Faraday - Interim / Quarterly Report 2019

English Translation of a Report and Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION

AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS FOR THE SIX MONTHS ENDED June 30, 2019 AND 2018

Address: No. 5 Li-Hsin Road III, Hsinchu Science Park, Hsinchu City, Taiwan, R.O.C. Telephone: 886-3-578-7888

Notice to Readers

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

Review Report of Independent Accountants

To Faraday Technology Corporation

Introduction

We have reviewed the accompanying consolidated balance sheets of Faraday Technology Corporation and its subsidiaries (“the Group”) as of June 30, 2019 and 2018, and the related consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2019 and 2018, changes in equity and cash flows for the six-month periods ended June 30, 2019 and 2018, and notes to the consolidated financial statements, including the summary of significant accounting policies (together “the consolidated financial statements”). Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard No. 34, “Interim Financial Reporting” as endorsed and became effective by Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” of the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the Republic of China and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

The basis of Conclusion

As explained in Note 4(3), the financial statements of certain insignificant subsidiaries were not reviewed by independent accountants. Those statements reflect total assets of NT$2,451,191 thousand and NT$2,378,196 thousand, constituting 33.02% and 32.87% of the consolidated total assets, and total liabilities of NT$361,021 thousand and NT$314,408 thousand, constituting 14.04% and 13.20% of the consolidated total liabilities as of June 30, 2019 and 2018, respectively; and total comprehensive income of NT$(50,093) thousand, NT$(108,896) thousand, NT$11,390 thousand and NT$51,038 thousand constituting (52.52)%, (210.51)%, 4.80% and 28.75% of the consolidated total comprehensive income for the three-month period and six-month periods ended June 30, 2019 and 2018, respectively. As explained in Note (6), the financial statements of the associate accounted for under the equity method were not reviewed by independent accountants. The associate under equity method amounted to NT$81,650 thousand and NT$87,469 thousand as of June 30, 2019 and 2018, respectively. The related shares of profits from the associate under the equity method amounted to NT$(2,389) thousand, NT$(3,201) thousand, NT$(4,207) thousand and NT$(8,246) thousand, and the related shares of other comprehensive income from the associate under the equity method amounted to NT$234 thousand, NT$1,614 thousand, NT$367 thousand, and NT$700 thousand for the three-month and six-month periods ended June 30, 2019 and 2018, respectively. The information related to above subsidiaries, and the associate accounted for under the equity method disclosed in Note 13 was also not reviewed by independent accountants.

Conclusion

Based on our reviews, except for the effect of such adjustments, if any, as might have been determined to be necessary had the financial statements of certain insignificant subsidiaries, and the associate accounted for using equity method and the information disclosed in the footnotes been reviewed by independent accountants described in the preceding paragraph, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of Faraday Technology Corporation and its subsidiaries as of June 30, 2019 and 2018, their consolidated financial performance, for the three-month and six-month periods ended June 30, 2019 and 2018 and cash flows for the six-month periods ended June 30, 2019 and 2018, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard No. 34, “Interim Financial Reporting” as endorsed and became effective by Financial Supervisory Commission of the Republic of China.

/s/Chiu, Wan-Ju

/s/Kuo, Shao-Pin

Ernst & Young, Taiwan July 23, 2019

Notice to Readers

The reader is advised that these financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

The accompanying consolidated financial statements are intended only to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China.

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2019, December 31, 2018 and June 30, 2018 (June 30, 2019 and 2018 are unaudited)

(Expressed in thousands of New Taiwan Dollars)

Assets	Note		As of
		June 30, 2019	December 31, 2018	June 30, 2018
Cash and cash equivalents Financial assets at fair value through profit or loss, current Contract assets, current Notes receivable, net Accounts receivable, net Accounts receivable from related parties, net Other receivables, net Inventories, net Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets measured at amortized cost, noncurrent Investments accounted for using equity method Property, plant and equipment Right-of-use assets Intangible assets Deferred tax assets Refundable deposits Current assets Total non-current assets Total assets	4, 6(1) 4, 6(2) 4, 6(13), 6(14) 4, 6(14) 4, 6(4), 6(14) 4, 6(4), 6(14), 7 4, 6(5) 7 4, 6(2) 6(3) 8 6(6) 6(7) 4, 6(15) 6(8) 4	2,734,006 $ 25,284 353,494 1,439 698,520 156,205 45,833 650,302 171,807 4,836,890 29,265 1,021,733 16,818 81,650 564,848 274,628 544,394 45,310 7,810 2,586,456 7,423,346 $	2,387,534 $ 25,525 367,258 1,558 766,844 114,694 45,640 596,017 88,653 4,393,723 29,265 967,922 16,772 85,490 575,858 - 691,470 47,344 6,875 2,420,996 6,814,719 $	3,192,958 $ 27,803 297,536 6,244 494,489 146,668 40,883 507,558 176,204
				4,890,343
				29,265 1,233,384 16,760 87,469 542,297 - 405,001 23,238 6,769
				2,344,183
				7,234,526 $

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2019, December 31, 2018 and June 30, 2018 (June 30, 2019 and 2018 are unaudited)

(Expressed in thousands of New Taiwan Dollars)

Liabilities and Equity	Note		As of
		June 30, 2019	December 31, 2018	June 30, 2018
Current tax liabilities Current liabilities Financial liabilities at fair value through profit or loss, current Contract liabilities, current Notes payable Accounts payable Accounts payable - related parties Payables on equipment Other payables Equity attributable to the parent company Lease liabilities-current Other current liabilities Total current liabilities Non-current liabilities Deferred tax liabilities Lease liabilities-noncurrent Long-term payables Long-term deferred revenue Defined benefit liabilities, non-current Total non-current liabilities Total liabilities Total liabilities and equity Capital Common stock Additional paid-in capital Retained earnings Legal reserve Special reserve Unappropriated earnings Other components of equity Equity attributable to the parent company Non-controlling interests Total equity	6(2) 4, 6(13) 7 6(10) 4, 6(15) 4 4, 6(15) 6(10) 4 6(12) 6(12) 6(12) 6(12) 6(12)	- $ 326,168 163 799,263 249,972 - 713,364 59,228 30,725 14,255 2,193,138 2,909 248,225 104,705 6,042 16,670 378,551 2,571,689 2,485,503 628,233 1,473,678 512,210 183,988 (444,197) 4,839,415 12,242 4,851,657 7,423,346 $	- $ 300,408 4 695,160 114,097 1,607 561,437 63,974 - 29,491 1,766,178 2,390 - 211,859 7,031 15,900 237,180 2,003,358 2,485,503 626,596 1,596,485 860 599,145 (512,210) 4,796,379 14,982 4,811,361 6,814,719 $	6,424 $ 417,573 24 550,936 212,927 788 1,073,565 23,162 - 13,989 2,299,388 6,255 - 48,406 11,227 17,310 83,198 2,382,586 2,485,503 602,899 1,596,485 860 420,826 (254,633) 4,851,940 - 4,851,940 7,234,526 $

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three-month and six-month periods ended June 30, 2019 and 2018

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

	Note	For the three-month periods ended June 30,	For the three-month periods ended June 30,	For the six-month periods ended June 30,	For the six-month periods ended June 30,
		2019	2018	2019	2018
Selling expenses Net sales Operating costs Gross profit Operating expenses Income from continuing operations before income tax Administrative expenses Research and development expenses Expected credit (losses) gain Total operating expenses Operating income Non-operating income and expenses Other income Other gains and losses Finance costs Share of profit or loss of associates and joint ventures Total non-operating income and expenses Stockholders of the parent Income tax expense Net income from continuing operations Other comprehensive income Item that will not be reclassified subsequently to profit or loss: Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income Item that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations Share of the other comprehensive income of associates and joint ventures accounted for using equity method Other comprehensive income (net of income tax) Total comprehensive income Net income attributable to: Earnings per share-diluted Non-controlling interests Comprehensive income (loss) attributable to: Stockholders of the parent Non-controlling interests Earnings per share (NTD) Earnings per share-basic	4, 6(13), 7 6(5), 6(16), 7 6(8), 6(16) 6(14) 4, 6(17) 4, 6(17) 4, 6(17) 4, 6(6) 4, 6(19) 4, 6(18) 6(20) 6(12) 6(20)	1,214,902 $ (550,937) 663,965 (57,591) (71,577) (455,245) (24,126) (608,539) 55,426 13,916 4,463 (1,778) (2,389) 14,212 69,638 (15,397) 54,241 42,941 (2,043) 234 41,132 95,373 $ 56,462 $ (2,221) 54,241 $ 97,758 $ (2,385) 95,373 $ 0.22 $ 0.22 $	1,104,001 $ (499,742) 604,259 (55,419) (114,493) (380,228) (15,740) (565,880) 38,379 16,807 (7,833) - (3,201) 5,773 44,152 (15,631) 28,521 7,620 13,974 1,614 23,208 51,729 $ 28,521 $ - 28,521 $ 51,729 $ - 51,729 $ 0.11 $ 0.11 $	2,312,281 $ (1,011,818) 1,300,463 (109,811) (143,612) (927,941) 22,113 (1,159,251) 141,212 44,676 6,341 (3,719) (4,207) 43,091 184,303 (35,089) 149,214 80,886 6,651 367 87,904 237,118 $ 152,517 $ (3,303) 149,214 $ 240,239 $ (3,121) 237,118 $ 0.61 $ 0.61 $	2,146,941 $ (979,166) 1,167,775 (96,179) (214,745) (740,786) (28,768) (1,080,478) 87,297 28,584 9,103 - (8,246) 29,441 116,738 (19,228) 97,510 68,528 10,790 700 80,018 177,528 $ 97,510 $ - 97,510 $ 177,528 $ - 177,528 $ 0.39 $ 0.39 $

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the six-month periods ended June 30, 2019 and 2018

(Expressed in thousands of New Taiwan Dollars)

				EquityA	EquityA	ttributable to the Parent Company	ttributable to the Parent Company			Non- Controlling Interests	Total Equity
	Common Stock	Additional Paid-in Capital		Retained Earnings			Other Components of Equity		Total
			Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gain or Loss on Financial Assets Measured at Fair Value through Other Comprehensive Income	Unrealized Gain or Loss on Available-for-sale Financial Assets
Balance as of January 1, 2018 Cash dividends Impact of retroactive application and restatement Restated balance as of January 1, 2018 Appropriation and distribution of 2017 retained earnings Legal reserve Special reserve Net income for the six-month ended June 30, 2019 Net income for the six-month ended June 30, 2018 Other comprehensive income for the six-month ended June 30, 2018 Total comprehensive income for the six-month ended June 30, 2018 Change in subsidiaries' ownership Disposal of equity instrument measured at fair value through other comprehensive income Balance as of June 30, 2018 Balance as of January 1, 2019 Appropriation and distribution of 2018 retained earnings Legal reserve Special reserve Cash dividends Other comprehensive income for the six-month ended June 30, 2019 Total comprehensive income for the six-month ended June 30, 2019 Change in subsidiaries' ownership Disposal of equity instrument measured at fair value through other comprehensive income Balance as of June 30, 2019	2,485,503 $ - 2,485,503 - - - - - - - - 2,485,503 $ 2,485,503 $ - - - - - - - - 2,485,503 $	598,879 $ - 598,879 - - - - - - 4,020 - 602,899 $ 626,596 $ - - - - - - 1,637 - 628,233 $	1,512,894 $ - 1,512,894 83,591 - - - - - - - 1,596,485 $ 1,596,485 $ 26,323 - (149,130) - - - - - 1,473,678 $	- $ - - - 860 - - - - - - 860 $ 860 $ - 511,350 - - - - - - 512,210 $	933,774 $ 134,275 1,068,049 (83,591) (860) (671,086) 97,510 - 97,510 - 10,804 420,826 $ 599,145 $ (26,323) (511,350) (49,710) 152,517 - 152,517 - 19,709 183,988 $	(67,610) $ - (67,610) - - - - 11,490 11,490 - - (56,120) $ (52,955) $ - - - - 6,836 6,836 - - (46,119) $	- $ (256,237) (256,237) - - - - 68,528 68,528 - (10,804) (198,513) $ (459,255) $ - - - - 80,886 80,886 - (19,709) (398,078) $	66,750 $ (66,750) - - - - - - - - - - $ - $ - - - - - - - - - $	5,530,190 $ (188,712) 5,341,478 - - (671,086) 97,510 80,018 177,528 4,020 - 4,851,940 $ 4,796,379 $ - - (198,840) 152,517 87,722 240,239 1,637 - 4,839,415 $	- $ - - - - - - - - - - - $ 14,982 $ - - - (3,303) 182 (3,121) 381 - 12,242 $	5,530,190 $ (188,712) 5,341,478 - - (671,086) 97,510 80,018 177,528 4,020 - 4,851,940 $ 4,811,361 $ - - (198,840) 149,214 87,904 237,118 2,018 - 4,851,657 $

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS For the six-month periods ended June 30, 2019 and 2018 (Expressed in thousands of New Taiwan Dollars)

Description	For the six-mont June	h periods ended 30,	Description	For the six-mont June	h periods ended 30,
	2019	2018		2019	2018
Adjustments for non-cash gain or loss: Depreciation Amortization Expected credit (gains) losses Loss on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Share-based payment expenses Share of loss of associates and joint ventures accounted for using equity method Others Changes in operating assets and liabilities: Contract assets Notes receivable Accounts receivable Accounts receivable from related parties Other receivables Inventories Other current assets Contract liabilities Notes payables Accounts payable Accounts payable - related parties Other payables Other current liabilities Defined benefit liabilities Cash generated from operations Interest received Interest paid Income tax paid Cash flows from operating activities: Net income before tax Net cash provided by operating activities	184,303 $ 46,714 168,450 (22,113) 430 3,719 (6,648) 2,018 4,207 (17) 13,764 119 90,437 (41,511) (142) (54,285) (86,419) 25,760 159 104,103 135,875 (109,521) (16,225) 770 443,947 6,597 (3,719) (34,517) 412,308 $	116,738 $ 23,274 183,743 28,768 13,415 - (6,514) 4,020 8,246 (18,779) (297,536) (1,174) 83,503 (57,603) 26,808 (73,395) (77,234) 367,998 (76) 92,131 128,706 (142,615) (30,078) (1,528) 370,818 6,605 - (105,195) 272,228 $	Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Net cash used in investing activities Cash flows from investing activities: Acquisition of financial asset measured at fair value through other comprehensive income Disposal of financial asset measured at fair value through other comprehensive income Acquisition of financial asset measured at fair value through profit or loss Disposal of financial asset measured at fair value through profit or loss Acquisition of property, plant and equipment Refundable deposits Acquisition of intangible assets Other investing activities Cash flows form financing activities: Cash payments for the principal portion of the lease liability Cash and cash equivalents at end of period	- $ 27,075 - - (20,375) (935) (57,032) (46) (51,313) (17,558) (17,558) 3,035 346,472 2,387,534 2,734,006 $	(30,000) $ 13,819 (58,465) 36,508 (31,437) (216) (184,941) (64) (254,796) - - 15,804 33,236 3,159,722 3,192,958 $

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

1. History and Organization

Faraday Technology Corporation (the "Company") was incorporated on June 10, 1993. The Company is a leading fabless ASIC vendor and silicon intellectual property and system platform provider, with products and services of ASIC/SoC Design Services, ASIC/SoC Production Turnkey Services, and ASIC EDA tools.

The Company’s shares are listed on the Taiwan Stock Exchange. The address of its registered office and principal place of business is No. 5, Li-Hsin III Road, Hsinchu Science Park, Taiwan.

2. Date and Procedures of Authorization of Financial Statements for Issue

The consolidated financial statements of the Company and its subsidiaries (the “Group”) for the sixmonth periods ended June 30, 2019 and 2018 were authorized for issue in accordance with a resolution of the Board of Directors’ meeting on July 23, 2019.

3. Newly Issued or Revised Standards and Interpretations

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Group applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after January 1, 2019. The nature and the impact of each new standard and amendment that has a material effect on the Group is described below:

A. IFRS 16“Leases”

IFRS 16 “Leases” replaces IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, SIC-15 “Operating Leases - Incentives” and SIC-27 “Evaluating the Substance of Transactions Involving the Legal Form of a Lease”.

The Group followed the transition provision in IFRS 16 and the date of initial application was January 1, 2019. The impacts arising from the adoption of IFRS 16 are summarized as follows:

-10-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
a. Please refer to Note 4 for the accounting policies before or after January 1, 2019.
b. For the definition of a lease, the Group elected not to reassess whether a contract was, or contained, a lease on January 1, 2019. The Group was permitted to apply IFRS 16 to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 but not to apply IFRS 16 to contracts that were not previously identified as containing a lease applying IAS 17 and IFRIC 4. That is, for contracts entered into (or changed) on or after January 1, 2019, the Group need to assess whether contacts are, or contain, leases applying IFRS 16. In comparing to IAS 17, IFRS 16 provides that a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group assessed most of the contracts are, or contain, leases and has no significant impact arised.
c. The Group is a lessee and elects not to restate comparative information in accordance with the transition provision in IFRS 16. Instead, the Group recognized the cumulative effect of initially applying IFRS 16 as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the date of initial application.
- (a) Leases previously classified as operating leases

For leases that were previously classified as operating leases applying IAS 17, the Group measured and recognized those leases as lease liability on January 1, 2019 at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019, In addition, the Group chooses, on a lease-by-lease basis, to measure the right-of-use asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the balance sheet immediately before January 1, 2019.

On January 1, 2019, the Group’s right-of-use asset increased by NT$289,497 thousand, lease liability-current increased by NT$28,505 thousand, lease liabilitynoncurrent increased by NT$266,109 thousand, other current assets decreased by NT$500 thousand and other payables decreased by NT$5,617 thousand.

In accordance with the transition provision in IFRS 16, the Group used the following practical expedients on a lease-by-lease basis to leases previously classified as operating leases:

-11-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

i. Apply a single discount rate to a portfolio of leases with reasonably similar characteristics.
ii. Rely on its assessment of whether leases are onerous immediately before January 1, 2019 as an alternative to performing an impairment review.
iii. Elect to account in the same way as short-term leases to leases for which the lease term ends within 12 months of January 1, 2019.
iv. Exclude initial direct costs from the measurement of the right-of-use asset on January 1, 2019.
v. Use hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease.
(b) Please refer to Note 4, Note 5 and Note 6(15) for additional disclosure of lessee and lessor which required by IFRS 16.
(c) As of January 1, 2019, the impacts arising from the adoption of IFRS 16 are summarized as follows:
i. The weighted average lessee’s incremental borrowing rate applied to lease liabilities recognized in the balance sheet on January 1, 2019 was 2.899%.
ii. The explanation for the difference of NT$193,338 thousand between: 1) operating lease commitments disclosed applying IAS 17 as of December 31, 2018, discounted using the incremental borrowing rate on January 1, 2019; and 2) lease liabilities recognized in the balance sheet as of January 1, 2019 is summarized as follows:

Operating lease commitments disclosed applying IAS 17 as of December 31, 2018 Discounted using the incremental borrowing rate on January 1, 2019 Add: the carrying value of lease payables as of December 31, 2018 Less: prepaid rent as of December 31, 2018 Less: adjustment to leases that meet and elect to account in the same way as short-term leases Add/(less): adjustments to the options to extend the lease that is reasonably certain to exercise The carrying value of lease liabilities recognized as of January 1, 2019	$101,276
	$78,322 5,617 (500) (429) 211,604
	$294,614

Operating lease commitments disclosed applying IAS 17 as of
December 31, 2018
Discounted using the incremental borrowing rate on
January 1, 2019
Add: the carrying value of lease payables as of December 31,
2018
Less: prepaid rent as of December 31, 2018
Less: adjustment to leases that meet and elect to account in the
same way as short-term leases
Add/(less): adjustments to the options to extend the lease that is
reasonably certain to exercise
The carrying value of lease liabilities recognized as of
January 1, 2019

$101,276

$78,322
5,617
(500)
(429)
211,604

$294,614

-12-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are not endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below:

		Effective Date
Items	New, Revised or Amended Standards and Interpretations	issued byIASB
a	IFRS 10“Consolidated Financial Statements” and IAS 28“Investments	To be determined
	in Associates and Joint Ventures” - Sale or Contribution of Assets	by IASB
	between an Investor and its Associate or Joint Ventures (Amendment)
b	IFRS 17“Insurance Contracts”	January 1, 2021
c	Definition of a Business - Amendments to IFRS 3	January 1, 2020
d	Definition of Material - Amendments to IAS 1 and 8	January 1, 2020

a. IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” - Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures (Amendment)

The amendments address the inconsistency between the requirements in IFRS 10 “Consolidated Financial Statements” (IFRS 10) and IAS 28 “Investments in Associates and Joint Ventures” (IAS 28), in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint venture. IFRS 10 requires full profit or loss recognition on the loss of control of a subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 “Business Combinations” (IFRS 3) between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gain or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

-13-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
b. IFRS 17 Insurance Contracts

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The fulfilment cash flows comprise of the following:

(1) estimates of future cash flows;
(2) Discount rate: an adjustment to reflect the time value of money and the financial risks related to the future cash flows, to the extent that the financial risks are not included in the estimates of the future cash flows; and
(3) a risk adjustment for non-financial risk.

The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims. Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

c. Definition of a Business - Amendments to IFRS 3

The amendments clarify the definition of a business in IFRS 3 Business Combinations. The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition.

IFRS 3 continues to adopt a market participant’s perspective to determine whether an acquired set of activities and assets is a business. The amendments clarify the minimum requirements for a business; add guidance to help entities assess whether an acquired process is substantive; and narrow the definitions of a business and of outputs; etc.

-14-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
d. Definition of a Material - Amendments to IAS 1 and 8

The main amendment is to clarify new definition of material. It states that “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information. An entity will need to assess whether the information, either individually or in combination with other information, is material in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users.

The above-mentioned standards and interpretations issued by IASB have not yet been recognized by FSC at the date when the Group’s financial statements were authorized for issue, and the local effective dates are to be determined by FSC. The above-mentioned standards and interpretations have no material impact on the Group.

4. Summary of Significant Accounting Policies

(1) Statement of Compliance

The consolidated financial statements of the Group for the six months ended June 30, 2019 and 2018 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”) and IAS 34 Interim Financial Reporting as endorsed and became effective by the FSC.

(2) Basis of Preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

(3) Basis of consolidation

Preparation principle of consolidated financial statements

Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if and only if the Company has:

-15-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
(b) exposure, or rights, to variable returns from its involvement with the investee, and
(c) the ability to use its power over the investee to affect its returns

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(a) the contractual arrangement with the other vote holders of the investee
(b) rights arising from other contractual arrangements
(c) the Company voting rights and potential voting rights

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the Company loses control of a subsidiary, it:

(a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;
(b) derecognizes the carrying amount of any non-controlling interest;
(c) recognizes the fair value of the consideration received;
(d) recognizes the fair value of any investment retained;
(e) recognizes any surplus or deficit in profit or loss; and

-16-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(f) reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss.

The consolidated entities are listed as follows:

Percentage of ownership (%)

Investor	Subsidiary	Main businesses		As of
			June 30, 2019	December 31, 2018	June 30, 2018
The Company The Company The Company The Company The Company The Company The Company Chih-Hung Chih-Hung Chih-Hung Sheng Bang Sheng Bang Innopower BCGL B.V.I. B.V.I. B.V.I. B.V.I.	Faraday Technology Corporation (USA) Faraday Technology Japan Corporation Faraday Technology`－`B.V. (Note 1) Faraday Technology`－`B.V.I. (B.V.I.) Faraday Technology Vietnam Company Limited (Note 2) Chih-Hung Investment Corporation (Chih-Hung) Sheng Bang Investment Corporation (Sheng Bang) Grain Media Inc. Innopower Technology Corporation (Innopower) FaradayTek Solutions India Private Limited (Note 3) Grain Media Inc. FaradayTek Solutions India Private Limited (Note 4) Bright Capital Group Limited (BCGL) Faraday Technology Corporation (Suzhou) Faraday Technology Corporation `－`Mauritius (Mauritius) GrainTech Electronics Limited Faraday Technology Corporation (Samoa) Artery Technology Corporation(Cayman) (Note 5)	Sales representative in America Sales representative in Japan Sales representative in Europe Trading and general investing IC designing service General investing General investing IC designing, marketing and customer IC designing Silicon Intellectual Property designing IC designing service IC designing, marketing and customer service IC designing service General investing IC designing, marketing and customer service General investing IC designing, marketing and customer service General investing General investing	100.00% 99.95% - 100.00% 100.00% 100.00% 100.00% 19.42% 100.00% 1.00% 80.58% 99.00% 100.00% 100.00% 100.00% 100.00% 100.00% 81.13%	100.00% 99.95% - 100.00% - 100.00% 100.00% 19.42% 100.00% - 80.58% - 100.00% 100.00% 100.00% 100.00% 100.00% 81.13%	100.00% 99.95% 100.00% 100.00% - 100.00% 100.00% 19.42% 100.00% - 80.58% - 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

-17-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Investor	Subsidiary	Main businesses	Percentage of ownership (%) As of	Percentage of ownership (%) As of	Percentage of ownership (%) As of
			June 30, 2019	December 31, 2018	June 30, 2018
Samoa Cayman Mauritius Mauritius	United Business Service Corporation Artery Technology Corporation, Ltd. Faraday Technology China Corporation Grain Media Technology (Shenzhen) Co., Ltd.(Note 6)	IC designing, marketing and customer service IC designing, marketing and customer service IC designing, marketing and customer service IC designing, marketing and customer service	100.00% 100.00% 100.00% 100.00%	100.00% 100.00% 100.00% 100.00%	100.00% 100.00% 100.00% 100.00%

We did not review the financial statements of certain subsidiaries, whose statements reflect total assets of NT$2,451,191 thousand and NT$2,378,196 thousand as of June 30, 2019 and June 30, 2018, respectively, and total liabilities of NT$361,021 thousand and NT$314,408 thousand as of June 30, 2019 and 2018, total comprehensive income of NT$(50,093) thousand and NT$(108,896) thousand for the three-month periods ended June 30, 2019 and 2018, and total comprehensive income of NT$11,390 thousand and NT$51,038 thousand for the six-month periods ended June 30, 2019 and 2018, respectively.

Notes:

－
(1) Faraday Technology B.V. has been liquidated and capital was remitted during the year ended December 31, 2018..
(2) The Company invested in the establishment of Faraday Technology Vietnam Company Limited in May 2019.
(3) Chih-Hung Investment Corporation invested in the establishment of FaradayTek Solutions India Private Limited in April 2019.
(4) Sheng Bang Investment Corporation invested in the establishment of FaradayTek Solutions India Private Limited in April 2019.
(5) Artery Technology Corporation (Cayman) has a capital increase by cash during the year ended December 31, 2018. The Group did not participate the capital increase and, accordingly, ownership percentage was reduced to 81.13%.
(6) Grain Media Technology (Shenzhen) Co., Ltd. filed for liquidation in February 2018. The liquidation procedures is still in progress as of the report date.

-18-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(4) Except for the accounting policies listed under Note 4(5) ~ (7), the same accounting policies have been followed in the consolidated financial statements for the six months ended June 30, 2019 as were applied in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2018. For the summary of other significant accounting policies, please refer to the consolidated financial statements for the year ended December 31, 2018.
(5) Leases

The accounting policy from January 1, 2019 as follow:

For contracts entered on or after January 1, 2019, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Group assesses whether, throughout the period of use, has both of the following:

(a) the right to obtain substantially all of the economic benefits from use of the identified asset; and
(b) the right to direct the use of the identified asset.

The Group elected not to reassess whether a contract is, or contains, a lease on January 1, 2019. The Group is permitted to apply IFRS 16 to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 but not to apply IFRS 16 to contracts that were not previously identified as containing a lease applying IAS 17 and IFRIC 4.

For a contract that is, or contains, a lease, the Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Group for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Group estimates the stand-alone price, maximising the use of observable information.

-19-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Group as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group recognizes right-of-use asset and lease liability for all leases which the Group is the lessee of those lease contracts.

At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

(a) fixed payments (including in-substance fixed payments), less any lease incentives receivable;
(b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
(c) amounts expected to be payable by the lessee under residual value guarantees;
(d) the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
(e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Group measures the lease liability on an amortised cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Group measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

(a) the amount of the initial measurement of the lease liability;
(b) any lease payments made at or before the commencement date, less any lease incentives received;

-20-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(c) any initial direct costs incurred by the lessee; and
(d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Group measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The Group applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Group accounted for as short-term leases or leases of low-value assets, the Group presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Group elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

The accounting policy before January 1, 2019 as follow:

Group as a lessee

Operating lease payments are recognized as an expense on a straight-line basis over the lease term.

-21-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(6) Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted and disclosed for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.
(7) Interim period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim period. The average annual effective income tax rate is estimated by current income tax expenses only. Deferred income tax is recognized and measured according to IAS 12 “Income Tax” and follows the same accounting policies of the Company’s annual consolidated financial statements. When income tax rate changes occur in interim period, the effect on deferred income tax is recognized in profit or loss, other comprehensive income or equity at once.

5. Significant Accounting Judgments, Estimates and Assumptions

The same significant accounting judgments, estimates and assumptions have been followed in the consolidated financial statements for the six months ended June 30, 2019 and 2018 as were applied in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2018. Please refer to the consolidated financial statements for the year ended December 31, 2018.

6. Contents of Significant Accounts

(1) Cash and cash equivalents

Cash and cash equivalents
Cash Cash on hand Checking and savings Time deposits Cash equivalents-Commercial paper with repurchase agreements Total		As of
	June 30,2019	December 31,2018	June 30,2018
	$376 1,527,705 1,095,912 110,013	$362 914,894 1,472,278 -	$360 1,600,877 1,461,668 130,053
	$2,734,006	$2,387,534	$3,192,958

-22-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

As of June 30,2019 December 31,2018 Mandatorily measured at fair value through profit or loss: Derivatives not designated as hedging instruments $1,182 $330 Stocks 29,265 29,265 Funds 24,102 25,195 Total $54,549 $54,790 Current $25,284 $25,525 Non-Current 29,265 29,265 Total $54,549 $54,790 Mandatorily measured at fair value through profit or loss: Derivatives not designated as hedging instruments $- $- Current $- $- Financial assets at fair value through profit or loss were not pledged. Financial assets at fair value through other comprehensive income As of June 30,2019 December 31,2018 Equity instrument investments measured at fair value through other comprehensive income – Non- current: Listed companies stocks $1,397 $19,031 Unlisted companies stocks 1,020,336 948,891 Total $1,021,733 $967,922		As of	June 30,2018 $- 29,265 27,803 $57,068 $27,803 29,265 $57,068 $(6,424) $(6,424)
	June 30,2019	December 31,2018
	$1,182 29,265 24,102	$330 29,265 25,195
	$54,549	$54,790
	$25,284 29,265	$25,525 29,265
	$54,549	$54,790
	$-	$-
	$-	$-
Equity instrument investments measured at fair value through other comprehensive income – Non- current: Listed companies stocks Unlisted companies stocks Total
	June 30,2019	December 31,2018	June 30,2018
	$1,397 1,020,336	$19,031 948,891	$46,845 1,186,539
	$1,021,733	$967,922	$1,233,384

(3) Financial assets at fair value through other comprehensive income

-23-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Group classified certain of its financial assets as financial assets at fair value through other comprehensive income which were not pledged.

In consideration of the Group’s investment strategy, the Group disposed the listed stock of Andes Technology Corporation during April 2019 and the year ended December 31, 2018, which were reported under equity instrument investments measured at fair value through other comprehensive income. Upon derecognition, the fair value of the investments was NT$27,075 thousand and NT$55,929 thousand, and the cumulative disposal gain of NT$19,709 thousand and NT$23,329 thousand was reclassified from other components of equity to retained earnings, respectively.

(4) Accounts receivable, net and accounts receivable from related parties, net

	As of
June 30,2019	December 31,2018	June 30,2018
$811,921	$905,346	$587,965
811,921 (113,401)	905,346 (138,502)	587,965 (93,476)
698,520 156,205	766,844 114,694	494,489 146,668
156,205	114,694	146,668
$854,725	$881,538	$641,157

Accounts receivable were not pledged.

Accounts receivable are generally on 30- 60 day terms from the date of monthly closing. The gross carrying amount of accounts receivable is amounted to NT$968,126 thousand, NT$1,020,040 thousand, and NT$734,633 thousand as of June 30, 2019, December 31, 2018, and June 30, 2018, respectively. Please refer to Note 6(14) for more details on impairment of account receivable, and Note 12 for credit risk disclosure.

(5) Inventories

nventories
Work in process Finished goods Total		As of
	June 30,2019	December 31,2018	June 30,2018
	$158,048 492,254	$153,158 442,859	$144,244 363,314
	$650,302	$596,017	$507,558

-24-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The cost of inventories recognized in expenses amounted to NT$550,937 thousand and NT$499,742 thousand for the three-month periods ended June 30, 2019 and 2018, respectively, including the loss of NT$930 thousand, loss on scrap of inventories of NT$0 thousand, the reversal gain of NT$10,661 thousand and loss on scrap of inventories of NT$18,930 thousand for the three-month periods ended June 30, 2019 and 2018, respectively.

The cost of inventories recognized in expenses amounted to NT$1,011,818 thousand and NT$979,166 thousand for the six-month periods ended June 30, 2019 and 2018, respectively, including the loss of NT$3,879 thousand, loss on scrap of inventories of NT$0 thousand, the reversal gain of NT$12,682 thousand and loss on scrap of inventories of NT$18,930 thousand for the six-month periods ended June 30, 2019 and 2018, respectively. The gain from reversal of allowance for decline in market value and obsolescence was recognized due to the sales of the Company’s previously written-down inventories during the six-month period ended June 30, 2018.

No inventories were pledged.

(6) Investments accounted for using equity method

			As of	As of	As of	As of
	June 30,2019		December 31,2018		June 30,2018
Investee company		Percentage of		Percentage of		Percentage of
		Ownership or		Ownership or		Ownership or
	Amount	VotingRights	Amount	VotingRights	Amount	VotingRights
Associate`：` Fresco Logic Inc.
	$81,650	22.61%	$85,490	22.61%	$87,469	22.61%

The Group’s investment in Fresco Logic Inc. was not individually material. The aggregate carrying amount of the Group’s interest in Fresco Logic Inc. is NT$81,650 thousand, NT$85,490 thousand, and NT$87,469 thousand, respectively. The aggregated financial information based on Group’s share of Fresco Logic Inc. is as follows:

Three-month periods ended June 30	Three-month periods ended June 30	Six-month periods ended June 30	Six-month periods ended June 30
2019	2018	2019	2018
$(2,389) -	$(3,201) -	$(4,207) -	$(8,246) -
$(2,389)	$(3,201)	$(4,207)	$(8,246)

-25-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

There were no contingent liabilities or capital commitments for the above-mentioned associate, and the investment was not pledged as of June 30, 2019, December 31, 2018, and June 30, 2018.

The carrying amount of investments accounted for under the equity method in investees whose financial statements were unreviewed amounts to NT$81,650 thousand and NT$87,469 thousand, as of June 30, 2019 and June 30, 2018, respectively. The share of the profit or loss of these associates and joint ventures accounted for using the equity method amount to NT$(2,389) thousand and NT$(3,201) thousand for the three-month periods ended June 30, 2019 and 2018, respectively. The share of the profit or loss of these associates and joint ventures accounted for using the equity method amount to NT$(4,207) thousand and NT$(8,246) thousand for the sixmonth periods ended June 30, 2019 and 2018, respectively. The share of other comprehensive income of these associates and joint ventures accounted for using the equity method amount to NT$234 thousand and NT$1,614 thousand for the three-month periods ended June 30, 2019 and 2018, respectively. The share of other comprehensive income of these associates and joint ventures accounted for using the equity method amount to NT$367 thousand and NT$700 thousand for the six-month periods ended June 30, 2019 and 2018, respectively. These amounts were based on unreviewed financial statements of the investees.

(7) Property, plant and equipment

Property, plant and equipment for own-use		As of
	June 30,2019	December 31, 2018 (Note)	June 30, 2018 (Note)
	$564,848

Note: The Group adopted IFRS 16 since January 1, 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

-26-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

A. Property, plant and equipment for own-use (after the application of IFRS 16)

Land	Buildings and facilities	Machinery	Computer equipment	Office furniture and fixtures	Miscellaneous equipment	Total
$33,576 - -	$603,753 470 271	$41,243 3,768 -	$143,208 13,836 116	$25,134 589 396	$857 105 10	$847,771 18,768 793
$33,576	$604,494	$45,011	$157,160	$26,119	$972	$867,332
$- - -	$183,215 7,576 146	$11,401 3,459 -	$59,341 17,602 99	$17,353 1,349 289	$603 44 7	$271,913 30,030 541
$-	$190,937	$14,860	$77,042	$18,991	$654	$302,484

-27-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

B. Property, plant and equipment (prior to the application of IFRS 16)

Land	Buildings and facilities	Machinery	Computer equipment	Office furniture and fixtures	Miscellaneous equipment	Construction inprocess	Total $795,473 31,808 (1,787) - 814 $826,308 $261,902 23,274 (1,787) 622
$33,576 - - - -	$592,818 - - 10,754 164	$21,452 700 - - -	$114,118 28,008 - - 193	$23,549 1,431 (1,787) - 387	$868 57 - - 20	$9,092 1,612 - (10,754) 50
$33,576	$603,736	$22,152	$142,319	$23,580	$945	$-
$- - - -	$167,749 7,557 - 138	$9,955 1,769 - -	$67,587 12,310 - 176	$16,040 1,552 (1,787) 294	$571 86 - 14	$- - - -
$-	$175,444	$11,724	$80,073	$16,099	$671	$-	$284,011
Land	Buildings and facilities	Machinery	Computer equipment	Office furniture and fixtures	Miscellaneous equipment	Construction inprocess
$33,576	$420,538	$29,842	$83,867	$7,781	$254	$-

Note:

(1) Significant components of buildings are main building structure, air conditioning units and elevators, which are depreciated based on their useful lives over 51 years, 8 years, and 6~16 years, respectively.

(2) Property, plant and equipment were not pledged.

-28-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(8) Intangible assets

ntangible assets
Cost Beginning balance Addition`－`acquired separately Decrease`－`derecognition Exchange differences Ending balance Accumulated Amortization Beginning balance Amortization Decrease`－`derecognition Exchange differences Ending balance Net carrying amount as of: June 30, 2019 December 31, 2018 June 30, 2018	Software
	Six-month period ended June 30,2019	Six-month period ended June 30,2018
	$1,065,829 18,103 (5,120) 4,002	$1,193,296 160,358 (321,688) (5,142)
	$1,082,814	$1,026,824
	$374,359 168,450 (5,120) 731	$758,480 183,743 (321,688) 1,288
	$538,420	$621,823
	$544,394
	$691,470
	$405,001

The amortization expenses of intangible assets are as follows:

Three-month periods ended June 30 2019 2018 Administrative expenses 26 24 Research and development expenses 83,937 94,185 Total $83,963 $94,209	Six-month periods ended June 30	Six-month periods ended June 30
	2019 51 168,399 $168,450	2018
		44 183,699
		$183,743

-29-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(9) Short-term loans

The Group’s credit limit from short-term loans was NT$1,376,250 thousand, NT$907,200 thousand and NT$354,800 thousand as of June 30, 2019, December 31, 2018, and June 30, 2018, respectively, and all of which was unused.

- (10) Long term payables

The payables were primarily attributable to several agreements which the Group entered into for certain software license. As of June 30, 2019, December 31, 2018, and June 30, 2018, future payments for other long-term payables were as follows ：

Year ofpayment		As of
	June 30,2019	December 31,2018	June 30,2018
2018 2019 2020 2021 Subtotal Less: Current portion (Recorded as other payables) Total	$- 166,181 106,581 52,481	$- 145,704 143,968 67,891	$62,998 38,045 25,080 5,421
	325,243 (220,538)	357,563 (145,704)	131,544 (83,138)
	$104,705	$211,859	$48,406

(11) Post-employment benefits

Defined contribution plan

Expenses under the defined contribution plan for the three-month periods ended June 30, 2019 and 2018 are NT$11,734 thousand and NT$9,960 thousand, respectively. Expenses under the defined contribution plan for the six-month periods ended June 30, 2019 and 2018 are NT$23,118 thousand and NT$19,898 thousand, respectively.

Defined benefit plan

Expenses under the defined benefit plan for the three-month periods ended June 30, 2019 and 2018 are NT$1,428 thousand and NT$136 thousand, respectively. Expenses under the defined benefit plan for the six-month periods ended June 30, 2019 and 2018 are NT$2,856 thousand and NT$272 thousand, respectively.

-30-

(12) Equity

A. Capital stock

The Company’s authorized capital was NT$5,000,000 thousand, divided into 500,000 thousand shares (including 55,000 thousand shares reserved for exercise of employee stock options) as of June 30, 2019, December 31, 2018, and June 30, 2018, each at a par value of NT$10. Following the resolution of the shareholders’ meeting on June 12, 2012, the Company decided to increase its authorized common shares to NT$6,000,000 thousand, divided into 600,000 thousand shares. As of June 30, 2019, related registration processes have not been completed.

The Company’s issued capital was NT$2,485,503 thousand, divided into 248,550 thousand shares, as of June 30, 2019, December 31, 2018, and June 30, 2018. Each share has one voting right and a right to receive dividends.

B. Additional paid-in capital

Additional paid-in capital
Premiums in excess of par Change in subsidiaries’ ownership Share of changes in net assets of associates and joint ventures accounted for using equity method Employee stock option and others Total		As of
	June 30,2019	December 31,2018	June 30,2018
	$594,782 29,354 1,531 2,566	$594,782 27,717 1,531 2,566	$594,782 4,020 1,531 2,566
	$628,233	$626,596	$602,899

According to the Company Act, the additional paid-in capital shall not be used except for offsetting deficit of the company. When a company does not have deficit, it may distribute the additional paid-in capital derived from the issuance of new shares at premiums in excess of par or income from endowments received by the Company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

-31-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
C. Retained earnings and dividend policies

According to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:

a. Reserve for tax payments;
b. Offset accumulated losses in previous years, if any;
c. Legal reserve, which is 10% of leftover profits.
d. Allocation or reverse of special reserves as required by law or government authorities;
e. The remaining net profits and the retained earnings from previous years will be allocated as shareholders’ dividend. The Board of Directors will prepare a distribution proposal and submit the same to the shareholders’ meeting for review and approval by a resolution.

The policy of dividend distribution should reflect factors such as the current and future investment environment, fund requirements, domestic and international competition and capital budgets; as well as the interest of the shareholders, share bonus equilibrium and long-term financial planning etc. The Board of Directors shall make the distribution proposal annually and present it at the shareholders’ meeting. The Company is in the growth stage, in order to plan for future funding requirement and long-term financial planning, and to satisfy shareholders’ need for cash dividend, cash dividends shall not be less than 10% of total dividends for distribution.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to offset the deficit of the Company. When the Company does not have deficit, it may distribute the portion of legal reserve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

When distributing distributable earnings, the Company has to set aside special reserve, for other net deductions from shareholders’ equity of the period. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed.

-32-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Following the adoption of TIFRS, the FSC issued Order No. Financial-Supervisory-SecuritiesCorporate-1010012865 on April 6, 2012, which set out the following provisions for compliance: On a public company's first-time adoption of the TIFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside an equal amount of special reserve. Following a company’s adoption of the TIFRS for the preparation of its financial reports, when distributing distributable earnings, it shall set aside to special reserve, from the profit/loss of the current period and the undistributed earnings from the previous period, an amount equal to “other net deductions from shareholders’ equity for the current fiscal year”, provided that if the company has already set aside special reserve according to the requirements in the preceding point, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed. The Order had no influence on the Company.

Details of the 2018 and 2017 earnings distribution and dividends per share as resolved by the shareholders’ meeting on June 13, 2019 and June 15, 2018, respectively, are as follows:

Legal reserve Increase in special reserve Common stock-cash dividend	Appropriation of earnings	Appropriation of earnings	Dividendper share(NT$)	Dividendper share(NT$)
	2018	2017	2018	2017
	$26,323 511,350 49,710	$83,591 860 671,086	- - $0.2	- - $2.7

Legal reserve distribution to dividends per share NT$0.6 and dividend per share NT$0.2 were resolved by the shareholders’ meeting on June 13, 2019. Total dividend per share was NT$0.8.

Please refer to Note 6(16) for more details on employees’ compensations and the remunerations to directors and supervisors.

-33-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

D. Non-controlling interests

Beginning balance Net income attributable to non-controlling interests Other comprehensive income (losses), attributable to non-controlling interests, net of tax: Exchange differences on translation of foreign operations Change in subsidiaries’ ownership Ending balance	Six-monthperiods ended June 30	Six-monthperiods ended June 30
	2019 $14,982 (3,303) 182 381 $12,242	2018
		$- - - -
		$-

(13) Sales revenue

Three-month periods ended June 30 2019 2018 $774,900 $550,294 347,340 471,753 92,662 81,954 $1,214,902 $1,104,001	Six-month periods ended June 30	Six-month periods ended June 30
2019	2019 $1,349,676 774,418 188,187 $2,312,281	2018
$774,900 347,340 92,662		$1,124,184 845,084 177,673
$1,214,902		$2,146,941

Analysis of revenue from contracts with customers for the six-month periods ended June 30, 2019 and 2018 is as follows:

(1) Disaggregation of revenue

Three-month periods ended June 30 2019 2018 $774,900 $550,294 347,340 471,753 92,662 81,954 $1,214,902 $1,104,001 $852,852 $604,372 362,050 499,629 $1,214,902 $1,104,001	Six-month periods ended June 30	Six-month periods ended June 30
2019	2019	2018
$774,900 347,340 92,662	$1,349,676 774,418 188,187	$1,124,184 845,084 177,673
$1,214,902	$2,312,281	$2,146,941
$852,852 362,050	$1,508,457 803,824	$1,273,981 872,960
$1,214,902	$2,312,281	$2,146,941

-34-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(2) Contract balances

A. Contract assets – current

Contract assets – current
Rendering of services		As of
	June 30,2019	December 31, 2018	June 30,2018	January 1, 2018
	$353,494	$367,258	$297,536	$16,159

The significant changes in the Group’s balances of contract assets for the six-month periods ended June 30, 2019 and 2018 are as follows:

		Six-month periods ended June 30	Six-month periods ended June 30
		2019	2018
		$138,618 124,854 of	$2,598 283,975
June 30,2019	December 31, 2018	June 30,2018	January 1, 2018
$167,247 157,615 1,306	$109,141 191,023 244	$173,790 242,809 974	$43,084 17,626 92

B. Contract liabilities – current

The significant changes in the Group’s balances of contract liabilities for the six-month period ended June 30, 2019 and 2018 are as follows:

-35- The opening balance transferred to revenue Increase in receipts in advance during the period (deducting the amount incurred and transferred to revenue during the period)	Six-month periods ended June 30	Six-month periods ended June 30
	2019	2018
	$99,848 125,608	$43,853 400,624

C. Transaction price allocated to unsatisfied performance obligations

As of June 30, 2019, there is no need to provide relevant information of the unsatisfied performance obligations as the contract terms with customers about the sales of goods are all shorter than one year. Besides, the summarized amount of transaction price allocated to unsatisfied performance obligations about rendering of services and silicon intellectual property license is NT$1,378,809 thousand. The Group will recognize revenue based on the stage of completion of the contracts. Those contracts are expected to complete within the next 1 to 1.5 years.

D. Assets recognized from costs to fulfil a contract

None.

(14) Expected credit losses

Three-month periods ended June 30	Three-month periods ended June 30	Six-month periods ended June 30	Six-month periods ended June 30
2019	2018	2019 $2,988 (25,101) $(22,113)	2018
$2,988 21,138	$- 15,740		$- 28,768
$24,126	$15,740		$28,768

Please refer to Note 12 for more details on credit risk.

The Group measures the loss allowance of its contract assets and trade receivables (including note receivables and account receivables) at an amount equal to lifetime expected credit losses. The assessment of the Group’s loss allowance as of June 30, 2019, December 31, 2018, and June 30, 2018 is as follows:

-36-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
i. The loss allowance of contract assets is measured at an amount equal to lifetime experied credit losses, details are as follow:

	As of
June 30,2019	December 31,2018 $367,258 0% - $367,258	June 30,2018
$356,482 0%~100% 2,988		$297,536 0% -
$353,494		$297,536

ii. the Group considers the grouping of trade receivables by counterparties’ credit rating, by geographical region and by industry sector, and its loss allowance is measured by using a provision matrix, details are as follow:

2019.06.30

2019.06.30
Gross carrying amount Expected credit loss rates Lifetime expected credit losses Subtotal 2018.12.31 Gross carrying amount Expected credit loss rates Lifetime expected credit losses Subtotal	Not yet due (note)			Overdue			Total
		<=30 days	31-60 days	61-90 days	91-120 days	>=121 days
	$551,166 -%	$191,597 -%	$44,508 0%~2%	$53,222 0%~10%	$39,774 2%~50%	$89,298 10%~100%	$969,565 113,401
	-	-	890	3,326	19,887	89,298
	$551,166	$191,597	$43,618	$49,896	$19,887	$-	$856,164
	Not yet due (note)						Total
		<=30 days	31-60 days	61-90 days	91-120 days	>=121 days
	$540,501 -%	$79,242 -%	$139,348 0~2%	$68,868 0%~10%	$96,555 2%~50%	$97,084 10%~100%	$1,021,598 138,502
	-	-	2,788	5,039	48,277	82,398
	$540,501	$79,242	$136,560	$63,829	$48,278	$14,686	$883,096

-37-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

2018.06.30

2018.06.30
Gross carrying amount Expected credit loss rates Lifetime expected credit losses Subtotal	Not yet due (note)			Overdue			Total
		<=30 days	31-60 days	61-90 days	91-120 days	>=121 days
	$494,894 -%	$109,626 -%	$12,917 2%	$27,723 10%	$10,544 50%	$85,173 100%	$740,877 93,476
	-	-	259	2,772	5,272	85,173
	$494,894	$109,626	$12,658	$24,951	$5,272	$-	$647,401

Note: All of the Group’s note receivables are not yet due.

The movement in the provision for impairment of accounts receivables for the six-month periods ended June 30, 2019 and 2018 is as follows:

June 30, 2019 and 2018 is as follows:
As of January 1, 2019 Reversal for the current period As of June 30, 2019 As of January 1, 2018 (in accordance with IAS 39) Beginning adjusted retained earnings As of January 1, 2018 (in accordance with IFRS 9) Addition for the current period As of June 30, 2018	Contract assets	Accounts receivables
	$- 2,988	$138,502 (25,101)
	$2,988	$113,401
	$- -	$64,708 -
	- -	64,708 28,768
	$-	$93,476

(15) Leases
A. The Group as lessee (applicable to IFRS 16)

The Group leases various properties, including real estate such as land and buildings, transportation equipment and office equipment. These leases have terms between 2 and 38 years.

The effect that leases have on the financial position, financial performance and cash flows of the Group are as follows:

a. Amounts recognized in the balance sheet

-38-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(a) Right-of-use asset

The carrying amount of right-of-use assets

	As of
June 30, 2019	December 31, 2018(Note)	June 30, 2018(Note)
$199,508 72,501 2,332 287
$274,628

Note: The Group adopted IFRS 16 since January 1, 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

During the six-month period ended June 30, 2019, the additions to right-of-use assets of the Group amounted to NT$722 thousand.

(b) Lease liability

	As of
June 30, 2019	December 31, 2018(Note)	June 30, 2018(Note)
$278,950
$30,725 248,225
$278,950

Please refer to Note 6 (17) for the interest on lease liability recognized during the six-month period ended June 30, 2019 and refer to Note 12 (5) for the maturity analysis for lease liabilities as of June 30, 2019.

Note: The Group adopted IFRS 16 since January 1, 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

-39-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

b. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

Land Buildings and facilities Transportation equipment Office equipment Total	Three-month periods ended June 30 2019 2018(Note) $1,330 6,815 292 28 $8,465	Six-month periods ended June 30	Six-month periods ended June 30
	2019 $1,330 6,815 292 28 $8,465	2019 $2,660 13,385 583 56 $16,684	2018(Note)

Note: The Group adopted IFRS 16 since January 1, 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

c. Income and costs relating to leasing activities

The expense relating to short-term leases	Three-month periods ended June 30	Three-month periods ended June 30	Six-month periods ended June 30	Six-month periods ended June 30
	2019	2018(Note)	2019 $190	2018(Note)
	$64

Note: The Group adopted IFRS 16 since January 1, 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

d. Cash outflow relating to leasing activities

During the six-month period ended June 30, 2019, the Group’s total cash outflow for leases amounted to NT$21,277 thousand.

e.Other information relating to leasing activities

Extension option

-40-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Some of the Group’s property rental agreement contain extension options. In determining the lease terms, the non-cancellable period for which the Group has the right to use an underlying asset, together with period covered by an option to extend the lease if the Group is reasonably certain to exercise that option. The options are used to maximize operational flexibility in terms of managing contracts. The majority of extension options held are exercisable only by the Group. After the commencement date, the Group reassesses the lease term upon the occurrence of a significant event or a significant change in circumstances that is within the control of the lessee and affects whether the Group is reasonably certain to exercise an option not previously included in its determination of the lease term, or not to exercise an option previously included in its determination of the lease term.

B. Operating lease commitments - The Group as lessee (applicable to IAS 17)

The Group has entered into commercial leases on land and office. Future minimum rentals payable as of December 31, 2018 and June 30, 2018 are as follows:

Not later than one year Later than one year and not later than five years Later than five years Total	As	of
	December 31, 2018 $34,192 64,236 2,848 $101,276	June 30, 2018
		$30,809 83,261 4,933
		$119,003

Operating lease expense recognized is as follows:

rating lease expense recognized is as	follows:
Minimum lease payments	Three-month period ended June 30,2018 $9,046	Six-month period ended June 30,2018
		$15,772

-41-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(16) Summary statement of employee benefits, depreciation and amortization expenses by function during the three-month periods and six-month periods ended June 30, 2019 and 2018:

		Three-monthperiods ended June 30	Three-monthperiods ended June 30	Three-monthperiods ended June 30	Three-monthperiods ended June 30
		2019			2018
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits expense
Salaries	$10,973	$329,075	$340,048	$9,662	$279,128	$288,790
Labor and health insurance	824	27,342	28,166	717	23,862	24,579
Pension	575	12,587	13,162	432	9,664	10,096
Others	253	5,640	5,893	232	5,305	5,537
Depreciation	224	23,118	23,342	160	11,900	12,060
Amortization	-	83,963	83,963	-	94,209	94,209

		Six-monthperiods ended June 30	Six-monthperiods ended June 30	Six-monthperiods ended June 30	Six-monthperiods ended June 30
		2019			2018
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits expense
Salaries	$23,070	$674,728	$697,798	$19,605	$564,050	$583,655
Labor and health insurance	1,644	53,759	55,403	1,433	48,688	50,121
Pension	1,157	24,817	25,974	867	19,303	20,170
Others	500	11,041	11,541	461	10,555	11,016
Depreciation	469	46,245	46,714	323	22,951	23,274
Amortization	-	168,450	168,450	-	183,743	183,743

According to the Company’s Article of Incorporation, no less than 10% of profit of the current year is distributable as employees’ compensation and no more than 2% of profit of the current year is distributable as remuneration to directors and supervisors. However, before distributing employees’ compensation and remuneration to directors and supervisors, the Company’s profit should offset its accumulated losses, if any. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. Information on the Board of Directors’ resolution regarding the employees’ compensation and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

-42-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Based on profit of the six-month period ended June 30, 2019, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors to be NT$21,301 thousand and NT$0 thousand, respectively, which were recognized as payroll expenses. The Company recognized the amounts of the employees’ compensation and remuneration to directors and supervisors to be NT$7,883 thousand and NT$0 thousand for the three-month periods ended June 30, 2019, respectively. The Company recognized the amounts of the employees’ compensation and remuneration to directors and supervisors to be NT$21,301 thousand and NT$0 thousand for the six-month periods ended June 30, 2019, respectively. Based on profit of the sixmonth period ended June 30, 2018, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors to be NT$14,561 thousand and NT$0 thousand, respectively, which were recognized as payroll expenses. The Company recognized the amounts of the employees’ compensation and remuneration to directors and supervisors to be NT$4,259 thousand and NT$0 thousand for the three-month period ended June 30, 2018, respectively. The Company recognized the amounts of the employees’ compensation and remuneration to directors and supervisors to be NT$14,561 thousand and NT$0 thousand for the six-month period ended June 30, 2018, respectively.

A resolution was approved in a meeting of the Board of Directors held on April 23, 2019 to distribute NT$39,345 thousand and NT$250 thousand in cash as employees’ compensation and remuneration to directors, respectively. There were no material differences between the aforementioned approved amounts and the amounts charged against earnings in 2018.

A resolution was approved in a meeting of the Board of Directors held on April 20, 2018 to distribute NT$125,016 thousand and NT$1,274 thousand in cash as employees’ compensation and remuneration to directors, respectively. There were no material differences between the aforementioned approved amounts and the amounts charged against earnings in 2017.

(17) Non-operating income and expenses

A. Other income

Other income
Financial assets measured at amortized cost Other income-other Total	Three-month periods ended June 30 2019 2018 $3,723 $3,378 10,193 13,429 $13,916 $16,807	Six-month periods ended June 30
	2019 $3,723 10,193 $13,916	2019	2018
		$6,648 38,028	$6,514 22,070
		$44,676	$28,584

-43-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

B. Other gains and losses

Other gains and losses
Foreign exchange gains Losses on financial assets at fair value through profit or loss Others Total	Three-month periods ended June 30		Six-month periods ended June 30
	2019	2018	2019 $7,773 (430) (1,002) $6,341	2018
	$3,604 725 134	$19,530 (10,824) (16,539)		$27,409 (13,415) (4,891)
	$4,463	$(7,833)		$9,103

C. Finance costs

Interest expenses on lease liabilities	Three-month periods ended June 30	Three-month periods ended June 30	Six-month periods ended June 30	Six-month periods ended June 30
	2019	2018	2019	2018 (Note)
	$1,778	(Note)	$3,719

Note: The Group adopted IFRS 16 since January 1, 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

-44-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(18) Components of other comprehensive income

For the three-month period ended June 30, 2019

Items that will not to be reclassified subsequently to profit or loss: Unrealized gains or losses from valuation on equity instruments measured at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences resulting from translating the financial statements of a foreign operation Share of other comprehensive income of associates and joint ventures accounted for using equity method Total of other comprehensive income	Arising during the period	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
	$42,941 (2,043) 234	$- - -	$42,941 (2,043) 234	$- - -	$42,941 (2,043) 234
	$41,132	$-	$41,132	$-)	$41,132

-45-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the three-month period ended June 30, 2018

For the three-month period ended June 30, 2018	June 30, 2018
Arising during the period Items that will not to be reclassified subsequently to profit or loss: Unrealized gains or losses from valuation on equity instruments measured at fair value through other comprehensive income $7,620 Items that may be reclassified subsequently to profit or loss Exchange differences resulting from translating the financial statements of a foreign operation 13,974 Share of other comprehensive income of associates and joint ventures accounted for using equity method 1,614 Total of other comprehensive income $23,208	Arising during the period	Reclassification adjustments duringtheperiod	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
		$- - -	$7,620 13,974 1,614	$- - -	$7,620 13,974 1,614
	$23,208	$-	$23,208	$-)	$23,208

-46-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the six-month period ended June 30, 2019

Items that will not to be reclassified subsequently to profit or loss: Unrealized gains or losses from valuation on equity instruments measured at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences resulting from translating the financial statements of a foreign operation Share of other comprehensive income of associates and joint ventures accounted for using the equity method Total of other comprehensive income	Arising during the period	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
	$80,886 6,651 367	$- - -	$80,886 6,651 367	$- - -	$80,886 6,651 367
	$87,904	$-	$87,904	$-	$87,904

-47-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the six-month period ended June 30, 2018

For the six-month period ended June	30, 2018
Items that will not to be reclassified subsequently to profit or loss: Unrealized gains or losses from valuation on equity instruments measured at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences resulting from translating the financial statements of a foreign operation Share of other comprehensive income of associates and joint ventures accounted for using the equity method Total of other comprehensive income	Arising during the period	Reclassification adjustments duringtheperiod	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
	$68,528 10,790 700	$- - -	$68,528 10,790 700	$- - -	$68,528 10,790 700
	$80,018	$-	$80,018	$-	$80,018

(19) Income tax

Based on the amendments to the Income Tax Act announced on February 7, 2019, starting from the year ended December 31, 2018, the Company’s applicable corporate income tax rate has changed from 17% to 20%. The corporate income surtax on undistributed retained earnings has changed from 10% to 5%.

The major components of income tax expense are as follows:

Income tax expense (income) recognized in profit or loss

-48-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Three-month periods ended June 30	Three-month periods ended June 30	Six-month periods ended June 30	Six-month periods ended June 30
2019	2018	2019	2018
$20,541 976 (6,120) -	$17,974 (16,960) 14,617 -	$ 31,560 976 2,553 -	$25,784 (16,914) 7,748 2,610
$15,397	$15,631	$35,089	$19,228

The assessment of income tax returns

As of June 30, 2019, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

The Company Chih Hung Investment Co. Sheng Bang Investment Co. Grain Media Inc. Innopower Technology Corporation	The assessment of income tax returns
	Assessed and approved up to 2016 Assessed and approved up to 2017 Assessed and approved up to 2017 Assessed and approved up to 2017 Assessed and approved up to 2017

(20)Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted-average number of ordinary shares outstanding during the year.

-49-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity by the weighted-average number of ordinary shares outstanding during the year plus the weighted-average number of ordinary shares that would be issued assuming all the dilutive potential ordinary shares were converted into ordinary shares.

Three-month periods ended June 30 2019 2018 $56,462 $28,521 248,550 248,550 $0.22 $0.11 Three-month periods ended June 30 2019 2018 $56,462 $28,521 248,550 248,550 636 758 249,186 249,308 $0.22 $0.11	Six-month periods ended June 30	Six-month periods ended June 30
	2019 2018 $152,517 $97,510 248,550 248,550 $0.61 $0.39 Six-month periods ended June 30	2018
		$97,510
		248,550
		$0.39
2019 $56,462 248,550 636 249,186 $0.22	2019 $152,517 248,550 937 249,487 $0.61	2018
		$97,510
		248,550 1,338
		249,888
		$0.39

-50-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date the financial statements were authorized for issue.

(21)Deconsolidation of subsidiary

Faraday Technology Corporation—B.V. filed for liquidation through the decision at its shareholders’ meeting in 2018. The Group received the capital remittance in the year ended December 31 2018, and derecognized the related assets and liabilities of the entity.

(1) The amount of assets and liabilities of Faraday Technology Corporation—B.V. over which the Group lost control are as follow ：

Assets: Cash and cash equivalents Account receivables-related parties Other receivables Other current assets Property, plant and equipment Total Liabilities Net assets of the deconsolidated	As of September 30,2018
	$22,896 350 46 257 8
	$23,557
	-
	$23,557

(2) Consideration received and gain recognized from the transaction `：`

onsideration received and gain recognized from the transaction`：`
Cash received Net assets of the subsidiary deconsolidated Effect of exchange rate change Loss on disposal	For the year ended December 31,2018
	$23,350 (23,557) (7,044)
	$(7,251)

Loss on disposal is included in other gains and losses in statements of comprehensive income for the year ended December 31, 2018.

-51-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(3) Analysis of net cash flow arising from deconsolidation of the subsidiary ：

Analysis of net cash flow arising from deconsolidation of the subsidiary`：`
Cash received Net cash of subsidiary derecognized Net cash flow from deconsolidation	For the year ended December 31,2018
	$23,350 (22,896)
	$454

7. Related Party Transactions

Information of the related parties that had transactions with the Group during the financial reporting years is as follows:

Name and nature of relationship of the related parties

Name of the relatedparties United Microelectronics Corporation Fresco Logic Inc. HeJian Technology (Suzhou) Co., Ltd. Wavetek Microelectronics Corporation United Semiconductor (Xiamen) Co., Ltd.	Nature of relationshipof the relatedparties
	Entity with joint control or significant influence over the Company Associates Other related parties Other related parties Other related parties

(1) Sales

Three-month periods ended June 30 2019 2018 $148,425 $146,993 11,348 13,173 6,025 4,685 $165,798 $164,851	Six-month periods ended June 30	Six-month periods ended June 30
2019	2019	2018
$148,425 11,348 6,025	$280,544 32,096 13,460	$232,176 25,858 17,680
$165,798	$326,100	$275,714

The Group’s sales terms were 30~60 days from the date of monthly closing for non-related parties, while 60 days for related parties. Selling prices for related parties were different from each other and a direct comparison was impractical since the products or services were customized based on each order.

-52-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(2) Purchases

Purchases
United Microelectronics Corporation HeJian Technology (Suzhou) Co., Ltd. Other related parties Total	Three-month periods ended June 30		Six-month periods ended June 30
	2019	2018	2019	2018
	$338,922 144,615 2,335	$152,939 50,820 15,863	$501,463 182,739 20,277	$275,243 70,506 24,028
	$485,872	$219,622	$704,479	$369,777

The purchase price to the related parties above was determined through mutual agreement based on the market rates. The payment terms from the related party suppliers are 45~60 days.

(3) Accounts receivable from related parties, net

	As of
June 30,2019	December 31,2018 $93,292 21,402 $114,694	June 30,2018
$148,570 7,635		$135,823 10,845
$156,205		$146,668

(4) Other current assets

Other current assets
Other related parties		As of
	June 30,2019	December 31,2018	June 30,2018
	$318	$314	$419

(5) Accounts payable from related parties, net

	As of
June 30,2019	December 31,2018	June 30,2018
$116,446 132,239 1,287	$69,177 38,484 6,436	$163,195 39,958 9,774
$249,972	$114,097	$212,927

(6) Key management personnel compensation

Three-month periods ended June 30 2019 2018 $13,447 $11,156 309 317 $13,756 $11,473	Six-month periods ended June 30	Six-month periods ended June 30
2019	2019	2018
$13,447 309	$45,973 633	$31,812 640
$13,756	$46,606	$32,452

-53-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

8. Assets Pledged As Collateral

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

Assetspledged for security	Carryingamount	Carryingamount	Carryingamount	Secured liabilities
	2019.06.30	2018.12.31	2018.06.30
Financial assets measured at amortized cost Financial assets measured at amortized cost	$15,265 1,553	$15,236 1,536	$15,236 1,524	Custom clearance deposit Office rental deposit
	$16,818	$16,772	$16,760

9. Commitments and contingencies

None.

10. Losses due to major disasters

None.

11. Significant subsequent events

None.

-54-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

12. Others

(1) Categories of financial instruments

	As of
June 30,2019	December 31,2018	June 30,2018
$54,549 1,021,733 3,660,255	$54,790 967,922 3,339,555	$57,068 1,233,384 3,904,411
$4,736,537	$4,362,267	$5,194,863
	As of
June 30,2019	December 31,2018	June 30,2018
$- 1,049,398 713,364 104,705 278,950	$- 810,868 561,437 211,859 (Note 2)	$6,424 764,675 1,073,565 48,406 (Note 2)
$2,146,417	$1,584,164	$1,893,070

Note 1: Including cash and cash equivalents (exclude cash on hand), notes receivable, accounts receivable, other receivable, refundable deposit and financial assets measured at amortized cost, non-current.

-55-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
Note 2: The Group adopted IFRS 16 since January 1, 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.
(2) Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activities. The Group identifies measures and manages the afore-mentioned risks based on the Group’s policy and risk exposures.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity instruments).

In practice, it is rarely the case that a single risk variable will change independently from other risk variables; there are usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense are denominated in a different currency from the Group’s functional currency) and the Group’s net investments in foreign subsidiaries.

The Group has certain foreign currency receivables denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is achieved. The Group also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

-56-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group’s profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. The Group’s foreign currency risk is mainly related to the volatility in the exchange rates for USD and RMB. The information of the sensitivity analysis is as follows:

When NTD strengthens/weakens against USD by 10%, the profit for the six-month period ended June 30, 2019 and 2018 would decrease / increase by NT$31,283 thousand and NT$28,985 thousand, respectively.

When NTD strengthens/weakens against RMB by 10%, the profit for the six-month periods ended June 30, 2019 would decrease / increase by NT$86,479 thousand.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s short-term deposits at variable interest rates. Therefore, interest rate risk is low.

Equity price risk and other investment risk

The Group’s listed and unlisted equity securities and other investments are susceptible to market price risk arising from uncertainties about future values of the investment objectives. The Group’s listed equity securities, unlisted equity securities and other investment are classified under financial assets measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income. The Group manages the equity price risk through diversification. Reports on the equity portfolio are submitted to the Group’s top management for reviews and approvals on a regular basis.

For the six-month periods ended June 30, 2019 and June 30, 2018, a change of 1% in the price of the listed companies stocks classified as equity instruments investments measured at fair value through other comprehensive income could have an impact of NT$14 thousand and NT$468 thousand, respectively, on the equity attributable to the Group.

Please refer to Note 12(9) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

-57-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Credit risk management

Credit risk is the risk that counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for contract assets, accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to credit risk management. Credit limits are established for all trading partners based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Group’s internal rating criteria and etc. Certain trading partners’ credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment.

As of June 30, 2019, December 31, 2018 and, June 30, 2018, accounts receivable from top ten customers represented 46%, 58% and 46% of the total accounts receivables of the Group, respectively. The credit concentration risk of other accounts receivable is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group’s treasury in accordance with the Group’s policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating and with no significant default risk. Consequently, there is no significant credit risk for these counter parties.

The Group adopted IFRS 9 to assess the expected credit losses. The measurement indicators of the Group are described as follows:

				Carryingamount	Carryingamount	Carryingamount
					As of
Level of credit risk	Indicator	Measurement method for expected credit losses	Loss rate
				June 30,	December 31,	June 30,
				2019	2018	2018
Simplified method (Note)	(Note)	Lifetime expected credit losses	0%~100%	$1,326,047	$1,388,856	$1,038,413

-58-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
Note: The Group adopted simplified method (lifetime expected credit loss) to measure credit risk. It includes contract asset, notes receivables and account receivables.
(5) Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, and bank borrowings. The table below summarizes the maturity profile of the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amounts include the contractual interest.

Non-derivative financial instruments

As of June 30, 2019 Payables (including related parties) Other payables Long-term payables Lease liability As of December 31, 2018 Payables (including related parties) Other payables Long-term payables As of June 30, 2018 Payables (including related parties) Other payables Long-term payables	Less than 1 year	2 to 3years	4 to 5years	> 5years	Total
	$1,049,398 713,364 - 37,603 $810,868 561,437 - $764,675 1,073,565 -	$- - 104,705 53,730 $- - 211,859 $- - 48,406	$- - - 27,958 $- - - $- - -	$- - - 259,248 $- - - $- - -	$1,049,398 713,364 104,705 378,539 $810,868 561,437 211,859 $764,675 1,073,565 48,406

-59-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Derivative financial instruments

Less than 1 year	2 to 3years	4 to 5years	> 5years	Total
$1,182 -	$- -	$- -	$- -	$1,182 -
$1,182	$-	$-	$-	$1,182
$330 -	$- -	$- -	$- -	$330 -
$330	$-	$-	$-	$330
$- (6,424)	$- -	$- -	$- -	$- (6,424)
$(6,424)	$-	$-	$-	$(6,424)

The table above contains the undiscounted net cash flows of derivative financial instruments.

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for six-month period ended June 30, 2019:

As of January 1, 2019 Cash flows Foreign exchange movement Revision of lease contracts As of June 30, 2019	Lease Liability
	$294,614 (17,558) 1,189 705
	$278,950

Reconciliation of liabilities for six-month period ended June 30, 2018: None.

-60-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(7) Fair values of financial instruments
a. the methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

i. The carrying amount of cash and cash equivalents, notes receivables and accounts receivables, other receivables, payables and other payables approximate their fair value due to their short maturities.
ii. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities and funds) at the reporting date.
iii.Fair value of equity instruments (including unlisted equity securities) without active market and market quotations cannot be reliably measured. Its amount is measured by cost net of impairment loss.
iv. The long-term payables are determined by discounted cash flow analysis. The Group estimates the fair value based on book value due to the insignificant difference between the fair value from discounted cash flow analysis and carrying amount.
v. The fair value of derivative financial instrument is based on market quotations. For unquoted derivatives that are not options, the fair value is determined based on discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using the option pricing model.
b. Fair value measurement hierarchy for financial instruments

Please refer to Note 12(9) for fair value measurement hierarchy for financial instruments of the Group.

-61-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(8) Derivative financial instruments

The Group’s derivative financial instruments include forward currency contracts. The related information for derivative financial instruments not qualified for hedge accounting and not yet settled as of June 30, 2019, December 31, 2018, and June 30, 2018 is as follows:

Forward currency contracts

The Group entered into forward currency contracts to manage its exposure to financial risk, but these contracts are not designated as hedging instruments. The table below lists the information related to forward currency contracts:

Items (by contract) Notional Amount Contract Period As of June 30, 2019 From 2019.06.20 to Forward currency contract Sell foreign currency USD 6,000 thousand 2019.07.08 As of December 31, 2018 From 2018.12.19 to Forward currency contract Sell foreign currency USD 6,000 thousand 2019.01.09 As of June 30, 2018 From 2018.06.11 to Forward currency contract Sell foreign currency USD 8,000 thousand 2018.07.11

(9) Fair values measurement hierarchy

(a) Fair value measurement hierarchy

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

-62-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Level 3 – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by reassessing categorization at the end of each reporting period.

(b) Fair value measurement hierarchy of the Group’s assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group’s assets and liabilities measured at fair value on a recurring basis is as follows:

As of June 30, 2019`：` Financial assets at fair value: Financial assets at fair value through profit or loss Forward currency contract Stocks Funds Financial assets at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income	Level 1	Level 2	Level 3	Total
	$- - - 1,397	$1,182 - - -	$- 29,265 24,102 1,020,336	$1,182 29,265 24,102 1,021,733

-63-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of December 31, 2018`：` Financial assets at fair value: Financial assets at fair value through profit or loss Forward currency contract Stocks Funds Financial assets at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income As of June 30, 2018`：` Financial assets at fair value: Financial assets at fair value through profit or loss Stocks Funds Financial assets at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income Financial liabilities at fair value: Financial liabilities at fair value through profit or loss Forward currency contract	Level 1	Level 2	Level 3	Total
	$- - - 19,031 Level 1	$330 - - - Level 2	$- 29,265 25,195 948,891 Level 3	$330 29,265 25,195 967,922 Total
	$- - 46,845 -	$- - - 6,424	$29,265 27,803 1,186,539 -	$29,265 27,803 1,233,384 6,424

Transfers between Level 1 and Level 2 during the period

During the six-month periods ended June 30, 2019 and 2018, there were no transfers between Level 1 and Level 2 fair value measurements.

-64-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Movements of fair value measurement in level 3 on recurring basis

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

Assets	Assets		Total
At fair value through profit or loss		At fair value through other comprehensive income
Stocks	Funds	Stocks
$29,265 - -	$25,195 (1,093) -	$948,891 - 71,445	$1,003,351 (1,093) 71,445
$29,265	$24,102	$1,020,336	$1,073,703

-65-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Assets	Assets		Total
At fair value throughprofit or loss		At fair value through other comprehensive income
Stocks	Funds	Stocks
$- - - 29,265	$- (1,397) - 29,200	$1,066,406 - 90,133 30,000	$1,066,406 (1,397) 90,133 88,465
$29,265	$27,803	$1,186,539	$1,243,607

Recognized as profit (loss) above, the loss from financial assets still held by the Group as of June 30, 2019 and June 30, 2018 was NT$1,093 thousand and NT$1,397 thousand.

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

-66-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of June 30, 2019

Financial assets: At fair value through other comprehensive income Stocks Preferred Stocks Stocks and others Preferred Stocks	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
	Market approach Option pricing model Asset approach Market approach	Discount for lack of marketability Discount for lack of marketability Discount for lack of marketability and non- controlling interest Discount for lack of marketability	15% 11%~18% 10% 21%	The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in decrease / increase in the Group’s equity by NT$1,941 thousand 10% increase (decrease) in the discount for lack of marketability would result in decrease/ increase in the Group’s equity by NT$1,416 thousand 10% increase (decrease) in the discount for lack of marketability and non-controlling interest would result in decrease/ increase in the Group’s equity by NT$88,637 thousand 10% increase (decrease) in the discount for lack of marketability would result in decrease/ increase in the Group’s equity by NT$10,040 thousand

-67-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of December 31, 2018

As of December	31, 2018
Financial assets: At fair value through other comprehensive income Stocks Preferred Stocks Stocks and others Preferred Stocks	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
	Market approach Option pricing model Asset approach Market approach	Discount for lack of marketability Discount for lack of marketability Discount for lack of marketability and non-controlling interest Discount for lack of marketability	15% 11%~18% 10% 21%	The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in decrease / increase in the Group’s equity by NT$2,869 thousand 10% increase (decrease) in the discount for lack of marketability would result in decrease / increase in the Group’s equity by NT$1,290 thousand 10% increase (decrease) in the discount for lack of marketability and non- controlling interest would result in decrease / increase in the Group’s equity by NT$79,351 thousand 10% increase (decrease) in the discount for lack of marketability would result in decrease / increase in the Group’s equity by NT$8,380 thousand

-68-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of June 30, 2018

Financial assets: At fair value through other comprehensive income Stocks Preferred Stocks Stocks and others Preferred Stocks	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
	Market approach Option pricing model Asset approach Recent price of captial increase	Price-Book ratio of similar entities Discount for lack of marketability Discount for lack of marketability and non-controlling interest Not applicable	10~46 15%~21% 10% Not applicable	The higher the Price-Book ratio of similar entities, the higher the fair value of the stocks The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the discount for lack of marketability, the lower the fair value of the stocks Not applicable	10% increase (decrease) in Price-Book ratio f similar entities would result in increase / decrease in the Group’s equity by NT$2,345 thousand 10% increase (decrease) in the discount for lack of marketability would result in decrease / increase in the Group’s equity by NT$1,353 thousand 10% increase (decrease) in the discount for lack of marketability and non- controlling interest would result in decrease / increase in the Group’s equity by NT$100,927 thousand Not applicable

-69-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Group’s Financial Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Group analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s accounting policies at each reporting date.

(b) Fair value measurement hierarchy of the Group’s assets and liabilities not measured at fair value but for which the fair value is disclosed.

June 30, 2019

None.

December 31, 2018

None.

June 30, 2018

None.

(10) Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

w:
Financial assets		As of June 30,2019
	Foreign currencies	Foreign exchange rate	NTD
	$39,614 197,255 884 29,539 5,972	31.05 4.521 31.05 31.05 4.521	$1,230,010 891,789 27,450 917,177 27,000
Monetary items: USD RMB Non-monetary items: USD Financial liabilities
Monetary items: USD RMB

-70-

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Financial assets	As of December 31,2018	As of December 31,2018	As of December 31,2018
	Foreign currencies	Foreign exchange rate	NTD
	$42,033 1,019 4,101	30.72 30.72 30.72 As of June 30,2018	$1,291,268 31,296 125,990
Monetary items: USD Non-monetary items: USD Financial liabilities
Monetary items: USD Financial assets
	Foreign currencies	Foreign exchange rate	NTD
	$30,231 1,092 20,722	30.48 30.48 30.48	$921,441 33,275 631,594
Monetary items: USD Non-monetary items: USD Financial liabilities
Monetary items: USD

The above information is disclosed based on the carrying amount of foreign currency (after conversion to functional currency).

Because there are several types of functional currencies within the Group, it is not practical to disclose the exchange gains and losses of monetary financial assets and liabilities by each significant asset and liability denominated in foreign currencies. The group foreign exchange gain was NT$3,604 thousand and NT$19,530 thousand for the three-month periods ended June 30, 2019 and 2018, respectively.The foreign exchange gain was NT$7,773 thousand and NT$27,409 thousand for the six-month periods ended June 30, 2019 and 2018, respectively.

-71-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(11) Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

13. Other disclosure

(1) Information related to significant transactions

Additional disclosures for information of the Group for the six-month period ended June 30, 2019:

(a) Financing provided to others for the six months ended June 30, 2019: None.
(b) Endorsement/Guarantee provided to others for the six months ended June 30, 2019: None.
(c) Securities held as of June 30, 2019: Please refer to Attachment 1.
(d) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the six-month period ended June 30, 2019: None.
(e) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the six-month period ended June 30, 2019: None.
(f) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the six-month period ended June 30, 2019: None.
(g) Related party transactions for purchases and sales amounts exceeding the lower of NT$300 million or 20 percent of the capital stock for the six-month period ended June 30, 2019: Please refer to Attachment 2.
(h) Receivables from related parties with amount exceeding the lower of NT$100 million or 20 percent of the capital stock for the six-month period ended June 30, 2019: Please refer to Attachment 3.

-72-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
(i) Financial instruments and derivative transactions: Please refer to Note 12.
(j) Other: Significant intercompany transactions between consolidated entities: Please refer to Attachment 4.
(2) Information on investees

Information on investees which significant influenced or controlled by the Group: Please refer to Attachment 5.

(3) Information on investments in Mainland China
(a) Investee company name, main business and products, total amount of capital, method of investment, accumulated inflow and outflow of investments from Taiwan, percentage of ownership, investment income (loss), carrying amount of investments, cumulated inward remittance of earnings and limits on investment in Mainland China: Please refer to Attachment 6.
(b) Significant transaction to investee Company in Mainland China for the six-month period ended June 30, 2019:
- i. Purchases amount and percentage, and related ending balance and percentage of payables: None.
- ii. Sales amount and percentage, and related ending balance and related ending balance and percentage of receivables: Please refer to Attachment 4.

iii. Property transaction amount and occurred gain (loss): None.

iv. Ending balance and purpose of endorsement/guarantee provided for notes or collateral: None.
v. Highest balance, ending balance, interest rate interval and total interest amount in current period of financing: None.
vi. Other transactions with significant influence on current period income or financial position: Please refer to Attachment 4.

-73-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

II. Segment information

General Information

The products of the Company and its subsidiaries are all related to integrated circuit design products and the chief operating decision maker reviews the Group’s operating results as a whole to make decisions about resources to be allocated and assess its performance; therefore, the Group is considered a single segment. The preparation basis of the segment is the same with the preparation of this financial statements, and the policies are the same with those mentioned in Note 4, Summary of Significant Accounting Policies.

-74-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 1 (Securities held as of June 30, 2019) (Excluding subsidiaries and associates)

Faraday Technology Corporation

Type of securities	Name of securities	Relationship	Financial statement account		As of June	30,2019		Note
				Units/shares	Carrying amount (thousand)	Percentage of ownership (%)	Fair value/ Net assets value
		- -	Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent	92,496,000 2,500,000	$722,932 63,634	12.12% 5.00%	$722,932 63,634	- -

Type of securities	Name of securities	Relationship	Financial statement account		As of June	30,2019		Note
				Units/shares	Carrying amount (thousand)	Percentage of ownership (%)	Fair value/ Net assets value
Preferred stock Common Stock Common Stock Common Stock Common Stock Common Stock Common Stock Preferred stock Preferred stock Preferred stock Common Stock	Innostor Technology Corporation apm Communication, Inc. Storm Semiconductors, Inc. Andes Technology Corporation SanJet Technology Corporation Gear Radio Limited NeuroSky Floadia Hsun Chieh Capital Corp. Aviacomm Ltd.	- - - - - - - - - -	Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through profit or loss, noncurrent	14,600,000 1,714,285 59,167 12,600 2,115,000 11,544 3,000,000 1,200,000 44,312,575 1,818 3,000,000	- - - 1,397 19,413 14,159 - 100,397 67,114 $29,265	0.70% 0.13% 8.01% 0.03% 9.53% 9.95% 7.76% 9.74% 15.00% 12.60%	- - - 1,397 19,413 14,159 - 100,397 67,114 $29,265	- - - - - - - - - -

Sheng Bang Investment Corporation

Type of securities	Name of securities	Relationship	Financial statement account		As of June	30,2019		Note
				Units/shares	Carrying amount (thousand)	Percentage of ownership (%)	Fair value/ Net assets value
Fund Common Stock Common Stock Common Stock Capital	IB FUND SPC -RCM Auto Parts Industry Fund Segregated Portfolio Storm Semiconductors, Inc. Sifotonics Technology Co., Ltd. Ascent Venture Capital Jian Rui Venture Capital (translated from Chinese)	- - - - -	Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent	10,000 641,000 800,000 3,000,000 -	$24,102 - - 11,298 21,389	- 2.43% 1.52% 19.67% 8.50%	$24,102 - - 11,298 21,389	- - - - -

-75 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 2 ( Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of capital stock for the six months ended June 30, 2019)

Faraday Technology Corporation

Counter-party	Entity with joint control or significant influence over the Company Entity with joint control or significant influence over the Company Other related parties Relationship			Transactions	Transactions		Notes and accounts receivable(payable)	Notes and accounts receivable(payable)	Note
		Purchases (Sales)	Amount	Percentage of total purchases (sales)	Term	Details of non-arm's length transaction	Balance	Percentage of total receivables(payable)
United Microelectronics Corporation United Microelectronics Corporation HeJian Technology (Suzhou) Co., Ltd.,		Purchases Sales Purchases	$501,463 279,925 182,739	75.82% 12.11% 27.63%	Month-end 60 days Month-end 60 days Month-end 60 days	- - -	$116,446 148,271 132,239	11.10% 17.32% 12.60%	- - -

-76 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 3 Receivables from related parties with amount exceeding the lower of NT$100 million or 20 percent of the capital stock:

Faraday Technology Corporation	Relationship	Ending alance of receivables from related parties(Note 1)	Turnover rate	Over due receivables	Amount received in subsequentperiod	Loss allowance
Company
				Amount Collection status
Faraday Technology Corporation	Entity with joint control or significant influence over the Company	$148,271	4.64	$- $-	$28,695	$-

Note 1: Fill out the form according to account receivables, note receivables, other receivables… Note 2: The capital stock is captial stock of the parent.

-77 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 4 (Significant intercompany transactions between consolidated entities)

For the six-month period ended June 30, 2019

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 No. (Note 1)	Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Related Party	Faraday Technology Corporation (USA) Faraday Technology Corporation (USA) Faraday Technology Japan Corporation Faraday Technology Japan Corporation Faraday Technology Japan Corporation GrainTech Electronics Limited Faraday Technology China Corporation Innopower Technology Corporation Artery Technology Corporation, Ltd. Artery Technology Corporation, Ltd. United Business Service Corporation United Business Service Corporation Grain Media Inc. Grain Media Inc. Faraday Technology Corporation (USA) Faraday Technology Corporation (USA) Counterparty	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Relationship with the Company (Note 2)			Transactions	Transactions
				Sales Research expense Sales Contract Assets Contract liabilities Sales Sales Sales Sales Accounts receivable Sales Accounts receivable Rent Revenue Other payables Accounts receivable Other receivable Account	$210,915 24,792 289,435 27,324 10,820 4,602 219,590 101,388 17,377 1,980 1,494 1,481 114 120 37,120 367 Amount	Term	Percentage of consolidated operating revenues or consolidated total assets (Note 3)
						Note 4 According to the contract Note 4 According to the contract According to the contract Note 5 Note 5 7 Note 5 Month-end 60 days Note 5 Month-end 60 days According to the contract Month-end 60 days Month-end 60 days Month-end 60 days	9.12% 1.07% 12.52% 0.37% 0.15% 0.20% 9.50% 4.38% 0.75% 0.03% 0.06% 0.02% - - 0.50% -

-78 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 3 (Significant intercompany transactions between consolidated entities)

For the six-month period ended June 30, 2019

==> picture [273 x 59] intentionally omitted <==

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 No. (Note 1)	Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Faraday Technology Corporation Related Party	Faraday Technology Corporation (USA) Faraday Technology Japan Corporation GrainTech Electronics Limited Faraday Technology China Corporation Faraday Technology China Corporation Faraday Technology China Corporation Faraday Technology China Corporation Faraday Technology China Corporation Faraday Technology Corporation (Suzhou) Faraday Technology Corporation (Suzhou) Faraday Technology Corporation (Suzhou) Faraday Technology Corporation (Suzhou) Faraday Technology Corporation (Suzhou) Innopower Technology Corporation Innopower Technology Corporation Innopower Technology Corporation Counterparty	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Relationship with the Company (Note 2)			Transactions	Transactions
				Other payables Accounts receivable Accounts receivable Contract Assets Contract liabilities Accounts receivable Other receivables Accounts payables Sales Contract Assets Accounts receivable Other receivables Accounts payables Accounts receivable Other receivables Other payables Account	11,298 37,262 999 244,709 110 142,674 63,040 120 29,555 21,238 1,481 754 5 30,641 34,828 302 Amount	Terms	Percentage of consolidated operating revenues or consolidated total assets (Note 3)
						Month-end 60 days Month-end 60 days Month-end 60 days According to the contract According to the contract Month-end 60 days Month-end 60 days Month-end 60 days Note 5 Month-end 60 days Month-end 60 days Month-end 60 days Month-end 60 days Month-end 60 days Month-end 60 days Month-end 60 days	0.15% 0.50% 0.01% 3.30% - 1.92% 0.85% - 1.28% 0.29% 0.02% 0.01% - 0.41% 0.47% -

-79 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 3 (Significant intercompany transactions between consolidated entities)

For the six-month period ended June 30, 2019

==> picture [273 x 59] intentionally omitted <==

1 1 1 1 2 2 2 2 No. (Note 1)	Faraday Technology Corporation (Suzhou) Faraday Technology Corporation (Suzhou) Faraday Technology Corporation (Suzhou) Faraday Technology Corporation (Suzhou) United Business Service Corporation United Business Service Corporation United Business Service Corporation United Business Service Corporation Related Party	Faraday Technology China Corporation Faraday Technology China Corporation Faraday Technology China Corporation FaradayTek Solutions India Private Limited Faraday Technology China Corporation Faraday Technology Corporation Faraday Technology Corporation (Suzhou) Faraday Technology Corporation (Suzhou) Counterparty	3 3 3 3 3 3 3 3 Relationship with the Company (Note 2)			Transactions	Transactions
				Sales Accounts receivable Contract liabilities Research expense Sales Accounts receivable Sales Accounts receivable Account	57,762 71,053 5,365 1,449 21,477 45,886 20,955 20,955 Amount	Terms	Percentage of consolidated operating revenues or consolidated total assets (Note 3)
						Note 5 Month-end 60 days According to the contract According to the contract Note 5 Month-end 60 days Note 5 Month-end 60 days	2.50% 0.96% 0.07% 0.06% 0.93% 0.62% 0.91% 0.28%

Note 1: Faraday Technology Corporation and its subsidiaries are coded as follows:
Faraday Technology Corporation is coded "0".
The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.
Note 2: Transactions are categorized as follows:
The holding company to subsidiary.
Subsidiary to holding company.
Subsidiary to subsidiary.
Note 3: The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on each item's balance at period-end.
For profit or loss items, cumulative balances are used as basis.
Note 4: The sales price to the above related parties was determined through mutual agreement in reference to resale price.
Note 5: As the sale of product or service is individually designed based on requirement of customers, they could not be compared directly.

-80 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 5 (Related information of investee companies as of June 30, 2019)

Faraday Technology Corporation

Faraday Technology Corporation
Investee company	Address	Main businesses andproducts	Initial Inv	estment	Investment	as of June 30,2019	Net income (loss) of investee company (Note)	Investment income (loss) recognized (Note)
			June 30,2019	December 31,2018	Number of shares	Carrying amount(Note) Percentage of ownership (%)
Faraday Technology Corporation (USA) Faraday Technology - B.V.I Faraday Technology Japan Corporation Chih-Hung Investment Corporation Sheng Bang Investment Corporation Faraday Technology Vietnam Company Limited Chih-Hung Investment Corporation	USA British Virgin Islands Japan Tokyo Taiwan Taiwan Vietnam	Sales representive in America Trading and general investing Sales representive in Japan General Investing General Investing IC designing	$436,907 706,792 29,320 910,000 222,020 9,287	$436,907 706,792 29,320 910,000 222,020 -	Common stock 118,580 thousand shares and preferred stock 2,000 thousand shares Common stock 22,140 thousand shares Common stock 2 thousand shares Common stock 91,000 thousand shares Common stock 22,202 thousand shares -	Common stock owned 100.00% and preferred stock owned 100.00% $429,960 100.00% 287,329 99.95% 75,128 100.00% 701,914 100.00% 193,361 100.00% 8,676	($7,275) (973) 10,425 12,136 (5,167) (693)	($5,693) 2,848 10,898 12,070 (5,197) (693)

Investee company	Address	Main businesses andproducts	Initial Inv	estment	Investment	as of June 30,2019	Net income (loss) of investee company (Note)	Investment income (loss) recognized (Note)
			June 30,2019	December 31,2018	Number of shares(thousand)	Percentage of ownership (%) Carrying amount(Note)
Grain Media Inc. Innopower Technology Corporation Fresco Logic Inc. FaradayTek Solutions India Private Limited Sheng Bang Investment Corporation Investee company	Taiwan Taiwan USA India Address	IC designing, marketing and customer service Silicon Intellectual Property designing IC designing IC designing service Main businesses andproducts	$1,456 80,000 281,853 45 Initial Inv	$1,456 80,000 281,853 - estment	Common stock 146 thousand shares Common stock 8,000 thousand shares Preferred stock 5,528 thousand shares Common stock 10 thousand shares Investment	19.42% $1,196 100.00% 191,741 22.61% 81,650 1.00% 11 as of June 30,2019	($275) 13,764 (16,315) (3,338) Net income (loss) of investee company (Note)	($53) 13,764 (4,207) (33) Investment income (loss) recognized (Note)
			June 30,2019	December 31,2018	Number of shares(thousand)	Carrying amount(Note) Percentage of ownership
Grain Media Inc. FaradayTek Solutions India Private Limited Innopower Technology Corporation Investee company	Taiwan India Address	IC designing, marketing and customer service IC designing service Main businesses andproducts	$6,044 $4,462 Initial Inv	$6,044 - estment	Common stock 604 thousand shares Common stock 990 thousand shares Investment	80.58% $4,964 99.00% $1,120 as of June 30,2019	($275) (3,338) Net income (loss) of investee company (Note)	($222) (3,305) Investment income (loss) recognized (Note)
			June 30,2019	December 31,2018	Number of shares(thousand)	Carrying amount(Note) Percentage of ownership
Bright Capital Group Limited	Samoa	General investing	$68,593	$68,593	Common stock 2,301 thousand shares	100.00% $204,090	$15,478	$15,478

-81 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 5 (Related information of investee companies as of June 30, 2019)

Faraday Technology - B.V.I

Faraday Technology- B.V.I
Investee company	Address	Main businesses andproducts	Initial Inv	estment	Investment	as of June 30,2019	Net income (loss) of investee company (Note)	Investment income (loss) recognized (Note)
			June 30,2019	December 31,2018	Number of shares(thousand)	Percentage of ownership Carrying amount(Note)
Faraday Technology Corporation- Mauritius GrainTech Electronics Limited Faraday Technology Corporation- Samoa Artery Technology Corporation- Cayman	Mauritius Hong Kong Samoa Cayman	General investing IC designing, marketing and customer service General investing General investing	USD $12,859,205 USD 100,000 USD 4,715,067 USD 4,460,000	USD $12,859,205 USD 100,000 USD 4,715,067 USD 4,460,000	Common stock 12,804 thousand shares Common stock 100 thousand shares Common stock 4,715 thousand shares Common stock 4,300 thousand shares	100.00% $93,635 100.00% 5,887 100.00% 133,117 81.13% 52,633	($1,468) 236 14,416 (17,503)	($1,468) 236 14,416 (14,200)

Note 1: USD are expressed in dollars.

-82 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 6 (Investment in Mainland China as of June 30, 2019)

Investee company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January1,2019	Investment F	lows	Accumulated Outflow of Investment from Taiwan as of June 30,2019	Net income (loss) of investee company	Percentage of Ownership Investment income (loss)recognized	Carrying Value as of June 30,2019	Unit:New Taiwan Dollars in thousands, USD and RMB in dollars
					Outflow	Inflow					Accumulated inward remittance of earnings as of June 30,2019
Faraday Technology China Corporation Faraday Technology Corporation (Suzhou) Grain Media Technology (Shenzhen) Co., Ltd. United Business Service Corporation Artery Technology Corporation, Ltd.	IC designing, marketing and customer service IC designing, marketing and customer service IC designing, marketing and customer service IC designing, marketing and customer service IC designing, marketing and customer service	$186,300 (USD 6,000,000) $180,090 (USD 5,800,000) $124,225 (USD 4,000,814) $135,630 (RMB 30,000,000) $175,743 (USD 5,660,000)	Note 1 Note 3 Note 1 Note 5 Note 1 Note 6 Note 1 Note 7 Note 4	$186,300 (USD 6,000,000) $180,090 (USD 5,800,000) $124,225 (USD 4,000,814) $135,630 (RMB 30,000,000) $138,483 (USD 4,460,000)	$- $- $- $- $-	$- $- $- $- $-	$186,300 (USD 6,000,000) $180,090 (USD 5,800,000) $124,225 (USD 4,000,814) $135,630 (RMB 30,000,000) $138,483 (USD 4,460,000)	($15,486) ($1,498) $15,478 - $14,416	($1,498) $15,478 $14,416 100.00% ($12,564) 81.13% - 100.00% 100.00% 100.00%	$468 $133,116 $90,897 $204,089 $52,615	$- $- $- $- $-

-83 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 6 (Investment in Mainland China as of June 30, 2019)

Accumulated investment in Mainland China as of June 30,2019	Investment amounts authorized by Investment Commission,MOEA	Upper limit on investment
$775,501 (Note 2) (USD 24,975,881)	$872,872 (Note 2) (USD 28,111,835)	$2,903,649

Note 1: Indirectly investment in Mainland China through subsidiaries of Faraday Technology-B.V.I. (registered in a third region) such as Faraday Technology CorporationMauritius, Faraday Technology Corporation- Samoa, and Artery Technology Corporation-Cayman.
Note 2: Amounts denominated in foreign currency is translated into New Taiwan Dollars by using exchange rate on June 30, 2019.
Note 3: As of June 30, 2019, Investment Commission, MOEA approved the total investment amount USD 6,000 thousand. The Company had remitted investment amounted to USD 5,500 thousand, and Faraday Technology Corporation-Mauritius had remitted investment amounted to USD 500 thousand from its owned capital.
Note 4: On May 19, 2010, Investment Commission, MOEA approved Innopower Technology Corporation acquired the 100% of ownership of AiceStar Technology Corporation (Mainland China company owned by Faraday Technology Corporation- Mauritius, which owned by Faraday Technology- B.V.I.) with USD 602,182 through Brigtht Capital Group Capital Limited. Before the transaction, Investment Commission, MOEA had approved the total investment amount USD 5,800 thousand, and USD 5,800 thousand had been remitted.
Note 5: As of June 30, 2019, Investment Commission, MOEA approved the total investment amount USD 4,112 thousand, and the Company had remitted USD 4,001 thousand for the investment.
Note 6: As of June 30, 2019, Investment Commission, MOEA approved the total investment amount RMB 30,000 thousand, and the Company had remitted RMB 30,000 thousand for the investment.
Note 7: As of June 30, 2019, Investment Commission, MOEA approved the total investment amount USD 5,500 thousand , and the Company had remitted USD 4,460 thousand for the investment.

-84 -

AI assistant

Faraday — Interim / Quarterly Report 2019

52268_rns_2019-12-31_b0be40f3-c2df-4acd-9c2e-ac12cf18d8f9.pdf

Notice to Readers

Review Report of Independent Accountants

Introduction

Scope of Review

The basis of Conclusion

Conclusion

Notice to Readers

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2019, December 31, 2018 and June 30, 2018 (June 30, 2019 and 2018 are unaudited)

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2019, December 31, 2018 and June 30, 2018 (June 30, 2019 and 2018 are unaudited)

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the six-month periods ended June 30, 2019 and 2018

English Translation of Consolidated Financial Statements Originally Issued in Chinese

1. History and Organization

2. Date and Procedures of Authorization of Financial Statements for Issue

3. Newly Issued or Revised Standards and Interpretations

A. IFRS 16“Leases”

English Translation of Consolidated Financial Statements Originally Issued in Chinese

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

English Translation of Consolidated Financial Statements Originally Issued in Chinese

English Translation of Consolidated Financial Statements Originally Issued in Chinese

English Translation of Consolidated Financial Statements Originally Issued in Chinese

4. Summary of Significant Accounting Policies

Preparation principle of consolidated financial statements

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

English Translation of Consolidated Financial Statements Originally Issued in Chinese

The accounting policy from January 1, 2019 as follow:

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

Group as a lessee

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

The accounting policy before January 1, 2019 as follow:

Group as a lessee

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

5. Significant Accounting Judgments, Estimates and Assumptions

6. Contents of Significant Accounts

(1) Cash and cash equivalents

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Accounts receivable, net and accounts receivable from related parties, net

(5) Inventories

(6) Investments accounted for using equity method

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(7) Property, plant and equipment

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

A. Property, plant and equipment for own-use (after the application of IFRS 16)

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

B. Property, plant and equipment (prior to the application of IFRS 16)

Note:

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(8) Intangible assets

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(9) Short-term loans

- (10) Long term payables

(11) Post-employment benefits

Defined contribution plan

Defined benefit plan

(12) Equity

A. Capital stock

B. Additional paid-in capital

Faraday Interim / Quarterly Report 2019

(2) Consideration received and gain recognized from the transaction `：`