087 ) (
212,799 )
6(3)(4)(26)
22,260
622,465
108,693
6(10)(12)
24
718
74,457
(
2,848 ) (
84,757 ) (
60,647 )
(
15,365 ) (
457,264 ) (
452,385 )
(
31,850 ) (
947,848 ) (
1,108,240 )
4,197
124,903
47,366
836
24,865 (
224,634 )
1,156
34,399
21,028
(
124,713 ) (
3,711,462 ) (
1,606,928 )
32,330
962,148
1,217,971
(
4,637 ) (
137,998 )
394,052
15,028
447,227 (
121,341 )
329
9,792
-
(
39,456 ) (
1,174,198 )
1,488,687
3,685
109,659
10,272
51,392
1,529,431
805,993
17,571
522,902
604,717
983
29,242 (
752,214 )
1,012,064
30,119,037
33,008,540
19,838
590,381
627,229
28,134
837,278
876,657
(
12,457 ) (
370,730 ) (
381,465 )
(
141,353 ) (
4,206,676 ) (
3,231,112 )
906,226
26,969,290
30,899,849

(Continued)

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) YEARS ENDED DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of financial assets at fair value
through profit or loss, designated upon initial
recognition
Acquisition of available-for-sale financial assets
Proceeds from disposal of available-for-sale financial
assets
Proceeds from capital reduction of available-for-sale
financial assets
Acquisition of financial assets at cost
Proceeds from disposal of financial assets at cost
Proceeds from capital reduction of financial assets
carried at cost
Net cash flow from acquisition of subsidiaries (net of
cash acquired)

Proceeds from disposal of subsidiaries (net of cash
disposed)

Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and
equipment

Advances on sale of property, plant and equipment
Acquisition of intangible assets

Decrease in other financial assets
(Increase) decrease in other non-current assets
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Proceeds from long-term debt
Repayment of long-term debt
Cash dividends paid
Cash dividends paid to minority share interests

Acquisition of non-controlling interests in subsidiaries
Net cash used in financing activities
Effects due to changes in exchange rate
Increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

USDollars
NewTaiwan Dollars
Notes
2017
2017
2016

$ 2,726
$ 81,132 $ 186,936
(
17,951 ) (
534,229 ) (
844,593 )
25,748
766,254
331,639
3,217
95,733
34,679
(
3,020 ) (
89,874 ) (
463,948 )
-
-
2,514
-
-
32
6(33)
(
102,764 ) (
3,058,262 ) (
7,732,070 )
6(34)
21,270
633,010
-
6(10)
(
432,751 ) (
12,878,670 ) (
8,078,237 )

9,208
274,022
797,778
-
-
473,606
6(12)
(
12,049 ) (
358,579 ) (
220,585 )
404
12,021
76,026
(
9,063 ) (
269,712 )
86,406
(
515,025 ) (
15,327,154 ) (
15,349,817 )
152,674
4,543,591
1,429,721
86,634
2,578,236
4,453,199
(
1,677 ) (
49,919 )
-
(
436,415 ) (
12,987,717 ) (
12,987,717 )
6(22)
(
10,601 ) (
315,485 ) (
225,604 )

-
- (
873,505 )
(
209,385 ) (
6,231,294 ) (
8,203,906 )
(
121,538 ) (
3,616,969 ) (
3,025,835 )
60,278
1,793,873
4,320,291
1,867,364
55,572,744
51,252,453
$ 1,927,642 $ 57,366,617 $ 55,572,744

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

-14-

DELTA ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

1. HISTORY AND ORGANIZATION

Delta Electronics, Inc. (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 global leaders in power and thermal management solutions and are primarily engaged in the research and development, design, manufacturing and sale of electronic control systems, DC brushless fans, thermal system, and miniaturization key component, industrial automation products, digital display products, communication products, consumer electronics products, energy-saving lighting application, renewable energy applications, EV charging, energy technology services and c onsulting services of building management and control solutions, etc. The Group’s mission statement, to provide innovative, clean and energy-efficient solutions for a better tomorrow, focuses on addressing key environmental issues such as global climate change. With the concern for the environment, the Group continues to develop innovative energy-efficient products and solutions. In recent years, the Group has transformed from a product provider towards a solution provider and the Group’s business is segregated into power electronics business, automation business, and infrastructure business.

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 to the Board of Directors on March 8, 2018.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

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

New standards, interpretations and amendments as endorsed by FSC follows:	effective from 2017 are
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10, IFRS 12 and IAS 28, ‘Investment entities: applying the consolidation exception’ Amendments to IFRS 11, ‘Accounting for acquisition of interests in joint operations’ IFRS 14,‘Regulatory deferral accounts’	January 1, 2016 January 1, 2016 January 1, 2016

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New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IAS 1, ‘Disclosure initiative’ Amendments to IAS 16 and IAS 38, ‘Clarification of acceptable methods of depreciation and amortisation’ Amendments to IAS 16 and IAS 41, ‘Agriculture: bearer plants’ Amendments to IAS 19, ‘Defined benefit plans: employee contributions’ Amendments to IAS 27, ‘Equity method in separate financial statements’ Amendments to IAS 36, ‘Recoverable amount disclosures for non- financial assets’ Amendments to IAS 39, ‘Novation of derivatives and continuation of hedge accounting’ IFRIC 21, ‘Levies’ Annual improvements to IFRSs 2010-2012 cycle Annual improvements to IFRSs 2011-2013 cycle Annual improvements to IFRSs 2012-2014 cycle	January 1, 2016 January 1, 2016 January 1, 2016 July 1, 2014 January 1, 2016 January 1, 2014 January 1, 2014 January 1, 2014 July 1, 2014 July 1, 2014 January 1, 2016

New Standards,Interpretations andAmendments

Effective date by
International Accounting
StandardsBoard

Amendments to IAS 1, ‘Disclosure initiative’
Amendments to IAS 16 and IAS 38, ‘Clarification of acceptable
methods of depreciation and amortisation’
Amendments to IAS 16 and IAS 41, ‘Agriculture: bearer plants’
Amendments to IAS 19, ‘Defined benefit plans: employee
contributions’
Amendments to IAS 27, ‘Equity method in separate financial
statements’
Amendments to IAS 36, ‘Recoverable amount disclosures for non-
financial assets’
Amendments to IAS 39, ‘Novation of derivatives and continuation of
hedge accounting’
IFRIC 21, ‘Levies’
Annual improvements to IFRSs 2010-2012 cycle
Annual improvements to IFRSs 2011-2013 cycle
Annual improvements to IFRSs 2012-2014 cycle

January 1, 2016
January 1, 2016
January 1, 2016
July 1, 2014
January 1, 2016
January 1, 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 as endorsed by the FSC effective from 2018 are as follows:

follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 2, ‘Classification and measurement of share- based payment transactions’ Amendments to IFRS 4, ‘Applying IFRS 9 Financial instruments with IFRS 4 Insurance contracts’ IFRS 9, ‘Financial instruments’ IFRS 15, ‘Revenue from contracts with customers’ Amendments to IFRS 15, ‘Clarifications to IFRS 15 Revenue from contracts with customers’ Amendments to IAS 7, ‘Disclosure initiative’ Amendments to IAS 12, ‘Recognition of deferred tax assets for unrealised losses’ Amendments to IAS 40, ‘Transfers of investment property’ IFRIC 22, ‘Foreign currency transactions and advance consideration’	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

follows:

New Standards,Interpretations andAmendments

Effective date by
International Accounting
StandardsBoard

Amendments to IFRS 2, ‘Classification and measurement of share-
based payment transactions’
Amendments to IFRS 4, ‘Applying IFRS 9 Financial instruments with
IFRS 4 Insurance contracts’
IFRS 9, ‘Financial instruments’
IFRS 15, ‘Revenue from contracts with customers’
Amendments to IFRS 15, ‘Clarifications to IFRS 15 Revenue from
contracts with customers’
Amendments to IAS 7, ‘Disclosure initiative’
Amendments to IAS 12, ‘Recognition of deferred tax assets for
unrealised losses’
Amendments to IAS 40, ‘Transfers of investment property’
IFRIC 22, ‘Foreign currency transactions and advance consideration’

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

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New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
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’	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. IFRS 9, ‘Financial instruments’

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.

A. When adopting the new standards endorsed by the FSC effective from 2018, the Group will apply the new rules under IFRS 9 retrospectively from January 1, 2018, with the practical expedients permitted under the statement. Under the new standards, the Group expects to reclassify financial assets at cost, current available-for-sale financial assets and non-current available-for-sale financial assets in the amounts of $1,147,672, $1,141,700 and $4,720,058, respectively, to financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income in the amount of $3,632,504 and $3,376,926, respectively, and increasing retained earnings in the amount of $492,141 and decreasing other equity interest in the amount of $492,141.
B. In line with the regulations under IFRS 9 on provision for impairment, other equity interest will have to be decreased by $626,735 and retained earnings increased by $626,735.

(3) Effect of 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 as endorsed by the FSC are as follows:

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New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 9, ‘Prepayment features with negative compensation’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 16, ‘Leases’ IFRS 17, ‘Insurance contracts’ Amendments to IAS 28, ‘Long-term interests in associates and joint ventures’ IFRIC 23, ‘Uncertainty over income tax treatments’ Annual improvements to IFRSs 2015-2017 cycle	January 1, 2019 To be determined by International Accounting Standards Board January 1, 2019 January 1, 2021 January 1, 2019 January 1, 2019 January 1, 2019

New Standards,Interpretations andAmendments

Effective date by
International Accounting
StandardsBoard

Amendments to IFRS 9, ‘Prepayment features with negative
compensation’
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
IFRS 16, ‘Leases’
IFRS 17, ‘Insurance contracts’
Amendments to IAS 28, ‘Long-term interests in associates and joint
ventures’
IFRIC 23, ‘Uncertainty over income tax treatments’
Annual improvements to IFRSs 2015-2017 cycle

January 1, 2019
To be determined by
International Accounting
Standards Board
January 1, 2019
January 1, 2021
January 1, 2019
January 1, 2019
January 1, 2019

IFRS 16, ‘Leases’

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

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

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(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) Available-for-sale financial assets measured at fair value.

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(c) Liabilities on cash-settled share-based payment arrangements measured at fair value.
(d) 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 IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries are consistent with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

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B. Subsidiaries included in the consolidated financial statements:

No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)
				December 31, 2017	December 31, 2016
1 2 3 4 5 6 7 8 9 10	Delta International Holding Limited (DIH) Delta Networks Holding Limited (DNH) Delta Electronics (Netherlands) B.V. (DEN) PreOptix (Hong Kong) Co., Ltd. (PHK) NeoEnergy Microlelectronics, Inc. (NEM) Cyntec Co., Ltd. (Cyntec) DelBio Inc. (DelBio) Delta Electronics Capital Company (Delta Capital) Delta Electronics Int'l (Singapore) Pte. Ltd. (DEIL-SG) Allied Material Technology Corp. (AMT)	Equity investments `〃` Trading of equipment, components and materials of telecom and computer systems Equity investments Designing and experimenting on integrated circuit and information software services Research, development, manufacturing and sales of film optic- electronics devices Manufacturing, wholesale and retail of medical equipment Equity investments Sales of electronic products Lease services, etc.	Delta Electronics, Inc. `〃` Delta Electronics, Inc. and DIH `〃` Delta Electronics, Inc. Delta Electronics, Inc. `〃` `〃` `〃` `〃`	94 100 100 100 98.17 100 100 100 100 99.97	94 100 100 100 98.17 100 100 100 100 99.97	Note 15 Note 19

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
11 12 13 14 15 16 17 18 19 20	Delta Green Life Co., Ltd. (DGL) Delta America Ltd. (DAL) Delta Electronics (H.K.) Ltd. (DHK) Delta Electronics International Limited (DEIL-Labuan) Delta Power Sharp Limited (DPS) DEI Logistics (USA) Corp. (ALI) Delta Electronics (Japan), Inc. (DEJ) DAC Holding (Cayman) Limited (DAC) Ace Pillar Holding Co., Ltd. (Ace) Drake Investment (HK) Limited (Drake-HK)	Providing installation and construction of lighting equipment Equity investments Equity investments, operations management and engineering services Sales of electronic products Operations and engineering services Warehousing and logistics services Sales of power products, display solution products, electronic components, industrial automation products and their materials Equity investments `〃` `〃`	Delta Electronics, Inc. Delta Electronics, Inc., DEN, Castle Horizon Limited and Energy Dragon Global Limited DIH `〃` `〃` `〃` `〃` `〃` `〃` `〃`	100 100 100 100 - 100 100 100 100 100	100 100 100 100 100 100 100 100 100 100	Note 17 Note 10

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
21 22 23 24 25 26 27 28 29 30 31 32	Delta Greentech (China) Co., Ltd. (DGC) Vivitek Corporation (Vivitek) Delta Greentech SGP Pte. Ltd. (DGSG) Delta Electronics Europe Ltd. (DEU) Boom Treasure Limited (Boom) Apex Investment (HK) Limited (Apex-HK) Galaxy Star Investment (HK) Limited (Galaxy Star-HK) Jade Investment (HK) Limited (Jade-HK) Delta Electronics (Dongguan) Co., Ltd. (DDG) Delta Electronics Power (Dongguan) Co., Ltd. (DEP) Delta Electronics (Shanghai) Co., Ltd. (DPEC) Delta Electronics (Jiangsu) Ltd. (DWJ)	Manufacturing and sales of uninterruptible power systems Sales of projector products and their materials Equity investments Repair centre and providing support services Equity investments 〃〃〃 Manufacturing and sales of transformer and thermal products Manufacturing and sales of transformer and power supplies Product design, management consulting service and distribution of electronic products Manufacturing and sales of power supplies and transformers	DIH, Ace, Drake-HK, DGSG and Boom DIH 〃 `〃` `〃` `〃` `〃` `〃` DHK `〃` `〃` DHK, Apex- HK, Galaxy Star-HK and Jade-HK	95.91 100 100 100 100 100 100 100 100 100 100 100	95.91 100 100 100 100 100 100 100 100 100 100 100

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
33 34 35 36 37 38 39 40 41	Delta Electronics Components (Wujiang) Ltd. (DWC) Delta Video Display System (Wujiang) Ltd. (DWV) Delta Electronics (Wuhu) Co., Ltd. (DWH) Delta Electronics (Chenzhou) Co., Ltd. (DCZ) Delta Electronics International Mexico S.A. DE C.V. (DEIL-MX) Delta Electronics (Wujiang) Trading Co., Ltd. (DWT) Delta Green (Tianjin) Industries Co., Ltd. (DGT) Delta Electronics (Pingtan) Co., Ltd. (Delta Pingtan) PreOptix (Jiang Su) Co., Ltd. (PJS)	Manufacturing and sales of new-type electronic components, variable-frequency drive and others Manufacturing and sales of various projectors Manufacturing and sales of LED light source, power supplies and others Manufacturing and sales of transformers Sales of power management of industrial automation product and telecommunications equipment Installation, consulting and trading of electronic products Manufacturing and sales of transformers Wholesale and retail of electronic products and energy-saving equipment Manufacturing and sales of lenses and optical engines for projectors	DHK, Apex- HK, Galaxy Star-HK and Jade-HK `〃` DHK `〃` `〃` `〃` `〃` `〃` PHK	100 100 100 100 100 100 100 100 100	100 100 100 100 100 100 100 100 100

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
42 43 44 45 46 47 48 49	Addtron Technology (Japan), Inc. (AT Japan) Delta Electronics (Korea), Inc. (Delta Korea) Delta Electronics Mexico S.A. DE C.V. (DEM) Delta Video Technology Limited (DVT) Wuhu Delta Technology Co., Ltd. (WDT) Delta Energy Technology (Wuhu) Co., Ltd. (DET- WH) Chenzhou Delta Technology Co., Ltd. (CDT) Delta Energy Technology (Chenzhou) Co., Ltd. (DET-CZ)	Trading of networking system and peripherals Sales of power products, display solution products electronic components, industrial automation products and their materials Manufacturing and sales of electronic products Sales of electronic products Manufacturing and sales of transformers Research and development of energy-saving technology, energy- saving equipment, energy management system and technology consulting service, etc. Manufacturing and sales of transformers Research and development of energy-saving technology, energy- saving equipment, energy management system and technology consulting service, etc.	DEJ `〃` DAC `〃` DWH DWH and DPEC DCZ DCZ and DPEC	100 100 100 100 100 - 100 -	100 100 100 100 100 100 100 100	Note 12 Note 14

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
50 51 52 53 54 55 56 57 58 59	Delta Energy Technology (Dongguan) Co., Ltd. (DET-DG) Delta Energy Technology (Shanghai) Co., Ltd. (DET-SH) Delta Networks, Inc. (DNI Cayman) Delta Networks, Inc. (Taiwan) (DNIT) DNI Logistics (USA) Co. (ALN) Delta Networks International Limited (DNIL- Labuan) Delta Networks (H.K.) Limited (DNHK) Delta Networks (Dongguan) Ltd. (DII) Delta Networks (Shanghai) Ltd. (DNS) Fairview Assets Ltd. (Fairview)	Research and development of energy-saving technology, energy- saving equipment, energy management system and technology consulting service, etc. `〃` Equity investments Manufacturing and sales of networking system and peripherals Trading of networking system and peripherals Trading of networking system and peripherals Equity investments Manufacturing and sales of other radio- broadcast receivers and the equipment in relation to broadband access networking system Design of computer software Equity investments	DDG and DPEC DPEC and DGC DNH Delta Electronics, Inc. DNI Cayman DNI Cayman `〃` DNHK `〃` Cyntec	100 100 100 99.98 100 100 100 100 100 100	100 100 100 99.98 100 100 100 100 100 100	Note 15 Note 28

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Name of Main Business Name of No. Subsidiary Activities Investor 60 Grandview Holding Ltd. (Grandview) Equity investments Fairview 61 Cyntec Holding (H.K.) Ltd. (CHK) `〃` Grandview 62 Cyntec International Ltd. (CIL-Labuan) Trading `〃` 63 Cyntec Electronics (Suzhou) Co., Ltd. (CES) Research, development, manufacturing and sales of new-type electronic components (chip components, sensing elements, hybrid integrated circuits) and wholesale of similar products CHK 64 DelBio (Wujiang) Co., Ltd. Manufacturing, wholesale and retail of medical equipment DelBio 65 ELTEK AS Research and sales of power supplies and others DEN 66 Castle Horizon Limited Equity investments ″ 67 Energy Dragon Global Limited ″ ″ 68 Delta Controls Inc. (DCI) ″ ″ 69 Eltek Energy Holding, Inc. ″ ELTEK AS 70 ELTEK PAKISTAN (PRIVATE) LIMITED Sales of power supplies and others ″	Ownership (%)	Description
	December 31, December 31, 2017 2016 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
		Note 2 Note 17 Note 2 Note 17 Note 2

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
71 72 73 74 75 76 77 78 79 80 81 82	Eltek Deutschland GmbH ELTEK AUSTRALIA PTY LIMITED Eltek Egypt for Power Supply S.A.E Eltek SGS Pvt Ltd. Eltek SGS Mechanics Pvt Ltd. ELTEK POWER PTE. LTD. Eltek Polska Sp. z o. o. Eltek s.r.o. ELTEK POWER FRANCE SAS ELTEK LIMITED ELTEK MEA FZCO ELTEK MEA DMCC	Sales of power supplies and others and system installation `〃` Sales of power supplies and others Sales of power supplies and others and system installation Sales of power supplies and others Sales of power supplies and others and system installation Sales of power supplies and others and system installation Manufacturing and sales of power supplies Sales of power supplies and others and system installation Equity investments and trading Closure Sales of power supplies and others	ELTEK AS `〃` `〃` `〃` ELTEK AS and Eltek SGS Pvt Ltd. ELTEK AS ELTEK AS 〃〃〃〃〃	100 100 95 100 51 100 51 - 100 100 - 100	100 100 95 100 51 100 51 100 100 100 80 100	Note 8 Note 24

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
83 84 85 86 87 88 89 90 91 92 93 94 95	ELTEK KENYA LIMITED ELTEK WEST AFRICA LIMITED Eltek Italia S.r.l. Eltek Power Sweden AB Eltek Power (UK) Ltd. Eltek Power Oy OOO Eltek ELTEK ENERJI SISTEMLERI LIMITED SIRKETI Eltek Montage GmbH E.V.I Electronics Sp. z o. o. ELTEK POWER INCORPORATED ELTEK POWER CO., LTD. ELTEK POWER (COMBODIA) LTD.	Sales of power supplies 〃 Sales of power supplies and others Sales of power supplies and others and equity investments Sales of power supplies Sales of power supplies and others Sales of power supplies and others and system installation Sales of power supplies and others Installation and maintenance of power supplies Trading and construction of power supply model Sales of power supplies and others `〃` `〃`	ELTEK MEA DMCC and ELTEK AS 〃 ELTEK AS 〃〃 `〃` `〃` `〃` Eltek Deutschland GmbH `〃` ELTEK POWER PTE. LTD. `〃` `〃`	100 100 100 100 100 100 100 100 100 100 100 100 100	100 100 100 100 100 100 100 100 100 100 100 100 100	Note 18 Note 5

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
96 97 98 99 100 101 102 103 104 105 106	ELTEK POWER (MALAYSIA) SDN. BHD. Eltek Power Korea Co., Ltd. ELTEK CVI LIMITED Eltek Energy Technology Eltek, Inc. Eltek Argentina S.R.L. Eltek Sistemas de Energia Industria e Commercio S.A. Eltek Peru S.R.L. Eltek Colombia S.A.S. Eltek Energy International I, LLC Eltek Energy International II, LLC	Sales of power supplies and others `〃` Equity investments Development, manufacturing and sale of intelligent power equipment and system for supporting access networking system, and manufacturing and sale of intelligent power equipment for supporting renewable energy Manufacturing and sales of power supplies Sales of power supplies and others Manufacturing and sales of power supplies Sales of power supplies and others `〃` Equity investments `〃`	ELTEK POWER PTE. LTD. `〃` ELTEK LIMITED ELTEK CVI LIMITED Eltek Energy Holding Inc. Eltek, Inc. `〃` `〃` `〃` `〃` `〃`	100 - 100 100 100 100 100 100 100 100 100	100 100 100 100 100 100 100 100 100 100 100	Note 6 Note 16

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
107 108 109 110 111 112 113 114 115 116 117 118	Eltekenergy Services, S.A. de C.V. Eltekenergy International de México, S. de R.L. de C.V. Delta Electronics (Americas) Ltd. Delta Solar Solutions LLC 2009 PPA LLC AGEMA SYSTEMS, INC DSS-CI LLC DSS-USF LLC Power Forest Technology Corporation Delta Energy Technology Puhuan (Shanghai) Co., Ltd. Loy Tec electronics GmbH LOYTEC Asia Corp., Ltd.	Sales of power supplies and others `〃` Sales of electronic components Equity investments Sales of power supplies Trading of networking system and peripherals Rental of solar power systems `〃` Manufacturing of electronic components Energy technology, development and consulting of environmental technical skills, and design and sales of energy saving equipment Consulting service of building management and control solutions Consulting service of building management and control solutions	Eltek Energy International II, LLC `〃` DAL `〃` Delta Electronics (Americas) Ltd. `〃` Delta Solar Solution LLC `〃` Cyntec Delta Energy Technology (Shanghai) Co., Ltd. DEIL-SG Loy Tec electronics GmbH and Delta Electronics, Inc.	100 100 100 100 100 - 100 100 60.02 100 85 -	100 100 100 100 100 100 100 100 60.02 100 85 54	Note 13 Note 27 Note 13 Note 2 Note 7 Note 2 Note 2 Note 2 Note 9 Note 11

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
119 120 121 122 123 124 125 126 127 128	LOYTEC Americas, Inc. Delta Electronics (Beijing) Co., Ltd. Delta Electronics (Xi'an) Co., Ltd. Beijing Industrial Foresight Technology Co., Ltd. UNICOM SYSTEM ENG. CORP. Unicom (Nanjing) System Eng. Corp Delta Electronics (Switzerland) AG (DES) Delta Greentech (Brasil) S.A. (DGB) Delta Greentech Electronics Industry LLC Delta Greentech (USA) Corporation (DGA)	Consulting service of building management and control solutions Installation of mechanic, electronic, telecommunication and circuit equipment Sales of computer, peripheral and software Computer system services and data process Design and sales of computer, peripheral and information system (software and hardware) `〃` Equity investments, research, development and sales of electronic products Manufacturing and sales of electronic products Marketing and sales of electronic products Sales of electronic products	Loy Tec electronics GmbH DHK ″ Delta Electronics (Beijing) Co., Ltd. Delta Electronics, Inc. UNICOM SYSTEM ENG. CORP. DEN ″ ″ ″	100 100 100 80 100 100 51 100 51 100	100 100 100 80 - - - - - -	Note 2 Note 2 Note 2 Note 2 Note 1 Note 1 Note 1 Note 4 Note 1 Note 1 Note 1

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
129 130 131 132 133 134 135 136 137 138 139 140	Delta Electronics (Czech Republic), spol. s.r.o. Delta Energy Systems (Italy) S.r.l. Delta Energy Systems (Poland) Sp. z o. o. Delta Soutions (Finland) Oy Delta Energy Systems (Spain) S.L Delta Electronics (France) SA Delta Energy Systems (Sweden) AB Vivotek Inc. Vatics Inc. Vivotek Holdings, Inc. Realwin Investment Inc. Vivotek Netherlands B.V.	Sales of electronic products ″ ″ Manufacturing and sales of electronic products Sales of electronic products ″ ″ Manufacturing and sales of video compression software and encoding, network video server, webcam and its related components Designing and sales on multimedia integrated circuits Holding company Investment in networking system industry Sales service	DES ″ ″ ″ ″ ″ ″ Delta Electronics, Inc. Vivotek Inc. ″ ″ ″	100 100 100 100 100 100 100 48.80 49.55 100 100 100	- - - - - - - - - - - -	Note 1 Note 20 Note 1 Note 25 Note 1 Note 3 Note 1 Note 26 Note 1 Note 22 Note 1 Note 21 Note 1 Note 1 Note 23 Note 1 Note 1 Note 1 Note 1

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No.	Name of Subsidiary	Main Business Activities	Name of Investor	Ownership (%)	Ownership (%)	Description
				December 31, 2017	December 31, 2016
141 142 143 144 145 146 147	Vivotek USA, Inc. Wellstates Investment, LLC Otus Imaging, Inc. Aetek Inc. Vivotek Middle East FZCO Lidlight Inc. Delta Electronics Brasil Ltda	Sales of webcams and related components Investment and commercial lease of real estate Sales of webcams and related components Sales of webcams and related components Sales of webcams and related components Lighting equipment sales Manufacturing and sales of electronic products	Vivotek Holdings, Inc. Realwin Investment Inc. Vivotek Inc. and Realwin Investment Inc. Realwin Investment Inc. ″ ″ DEN	100 100 100 56.21 89.99 51 100	- - - - - - -	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1

Note 1: Companies were established or acquired through merger during 2017.
Note 2: Companies were established or acquired through merger during 2016.
Note 3: Formerly named Delta Energy Systems (Poland) Sp. Z.o.o., and was renamed Delta Electronics Systems (Poland) Sp. Z o.o.
Note 4: Formerly named Delta Energy Systems (Switzerland) AG., and was renamed Delta Electronics (Switzerland) AG.
Note 5: 55% of shares are held through others due to local regulations.
Note 6: 71% of shares are held through others due to local regulations.
Note 7: On January 12, 2016, the subsidiary, Cyntec Co., Ltd., held 38.81% share ownership of Power Forest Technology Corporation. The total shareholding ratio along with the 21.21% share ownership in Power Forest Technology Corporation held by Cyntec Co., Ltd. in 2015 was 60.02%; therefore, Power Forest Technology Corporation was included in the consolidated financial statements.
Note 8: On April 1, 2017, the company was sold to the Group’s associate, Delta Greentech (Netherlands) B.V..
Note 9: In February 2017, the Company directly held 46% share ownership of LOYTEC Asia Corp., Ltd. and the comprehensive shareholding ratio was 91.9% if the 45.9%

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comprehensive share ownership of LOYTEC Asia Corp., Ltd. held by the Company’s subsidiary, DEIL-SG, was inclusive.

Note 10: In August 2016, the subsidiary company began liquidation process, which had been completed in the second quarter of 2017.
Note 11: In the first quarter of 2017, the subsidiary company was dissolved and the dissolution process had been completed on November 30, 2017.
Note 12: Delta Energy Technology (Wuhu) Co., Ltd. had been liquidated and dissolved in August 2017.
Note 13: AGEMA SYSTEMS, INC. merged with Delta Products Corporation in September 2017. Under the merger, Delta Products Corporation was the surviving company while AGEMA SYSTEMS, INC. was the dissolved company.
Note 14: Delta Energy Technology (Chenzhou) Co., Ltd. had been liquidated and dissolved in March 2017.
Note 15: The subsidiary, DNH, distributed its shares in Delta Networks to the Company in October 2016.
Note 16: Eltek Power Korea Co., Ltd. had been liquidated in July 2017.
Note 17: On October 3, 2016 and July 2, 2015, the Company indirectly held 49.79% and 39.95% share ownership of DAL through DEN and its subsidiaries, Castle Horizon Limited and Energy Dragon Global Limited. The total shareholding ratio along with the 10.26% share ownership in DAL held by the Company was 100%; therefore, DAL was included in the consolidated financial statements.
Note 18: Eltek Holding AB and Valere Power Europe AB merged with Eltek Power Sweden AB in the fourth quarter of 2016. Under the merger, Eltek Power Sweden AB was the surviving company while Eltek Holding AB and Valere Power Europe AB were the dissolved companies.
Note 19: In the fourth quarter of 2015, the subsidiary company began liquidation process and was dissolved, but has not yet been completed as of December 31, 2017.
Note 20: Formerly named Delta Energy Systems (Czech Republic), spol. s.r.o., and was renamed Delta Electronics (Czech Republic), spol. s.r.o.
Note 21: Formerly named Delta Energy Systems (France) S.A., and was renamed Delta Electronics (France) SA.
Note 22: Formerly named Delta Energy Systems (Spain) S.L., and was renamed Delta Electronics Solutions (Spain) S.L.
Note 23: Because most of the shares were held by the company and other shareholdings are disaggregated, therefore, it was included in the consolidated financial statements.
Note 24: This company had been liquidated in No vember, 2017.

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Note 25: Formerly named Delta Energy Systems (Italy) S.r.l., and was renamed Delta Electronics (Italy) S.r.l.
Note 26: Formerly named Delta Energy Systems (Finland) Oy., and was renamed Delta Solutions (Finland) OY.
Note 27: Formerly named Delta Products Corporation, and was renamed Delta Electronics (Americas) Ltd.
Note 28: In the fourth quarter of 2017, the subsidiary company began liquidation and dissolved process, but has not yet been completed as of December 31, 2017.
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:

As of December 31, 2017 and 2016, the non-controlling interest amounted to $9,216,505 and $4,894,440, respectively. The information on non-controlling interest and respective subsidiary is as follows:

as follows:
Name ofsubsidiary	Principal place ofbusiness Cayman Islands Taiwan	Non-controllinginterest
		Ownership Amount (%) $ 3,940,019 6% 4,206,236 51.20% December31,2017	December31,2016
		Amount $ 3,940,019 4,206,236	Amount $ 4,323,174 -	Ownership (%)
Delta International Holding Ltd. (DIH) Vivotek Inc.				6% -

Summarised financial information of the subsidiary:

Balance sheet

Balance sheet
			DIH
		December31,2017		December31,2016
Current assets		$	82,004,197	$	81,957,178
Non-current assets			40,540,530		41,319,991
Current liabilities	(		44,828,240)	(	41,771,968)
Non-current liabilities	(		2,073,048)	(	2,587,336)
Total net assets		$	75,643,439	$	78,917,865

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			Vivotek Inc.
		December31,2017
Current assets		$	3,188,626
Non-current assets			6,446,325
Current liabilities	(		1,217,494)
Non-current liabilities	(		202,154)
Total net assets		$	8,215,303

Statement of comprehensive income

Statement of comprehensive income
		DIH
		Years ended	December31,
		2017		2016
Revenue	$	155,108,606	$	151,768,484
Profit before income tax		7,161,357		7,577,947
Income tax expense	(	1,921,637)	(	2,118,254)
Profit for the year from continuing operations		5,239,720		5,459,693
Loss attributable to non-controlling interest	(	29,463)	(	42,945)
Profit for the year		5,210,257		5,416,748
Other comprehensive income (loss), net of tax		2,012,159	(	1,616,101)
Total comprehensive income for the year	$	7,222,416	$	3,800,647
Comprehensive income attributable to
non-controlling interest	$	433,345	$	134,354
Dividends paid to non-controlling interest	$	310,287	$	218,881
				Vivotek Inc.
				Years ended
				December31,
				2017
Revenue			$	5,876,591
Profit before income tax				401,753
Income tax expense			(	105,577)
Profit for the year from continuing operations				296,176
Gains attributable to non-controlling interest				81,755
Profit for the year				377,931
Other comprehensive loss, net of tax			(	26,898)
Total comprehensive income for the year			$	351,033
Comprehensive income attributable to
non-controlling interest			$	89,089
Dividends paid to non-controlling interest			$	-

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Statements of cash flows

DIH

			Years ended	December31,	December31,
			2017		2016
Net cash provided by operating activities		$	7,971,941	$	14,399,018
Net cash used in investing activities	(		5,505,694)	(	5,049,586)
Net cash used in financing activities	(		4,307,178)	(	3,426,443)
Effect of exchange rates on cash and cash
equivalents	(		1,384,793)	(	2,345,908)
(Decrease) increase in cash and cash
equivalents	(		3,225,724)		3,577,081
Cash and cash equivalents, beginning of
year			34,902,792		31,325,711
Cash and cash equivalents, end of year		$	31,677,068	$	34,902,792
					Vivotek Inc.
					Year ended
					December31,
					2017
Net cash provided by operating activities				$	426,903
Net cash used in investing activities				(	447,432)
Net cash used in financing activities				(	193,296)
Effect of exchange rates on cash and cash
equivalents				(	20,812)
Decrease in cash and cash equivalents				(	234,637)
Cash and cash equivalents, beginning of
year					1,420,179
Cash and cash equivalents, end of year				$	1,185,542

(4) Foreign currency translation

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

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise, except when deferred in other comprehensive income as qualifying cash flow hedges.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences

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arising upon re-translation at the balance sheet date are recognised in profit or loss.

(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss as part of the fair value gain or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses are presented in the statement of comprehensive income within other gains and losses.
B. Translation of foreign operations
(a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

iii. All resulting exchange differences are recognised in other comprehensive income

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

(5) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are

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classified as non-current assets:

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

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

A. Financial assets at fair value through profit or loss are financial assets held for trading or financial assets designated as at fair value through profit or loss on initial recognition. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as financial assets held for trading unless they are designated as hedges. Financial assets that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition:
(a) Hybrid (combined) contracts; or
(b) They eliminate or significantly reduce a measurement or recognition inconsistency; or
(c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy.
B. On a regular way purchase or sale basis, financial assets held for trading are recognised and derecognised using trade date accounting. Derivatives and financial assets designated as at fair value through profit or loss on initial recognition are recognised and derecognised using settlement

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date accounting.

C. Financial assets at fair value through profit or loss are initially recognised at fair value. Related transaction costs are expensed in profit or loss. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognised in profit or loss. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets measured at cost’.

(8) Available-for-sale financial assets

A. Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
B. On a regular way purchase or sale basis, available-for-sale financial assets are recognised and derecognised using trade date accounting.
C. Available-for-sale financial assets are initially recognised at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognised in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets measured at cost’.

(9) Notes receivable, accounts receivable and other receivables

Notes receivable and accounts receivable are claims resulting from the sale of goods or services. Other receivables are those arising from transactions other than the sale of goods or services. Notes receivable, accounts receivable and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. However, for short-term accounts receivable without bearing interest, as the effect of discounting is insignificant, they are measured subsequently at original invoice amount.

(10) Impairment of financial assets

A. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
B. The criteria that the Group uses to determine whether there is objective evidence of an impairment loss is as follows:
(a) Significant financial difficulty of the issuer or debtor;
(b) A breach of contract, such as a default or delinquency in interest or principal payments;

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(c) The Group, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider;
(d) It becomes probable that the borrower will enter bankruptcy or other financial reorganisation;
(e) The disappearance of an active market for that financial asset because of financial difficulties;
(f) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group;
(g) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered;
(h) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
C. When the Group assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets:
(a) Financial assets measured at amortised cost
- The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate, and is recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortised cost that would have been at the date of reversal had the impairment loss not been recognised previously. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.
(b) Financial assets measured at cost

The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognised in profit or loss. Impairment loss recognised for this category shall not be reversed subsequently. Impairment loss is recognised by adjusting the carrying amount of the asset through the use of an impairment allowance account.

The amount of the impairment loss is measured as the difference between the asset’s

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acquisition cost (less any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, and is reclassified from ‘other comprehensive income’ to ‘profit or loss’. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognised, then such impairment loss is reversed through profit or loss. Impairment loss of an investment in an equity instrument recognised in profit or loss shall not be reversed through profit or loss. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(11) Derecognition of financial assets

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

A. The contractual rights to receive the cash flows from the financial asset expire.
B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.
C. The contractual rights to receive cash flows of the financial asset have been transferred and, the Group has not retained control of the financial asset.

(12) Inventories

Inventories are stated at the lower of cost and net realisable value. Inventories are recorded at standard cost and variances are allocated to inventories and cost of goods sold at the balance sheet date. The cost of finished goods and work in process comprises raw materials, direct labour, other director costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(13) Investments accounted for using equity method / associates

A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 per cent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.
B. The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the

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associate, the Group recognises change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

D. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are consistent with the policies adopted by the Group.
E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.
G. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

(14) Cash surrender value of life insurance

Premium paid for life insurance with saving nature belonging to cash surrender value is recognised as a deduction to insurance premium expense in current period and is added to the carrying amount of cash surrender value.

(15) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives.

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Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are 1~15 years except for buildings, the estimated life of which is 5~55 years.

(16) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 7~50 years.

(17) Intangible assets

A. Goodwill

Goodwill arises in a business combination accounted for by applying the acquisition method. Acquisition prices in the business combination are calculated by the price of acquisition plus related direct costs. Goodwill is recognised at the difference of the acquisition prices less net fair value of identifiable assets acquired. The amortisation duration of acquisition prices may not exceed one year after the acquisition.

B. Trademarks
(a) Separately acquired trademarks with finite useful lives are stated at acquisition cost and are amortised on a straight-line basis over their estimated useful lives.
(b) Certain trademarks which are assessed to generate net cash inflows and have indefinite useful lives are recorded at actual cost. These are not amortised and instead, are tested for impairment annually.
C. Intangible assets other than goodwill and trademarks, mainly computer software, patents, customer relationship and technology authorization fees, are amortised on a straight-line basis over their estimated useful lives of 1~15 years.

(18) Impairment of non-financial assets

A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the

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impairment had not been recognised.

B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.
C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(19) Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(20) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. However, for shortterm accounts payable without bearing interest, as the effect of discounting is insignificant, they are measured subsequently at original invoice amount.

(21) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss are financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition. Derivatives are classified in this category of held for trading unless they are designated as hedges. Derivatives are initially recognised at fair value, and related transaction costs are expensed in profit or loss. These financial liabilities are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial liabilities are recognised in profit or loss.

(22) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(23) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

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(24) Derivative financial instruments and hedging activities

A. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Any changes in the fair value are recognised in profit or loss.
B. The Group designates certain derivatives as either:
(a) Hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);
(b) Hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge).
C. The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.
D. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as current assets or liabilities.
E. Fair value hedge
(a) Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recorded in profit or loss, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
(b) If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to profit or loss over the period to maturity.
F. Cash flow hedge
(a) The effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow hedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the statement of comprehensive income within ‘other gains and losses’.
(b) When a hedging instrument expires, or is sold, cancelled or executed, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive income. When a forecast transaction occurs or is no longer expected to occur, the cumulative gain or loss that was reported in other comprehensive income is transferred to profit or loss in the periods when the hedged forecast cash flow affects profit or loss.

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(25) Employee benefits

A. Pensions

(a) Defined contribution plans

Under the defined contribution plans, the contributions are recognised as pension expenses when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans
i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of highquality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.
ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

iii. Past service costs are recognised immediately in profit or loss.

B. Employees’, directors’ and supervisors’ remuneration

Employees’ remuneration and directors’ and supervisors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employees’ compensation is distributed by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

- (26) Employee share based payment

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

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equity instruments that eventually vest.

B. Restricted stocks:
(a) Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period.
(b) For restricted stocks where those stocks do not restrict distribution of dividends to employees but employees must return the dividends received if they resign during the vesting period, when the Group receives dividends from employees resigning during the vesting period, the Group credits related amounts that were previously debited from retained earnings, legal reserve or capital surplus at the date of dividends declared.
(c) For restricted stocks where employees do not need to pay to acquire those stocks, if the Group will pay the employees who resign during the vesting period to repurchase the stocks, the Group estimates such payments that will be made and recognises such amounts as compensation cost and liability at the grant date, in accordance with the terms of restricted stocks.

(27) Income tax

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

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will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

E. Current income tax assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.
F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

(28) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

(29) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities.

(30) Revenue recognition

A. Sales of goods

The Group is mainly engaged in manufacturing and sales of information, electric machinery, power supply, industrial automation, networking and communication equipment and components and its related products. Revenue is measured at the fair value of the consideration received or receivable taking into account the business tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Group’s activities. Revenue arising from the sales of goods is recognised when the Group has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.

B. Sales of services

The Group provides installation of certain software and module and energy technology services. Revenue is recognised if all of the following conditions are met and the cost incurred shall be

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recognised as the cost in the current period. If loss is expected to incur on the transaction, loss shall be recognised immediately.

(a) The amount of the revenue can be measured reliably;
(b) It is probable that the economic benefits related to the transaction will flow to the enterprise;
(c) The costs incurred and to be incurred associated with the transaction can be measured reliably;
and
date.

(31) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are presented by deducting the grants from the asset’s carrying amount and are amortised to profit or loss over the estimated useful lives of the related assets as reduced depreciation expenses.

(32) Business combinations

The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of noncontrolling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

(33) Operating segments

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

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

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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

A. Financial assets—impairment of equity investments

The Group follows the guidance of IAS 39 to determine whether a financial asset—equity investment is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an equity investment is less than its cost and the financial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

If the decline of the fair value of an individual equity investment below cost was considered significant or prolonged, the Group would suffer a loss in its financial statements, being the transfer of the accumulated fair value adjustments recognised in other comprehensive income on the impaired available-for-sale financial assets to profit or loss or being the recognition of the impairment loss on the impaired financial assets measured at cost in profit or loss.

B. Investment property

The Group uses part of the property for its own use and part to earn rentals or for capital appreciation. When the portions cannot be sold separately and cannot be leased out separately under a finance lease, the property is classified as investment property only if the own-use portion accounts for less than 20% of the property.

(2) Critical accounting estimates and assumptions

The Group makes estimates and assumptions based on the expectation of future events that are believed to be reasonable under the circumstances at the end of the reporting period. The resulting accounting estimates might be different from the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:

A. Impairment assessment of tangible and intangible assets (excluding goodwill)

The Group assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of Group strategy might cause material impairment on assets in the future.

B. Impairment assessment of goodwill

The impairment assessment of goodwill relies on the Group’s subjective judgement, including identifying cash-generating units, allocating assets and liabilities as well as goodwill to related cash-generating units, and determining the recoverable amounts of related cash-generating units.

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Please refer to Note 6(12) for the information on goodwill impairment.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash on hand Checking accounts and demand deposits Time deposits	December31,2017 4,862 $ 29,671,136 27,690,619 57,366,617 $	December31,2016
		5,748 $ 35,458,887 20,108,109
		55,572,744 $

A. The Group associates 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. Details of the Group’s cash and cash equivalents pledged to others as collateral are provided in Note 8.

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

		December	31,2017		December	31,2016
Current items:
Financial assets held for trading
Listed stocks		$	29,341		$	16,840
Valuation adjustment of financial assets held
for trading			85,407			39,412
		$	114,748		$	56,252
Non-current items:
Financial assets designated as at fair value
through profit or loss
Convertible bonds		$	94,512		$	94,512
Valuation adjustment of financial assets
designated as at fair value through profit
or loss	(		94,512)	(		94,512)
		$	-		$	-

A. The Group recognised net gain on financial assets held for trading of $45,266 and $35,267 for the years ended December 31, 2017 and 2016, respectively. The Group recognised net loss on financial assets designated as at fair value through profit or loss of $0 and $126,995 for the years ended December 31, 2017 and 2016, respectively.
B. The counterparties of the Group’s private placement of convertible bonds are mostly listed companies in Taiwan and overseas. The fair value is $0 after assessment.
C. The non-hedging derivative instrument transactions and contract information are as follows:

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`-` Sell AUD / Buy NOK `-` Sell AUD / Buy USD `-` Sell BRL / Buy USD `-` Sell EUR / Buy NOK `-` Sell EUR / Buy USD `-` Sell INR / Buy USD `-` Sell JPY / Buy USD `-` Sell THB / Buy SGD `-` Sell THB / Buy USD `-` Sell USD / Buy RMB `-` Sell USD / Buy JPY `-` Sell USD / Buy NOK `-` Buy USD / Buy SGD `-` Sell USD / Buy TWD `-` Sell USD / Buy EUR `-` Sell USD / Buy HKD `-` Sell USD / Buy CZK `-` Sell RMB / Buy USD Financial instruments Forward exchange contracts:	December31,2017	December31,2017
	AUD 3,000 AUD 2,500 BRL 5,716 EUR 8,000 EUR 22,800 INR 130,241 JPY 834,001 THB 131,018 THB 28,500 USD 110,571 USD 1,500 USD 3,000 USD 25,200 USD 3,000 USD 5,934 USD 6,200 USD 350 RMB 31,000 Contract amount (nominal principal) (inthousands)	Contract period
		2017.11.28~2018.02.05 2017.08.25~2018.05.29 2017.11.28~2018.02.05 2017.11.16~2018.04.05 2017.08.25~2018.05.29 2017.11.28~2018.02.05 2017.08.25~2018.04.26 2017.12.20~2018.01.22 2017.12.20~2018.01.22 2017.10.25~2018.02.09 2017.11.06~2018.01.10 2017.12.04~2018.03.05 2017.01.25~2018.11.02 2017.10.25~2018.01.03 2017.11.15~2018.02.02 2017.11.03~2018.02.02 2017.12.08~2018.01.23 2017.11.06~2018.02.09

Sell RMB / Buy USD

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December 31, 2016

`-` Sell AUD / Buy NOK `-` Sell EUR / Buy NOK `-` Sell EUR / Buy NTD `-` Sell EUR / Buy USD `-` Sell INR / Buy USD `-` Sell JPY / Buy USD `-` Sell THB / Buy SGD `-` Sell USD / Buy CZK `-` Sell USD / Buy EUR `-` Sell USD / Buy HKD `-` Sell USD / Buy JPY `-` Sell USD / Buy NOK `-` Sell USD / Buy RMB `-` Sell USD / Buy RUB `-` Sell USD / Buy SGD `-` Sell USD / Buy NTD `-` Sell AUD / Buy NOK `-` Sell EUR / Buy GBP Cross currency swap: Financial instruments Forward exchange contracts:	AUD 1,000 EUR 2,000 EUR 27 EUR 19,900 INR 243,145 JPY 455,464 THB 405,000 USD 180 USD 4,871 USD 11,450 USD 6,620 USD 2,500 USD 252,500 USD 1,000 USD 16,360 USD 21,600 AUD 2,000 EUR 500 Contract amount (nominal principal) (in thousands)	Contractperiod
		2016.11.22～2017.01.30 2016.12.23～2017.01.30 2016.11.02～2017.04.14 2016.08.25～2017.06.20 2016.11.28～2017.01.30 2016.10.14～2017.03.23 2016.11.28～2017.02.28 2016.12.15～2017.01.23 2016.11.15～2017.03.02 2016.10.05～2017.04.05 2016.11.16～2017.04.05 2016.11.21～2017.01.30 2016.09.29～2017.05.09 2016.11.04～2017.02.07 2016.02.03～2017.10.03 2016.10.13～2017.03.10 2016.11.28～2017.01.30 2016.12.13～2017.02.28

The Group entered into forward exchange contracts to manage exposures to foreign exchange rate fluctuations of import or export sales. However, the forward exchange transactions did not meet the criteria for hedge accounting. Therefore, the Group did not apply hedge accounting.

D. The Group has no financial assets at fair value through profit or loss pledged to others.

(3) Available-for-sale financial assets

Available-for-sale financial assets
December31,2017 Current items: Listed stocks 1,197,724 $ Emerging stocks 58,943 Convertible bonds 65,000 Valuation adjustment of available-for-sale financial assets 446,768 Accumulated impairment-available-for-sale financial assets 626,735) ( 1,141,700 $	December31,2016
	312,145 $ 59,286 - 304,386 -
	675,817 $

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		December	31,2017		December	31,2016
Non-current items:
Listed stocks		$	4,468,722		$	5,462,496
Emerging stocks			585,308			284,583
Convertible bonds			-			137,894
Unlisted stocks			1,593,527			1,826,976
			6,647,557			7,711,949
Valuation adjustment of available-for-sale
financial assets	(		1,695,776)	(		1,574,104)
Accumulated impairment-available-for-sale
financial assets	(		231,723)	(		211,154)
		$	4,720,058		$	5,926,691

A. The Group recognised gain (loss) of $258,085 and ($1,301,081) in other comprehensive income for fair value change and reclassified $237,375 and $181,351 from equity to profit or loss for the years ended December 31, 2017 and 2016, respectively.
B. At period end,there was a significant decline in the fair value of equity investments held by the Group below its original cost. Accordingly, the Group recognised impairment loss of $647,304 and $108,693 for the years ended December 31, 2017 and 2016, respectively.
C. As of December 31, 2017 and 2016, the Group has no available-for-sale financial assets pledged to others.

(4) Financial assets measured at cost

		December	31,2017		December	31,2016
Non-current items:
Unlisted stocks		$	1,181,036		$	1,131,150
Accumulated impairment - financial assets
measured at cost	(		33,364)	(		17,871)
		$	1,147,672		$	1,113,279

A. Based on the Group’s intention, its stock investments should be classified as available-for-sale financial assets. However, as those stocks are not traded in active market, and sufficient industry information of companies similar to stocks investment companies and their financial information cannot be obtained, the fair value of the stock investments cannot be measured reliably. Accordingly, the Group classified those stocks as financial assets measured at cost.
B. At period end, there was a significant decline in the net value of stock investment held by the Group below its original cost. For the years ended December 31, 2017 and 2016, the Group recognised impairment loss amounting to $15,161 and $0, respectively.

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(5) Hedge accounting

Hedge accounting
Items Current items: Cash flow hedges using forward foreign exchange contracts	December31,2017 Assets(Liabilities),net 7,061 $	December31,2016
		Assets(Liabilities),net
		7,708 $

A. The Group entered into derivative financial instruments contracts with financial institutions with good credit quality.
B. Cash flow hedges

Cash flow hedges
December 31, 2017 December 31, 2016	Hedged items	Derivative instruments designated as hedges Forward foreign exchange contracts Forward foreign exchange contracts	Designated as hedging instruments Fairvalue 7,061 $ 7,708 $	Period of anticipated cash flow 2017.9.30 ~2018.3.31 2016.11.23 ~2017.6.14	Period of gain (loss) expected to be recognised in profit or loss
	Accounts payable in foreign currency Accounts payable in foreign currency				2017.9.30 ~2018.3.31 2016.11.23 ~2017.6.14

(a) The hedged highly probable forecast transactions denominated in foreign currency are expected to occur during the next 12 months. Amounts accumulated in other comprehensive income as of December 31, 2017 and 2016 are recycled into profit or loss in the period or periods when the hedged item affects profit or loss.
(b) Information about gain or loss arising from cash flow hedges recognised in profit or loss and other comprehensive income:

other comprehensive income:
		Years ended	December31,
Items		2017	2016
Amount of gain or loss adjusted in other
comprehensive income	($	647)	$	7,708

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C. Hedges of net investments in foreign operations

Designated as hedging instruments

Hedgeditems Net investments in foreign operations "	Derivative instruments designated ashedges Borrowing in US dollars Borrowing in Euro	Fairvalue	Fairvalue
		December 31, 2017 1,339,199 $ 426,840 1,766,039 $	December 31, 2016
			1,612,500 $ 542,399
			2,154,899 $

On December 31, 2017 and 2016, the Group designated a portion of its US dollar and Euro denominated borrowings amounting to $1,339,199 (USD 45 million), $426,840 (EUR 12 million) and $1,612,500 (USD 50 million), $542,399 (EUR 16 million) to hedge its net investment in the Group’s foreign operations, respectively. The fair value of this portion of borrowings at December 31, 2017 and 2016 was $1,766,039 and $2,154,899, respectively. The foreign exchange gain of $32,917 and $49,599 on translation of this portion of borrowing to NTD currency for the years ended December 31, 2017 and 2016 was recognised in other comprehensive income, respectively.

(6) Accounts receivable and overdue receivables

Accounts receivable and overdue receivables
		December31,2017			December31,2016
Accounts receivable		$	50,549,708		$	47,663,586
Less: Allowance for doubtful accounts	(		1,166,495)	(		907,072)
			49,383,213			46,756,514
Overdue receivables (shown as other non-current
assets)			238,283			256,516
Less: Allowance for doubtful accounts	(		238,283)	(		256,516)
		$	49,383,213		$	46,756,514

A. The Group took out a credit insurance on the accounts receivable from certain main customers, whereby 90% of the receivable amount can be covered when the receivables are uncollectible.
B. The aging analysis of accounts receivable that were past due but not impaired is as follows:

Up to 90 days 91 to 180 days 181 to 365 days Over 365 days	December31,2017 3,443,039 $ 214,089 243,603 166,400 4,067,131 $	December31,2016
		2,501,653 $ 314,154 232,110 175,519
		3,223,436 $

The above aging analysis was based on past due date.

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

						2017
			Individual			Group
			provision			provision			Total
At January 1		$	256,516		$	907,072		$	1,163,588
Acquired from business
combinations			50,626			63,288			113,914
Provision for (reversal of)
impairment	(		13,227)			388,392			375,165
Write-offs during the
year	(		21,948)	(		162,675)	(		184,623)
Net exchange differences	(		33,684)	(		29,582)	(		63,266)
At December 31		$	238,283		$	1,166,495		$	1,404,778
						2016
			Individual			Group
			provision			provision			Total
At January 1		$	168,850		$	1,088,718		$	1,257,568
Acquired from business
combinations			-			1,833			1,833
Provision for impairment			117,125			5,961			123,086
Write-offs during the
year	(		17,532)	(		122,376)	(		139,908)
Net exchange differences	(		11,927)	(		67,064)	(		78,991)
At December 31		$	256,516		$	907,072		$	1,163,588

D. 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	December31,2017 22,112,811 $ 23,203,271 45,316,082 $	December31,2016
		23,999,392 $ 19,533,686
		43,533,078 $

Group 1: Medium to low risk customers: These customers include large enterprise groups which are operating well, and in which financial transparency is high and approved by the headquarters’ credit controller as well as government and educational institutions.

Group 2: Normal risk customers: Customers other than the medium to low risk customers.

(7) Transfer of financial assets

The Group entered into a factoring agreement with financial institutions to sell its accounts receivable. Under the agreement, the Group is not required to bear the default risk of the accounts receivable and the percentage of advance payments is zero, but is liable for the losses incurred on any business

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dispute. As of December 31, 2017 and 2016, the relevant information of unsettled accounts receivable that were sold is set forth below:

		December31,	2017
Purchaser of accounts receivable Taishin International Bank	Accounts receivable transferred 150,152 $	Amount derecognised - $ December31,	Facilities 297,600 $ 2016	Amount advanced - $	Interest rate of amount advanced
					- $
Inventories The Group recognised as expense or loss: Purchaser of Accounts Interest rate accounts receivable Amount Amount of amount receivable transferred derecognised Facilities advanced advanced Taishin International Bank 283,393 $ - $ 322,500 $ - $ - $ Allowance for Cost valuation loss Bookvalue Raw materials 9,430,769 $ 1,342,968) ($ 8,087,801 $ Work in process 2,436,778 - 2,436,778 Finished goods 22,034,497 2,168,107) ( 19,866,390 Inventory in transit 434,433 - 434,433 34,336,477 $ 3,511,075) ($ 30,825,402 $ Allowance for Cost valuation loss Bookvalue Raw materials 8,715,481 $ 1,219,489) ($ 7,495,992 $ Work in process 2,206,661 - 2,206,661 Finished goods 17,860,446 1,737,711) ( 16,122,735 Inventory in transit 127,794 - 127,794 28,910,382 $ 2,957,200) ($ 25,953,182 $ December31,2017 December31,2016 2017 2016 Cost of goods sold 158,350,323 $ 150,641,062 $ Loss on market value decline and obsolete and slow-moving inventories 707,883 575,604 Others 433,353) ( 408,245) ( 158,624,853 $ 150,808,421 $ Years endedDecember31,		Amount derecognised - $	Amount Facilities advanced 322,500 $ - $ December31,2017		Interest rate of amount advanced

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(9) Investments accounted for under the equity method

A. Details of investments accounted for under the equity method are set forth below:

Name Ownership % of associates (Note) Bookvalue Delta Electronics (Thailand) Public Co., Ltd. (DET) 20.93 7,418,365 $ Optovue, Inc. 23.21 777,126 Digital Projection International Ltd. (DPI) 41.00 190,787 Others 48,241 8,434,519 $ December31,2017	December31,2016	December31,2016
	Ownership % (Note) 20.93 24.07 41.00	Bookvalue
		7,084,482 $ 894,560 294,265 46,255
		8,319,562 $

Note: The shareholding ratio in associates represent the ratio of common shares held by the Group.
B. Share of profit (loss) of associates accounted for under the equity method are set forth below:

				Years ended	December31,
	Name of associates			2017	2016
DET			$	817,150	1,012,792 $
Others		(		102,331)	86,117) (
			$	714,819	926,675 $

C. The financial statements of investments using equity method were reviewed by other independent accountants. Share of other comprehensive income of associates of $923,720 and $909,301 for the years ended December 31, 2017 and 2016, respectively, and investments accounted for under equity method was $7,418,365 and $7,084,482 as of December 31, 2017 and 2016, respectively.
D. The summarised financial information of the associates that are material to the Group is shown below:

	Principal place December 31, December 31, Companyname ofbusiness 2017 2016 DET Thailand 20.93% 20.93% Shareholdingratio (Note)	Nature of relationship Holds more than 20% of voting rights	Method of measurement
			Equity method

Note: The shareholding ratio in associates represent the ratio of common shares held by the Group.

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Balance sheet			DET	DET
		December31,2017		December31,2016
Current assets		$	33,541,968	$	35,230,192
Non-current assets			8,809,093		6,688,743
Current liabilities	(		10,860,891)	(	11,223,876)
Non-current liabilities	(		1,692,283)	(	1,833,622)
Total net assets		$	29,797,887	$	28,861,437
Share in associate’s net assets		$	6,236,698	$	6,040,699
Unrealised upstream and sidestream
transactions	(		110,193)	(	44,555)
Others			1,291,860		1,088,338
Carrying amount of the associate		$	7,418,365	$	7,084,482
Statement of comprehensive income			DET
			Years ended	December31,
			2017		2016
Revenue		$	44,900,209	$	43,343,677
Profit for the year from continuing operations		$	4,398,990	$	5,017,576
Loss attributable to non-controlling interests		(	1,912)		-
Other comprehensive income (loss), net of tax			341,519	(	287,505)
Total comprehensive income		$	4,738,597	$	4,730,071
Dividends received from associates		$	684,591	$	739,303

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

As of December 31, 2017 and 2016, the carrying amount of the Group’s individually immaterial associates amounted to $1,016,154 and $1,235,080, respectively.

		Years ended	December31,	December31,
		2017		2016
Loss for the year from continuing operations	($	101,420)	($	86,117)
Other comprehensive loss, net of tax	(	18,307)	(	16,197)
Total comprehensive loss	($	119,727)	($	102,314)

F. The Group’s investment in DET has quoted market price. The fair value of DET as of December 31, 2017 and 2016 was $17,550,474 and $19,259,012, respectively.

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(10) Property, plant and equipment

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Unfinished
construction
Buildings and Machinery and Testing and equipment
At January 1, 2017 Land structures equipment equipment Others under acceptance Total
Cost $ 5,636,920 $ 35,138,305 $ 28,050,052 $ 13,001,329 $ 10,909,238 $ 804,104 $ 93,539,948
Accumulated depreciation and
impairment ( 12,076) ( 11,864,436) ( 21,716,694) ( 10,680,588) ( 8,708,017) - ( 52,981,811)
$ 5,624,844 $ 23,273,869 $ 6,333,358 $ 2,320,741 $ 2,201,221 $ 804,104 $ 40,558,137
2017
Opening net book amount $ 5,624,844 $ 23,273,869 $ 6,333,358 $ 2,320,741 $ 2,201,221 $ 804,104 $ 40,558,137
Additions 178,990 532,797 6,019,728 2,131,405 1,902,183 2,113,567 12,878,670
Acquired through business
combinations 411,854 160,076 3,434 2,766 131,006 436 709,572
Effect of decrease in consolidated
entities ( 3,011) ( 441,348) ( 9,289) - ( 14,800) - ( 468,448)
-
Disposal ( 121) ( 28,006) ( 77,946) ( 43,662) ( 23,703) ( 173,438)
Transfer 38,750 211,236 574,192 227,379 372,574 ( 1,424,131) -
- -
Depreciation charge ( 1,759,794) ( 3,168,147) ( 1,602,138) ( 1,600,045) ( 8,130,124)
Net exchange differences ( 62,593) ( 476,241) ( 156,957) ( 29,951) ( 82,643) ( 227,356) ( 1,035,741)
Closing net book amount $ 6,188,713 $ 21,472,589 $ 9,518,373 $ 3,006,540 $ 2,885,793 $ 1,266,620 $ 44,338,628
At December 31, 2017
Cost $ 6,200,330 $ 34,716,148 $ 32,147,803 $ 14,124,840 $ 12,529,075 $ 1,266,620 $ 100,984,816
Accumulated depreciation and
impairment ( 11,617) ( 13,243,559) ( 22,629,430) ( 11,118,300) ( 9,643,282) - ( 56,646,188)
$ 6,188,713 $ 21,472,589 $ 9,518,373 $ 3,006,540 $ 2,885,793 $ 1,266,620 $ 44,338,628
----- End of picture text -----

~62~

																	Unfinished
																	construction
					Buildings and			Machinery and				Testing				and equipment
At January 1, 2016			Land			structures			equipment			equipment			Others	under acceptance				Total
Cost		$	5,723,429		$	35,443,305		$	29,988,713		$	13,134,317		$	10,872,794	$	984,749		$	96,147,307
Accumulated depreciation and
impairment	(		11,954)	(		10,955,161)	(		23,609,029)	(		10,870,064)	(		8,809,682)		-	(		54,255,890)
		$	5,711,475		$	24,488,144		$	6,379,684		$	2,264,253		$	2,063,112	$	984,749		$	41,891,417
2016
Opening net book amount		$	5,711,475		$	24,488,144		$	6,379,684		$	2,264,253		$	2,063,112	$	984,749		$	41,891,417
Additions			71			906,822			2,872,139			1,303,046			1,308,147		1,688,012			8,078,237
Acquired through business combinations			58,868			171,905			965			69,304			22,610		-			323,652
Disposals	(		83,078)	(		107,962)	(		432,435)	(		5,462)	(		23,670)		-	(		652,607)
Transfer	(		832)			840,667			524,758			146,955			314,281	(	1,825,829)			-
Depreciation charge			-	(		1,798,030)	(		2,646,163)	(		1,295,550)	(		1,403,953)		-	(		7,143,696)
Provision for impairment			-	(		9,973)			-			-			-		-	(		9,973)
Net exchange differences	(		61,660)	(		1,217,704)	(		365,590)	(		161,805)	(		79,306)	(	42,828)	(		1,928,893)
Closing net book amount		$	5,624,844		$	23,273,869		$	6,333,358		$	2,320,741		$	2,201,221	$	804,104		$	40,558,137
At December 31, 2016
Cost		$	5,636,920		$	35,138,305		$	28,050,052		$	13,001,329		$	10,909,238	$	804,104		$	93,539,948
Accumulated depreciation and
impairment	(		12,076)	(		11,864,436)	(		21,716,694)	(		10,680,588)	(		8,708,017)		-	(		52,981,811)
		$	5,624,844		$	23,273,869		$	6,333,358		$	2,320,741		$	2,201,221	$	804,104		$	40,558,137

A. No interest expense was capitalised on property, plant and equipment.
B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

~63~

(11) Investment property

At January 1, 2017
Cost
Accumulated depreciation
and impairment
2017
Opening net book amount
Depreciation charge
Closing net book amount
At December 31, 2017
Cost
Accumulated depreciation
and impairment
At January 1, 2016
Cost
Accumulated depreciation
and impairment
2016
Opening net book amount
Depreciation charge
Closing net book amount
At December 31, 2016
Cost
Accumulated depreciation
and impairment

Buildings and
Land
structures
Total
465,724
$ 4,298,176
$ 4,763,900
$ -
2,839,803)
(
2,839,803)
(
465,724
$ 1,458,373
$ 1,924,097
$ 465,724
$ 1,458,373
$ 1,924,097
$ -
147,686)
(
147,686)
(
465,724
$ 1,310,687
$ 1,776,411
$ 465,724
$ 4,298,176
$ 4,763,900
$ -
2,987,489)
(
2,987,489)
(
465,724
$ 1,310,687
$ 1,776,411
$ Buildings and
Land
structures
Total
465,724
$ 4,321,469
$ 4,787,193
$ -
2,713,545)
(
2,713,545)
(
465,724
$ 1,607,924
$ 2,073,648
$ 465,724
$ 1,607,924
$ 2,073,648
$ -
149,551)
(
149,551)
(
465,724
$ 1,458,373
$ 1,924,097
$ 465,724
$ 4,298,176
$ 4,763,900
$ -
2,839,803)
(
2,839,803)
(
465,724
$ 1,458,373
$ 1,924,097
$

~64~

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

from the investment property are shown below:
Rental revenue from the lease of the investment property Direct operating expenses of investment property that generated rental revenue during the year Direct operating expenses of investment property that did not generate rental revenue during the year	Years endedDecember31,
	2017 34,090 $ 38,160 $ 134,352 $	2016
		105,567 $
		63,906 $
		108,477 $

B. The fair value of the investment property held by the Group as at December 31, 2017 and 2016 was $3,253,316 and $2,498,692, respectively, which was revalued by the Group.

~65~

(12) Intangible assets

												Customer			Technical
At January 1, 2017			Trademarks			Patents			Goodwill			Relationship			Skill			Others			Total
Cost		$	3,089,441		$	1,127,285		$	16,851,610		$	10,070,984		$	3,985,745		$	2,620,949		$	37,746,014
Accumulated amortisation and
impairment	(		407,175)	(		1,021,597)	(		7,291)	(		3,570,182)	(		478,762)	(		1,342,151)	(		6,827,158)
		$	2,682,266		$	105,688		$	16,844,319		$	6,500,802		$	3,506,983		$	1,278,798		$	30,918,856
2017
Opening net book amount		$	2,682,266		$	105,688		$	16,844,319		$	6,500,802		$	3,506,983		$	1,278,798		$	30,918,856
Additions - acquired separately			-			11,187			-			-			-			347,392			358,579
Additions - acquired through business
combinations			-			-			3,791,065			76,551			-			2,430,116			6,297,732
Effect of decrease in consolidated entities			-			-	(		224,856)			-			-	(		1,770)	(		226,626)
Amortisation	(		215,058)	(		15,725)			-	(		978,698)	(		297,794)	(		372,231)	(		1,879,506)
Impairment loss			-			-	(		718)			-			-			-	(		718)
Net exchange differences	(		161,321)			-	(		732,855)	(		376,644)	(		271,891)	(		91,958)	(		1,634,669)
Closing net book amount		$	2,305,887		$	101,150		$	19,676,955		$	5,222,011		$	2,937,298		$	3,590,347		$	33,833,648

At December 31, 2017
Cost		$	2,928,120		$	1,138,472		$	19,684,246		$	9,770,892		$	3,713,854		$	5,304,729		$	42,540,313
Accumulated amortisation and
impairment	(		622,233)	(		1,037,322)	(		7,291)	(		4,548,881)	(		776,556)	(		1,714,382)	(		8,706,665)
		$	2,305,887		$	101,150		$	19,676,955		$	5,222,011		$	2,937,298		$	3,590,347		$	33,833,648

~66~

												Customer			Technical
At January 1, 2016			Trademarks			Patents			Goodwill			Relationship			Skill			Others			Total
Cost		$	2,828,043		$	1,032,543		$	13,043,233		$	8,357,364		$	3,228,348		$	2,331,624		$	30,821,155
Accumulated amortisation and
impairment	(		144,312)	(		1,007,531)	(		7,291)	(		2,609,211)	(		179,353)	(		1,448,531)	(		5,396,229)
		$	2,683,731		$	25,012		$	13,035,942		$	5,748,153		$	3,048,995		$	883,093		$	25,424,926
2016
Opening net book amount		$	2,683,731		$	25,012		$	13,035,942		$	5,748,153		$	3,048,995		$	883,093		$	25,424,926
Additions - acquired separately			-			10,434			-			-			-			210,151			220,585
Additions - acquired through business combinations			261,398			84,308			4,070,131			1,398,583			816,809			1,024,417			7,655,646
Reclassification			-			-	(		21,855)			448,476			-	(		426,621)			-
Amortisation	(		222,982)	(		14,066)			-	(		1,011,786)	(		299,409)	(		291,011)	(		1,839,254)
Net exchange differences	(		39,881)			-	(		239,899)	(		82,624)	(		59,412)	(		121,231)	(		543,047)
Closing net book amount		$	2,682,266		$	105,688		$	16,844,319		$	6,500,802		$	3,506,983		$	1,278,798		$	30,918,856
At December 31, 2016
Cost		$	3,089,441		$	1,127,285		$	16,851,610		$	10,070,984		$	3,985,745		$	2,620,949		$	37,746,014
Accumulated amortisation and
impairment	(		407,175)	(		1,021,597)	(		7,291)	(		3,570,182)	(		478,762)	(		1,342,151)	(		6,827,158)
		$	2,682,266		$	105,688		$	16,844,319		$	6,500,802		$	3,506,983		$	1,278,798		$	30,918,856

~67~

A. Details of amortisation on intangible assets are as follows:

Operating costs Selling expenses Administrative expenses Research and development expenses	Years endedDecember31,	Years endedDecember31,
	2017 9,253 $ 1,226,062 125,848 518,343 1,879,506 $	2016
		8,137 $ 1,161,243 112,633 557,241
		1,839,254 $

B. The Group acquired registered or under-application trademark rights such as ,
, VIVITEK , 麗訊 , , and . Trademarks
registered in certain countries are assessed to have finite useful lives. The remaining trademarks which have indefinite useful lives shall not be amortised but are tested for impairment annually.
C. Goodwill and trademarks with indefinite useful lives are allocated as follows to the Group’s cashgenerating units identified according to operating segment:

Goodwill: Cyntec and its subsidiaries Eltek Vivotek Inc. DCI DGC Loy Tec Others Trademarks: Power electronics business (It belonged to smart green life business before the first quarter of 2017)	December31,2017 December31,2016 5,146,053 $ 5,146,053 $ 5,127,578 5,795,224 3,258,375 - 2,487,777 2,451,714 1,725,415 1,869,771 1,376,514 1,491,679 555,243 89,878 19,676,955 $ 16,844,319 $ 386,823 $ 386,823 $

Acquisition prices in business combination are calculated based on the price of acquisition and direct costs for related acquisition. The amount of goodwill recognised is the difference of the acquisition prices less net fair value of identifiable assets acquired. The amortisation duration of acquisition price may not exceed one year after the acquisition. The Group acquired Vivotek Inc. in October, 2017, and the allocation of acquisition price will be completed within a year.

D. As of December 31, 2017, the Group’s goodwill arose from business combinations amounting to $19,671,955 in order to improve benefit comprising of potential customer relations and operating revenue in the location of acquired companies. Based on IAS 36, goodwill acquired in a business combination should be tested at least annually for impairment. For the impairment testing of goodwill, goodwill acquired in a business combination is allocated to each of the cashgenerating units that are expected to benefit from the synergies of the business combination.

~68~

Each company may be a cash-generating unit which can generate independent cash flows and the impairment of goodwill is calculated based on value in use and carrying amount of net assets of each company.

For the calculated value of share right based on the analysis report issued by experts hired by the merged company when the business combination occurred, the analyzed information of value in use of each company was evaluated based on financial projections of operating revenue by product for each company. The consolidated financial statements would indicate how much of the projected revenues had been achieved based on the financial statements as of December 31, 2017 and 2016.

The recoverable amount of all cash-generating units calculated using the value-in-use exceeded their carrying amount, so goodwill was not impaired. The key assumptions used for value-in-use calculations are operating profit margin growth rate and discount rate.

Management determined budgeted operating profit margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant operating segments.

E. The subsidiary, LOYTEC Asia Corp., Ltd., was liquidated in the fourth quarter of 2017. The Group has assessed and recognised impairment loss on goodwill of $718 for the year ended December 31, 2017.

(13) Non-current assets held for sale

On October 11, 2016, the Group entered into land and building contracts with the counterparty, Dongguan Starry-sky City Investment Co., Ltd., for $473,606 (RMB 100 million). The transfer of ownership has been completed, and gain on disposal of non-current assets classified as held for sale was $373,138.

(14) Other non-current assets

Other non-current assets
Prepayments for long-term investments Long-term prepaid rent Prepayments for business facilities Guarantee deposits paid Cash surrender value of life insurance Others	December31,2017 131,193 $ 1,085,468 759,459 262,902 69,195 438,933 2,747,150 $	December31,2016
		72,323 $ 1,155,734 533,339 275,617 74,281 507,018
		2,618,312 $

(15) Short-term borrowings

Short-term borrowings
Unsecured bank loans Credit lines Interest rate per annum	December31,2017 17,463,509 $ 95,092,313 $ 0.40%~10.00%	December31,2016
		12,539,294 $
		87,147,362 $
		0.40%~17.40%

~69~

As of December 31, 2017, short-term borrowings of $1,766,039 are hedges of net investments in foreign operations. Please refer to Note 6(5)C.

(16) Financial liabilities at fair value through profit or loss

Current item: Valuation adjustment of non-hedging derivatives	December31,2017 9,746 $	December31,2016
		219,490 $

A. The Group recognised net gain (loss) of $210,474 and ($85,246) for the years ended December 31, 2017 and 2016, respectively.
B. The non-hedging derivative instruments transaction and contract information are provided in Note 6(2)C.

- (17) Long term borrowings

Note 6(2)C. Long-term borrowings
Type ofborrowings		December31,2017			December31,2016
Credit loans		$	11,081,754		$	8,561,030
Collateral loans			185,934
Less: Current portion (shown as other current
liabilities)	(		48,752)	(		47,072)
		$	11,218,936		$	8,513,958
Credit lines		$	46,106,721		$	51,396,216
Interest rate per annum			0.35%~6.23%			0.33%~6.00%

A. As of December 31, 2017, the revolving loans of $10,576,000 can be drawn down during the period from June 30, 2017 to August 10, 2019 and are payable before the due date under the agreement.
B. Information in relation to the assets pledged to others as collateral for bank borrowings is provided in Note 8.

(18) Pensions

A. Defined benefit plans

(a) The Group has a defined benefit pension plan as follows:

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 and its domestic subsidiaries contribute 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

~70~

of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is not enough to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contribution for the deficit by next March.

Certain subsidiaries located in Mainland China maintain defined benefit retirement (resignation) plans with relative contribution scheme. The employees and the subsidiaries contribute an amount relatively based on a certain percentage of the monthly basic salary depending on the employee’s position. When an employee retires or resigns, the total contribution from the employee is reimbursed based on the accumulated contribution (without interest) less withdrawals made by the employee in advance during the service period. The employee is also entitled to receive benefits calculated based on the accumulated contribution (without interest) from the related subsidiary multiplied by the approved benefit percentage for the employee’s service years less withdrawals made by the employee in advance during the service period. The scheme mentioned above ceased on August 1, 2004. The amount contributed before was archived, and the payment scheme was not changed.

(b) The amounts recognised in the balance sheet are as follows:

	December	31,2017	December	31,2016
Present value of defined benefit obligations	($	4,213,525)	($	4,162,664)
Fair value of plan assets		1,360,130		1,260,045
Net defined benefit liability	($	2,853,395)	($	2,902,619)

~71~

(c) Movements in net defined benefit liabilities are as follows:

		Present value of
		defined benefit			Fair value of		Net defined
		obligations			plan assets	benefit liability
Year ended December 31, 2017
Balance at January 1	($	4,162,664)	$		1,260,045	($	2,902,619)
Current service cost	(	38,942)			-	(	38,942)
Interest (expense) revenue	(	67,609)			18,939	(	48,670)
Past service cost		16,949			-		16,949
	(	4,252,266)			1,278,984	(	2,973,282)
Remeasurements:
Return on plan assets (excluding amounts
included in interest income or expense)		-	(		8,625)	(	8,625)
Change in demographic assumptions	(	4,754)			-	(	4,754)
Change in financial assumptions	(	93,355)			-	(	93,355)
Experience adjustments	(	61,142)			-	(	61,142)
	(	159,251)	(		8,625)	(	167,876)
Pension fund contribution		-			219,368		219,368
Paid pension		212,522	(		154,017)		58,505
Exchange difference		40,888			-		40,888
Effect of business combination	(	55,418)			24,420	(	30,998)
Balance at December 31	($	4,213,525)	$		1,360,130	($	2,853,395)
		Present value of
		defined benefit			Fair value of		Net defined
		obligations			plan assets		benefit liability
Year ended December 31, 2016
Balance at January 1	($	4,268,432)		$	634,444	($	3,633,988)
Current service cost	(	44,622)			-	(	44,622)
Interest (expense) revenue	(	69,202)			9,349	(	59,853)
Past service cost		2,620			-		2,620
Profit arising from curtailment		2,792			-		2,792
	(	4,376,844)			643,793	(	3,733,051)
Remeasurements:
Return on plan assets (excluding amounts
included in interest income or expense)		-			993		993
Change in demographic assumptions	(	15,592)			-	(	15,592)
Change in financial assumptions	(	1,296)			-	(	1,296)
Experience adjustments		25,270			-		25,270
		8,382			993		9,375
Pension fund contribution		-			739,640		739,640
Paid pension		188,277	(		124,381)		63,896
Exchange difference		17,521			-		17,521
Balance at December 31	($	4,162,664)		$	1,260,045	($	2,902,619)

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic

~72~

subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2017 and 2016 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	Years endedDecember31,	Years endedDecember31,
	2017 1.25%~4.25% 3%~3.5%	2016
		1.5%~3.5%
		3%~3.5%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in each territory.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis is as follows:

Increase0.25% Decrease0.25% December 31, 2017 Effect on present value of defined benefit obligation 124,600) ($ 129,898 $ December 31, 2016 Effect on present value of defined benefit obligation 127,832) ($ 133,438 $ Discount rate	Increase0.25% Decrease0.25% 119,042 $ 114,864) ($ 131,524 $ 125,196) ($ Future salaryincreases

The sensitivity analysis above was arrived at based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

(f) Expected contributions to the defined benefit pension plans of the Group within one year

~73~

from December 31, 2017 are $54,866.

(g) As of December 31, 2017, the weighted average duration of that retirement plan is 11~20 years.

The analysis of timing of the future pension payment was as follows:

Within 1 year 1-2 year(s) 2-5 years Over 5 years	139,919 $ 155,755 600,540 4,690,463
	5,586,677 $

B. Defined contribution plans

(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, covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under the defined contribution pension plans of the Company and its domestic subsidiaries for the years ended December 31, 2017 and 2016 were $351,193 and $313,021, respectively.
(b) Other overseas companies have defined contribution plans in accordance with the local regulations.

(19) Share capital

A. In accordance with the Company’s Articles of Incorporation, the total authorised common stock is 4 billion shares (including 100 million shares for stock warrants conversion). As of December 31, 2017, the total issued and outstanding common stock was 2,597,543 thousand shares with par value of $10 (in dollars) per share.
B. On December 20, 2004, the Board of Directors of the Company adopted a resolution that allowed certain stockholders to issue 16 million units of global depository receipts (GDRs), represented by 80 million shares of common stock (Deposited Shares), with one unit of GDR representing 5 shares of common stock. After obtaining approval from SFB, these GDRs were listed on the Securities Exchange of Luxembourg, with total proceeds of US$134,666 thousand. The issuance of GDRs was represented by outstanding shares, therefore, there is no dilutive effect on the common shares’ equity. The main terms and conditions of the GDRs are as follows:

(a) Voting rights

GDR holders may, pursuant to the Depositary Agreement and the relevant laws and regulations of the R.O.C., exercise the voting rights pertaining to the underlying common shares represented by the GDRs.

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(b) Redemption of GDRs

For sales and redemption of the underlying common shares represented by the GDRs when the holders of the GDRs request the Depositary to redeem the GDRs in accordance with the relevant R.O.C. regulations and the provisions in the Depositary Agreement, the Depositary may (i) deliver the underlying common shares represented by the GDRs to the GDR holders, or (ii) sell the underlying common shares represented by the GDRs in the R.O.C. stock market on behalf of the GDR holder. The payment of proceeds from such sale shall be made subject to the relevant R.O.C. laws and regulations and the provisions in the Depositary Agreement.

Distribution of dividends, preemptive rights and other rights and interests of GDR units bear the same rights as common shares.

(d) After considering the stock dividend distribution year by year, as of December 31, 2017, there were 2,343 thousand units outstanding, representing 11,715 thousand common shares of the Company’s common stock.

(20) 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.

(21) Retained earnings

A. Under the Company’s Articles of Incorporation approved by the shareholders on June 8, 2016, the current year’s earnings, if any, shall be distributed in the following order:
(a) Payment of all taxes and dues.
(b) Offset against prior years’ operating losses, if any.
(c) Set aside 10% of the remaining amount as legal reserve, unless the accumulated amount of the legal reserve has reached the total authorized capital of the Company.
(d) Setting aside or reversing a special reserve according to relevant regulations when necessary.
(e) The remainder along with beginning unappropriated earnings shall be stockholders’ bonus. The appropriation of earnings shall be proposed by the Board of Directors and resolved by the shareholders. As the Company is in the growth stage, and taking into consideration the shareholders’ benefits, financial health and business development, the amount of bonus distributed to shareholders shall be no less than 60% of the distributable earnings for the current period. Cash dividends shall be at least 15% of the bonus distributed to shareholders.
B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in

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proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

C. (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.
D. The appropriations of 2016 and 2015 earnings had been approved by the shareholders during their meeting on June 13, 2017 and June 8, 2016, respectively. Details are summarised below:

Years endedDecember31,	Years endedDecember31,	Years endedDecember31,
Dividends per share Amount (indollars) 1,879,780 $ 2,240,193 12,987,717 5.0 $ 2016	2015
Amount 1,879,780 $ 2,240,193 12,987,717	Amount 1,871,462 $ 527,556 12,987,717	Dividends per share (indollars)
		5.0 $

E. The appropriations of 2017 earnings had been proposed by the Board of Directors on March 8, 2018. Details are summarised below:

2018. Details are summarised below:
Appropriation for legal reserve Appropriation for special reserve Cash dividends	2017
	Amount 1,838,056 $ 4,320,394 12,987,717	Dividends per share (indollars)
		5.0 $

As of March 8, 2018, the abovementioned 2017 earnings appropriation has not yet been approved by the stockholders.

F. For the information relating to employees’ compensation and directors’ remuneration, please refer to Note 6(29).

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(22) Non-controlling interest

Non-controlling interest
			Years ended	December31,
			2017		2016
At January 1		$	4,894,440	$	5,182,622
Share attributable to non-controlling interest:
Profit for the year			376,400		462,183
Currency translation differences	(		205,798)	(	243,358)
Dividends paid to minority interest	(		315,485)	(	225,604)
Increase in non-controlling interest (Note 1)			4,466,948		498,901
Decrease in non-controlling interest (Note 2)			-	(	780,304)
At December 31		$	9,216,505	$	4,894,440

(Note 1) The increase in non-controlling interest mainly arises from the acquisitions of share capital of DES, Delta Greentech Electronics Industry LLC and Vivotek Inc. in 2017, and the acquisitions of share capital of Power Forest Technology Corporation and Loy Tec in 2016.

(Note 2) It was caused by the acquisition of a 49.79% non-controlling interest of DAL in 2016.

(23) Operating revenue

Operating revenue
Sales revenue Service revenue Other operating revenue	Years endedDecember31,
	2017 217,443,508 $ 3,018,173 3,115,833 223,577,514 $	2016
		209,591,547 $ 2,439,269 2,324,755
		214,355,571 $

(24) Operating cost

Operating cost
Cost of sales Cost of services Other operating cost	Years endedDecember31,
	2017 158,624,853 $ 2,350,396 1,833,991 162,809,240 $	2016
		150,808,421 $ 2,311,322 1,742,097
		154,861,840 $

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(25) Other income

Other income
Interest income Rental income Dividend income Others	Years endedDecember31,
	2017 632,353 $ 92,768 152,687 3,006,694 3,884,502 $	2016
		623,297 $ 196,015 136,534 3,076,659
		4,032,505 $

(26) Other gains and losses

Other gains and losses
		Years ended	December31,
		2017			2016
Net currency exchange (loss) gain	($	21,904)		$	229,912
Gain (loss) on financial assets / liabilities at fair
value through profit or loss		255,740	(		176,974)
Gain on disposal of property, plant and equipment		100,584			145,171
Gain on disposal of non-current assets classified
as held for sale		373,138			-
Gain on disposal of investments		338,087			212,799
Miscellaneous disbursements	(	578,430)	(		839,001)
Impairment loss	(	663,183)	(		183,150)
	($	195,968)	($		611,243)

(27) Finance costs

Finance costs
Expenses by nature Interest expense Employee benefit expense Depreciation charges on property, plant and equipment Amortisation charges on intangible assets	Years ended
	2017 41,085,372 $ 8,130,124 1,879,506 51,095,002 $	2016
		37,467,630 $ 7,143,696 1,839,254
		46,450,580 $

(28) Expenses by nature

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(29) Employee benefit expense

Employee benefit expense
Post-employment benefit Defined contribution plans Defined benefit plans Other employee benefits	Years endedDecember31,
	2017 593,874 $ 70,663 664,537 40,420,835 41,085,372 $	2016
		402,037 $ 99,063
		501,100
		36,966,530
		37,467,630 $

A. According to the Articles of Incorporation of the Company, a ratio of profit of the current year distributable, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 3% for employees’ compensation and shall not be higher than 1% for directors’ remuneration.
B. For the years ended December 31, 2017 and 2016, employees’ compensation was accrued at $2,277,777 and $3,454,571, respectively; while directors’ remuneration was accrued at $35,400 and $32,904, respectively. The aforementioned amounts were recognised in salary expenses.

For the years ended December 31, 2017, the employees’ compensation and directors’ remuneration were estimated and accrued based on profit of current year distributable as of the end of reporting period as prescribed by the Company’s Articles of Incorporation.

The employees’ compensation of $1,746,152 and directors’ remuneration of $35,400 for 2017 were resolved by the Board of Directors on March 8, 2018.

The employees’ compensation and directors’ remuneration for 2016 resolved by the Board of Directors were $2,631,691 and $35,400, respectively, which were $0 and $2,496 less than those amounts recognised in the current financial statements, respectively. The differences had been adjusted and recognised in 2017.

Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors and shareholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(30) Income tax

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

e tax ome tax expense Components of income tax expense:
			Years ended	December31,
			2017		2016
Current tax:
Current tax on profits for the year		$	5,170,284	$	3,730,502
Prior year income tax overestimation	(		336,403)	(	116,288)
Additional 10% income tax on
undistributed surplus earnings			178,342		381,377
Total current tax			5,012,223		3,995,591
Deferred tax:
Origination and reversal of temporary
differences			788		1,505,944
Impact of change in tax rate			28,317		28,444
Total deferred tax			29,105		1,534,388
		$	5,041,328	$	5,529,979

(b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

follows:
		Years ended	December31,
		2017		2016
Gain (losses) on remeasurements of defined
benefit obligations	$	25,631	($	910)
Cash flow hedges	(	5,486)	(	9,742)
Currency translation differences		528,003		734,950
	$	548,148	$	724,298

B. Reconciliation between income tax expense and accounting profit:

			Years ended	December31,	December31,
			2017		2016
Tax calculated based on profit before tax and
statutory tax rate		$	6,934,002	$	7,135,502
Effect from items disallowed by tax regulation	(		1,277,281)	(	1,490,337)
Tax exempt income by tax regulation			-	(	3,095)
Effect from investment tax credits	(		499,411)	(	406,645)
Effect from taxable loss			32,577		10,444
Prior year income tax overestimation	(		336,403)	(	116,288)
Effect from Alternative Minimum Tax			9,502		19,021
Tax on undistributed earnings			178,342		381,377
Tax expenses		$	5,041,328	$	5,529,979

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C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

									2017
								Recognised in other
					Recognised in				comprehensive			Recognised			Business
			January1			profit or loss			income			in equity			combination			December31
Deferred tax assets:
-Temporary differences:
Allowance for inventory
obsolescence		$	484,560		$	60,583		$	-		$	-		$	14,543		$	559,686
Pension liability			448,589	(		64,704)			25,631			-			5,479			414,995
Assets impairment			214,612			92,718			-			-			-			307,330
Tax losses			574,196	(		244,075)			-			-			156,159			486,280
Depreciation difference between
tax and financial basis			1,703,525	(		55,328)			-			-			-			1,648,197
Others			1,908,556			443,866			-			-			67,685			2,420,107
			5,334,038			233,060			25,631			-			243,866			5,836,595
Deferred tax liabilities:
-Temporary differences:
Long-term equity investments	(		10,053,509)	(		484,429)			528,003	(		666)	(		350)	(		10,010,951)
Land revaluation increment tax	(		119,862)			-			-			-			-	(		119,862)
Others	(		2,213,288)			250,581	(		5,486)			-	(		4,393)	(		1,972,586)
	(		12,386,659)	(		233,848)			522,517	(		666)	(		4,743)	(		12,103,399)
	($		7,052,621)	($		788)		$	548,148	($		666)		$	239,123	($		6,266,804)

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									2016	2016
								Recognised in other
					Recognised in				comprehensive				Recognised			Business
			January1			profit or loss			income				in equity			combination			December31
Deferred tax assets:
-Temporary differences:
Allowance for inventory
obsolescence		$	445,168		$	39,269		$		-		$	-		$	123		$	484,560
Investments tax credits			8,436	(		8,436)				-			-			-			-
Pension liability			598,907	(		149,408)	(		910)				-			-			448,589
Assets impairment			246,931	(		32,319)				-			-			-			214,612
Tax losses			704,364	(		132,295)				-			-			2,127			574,196
Depreciation difference between
tax and financial basis			1,772,599	(		69,074)				-			-			-			1,703,525
Others			1,886,822			21,734				-			-			-			1,908,556
			5,663,227	(		330,529)	(		910)				-			2,250			5,334,038
Deferred tax liabilities:
-Temporary differences:
Long-term equity investments	(		9,882,100)	(		881,706)			734,950		(		24,653)			-	(		10,053,509)
Land revaluation increment tax	(		119,862)			-				-			-			-	(		119,862)
Others	(		1,713,070)	(		293,709)	(		9,742)				-	(		196,767)	(		2,213,288)
	(		11,715,032)	(		1,175,415)			725,208		(		24,653)	(		196,767)	(		12,386,659)
	($		6,051,805)	($		1,505,944)		$	724,298		($		24,653)	($		194,517)	($		7,052,621)

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D. Expiration dates of unused net operating loss carryforward and amounts of unrecognised deferred tax assets are as follows:

December 31, 2017

	December31,2017	December31,2017
Year incurred 2003-2017	Amount filed / assessed Unused amount 9,045,715 $ 8,988,329 $ December31,2016		Unrecognised deferred tax assets 8,222,272 $	Usable until year
				2035
Year incurred 2007-2016	Amount filed / assessed 11,958,542 $	Unused amount 11,870,620 $	Unrecognised deferred taxassets 9,237,077 $	Usable until year
				2028

E. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

are as follows:
Deductible temporary differences	December31,2017 443,831 $	December31,2016
		352,717 $

F. The Group has not recognised taxable temporary differences associated with investment in subsidiaries as deferred tax liabilities. As of December 31, 2017 and 2016, the amounts of temporary differences unrecognised as deferred tax liabilities were $6,969,342 and $6,907,483, respectively.
G. The status of the Company and its domestic subsidiaries’ assessed and approved income tax returns are as follows:

returns are as follows:
Cyntec, DNIT and UNICOM SYSTEM ENG. CORP. The Company, NEM, AMT, Delta Capital, DGL, Power Forest Technology Corporation, Vivotek Inc., Vatics Inc., Realwin Investment Inc., Otus Imaging, Inc., Aetek Inc. and DelBio	Latest year assessed by Tax Authority
	2014 2015

Lidlight Inc.

It is newly established in 2017, which has not yet been assessed by the Tax Authority.

H. With the abolishment of the imputation tax system under the amendments to the Income Tax Act promulgated by the President of the Republic of China in February, 2018, the information on unappropriated retained earnings and the balance of the imputation credit account as of December 31, 2017, as well as the estimated creditable tax rate for the year ended December 31, 2017 is no longer disclosed.

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Unappropriated retained earnings on December 31, 2016:

Unappropriated retained earnings on December 31, 2016:
Earnings generated in and before 1997 Earnings generated in and after 1998	December31,2016
	- $ 31,915,572
	31,915,572 $

I. As of December 31, 2016, the balance of the imputation tax credit account was $1,005,087. The creditable tax rate was 1.56% for the year ended December 31, 2016.

(31) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares: Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	YearendedDecember31,2017
	Weighted average number of ordinary shares Amount outstanding aftertax (sharesinthousands) 18,380,552 $ 2,597,543 18,380,552 $ 2,597,543 - 20,412 18,380,552 $ 2,617,955	Earnings per share (indollars)
		7.08 $
		7.02 $

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Year ended December 31, 2016

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares: Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Weighted average number of ordinary shares Amount outstanding aftertax (sharesinthousands) 18,797,799 $ 2,597,543 18,797,799 $ 2,597,543 - 25,335 18,797,799 $ 2,622,878	Earnings per share (indollars)
		7.24 $
		7.17 $

(32) Transactions with non-controlling interest

On October 3, 2016, the Group indirectly acquired 49.79% issued shares of DAL for cash of $873,505 through a subsidiary, DEN. The details of the transaction which had an impact on equity attributable to owners of parent are as follows:

attributable to owners of parent are as follows:
		YearendedDecember31,2016
Carrying amount of non-controlling interest acquired		$	993,871
Consideration paid to non-controlling interest	(		873,505)
Difference between consideration and carrying
amount of subsidiaries acquired or disposed		$	120,366
Increase in capital surplus contributed to:
Owners of the parent		$	120,366

(33) Business combinations

A. Business combination transactions of the Group for the years ended December 31, 2017 and 2016 are as follows:

(a) In January 2017, the Group acquired 100% share ownership of UNICOM SYSTEM ENG. CORP. for cash of $351,014. In the third quarter, the acquisition price decreased by $9,320 based on the adjustment rule in the contract.

(b) In April 2017, the Group acquired 51% of the share capital of DES, acquired 100% of the share capital of DGB, acquired 51% of share capital of Delta Greentech Electronics Industry

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LLC, and acquired 100% of share capital of DGA for a total amount of $755,090 (approximately US$24,850 thousand).

(c) On October 2, 2017, the Group publicly acquired 49.22% share ownership of Vivotek Inc. for cash of $3,945,583, and the allocation of acquisition price will be completed within a year.
(d) On January 12, 2016, the Group acquired 38.81% of the share capital of Power Forest Technology Corporation for a total amount of $123,793, and acquired 21.21% of the share capital of Power Forest Technology Corporation for a total amount of $55,368 in 2015. The Group acquired a total of 60.02% of the share capital of Power Forest Technology Corporation for a total amount of $179,161.
(e) On April 28, 2016, the Group acquired 85% of the share capital of Loy Tec and INNOCONTROL for a total amount of $2,229,415 (approximately EUR $61,200 thousand).
(e) The Group acquired Delta Controls Inc.’s building automation system operating segment’s assets for a cash consideration of $5,480,200 (approximately CAD 220 million) through its subsidiary, 0172043 B.C. Ltd. (name was changed to Delta Controls Inc.) on July 11, 2016.
(g) On December 15, 2016, the Group acquired 100% share ownership of AGEMA SYSTEMS, INC. for cash of $20,972 (US$658 thousand).
B. Consideration paid for acquisition of the abovementioned subsidiaries and fair value information of assets acquired and liabilities assumed from the acquisition on the acquisition date are as follows:

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		December	31,2017		December	31,2016
Purchase consideration
Cash		$	5,042,367		$	7,909,748
Fair value of equity interest in the acquired
companies held by the Company and
subsidiaries before the business combination			-			1,095
Non-controlling interest’s proportionate share
of the recognised amounts of acquiree’s
identifiable net assets			4,466,948			498,901
			9,509,315			8,409,744
Fair value of the identifiable assets
acquired and liabilities assumed
Cash			1,984,105			122,310
Other current assets			3,916,309			795,058
Investments accounted for using equity
method			1,196			2,368
Property, plant and equipment			709,572			323,652
Intangible assets			2,506,667			3,585,515
Deferred tax assets			243,866			2,250
Other non-current assets			97,720			1,440
Current liabilities	(		3,187,761)	(		264,443)
Non-current liabilities	(		443,243)	(		31,770)
Deferred tax liabilities	(		4,743)	(		196,767)
Minority interest	(		105,438)			-
Total identifiable net assets			5,718,250			4,339,613
Goodwill		$	3,791,065		$	4,070,131

C. Starting from the acquisition of share ownership in the abovementioned subsidiaries, the operating revenue and loss before tax included in the consolidated statements of comprehensive income (loss) and contributed by those companies amounted to $6,667,581 and $305,832 for the year ended December 31, 2017, respectively. Had those companies been consolidated from January 1, 2016, the consolidated statement of comprehensive income would show operating revenue and profit before income tax as follows:

revenue and profit before income tax as follows:
Operating revenue Profit before income tax	Years endedDecember31,
	2017 229,220,959 $ 24,132,567	2016
		225,784,507 $ 25,431,081

(34) Supplemental cash flow information

The Group sold 100% of shares in the subsidiary-Eltek s.r.o in April 2017, and therefore lost control over the subsidiary (please refer to Note 4(3) B. No. 8). The details of the consideration received from the transaction (including cash and cash equivalents) and assets and liabilities relating to the subsidiary are as follows:

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			April 1,2017
Consideration received
Cash		$	668,490
Total consideration			668,490
Carrying amount of the assets and liabilities of the subsidiary -
Eltek s.r.o.
Cash			35,480
Accounts receivable			22,882
Accounts receivable due from related parties			98,412
Inventories			195,628
Prepayments			161,308
Other current assets			114
Deferred income tax assets			76,806
Property, plant and equipment			468,448
Intangible assets			226,626
Other non-current assets			2,523
Accounts payable	(		143,383)
Accounts payable to related parties	(		69,612)
Other payables	(		431,753)
Current income tax liabilities	(		244)
Other current liabilities	(		3,992)
Deferred income tax liabilities	(		86,267)
Total net assets		$	552,976

For information of the deferred gain on disposal of subsidiary, Eltek s.r.o of 20.01%, please refer to Note 6(9) D.

(35) Share-based payment

A. For the year ended December 31, 2017, the Group’s share-based payment arrangements were as follows:

follows:
Type ofarrangement Grant date Vatics Inc. - Employee stock options 2016.11.8 Vivotek Inc. - Plan of restricted stocks to employees 2017.11.20 Power Forest - Employee stock options 2017.3.3	Quantity granted 1,000,000 2,116,000 700,000	Contract period 3 years 2 years 6 years	Vesting conditions
			1 year’s service: 40% vested 2 years’ service: 70% vested 3 years’ service: 100% vested 1~3 years' service 1~2 years’ performance

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B. Details of the share-based payment arrangements are as follows:
(a) Employee share options

Employee share options
			2017
					Weighted-average
			No. of		exercise price
			options		(indollars)
Options outstanding opening balance at
January 1			-	$	-
Acquired from business combinations			1,838,000		16.50
Options granted			1,000,000		15.00
Options forfeited	(		96,000)		14.51
Options outstanding at December 31			2,742,000		15.95
Options exercisable at December 31			871,000		16.50
Restricted stocks to employees
			2017		2016
			No. of shares		No. of shares
January 1		$	-	$	-
Issued during the year			700,000		-
December 31		$	700,000	$	-

(b) Restricted stocks to employees
C. The expiry date and exercise price of stock options outstanding at balance sheet date are as follows:

ollows:
Issue date approved March 3, 2017 November 8, 2016	Expiry date March 2, 2023 November 8, 2019	December	31,2017
		No. ofshares 1,000,000 1,742,000	Exercise price (indollars)
			15.00 $ 16.50

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

Type of Grant Stock price Exercise price Expected price arrangement date (in dollars) (in dollars) volatility Power Forest- Employee stock options 2017.3.3 18.38 15.00 32.08%~ 33.22% (Note) Vatics Inc.- Employee stock options 2016.11.8 14.60 16.50 36.37%~ 37.25% (Note) Vivotek Inc.- Plan of restricted stocks to employees 2017.11.20 97.20 - Not applicable	Expected option Expected Risk-free interest Fair value per unit life dividends rate (in dollars) 3.5~4.5 5% 0.79%~ 0.88% 4.0053~ 4.0960 2.5~3.5 0% 0.57%~ 0.67% 2.7995~ 3.3727 1~2 Not applicable Not applicable 97.2000

Note: Expected price volatility rate was estimated by using the stock prices of the most recent period with length of this period approximate to the length of the stock options’ expected life, and the standard deviation of return on the stock during this period.

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

RELATED PARTY TRANSACTIONS (1)Names and relationship of related parties Equity-settled Names andrelationship of related parties Delta Electronics (Thailand) Public Company Limited Delta Power Solutions (India) Pvt Ltd. Delta Electronics (Slovakia) s.r.o. Delta Electronics India Pvt Ltd. Delta Energy Systems (Singapore) PTE. LTD. Delta Energy Systems (Australia) PTY.LTD. Delta Greentech (Netherlands) B.V. Digital Projection Ltd. Digital Projection Inc. Infani Technology Inc.	RELATED PARTY TRANSACTIONS (1)Names and relationship of related parties Equity-settled Names andrelationship of related parties Delta Electronics (Thailand) Public Company Limited Delta Power Solutions (India) Pvt Ltd. Delta Electronics (Slovakia) s.r.o. Delta Electronics India Pvt Ltd. Delta Energy Systems (Singapore) PTE. LTD. Delta Energy Systems (Australia) PTY.LTD. Delta Greentech (Netherlands) B.V. Digital Projection Ltd. Digital Projection Inc. Infani Technology Inc.

		$

(1)
	Delta Electronics (Thailand) Public Company Limited Delta Power Solutions (India) Pvt Ltd. Delta Electronics (Slovakia) s.r.o. Delta Electronics India Pvt Ltd. Delta Energy Systems (Singapore) PTE. LTD. Delta Energy Systems (Australia) PTY.LTD. Delta Greentech (Netherlands) B.V. Digital Projection Ltd. Digital Projection Inc. Infani Technology Inc.

7. RELATED PARTY TRANSACTIONS

(1) Names and relationship of related parties

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Names andrelationship of related parties	Relationship withthe Group
Delta Electronics (Switzerland) AG (Note 1) Delta Electronics (Italy) S.r.l (Note 2) Delta Greentech (Brasil) S.A. Delta Greentech (USA) Corporation Eltek s.r.o.	It was an associate before April 1, 2017, and became a subsidiary since April 1, 2017. " " " It was a subsidiary before April 1, 2017, and became an associate since April 1, 2017.

Note 1: Formerly named Delta Energy Systems (Switzerland) AG, and was renamed Delta Electronics (Switzerland) AG.
Note 2: Formerly named Delta Energy Systems (Italy) S.r.l., and was renamed Delta Electronics (Italy) S.r.l..

(2) Significant transactions and balances with related parties

A. Sales of goods

Sales of goods
Sales of goods: Associates	Years endedDecember31,
	2017 5,748,053 $	2016
		5,553,935 $

The sales terms, including prices and collections, were negotiated based on cost, market, competitors and other factors.

B. Purchases of goods

Purchases of goods
Purchases of goods: Associates	Years endedDecember31,
	2017 4,894,669 $	2016
		1,422,296 $

The purchase terms, including prices and payments, were negotiated based on cost, market, competitors and other factors.

C. Period-end balances arising from sales of goods

Period-end balances arising from sales of goods
Receivables from related parties: Associates	December31,2017 1,319,469 $	December31,2016
		1,431,921 $

The receivables from related parties arise mainly from sales transactions. The receivables are due 75 days after the date of sale. The receivables are unsecured in nature and bear no interest.

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D. Period-end balances arising from purchases of goods

December 31, 2017 December 31, 2016 Payables to related parties: Associates $ 1,206,197 $ 468,980

The payables to related parties arise mainly from purchase transactions and are due 70 days after the date of purchase. The payables bear no interest.

E. Period-end balances arising from other transactions

December 31, 2017 December 31, 2016 Other receivables-related parties Associates $ 70,181 $ 104,580

The above pertain mainly to payments on behalf of others.

F. Property transactions:
(a) Acquisition of financial assets:

" Total Delta Greentech (Netherlands) B.V. " "	Accounts No. ofshares " 1,500,000 Investments accounted for using equity method 10,200 " 4,315,657 " 15,708	Objects Delta Electronics Systems (Switzerland) AG Delta Greentech (Brasil) S.A. Delta Greentech Electronics Industry LLC Delta Greentech (USA) Corporation	Year ended December 31, 2017 Consideration 125,797 755,090 $ 388,940 $ 216,044 24,309

The Group has not acquired financial assets from related parties for the year ended December 31, 2016.

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(b) Disposal of financial assets:

Accounts	December31,2017 Year ended	December31,2017 Year ended
	Proceeds 668,490 $	Gain/(loss)
Investments accounted for using equity method		115,514 $

A. As of December 31, 2017, all proceeds have been collected, and gains on disposal of financial assets are deferred based on shareholding ratio.
B. For the year ended December 31, 2016, the Group has not disposed financial assets to related parties.
(c) Acquisition of equipment

Acquisition of equipment
Associates	December31,2017 2,300 $	December31,2016
		- $

(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits	Years ended December31,
	2017 434,245 $	2016 561,149 $

8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

Book value

Pledged assets Demand deposits (shown as other current assets and other non- current assets) Time deposits (shown as other current assets) Property, plant and equipment	December 31, 2017 96,349 $ 183,623 399,957 679,929 $	December 31, 2016 146,174 $ 145,819 - 291,993 $	Pledge purpose
			Performance bonds Perfermance bonds, customs deposits and other guarantee Long-term borrowings and credit line

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

(1) Contingencies

None.

(2) Commitments

A. Capital commitments

Capital expenditures contracted for at the balance sheet date but not yet incurred are as follows:

Property, plant and equipment Costs of computer software	December31,2017 352,348 $ - $	December31,2016
		148,991 $
		175,350 $

B. Operating lease commitments

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

follows:
Not later than one year Later than one year but not later than five years Later than five years	December31,2017 342,577 $ 600,593 115,309 1,058,479 $	December31,2016
		318,111 $ 594,015 171,317
		1,083,443 $

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

On March 8, 2018, the Board of Directors adopted a resolution to acquire the land located in Zhongli District, Taoyuan City amounting to $1,285,000 in order to expand the plant for future business development.

12. OTHERS

(1) Capital risk management

The Group’s objectives (including disposal groups held for sale) when managing capital are to maintain an integrity credit rating and good capital structure to support operating and maximum stockholders’ equity.

(2) Financial instruments

A. Fair value information of financial instruments

The fair value of financial instruments measured at amortised cost (including notes receivable,

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accounts receivable (including related parties), other receivables (including related parties), short-term borrowings, notes payable, accounts payable (including related parties) and other payables) are based on their book value as book value is approximate to fair value. The fair value of long-term loans (including current portion) is based on book value as their interest rate is approximate to market interest rate. The fair value information of financial instruments measured at fair value is provided in Note 12(3).

B. Financial risk management policies

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. The Group uses derivative financial instruments to hedge certain risk exposures (see Notes 6(2) and 6(16)).

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, RMB and EUR. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.
ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. To manage their foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in the Group use forward foreign exchange contracts, foreign exchange swap contracts and options, transacted with Group treasury.
iii. The Group adopts the derivative financial instruments like forward exchange contracts / forward exchange transactions, etc. to hedge the fair value risk and cash flow risk due to foreign exchange rate fluctuations. The Group monitors at any time and pre-sets a “stop loss” amount to limit its foreign exchange risk.
iv. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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December 31, 2017

Foreign currency
amount
(in thousands)
(Foreign currency: functional
currency)
Financial assets
Monetary items
RMB : USD (Note)
1,306,689
$ USD : RMB (Note)
374,463
USD : NTD
366,890
USD : NOK (Note)
55,435
EUR : NOK (Note)
52,568
EUR : USD (Note)
39,844
Non-monetary items
USD : NTD
3,639,718
$ THB : NTD
9,486,456
RMB : USD (Note)
6,575,994
THB : USD (Note)
1,401,926)
(
EUR : USD (Note)
58,244
NOK : USD (Note)
4,146,750
CAD : USD (Note)
104,037
Financial liabilities
Monetary items
RMB: USD (Note)
1,866,439
$ USD : RMB (Note)
313,273
USD : NTD
286,275
USD : CAD (Note)
98,108
USD : NOK (Note)
91,127
EUR : NOK (Note)
41,218

Exchange
Book value
rate
(NTD)
0.1536
5,972,706
$ 6.5108
11,144,019
29.7600
10,918,646
8.2224
1,649,746
9.8276
1,869,844
1.1952
1,417,251
29.7600
108,318,012
$ 0.9170
8,704,772
0.1536
30,058,012
0.0308
1,286,407)
(
1.1952
2,071,730
0.1216
15,008,748
0.7967
2,446,714
0.1536
8,531,250
$ 6.5108
9,323,004
29.7600
8,519,544
1.2552
2,919,694
8.2224
2,711,940
9.8276
1,466,124

Note: Certain consolidated entities’ functional currency is not NTD. Therefore, the Group shall consider these items when disclosing the above information.

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December 31, 2016

Foreign currency
(Foreign currency: functional
amount
currency)
(in thousands)
Financial assets
Monetary items
RMB：USD (Note)
1,136,518
$ USD：RMB (Note)
443,983
USD：NTD
290,284
EUR：USD (Note)
33,349
USD：NOK (Note)
55,693
EUR：NOK (Note)
47,857
Non-monetary items
RMB：USD (Note)
9,353,911
$ EUR：USD (Note)
65,423
USD：NTD
3,425,504
THB：NTD
8,776,613
THB：USD (Note)
948,456)
(
NOK：USD (Note)
4,251,777
Financial liabilities
Monetary items
RMB：USD (Note)
1,805,188
$ USD：RMB (Note)
267,041
USD：NTD
262,441
USD：CAD (Note)
98,345
USD：NOK (Note)
78,245
EUR：NOK (Note)
35,298 Exchange
Book value
rate
(NTD)
0.1438
5,269,000
$ 6.9563
14,318,452
32.2500
9,361,659
1.0512
1,130,531
8.6335
1,796,099
9.0753
1,622,352
0.1438
43,365,946
$ 1.0512
2,217,841
32.2500
110,472,488
0.9050
7,942,835
0.0281
858,353)
(
0.1158
15,882,217
0.1438
8,369,014
$ 6.9563
8,612,072
32.2500
8,463,722
1.3488
3,171,626
8.6335
2,523,401
9.0753
1,196,602

Note: Certain consolidated entities’ functional currency is not NTD. Therefore, the Group shall consider these items when disclosing the above information.

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v. Total exchange (loss) gain, including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2017 and 2016 amounted to ($21,904) and $229,912, respectively.

December 31, 2017 and 2016 amounted to ($21,904) and $229,912, respectively.	December 31, 2017 and 2016 amounted to ($21,904) and $229,912, respectively.
(Foreign currency: Degree of Effect on Effect on functional currency) variation profit or loss comprehensive income Financial assets Monetary items RMB : USD (Note) 1% 59,727 $ - $ USD : RMB (Note) 1% 111,440 - USD : NTD 1% 109,186 - USD :NOK (Note) 1% 16,497 - EUR : NOK (Note) 1% 18,698 - EUR : USD (Note) 1% 14,173 - Financial liabilities Monetary items RMB : USD (Note) 1% 85,313 $ - $ USD : RMB (Note) 1% 93,230 - USD : NTD 1% 85,195 - USD : CAD (Note) 1% 29,197 - USD : NOK (Note) 1% 27,119 - EUR : NOK (Note) 1% 14,661 - Year ended December31,2017 Sensitivityanalysis
	- $ - - - - - - $ - - - - -

Note: Certain consolidated entities’ functional currency is not NTD. Therefore, the Group shall consider these items when disclosing the above information.

~98~

YearendedDecember31,2016	YearendedDecember31,2016	YearendedDecember31,2016
	Sensitivity analysis
Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit or loss 52,690 $ 143,185 93,617 11,305 17,961 16,224 83,690 $ 86,121 84,637 31,716 25,234 11,966	Effect on comprehensiveincome
		- $ - - - - - - $ - - - - -

Note: Certain consolidated entities’ functional currency is not NTD. Therefore, the Group shall consider these items when disclosing the above information.

Price risk

The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance sheet either as available-for-sale or at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio to control this risk.

The Group’s investments in equity securities comprise listed and unlisted stocks. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2017 and 2016 would have increased/decreased by $309 and $151, respectively, as a result of gain/loss on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $57,902 and $64,624 as of December 31, 2017 and 2016, respectively, as a result of gain/loss on equity securities classified as available-for-sale.

Interest rate risk

i. The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the

~99~

Group to fair value interest rate risk. The Group’s borrowings mainly bear fixed and variable interest rate. During the years ended December 31, 2017 and 2016, the Group’s borrowings at variable rate were denominated in NTD, USD, JPY and EUR.

ii. If the interest rate increases by 0.25%, and all other conditions are the same, the impact on post-tax profit would decrease by $1,435 and $1,093 for the years ended December 31, 2017 and 2016, respectively, resulting from the variable rate borrowings.
(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 as described below:
- According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors.
- Individual risk limits are set based on internal or external ratings in accordance with limits set by the credit controller. The utilisation of credit limits is regularly monitored.
- For banks and financial institutions, only well rated parties are accepted.
- Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions.
ii. For the years ended December 31, 2017 and 2016, the management does not expect any significant losses from non-performance by these counterparties.
iii. The credit quality information of significant financial assets that are neither past due nor impaired is described in Note 6(6).
(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.
ii. The table below analyses the Group’s non-derivative financial liabilities (including noncurrent disposal group classified as held for sale) and net-settled or gross-settled 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 and to the expected maturity date for derivative financial liabilities:

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Non-derivative financial liabilities:

December31,2017 Short-term borrowings Notes and accounts payable (including related parties) Other payables Long-term borrowings (including current portion) December31,2016 Short-term borrowings Notes and accounts payable (including related parties) Other payables Long-term borrowings (including current portion)	Less than 1year 17,463,509 $ 37,924,813 25,209,483 48,752 Less than 1year 12,539,294 $ 37,514,151 23,275,430 47,072	Between 1 and 2years - $ - - 10,730,741 Between 1 and 2years - $ - - 8,059,405	Between 2 and5 years - $ - - 102,195 Between 2 and5 years - $ - - 228,166	Over 5 years
				- $ - - 386,000 Over 5 years
				- $ - - 226,387

Derivative financial liabilities:

As of December 31, 2017 and 2016, the derivative financial liabilities which were operated by the Group are due within 1 year.

iii. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis to be significantly earlier, nor expect the actual cash flow amount to be significantly different.

(3) Fair value information

A. Details of the fair value of the Group’s financial assets and financial liabilities not measured at fair value are provided in Note 12(2)A. Details of the fair value of the Group’s investment property measured at cost are provided in Note 6(11).
B. 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.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
C. 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 December

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31, 2017 and 2016 is as follows:

31, 2017 and 2016 is as follows:
December 31, 2017 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Forward exchange contracts Available-for-sale financial assets Equity securities Convertible bonds Derivative financial assets for hedging Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward exchange contracts	Level 1 30,911 $ - 4,209,730 71,600 - 4,312,241 $ - $	Level 2 - $ 83,837 - - 7,061 90,898 $ 9,746 $	Level3 - $ - 1,580,428 - - 1,580,428 $ - $	Total
				30,911 $ 83,837 5,790,158 71,600 7,061
				5,983,567 $
				9,746 $

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December 31, 2016 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Forward exchange contracts Derivative financial assets for hedging Available-for-sale financial assets Equity securities Convertible bonds Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward exchange contracts	Level 1 15,075 $ - - 4,880,265 140,103 5,035,443 $ - $	Level 2 - $ 41,177 7,708 - - 48,885 $ 219,490 $	Level3 - $ - - 1,582,140 - 1,582,140 $ - $	Total
				15,075 $ 41,177 7,708 6,462,405 140,103
				6,666,468 $
				219,490 $

D. The methods and assumptions that the Group used to measure fair value are as follows:
(a) The instruments that the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Market quoted price	Listed shares Closing price	Convertible (exchangeable) bond
		Closing price

(b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques that are approved for financial management.
(c) When assessing non-standard and low-complexity financial instruments, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.
(d) The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate.
(e) The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using the valuation model is adjusted accordingly with

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additional inputs. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

(f) The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty.
E. For the years ended December 31, 2017 and 2016, there was no transfer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the years ended December 31, 2017 and 2016:

2016:
		2017		2016
		Equitysecurities		Equitysecurities
At January 1	$	1,582,140	$	1,322,317
Acquired in the year		502,639		422,835
Losses recognised in profit or loss	(	20,569)	(	108,693)
Losses recognised in other comprehensive
income		-	(	14,150)
Proceeds from capital reduction	(	95,733)	(	34,679)
Disposals in the year	(	49,500)		-
Transfers out from level 3	(	314,776)		-
Net exchange differences	(	23,773)	(	5,490)
At December 31	$	1,580,428	$	1,582,140

G. Because some of Level 3 equity securities were listed or emerged in 2017, and there is sufficient observable market information available, the Group has transferred the fair value from Level 3 into Level 1 at the end of the month when the event occurred.
H. Investment department is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions and periodical review. Investment property is evaluated regularly by the Group’s financial treasury based on the valuation methods and assumptions announced by the Financial Supervisory Commission, Securities and Futures Bureau.

The capital department establishes valuation policies, valuation processes and ensures compliance with the related requirements in IFRS. The related valuation results are reported to the management monthly. The management is responsible for managing and reviewing valuation processes.

I. The following is the qualitative information of significant unobservable inputs and sensitivity

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analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non-derivative equity instrument: Unlisted shares Non-derivative equity instrument: Unlisted shares	Fair value at December 31, 2017	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
	$ 1,580,428 Fair value at December 31, 2016	Net asset value Valuation technique	Not applicable Significant unobservable input	- Range (weighted average)	Not applicable Relationship of inputs to fair value
	$ 1,582,140	Net asset value	Not applicable	-	Not applicable

J. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorised within Level 3 if the inputs used to valuation models have changed:

December 31, 2017

		December	31,2017
Financial assets Equity instrument Financial assets Equity instrument	Net asset value ± 1% Net asset value ± 1% Input Change Input Change	Favourable Unfavourable change change - $ - $ December Recognised in profit or loss	Favourable Unfavourable change change 15,804 $ 15,804) ($ Favourable Unfavourable change change 15,821 $ 15,821) ($ comprehensive income 31,2016 Recognised in other Recognised in other comprehensive income
		Favourable change - $
		Favourable Unfavourable change change - $ - $ Recognised in profit or loss
		Favourable change - $

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13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: Please refer to table 1.
B. Provision of endorsements and guarantees to others: Please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to table 4.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: Please refer to table 5.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 6.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 7.
I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes 6(2), 6(5), 6(16) and 12(2).
J. Significant inter-company transactions during the reporting periods: Please refer to table 8.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 9.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 10.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland China: Please refer to table 6, 7 and 8 for significant transactions of purchases, sales, receivables and payables of investee companies in the Mainland China, and transactions between the Company indirectly through investees in a third area, Delta Electronics Int'l (Singapore) Pte. Ltd. (DEIL-SG) and Cyntec International Ltd. (CIL-Labuan), with investee companies in the Mainland China, for the year ended December 31, 2017.

14. OPERATING SEGMENT INFORMATION

(1) General information

The Group’s management has determined the reportable segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions. The Group considers the business from a product perspective. The Group’s business is segregated into power electronics business,

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automation business and infrastructure business. Breakdown of the revenue from all sources is as follows:

A. Power electronics: Component, Embedded Power, Fans and Thermal Management, Automotive Electronics, Merchant & Mobile Power and Vivitek Projectors.
B. Automation: Industrial Automation and Building Automation.
C. Infrastructure: ICT Infrastructure and Energy Infrastructure.

Because of the change of product classification, the Group’s internal business segment restructed accordingly. The prior period information was restated for comparison.

(2) Measurement of segment information

The Group’s segment profit (loss) is measured with the operating profit (loss) before tax, which is used as a basis for the Group in assessing the performance of the operating segments. The accounting policies of the operating segments are in agreement with the significant accounting policies summarized in Note 4.

(3) Segment information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

is as follows:
Revenue from external customers Segment income (Note) Revenue from external customers Segment income (Note)		Year ended December31,2017
	Power electronics business 117,951,431 $ 13,917,261 $	Automation Infrastructure business business 33,025,178 $ 70,728,482 $ 5,474,338 $ 5,550,517 $ YearendedDecember31,2016		Total
				221,705,091 $
				24,942,116 $

	Power electronics business 118,741,155 $ 16,133,906 $	Automation business 26,961,883 $ 4,621,967 $	Infrastructure business 67,084,844 $ 5,051,938 $	Total
				212,787,882 $
				25,807,811 $

Note: Segment income represents income after eliminating inter-segment transactions.

(4) Reconciliation information for segment income (loss)

A. The revenue from external customers reported to the chief operating decision-maker is measured in a manner consistent with that of the statement of comprehensive income.
B. A reconciliation of reportable segments income or loss to income (loss) before tax from

~107~

continuing operations for the years ended December 31, 2017 and 2016 is provided as follows:

			Years ended	December31,	December31,
			2017		2016
Reportable segments income		$	24,942,116	$	25,807,811
Other segments' loss	(		5,168,328)	(	4,982,140)
Non-operating income and expenses			4,024,492		3,964,290
Income before tax from continuing operations		$	23,798,280	$	24,789,961

(5) Information on products and services

As the Group considered the business from a product perspective, the reportable segments were based on different products and services. Revenues from external customers are the same as in Note 14(3).

(6) Geographical information

Information about geographic areas for the years ended December 31, 2017 and 2016 were as follows:

follows:
Mainland China U.S.A. Taiwan Others	Years endedDecember31,
	Non-current Revenue assets 123,318,752 $ 29,197,097 $ 34,617,660 2,721,513 7,029,237 28,919,089 58,611,865 21,858,138 223,577,514 $ 82,695,837 $ 2017	2016
	Revenue 123,318,752 $ 34,617,660 7,029,237 58,611,865 223,577,514 $	Revenue 117,653,470 $ 39,626,956 10,668,246 46,406,899 214,355,571 $	Non-current assets
			26,255,162 $ 2,916,163 21,749,131 25,098,946
			76,019,402 $

(7) Major customer information

There are no customers accounting for more than 10% of the Group’s operating revenues for the years ended December 31, 2017 and 2016.

~108~

Delta Electronics Inc. and Subsidiaries Loans to others

Year ended December 31, 2017

Table 1

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

No. (Note 1)	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended December 31, 2017(Note 2)	Balance at December 31, 2017	Actual amount drawn down	Interest rate	Nature of loan (Note 7)	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
1	Fairview Assets Ltd.	Delta Electronics (Netherlands) B.V.	Other receivables - related parties	Yes	7,440,000 $	7,440,000 $	7,440,000 $	0.50%	2	- $	Additional operating capital	- $	None	- $	27,181,071 $	27,181,071 $	Note 5
1	Fairview Assets Ltd.	Delta Controls Inc.	Other receivables – related parties	Yes	3,868,800	3,868,800	2,886,720	0.50%	2	-	Additional operating capital	-	None	-	27,181,071	27,181,071	Note 5
2	Delta Networks Holding Limited	Delta Electronics (Netherlands) B.V.	Other receivables - related parties	Yes	6,547,200	6,547,200	6,547,200	0.50%	2	-	Additional operating capital	-	None	-	10,991,810	10,991,810	Note 5
3	Delta Electronics (H.K.) Ltd.	Delta Electronics (Netherlands) B.V.	Other receivables - related parties	Yes	833,280	833,280	833,280	0.50%	2	-	Additional operating capital	-	None	-	14,643,249	14,643,249	Note 4
4	Delta International Holding Limited	Delta Electronics (Netherlands) B.V.	Other receivables - related parties	Yes	892,800	892,800	892,800	0.50%	2	-	Additional operating capital	-	None	-	30,055,980	30,055,980	Note 4
5	ELTEK AS	Eltek Italia S.r.l.	Other receivables - related parties	Yes	21,342	21,342	21,341	1.90%	2	-	Additional operating capital	-	None	-	3,958,907	3,958,907	Note 5
5	ELTEK AS	ELTEK MEA DMCC	Other receivables - related parties	Yes	202,368	202,368	-	2.70%	2	-	Additional operating capital	-	None	-	3,958,907	3,958,907	Note 5
5	ELTEK AS	Eltek s.r.o.	Other receivables - related parties	Yes	256,104	-	-	1.90%	2	-	Additional operating capital	-	None	-	3,958,907	3,958,907	Note 5 and 8
6	Eltek Deutschland GmbH	E.V.I. Electronics Sp. z o.o.	Other receivables - related parties	Yes	321,100	321,100	-	3.25%	2	-	Additional operating capital	-	None	-	329,084	329,084	Note 5
7	Delta Electronincs (Wuhu) Co. Ltd.	Cyntec Electronics (Suzhou) Co., Ltd.	Other receivables - related parties	Yes	1,599,805	1,403,257	1,403,257	4.35%	2	-	Additional operating capital	-	None	-	1,853,398	1,853,398	Note 4
8	Delta Electronincs Compenents (Wujang) Ltd.	Cyntec Electronics (Suzhou) Co., Ltd.	Other receivables - related parties	Yes	594,213	594,213	-	0.00%	2	-	Additional operating capital	-	None	-	2,878,616	2,878,616	Note 4
9	Vivotek Inc.	Vatics Inc.	Other receivables - related parties	Yes	200,000	200,000	117,170	1.00%	2	-	Additional operating capital	-	None	-	280,822	561,644	Note 6
9	Vivotek Inc.	Aetek Inc.	Other receivables - related parties	Yes	30,000	30,000	-	1.00%	2	-	Additional operating capital	-	None	-	60,000	561,644	Note 6

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows: (1) The Company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Maximum outstanding balance during the current period was translated into New Taiwan dollars using the exchange rate at December 31, 2017, which the Company reported to the Securities and Futures Bureau. Note 3: Limit on loans granted by the Company to a single party is 20% of the Company’s net assets based on the latest audited or reviewed financial statements, and limit on total loans is 40% of the Company’s net assets based on the latest audited or reviewed financial statements. Note 4: Limit on loans granted by subsidiaries to a single party is 40% of the subsidiaries’ net assets based on the latest audited or reviewed financial statements, and limit on total loans is 40% of the subsidiaries’ net assets based on the latest audited or reviewed financial statements. Note 5: Limit on loans for financing granted by and to subsidiaries of which the ultimate parent directly or indirectly holds 100% of its voting shares is the lender’s net assets based on the latest audited or reviewed financial statements, and limit on total loans is the lender’s net assets based on the latest audited or reviewed financial statements.

Table 1一1

Note 6: The calculation and amount on ceiling of loans of Vivotek Inc. are as follows:
(1) The ceiling on total amount of loans to others shall not exceed 20% of the company’s net assets value in the lastest financial statement which was reviewed or audited by independent accountant.
(2) For the short-term financing, the limit on loans granted to a single party shall not exceed 10% of the borrower’s paid-in capital and Vivotek Inc.’s net assets value in the lastest financial statement which was reviewed or audited by independent accountant. Note 7: Nature of loans:
(1) Business transaction: 1.
(2) Short-term financing: 2.
Note 8: The loans occurred when Eltek s.r.o. was an overseas subsidiary to which the Company indirectly held 100% of its voting right. Therefore, the limit of loan was calculated according to Note 5.

Table 1一2

Delta Electronics Inc. and Subsidiaries Provision of endorsements and guarantees to others Year ended December 31, 2017

Table 2

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

Number (Note 1)	Endorser /guarantor	Partybeingendorsed/guaranteed	Partybeingendorsed/guaranteed	Limit on endorsements / guarantees provided for a singleparty	Maximum outstanding endorsement / guarantee amount as of December 31, 2017	Outstanding endorsement / guarantee amount at December 31, 2017	Actual amount drawn down	Amount of endorsements / guarantees secured with collateral	Ratio of accumulated endorsement / guarantee amount to net asset value of the endorser / guarantor company	Ceiling on total amount of endorsements / guarantees provided	Provision of endorsements / guarantees by parent company to subsidiary	Provision of endorsements / guarantees by subsidiary to parent company	Provision of endorsements / guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser / guarantor (Note 6)
1	ELTEK AS	ELTEK POWER PTE. LTD.	3	2,491,139 $	297,600 $	297,600 $	- $	$ -	0.24%	6,227,848 $	Y	N	N	Note 3
1	ELTEK AS	Eltek Power Sweden AB	3	2,491,139	18,050	18,050	18,050	-	0.01%	6,227,848	Y	N	N	Note 3
1	ELTEK AS	ELTEK MEA DMCC	3	2,491,139	69,423	69,423	69,423	-	0.06%	6,227,848	Y	N	N	Note 3
1	ELTEK AS	ELTEK AUSTRALIA PTY LIMITED	3	2,491,139	133,920	133,920	133,920	-	0.11%	6,227,848	Y	N	N	Note 3
2	Vivotek Inc.	Vatics Inc.	1	192,900	120,000	120,000	-	-	4.27%	1,123,288	Y	N	N	Note 5

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: In accordance with the Company's“Procedures for Provision of Endorsements and Guarantees,” limit on total endorsements is 40% of the Company's net assets based on the latest audited or reviewed financial statements, limit on endorsements to a single company is 20% of the Company's net assets based on the latest audited or reviewed financial statements. Limit on total endorsements granted by the Company and subsidiaries is 50% of the Company's net assets based on the latest audited or reviewed financial statements, limit on total endorsements to a single party is 30% of the Company's net assets based on the latest audited or reviewed financial statements.
Note 3: In accordance with Eltek's “Procedures for Provision of Endorsements and Guarantees,” limit on total endorsements is 5% of the Company’s net assets based on the latest audited or reviewed financial statements, and limit on endorsements to a single party is 2% of the Company’s net assets based on the latest audited or reviewed financial statements.

Note 4: The Company's net assets based on the latest audited or reviewed financial statements were $124,556,969 thousand (2017/12/31).

Note 5: The limit on total endorsements/guarantees of Vivotek Inc. shall not exceed 40% of the company’s net assets value in the lastest financial statement which was reviewed or audited by independent accountant, and limit on endorsements to a single party is 20% of Vivotek Inc.’s net assets based on the latest audited or reviewed financial statements. At the same, the limit is not allowed to excess the purchase or sales amount, which is higher, within one year or current period when endorsements and guarantees are incurred.

Note 6: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories:

(1) Having business relationship.
(2) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(3) The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.
(4) The endorsed/guaranteed parent company directly or indirectly owns more than 50% voting shares of the endorser/guarantor subsidiary.
(5) Mutual guarantee of the trade as required by the construction contract.
(6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

Table 2-1

Delta Electronics Inc. and Subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2017

Table 3 Expressed in thousands of New Taiwan dollars, except as otherwise indicated

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	As of December 31, 2017	As of December 31, 2017	As of December 31, 2017	As of December 31, 2017
				Number of shares	Book value	Ownership (%)	Fair value
Delta Electronics Inc.	Swissray Global Healthcare Holding Limited common stock	None	Available-for-sale financial assets	26,852,000	254,825 $	18.94	254,825 $
Delta Electronics Inc.	Neo Solar Power Corp. common stock	None	Available-for-sale financial assets	167,145,851	2,298,255	16.40	2,298,255
Delta Electronics Inc.	Tong Hsing Electronic Industries, Ltd.	None	Available-for-sale financial assets	608,000	82,080	0.37	82,080
Delta Electronics Inc.	Others	None	-	-	232,087	-	232,087
Delta International Holding	Solarflare Communications, Inc. preferred shares	None	Available-for-sale financial assets	9,547,235	284,126	3.68	284,126
Delta International Holding	Mentis Technology, Inc., etc	None	-	-	89,282	-	89,282
Delta Electronics (Japan) Inc.	Macy Inc. common stock	None	Financial assets carried at cost - non-current	74,000,000	32,808	19.79	32,808
Delta Electronics (Pinatan) Co., Ltd.	Pingtan Hi Tech Investment Development Shares Co., Ltd.	None	Financial assets carried at cost - non-current	-	34,282	15.00	34,282
Delta Electronics Capital Company	Fusheng Precision Co., Ltd. common stock	None	Available-for-sale financial assets	1,800,000	265,122	1.52	265,122
Delta Electronics Capital Company	Tong Hsing Electronic Industries, Ltd. common stock	None	Available-for-sale financial assets	1,809,000	244,215	1.09	244,215
Delta Electronics Capital Company	Nien Made Enterprise Co., Ltd. common stock	None	Available-for-sale financial assets	822,043	261,410	0.28	261,410
Delta Electronics Capital Company	Globalwafers Co., Ltd. common stock	None	Available-for-sale financial assets	573,650	228,026	0.13	228,026
Delta Electronics Capital Company	EBM Technologies, Inc. common stock, etc.	None	-	-	1,801,879	-	1,801,879
Delta America Ltd.	VPT, Inc. common stock, etc.	None	Financial assets carried at cost - non-current	-	5,208	-	5,208
Cyntec Co., Ltd.	SUSUMU Co., Ltd., stock	None	Financial assets carried at cost - non-current	200,000	104,081	11.53	104,081
Cyntec Co., Ltd.	LUXTERA. INC. stock	None	Financial assets carried at cost - non-current	55,029,284	336,195	3.46	336,195
Cyntec Co., Ltd.	GaN Systems Inc. stock	None	Financial assets carried at cost - non-current	1,454,193	89,874	3.31	89,874
Delta Electronics Int'l (Singapore) Pte. Ltd.	PBA Internatonal Pte. Ltd. common stock	None	Financial assets carried at cost - non-current	1,900	341,203	19.00	341,203
Delta Electronics Int'l (Singapore) Pte. Ltd.	Assent Solution Pte Ltd. preferred shares	None	Financial assets carried at cost - non-current	33,795	44,281	4.65	44,281
UNICOM SYSTEM ENG. CORP.	IMES TECH. INC. common stock, etc.	None	Financial assets carried at cost - non-current	-	3,885	-	3,885
Delta Electronics (Netherlands) B.V.	Wynd Technologies Inc. warrants	None	Financial assets carried at cost - non-current	-	11,904	-	11,904

Table 3-1

Delta Electronics Inc. and Subsidiaries

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital Year ended December 31, 2017

Table 4

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

Investor	Marketable securities	General ledger account	Counterparty	Relationship with the investee	Balance as at January1, 2017	Balance as at January1, 2017	Addition	Addition	Disposal	Disposal	Disposal	Disposal	Balance as at December 31, 2017	Balance as at December 31, 2017
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
Delta Electronics Inc	UNICOM SYSTEM ENG. CORP.	Investments accounted for using equity method	Natural person	None	-	$ -	570,000	$ 378,504 (Note 1)	-	$ -	$ -	$ -	570,000	$ 378,504
Delta Electronics Inc.	Delta Electronics Capital Company	Investments accounted for using equity method	Delta Electronics Capital Company	Subsidiary	266,254,470	2,948,807	40,000,000	708,762 (Note 2)	-	-	-	-	306,254,470	3,657,569
Delta Electronics Inc.	Vivotek Inc.	Investments accounted for using equity method	Natural person	None	-	-	40,261,047	3,983,116 (Note 8)	-	-	-	-	40,261,047	3,983,116
ELTEK AS	Eltek s.r.o.	Investments accounted for using equity method	Delta Electronics (Netherlands) B.V.	The Company	-	348,059	-	204,917 (Note 5)	-	668,490	552,976	Note 4	-	-
Delta Electronics (Netherlands) B.V.	Delta Electronics (Switzerland) AG	Investments accounted for using equity method	Delta Greentech (Netherlands) B.V.	Associates	-	-	10,200	497,894 (Note 3)	-	-	-	-	10,200	497,894
Delta Electronics (Netherlands) B.V.	Eltek s.r.o.	Investments accounted for using equity method	Delta Greentech (Netherlands) B.V.	Associates	-	-	-	552,976 (Note 6)	-	668,490	552,976	115,514 (Note 7)	-	-

Note 1: Delta Electronics Inc. increased investment by $341,694 in UNICOM SYSTEM ENG. CORP. in 2017, which includes recognition of adjustments in profit (loss) and net value of associates. Note 2: Delta Electronics Inc. increased investment by $400,000 in Delta Eletronics Capital Company in March 2017, which includes recognition of adjustments in profit (loss) and net value of associates. Note 3: Delta Electronics (Netherlands) B.V. increased investment by $388,940 in Delta Electronics (Switzerland) AG in April 2017, which includes recognition of adjustments in profit (loss) and net value of associates. Note 4: The transaction resulted from the Group’s adjustment in investment structure. There was no gain or loss on disposal pursuant to related ordinances. Note 5: It reflected the movement in the adjustments in the profit (loss) and net value of investments recognised in this period. Note 6: In April 2017, Delta Electronics (Netherlands) B.V. increased investment in Eltek s.r.o. Note 7: There was 20.01% of gain on disposal was deferred after selling the subsidiary, Eltek s.r.o. Please refer to Note 6(9)D for details. Note 8: Delta Electronics Inc. increased investment by $3,945,583 in Vivotek Inc. in October, 2017, which includes recognition of adjustments in profit (loss) and net value of associates.

Table 4-1

Delta Electronics Inc. and Subsidiaries Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more

Year ended December 31, 2017

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

Table 5

Real estate disposed by	Real estate	Transaction date or date of the event	Date of acquisition	Book value	Disposal amount (Note 1)	Status of collection of proceeds	Gain (loss) on disposal	Counterparty	Relationship with the seller	Reason for disposal	Basis or reference used in settingtheprice	Other commitments
Delta Electronics (Dongguan) Co., Ltd.	One plant and nine dormitories at Tong Fu Road, Shi Jie Township, Dong Wan City.	2017/9/28	1994/8/10	- $	323,592 $	Based on mutual agreement	323,592 $	Dongguan Starry-sky City Investment Co., Ltd.	None	Preventing idle assets	Evaluated by professional appraisal institute and active market price.	Based on mutual agreement

Note 1:This table is translated at the exchange rate of 4.5389 from RMB to NTD.

Table 5-1

Delta Electronics Inc. and Subsidiaries

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more Year ended December 31, 2017

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

Table 6

Purchaser/seller	Counterparty	Relationship with the counterparty	Transaction	Transaction	Transaction	Transaction	Differences in transaction term compared to third party transactions	Differences in transaction term 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)
Delta Electronics Inc.	Delta Electronics Int'l (Singapore) Pte. Ltd.	Subsidiary	Sales and other operating revenue	12,126,635 $	31.43	70 days	- $	-	1,796,651 $	23.14
Delta Electronics Inc.	Cyntec Electronics (Suzhou) Co., Ltd.	Affiliated enterprise	Sales	330,290	0.86	70 days	-	-	-	-
Delta Electronics Inc.	DEI Logistics (USA) Corp.	Affiliated enterprise	Sales	308,279	0.80	70 days	-	-	58,837	0.76
Delta Electronics Inc.	Delta Electronics (Thailand) Public Company Limited	Associate	Sales	378,870	0.98	70 days	-	-	21,833	0.28
Delta Electronics Inc.	Delta Energy Systems (Singapore) PTE. LTD	Associate	Sales	259,965	0.67	70 days	-	-	78,532	1.01
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Electronics Inc.	Ultimate parent company	Sales	17,791,963	7.96	70 days	-	-	6,256,498	12.58
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Dongguan) Co., Ltd.	Affiliated enterprise	Sales	7,299,027	3.26	70 days	-	-	1,411,348	2.84
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics Power (Dongguan) Co., Ltd.	Affiliated enterprise	Sales	14,736,696	6.59	70 days	-	-	2,530,486	5.09
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Jiangsu) Ltd.	Affiliated enterprise	Sales	17,698,067	7.91	70 days	-	-	1,152,152	2.32
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics Components (Wujiang) Ltd.	Affiliated enterprise	Sales	11,605,748	5.19	70 days	-	-	1,165,966	2.34
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Video Display System (Wujiang) Ltd.	Affiliated enterprise	Sales	4,356,622	1.95	70 days	-	-	490,336	0.99
Delta Electronics Int'l (Singapore) Pte. Ltd.	Preoptix (Jiangsu) Co., Ltd.	Affiliated enterprise	Sales	117,690	0.05	70 days	-	-	33,584	0.07
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Wuhu) Co., Ltd.	Affiliated enterprise	Sales	5,394,342	2.41	70 days	-	-	903,943	1.82

Table 6-1

Purchaser/seller	Counterparty	Relationship with the counterparty	Transaction	Transaction	Transaction	Transaction	Differences in transaction term compared to third party transactions	Differences in transaction term 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)
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Chenzhou) Co., Ltd.	Affiliated enterprise	Sales	2,493,982 $	1.12	70 days	- $	-	734,630 $	1.48
Delta Electronics Int'l (Singapore) Pte. Ltd.	Chenzhou Delta Technology Co. Ltd.	Affiliated enterprise	Sales	185,384	0.08	70 days	-	-	30,642	0.06
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Japan), Inc.	Affiliated enterprise	Sales	3,582,984	1.60	70 days	-	-	810,306	1.63
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Electronics (Korea), Inc.	Affiliated enterprise	Sales	244,508	0.11	70 days	-	-	70,046	0.14
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Electronics International Mexico SA de CV	Affiliated enterprise	Sales	247,510	0.11	70 days	-	-	51,011	0.10
Delta Electronics Int'l (Singapore) Pte. Ltd.	DEI Logistics (USA) Corp.	Affiliated enterprise	Sales	19,098,785	8.54	70 days	-	-	6,156,833	12.38
Delta Electronics Int'l (Singapore) Pte. Ltd.	Vivitek Corporation	Affiliated enterprise	Sales	491,452	0.22	70 days	-	-	123,867	0.25
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Networks (Dongguan) Ltd.	Affiliated enterprise	Sales	16,658,229	7.45	70 days	-	-	3,733,155	7.50
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Networks, Inc. (Taiwan)	Affiliated enterprise	Sales	647,368	0.29	70 days	-	-	240,126	0.48
Delta Electronics Int’l (Singapore) Pte. Ltd.	DNI Logistics (USA) Co.	Affiliated enterprise	Sales	9,486,220	4.24	70 days	-	-	2,434,393	4.89
Delta Electronics Int’l (Singapore) Pte. Ltd.	ELTEK AUSTRALIA PTY LIMITED	Affiliated enterprise	Sales	492,081	0.22	70 days	-	-	33,537	0.07
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Greentech (Brasil) S.A.	Affiliated enterprise	Sales	193,344	0.09	70 days	-	-	147,958	0.30
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Electronics (Netherlands) B.V.	Affiliated enterprise	Sales	2,404,094	1.07	70 days	-	-	608,097	1.22
Delta Electronics Int’l (Singapore) Pte. Ltd.	ELTEK AS	Affiliated enterprise	Sales	1,212,452	0.54	70 days	-	-	243,564	0.49
Delta Electronics Int’l (Singapore) Pte. Ltd.	ELTEK POWER PTE. LTD.	Affiliated enterprise	Sales	207,090	0.09	70 days	-	-	133,180	0.27
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Electronics (Americas) Ltd.	Affiliated enterprise	Sales	2,497,662	1.12	70 days	-	-	502,287	1.01
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Greentech (USA) Corporation	Affiliated enterprise	Sales	1,031,823	0.46	70 days	-	-	331,138	0.67

Table 6-2

Purchaser/seller	Counterparty	Relationship with the counterparty	Transaction	Transaction	Transaction	Transaction	Differences in transaction term compared to third party transactions	Differences in transaction term 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)
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Energy Systems (Australia) PTY LTD.	Affiliated enterprise	Sales	137,566 $	0.06	70 days	- $	-	43,931 $	0.09
Delta Electronics Int’l (Singapore) Pte. Ltd.	Digital Projection Ltd	Associate	Sales	222,943	0.10	70 days	-	-	77,807	0.16
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Power Solutions (India) Pvt Ltd.	Associate	Sales	975,937	0.44	70 days	-	-	244,453	0.49
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Electronics India Pvt Ltd	Associate	Sales	884,183	0.40	70 days	-	-	308,643	0.62
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Electronics (Slovakia) s.r.o.	Associate	Sales	341,815	0.15	70 days	-	-	40,362	0.08
Delta Electronics Int’l (Singapore) Pte. Ltd.	Delta Electronics (Thailand) Public Company Limited	Associate	Sales	298,668	0.13	70 days	-	-	71,041	0.14
Delta Electronics Int’l (Singapore) Pte. Ltd.	Digital Projection Inc	Associate	Sales	415,269	0.19	70 days	-	-	179,250	0.36
Preoptix (Jiangsu) Co., Ltd.	Delta Electronics Int'l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	511,626	98.31	70 days	-	-	40,105	98.74
Delta Networks (Dongguan) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	18,582,061	84.83	70 days	-	-	3,138,276	91.38
Delta Networks, Inc. (Taiwan)	Delta Electronics Inc.	Ultimate parent company	Sales and other operating revenue	1,025,289	11.32	70 days	-	-	63,616	4.00
Delta Networks, Inc. (Taiwan)	DNI Logistics (USA) Co.	Affiliated enterprise	Sales	3,977,859	49.09	70 days	-	-	1,167,416	73.49
Delta Networks, Inc.(Taiwan)	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	789,295	9.74	70 days	-	-	252,333	15.88
Delta Electronics (Dongguan) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	9,580,873	80.63	70 days	-	-	2,246,575	74.99
Delta Electronics (Dongguan) Co., Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	Sales	1,153,967	9.71	70 days	-	-	409,784	13.68
Delta Electronics Power (Dongguan) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	20,325,911	91.53	70 days	-	-	2,770,647	78.11
Delta Electronics Power (Dongguan) Co., Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	Sales	1,368,173	6.16	70 days	-	-	536,523	15.12
Delta Electronics Power (Dongguan) Co., Ltd.	Delta Electronics (Dongguan) Co., Ltd.	Affiliated enterprise	Sales	121,344	0.55	70 days	-	-	104,381	2.94

Table 6-3

Purchaser/seller	Counterparty	Relationship with the counterparty	Transaction	Transaction	Transaction	Transaction	Differences in transaction term compared to third party transactions	Differences in transaction term 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)
Delta Electronics (Jiangsu) Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	Sales	4,142,552 $	6.81	70 days	- $	-	855,837 $	14.51
Delta Electronics (Jiangsu) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	35,598,708	58.55	70 days	-	-	3,093,816	52.46
Delta Electronics (Jiangsu) Ltd.	Delta Electronics (Wuhu) Co., Ltd.	Affiliated enterprise	Sales	462,437	0.76	70 days	-	-	122,534	2.08
Delta Electronics (Jiangsu) Ltd.	Delta Electronics Components (Wujiang) Ltd.	Affiliated enterprise	Sales	159,214	0.26	70 days	-	-	50,918	0.86
Delta Electronics (Jiangsu) Ltd.	Eltek Energy Technology (Dongguan) Ltd.	Affiliated enterprise	Sales	106,150	0.17	70 days	-	-	918	0.02
Delta Electronics Components (Wujiang) Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	Sales	10,245,818	28.00	70 days	-	-	3,275,717	49.18
Delta Electronics Components (Wujiang) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	13,877,976	37.93	70 days	-	-	1,282,138	19.25
Delta Video Display System (Wujiang) Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	Sales	2,005,388	20.12	70 days	-	-	843,522	45.83
Delta Video Display System (Wujiang) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	4,449,488	44.63	70 days	-	-	395,387	21.48
Delta Electronics (Wuhu) Co., Ltd.	Delta Electronics Int'l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	9,555,049	99.12	70 days	-	-	1,946,010	98.00
Delta Electronics (Chenzhou) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	4,079,511	94.32	70 days	-	-	618,288	89.79
Delta Electronics (Chenzhou) Co., Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	Sales	245,505	5.68	70 days	-	-	70,288	10.21
Chenzhou Delta Technology Co., Ltd.	Delta Electronics Power (Dongguan) Co., Ltd.	Affiliated enterprise	Sales	1,574,728	73.96	70 days	-	-	389,984	74.18
Chenzhou Delta Technology Co., Ltd.	Delta Electronics (Chenzhou) Co., Ltd.	Affiliated enterprise	Sales	125,478	5.89	70 days	-	-	31,967	6.08
Chenzhou Delta Technology Co., Ltd.	Delta Electronics Int'l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	421,329	19.79	70 days	-	-	100,115	19.04
Delta Electronics (Shanghai) Co., Ltd.	Delta Greentech (China) Co., Ltd.	Affiliated enterprise	Sales	13,161,817	54.13	70 days	-	-	3,838,701	53.84
Delta Electronics (Shanghai) Co., Ltd.	Delta Networks (Dongguan) Ltd.	Affiliated enterprise	Sales	121,081	0.50	70 days	-	-	39,962	0.56

Table 6-4

Purchaser/seller	Counterparty	Relationship with the counterparty	Transaction	Transaction	Transaction	Transaction	Differences in transaction term compared to third party transactions	Differences in transaction term 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)
Delta Electronics (Shanghai) Co., Ltd.	Delta Electronics Components (Wujiang) Ltd.	Affiliated enterprise	Sales	185,728 $	0.76	70 days	- $	-	11,314 $	0.16
Delta Electronics (Shanghai) Co., Ltd.	Delta Electronics (Thailand) Public Company Limited	Associate	Sales	454,176	1.87	70 days	-	-	34,088	0.48
Delta Electronics (Shanghai) Co., Ltd.	Delta Electronics (Pinatan) Co., Ltd.	Affiliated enterprise	Sales	1,506,628	6.20	70 days	-	-	523,001	7.33
Delta Electronics (Japan), Inc.	Delta Electronics Int'l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	951,186	17.54	70 days	-	-	199,911	19.01
Vivotek Inc.	Vivotek USA, Inc.	Affiliated enterprise	Sales	575,275	10.53	90 days	-	-	138,809	13.49
Vivotek Inc.	Vatics Inc.	Affiliated enterprise	Purchases	192,900	5.19	30 days	-	-	12,574) (	-
Cyntec Co., Ltd.	Cyntec International Ltd - LABUAN	Affiliated enterprise	Sales	1,235,407	28.61	Note 1	-	-	125,739	15.61
Cyntec Co., Ltd.	DEI Logistics (USA) Corp.	Affiliated enterprise	Sales	415,184	9.62	Note 2	-	-	88,385	10.97
Cyntec Co., Ltd.	Delta Electronics Inc.	Ultimate parent company	Sales and other operating revenue	660,167	15.29	Note 2	-	-	244,134	30.31
Cyntec Co., Ltd.	Delta Electronics Int'l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	747,419	17.31	Note 2	-	-	84,393	10.48
Cyntec Electronics (Suzhou) Co., Ltd.	Cyntec International Ltd - LABUAN	Affiliated enterprise	Sales	4,566,861	44.89	Note 1	-	-	495,321	40.58
Cyntec Electronics (Suzhou) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	5,605,320	55.10	Note 2	-	-	724,966	59.39
Cyntec International Ltd. - LABUAN	Cyntec Co., Ltd.	Affiliated enterprise	Sales	858,606	10.54	Note 1	-	-	181,054	5.93
Cyntec International Ltd. - LABUAN	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	Sales	402,247	4.92	Note 2	-	-	32,617	1.07
ELTEK AS	Eltek s.r.o.	Associate	Sales	581,503	3.40	70 days	-	-	63,912	3.61
ELTEK AS	Eltek s.r.o.	Associate	Purchases	2,480,223	19.90	70 days	-	-	104,803) (	14.33) (
Delta Electronics (Netherlands) B.V.	Delta Electronics (Italy) S.r.l.	Affiliated enterprise	Sales	198,873	5.88	70 days	-	-	54,024	6.75
Delta Electronics (Netherlands) B.V.	Delta Grentech Electronics Industry LLC	Affiliated enterprise	Sales	146,541	4.33	70 days	-	-	-	-

Table 6-5

Purchaser/seller	Counterparty	Relationship with the counterparty	Transaction	Transaction	Transaction	Transaction	Differences in transaction term compared to third party transactions	Differences in transaction term 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)
Delta Electronics (Switzerland) AG	Delta Electronics (Slovakia) s.r.o.	Associate	Purchases	1,160,199 $	81.60	70 days	- $	-	322,270) ($	67.03) (
Delta Electronics (Americas) Ltd	Delta Electronics (Thailand) Public Company Limited	Associate	Purchases	643,943	19.00	70 days	-	-	126,763) (	19.78) (

Note 1: Selling price was the same with the third parties. The credit term to related parties is 60~90 days after monthly billings, while 30~120 days after monthly billings for the third parties. Note 2: For the sales transactions, the amount is calculated by adding costs, fees and all necessary processing costs. The credit term to related parties is 60~90 days after monthly billings, while 30~120 days after monthly billings for the third parties.

Table 6-6

Delta Electronics Inc. and Subsidiaries

Receivables from related parties reaching $100 million or 20% of paid-in capital or more December 31, 2017

Table 7

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

Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2017 (Note 1)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance date (Note 2)	Allowance for doubtful accounts
					Amount	Action taken
Delta Electronics Inc.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Subsidiary	1,796,651 $	6.81	- $		1,796,651 $	- $
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics Inc.	Ultimate parent company	6,256,498	5.36	-		2,795,883	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Dongguan) Co., Ltd.	Affiliated enterprise	1,411,348	10.36	-		1,296,180	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics Power (Dongguan) Co., Ltd.	Affiliated enterprise	2,530,486	10.24	-		2,455,463	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Jiangsu) Ltd.	Affiliated enterprise	1,152,152	27.40	-		1,152,152	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics Components (Wujiang) Ltd.	Affiliated enterprise	1,165,966	21.66	-		1,165,966	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Video Display System (Wujiang) Ltd.	Affiliated enterprise	490,336	17.07	-		490,336	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Wuhu) Co., Ltd.	Affiliated enterprise	903,943	13.20	159		903,943	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Chenzhou) Co., Ltd.	Affiliated enterprise	734,630	7.73	-		357,120	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Japan), Inc.	Affiliated enterprise	810,306	9.74	28		492,790	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	DEI Logistics (USA) Corp.	Affiliated enterprise	6,156,833	6.33	1,226,556		2,899,423	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Vivitek Corporation	Affiliated enterprise	123,867	8.42	29,908		87,632	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Networks (Dongguan) Ltd.	Affiliated enterprise	3,733,155	8.60	-		2,913,073	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Networks, Inc. (Taiwan)	Affiliated enterprise	240,126	7.11	71		90,121	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	DNI Logistics (USA) Co.	Affiliated enterprise	2,434,393	5.83	-		1,363,930	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Greentech (Brasil) S.A.	Affiliated enterprise	147,958	3.48	55,477		13,412
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Netherlands) B.V.	Affiliated enterprise	608,097	9.87	-		72,043	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	ELTEK AS	Affiliated enterprise	243,564	10.62	-		206,381	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	ELTEK POWERPTE. LTD.	Affiliated enterprise	133,180	6.22	112		93,163
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Americas) Ltd.	Affiliated enterprise	502,287	8.33	54,538		210,326

Table 7-1

Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2017 (Note 1)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance date (Note 2)	Allowance for doubtful accounts
					Amount	Action taken
Delta Electronics Int'l (Singapore) Pte. Ltd.	Digital Greentech (USA) Corporation	Affiliated enterprise	331,138 $	7.34	893 $		232,790 $	- $
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Power Solutions (India) Pvt. Ltd.	Associate	244,453	9.25	47,920		131,055	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics India Pvt. Ltd.	Associate	308,643	6.57	85,585		148,607	-
Delta Electronics Int'l (Singapore) Pte. Ltd.	Digital Projection Ltd.	Associate	179,250	9.18	42,713		95,242	-
Delta Networks (Dongguan) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	3,138,276	4.83	-		3,065,280	-
Delta Networks, Inc. (Taiwan)	DNI Logistics (USA) Co.	Affiliated enterprise	1,167,416	6.71	-		824,382	-
Delta Networks, Inc. (Taiwan)	Delta Electronics Int'l (Singapore) Pte. Ltd.	Affiliated enterprise	252,333	10.40	-		252,333	-
Delta Electronics (Dongguan) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	2,246,575	4.83	-		1,755,840	-
Delta Electronics (Dongguan) Co., Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	409,784	3.25	-		251,575	-
Delta Electronics Power (Dongguan) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	2,770,647	5.28	-		2,770,647	-
Delta Electronics Power (Dongguan) Co., Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	536,523	3.15	-		343,528	-
Delta Electronics Power (Dongguan) Co., Ltd.	Delta Electronics (Dongguan) Co., Ltd.	Affiliated enterprise	104,381	0.56	-		90,785	-
Delta Electronics (Jiangsu) Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	855,837	4.92	-		855,837	-
Delta Electronics (Jiangsu) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	3,093,816	15.51	-		3,093,816	-
Delta Electronics (Jiangsu) Ltd.	Delta Electronics (Wuhu) Co., Ltd.	Affiliated enterprise	122,534	8.77	-		79,273	-
Delta Electronics Components (Wujiang) Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	3,275,717	4.77	-		2,160,757	-
Delta Electronics Components (Wujiang) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	1,282,138	14.89	-		1,282,138	-
Delta Video Display System (Wujiang) Ltd.	Delta Electronics (Shanghai) Co., Ltd.	Affiliated enterprise	843,522	3.42	-		527,760	-
Delta Video Display System (Wujiang) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	395,387	16.40	-		395,387	-
Delta Electronics (Wuhu) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	1,946,010	5.98	-		1,827,067	-
Delta Electronics (Chenzhou) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	618,288	5.64	-		-	-
Chenzhou Delta Technology Co., Ltd.	Delta Electronics Power (Dongguan) Co., Ltd.	Affiliated enterprise	389,984	5.00	-		389,948	-
Chenzhou Delta Technology Co., Ltd.	Delta Electronics Int'l (Singapore) Pte. Ltd.	Affiliated enterprise	100,115	0.19	-		-

Table 7-2

Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2017 (Note 1)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance date (Note 2)	Allowance for doubtful accounts
					Amount	Action taken
Delta Electronics (Shanghai) Co., Ltd.	Delta Greentech (China) Co., Ltd.	Affiliated enterprise	3,838,701 $	3.36	- $		2,681,580 $	- $
Delta Electronics (Shanghai) Co., Ltd.	Delta Electronics (Pington) Co., Ltd.	Affiliated enterprise	523,001	4.19	-		305,988	-
Delta Electronics (Jiangsu) Ltd.	Delta Electronics Int'l (Singapore) Pte. Ltd.	Affiliated enterprise	199,911	2.60	-		93,249	-
Cyntec Co., Ltd.	Cyntec International Ltd. - LABUAN	Affiliated enterprise	125,739	5.84	-		125,739	-
Cyntec Co., Ltd.	Delta Electronics Inc.	Ultimate parent company	244,245	3.85	-		151,707	-
Cyntec Electronics (Suzhou) Co., Ltd.	Cyntec International Ltd. - LABUAN	Affiliated enterprise	495,321	5.41	-		495,321	-
Cyntec Electronics (Suzhou) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	Affiliated enterprise	724,966	6.24	-		724,966	-
Cyntec International Ltd. - LABUAN	Cyntec Co., Ltd.	Affiliated enterprise	181,054	5.17	-		181,054	-
Vivotek Inc.	Vivotek USA, Inc.	Affiliated enterprise	138,809	4.48	-		52,118	-
Fairview Assets Ltd.	Delta Electronics (Netherlands) B.V.	Affiliated enterprise	7,440,000	-	-		-	-
Fairview Assets Ltd.	Delta Controls Inc.	Affiliated enterprise	2,886,720	-	-		-	-
Delta Networks Holding Limited	Delta Electronics (Netherlands) B.V.	Affiliated enterprise	6,547,200	-	-		-	-
Delta Electronics (HK) Ltd.	Delta Electronics (Netherlands) B.V.	Affiliated enterprise	833,280	-	-		-	-
Delta International Holding Limited	Delta Electronics (Netherlands) B.V.	Affiliated enterprise	892,800	-	-		-	-
Delta Electronics (Wuhu) Co., Ltd.	Cyntec Electronics (Suzhou) Co., Ltd.	Affiliated enterprise	1,403,257	-	-		-	-
Vivotek Inc.	Vatics Inc.	Affiliated enterprise	117,170	-	-		-	-

Note 1: Including other receivables in excess of $100,000.

Note 2: The amount represents collections subsequent to December 31, 2017 up to March 8, 2018.

Table 7-3

Delta Electronics Inc. and Subsidiaries Significant inter-company transactions during the reporting period Year ended December 31, 2017

Table 8

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

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	Transaction	Transaction	Transaction	Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
0	Delta Electronics Inc.	Delta Electronics Int'l (Singapore) Pte. Ltd.	`1`	Sales and other operating revenue	12,126,635 $	(Note 4)	5.42
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics Inc.	`2`	Sales	17,791,963	(Note 4)	7.96
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Dongguan) Co., Ltd.	`3`	Sales	7,299,027	(Note 4)	3.26
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics Power (Dongguan) Co., Ltd.	`3`	Sales	14,736,696	(Note 4)	6.59
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Jiangsu) Ltd.	`3`	Sales	17,698,067	(Note 4)	7.92
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics Components (Wujiang) Ltd.	`3`	Sales	11,605,748	(Note 4)	5.19
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Video Display System (Wujiang) Ltd.	`3`	Sales	4,356,622	(Note 4)	1.95
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Wuhu) Co., Ltd.	`3`	Sales	5,394,342	(Note 4)	2.41
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Chenzhou) Co., Ltd.	`3`	Sales	2,493,982	(Note 4)	1.12
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Japan), Inc.	`3`	Sales	3,582,984	(Note 4)	1.60
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	DEI Logistics (USA) Corp.	`3`	Sales	19,098,785	(Note 4)	8.54
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Networks (Dongguan) Ltd.	`3`	Sales	16,658,229	(Note 4)	7.45
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	DNI Logistics (USA) Co.	`3`	Sales	9,486,220	(Note 4)	4.24
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Netherlands) B.V.	`3`	Sales	2,404,094	(Note 4)	1.08

Table 8-1

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	Transaction	Transaction	Transaction	Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics (Americas) Ltd.	`3`	Sales	2,497,662 $	(Note 4)	1.12
2	Delta Networks (Dongguan) Ltd.	Delta Electronics Int'l (Singapore) Pte. Ltd.	`3`	Sales	18,582,061	(Note 4)	8.31
3	Delta Networks, Inc, (Taiwan)	DNI Logistics (USA) Co.	`3`	Sales	3,977,859	(Note 4)	1.78
4	Delta Electronics (Dongguan) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	`3`	Sales	9,580,873	(Note 4)	4.29
5	Delta Electronics Power (Dongguan) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	`3`	Sales	20,325,911	(Note 4)	9.09
6	Delta Electronics (Jiangsu) Ltd.	Delta Electronics (Shanghai) Co., Ltd.	`3`	Sales	4,142,552	(Note 4)	1.85
6	Delta Electronics (Jiangsu) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	`3`	Sales	35,598,708	(Note 4)	15.92
7	Delta Electronics Components (Wujiang) Ltd.	Delta Electronics (Shanghai) Co., Ltd.	`3`	Sales	10,245,818	(Note 4)	4.58
7	Delta Electronics Components (Wujiang) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	`3`	Sales	13,877,976	(Note 4)	6.21
8	Delta Video Display System (Wujiang) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	`3`	Sales	4,449,488	(Note 4)	1.99
9	Delta Electronics (Wuhu) Co., Ltd.	Delta Electronics Int'l (Singapore) Pte. Ltd.	`3`	Sales	9,555,049	(Note 4)	4.27
10	Delta Electronics (Chenzhou) Co., Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	`3`	Sales	4,079,511	(Note 4)	1.82
11	Delta Electronics (Shanghai) Co., Ltd.	Delta Greentech (China) Co., Ltd.	`3`	Sales	13,616,817	(Note 4)	5.89
12	Cyntec Electronics (Suzhou) Co., Ltd.	Cyntec International Ltd. - LABUAN	`3`	Sales	4,566,861	(Note 4)	2.04
12	Cyntec Electronics (Suzhou) Co., Ltd.	Delta Electronics Int'l (Singapore) Pte. Ltd.	`3`	Sales	5,605,320	(Note 4)	2.51
13	ELTEK AS	Eltek s.r.o.	`3`	Purchases	2,480,223	(Note 4)	1.11
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics Inc.	`2`	Accounts receivable	6,256,498	(Note 4)	2.50

Table 8-2

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	Transaction	Transaction	Transaction	Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Electronics Power (Dongguan) Co., Ltd.	`3`	Accounts receivable	2,530,486 $	(Note 4)	1.01
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	DEI Logistics (USA) Corp.	`3`	Accounts receivable	6,156,833	(Note 4)	2.46
1	Delta Electronics Int'l (Singapore) Pte. Ltd.	Delta Networks (Dongguan) Ltd.	`3`	Accounts receivable	3,733,155	(Note 4)	1.49
2	Delta Networks (Dongguan) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	`3`	Accounts receivable	3,138,276	(Note 4)	1.25
5	Delta Electronics (Dongguan) Co., Ltd.	Delta Electronics Int'l (Singapore) Pte. Ltd.	`3`	Accounts receivable	2,770,647	(Note 4)	1.11
6	Delta Electronics (Jiangsu) Ltd.	Delta Electronics Int’l (Singapore) Pte. Ltd.	`3`	Accounts receivable	3,093,816	(Note 4)	1.23
7	Delta Electronics Components (Wujiang) Ltd.	Delta Electronics (Shanghai) Co., Ltd.	`3`	Accounts receivable	3,275,717	(Note 4)	1.31
11	Delta Electronics (Shanghai) Co., Ltd.	Delta Greentech (China) Co., Ltd.	`3`	Accounts receivable	3,838,701	(Note 4)	1.53
14	Fairview Assets Ltd.	Delta Electronics (Netherlands) B.V.	`3`	Other receivables	7,440,000	(Note 5)	2.97
14	Fairview Assets Ltd.	Delta Controls Inc.	`3`	Other receivables	2,886,720	(Note 5)	1.15
15	Delta Networks Holding Limited	Delta Electronics (Netherlands) B.V.	`3`	Other receivables	6,547,200	(Note 5)	2.61

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

(1) Parent company to subsidiary.
(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 3: 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 4: There is no similar transaction to compare with. It will follow the agreed price and transaction terms and all the credit terms are 70 days.

Note 5: Lending of capital

Note 6: Selling price was the same with the third parties. The credit term to related parties is 60~90 days after monthly billings, while 30~120 days after monthly billings for the third parties.

Note 7: Selling price was calculated based on the cost plus handling charges and necessary processing costs. The credit term to related parties is 60~90 days after monthly billings, while 30~120 days after monthly billings for the third parties. Note 8: The disclosure requirement for the above disclosed amounts is 1% of the consolidated total assets for balance sheet accounts and 1% of the consolidated total revenue for income statement accounts.

Table 8-3

Delta Electronics Inc. and Subsidiaries

Information on investees Year ended December 31, 2017

Table 9

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

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2017	Shares held as at December 31,2017	Shares held as at December 31,2017	Net profit (loss) of the investee for the year ended December 31, 2017	Investment income (loss) recognised by the Company for the year ended December 31, 2017	Footnote
				Balance as at December 31, 2017	Balance as at December 31, 2016	Number of shares	Ownership (%)	Book value
Delta Electronics Inc.	Delta International Holding Limited	Cayman Islands	Equity investments	8,922,118 $	8,922,118 $	67,680,000	94.00	57,087,661 $	5,204,079 $	4,676,624 $	(Note 6)
Delta Electronics Inc.	Delta Networks Holding Ltd.	Cayman Islands	Equity investments	29,581	29,581	83,800,000	100.00	11,017,200	666,718	706,300	(Note 6)
Delta Electronics Inc.	PreOptix (Hong Kong) Co. Ltd.	Hong Kong	Equity investments	162,376	162,376	5,250,000	39.62	216,922	10,440	4,136
Delta Electronics Inc.	Cyntec Co., Ltd.	Taiwan	Research, development, manufacturing and sales of thin film optic-electronic devices	12,067,931	12,067,931	2,062,257,714	100.00	32,297,074	2,195,664	1,949,899	(Note 6)
Delta Electronics Inc.	Delta Electronics Capital Company	Taiwan	Equity investments	2,900,000	2,500,000	306,254,470	100.00	3,657,569	128,185	128,185
Delta Electronics Inc.	Delta Electronics Int'l (Singapore) Pte. Ltd.	Singapore	Sales of electronics products	7,270	7,270	300,000	100.00	7,305,059	8,608,714	8,655,833	(Note 6)
Delta Electronics Inc.	DelBio Inc.	Taiwan	Manufacturing, wholesale and retail of medical equipment	900,000	900,000	90,000,000	100.00	195,124	26,635	26,607	(Note 6)
Delta Electronics Inc.	Allied Material Technology Corp.	Taiwan	Manufacturing and sales of color filter and lease services, etc.	2,113,978	2,113,978	211,400,909	99.97	1,985,384	134,470) (	134,430) (
Delta Electronics Inc.	UNICOM SYSTEM ENG. CORP.	Taiwan	Design and sales of computer, peripheral and information system (software and hardware)	341,695	-	570,000	100.00	378,504	39,246	37,213
Delta Electronics Inc.	NeoEnergy Microelectronics, Inc.	Taiwan	Designing and experimenting on integrated circuit and information software services	462,442	462,442	14,313,530	98.17	45,744	648) (	637) (
Delta Electronics Inc.	Delta Electronics (Thailand) Public Co., Ltd	Thailand	Manufacturing and sales of electronic products	114,615	114,615	69,128,140	5.54	8,704,772	3,228,791	817,150	(Note 6 and 7)
Delta Electronics Inc.	Delta Electronics (Netherlands) B.V.	Netherlands	Sales of electronics products	4,247,073	4,247,073	120,219,545	100.00	4,670,180	205,380	198,602	(Note 6)
Delta Electronics Inc.	LOYTEC Asia Corp., Ltd.	Taiwan	Consulting services of building management and control solutions	-	-	-	-	-	666) (	1,026) (	(Note 11)
Delta Electronics Inc.	Delta Green Life Co., Ltd.	Taiwan	Manufacturing of electronic parts, etc.	135,083	135,083	23,817,300	100.00	18,436) (	60,602) (	60,593) (	(Note 6)

Table 9-1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2017	Shares held as at December 31,2017	Shares held as at December 31,2017	Net profit (loss) of the investee for the year ended December 31, 2017	Investment income (loss) recognised by the Company for the year ended December 31, 2017	Footnote
				Balance as at December 31, 2017	Balance as at December 31, 2016	Number of shares	Ownership (%)	Book value
Delta Electronics Inc.	Delta Networks, Inc. (Taiwan)	Taiwan	Manufacturing and design of networking system and peripherals	2,490,390 $	2,490,390 $	50,040,838	99.98	1,597,444 $	648,648 $	603,679 $	(Note 6)
Delta Electronics Inc.	Delta America Ltd.	U.S.A	Equity investments	103,065	103,065	2,100,000	10.26	273,393	108,159	25,644	(Note 9)
Delta International Holding Limited	Vivotek Inc.	Taiwan	Manufacturing and sales of communication machinery, electronic components and telecom equipment	3,945,583	-	40,261,047	48.80	3,983,116	348,701	45,994
Delta International Holding Limited	Delta Electronics International Ltd.	Malaysia	Sales of electronics products	59,520	59,520	2,000,000	100.00	-	73,664	73,664	(Note 1)
Delta International Holding Limited	Delta Electronics (H.K.) Ltd.	Hong Kong	Equity investments	9,773,097	9,773,097	2,549,297,600	100.00	36,596,542	3,882,040	3,882,040	(Note 1)
Delta International Holding Limited	DAC Holding (Cayman) Ltd.	Cayman Islands	Equity investments	480,334	480,334	22,200,000	100.00	296,161	10,199) (	10,199) (	(Note 1)
Delta International Holding Limited	Delta Electronics (Japan), Inc.	Japan	Sales of power products, display solution products, electronic components, industrial automation products and their materials	85,083	85,083	5,600	100.00	411,311	78,071	78,071	(Note 1)
Delta International Holding Limited	Digital Projection International Ltd.	Britain	Equity investments	340,465	340,465	19,249,667	41.00	190,787	126,314) (	51,789) (	(Note 1)
Delta International Holding Limited	PreOptix (Hong Kong) Co., Ltd.	Hong Kong	Equity investments	238,080	238,080	8,000,000	60.38	314,035	10,796	6,519	(Note 1)
Delta International Holding Limited	Delta Power Sharp Ltd.	Hong Kong	Operations management and engineering services	-	38,487	-	-	-	-	-	(Note 1 and 12)
Delta International Holding Limited	DEI Logistics (USA) Corp.	U.S.A	Warehousing and logistics services	14,880	14,880	500,000	100.00	169,272	23,510	23,510	(Note 1)
Delta International Holding Limited	Ace Pillar Holding Ltd.	Samoa	Equity investments	406,387	406,387	2,858,718	100.00	396,977	24,987	12,345	(Note 1)
Delta International Holding Limited	Drake Investment (H.K.) Ltd.	Hong Kong	Equity investments	5,122,182	5,122,182	304,504,306	100.00	4,722,375	318,893	157,921	(Note 1)
Delta International Holding Limited	Delta Electronics International Mexico SA de CV	Mexico	Sales of power management system of industrial automation product and telecommunications equipment	-	-	1	-	-	16,235) (	-	(Note 1)
Delta International Holding Limited	Vivitek Corporation	U.S.A	Sales of projector products	44,640	44,640	9,000,000	100.00	67,533	56,494	56,494	(Note 1)
Delta International Holding Limited	Delta Greentech SGP Pte Ltd.	Singapore	Equity investments	831,216	831,216	12,175,470	100.00	706,166	53,102	15,199	(Note 1)

Table 9-2

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2017	Shares held as at December 31,2017	Shares held as at December 31,2017	Net profit (loss) of the investee for the year ended December 31, 2017	Investment income (loss) recognised by the Company for the year ended December 31, 2017	Footnote
				Balance as at December 31, 2017	Balance as at December 31, 2016	Number of shares	Ownership (%)	Book value
Delta International Holding Limited	Delta Electronics Europe Limited	Britain	Maintenance centre and providing support service	108,922 $	108,922 $	500,000	100.00	46,517 $	7,219 $	7,219 $	(Note 1)
Delta International Holding Limited	Boom Treasure Limited	Hong Kong	Equity investments	2,592,718	2,592,718	1	100.00	2,158,580	166,444	41,177	(Note 1)
Delta International Holding Limited	Apex Investment (HK) Limited	Hong Kong	Equity investments	3,760,004	3,760,004	2,000,001	100.00	1,657,627	218,800	220,763	(Note 1)
Delta International Holding Limited	Galaxy Star Investment (HK) Limited	Hong Kong	Equity investments	3,760,004	3,760,004	2,000,001	100.00	1,657,627	218,800	220,763	(Note 1)
Delta International Holding Limited	Jade Investment (HK) Limited	Hong Kong	Equity investments	3,760,004	3,760,004	2,000,001	100.00	1,657,627	218,800	220,763	(Note 1)
Delta Electronics (H.K.) Ltd.	Delta Electronics International Mexico SA de CV	Mexico	Sales of power management system of industrial automation product and telecommunications equipment	31,248	31,248	252,002	100.00	589	16,235) (	16,235) (	(Note 2)
Delta International Holding Limited	Delta Electronics (Netherlands) B.V.	Netherlands	Sales of electronics products	1	1	260,416,667	-	17,730	205,380	-	(Note 1)
Delta America Ltd.	Delta Electronics (Americas) Ltd.	U.S.A	Manufacturing and design of networking system and peripherals	224,815	224,815	250,000	100.00	906,150	51,484	51,484
Delta America Ltd.	Delta Solar Solutions LLC	U.S.A	Equity investments	67,555	67,555	-	100.00	61,510	2,886) (	2,886) (
Delta Electronics Int’l (Singapore) Pte. Ltd.	Loy Tec electronics GmbH	Austria	Consulting services of building management and control solutions	2,056,646	2,056,646	-	85.00	2,071,730	103,556	26,814	(Note10)
Loy Tec electronics GmbH	LOYTEC Americas, Inc.	U.S.A	Consulting services of building management and control solutions	297	297	9,978	100.00	12,706	5,737	5,737
Loy Tec electronics GmbH	LOYTEC Asia Corp., Ltd.	Taiwan	Consulting services of building management and control solutions	-	2,160	-	-	-	666) (	360) (	(Note 11)
Delta Networks Holding Limited	Delta Networks, Inc.	Cayman Islands	Equity investments	5,293,083	5,293,083	1,196,886,000	100.00	3,860,189	637,720	637,720	(Note 3)
Delta Networks Inc.	Delta Networks (H.K.) Limited	Hong Kong	Equity investments	1,041,600	1,041,600	35,000,000	100.00	3,561,279	471,633	471,633	(Note 4)
Delta Networks Inc.	Delta Networks International Ltd. (Labuan)	Malaysia	Research, development, design, manufacturing and sales of networking system and peripherals	29,760	29,760	1,000,000	100.00	-	34,110	34,110	(Note 4)

Table 9-3

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2017	Shares held as at December 31,2017	Shares held as at December 31,2017	Net profit (loss) of the investee for the year ended December 31, 2017	Investment income (loss) recognised by the Company for the year ended December 31, 2017	Footnote
				Balance as at December 31, 2017	Balance as at December 31, 2016	Number of shares	Ownership (%)	Book value
Delta Networks Inc.	DNI Logistics (USA) Corp.	U.S.A	Research, development, design, manufacturing and sales of networking system and peripherals	16,548 $	16,548 $	500,000	100.00	72,716 $	6,561 $	6,561 $	(Note 4)
Cyntec Co., Ltd.	Fairview Assets Ltd.	Cayman Islands	Equity investments	1,116,521	1,116,521	32,740,062	100.00	27,181,071	2,006,846	2,006,846	(Note 5)
Cyntec Co., Ltd.	Power Forest Technology Corporation	Taiwan	Design of power management IC	179,161	179,161	8,702,934	60.02	186,359	33,554	10,464	(Note 5)
Delta Electronics (Netherlands) B.V.	ELTEK AS	Norway	Research, development and sales of power supplies and others	14,795,704	14,795,704	93,531,101	100.00	14,896,121	1,402,051	22,779) (	(Note 8)
Delta Electronics (Netherlands) B.V.	Delta America Ltd.	U.S.A	Equity investments	683,989	683,989	8,179,182	39.95	814,531	108,159	21,861	(Note 8 and 9)
Delta Electronics (Netherlands) B.V.	Optovue, Inc.	U.S.A	Research, development, design, manufacturing and sales of medical equipment	892,800	892,800	3,750,000	23.21	777,126	224,795) (	49,483) (	(Note 8)
Delta Electronics (Netherlands) B.V.	Delta Controls Inc.	Canada	Consulting services of building management and control	2,232,000	2,232,000	75,000,000	100.00	2,448,203	241,471	29,374	(Note 8)
Delta Electronics (Netherlands) B.V.	Energy Dragon Global Limited	British Virgin Islands	~~solutions~~ Equity investments	144,671	144,671	10,001	100.00	181,442	9,611	9,611	(Note 8 and 9)
Delta Electronics (Netherlands) B.V.	Castle Horizon Limited	Republic of Seychelles	Equity investments	674,730	674,730	471,800	100.00	846,318	44,829	44,829	(Note 8 and 9)
Delta Electronics (Netherlands) B.V.	Delta Electronics (Switzerland) AG	Switzerland	Equity investments, research and development and sales of electronic products	380,928	-	10,200	51.00	497,894	110,304	54,883	(Note 8)
Delta Electronics (Netherlands) B.V.	Delta Greentech Electronics Industry LLC	Turkey	Marketing and sales of electronic products	23,808	-	15,708	51.00	14,798	3,120	8,359) (	(Note 8)
Delta Electronics (Netherlands) B.V.	Delta Greentech (Brasil) S.A.	Brazil	Manufacturing and sales of electronic products	211,594	-	4,315,657	100.00	177,902	56,487) (	23,311) (	(Note 8)
Delta Electronics (Netherlands) B.V.	Delta Greentech (USA) Corporation	U.S.A	Sales of electronics products	123,206	-	1,500,000	100.00	128,814	48,677	5,737	(Note 8)
Delta Electronics (Netherlands) B.V.	DELTA ELECTRONICS BRASIL LTDA	Brazil	Sales of electronics products	235,104	-	24,999,999	100.00	208,490	15,274) (	15,274) (	(Note 8)
Vivotek Inc.	Vatics Inc.	Taiwan	Design and sales of Multimedia Integrated Circuit	216,738	216,738	15,798,000	49.55	30,947	151,402) (	68,503) (	(Note 13)
Vivotek Inc.	Vivotek Holdings, Inc.	U.S.A	Holding company	31,555	31,555	1,000	100.00	187,010	5,301	5,301	(Note 13)
Vivotek Inc.	Realwin Investment Inc.	Taiwan	venture capital company	200,000	150,000	20,000,000	100.00	117,630	22,223) (	26,227) (	(Note 13)

Table 9-4

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2017	Shares held as at December 31,2017	Shares held as at December 31,2017	Net profit (loss) of the investee for the year ended December 31, 2017	Investment income (loss) recognised by the Company for the year ended December 31, 2017	Footnote
				Balance as at December 31, 2017	Balance as at December 31, 2016	Number of shares	Ownership (%)	Book value
Vivotek Inc.	Vivotek Netherlands B.V.	Netherlands	Sales service	11,418 $	11,418 $	3,000	100.00	8,667 $	619 $	619 $	(Note 13)
Vivotek Inc.	OTUS Imaging, Inc.	Taiwan	Sales of webcam and its related components	17,991	-	1,574,000	26.23	9,354	12,817) (	-	(Note 13)
Vivotek Holdings, Inc.	Vivotek USA, Inc.	U.S.A	Sales of webcam and its related components	29,760	29,760	10,000,000	100.00	252,803	5,311	5,311	(Note 15)
Realwin Investment Inc.	OTUS Imaging, Inc.	Taiwan	Sales of webcam and its related components	46,146	25,400	4,426,000	73.77	26,304	12,817) (	9,584) (	(Note 14)
Realwin Investment Inc.	Aetek Inc.	Taiwan	Sales of webcam and its related components	34,045	34,045	3,373,000	56.21	27,549	4,693	2,638	(Note 14)
Realwin Investment Inc.	Lidlight Inc.	Taiwan	Sales of lighting equipment	10,200	-	1,020,000	51.00	6,721	6,744) (	3,439) (	(Note 14)
Realwin Investment Inc.	Wellstates Investment, LLC	U.S.A	Investment and commercial lease of real estate	34,859	34,859	-	100.00	43,321	1,406	1,406	(Note 14)
Realwin Investment Inc.	Vivotek Middle East FZCO	United Arab Emirates	Sales of webcam and its related components	11,242	11,242	1,000	89.99	11,764) (	13,096) (	11,786) (	(Note 14)
Realwin Investment Inc.	Skywatch Innovation Incorporation	Taiwan	Wholesale of electronic equipment	6,211	7,718	412,000	13.64	-	7,763) (	-	(Note 14)
Realwin Investment Inc.	Aicasa Incorporated	Cayman Islands	venture capital company	10,275	10,275	315,000	35.00	946	9,626) (	3,369) (	(Note 14)

Note 1: Investment income / loss recognised by Delta International Holding Limited Note 2: Investment income / loss recognised by Delta Electronics (H.K.) Ltd.

Note 3: Investment income / loss recognised by Delta Networks Holding Limited Note 4: Investment income / loss recognised by Delta Networks, Inc. Note 5: Investment income / loss recognised by Cyntec Co., Ltd.

Note 6: The investment income /loss is net of the elimination of intercompany transactions.

Note 7: The weighted average combined ownership percentage of 20.01%.

Note 8: Investment income / loss recognised by Delta Electronics (Netherlands) B.V.

Note 9: The Company indirectly acquired 39.95% and 49.79% equity shares of Delta America Ltd. through Delta Electronics (Netherlands) B.V. and its subsidiaries, Castle Horizon Limited and Energy Dragon Global Limited, respectively, considering 10.26% equity shares of DAL held by the Company, the total ownership are 100%.

Note 10: Investment income / loss and adjustments in net value recognized by Delta Electronics Int’l (Singapore) Pte. Ltd.

Note 11: In February, 2017, the Company acquire a 46% equity interest of LOYTEC Asia Corp., Ltd., considering a 45.9% equity interest held by the Company’s subsidiary, DEIL-SG, the comprehensive shareholding is 91.9%. However, LOYTEC Asia Corp., Ltd. resolved to dissolve in the first quarter of 2017, and the liquidation was completed in November, 2017.

Note 12: In August, 2016, the company conducted the liquidation, which was completed in the second quarter of 2017.

Note 13: The Company’s second-tier subsidiary, which was recognised as investment gains/losses through Vivotek Inc.

Note 14: The Company’s third-tier subsidiary, which was recognised as investment gains/losses through Realwin Investment Inc.

Note 15: The Company’s third-tier subsidiary, which was recognised as investment gains/losses through Vivotek Holdings, Inc.

Table 9-5

Delta Electronics Inc. and Subsidiaries Information on investments in Mainland China Year ended December 31, 2017

Table 10

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

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2017	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2017	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2017	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2017	Net income of investee for the year ended December 31, 2017	Ownership held by Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2017 (Note 28)	Book value of investments in Mainland China as of December 31, 2017	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2017	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Delta Electronics (Dongguan) Co., Ltd.	Manufacturing and sales of transformer and thermal products	2,910,826 $	Invested by DHK	2,000,794 $	- $	- $	2,000,794 $	593,523 $	94.00	530,063 $	3,893,229 $	287,482 $	(Note 3 and 19)
Delta Electronics Power (Dongguan) Co., Ltd.	Manufacturing and sales of power supplies	1,252,896	Invested by DHK	503,539	-	-	503,539	498,247	94.00	467,911	2,382,883	399,855	(Note 6 and 19)
Delta Electronics (Shanghai) Co., Ltd.	Product design, management consulting service and distribution of electronic products.	3,625,477	Invested by DHK	-	-	-	-	1,662,065	94.00	1,560,764	5,381,104	-	(Note 9 and 19)
Delta Electronics (Wuhu) Co., Ltd.	Manufacturing and sales of LED light source, power supplies and others.	3,987,840	Invested by DHK	167,846	-	-	167,846	287,579	94.00	269,759	4,363,450	-	(Note 10 and 19)
Delta Electronics (Chenzhou) Co., Ltd.	Manufacturing and sales of transformers	1,874,880	Invested by DHK	-	-	-	-	(81,759)	94.00	(45,660)	1,920,503	-	(Note 12 and 19)
Delta Electronics (Jiangsu) Ltd.	Manufacturing and sales of power supplies and transformers	1,190,400	Invested by DHK	3,981,484	-	-	3,981,484	495,458	94.00	465,662	2,557,269	-	(Note 25)
Delta Electronics Components (Wujiang) Ltd.	Manufacturing and sales of new-type electronic components, variable-frequency drive and others.	3,506,026	Invested by DHK	6,304,097	-	-	6,304,097	1,250,062	94.00	1,176,668	6,631,667	52,504	(Note 7 and 25)
Delta Video Display System (Wujiang) Ltd.	Manufacturing and sales of various projectors	863,040	Invested by DHK	1,320,998	-	-	1,320,998	172,048	94.00	166,859	1,311,104	-	(Note 8 and 25)
Delta Electronics (Wujiang) Trading Co., Ltd.	Installation, consulting and trading of electronic products	59,520	Invested by DHK	11,190	-	-	11,190	-	94.00	(10)	96,716	-	(Note 15 and 19)
Delta Green (Tianjin) Industries Co., Ltd.	Manufacturing and sales of transformers	674,064	Invested by DHK	924,059	-	-	924,059	25,963) (	94.00	24,406) (	616,276	-	(Note 14 and 19)
Delta Electronics (Pingtan) Co., Ltd.	Wholesale and retail of electronic products and energy-saving equipment	137,126	Invested by DHK	139,872	-	-	139,872	31,160	94.00	29,290	145,231	-	(Note 19)
PreOptix (Jiang Su) Co., Ltd.	Manufacturing and sales of lenses and optical enginges for projectors	394,320	Invested by PHK	380,035	-	-	380,035	10,796	96.38	17,419	429,847	-	(Note 13 and 22)
Wuhu Delta Technology Co., Ltd.	Manufacturing and sales of transformers	134,841	Invested by DWH	-	-	-	-	1,269) (	94.00	1,153) (	141,938	-	(Note 17)
Chenzhou Delta Technology Co., Ltd.	Manufacturing and sales of transformers	116,557	Invested by DCZ	-	-	-	-	37,451) (	94.00	35,225) (	189,041	-	(Note 17)
Delta Energy Technology (Wuhu) Co., Ltd.	Research and development of energy-saving technology, energy-saving equipment, energy management system and technology consulting service, etc.	9,142	Invested by DPEC and DWH	-	-	-	-	13	94.00	13	-	-	(Note 17 and 27)

Table 10-1

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2017	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2017	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2017	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2017	Net income of investee for the year ended December 31, 2017	Ownership held by Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2017 (Note 26)	Book value of investments in Mainland China as of December 31, 2017	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2017	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Delta Energy Technology (Dongguan) Co., Ltd.	Research and development of energy-saving technology, energy-saving equipment, energy management system and technology consulting service, etc	137,126 $	Invested by DPEC and DDG	- $	- $	- $	- $	570) ($	94.00	535) ($	153,143 $	- $	(Note 17)
Delta Energy Technology (Shanghai) Co., Ltd.	Research and development of energy-saving technology, energy-saving equipment, energy management system and technology consulting service, etc	45,709	Invested by DPEC and DGC	-	-	-	-	2,845) (	90.54	2,576) (	37,724	-	(Note 17)
Delta Greentech (China) Co., Ltd.	Manufacturing and sales of uninterruptible power systems	2,596,254	Invested by DIH, Ace, Boom, Drake and DGSG	8,687,656	-	-	8,687,656	740,656	90.16	667,918	4,925,723	-	(Note 4 and 18)
Delta Energy Technology Puhuan (Shanghai) Co. , Ltd.	Energy technology, development and consulting of environmental technical skills, and design and sales of energy saving equipment	457	Invested by DPEC	-	-	-	-	2,145	90.54	1,942	2,476	-	(Note 17)
Cyntec Electronics (Suzhou) Co., Ltd.	Research, development, manufacturing and sales of new-type electronic components (chip components, sensing elements, hybrid integrated circuits) and wholesale of similar products	6,025,280	Invested by CHK	5,906,240	-	-	5,906,240	277,897	100.00	277,897	6,949,877	-	(Note 21)
Delta Networks (Dongguan) Ltd.	Manufacturing and sales of other radio- broadcast receivers and the equipment in relation to broadband access networking system	1,041,600	Invested by DNHK	1,330,461	-	-	1,330,461	494,465	100.00	494,465	2,110,211	654,720	(Note 5 and 20)
Delta Networks (Shanghai) Ltd.	Design of computer software	59,520	Invested by DNHK	84,353	-	-	84,353	2,455	100.00	2,455	89,901	-	(Note 11 and 20)
Delta Networks (Xiamen) Ltd.	Operation of radio transmission apparatus, and automatic data processing, reception, conversion and transmission or regeneration of voice, images or other data of the machine, including switches and routers, with a special program to control a computer or word processor with memory business	67,413	Invested by DNHK	20,832	-	-	20,832	22,853) (	30.00	6,881) (	20,448	-	(Note 20)
Eltek Energy Technology	Development, manufacturing and sales of intelligent power equipment and system for supporting access networking system, and manufacturing and sale of intelligent power equipment for supporting renewable energy	220,224	Invested by Eltek AS	1,115,419	-	-	1,115,419	38,758) (	100.00	38,758) (	198,981	-	(Note 24)
DelBio (Wujiang)., Ltd.	Manufacturing, wholesale and retail of medical equipment	119,040	Invested by DelBio	119,040	-	-	119,040	32,426	100.00	32,426	127,323	-	(Note 23)
Delta Electronics (Beijing) Co., Ltd.	Installation of mechanic, electronic, telecommunication and circuit equipment	228,544	Invested by DHK	-	-	-	-	14,283) (	94.00	13,494) (	201,202	-	(Note 16 and 19)

Table 10-2

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2017	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2017	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2017	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2017	Net income of investee for the year ended December 31, 2017	Ownership held by Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2017 (Note 26)	Book value of investments in Mainland China as of December 31, 2017	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2017	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Delta Electronics (Xi'an) Co., Ltd.	Sales of computer, peripheral equipment and software	251,398 $	Invested by DHK	- $	233,669 $	- $	233,669 $	961 $	94.00	903 $	237,245 $	- $	(Note 19)
Beijing Industrial Foresight Technology Co., Ltd.	Computer system services and data process	29,711	Invested by Delta Electronics (Beijing) Co., Ltd.	-	-	-	-	24,184) (	75.20	18,186) (	4,852	-	(Note 17)
Unicom (Nanjing) System Eng. Corp	Design and sales of computer, peripheral and information system (software and hardware)	8,928	Invested by UNICOM SYSTEM ENG. CORP.	8,928	-	-	8,928	19,195	100.00	19,195	36,041	-	(Note 26)

Note 1: The capital was translated based on the capital certified report of the investee companies into New Taiwan Dollars at the average exchange rate of RMB 6.51080 to US$1 and RMB 4.57087 to NT$1.

Note 2: The accumulated remittance as of January 1, 2017, remitted or collected this period, accumulated remittance as of December 31, 2017 and investment income remitted back as of December 31, 2017 was translated into New Taiwan Dollars at the average exchange rate of NTD 29.76 to US$1 at the balance sheet date.

Note 3: Except for the facility of US$67,231 thousand permitted by Investment Commission, the capitalization of earnings of US$27,081 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China.

Note 4: Except for the facility of US$291,924 thousand permitted by Investment Commission, the capitalization of earnings of US$980 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China.

Note 5: Except for the facility of US$44,706 thousand permitted by Investment Commission, the capitalization of earnings of US$11,312 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China.

Note 6: Except for the facility of US$16,920 thousand permitted by Investment Commission, the capitalization of earnings of US$22,654 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China.

Note 7: Except for the facility of US$211,831 thousand permitted by Investment Commission, the capitalization of earnings of US$27,303 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China. Note 8: Except for the facility of US$44,388 thousand permitted by Investment Commission, the capitalization of earnings of US$8,272 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China. Note 9: The capitalization of earnings of US$110,401 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China.

Note 10: Except for the facility of US$5,640 thousand permitted by Investment Commission, the capitalization of earnings of US$120,320 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China.

Note 11: Except for the facility of US$2,834 thousand permitted by Investment Commission, the capitalization of earnings of US$298 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China.

Note 12: The earnings transferred to investment in Delta Electronics (Chenzhou) Co., Ltd. is US$59,220 thousand approved by the Investment Commission of the Ministry of Economic Affairs (MOEA) is not included in the Company's investments in Mainland China. Note 13: Except for the facility of US$7,520 thousand permitted by Investment Commission, the investment of US$5,250 thousand by PreOptix Co., Ltd. was permitted by Investment Commission.

Note 14: Except for the facility of US$31,050 thousand permitted by Investment Commission, the capitalization of earnings of US$265 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China.

Note 15: Except for the facility of US$376 thousand permitted by Investment Commission, the capitalization of earnings of US$1,504 thousand permitted by Investment Commission is excluded from the Company’s amount of investment in Mainland China.

Note 16: The capitalization of earnings of US$7,268 thousand permitted by Investment Commission, is exclued from the Company’s amount of investment in Mainland China.

Note 17: According to the regulations of the Investment Commission, the reinvestment of the investee companies in Mainland China is not required to obtain the approval of the Investment Commission; thus the investment amounts are excluded from the calculation of the Company’s ceiling of investment amount in Mainland China.

Note 18: Jointly invested through Delta International Holding Limited, Ace Pillar Holding Co., Ltd., Drake Investment (H.K.) Ltd., Delta Greentech SGP Pte Ltd and Boom Treasure Limited.

Note 19: Invest through Delta Electronics (H.K.) Ltd.

Note 20: Invest through Delta Networks (H.K.) Ltd.

Note 21: Invest through Cyntec Holding (H.K.) Ltd.

Note 22: Invest through PreOptix (Hong Kong) Co., Ltd.

Note 23: Invest through DelBio Inc.

Note 24: Invest through Delta Electronics (Netherlands) B.V..

Note 25: Invest through Delta Electronics (H.K.) Ltd., and Delta International Holding Ltd.

Note 26: Invest through UNICOM SYSTEM ENG. CORP. Note 27: Delta Energy Technology (Wuhu) Co., Ltd. Company completed the liquidation process and was dissolved in August 2017.

Note 28: The Company recognised investment income / loss based on the audited financial statements.

Table 10-3

Company name	Accumulated amount remitted from Taiwan to Mainland China as of Decemberr 31, 2017	Investment amount approved by the Investment Commission of Ministry of Economic Affairs (MOEA)	Ceiling of investments in Mainland China imposed by the Investment Commission of MOEA
Delta Electronics Inc.(Note 2 and 3)	$ 25,895,651	$ 26,434,158	$ -
Cyntec Co.,Ltd.	5,906,240	5,906,240	15,845,675
DelBio Inc.(Note 4)	119,040	119,040	117,091
UNICOM SYSTEM ENG. CORP. (Note 5)	8,928	8,928	80,000

Note 1: The accumulated amount remitted out of Taiwan to Mainland China and investment amount approved by the investment commission was translated into New Taiwan Dollars at the average exchange rate of NTD 29.76 to US$1 at the balance sheet date. Note 2: The investment income of US$22,000 thousand, US$18,000 thousand, US$10,509 thousand and US$14,351 thousand were remitted back on March 11, 2011, June 27, 2012, August 14, 2012, June 24, 2009 and December 29, 2005, respectively, from the investee companies in Mainland China and was permitted by Investment Commission on August 3, 2012, August 28, 2012, July 17, 2009 and January 6, 2006, respectively, which are deductible from the Company’s accumulated amount remitted out of Taiwan to Mainland China. Note 3: According to “Regulation Governing the Approval of Investment or Technical Cooperation in Mainland China”, the Company and Cyntec Co., Ltd. obtained the approval of operation headquarters from Industrial Development Bureau of Ministry of Economic Affairs. There is no ceiling of investment amount.

Note 4: Ceiling of $117,091 is calculated based on DelBio Inc.'s net assets as of December 31, 2017. However, ceiling was $119,040 at the time when applying for investments.

Note 5: The limitation pursuant to the regulations is NT $80 million or 60% of net value or consolidated net assets, whichever is higher.

The significant purchases, sales, accounts payable and accounts receivable that the Company directly conducted with investee companies in Mainland China as well as those that the Company indirectly conducted with investee companies in Mainland China through Delta Electronics Int'l (Singapore) Pte. Ltd. (DEIL-SG) and Cyntec International Ltd. (CIL-Labuan) for the year ended December 31, 2017 are shown in Table 5 and 6.

Table 10-4

AI assistant

DELTA — Audit Report / Information 2017

52000_rns_2017-10-30_97aad667-6c7a-40ee-b02e-bdaa2fa60bb8.pdf

DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REPORT OF INDEPENDENT ACCOUNTANTS

Opinion

Basis for opinion

Key audit matters

Business combination

Description

How our audit addressed the matter

Impairment assessment of intangible assets

Description

How our audit addressed the matter

– Other matter Scope of the Audit

Other matter-Parent company only financial reports

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

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

2.

3.

4.

5.

6.

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) DECEMBER 31, 2017 AND 2016

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2017 AND 2016

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2017 AND 2016

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2017 AND 2016

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2017 AND 2016

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2017 AND 2016

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) YEARS ENDED DECEMBER 31, 2017 AND 2016

DELTA ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2017 AND 2016

1. HISTORY AND ORGANIZATION

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

IFRS 16, ‘Leases’

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

B. Subsidiaries included in the consolidated financial statements:

Balance sheet

Statements of cash flows

DIH

(4) Foreign currency translation

(5) Classification of current and non-current items

(6) Cash equivalents

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

(8) Available-for-sale financial assets

(9) Notes receivable, accounts receivable and other receivables

(10) Impairment of financial assets

(11) Derecognition of financial assets

(12) Inventories

(13) Investments accounted for using equity method / associates

(14) Cash surrender value of life insurance

(15) Property, plant and equipment

(16) Investment property

(17) Intangible assets

(18) Impairment of non-financial assets

(19) Borrowings

(20) Notes and accounts payable

(21) Financial liabilities at fair value through profit or loss

(22) Derecognition of financial liabilities

(23) Offsetting financial instruments

(25) Employee benefits

A. Pensions

- (26) Employee share based payment

(27) Income tax

(28) Share capital

(29) Dividends

(30) Revenue recognition

A. Sales of goods

(31) Government grants

(32) Business combinations

(33) Operating segments

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

(1) Critical judgements in applying the Group’s accounting policies

B. Investment property

DELTA Audit Report / Information 2017

`–` Other matter Scope of the Audit