FTC — Audit Report / Information 2017

Nov 14, 2017

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2017 AND 2016

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

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Stockholders of Foxconn Technology Co., Ltd.

Opinion

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

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

Basis for opinion

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

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion

thereon, we do not provide a separate opinion on these matters.

The key audit matters in relation to the consolidated financial statements for the year ended December 31, 2017, are outlined as follows:

Cutoff of sales revenue from distribution warehouse

Description

Please refer to Note 4(26) for accounting policies on revenue recognition.

The Group recognises sales revenue when goods are drop-shipped from factories directly and upon acceptance of customers (the transfer of significant risks and rewards of ownership of the goods) if goods are shipped from the distribution warehouse. For shipments from distribution warehouse, the Group recognises sales revenue based on movements of inventories indicated in the statements or other information provided by the warehouse custodians. The Group has warehouses in various locations with numerous custodians, the frequency and contents of statements provided by custodians vary, and the process of revenue recognition contains numerous manual procedures, which may potentially result in inaccurate timing of sales revenue recognition and discrepancy between physical inventory quantities in the distribution warehouse and quantities as reflected in accounting records. As there are numerous daily sales transactions from distribution warehouse and the transaction amounts prior to and after the balance sheet date are significant to the financial statements, cutoff of sales revenue from distribution warehouse was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter.

• A. Assessed and tested internal controls over periodic reconciliations to ascertain the consistency between shipment and timing of revenue recognition with customers.
• B. Performed cut-off testing for shipments that occurred within a specific time frame prior to and after the balance sheet date, including validating supporting documents from warehouse custodians and ensuring the appropriateness of timing for recording inventory movements.
• C. Confirmed or conducted physical count of inventory quantities held by distribution warehouses and agreed to accounting record, assessed the reasonableness of reconciling items identified

through confirmation or physical inventory, if any, and inspected respective supporting documents and rationale.

Provision for inventory valuation losses

Description

Please refer to Note 4(13) for accounting policies on inventory valuation, Note 5(2) for uncertainty of accounting estimates and assumptions in relation to inventory valuation losses, and Note 6(7) for details of inventories. As at December 31, 2017, the Group's inventories and provision for inventory valuation losses amounted to NT\$4,153,077 thousand and NT\$139,754 thousand, respectively.

The Group is primarily engaged in manufacturing and sales of 3C electronic products. Due to rapid technological innovations, short life cycles of electronic products and the fluctuation of market prices, there is a higher risk of inventory losses due from market value decline or obsolescence. The Group recognises inventories at the lower of cost and net realisable value and inventory valuation losses are provided against inventory aged over a certain period of time and individually identified as obsolete or damaged, whose net realisable value is determined based on historical data of inventory clearance and range of discount.

As the amounts of inventory are material, types of inventories vary, the identification of obsolete or damaged inventories and determination of net realisable value are subject to management and audit judgment, we consider the provision for inventory valuation losses a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A. Ensured consistent application of policies relating to provision for inventory valuation losses and in compliance with respective accounting guidance.
• B. Validated the appropriateness of system logic of inventory aging report utilised by management in assessing inventory valuation losses and sampled and tested transactions for proper categorisation in inventory aging report.
• C. Discussed with management and obtained corroboration for the net realisable value of obsolete and damaged inventories to assess the reasonableness of allowance for inventory valuation losses.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Foxconn Technology Co., Ltd. as at and for the years ended December 31, 2017 and 2016.

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

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

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

Those charged with governance, including the Audit Committee, are responsible for overseeing the Group's financial reporting process.

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

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

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

• A. Identify and assess the risks of material misstatement of the consolidated financial statements. whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
• B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal controls.
• C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• D. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• E. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

Hsu, Yung-Chien Hsu, Sheng-Chung For and on behalf of PricewaterhouseCoopers, Taiwan March 29, 2018

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2017 AND 2016
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	Assets	Notes	December 31, 2017 AMOUNT	$\overline{\frac{9}{6}}$	December 31, 2016 AMOUNT $\frac{0}{0}$
	Current assets
1100	Cash and cash equivalents	6(1)	\$ 59,389,534	$27\,$	\$ 49,024,765	33
1110	Current financial assets at fair	6(2)
	value through profit or loss		1,446		1,984,968	2
1170	Accounts receivable, net	6(5)	16,860,595	8	9,139,763	6
1180	Accounts receivable due from	$\boldsymbol{7}$
	related parties, net		35,990,057	17	13,492,173	9
1200	Other receivables	$6(6)$ and $7$	1,388,872	$\mathbf{1}$	3,362,762	2
130X	Inventories	6(7)	4,013,323	$\overline{c}$	3,429,097	2
1470	Other current assets	6(8)	20,746,102	9	19, 174, 154	13
11XX	Total current assets		138,389,929	64	99,607,682	67
	Non-current assets
1523	Non-current available-for-sale	6(3)
	financial assets		61,861,247	29	35,879,251	24
1546	Bond investments without active $6(4)$
	markets - noncurrent		4,571,100	$\overline{2}$
1550	Investments accounted for under	6(9)
	equity method		563,534		797,032	I
1600	Property, plant and equipment	$6(10)$ and 7	7,444,897	4	9,150,769	6
1760	Investment property - net	6(11)	793,958		754,225
1840	Deferred tax assets	6(26)	569,660		778,407	1
1900	Other non-current assets	6(12)	1,270,102	1	1,284,911	-1
15XX	Total non-current assets		77,074,498	36	48,644,595	33
1XXX	Total assets		\$ 215, 464, 427	100	148, 252, 277 \$	100

(Continued)

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2017 AND 2016
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

		Notes	December 31, 2017			December 31, 2016
	Liabilities and Equity Current liabilities		AMOUNT	$\%$		AMOUNT	$\overline{\%}$
2100	Short-term borrowings	6(13)
2120	Current financial liabilities at fair 6(2)		\$ 23, 298, 389	11	\$	7,818,924	6
	value through profit or loss
2170			47,417			1,503,327	1
2180	Accounts payable Accounts payable to related	7	6,219,942	3		6,840,531	5
	parties		35, 226, 222	16		11,899,218	8
2200	Other payables	$6(14)$ and 7	13,807,252	6		10,776,793	7
2230	Current tax liabilities	6(26)	1,403,438	1		1,831,524	1
2300	Other current liabilities		150,722			130,654
21XX	Total current liabilities		80, 153, 382	37		40,800,971	28
	Non-current liabilities
2570	Deferred tax liabilities	6(26)	561,390	1		573,888
2600	Other non-current liabilities		154,722			131,141
25XX	Total non-current liabilities		716,112	-1		705,029
2XXX	Total Liabilities		80, 869, 494	$38\,$		41,506,000	28
	Equity attributable to owners of
	parent
	Share capital	6(16)
3110	Share capital - common stock		14, 144, 852	6		14, 144, 852	10
	Capital reserve	6(17)
3200	Capital surplus		7,768,067	4		7,793,643	5
	Retained earnings	6(18)
3310	Legal reserve		10,106,948	5		9,034,837	6
3350	Unappropriated retained earnings		63,516,070	29		60,007,688	40
	Other equity interest	6(19)
3400	Other equity interest		38, 983, 202	18		15,691,346	$\overline{11}$
31XX	Total equity attributable to
	owners of parent		134,519,139	62		106,672,366	72
36XX	Non-controlling interests	6(20)	75,794			73,911
3XXX	Total equity		134,594,933	62		106,746,277	72
	Commitments and Contingent	9
	Liabilities
3X2X	Total liabilities and equity		\$ 215,464,427	100	\$.	148, 252, 277	100

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

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2017 AND 2016
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

			Year ended December 31
				2017			2016
	Items	Notes		AMOUNT	%		AMOUNT	%
4000	Operating revenue	$6(21)$ and 7	\$	147,815,617	100	\$	80,110,459	100
5000	Operating costs	$6(7)(24)$ and 7		133,556,310) (	90)		65,507,435)(	82)
5900	Gross profit from operations			14, 259, 307	10		14,603,024	$\overline{18}$
	Operating expenses	$6(24)$ and 7
6100	Selling expenses			579,901) (		$1)$ (	546,625) (	1)
6200 6300	Administrative expenses			$1,679,864$ (		$1)$ (	$1,756,585$ ) (	2)
6000	Research and development expenses Total operating expenses			$1,473,400$ ( $\overline{3,733,165}$ (	$\mathbf{D}$ 3)	$\epsilon$	975,610) (	$\left \right $ $\overline{4}$
6900	Net operating income			10.526, 142	7		3.278,820) ( 11,324,204	$\overline{14}$
	Non-operating income and expenses
7010	Other income	6(22)		2,143,914	1		1 605,094	2
7020	Other gains and losses	6(23)	€	782, 191) (	$\vert$ )		1.212,047	1
7050	Finance costs			268,237)	$\ddot{\phantom{0}}$	- (	58,832)
7060	Share of loss of associates and joint	6(9)
	ventures accounted for using equity
7000	method Total non-operating income and			173,400)			368,259)
	expenses			920,086			2,390,050
7900	Profit before income tax			11,446,228	7		13,714,254	3 $\overline{17}$
7950	Tax expense	6(26)		1,477,893)	1)		2,994,281)	$\overline{4}$
8200	Profit		\$	9,968,335	6	$\overline{\mathbf{S}}$	10,719,973	$\overline{13}$
	Components of other comprehensive
	income that will not be reclassified to
	profit or loss
8311	Other comprehensive income, before
	tax, actuarial losses on defined benefit plans		(5)	11,866)		$- (5)$	2,694)
8349	Income tax related to components of
	other comprehensive income that
	will not be reclassified to profit or
	loss			2,017			457
8310	Components of other
	comprehensive loss that will not be reclassified to profit or loss			9,849)			2,237)
	Components of other comprehensive	6(19)(20)
	income that will be reclassified to
	profit or loss
8361	Financial statements translation
	differences of foreign operations		$\left($	4, 167, 472) (		$3)$ (	4,931,134) (	6)
8362	Unrealised gain on valuation of				19
8360	available-for-sale financial assets Components of other			27,458,262			13,792,869	17
	comprehensive income that will
	be reclassified to profit or loss			23, 290, 790	16		8,861,735	11
8500	Total comprehensive income			33, 249, 276	$\overline{22}$	$\overline{\mathbf{r}}$	19,579,471	$\overline{24}$
	Profit (loss), attributable to:
8610	Owners of parent		\$	9,965,386	6	\$	10,721,108	13
8620	Non-controlling interests		$\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\over$	2,949 9,968,335	6		1,135) 10,719,973	$\overline{13}$
	Comprehensive income (loss)
	attributable to:
8710	Owners of parent		\$	33, 247, 393	22	-\$	19,587,263	24
8720	Non-controlling interests			1,883			7,792)
			\$	33, 249, 276	$\overline{22}$	$\overline{\mathbf{r}}$	19,579,471	$\overline{24}$
	Earnings per share (in dollars)	6(27)
9750	Basic earnings per share		↨		7.05			7.59
9850	Diluted earnings per share		\$		7.01	$\frac{s}{s}$		7.54

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

FOXCONN TECHNOLOGY CO., LTD, AND SUBSIDIARES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
Expressed in thousands of New Taiwan dollars, exeept as otherwise indicated)

Equity attributable to owners of the parent

				Retained Earnings		Other equity interest
	Notes	Share capital - common stock	Capital reserve	Legal reserve	Unappropriated retained earnings	differences of statements translation operations Financial foreign	Unrealized gain available-for- sale financial or loss on assets	Total	controlling interests Non-	Total equity
2016
Balance at January 1, 2016		\$13,950,240	7,470,233 Ģ	\$7,815,013	\$54 833,215	6,504,594 ų,	318,360 ⇔	\$ 90,891,655	81.703 ⊷	90.973.358 ç,
Appropriationsn of 2015 earnings:	6(18)
Legal reserve appropriated				1,219,824	1, 219, 824
Cash dividends					4,185,072)			4,185,072)		4,185,072)
Stock dividends		139,502			139,502)
Employees' stock bonus		55,110	329,558					384,668		384,668
Consolidated net income					10.721,108			10,721,108	1,135)	10,719,973
Other comprehensive income, net of income tax	(6(19)				2,237)	4,924,477)	13,792,869	8,866,155	$6,657$ )	8,859,498
Changes in equity of associates and joint ventures accounted for under equity Changes in equity			6.148 J					6,148		6,148
Balance at December 31, 2016		\$14,144,852	7.793.643 ∥⊶	9,034,837 اجہ	\$60.007.688	5.1.580.117	\$14,111,229	\$106.672.366	73.911	\$106,746,277
2017
Balance at January 1, 2017		\$14,144,852	7,793,643 ÷,	9,034,837 Ļ,	\$60,007,688	\$1,580,117	\$14,111,229	\$106,672,366	73,911 ↮	\$106,746,277
Appropriationsn of 2016 earnings:	6(18)
Legal reserve appropriated				1,072,111	$1,072,111$ )
Cash dividends					5,375,044)			5,375,044)		5,375,044)
Consolidated net income					9.965,386			9,965,786	2,949	9,968,335
Other comprehensive income, net of income tax	6(19)				9,849)	4,166,406)	27,458,262	23,282,007	$1,066$ )	23,280,941
Changes in equity of associates and joint ventures accounted for under equity method			25.576 $\mathbf{I}$					25,576		25,576
Balance at December 31, 2017		\$14,144,852	7,768,067 ⊷∥	\$10,106,948	\$63,516,070	2,586,289 ۳	\$41,569,491	\$134,519,139	75,794	\$134,594,933

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

$\frac{1}{l}$

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2017 AND 2016
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	Notes 2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax		\$	11,446,228	\$	13,714,254
Adjustments
Income and expenses having no effect on cash flows
Depreciation expense (including investment property)	6(24)		2,300,949		2,738,198
Amortization expense	6(24)		22,194		61,555
Net loss on financial assets or liabilities at fair value through profit or loss	6(2)		527,612		27,718
Loss on disposal of investments	6(3)(9)				103,772
Loss on disposal of property, plan and equipment	6(23)		29,588		34,730
Interest expense			268,237		58,832
Interest income	6(22)	€	$1,535,779$ ) (		984,638)
Dividend income	6(22)		$36,331$ ) (		98,624)
Share of loss of associates and joint ventures accounted	6(9)
for using equity method			173,400		368,259
Changes in assets/liabilities relating to operating
activities
Changes in operating assets
Accounts receivable net			$7,891,302$ ) (		$3,342,685$ )
Accounts receivable due from related parties			22,746,231)		4,732,631
Other receivable			$156,617$ ) (		375,776)
Inventories			$615,493$ )		443,750
Other current assets		(	45,655)		83,440
Other non-current assets		(	21,735)
Net changes in liabilities relating to operating activities
Accounts payable		(	$404,381$ )		2,821,178
Accounts payable to related parties			23, 611, 535		752,384
Other payable			5,203,866	$\left($	5,004,209)
Other current liabilities			21,892		53,374
Other non-current liabilities			32,684		11,309
Cash inflow generated from operations			10,184,661		16, 199, 452
Income taxes paid			1,830,116)		1,689,060)
Net cash flows from operating activities			8, 354, 545		14,510,392

(Continued)

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS TEARS ENDED DECEMBER 31, 2017 AND 2016
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	Notes		2017		2016
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of available-for-sale financial assets	6(3)	\$		$($ \$	17,495,657)
Proceeds from disposal of available-for-sale financial
assets					296,789
Proceeds from disposal of investments accounted for using
equity method					126,521
Proceeds from capital reduction of investments accounted	6(8)
for under equity method					189,293
Acquisition of investments accounted for using equity	6(8)
method					$100,000$ )
Acquisition of investments in debt instrument without	6(4)
active market		€	4,571,100)
Increase in other financial assets		C	$1,956,856$ ) (		3,245,378)
Acquisition of property, plant and equipment	6(28)		$1,442,068$ ) (		1,418,830)
Proceeds from disposal of property, plant and equipment	6(28)		297,837		38,859
Decrease in other non-current assets					2,353
Increase in deferred expense				(	4,619)
Decrease(Increase) in net receivable/ payable on raw
materials			502,095		310,264)
Interest received			1,512,607		1,020,106
Dividend received			36,331		98,624
Net cash flows used in investing activities			5,621,154)		20,802,203)
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid		€	$255,604$ ) (		$71,007$ )
Increase in short-term loans			15,573,657		8, 144, 483
Cash dividends paid	6(18)		5,375,044)		4, 185, 072)
Net cash flows from financing activities			9,943,009		3,888,404
Effect of changes in foreign currency exchange rates			2,311,631)		2,509,279)
Net increase (decrease) in cash and cash equivalents			10,364,769		4,912,686)
Cash and cash equivalents at beginning of year			49,024,765		53,937,451
Cash and cash equivalents at end of year		\$	59,389,534	\$	49,024,765

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

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS. EXCEPT AS OTHERWISE INDICATED)

1. HISTORY AND ORGANIZATION

The Company was originally known as Q-RUN Technology Co., Ltd. and established on April 26, 1990. On March 1, 2004, the Company merged with Foxconn Precision Components Co., Ltd. and was renamed Foxconn Technology Co., Ltd. The Company and its subsidiaries (collectively referred herein as "the Group") are primarily engaged in manufacturing, processing and sales of case, heat dissipation modules and consumer electronics products.

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

These consolidated financial statements were authorised for issuance by the Board of Directors on March 29, 2018.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

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

	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 10, IFRS 12 and IAS 28, 'Investment entities:	January 1, 2016
applying the consolidation exception'
Amendments to IFRS 11, 'Accounting for acquisition of interests in joint	January 1, 2016
operations'
IFRS 14, Regulatory deferral accounts'	January 1, 2016
Amendments to IAS 1, 'Disclosure initiative'	January 1, 2016
Amendments to IAS 16 and IAS 38, 'Clarification of acceptable methods	January 1, 2016
of depreciation and amortisation'
Amendments to IAS 16 and IAS 41, 'Agriculture: bearer plants'	January 1, 2016
Amendments to IAS 19, 'Defined benefit plans: employee	July 1, 2014
contributions'
Amendments to IAS 27, 'Equity method in separate financial statements'	January 1, 2016
Amendments to IAS 36, 'Recoverable amount disclosures for non-	January 1, 2014
financial assets'
Amendments to IAS 39, 'Novation of derivatives and continuation of	January 1, 2014
hedge accounting'
IFRIC 21, 'Levies'	January 1, 2014
Annual improvements to IFRSs 2010-2012 cycle	July 1, 2014
Annual improvements to IFRSs 2011-2013 cycle	July 1, 2014
Annual improvements to IFRSs 2012-2014 cycle	January 1, 2016
The above standards and interpretations have no significant impact to the Group's financial condition

and financail performance based on the Group's assessment.

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

New standards, interpretations and amendments endorsed by the FSC effective from 2018 are as follows:

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

Based on the Group's assessment, the above standards and interpretations affect the Group's financial condition and financial performance as follows:

• A. IFRS 9. 'Financial instruments'
• (a) Classification of debt instruments is driven by the entity's business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset measured at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.
• (b) The impairment losses of debt instruments are assessed using an 'expected credit loss' approach. An entity assesses at each balance sheet date whether there has been a significant increase in credit risk on that instrument since initial recognition to recognise 12-month expected credit losses or lifetime expected credit losses (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment

would be calculated on the book value of net carrying amount (i.e. net of credit allowance). The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component.

B. IFRS 15, 'Revenue from contracts with customers'

If the consideration is not fixed for the sales of goods, the entity recognises the amount to the extent it has a right to collect, net of expected refund. The asset is presented separately from the refund liability.

When adopting the new standards endorsed by the FSC effective from 2018, the Group will apply the new rules under IFRS 9 retrospectively from January 1, 2018, with the practical expedients permitted under the statement. Further, the Group expects to adopt IFRS 15 using the modified retrospective approach. The significant effects of applying the new standards as of January 1, 2018 are summarised helow:

• A. In accordance with IFRS 9, the Group expects to reclassify available-for-sale financial assets in the amount of \$61,861,247 and make an irrevocable election at initial recognition on equity instruments not held for dealing or trading purpose. It does not affect retained earnings and other equity interest.
• B. In accordance with IFRS 9, the Group expects to reclassify investments in debt instruments without active market by increasing financial assets at amortised cost in the amount of \$4,571,100.
• C. In accordance with IFRS 9, the Group expects to reclassify the principal guaranteed products and time deposits with maturity term of over three months by increasing financial assets at amortised cost by \$20,541,568.
• D. In line with the regulations of IFRS 9 on provision for impairment, accounts receivable will have to be reduced by \$16,843 and retained earnings decreased by \$16,843.
• E. Under IFRS 15, liabilities in relation to expected volume discounts and refunds to customers are recognised as contract liabilities, but were previously presented as accounts receivable - allowance for sales returns and discounts in the balance sheet. As of January 1, 2018, the balance would amount to \$64,929.
• (3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 9, 'Prepayment features with negative compensation	January 1, 2019
Amendments to IFRS 10 and IAS 28, 'Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture'	International Accounting
	Standards Board
IFRS 16, 'Leases'	January 1, 2019
IFRS 17, 'Insurance contracts'	January 1, 2021
Amendments to IAS 19, 'Plan amendment, curtailment or settlement'	January 1, 2019
Amendments to IAS 28, 'Long-term interests in associates and joint	January 1, 2019
IFRIC 23, 'Uncertainty over income tax treatments'	January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle	January 1, 2019

Based on the Group's assessment, the above standards and interpretations affect the Group's financial condition and financial performance as follows:

IFRS 16. 'Leases'

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

The Group has evaluated the impact of adopting IFRS 16 based on 2016 financial report and new lease contracts during 2017, which will increase assets and lease liability. There is no impact to equity. The Group will continue evaluating the impact until effective date of IFRS 16.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

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

• (2) Basis of preparation
• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
  • (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
  • (b) Available-for-sale financial assets measured at fair value.
• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.
• (3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

  • (a) All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
  • (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

• (d) Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss.

				Ownership (%)
				December 31,
Investor	Subsidiary	Main business activities	2017	2016	Description
Foxconn Technology Co., Ltd.	Foxconn Precision Components Holding Co., Ltd.	Investment holdings in companies in Mainland China, Hong Kong and America primarily engaged in manufacturing, sale, research and development of computer thermal module and computer components	100	100
Foxconn Technology Co., Ltd.	Q-RUN Holdings Ltd.	Investment holdings in companies in Mainland China, Hong Kong, Singapore and America primarily engaged in manufacturing, sale, research and development of aluminum magnesium case and computer components	100	100
Foxconn Technology Co., Ltd.	Huazhun Investment Co., Ltd.	Investment holdings in R.O.C. companies	100	100
Foxconn Precision Components Holding Co., Ltd.	Atkinson Holdings Ltd.	Investment holding and reinvestment	100	100
Q-RUN Holdings Ltd.	Q-RUN Far East Corporation	Investment holding and reinvestment	100	100

B. Subsidiaries included in the consolidated financial statements:

				Ownership (%)
				December 31,
Investor	Subsidiary	Main business activities	2017	2016	Description
Q-RUN	World Trade	Investment holding and	100	100
Holdings Ltd.	Trading Ltd.	reinvestment
Q-RUN	High Tempo	Investment holding and	100	100
Holdings Ltd.	International Ltd.	reinvestment
Q-RUN	FTC Technology	Investment holding and	100	100
Holdings Ltd.	Inc.	reinvestment
Q-RUN	Foxconn	Sales, investment holdings	100	100
Holdings Ltd.	Technology Pte. Ltd.	and reinvestment
Atkinson	Kenny	Investment holding and	100	100
Holdings Ltd.	International Ltd.	reinvestment
Atkinson	Double Wealth	Investment holding and	100	100
Holdings Ltd.	Profits Ltd.	reinvestment
Atkinson	Precious Star	Investment holding and	100	100
Holdings Ltd.	International Ltd.	reinvestment
Q-RUN	Eastern Star	Investment holding and	100	100
Far East	Limited	reinvestment
Corporation
Q-RUN	Foreign	Investment holding and	100	100
Far East	Technology	reinvestment
Corporation	Ltd.
Q-RUN	Topfry	Investment holding and	100	100
Far East	Industrial Ltd.	reinvestment
Corporation Q-RUN			100	100
Far East	Gold Glory International	Investment holding and reinvestment
Corporation	Ltd.
Q-RUN	New Glory	Investment holding and	100	100
Far East	Holdings Ltd.	reinvestment
Corporation
Foxconn	FTP	Investment holding and	100	100
Technology	Technology	reinvestment
Pte. Ltd.	Inc.

$\mathcal{L}^{\text{max}}{\text{max}}$ and $\mathcal{L}^{\text{max}}{\text{max}}$

				Ownership (%)
				December 31,
Investor	Subsidiary	Main business activities	2017	2016	Description
Kenny International Ltd.	Fu Rui Precision Components (Kunshan) Co., Ltd.	Electrical board components processing; manufacturing and marketing of optoelectronics and computer cables	100	100
Double Wealth Profits Ltd.	Fuzhun Precision (Shenzhen) Industry Co., Ltd.	Manufacturing and marketing of computer components (computer thermal module)	100	100
Fuzhun Precision (Shenzhen) Industry Co., Ltd.	Fuyu Technology (Nanyang) Co., Ltd.	Production of LED lamps and LED display; engagement in smart light pole and other products in relation to LED	100	100
Eastern Star Limited	Hon Fujin Precision Industry	Manufacturing and marketing of computer components and (Taiyuan) Co., Ltd. peripherals and computer cases	87.63	87.63

$\mathcal{L}^{\mathcal{L}}(\mathcal{L}^{\mathcal{L}})$ . The $\mathcal{L}^{\mathcal{L}}(\mathcal{L}^{\mathcal{L}})$

$\frac{\text{Ownership } (\%)}{\text{December } 31}$

				December $31$ ,
Investor	Subsidiary	Main business activities	2017	2016
Eastern Star	Fuzhun Precision	New alloy material, precision	100	100
Limited	(Hebi) Electronics	molds, new electronic
	Co., Ltd.	components, portable computers
		and their components
Precious Star		Hon Fujin Precision Manufacturing and marketing of	12.37	12.37
International	Industry (Taiyuan)	computer components and
Ltd.	Co., Ltd.	related peripherals, computer
		cases and metal stamping
Hon Fujin	Qingdao Hiyn	Research, development,	70	70
Precision	Materials	production and sales of aluminum
Industry	Co., Ltd.	alloy materials, rail vehicle
(Taiyuan) Co., Ltd.		components, car accessories and electronic components;
		manufacturing and sales of
		structured metal products and
		metal container (not including
		precious metal and
		electroplating)
Hon Fujin Precision	Fuzhun Precision	Manufacturing and sales of motors	100
Industry	Industry (Shenyang) Co.,	and motor parts, aluminum alloy parts for electronic device
(Taiyuan) Co.,	Ltd.
Ltd.
Topfry		Fuhuigang Industrial Manufacturing and marketing of	100	100
Industrial Ltd.	(Shenzhen)	computer case – electronic and
	Co., Ltd.	electrical components
Gold Glory International	Fu Yu Precision Components	Manufacturing and marketing of power plug and wall socket,	100	100
Ltd.	(Kunshan)	micro ribbon connectors for
	Co., Ltd.	terminals, etc.
New Glory	YanTai Fuzhun	Manufacturing and marketing of	100	100
Holdings	Precision	computer case - electronic and
Limited	Electronics	electrical components
	Co., Ltd.
New Glory Holdings	Nanning Funing Precision	Manufacturing and marketing of computer components (computer	100	100
Limited	Co., Ltd.	thermal module)

Note: The Company's subsidiary, Fuzhun Precision Industry (Shenyang) Co., Ltd., completed its registration of incorporation in the third quarter of 2017 and included in the consolidated financial statements thereafter.

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

(4) Foreign currency translation

The consolidated financial statements are presented in NTD, which is the Company's functional and the Group's presentation currency.

A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.
• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income.

However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within 'other gains and losses'.
• B. Translation of foreign operations
• (a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
  • iii. All resulting exchange differences are recognized in other comprehensive income.
• (b) When the foreign operation partially disposed of or sold is an associate, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, if the Group retains partial interest in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.
• (c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, if the Group retains partial

interest in the former foreign subsidiary after losing control of the former foreign subsidiary. such transactions should be accounted for as disposal of all interest in the foreign operation.

(5) Classification of current and non-current items

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

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

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

transaction costs are expensed in profit or loss. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss.

(8) Available-for-sale financial assets

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

(9) Loan and accounts receivables

A. Accounts receivable

They are created by the entity by selling goods or providing services to customers in the ordinary course of business. Accounts receivable are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. However, short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• B. Investments in debt instruments without active markets
• (a) Investments in debt instrument without active market are loans and receivables not originated by the entity. They are bond investments with fixed or determinable payments that are not quoted in an active market, and also meet all of the following conditions:
  • i. Not designated on initial recognition as at fair value through profit or loss;
  • ii. Not designated on initial recognition as available-for-sale;
  • iii. Not for which the holder may not recover substantially all of its initial investment, other than because of credit deterioration.
• (b) On a regular way purchase or sale basis, investments in debt instrument without active market are recognised and derecognised using trade date accounting.
• (c) Investments in debt instruments without active market are initially recognised at fair value on the trade date plus transaction costs and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Amortisation of a premium or a discount on such assets is recognised in profit or loss.

(10) Impairment of financial assets

• A. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
• B. The criteria that the Group uses to determine whether there is objective evidence of an

impairment loss is as follows:

• (a) Significant financial difficulty of the issuer or debtor;
• (b) A breach of contract, such as a default or delinquency in interest or principal payments;
• (c) The Group, for economic or legal reasons relating to the borrower's financial difficulty, granted the borrower a concession that a lender would not otherwise consider:
• (d) Increase in probability of the borrower going bankruptcy or suffering financial reorganisation:
• (e) The disappearance of an active market for that financial asset because of financial difficulties:
• (f) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group. including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group;
• (g) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; or
• (h) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
• C. When the Group assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets:
• (a) Financial assets measured at amortised cost

The amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate, and is recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortised cost that would have been at the date of reversal had the impairment loss not been recognised previously. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(b) Available-for-sale financial assets

The amount of the impairment loss is measured as the difference between the asset's acquisition cost (less any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, and is reclassified from 'other comprehensive income' to 'profit or loss'. Impairment loss of an investment in an equity instrument recognised in profit or loss shall not be reversed through profit or loss. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(11) Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to receive the cash flows from

the financial asset expire.

(12) Operating leases (lessor)

Lease income from an operating lease (net of any incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease term.

(13) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average cost method. The cost of finished goods and work in process comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(14) Investments accounted for under equity method / associates

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

G. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

(15) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
• B. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset. as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each component of property, plant, and equipment that is significant in relation to the total cost of the item must be depreciated separately.
• D. The assets' residual values, useful lives and depreciation methods are evaluated, and adjusted if appropriate, at each balance sheet date. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors', from the date of the change. The estimated useful lives of buildings, machinery and equipment and other equipment are $3\nu$ -55 years, $1\nu$ -10 years and $1\nu$ -10 years, respectively.
• (16) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of $8 \sim 55$ years.

(17) Impairment of non-financial assets

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

(18) Borrowings

• A. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.
• B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case,

the fee is deferred until the drawdown occurs.

(19) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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

• A. Financial liabilities at fair value through profit or loss are financial liabilities held for trading. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges.
• B. Financial liabilities at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial liabilities are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial liabilities are recognized in profit or loss.
• (21) Derecognition of financial liabilities

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

(22) Offsetting financial instruments

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

(23) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

• B. Pensions
• (a) Defined contribution plans

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

• (b) Defined benefit plans
• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognized past service costs. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment

benefit obligations.

• ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.
• iii. Past service costs are recognised immediately in profit or loss.
• C. Employees' compensation and directors' and supervisors' remuneration

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

• $(24)$ Income tax
• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
• C. Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting or taxable profit nor loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
• D. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

$(25)$ Dividends

Dividends are recorded in the Company's financial statements in the period in which they are approved by the Company's shareholders. Cash dividends are recorded as liabilities: stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(26) Revenue recognition

The Group manufactures and sells 3C products. Revenue is measured at the fair value of the consideration received or receivable, taking into account business tax or value-added tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Group's activities. Revenue arising from the sales of goods is recognized when the Group has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.

(27) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate.

(28) Operating segments

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

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS ON UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group's accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

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

A. Revenue recognition

The determination of whether the Group is acting as principal or agent in a transaction is based on an evaluation of Group's exposure to the significant risks and rewards associated with the sale of goods or the rendering of service in accordance with the business model and substance of the transaction. Where the Group acts as a principal, the amount received or receivable from customer is recognized as revenue on a gross basis. Where the Group acts as an agent, net revenue is recognized representing commission earned.

The Group provides integrated electronics manufacturing services to meet the following criteria

by judgment, and recognises revenue on a gross basis:

• (a) The Group has primary responsibilities for the goods or services it provides:
• (b) The Group bears inventory risk;
• (c) The Group has the latitude in establishing prices for the goods or services, either directly or indirectly.
• (d) The Group bears credit risk of customers.
• B. Offsetting financial instruments

The determination of whether the Group's financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(2) Critical accounting estimates and assumptions

Evaluation of inventories

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

Please refer to Note 6(7) for the carrying amount of inventories as of December 31, 2017.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

	December 31, 2017 December 31, 2016
Cash on hand and revolving funds	S	366	371
Checking accounts and demand deposits		38, 533, 253	38,046,767
Cash equivalents
Time deposits		20,810,915	10,916,627
Bonds sold under repurchase agreement		45,000	61,000
	\$	59,389,534	49,024,765

A. The Group associates with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

B. The Group has no cash and cash equivalents pledged to others. Time deposits with maturity in excess of three months have been listed under 'other current assets'.

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

Assets			December 31, 2017 December 31, 2016
Current items:
Cross currency swap contracts	\$ $1,446$ \$		1,737,730
Foreign exchange contracts			247,238
	1,446		1,984,968
Liabilities			December 31, 2017 December 31, 2016
Current items:
Foreign exchange contracts	\$ 39,168	- S
Cross currency swap contracts	8,249
Forward exchange contracts			1,503,327
	47,417		1,503,327

A. The Group recognized net (loss) profit of (\$699,473) and \$188,395 on financial assets designated as at fair value through profit or loss for the years ended December 31, 2017 and 2016 (including unrealised loss on valuation of \$527,612 and \$27,718), respectively.

B. The counterparties of the Group's investments in derivatives are banks with good credit quality or financial institutions with investment grade or above, and their credit ratings are all above A category.

C. The non-hedging derivative instruments transaction and contract information are as follows:

		December 31, 2017
	Contract amount
Derivative instruments	(Nominal principal in thousands)		Contract period
Current items:
Cross currency swap contracts	TWD (SELL)	1,204,000	2017/09~2018/03
	USD (BUY)	40,000
Foreign exchange contracts	TWD (SELL)	6,432,294	2017/09~2018/04
	USD (BUY)	216,126
	TWD (SELL)	8,438,526	2017/09~2018/03
	USD (BUY)	282,000

		December 31, 2016
	Contract amount
Derivative instruments		(Nominal principal in thousands)	Contract period
Current items:
Cross currency swap contracts	USD (SELL)	538,000	2016/06~2017/06
	JPY (BUY)	56,960,400
Foreign exchange contracts	TWD (SELL)	4,712,508	2016/09~2017/09
	USD (BUY)	152,000
	TWD (SELL)	6,238,422	2016/10~2017/10
	USD (BUY)	198,689
	TWD (SELL)	547,708	$2016/11 - 2017/10$
	USD (BUY)	17,438
Forward exchange contracts	USD (SELL)	21,929	2016/11~2017/01
	CNH (BUY)	150,667
	USD (SELL)	9,477	2016/12~2017/01
	CNH (BUY)	65,906
	USD (SELL)	532,400	2016/11~2017/06
	JPY (BUY)	56,346,292

(a) Cross currency swap contracts

The Company signed cross currency swap contracts aiming to satisfy capital requirement. In terms of exchange rate swaps, the principal in two currencies are exchanged at the beginning and the end of period to reduce exchange rate risk. In terms of rate swaps, the fixed interest rates of two currencies are exchanged to reduce interest rate risk.

(b) Forward exchange contracts

The Company signed forward exchange contracts to hedge exchange rate risks arising from the activities listed below:

• i. Business activity: The payables due from exporting materials and supplies as well as receivables from exports.
• ii. Investment activity: The payment due from importing machinery and equipment.
• iii. Financial activity: Assets and liabilities (financing) resulted from long-term or short-term borrowings.
• (c) Foreign exchange contracts

The Company entered into foreign exchange contracs to satisfy capital requirement. The principal in two currencies are swapped using the same exchange rate at the beginning and the end of the period to reduce exchange rate risk.

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

(3) Available-for-sale financial assets

Items	December 31, 2017 December 31, 2016
Non-current items:
Listed and emerging stocks	\$ 19,994,156 \$	21,445,522
Foreign investment funds	297,600	322,500
Adjustment of available-for-sale financial assets	41,569,491	14, 111, 229
	\$ 61,861,247	35,879,251

• A. Q-RUN Holdings Limited, a subsidiary of the Company, has disposed 7,737, 6,097 and 2,426 thousand shares of China Harmony New Energy Auto Holding Limited (formerly China Harmony Auto Holding Limited) to non-related parties, amounting to US\$4,211 thousand, US\$3,367 thousand and US\$1,573 thousand in July, June and April, 2016, respectively. The loss on disposal of China Harmony New Energy Auto Holding Limited was \$24,572 (US\$762 thousand).
• B. On April 2, 2016, the subsidiary, Foxconn Technology Pte. Ltd., signed an investment agreement with the Japanese listed company, Sharp Corporation, to purchase 646,400,000 newly issued ordinary shares of Sharp Corporation for ¥88 per share, amounting to 12.97% of equity. The total price of acquisition was \$17,495,657 (¥56,883,200 thousand). On August 12, 2016, the transaction for the abovementioned investment was completed.
• C. For fair value change recognised in other comprehensive income for the years ended December 31, 2017 and 2016, please refer to Note $6(19)$ for details.
• D. The Group has no available-for-sale financial assets pledged to others.
• (4) Investments in bonds without active markets

December 31, 2017 December 31, 2016

Items

Non-current items:

Financial bonds

4,571,100 \$

• A. The Group invested in the trust fund named Guangdong Finance Trust Peng Yun Tian Hua Collection Fund Trust for RMB 1 billion. The fund was mainly created for the investment in Guangzhou Guangyin Nanyue Intelligent Technology Industrial Investment Partnership.
• B. The significant rights and obligations of the aforementioned investment are outlined as follows:
• (a) The preferred beneficiary has priority over ordinary beneficiary of the allocation of principal and interests (derived from the principal). The ordinary beneficiary is allocated with residual interests if there is any.
• (b) The Group is an ordinary beneficiary whereby its right to claim interests is only subject to preferred beneficiary.
• C. Under IAS 39, 'Financial Instruments: Recognition and Measurement', the investment in trust fund is regarded as debt investments that are not quoted in an active market with fixed or determinable payments. Hence, it was recorded as 'non-current bond investment without active market'.
• D. The counterparties of the Group's investments have good credit quality.
• E. As of December 31, 2017, the Group has no investments in bonds without active markets pledged

to others.

(5) Accounts receivable

	December 31, 2017 December 31, 2016
Notes receivable	\$ 10,093	\$	4,686
Accounts receivable	16,915,431		9,206,431
Less: Allowance for sales discounts	$64,929$ )		71,354)
	\$ 16,860,595	S	9,139,763
The Group does not hold any collateral as security.
(6) Other receivables
	December 31, 2017 December 31, 2016
Receivable from purchases made on behalf of others	\$ 901,649	$\mathcal{S}$	2,792,119
Receivable from disposal of equipment	2,254		86,669
Interest receivable	52,237		29,065
Others	432,732		454,909
	1,388,872		3,362,762

'Others' refer to payments such as water and electricity fee and power expense made on behalf of related parties.

$(7)$ Inventories

	December 31, 2017 December 31, 2016
Raw materials	\$ 1,165,118	-S	514,117
Work in process	353,549		464,058
Finished goods	2,634,410		2,680,869
	4,153,077		3,659,044
Less: Allowance for inventory obsolescence and
market price decline	139,754)		229,947)
	4,013,323		3,429,097

The cost of inventories recognised as expense for the year:

	Years ended December 31,
	2017	2016
Cost of inventories sold	\$ 134,049,286	66,315,813
Gain from price recovery on inventory
obsolescence and market price decline	$85,005$ (	595,345)
Revenue from sale of scraps	407,971)	213,033)
	133,556,310	65,507,435

As the Group sold some inventory with net realizable value lower than its cost, the allowance for inventory obsolescence and market price decline was reversed for the years ended December 31, 2017 and 2016.

(8) Other current assets

	December 31, 2017 December 31, 2016
Capital guarantee financial products	13,775,019	13,852,788
Time deposits with maturity over three months	6,766,549	5,176,581
Prepayments	73,483	42,022
Others	131,051	102,763
	20,746,102	19,174,154

The Group has signed a contract for capital guarantee financial products with the bank for the years ended December 31, 2017 and 2016, and the rate of return is between $3.7\% \sim 4.8\%$ and $3.0\% \sim 3.4\%$ , respectively.

(9) Investments accounted for under equity method

Investee companies	December 31, 2017 December 31, 2016
FSK Holdings Limited	248,712	453,782
Syntrend Creative Park Co., Ltd.	303,283	330,715
Foxstar Technology Co., Ltd.	11,539	12,535
	563,534	797,032

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

As of December 31, 2017 and 2016, the carrying amount of the Group's individually immaterial associates amounted to \$563,534 and \$797,032, respectively.

	Years ended December 31,
	2017	2016
Total comprehensive (loss) income	$838,459$ (\$)	2,279,521)

• B. In September 2016, the Group increased investment for cash of \$100,000 in Syntrend Creative Park Co. Ltd.
• C. In February 2016, FSK Holdings Limited conducted capital reduction by returning \$189,293 (US\$5,712 thousand) of share capital.
• D. Wheego Electric Cars, Inc. repurchased the shares, equivalent to 11.65% equity interest, which the Group holds in March, 2016. Repurchase price was US\$3,818 thousand and loss on disposal of investment was \$79,200 (US\$2,455 thousand) (shown as "other gains and losses").

E. The Group's share of loss on investment accounted for under equity method was \$173,400 and \$368,259 for the years ended December 31, 2017 and 2016, respectively.

										Construction in
										progress and
				Buildings		Machinery and				equipment under
		Land		and structures		equipment		Others		acceptance		Total
At January $1, 2017$
Cost	မာ	51,850	∽	8,010,112	ی	22,994,397	မာ	4,858,499	↮	375.314	↔	36,290,172
Accumulated depreciation				4,714,096)		18,361,231)		4,064,076)				27,139,403)
	↔	51,850	↔	3,296,016	$\leftrightarrow$	4,633,166	69	794,423	↔	375,314	↔	9,150,769
2017
Opening net book amount as
at January 1	59	51,850	S	3,296,016	↔	4,633,166	↔	794,423	↔	375,314	چي	9,150,769
Additions				144,054		479,536		237,511		194,881		1,055,982
Reclassifications				27,877		10,961				48,935)		10,097)
Transfer				115,692)								115,692)
Disposals				42,409)		187,464		13,137				243,010)
Depreciation expense				310,082)		1,562,000)		361,602)				2,233,684)
Net exchange differences				53,519)		88,927)		13,484)		3,441)		159,371
Closing net book amount as
at December 31	↔	51,850	ę,	2,946,245	↔	3,285,272	↮	643,711	↔	517,819	$\leftrightarrow$	7,444,897
At December 31, 2017
Cost	↔	51,850		7,698,313	Ø	24,473,429	Ģ	4,816,001	ص	517,819	69	37,557,412
Accumulated depreciation				4,752,068)		21,188,157)		4,172,290)				30,112,515)
	s,	51,850	s,	2,946,245	اجه	3,285,272	إجو	643,711	↮	517,819	S	7,444,897

(10) Property, plant and equipment

$-37$

										Construction in
										progress and
				Buildings		Machinery and				equipment under
		Land		and structures		equipment		Others		acceptance		Total
At January 1, 2016
Cost	∽	51,850	မာ	9,959,433	↔	27,084,588		4,599,402	↮	656,059	59	42,351,332
Accumulated depreciation				5,368,215)		20,947,666)		4,012,392)				30,328,273)
		51,850	€	4,591,218	6A	6,136,922	↔	587,010		656,059	↮	(2,023,059)
2016
Opening net book amount
as at January 1	∽	51,850	↔	4,591,218	မာ	6,136,922	∽	587,010	69	656,059	↔	12,023,059
Additions				92,835		587,205		801,002		90,603		1,571,645
Reclassifications						290,224		27,512		324,916)		7,180)
Transfer				685,518)								685,518
Disposals				227)		113,818		7,693)				121,738)
Depreciation expense				389,827)		1,667,837)		635,787)				2,693,451)
Net exchange differences				312,465)		599,530)		22,379		46,432)		936,048)
Closing net book amount
as at December 31	↔	51,850	Ø	3,296,016	$\leftrightarrow$	4,633,166	€Ą	794,423	↮	375,314	↔	9,150,769
At December 31, 2016
Cost	∽	51,850	∽	8,010,112		\$22,994,397	∽	4,858,499	⊷	375,314	ۄ	36,290,172
Accumulated depreciation				4,714,096)		18,361,231)		4,064,076)				27,139,403)
		51,850	ę۹,	3,296,016	اجح	4,633,166	69	794,423	↔	375,314	↔	9,150,769

$-38-$

$(11)$ Investment property

		Land		and structures		Total
At January 1, 2017
Cost	\$	95,910	\$	1,224,688	\$	1,320,598
Accumulated depreciation and impairment				566,373)		566,373)
	\$	95,910	\$	658,315	\$	754,225
2017
Opening net book amount as at January 1	\$	95,910	\$	658,315	\$	754,225
Transfer				115,692		115,692
Depreciation expense				$67,265$ ) (		67,265
Net exchange differences				$8,694)$ (		8,694)
Closing net book amount as at December 31	$\mathcal{S}$	95,910	$\boldsymbol{\mathcal{S}}$	698,048	S.	793,958
At December 31, 2017
Cost	\$	95,910	$\mathbf{\hat{S}}$	1,451,442	\$	1,547,352
Accumulated depreciation and impairment				753,394)		753,394)
	\$	95,910	$\mathbb{S}$	698,048	\$	793,958
		Land		Buildings		Total
At January 1, 2016
Cost	$\mathbf S$	95,910	$\mathbf S$	81,436	\$	177,346
Accumulated depreciation and impairment				34,923)		34,923)
	\$	95,910	\$	46,513	\$	142,423
2016
Opening net book amount as at January 1	\$	95,910	\$	46,513	\$	142,423
Transfer				685,518		685,518
Depreciation expense				44,747) (		44,747)
Net exchange differences				28,969)		28,969)
Closing net book amount as at December 31	\$	95,910	$\mathbb S$	658,315	\$	754,225
At December 31, 2016
Cost	\$	95,910	\$	1,224,688	\$	1,320,598
Accumulated depreciation and impairment				566,373)		566,373)

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

	Years ended December 31,
	2017	2016
Rental income from the lease of the
investment property	131,112	74,458
Direct operating expenses arising from
the investment property that generated
rental income for the year	67,265	44,747

• B. The fair value of the investment property held by the Group as at December 31, 2017 and 2016 was \$1,198,857 and \$1,144,801, respectively, which was valued using transactions traded in markets and the comparative method. The investment property is categorised within Level 3 in the fair value hierarchy.
• (12) Other non-current assets

		December 31, 2017 December 31, 2016
Receivable from payment on behalf of others	\$	599,120	-S	604,570
Long-term prepaid rents		556,556		579,116
Prepayments for equipment		53,453		60,607
Other assets		60,973		40,618
	S	1,270,102		1,284,911

The long-term prepaid rents are for a land use right contract that the Group signed for the use of the land in China. All rentals had been paid on the contract date. The Group recognised rental expenses of \$13,658 and \$14,724 for the years ended December 31, 2017 and 2016, respectively.

(13) Short-term loans

Type of loans		December 31, 2017	Interest rate range	Collateral
Bank loans
Credit loans	\$	23,152,114	$0.55\% \sim 5.0\%$	None
Other short-term loans		146,275	4.35%	Ħ
	\$	23,298,389
Type of loans		December 31, 2016	Interest rate range	Collateral
Bank loans
Credit loans	\$	7,577,602	$0.83\%$ ~1.29%	None
Other short-term loans		241,322	$4.35\% \sim 5\%$	Ħ
	¢	7,818,924

The Group has signed an agreement to offset financial assets and liabilities with financial institutions. The counterbalance of assets to liabilities was \$0 as of December 31, 2017. Details of the offset agreement as of December 31, 2016 are as follows:

			December 31, 2016
	Gross amount of		Gross amount of		Net amount of financial
recognized			recognized financial		liabilities presented
	financial liabilities		assets in the balance sheet		in the balance sheet
	2,079,191		2,079,191

(14) Other payables

			December 31, 2017 December 31, 2016
Payable for purchases made on behalf of others
- related parties	\$ 2,935,782	S
Awards and salaries payable	2,436,473		2,798,380
Payable for module expense	1,467,668		1,044,673
Consumption goods expense payable	1,391,007		739,289
Payable for purchases made on behalf of others	1,221,005		2,609,380
Employees' compensation payable	1,172,315		960,413
Processing fees payable	414,492		549,563
Payables for equipment	341,843		727,929
Freight payable	155,225		74,493
Others	2,271,442		1,272,673
	\$ 13,807,252	S	10,776,793

$(15)$ Pensions

A. Defined benefit plans

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

			December 31, 2017 December 31, 2016
Present value of defined benefit obligations	ſS.	$55,950$ (\$)	48,357)
Fair value of plan assets		41,646	41,711
Net defined benefit liability	í S	$14,304)$ (\$)	6,646)

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

		Present value of
		defined benefit		Fair value of		Net defined
		obligations		plan assets		benefit liability
Year ended December 31, 2017
Balance at January 1	$($ \$	48,357)	\$	41,711	$($ \$	6,646)
Current service cost		65)				65)
Interest income		665)		586		79)
		49,087)		42,297		6,790)
Remeasurements
Return on plan assets (Note)			€	$166)$ (		166)
Change in demographic						127)
assumptions		127)
Change in financial assumptions		636)				636)
Experience adjustments		10,937)				10,937)
		$11,700)$ (		166)		11,866)
Pension fund contribution				1,842		1,842
Paid pension		4,837		2,327)		2,510
		4,837	\$	485)		4,352
Balance at December 31	΄\$	55,950) Present value of		41,646	(	14,304)
		defined benefit		Fair value of		Net defined
		obligations		plan assets		benefit liability
Year ended December 31, 2016
Balance at January 1	$\left( \mathcal{S}\right)$	56,691)	\$	48,999	$\binom{3}{5}$	7,692)
Current service cost		117)				117)
Interest income		992)		875		117)
		57,800)		49,874		7,926)
Remeasurements
Return on plan assets (Note)				$554)$ (		554)
Change in demographic
assumptions		341)				341)
Change in financial assumptions		1,707)				1,707)
Experience adjustments		92)				92)
		2,140)		554)		2,694)
Pension fund contribution				1,882		1,882
Paid pension		11,583		9,491)		2,092
		11,583		7,609)		3,974

Note: The amount included in interest income or expense is excluded.

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

	Years ended December 31,
	2017	2016
Discount rate	1.25%	1.375%
Future salary increases	2.00% ----------	2.00%

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

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

		Discount rate			Future salary increases
		Increase 0.25%		Decrease 0.25%	Increase 0.25%		Decrease 0.25%
December 31, 2017
Effect on present value of defined benefit obligation		1,294	(\$	1,340		1,288)		1,251
December 31, 2016
Effect on present value of defined benefit obligation		1.156	17	1,198)		1.1541	S	1,120

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

• (f) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2018 are \$1,900.
• B. Defined contribution plans
• (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the "New Plan") under the Labor Pension Act (the "Act"), covering

all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• (b) The subsidiaries in mainland China have defined contribution pension plans and contribute an amount monthly based on $14\% \sim 20\%$ of employees' monthly salaries and wages to an independent fund administered by a government agency. The plan is administered by the government of mainland China. Other than the monthly contributions, the Group has no further obligations.
• (c) The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2017 and 2016 were \$724,536 and \$832,953, respectively.

$(16)$ Capital stock

• A. As of December 31, 2017, the Company's authorized capital was \$15,000,000 (including subscription warrant or 50 million shares reserved for convertible bonds issued by the Company), and the paid-in capital was \$14,144,852, constituting 1,414,485 thousand shares with a par value of \$10 (in NT dollars) per share.
• B. The stockholders at their annual stockholders' meeting in June 2016 adopted a resolution to issue new shares of 19,461 thousand shares (including new shares of 5,511 thousand shares for employees' compensation) through capitalisation of unappropriated earnings of \$139,502 and employees' compensation of \$384,668.
• (17) Capital surplus

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

(18) Retained earnings

A. In accordance with the Company's Articles of Incorporation, current year's earnings must be distributed in the following order:

The Company's current year's earnings must be distributed in the following order:

• (a) Covering accumulated deficit;
• (b) Setting aside as legal reserve equal to 10% of current year's net income:
• (c) Setting aside a special reserve in accordance with applicable statutory and regulatory requirements.

The remaining earnings along with the unappropriated earnings at the beginning of the period are considered as accumulated distributable earnings. In accordance with dividend policy, the proposal of earnings appropriation is prepared by the Board of Directors and resolved by the shareholders.

The Company is at the growing stage. The Company's stock dividend policy shall consider the Company's current and future investment environment, capital needs, local and foreign

competition situation and capital budget, along with shareholders' profit and the Company's long-term financial plans. The shareholders' dividends are appropriated based on accumulated distributable earnings, which shall not be lower than 15% of the distributable earnings for the period and the cash dividends shall not be less than 10% of the shareholders' dividends.

• B. According to related regulations, 10% of the balance of earnings after tax less the accumulated loss of prior years should be set aside as legal reserve, until the legal reserve amount reaches the total paid-in capital. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company's paid-in capital.
• C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
• D. The appropriations of earnings for 2016 and 2015 had been resolved at the stockholders' meeting on June 22, 2017 and June 22, 2016, respectively. Details are summarized below:

		2016		2015
		Dividends per			Dividends per
	Amount	share (in dollars)		Amount	share (in dollars)
Legal reserve	1,072,111	$\overline{\phantom{a}}$	-8	1,219,824
Cash dividends	5,375,044	3.8		4,185,072	3.0
Stock dividends				139,502	0.1
	6,447,155	3.8		5,544,398	3.1

The appropriations of 2016 and 2015 earnings were in agreement with the Board of Directors' proposals on May 10, 2017 and May 12, 2016, respectively. The information on distribution of earnings will be posted in the "Market Observation Post System" of the TSEC.

E. For the information relating to employees' compensation and directors' and supervisors' remuneration, please refer to Note 6(25).

$(19)$ Other equity

		Available-for-sale investment		Currency translation adjustments		Total
At January 1, 2017	S	14, 111, 229	S	1,580,117		15,691,346
Gain on valuation of fair value		27,458,262				27,458,262
Currency translation differences:
$-Group$		٠		4,166,406		4,166,406)
At December 31, 2017	S	41,569,491	(\$	2,586,289)	S	38,983,202

	Available-for-sale		Currency translation
	investment		adjustments		Total
At January 1, 2016	\$ 318,360	$\mathbf{\$}$	6,504,594 \$		6,822,954
Gain on valuation of fair value	13,792,869				13,792,869
Currency translation differences:
$-Group$	-		$4,922,610$ (		4,922,610)
-Associates			1,867)		1,867)
At December 31, 2016	\$ 14,111,229	\$	1,580,117	\$	15,691,346
(20) Non-controlling interests
			Years ended December 31,
			2017		2016
At January 1		\$	73,911	$\mathsf{\$}$	81,703
Shares attributable to non-controlling interests:
Loss for the year			2,949		1,135)
Currency translation differences			1,066)		6,657
At December 31		\$	75,794	\$	73,911
$(21)$ Operating revenue
			Years ended December 31,
			2017		2016
3C products (including components and related
electronic products)		\$	147,815,617	\$	80,110,459
(22) Other income
			Years ended December 31,
			2017		2016
Interest income:
Interest income from bank deposits		\$	1,123,194	\$	789,182
Interest income from guaranteed income financial
products			412,585		195,456
Rental income Government grants income			195,869 75,151		202,398 146,191
Dividend income			36,331		98,624
Others			300,784		173,243
		\$	2,143,914	\$	1,605,094

(23) Other gains and losses

	Years ended December 31,
		2017	2016
Net (losses) gains on financial assets at fair value
through profit or loss	(\$	$727,284$ ) \$	1,711,079
Net gains (losses) on financial liabilities at fair
value through profit or loss		27,811	1,522,684)
Net currency exchange gains		39,898	1,204,858
Losses on disposal of property, plant and
equipment		$29,588$ (	34,730)
Losses on disposal of investments		-	103,772)
Others		93,028)	42,704)
	(\$	782,191) \$	1,212,047

Information related to gains (losses) on financial assets at fair value through profit or loss is provided in Note $6(2)$ .

(24) Expenses by nature

	Years ended December 31,
		2017		2016
Employee benefit expense	\$	9,737,863		9,658,437
Depreciation		2,300,949		2,738,198
Amortization (including long-term prepaid rent
amortization)		22,194		61,555
	\$	12,061,006		12,458,190

(25) Employee benefit expense

		Years ended December 31,
		2017	2016
Wages and salaries	S	7,814,813	7,603,176
Labor and health insurance fees		329,189	388,114
Pension costs		724,680	833,187
Other personnel expenses		869,181	833,960
		9.737.863	9.658.437

• A. According to the Company's Articles of Incorporation, if the Company accrues profit (referring to profit before tax prior to deducting the appropriation of employees' compensation and directors' remuneration), 4%~6% should be appropriated as employees' compensation.
• B. For the years ended December 31, 2017 and 2016, employees' compensation was accrued at \$457,835 and \$489,033, respectively. The aforementioned amounts were recognised in salary expenses.

The expenses recognised for 2017 and 2016 were estimated and accrued based on 4% of profit of current year distributable.

Employees' compensation of 2016 resolved by the Board of Directors was \$489,033 in the form of cash. The amount was in agreement with that recognised in the 2016 financial statements.

Information about employees' compensation of the Company as resolved by the board of directors and shareholders will be posted in the "Market Observation Post System" at the website of the Taiwan Stock Exchange.

$(26)$ Income tax

A. Components of income tax expense:

	Years ended December 31,
		2017		2016
Current tax:
Current tax on profits for the year	S	1,968,999	-S	2,760,201
Prior year income tax overestimation		$674,301$ )		301,617)
Total current tax		1,294,698		2,458,584
Deferred tax:
Origination and reversal of temporary
differences		183,195		535,697
Income tax (benefit) expense		1,477,893	S	2,994,281

B. Reconciliation between income tax expense and accounting profit:

		Years ended December 31,
	2017		2016
Tax calculated based on profit before tax and statutory tax rate (note)	\$	3,007,172 - \$	4,281,021
Tax effects of unrecognised deferred tax assets		$1,282,150$ (	1,650,514)
Additional 10% tax on undistributed earnings		427,172	665,391
Prior year income tax overestimation		674,301)	301,617)
Income tax expenses		1,477,893	2,994,281
Origination and reversal of temporary differences		$183, 195$ ) (	535,697)
Prior year income tax overestimation		674.301	301,617
Prepaid income tax		579,554) (	853,883)
Net exchange differences		13,993	74,794)
Current income tax liabilities		1,403,438	1,831,524

Note: The basis for computing the applicable tax rate are the rates applicable in the respective countries where the Group entities operate.

			2017
			Recognized
		Recognized	in other	Net
		in profit	comprehensive	exchange
	January 1	or loss	income	differences	December 31
Temporary differences:
Deferred tax assets:
Reserve for inventory obsolescence and
market price decline	${\mathbb S}$ 2,674	$\boldsymbol{\mathcal{S}}$	\$	\$	2,674 \$
Permanent loss on market value decline
of long-term equity investments	13,789				13,789
Differences in useful lives of property, plant and equipment	736,803	199,675) $\overline{C}$		14,064)	523,064
Unused compensated absences for
employees	16,321	940		186)	17,075
Others	8,820	3,042	2,017	821)	13,058
	778,407	(\$195,693)	$\mathbb S$ 2,017	(\$ 15,071)	569,660 S
Deferred tax liabilities:
Foreign investment income using equity
method	531,858) (	\$32,994	\$	\$	498,864) (
Unrealized exchange gain		62,526) €			62,526) €
Unrealized valuation gain on financial
instruments	42,030)	42,030
	573,888) í\$	\$12,498	\$	\$	561,390) $($ \$
			2016
			Recognized
		Recognized	in other	Net
		in profit	comprehensive	exchange
	January 1	or loss	income	differences	December 31
Temporary differences:
Deferred tax assets:
Reserve for inventory obsolescence and
market price decline	2,674 \$	\$	\$	S	2,674 \$
Permanent loss on market value decline
of long-term equity investments	13,789				13,789
Differences in useful lives of property,
plant and equipment		1,360,302 ( 535,873)		87,626)	736,803
Unused compensated absences for
employees	17,849 (	306)		1,222) $\left($	16,321
Others	2,340	6,023	457		8,820
		\$1,396,954 (\$530,156) \$	457	(\$88,848)	778,407 - \$
Deferred tax liabilities:
Foreign investment income using equity
method	(S	475,818) (\$56,040) \$		S	531,858) $\left( \mathbb{S}\right)$
Unrealized exchange gain Unrealized valuation gain on financial	963)	963
instruments	91,566)	49,536			42,030)
	(Y	568,347) (\$ 5,541)	-S	S	573,888) (\$

C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

• D. The Company did not recognise taxable temporary differences associated with investment in subsidiaries as deferred tax liabilities. As of December 31, 2017 and 2016, the temporary differences unrecognized as deferred tax liabilities were \$116,426,043 and \$94,362,167, respectively. Abovementioned taxable temporary differences arose from the differences between estimated carrying amounts of long-term investments in foreign subsidiaries and tax payable. The Company will not dispose the subsidiaries in the foreseeable future nor remit back earnings and thus, did not recognise deferred income tax liabilities.
• E. The Company's income tax returns through 2015 have been assessed and approved by the Tax Authority.
• F. With the abolishment of the imputation tax system under the amendments to the Income Tax Act promulgated by the President of the Republic of China in February, 2018, the information on unappropriated retained earnings and the balance of the imputation credit account as of December 31, 2017, as well as the estimated creditable tax rate for the year ended December 31, 2017 is no longer disclosed.

Unappropriated retained earnings on December 31, 2016:

	December 31, 2016
Earnings generated in and after 1998	60,007,688

• G. As of December 31, 2016, the balance of the imputation tax credit account was \$5,856,230. The creditable tax rate was 10.40% for the year ended December 31, 2016.
• (27) Earnings per share

		Year ended December 31, 2017
			Weighted average
			number of ordinary	Earnings
		Amount	shares outstanding	per share
		after tax	(shares in thousands)	(in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders
of the parent	\$	9,965,386	1,414,485	\$	7.05
Diluted earnings per share
Profit attributable to ordinary shareholders
of the parent	S.	9,965,386
Assumed conversion of all dilutive
potential ordinary shares
Employees' compensation			6,807
Profit attributable to ordinary shareholders
of the parent plus assumed conversion of		9,965,386	1,421,292	\$	7.01
all dilutive potential ordinary shares

	Year ended December 31, 2016
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	Earnings per share (in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders of the parent	\$10,721,108	1,411,880	\$ 7.59
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive	\$10,721,108
potential ordinary shares		9,096
Employees' bonus
Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	\$10,721,108	1,420,976	7.54 \$
(28) Supplementary information on cash flows
Investing activities with partial cash payments:
		Years ended December 31,
		2017	2016
Purchase of property, plant and equipment	\$	$\mathbb{S}$ 1,055,982	1,571,645
Add: Opening balance of payable on equipment		727,929	575,114

Less: Ending balance of payable on equipment Cash paid during the year

Disposal of property, plant and equipment Add: Opening balance of receivable on equipment Less: Ending balance of receivable on equipment Cash received during the year

	$\frac{1}{2}$ can change is coomed in the
	2017		2016
\$	1,055,982 \$		1,571,645
	727,929		575,114
	341,843) (		727,929)
$\boldsymbol{\mathsf{S}}$	1,442,068	S	1,418,830
	Years ended December 31,
	2017		2016
\$	213,422	$\mathbb{S}$	121,738
	86,669		3,790
	2,254)		86,669)
\$	297,837	S	38,859

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties	Relationship with the Company
Hon Hai Precision Industry Co., Ltd. and subsidiaries	Entities with significant influence
(Hon Hai Co., Ltd. and subsidiaries)	to the Group
Foxconn Precision Electronics (Taiyuan) Co., Ltd.	n
(Foxconn (Taiyuan))
ShanXi Yuding Precision Technology Co., Ltd. (ShanXi	n
Yuding)
Hongfujin Precision Industry (Yantai)	n
Co., Ltd. (Hongfujin (Yantai))
Pan-International Industrial Corp. and subsidiaries	Other related party
ESON PRECISION IND. CO. LTD and subsidiaries	n
SHARP CORPORATION and subsidiaries	n
Hong Qi Sheng Precision Electronics (Qinhuangdao) Co.,	n
Ltd.
INNOLUX CORPORATION	n
CyberTAN Technology Inc.	n
FOXSEMICON INTEGRATED	n
TECHNOLOGY(Shanghai)INC.
MOOXEE PRECISION INDUSTRY CO.	n
ShenZhen XiaoHe E-commerce Ltd.	n
Foxstar Technology Co., Ltd	Associate
(2) Significant related party transactions
A. Operating revenue
	Years ended December 31,
	2017 2016
Sales of goods and services:

$ -$
Entities with significant influence to the Group
-Hon Hai Co., Ltd. and subsidiaries	\$	23,305,671	17,491,971
$-F$ oxconn (Taiyuan)		21,734,839	32,069,220
-ShanXi Yuding		14,862,525
Other related parties		95,252	7,636
Associats		6,115
	S	60,004,402	49,568,827

There are no similar transactions for reference, and prices and terms are negotiated by both parties, all sales to the aforementioned related party are made at prices available to the third party. The Group collects payment from related parties in 30 to 90 days. Sales of raw material to related parties are eliminated in finished goods transactions, which are made from the same raw material repurchased by the Group.

B. Purchases

	Years ended December 31,
	2017			2016
Purchases of goods and services:
Entities with significant influence to the Group
$-$ (Hongfujin (Yantai))	\$	68,665,605 \$		19,094,055
-Hon Hai Co., Ltd. and subsidiaries		23, 232, 446		17,615,061
Other related parties		2,387,642		130,322
		94,285,693		36,839,438

There are no similar transactions for reference, and prices and payment terms are negotiated by both parties, all purchases from the aforementioned related party are made at market prices at the time of purchase. The Group's payment to related parties is made in 30 to 90 days.

C. Receivables from related parties

		December 31, 2017 December 31, 2016
Accounts receivable:
Entities with significant influence to the Group
-Hon Hai Co., Ltd. and subsidiaries	\$	22,507,279 \$		13,489,114
-ShanXi Yuding		13,478,271
Other related parties		4,439		3,059
Associats		68
		35,990,057	\$	13,492,173
		December 31, 2017 December 31, 2016
Other receivables-purchases made on behalf of others:
Entities with significant influence to the Group
-Hon Hai Co., Ltd. and subsidiaries	\$	901,649 \$		2,792,119
Other receivables-proceeds from sale of property,
plant and equipment:
Entities with significant influence to the Group
-Hon Hai Co., Ltd. and subsidiaries		2,254		38,374
		903,903		2,830,493
	\$	36,893,960	\$	16,322,666

The receivables from related parties arise mainly from sale transactions. The amount is due three months after the invoice date. The receivables are unsecured and non-interest bearing. No allowance for doubtful debts was provided against receivables from related parties.

D. Payables to related parties

			December 31, 2017 December 31, 2016
Accounts receivable:
Entities with significant influence to the Group
-Hongfujin (Yantai)	\$	21,318,436	-\$ 8,843,835
-Hon Hai Co., Ltd. and subsidiaries		13,303,428	2,991,585
Other related parties		604,358	63,798
		35,226,222	11,899,218
Other payables-purchases made on behalf of others: Entities with significant influence to the Group
-Hon Hai Co., Ltd. and subsidiaries		2,935,782
Other payables-processing fees:
Entities with significant influence to the Group
-Hon Hai Co., Ltd. and subsidiaries			25,299
Other payables-management service fees:
Other related parties		9,882	12,394
Other payables-acquisition of property, plant and equipment:
Entities with significant influence to the Group
-Hon Hai Co., Ltd. and subsidiaries		136,966	579,754
		3,082,630	617,447
	\$	38,308,852	S 12,516,665

The payables to related parties arise mainly from purchase and processing transactions and are at arm's length, non-interest bearing and payable within 30~90 days.

E. Management service fees

	Years ended December 31,
		2017		2016
Management service fees Entities with significant influence to the Group -Hon Hai Co., Ltd. and subsidiaries		666,556	S	350,361
F. Raw materials purchased on behalf of others
	Years ended December 31,
		2017		2016
Entities with significant influence to the Group -Hon Hai Co., Ltd. and subsidiaries
Raw materials purchased on behalf of others	\$	27,973,506	- S	9,301,903
Raw materials purchased by related parties		8,773,670
		36,747,176		9,301,903

G. Property transactions

(a) Property acquisition:

	Years ended December 31,
	2017		2016
Acquisition of property, plant and equipment: Entities with significant influence to the Group
-Hon Hai Co., Ltd. and subsidiaries	534.976	- S	982,921
Other related parties	25.922		149,087
	560.898		1,132,008

(b) Proceeds from sale of property, plant and equipment:

						Years ended December 31,
		2017				2016
		Proceeds from				Proceeds from
		sale of property,				sale of property,
		plant and				plant and
		equipment		Gain		equipment		Gain
Sale of property, plant and equipment:
Entities with significant influence to
the Group
-Hon Hai Co., Ltd. and
subsidiaries	\$	214,742	S.	25,040	-S	101,558	S.	26,433
Other related parties		14,752		9,205		618		618
	ጥ	229,494		34,245	ς	102,176		27,051

H. Rent revenue

Foxconn Precision Electronics (Taiyuan) Co., Ltd., referred herein as "Foxconn (Taiyuan)", a subsidiary of Hon Hai, leases part of plants, offices and dormitories in Taiyuan with the Group in April, 2016. Lease price is agreed upon by both parties and the Group collects rent from Foxconn (Taiyuan) in accordance with the agreement monthly. The rental income under operating leases for the year ended December 31, 2017 and 2016 were \$78,985 and \$48,533, respectively.

(3) Key management compensation

	Years ended December 31,
		2017		2016
Salaries and other short-term employee benefits		22,872		34,016
Post-employment benefits		514		525
		23.386		34,541

8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Contingencies

None.

(2) Commitments

A. Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

	December 31, 2017 December 31, 2016
Property, plant and equipment	59.314 S		57,224
B. Operating lease commitments:

The future aggregate minimum lease payments for the lease of dormitory are as follows:

		December 31, 2017 December 31, 2016
Not later than one year	459,695 S		435,841
Later than one year but not later than five years	1,781,658		1,715,381
	$2,241,353$ \$		2,151,222

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

• A. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China in February, 2018, the Company's applicable income tax rate will be raised from 17% to 20% effective from January 1, 2018, which will be adjusted in the first quarter of 2018.
• B. On December 13, 2017, the Board of Directors of the Group's subsidiaries, O-Run Holdings Ltd., Foxconn Technology Pte. Ltd., High Tempo International Ltd., World Trade Trading Ltd. and Q-Run Far East Corporation, approved the acquisition of the newly issued common shares of IDG Energy Investment Limited, a publicly listed company in Hong Kong, at the price of HK \$1 per share. In total, 1,485,000 thousand shares were purchased, equivalent to 24.35% of total shares. The aforementioned investment was completed in January 2018.
• C. In 2017, the Group's subsidiary, Hon fujin Precision Industry (Taiyuan) Co., Ltd subscribed to the investment trust of "Yuecai Trust—Pengyun Tianhua Investment Trust Plan". The investment of RMB 500,000 thousand in the trust was made in March 2018. Please refer to Note 6(4) for more information.

12. OTHERS

(1) Capital management

The Group's objectives when managing capital are to safeguard the Group's ability to operate with the goal to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including 'current and non-current borrowings' as shown in the consolidated balance sheet) less cash and cash equivalents. Total is calculated as 'equity' as shown in the consolidated balance sheet less total intangible assets capital.

During 2017, the Group's strategy, which was unchanged from 2016, was to maintain the gearing ratio below 70%.

• (2) Financial instruments
• A. Fair value information of financial instruments

The carrying amounts of the Group's financial instruments not measured at fair value (including

cash and cash equivalents, financial assets at fair value through profit or loss, available-for-sale financial assets, accounts receivable, other receivables, time deposits with maturity more than three months, short-term loans, financial liabilities at fair value through profit or loss, accounts payable and other payables) approximate to their fair values. The fair value information of financial instruments measured at fair value is provided in Note 12(3).

• B. Financial risk management policies
• (a) Risk categories

The Group employs a comprehensive financial risk management and control system to clearly identify, measure and control the various kinds of financial risk it faces, including market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

• (b) Management objectives:
• i. Except for market risk, which is controlled by outside factors, the remainder of the foregoing types of risks can be controlled internally or removed from business processes. Therefore, the goal in managing each of these risks is to reduce them to zero.
• ii. As for market risk, the goal is to optimize its overall position through strict analysis, suggestion, execution and audit processes, and proper consideration of a) long-term trends in the external economic/financial environment, b) internal operating conditions, and c) the actual effects of market fluctuations.
• iii. The Group's overall risk management policy focuses on the unpredictable items in financial markets and seeks to reduce the risk that potentially pose adverse effects on the Group's financial position and financial performance.
• iv. For the information on the derivative financial instruments that the Group enters into, please refer to Note 6(2).
• (c) Management system:
• i. Risk management is executed by the Group's finance department by following policies approved by the Board. Through cooperation with the Group's operating units, finance department is responsible for identifying, evaluating and hedging financial risks.
• ii. The Board has a written policy covering overall risk management. It also has written policies covering specific issues, such as exchange rate risk, interest rate risk, credit risk, derivative and non-derivative financial instruments used, and the investment of excess working capital.
• C. Significant financial risks and degrees of financial risks
• (a) Market risk

Foreign exchange risk

i. Nature:

The Group is a multinational group in the Electronic manufacturing services industry. Most of the exchange rate risk from operating activities comes from:

(i) Foreign exchange risk arises from different exchange rates to functional currency as the invoice dates of accounts receivable and payable denominated in non-functional foreign currency are different. Because the amount after the assets and liabilities are offset is insignificant, income/loss is insignificant as well. (Note: The Group has several sites in various countries and thus is exposed to various foreign exchange risks. The main risk arises from USD and RMB.)

• (ii) Changes in exchange rates of functional currencies to presentation currency at different timing will cause another foreign exchange risk.
• (iii) Except for the above transactions (operating activities) recognized in the income statement, assets and liabilities recognized in the balance sheet and the net investment in foreign operations also result in the exchange rate risk.
• ii. Management:
• (i) For such risks, the Group has set up policies requiring companies in the Group to manage its exchange rate risks.
• (ii) As to the exchange rate risk arising from the difference between various functional currencies and the reporting currency in the consolidated financial statements, it is managed by the Group's finance department.
• iii. Sources of risk:
• (i) U.S. dollars and NT dollars:

Foreign exchange risk arises primarily from U.S. dollar-denominated cash, cash equivalents, accounts receivable, other receivables, Time deposits mature in excess of 3 months, other assets, loans, accounts payable and other payables and other liabilities. which results in exchange loss or gain when they are translated into New Taiwan dollars.

(ii) U.S. dollars and RMB:

Foreign exchange risk arises primarily from U.S. dollar-denominated cash, cash equivalents, accounts receivable and other receivables, other assets, loans, accounts payable and other payables and other liabilities, which results in exchange loss or gain when they are translated into RMB.

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

			December 31, 2017
	Foreign currency amount (in thousands)	Exchange rate	Book value (NTD)	Extent of variation	Effect on profit or loss
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD	\$ 1,329,814	29.76	\$39,575,265	$1\%$	\$ 395,753
USD: RMB	560,052	6.5342	16,667,148	1%	166,671
Non-monetary items
Foreign operations
USD: NTD	4,694,429	29.76	139,706,204
Financial liabilities
Monetary items
USD: NTD	1,421,975	29.76	42,317,976	$1\%$	423,180
USD: RMB	393,504	6.5342	11,710,679	$1\%$	117,107
			December 31, 2016
	Foreign
	currency				Effect
	amount	Exchange	Book value	Extent of variation	on profit
	(in thousands)	rate	(NTD)		or loss
(Foreign currency:
functional currency)
Financial assets
Monetary items USD: NTD	\$	32.25			\$
USD: RMB	333,137 447,513	6.9370	\$10,743,668 14,432,294	$1\%$ $1\%$	107,437
			132,136		144,323
JPY:USD Non-monetary items	479,450	0.0085		$1\%$	1,321
Foreign operations USD: NTD	3,385,183	32.25	109,172,137
Financial liabilities
Monetary items
USD: NTD	610,437	32.25	19,686,593	1%	196,866
USD: RMB	118,152	6.9730	3,810,402	$1\%$	38,104

v. Total exchange gain, including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2017 and 2016 amounted to \$39,898 and \$1,204,858, respectively.

Price risk

$\hat{\mathcal{A}}$

i. Nature

The Group primarily invests in domestic and foreign publicly traded and unlisted equity instruments, which are accounted for as available-for-sale investment carried at cost. The price of those equity instruments will be affected by the uncertainty of the future value of the investment.

ii. Extent

If such equity instruments' price rise or fall by 1%, with all other factors held constant, the impact on equity due to available-for-sale equity instruments are \$618,612 and \$358,793 for the years ended December 31, 2017 and 2016, respectively.

Interest rate risk

The Group's interest rate risk arises from short-term loans. Short-term loans with floating rates expose the Group to cash flow interest rate risk, but most of the risks are offset by cash and cash equivalents with variable interest rates.

If short-term loans interest rates rise or fall by 1%, with all other factors held constant, profit after tax would decrease/increase by \$193,377 and \$\$64,897 for the years ended December 31, 2017 and 2016, respectively.

(b) Credit risk

Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments.

• i. According to the Group's credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. The Group assesses the credit quality of the customers by taking into account their financial position, past experience and other factors to conduct its internal risk management.
• ii. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board of directors. The utilisation of credit limits is regularly monitored. Major credit risk arises from cash and cash equivalents, derivative financial instruments and other financial instruments. The counterparties are banks with good credit quality and financial institutions with investment grade or above and government agencies, so there is no significant compliance concerns and credit risk.
• iii. The credit quality information of accounts receivable (including related parties) that are neither past due nor impaired is in the following categories based on the Group's Credit Quality Control Policy:

	December 31, 2017 December 31, 2016
Group 1	\$ 48,900,569	19,782,641
Group 2	437,838	153,418
Group 3	1.024,465	667,575
Group 4	370,819	403,686
	\$ 50,733,691	\$ 21,007,320

Group 1: Standard Poor's, Fitch's, or Moody's rating of A-level, or rated as A-level in accordance with the Group's credit policies for those that have no external credit ratings.

• Group 2: Standard Poor's or Fitch's rating of BBB, Moody's rating of Baa, or rated as B or C in accordance with the Group's credit policies for those that have no external credit ratings.
• Group 3: Standard Poor's or Fitch's rating of BB + and below, or Moody's rating of Ba1 and below.
• Group 4: Rated as other than A, B, or C in accordance with the Group's credit policies for those that have no external credit ratings.
• iv. The aging analysis of accounts receivable (including related parties) that were past due but not impaired is as follows:

	December 31, 2017 December 31, 2016
Up to 30 days	\$ 1,214,708	453,113
31 to 90 days	827,230	1,124,945
91 to 180 days	53,203	9,462
181 to 360 days	63,086	81,863
Over 361 days	13,570	21,901
	\$ 2,171,797	1,691,284

(c) Liquidity risk

• i. Cash flow forecasting is performed by each of the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group's liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group's debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements, for example, currency restrictions.
• ii. The table below analyses the Group's non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

			Between	Between
	Less than	Between 3	6 months	1 year to
December 31, 2017	3 months	to 6 months	to 1 year	2 years	Total
Short-term loans	\$16,571,523	\$6,681,155	45.711 - 8	- \$	$-$ \$23,298,389
Accounts payable	41,334,356	110.956		852	41,446,164
Other payables	13,358,201	1,083	447,968		13,807,252
	\$71,264,080	6,793,194	493,679	S 852	\$78,551,805

Non-derivative financial liabilities

Non-derivative financial liabilities

		Less than		Between 3		Between 6
December 31, 2016		3 months		to 6 months		months to 1 year		Total
Short-term loans	\$	7,772,516	\$		\$	46,408	\$	7,818,924
Accounts payable		18,731,478		8,271				18,739,749
Other payables		10,772,845		3,948				10,776,793
Guarantee deposits
received		31,884						31,884
		37,308,723	\$	12,219	\$	46,408		\$37,367,350
Derivative financial liabilities
		Less than		Between 3		Between 6
December 31, 2017		3 months		to 6 months		months to 1 year		Total
Foreign exchange
contracts	\$	14,556	S	24,612	\$		S	39,168
Cross currency swap
contracts		8,249						8,249
	S	22,805	\$	24,612	$\mathbf S$		\$	47,417
		Less than		Between 3		Between 6
December 31, 2016		3 months		to 6 months		months to 1 year		Total
Foreign exchange
contracts			\$	1,503,327	\$		\$	1,503,327
.

(3) Fair value information

• A. Details of the fair value of the Group's financial assets and financial liabilities not measured at fair value are provided in Note 12(2)A. Details of the fair value of the Group's investment property measured at cost are provided in Note 6(11).
• B. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability takes place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group's investment in listed stocks is included in Level 1.
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group's investments in forward foreign exchange, cross currency swap, foreign exchange and foreign investment fund are included in Level 2.
• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group's investment in investment property is included in Level 3.
• C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2017 and 2016 is as follows:

December 31, 2017		Level 1	Level 2	Level 3	Total
Assets:
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Cross currency swap contracts	\$		\$ 1,446	\$	\$ 1,446
Available-for-sale financial assets
Equity securities	\$	4,415,855	\$57,140,494	\$	\$61,556,349
Foreign investment fund			304,898		304,898
		4,415,855	\$57,445,392	\$	\$61,861,247
Liabilities:
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Foreign exchange contracts	\$		\$ 39,168	\$	\$ 39,168
Cross currency swap contracts			8,249		8,249
	\$		\$ 47,417	\$	\$ 47,417
December 31, 2016		Level 1	Level 2	Level 3	Total
Assets:
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Cross currency swap contracts	\$		\$ 1,737,730	\$	\$ 1,737,730
Foreign exchange contracts			247,238		247,238
	\$		\$ 1,984,968	\$	\$ 1,984,968
Available-for-sale financial assets
Equity securities	S	3,720,459	\$31,882,234	\$	\$35,602,693
Foreign investment fund			276,558		276,558
	S	3,720,459	\$32,158,792	\$	\$35,879,251
Liabilities:
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Forward exchange contracts	\$		\$ 1,503,327	\$	\$ 1,503,327

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

Listed shares Closing price Market quoted price

• (b) The fair value of foreign investment fund is measured by reference to counterparty quotes.
• (c) When assessing non-standard and low-complexity financial instruments, for example, cross currency swap contracts and foreign exchange contracts, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.
• (d) The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate.
• (e) The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group's financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, liquidity risk and etc. In accordance with the Group's management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.
• (f) The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group's credit quality.
• E. For the years ended December 31, 2017 and 2016, there was no transfer between Level 1 and Level 2.
• F. For the years ended December 31, 2017 and 2016, there was no transfer into or out from Level 3.

13. ADDITIONAL DISCLOSURES REQUIRED BY THE SECURITIES AND FUTURES COMMISSION

• (1) Related information of significant transactions
• A. Loans to others: Please refer to table 1.
• B. Provision of endorsements and guarantees to others: None.
• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.
• D. Acquisition or sale of the same security with the accumulated cost reaching NT\$300 million or 20% of paid-in capital or more: Please refer to table 3.
• E. Acquisition of real estate reaching NT\$300 million or 20% of paid-in capital or more: None.
• F. Disposal of real estate reaching NT\$300 million or 20% of paid-in capital or more: None.
• G. Purchases or sales of goods from or to related parties reaching NT\$100 million or 20% of paidin capital or more: Please refer to table 4.
• H. Receivables from related parties reaching NT\$100 million or 20% of paid-in capital or more: Please refer to table 5.
• I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes $6(2)$ , $6(23)$ and $12(3)$ .
• J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 8.
• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 6.

14. SEGMENT INFORMATION

(1) General information

The Group is primarily engaged in the assembly and sales of cases, heat dissipation modules and consumer electronics products. The chief operating decision-maker manages the abovementioned items by business activity. Currently, business activities can be categorized into trading services of electronic products and manufacturing and sales of mechanism and components.

Revenue and operating income of operating segments are used by the Group's chief operating decision-maker for imputation of internal costs and allocation of expenses to segment profit (loss) and are used as an indication for assessment of performance and allocation of resources.

(2) Measurement of segment information

The financial information of reportable segments provided to the chief operating decision maker is as follows:

			Year ended December 31, 2017
			Production and
	Electronic products		sales of mechanical
	trading services		components	Total
External revenue	\$ 83.954.859	\$	63,695,247	\$ 147,650,106
Revenue from internal
customers	300,365		5,046,648	5,347,013
Segment revenue	84,255,224	\$	68,741,895	\$ 152,997,119
Measurement of segment
profit or loss	\$ 3,111,127	\$	6,412,134	\$ 9,523,261
Depreciation and amortization	\$ 9,735	\$	2,302,528	\$ 2,312,263
Interest income	\$ 181,460	\$	1,353,975	\$ 1,535,435
Interest expense	235,341	S	32,450	\$ 267,791
Total segment assets (Note)	\$	\$		\$

				Year ended December 31, 2016
				Production and
		Electronic products trading services		sales of mechanical components	Total
External revenue	S	26,114,897	S	53,860,926	\$ 79,975,823
Revenue from internal
customers		524,904		6,534,207	7,059,111
Segment revenue		26,639,801	S	60,395,133	\$ 87,034,934
Measurement of segment
profit or loss	S	1,489,090	S	10,840,962	\$ 12,330,052
Depreciation and amortization	\$	2,297	S	2,790,381	\$ 2,792,678
Interest income		8,150		976,459	\$ 984,609
Interest expense		16,901	\$	41,872	\$ 58,773
Total segment assets (Note)	S		۰

Note: The measurement of operating segment assets is not provided to the operating decisionmaker; thus, the measurement that shall be disclosed is zero.

(3) Reconciliation for segment income (loss)

Sales between segments are carried out at arm's length. The revenue from external parties reported to the chief operating decision-maker is measured in a manner consistent with that in the income statement.

A reconciliation of reportable segment profit or loss to the profit /(loss) before tax from continuing operations for the years ended December 31, 2017 and 2016 is provided as follows:

		Years ended December 31,
Operating revenue		2017		2016
Total income of reportable operating segments	S	152,997,119	S	87,034,934
Other segments income		165,511		134,636
Elimination of inter-segment revenue		5,347,013)		7,059,111)
Total corporate revenue		147,815,617	S	80,110,459
		Years ended December 31,
Profit and loss		2017		2016
Profit of reportable operating segments	S	9,523,261	S	12,330,052
(Loss) profit of other operating segments		445,074		1,610,079)
Income after tax from continuing operations		9,968,335	\$	10,719,973

(4) Information on product

	Years ended December 31,
	2017	2016
Electronic products	83,954,859	26,114,897
Mechanism and components	63,695,427	53,860,926
Others	165,511	134,636
	147,815,797	80,110,459

(5) Geographical information

Geographical information for the years ended December 31, 2017 and 2016 is as follows:

			Years ended December 31,
		2017			2016
	Revenue		Non-current assets	Revenue		Non-current assets
China	\$ 58,524,786	\$	8,658,253	\$ 59,249,278	\$	10,329,455
Japan	73,397,004		۰	14,116,237
USA	5,074,021		93	6,063,141		90
Taiwan	2,069,344		225,088	149,366		228,390
Others	8,750,462		1,033	532,437		11,963
	\$ 147,815,617		8,884,467	80,110,459	\$	10,569,898

(6) Major customer information

Details of customers contributing more than 10% of operating revenue of the Group for the years ended December 31, 2017 and 2016 are as follows:

		Years ended December 31,
	2017		2016
Customer	Revenue	%	Revenue	%
A Group	76,731,852	52%	18,720,379	23%
B Group	59,903,037	41%	49,561,191	62%
	136,634,889		68,281,570

Co., Ltd and Subsidiancs bans to others Foxconn Technology
------------------------------------------------------------------

Year ended December 31, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

						80,711,484 Note 2
				Limit on loans Collateral granted to a single Ceiling on total hem Value party collecting on total None $S \rightarrow S$ 3,701,426 $S$ 14,805,703 Note 1		40,355,742
				Reason for Allowance for short-term doubtful financing accounts $\frac{1}{10}$ Business 5 operation		None
						Business operation
	Amount of		transactions with the borrower $\frac{1}{5}$
				Nature of $\frac{\log m}{\sinh \tan \frac{\pi}{2}}$		Short term financing
						175688%
						595,500
						595,500
laximum				outstanding balance during the year -4 ended December 31, Balance at Actual amount -4 ended December 31, 2017 (Aman down Linerestian 2017) -3 5 673,681 - 43400000		630.780
				Is a related $\frac{party}{Related}$ Related		Related parties
		General		$\begin{array}{r}\n\text{leq}\n\text{for} \ \hline\n\text{account} \ \hline\n\text{Other} \ \text{recivables}\n\end{array}$
				$-\dfrac{\text{Bornver}}{\text{Qingdao Hip}}$ Materials Co., Ltd		Q-Run Holdings Ltd. Yan Tai Fuzhun Precision Other Electronics Co., Ltd. receivables
					No. If the Fujin Precision Industry (Taiyuan) M. Co., Ltd Co., Ltd

Note 1: For short-tern borowings, limit on loans grand for a single pany is 10% of the longary's active of the compary's actuated the compary's net assed on the latest audited or reviewed functional statements.
Note 2: Lim

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) Foxcom Technology Co., Ltd and Subsidiaries

Year ended December 31, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

					As of December 31, 2017
		Relationship with the			Book value			Note
Securities held by	Marketable securities (Note 1)	securities issuer (Note 2)	General ledger account	Number of shares	(Note 3)	Ovnership (%)	Fair value	(Note 4)
Foxcoun Technology Co., Ltd.	Common stock of CyberTAN Technology Inc.	None	Available-for-sale financial assets -non-curren	s 10,035,348	182.142	s, 3.05	182,142
Foxconn Technology Co., Ltd	Common stock of Pan-International Industrial Corp.	None	Available-for-sale financial assets -non-current	1,079,986	27.378	$\overline{c}$	27,378
Foxconn Technology Co., Ltd.	Common stock of Innolux Corporation	Noic	Available-for-sale financial assets -non-current	127,556,349	1,581,698	1.28	869'185'
Foxcom Technology Co., Ltd.	Common stock of Advanced Optoelectronic Technology, Inc.	None	Available-for-sale financial assets -non-current	1,000	$\mathfrak{z}$		π
Huazhun Investment Co., Ltd.	Common stock of Innolux Corporation	None	Available-for-sale financial assets -non-current	121,036,800	1,500,857	1.22	.500, 857
Huazhun Investment Co., Ltd.	Common stock of Advanced Optoclectronic Technology Inc.	None	Available-for-sale financial assets -non-current	7,672,000	283,864	5.15	283,864
Q-Run Holdings Ltd.	Conquer Hill Advantage Fund	None	Available-for-sale financial assets-non-current	89,927	304,898		304,898
Q-Run Holdings Ltd.	Common stock of China Harmony Auto Holding Ltd	None	Available-for-sale financial assets -non-current	38,452,340	839,879	2.50	839,879
Foxcom Technology Ptc. Ltd.	Common stock of Sharp corporation	Norte No	Available-for-sale financial assets-non-current	64,640,000	57,140,494	12.97	57, 140, 494
Hon Fujin Precision Industry (Taiyuan) Co., Ltd.	Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle)(WG17144SB)	None	Other current assets		1,833,846		2,320,400
Hon Fujin Precision Industry (Taiyuan) Co., Ltd	Bank of Shanghai for "Winer" eurrency and bonds series (bit by bit make a mickle)(WG17144SA)	$_{\rm None}$	Other current assets		2,292,306		2,320,400
Hon Fujin Precision Industry (Taiyuan) Co., Ltd.	Bank of Shanghai for "Winer" currency and bonds scries (bit by bit make a mickle)(WG17145SB)	None	Other current assets		1,833,637		1,392,240
Hon Fujin Precision Industry (Taiyuan) Co., Ltd.	Barik of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle)(WG17145SA)	None	Other current assets		2,292,047		923,160
Hon Fujin Precision Industry (Taiyuan) Co., Ltd.	Yun Tong Fortune Increasing Profits 35 Days Financial Products	None	Other current assets		916,995		916,993
Fu Rui Precision Components (Kunshan) Co. Ltd	Yun Tong Fortune Increasing Profits 40 Days Financial Products	None	Other current assets		503,085		503,085
Fu Rui Precision Components (Kunshan) Co., Ltd.	Yun Tong Fortune Increasing Profits 67 Days Financia Products	None	Other current assets		594.477		594,477
Naming Funing Precision Electronics Co., Ltd.	"Ben Li Feng" Targeted (BFDG170475) RMB Wealth Managements Products	None	Other current assets		1,150,662		1,150,665
Fuzhun Precision (Shenzhen) Electronics Co., Ltd.	Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle)(WG17151S)	$_{\mbox{\small{None}}}$	Other current assets		2,059,878		2,059,878
Fuhuigang Industrial (Shenzhen) Co., Ltd.	RMB Continuous Serial Deposits Financial Products	None	Other current assets		298,085		298,085
Hon Fujin Precision Industry (Taiyuan) Co., Ltd.	Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust	None	Non-current investments in debt instrument without active market		2,285,550		2,285,550
Fuzhun Precision (Shenzhen) Electronics Co., Ltd.	Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust	None	Non-current investments in debt instrument without active market		2,285,550		2,285,550
	Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2. Leave the column blank if the issuer of marketable securities is non-reduced party.
Note 3: Fill in the amount after value and deducted by accumulated impairment for the marketable securities measured at fair value

$\mbox{Table 2}$

医生物 医小脑 j	THOMA م استدعات المناب . S The model of the control con- w came certurities to where me cale of the
--------------	------------------------------------------------------------------------------------------------------------------------------

Year ended December 31, 2017

Expressed in thous
ands of NTD (Except as otherwise indicated)

		General		Relationship		Balance as at January 1, 2017		Addition			Disposal			Balance as at December 31, 2017
		ledger		with the	Number of		Number		Number of			Gain (loss)	Number of
In restor	Marketable securities(Note 1)	account	Counterparty	investor	shares	Amount	of shares	Amount	shares	Selling price	Book value	on disposal	shares	Amount
(Shenzhen) Industry Fuzhun Precision Co., LId.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None		RMB 800,000 housand				RMB 303 879 thousand	RMB 800 000 housand	RMB 3.879 thousand
(Shenzhen) Industry Fuzhun Precision $Co.$ Ltd.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None		RMB 70,000 thousand				RMB 70.345 thousand	RMB 70,000 thousand	RMB 345 thousand
(Shenzhen) Industry Fuzhun Precision Co., Ltd.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None				RMB 800,000 thousand		RMB 805,600 thousand	RMB 800,000 housand	RMB 5.600 housand
(Shenzhen) Industry Fuzhun Precision Co., Ltd.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None				RMB 70,000 thousand		RMB 70.409 thousand	RMB 70.000 thousand	60F SINN housand
(Shenzhen) Industry Fuzhun Precision Co., Ltd.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None				RMB 500,000 thousand		RMB 501 627 thousand	RMB 500.000 housand	RMB 1.627 housand
(Shenzhen) Industry Fuzhun Precision $Co.$ Ltd.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	Nome ∑				RMB 370,000 thousand		RMB 371,171 thousand	RMB 370,000 thousand	RMB 1.171 thousand
(Shenzhen) Industry Fuzhun Precision Co., Ltd.	Agricultural Bank of China for "The Golden Key The Beh&Li Fung" the RMB Financial Products (Issue 1030 of 2017)	Note 1	Agricultural Bank of China Ltd.	None				RMB 170,000 thousand		RMB 471, 762 thousand	RMB 170,000 bousand	RMB 1.762 thousand
(Shenzhen) Industry Fuzhun Precision Co., Ltd.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None				RMB 400,000 thousand		RMB-101.499 thousand	RMB 400,000 thousand	KVI 8 IV3 thousand
(Shenzhen) Industry Fuzhun Precision Co., Ltd.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None				RMB 450,000 thousand		RMB 453,058 thousand	RMB 450,000 thousand	RMB 3,058 housand
(Shenzhen) Industry Fuzhun Precision Co., Ltd.	currency and bonds series (bit by bit Bank of Shanghai for "Winer" make a mickle)(WGI7068SB)	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None				RMB 460 000 thousand		RMB 463.319 thousand	RMB 460 000 thousand	RMB3319 thousand
(Shenzhen) Industry Fuzhun Precision Co., Lid.	currency and bonds series (bit by bit make a mickle)(WG17106SB) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None				RMB 460,000 thousand		RMB 461 847 thousand	RMB 460,000 thousand	RMB 1.847 thousand
(Shenzhen) Industry Fuzhun Precision $Co.$ Ltd.	(BFDG170345) RMB Wealth "Ben Li Feng" Targeted Managements Products	Note 1	Agricultural Bank of China Ltd.	None				RMB 450,000 thousand		RMB 461,802 thousand	RMB 450,000 thousand	RMB 1,802 thousand
(Shenzhen) Industry Fuzhun Precision $Co.$ Ltd.	currency and bonds series (bit by bit make a mickley WG17125SA) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None				RMB 480,000 thousand		RMB 481,951 thousand	RMB 480,000 thousand	RMB 1,951 thousand
(Shenzhen) Industry Fuzhun Precision Co., Ltd.	(BFDG170502) RMB Wealth Managements Products "Ben Li Feng" Targeted	Note 1	Agricultural Bank of China Ltd	None				RMB 470,000 thousand		RMB 471 615 thousand	RMB 470 000 thousand	RMB1.615 thousand
(Shenzhen) Industry Fuzhun Precision Co., Lul	currency and bonds series (bit by bit Bank of Shanghai for "Winer" make a mickleXWG17151S)	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None				RMB 450,000 thousand					ï	RMB450,000 thousand
(Shenzhen) Industry Fuzhun Preciston Co., Ltd.	Guangdong Finance Trust - Peng Yun Tian Hua	Note 2	Guangdong Finance Trust Co. Ltd.	None				RMB 500,000 thousand					$\bullet$	RMB 500,000 thousand

Table 3, Page 1

		General		Relationship	Balance as at January 1, 2017			Addition			Disposal		Balance as at December 31, 2017
		ledger		with the	Number of		Number		Number of			Gain (loss)	Number of
In ester	Marketable securities(Note 1)	account	Counterparty	investor	shares	Amount	of shares	Amount	shares	Selling price	Book value	on disposa	shares	Amoun
(Shenzhen) Industry Fuzhun Precision Со., Ltd.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None	thousand	RMB 800,000				RMB 803.879 thousand	RMB 800,000 thousand	RMB3.879 thousand
(Kunshan) Co., Ltd Fu Rui Precision Components	Collection Fund Trust	Note 1	Communications Bank of	None				RMB130.000 thousand		RMB 130,653 thousand	RMB 130,000 thousand	RMB 653 Inousand
(Kunshan) Co., Ltd Fu Rui Precision Components	Yun Tong Fortune Increasing Profits 47 Days Financial Products	Note 1	Communications Bank of	None				RMB 130.000 thousand		RMB 130.686 thousand	RMB 130,000 thousand	RMB 686 thousand
(Kunshan) Co., Ltd. Fu Rui Precision Components	Yun Tong Fortune Increasing Profits 32 Days Financial Products	Note 1	Communications Bank of	None				RMB130,000 housand		RMB 130,456 thousand	RMB 130,000 thousand	RMB 456 thousand
(Kunshan) Co., Ltd. Fu Rui Precision Components	Yun Tong Fortune Increasing Profits 47 Days Financial Products	Note 1	Communications Bank of	None				RMB 120,000 thousand		RMB 120,664 thousand	RMB 120,000 thousand	RMB 664 thousand
Fu Rui Precision Components	Yun Tong Fortune Increasing Profits 47 Days Financial	Note 1	Communications Bank of	None				RMB 110,000 thousand		RMB 110.567 thousand	RMB 110.000 thousand	RMB 567 Inousand
(Kunshan) Co., Ltd. (Kunshan) Co., Ltd. Fu Rui Precision Components	Yun Tong Fortune Increasing Profits 40 Days Financial Products Products	Note 1	Communications Bank of	None				RAIB 110,000 thousand						RMB 110,000 thousand
(Kunshan) Co., Ltd. Fu Rui Precision Components	Yun Tong Fortune Increasing Profits 67 Days Financial Products	Note 1	Communications Bank of	None				RMB 130,000 thousand						RMB 130,000 thousand
(Kunshan) Co., Ltd. Fu Yu Precision Components	Yun Tong Forture Increasing Profits 31 Days Financial Products	Note 1	Communications Bank of	None	thousand	RMB 50.000				RMB 50.145 thousand	RMB 50,000 thousand	RMB 145 thousand
(Kunshan) Co., Ltd. Fu Yu Precision Components	Yun Tong Fortune Increasing Profits 32 Days Financial Products	Note 1	Communications Bank of	None				RMB 150,000 thousand		RMB 150.526 thousand	RMB 150,000 thousand	RMB 526 thousand
(Kunshan) Co., Ltd. Fu Yu Precision Components	Yun Tong Fortune Increasing Profits 32 Days Financial Products	Note 1	Communications Bank of	None				RMB 50,000 thousand		RMB 50.180 thousand	RMB 50,000 thousand	RMB 180 thousand
Industry (Taiyuan) Co., Hon Fujin Precision	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None	$f_{\text{crossand}}$	RAIB 500,000				RMB 500,978 thousand	RMB 500,000 thousand	RMB 978 thousand
Industry (Taiyuan) Co., Hon Fujin Precision ٦İ	Steady Series RMB 35 Days Interest Guaranteed Wealth Management Products	Note 1	Bank of Beijing	None	thousand	RMB 500,000				RMB 501.438 thousand	RMB 500.000 thousand	RMB 1.438 thousand
Industry (Taiyuan) Co. Hon Fujin Precision Ę	Steady Series RMB 39 Days Interest Guaranteed Wealth Management Products	Note 1	Bank of Beijing	None	thousand	RMB 300,000				RMB 300,962 thousand	RMB 300,000 thousand	RMB 962 thousand
Industry (Taiyuan) Co., Hon Fujin Precision É	Steady Series RMB 52 Days Interest Guaranteed Wealth Management Products	Note 1	Bank of Beijing	None		RMB 200,000 thousand				RMB 200, 855 thousand	RMB 200,000 thousand	RMB 855 thousand
Industry (Taiyuan) Co., Hon Fujin Precision	(BFDG170024) RMB Wealth Managements Products "Ben Li Feng" Targeted	Note 1	Agricultural Bank of China Ltd.	None				RMB 500,000 thousand		RMB 501.918 thousand	RMB 500,000 thousand	RMB 1,918 thousand
Industry (Taiyuan) Co., Hon Fujin Precision Ì.	(BFDG170025) RMB Wealth Managements Products "Ben Li Feng" Targeted	Note 1	Agricultural Bank of China Ltd.	None				RMB 350,000 thousand		RMB 351.342 housand	RMB 350,000 thousand	RMB1342 thousand
Industry (Taiyuan) Co. Hon Fujin Precision E.	Weath Management Products (Issue "Hui Li Feng" Corporate RMB 4163 of 2017)	Note 1	Agricultural Bank of China Ltd.	None				RMB 150,000 thousand		RMB 150.542 thousand	RMB 150,000 thousand	RMB 542 thousand
Industry (Taiyuan) Co., Hon Fujin Precision Е.	(BFDG170067) RMB Wealth Managements Products "Ben Li Fong" Targeted	Note 1	Agricultural Bank of China Ltd.	None				RMB 500,000 thousand		RMB 501.853 thousand	RMB 500,000 housand	RMB 1,853 thousand

		General		Relationship	Balance as at January 1, 2017	Addition			Disposal			Balance as at December 31, 2017
		ledger		with the	Number of	Number		Number of			Gain (loss)	Number of
Investor	Marketable securities(Note 1)	account	Counterparty	investor	Amount shares	of shares	Amoun	Selling price shares		Book value	on dispos	shares	Amoun
(Shenzhen) Industry Fuzhun Precision $Co.$ Ltd	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	$\sum_{i=1}^{n}$	RMB 800,000 housand			RMB 803,879 bousand	thousand	RMB 800,000	RMB3879 thousand
Industry (Taiyuan) Co., Hon Fujin Precision Ë	(BFDG170066) RMB Wealth Managements Products "Ben Li Feng" Targeted	Note 1	Agricultural Bank of China Ltd.	Č Z		thousand	RMB 500 000	RMB 501 853 thousand	thousand	R-1B 500,000	RMB1.853 thousand
Industry (Tanyuan) Co., Hon Fujin Precision 콬	Steady Series RMB 36 Days Interest Guaranteed Wealth Management Products	Note 1	Bank of Beijing	None		thousand	RMB 500,000	RMB 501,874 thousand	thousand	RMB 500,000	RMB 1,87- thousand
Industry (Taiyuan) Co., Hon Fujin Precision 봌	Steady Series RMB 35 Days Interest Guaranteed Wealth Management Products	Note 1	Bank of Beijing	None			RMB 500.000 thousand	RMB 501,822 thousand	thousand	RMB 500,000	RMB 1,822 thousand
Industry (Taiyuan) Co., Hon Fujin Precision 격	currency and bonds series (bit by bit make a mickley WGI 7034SB) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	Nor		thousand	RMB 500 000	RMB 501 932 thousand	thousand	RMB 500,000	RMB 1,937 thousand
Industry (Taiyuan) Co., Hon Fujin Precision Å	currency and bonds series (bit by bit Bank of Shanghai for "Winer" make a mickle)(WGI 7034SC)	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None		thousand	RMB 500,000	RMB 501,932 thousand	thousand	RMB 500,000	RMB 1,932 housand
Industry (Taiyuan) Co., Hon Fujin Precision $\mathbb{E}$	(BFDG170128) RMB Wealth "Ben Li Feng" Targeted Managements Products	Note 1	Agricultural Bank of China Ltd.	None			RMB 500.000 thousand	RMB 500 964 thousand	thousand	RMB 500.000	RMB 964 thousand
Industry (Taiyuan) Co., Hon Fujin Precision ョ	(BFDG170129) RMB Wealth "Ben Li Feng" Targeted Managements Products	Note 1	Agricultural Bank of China Ltd.	$\frac{1}{2}$			RMB 300.000 thousand	RMB 300 579 thousand	housand	RMB 300,000	RMB 579 thousand
Industry (Taiyuan) Co., I Ion Fujin Precision $\vec{E}$	currency and bonds series (bit by bit make a mickleXWG17035SB) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None		thousand	RMB 500,000	RMB 502.247 thousand	thousand	RMB 500,000	RMB 2.247 thousand
Industry (Taiyuan) Co Hon Fujin Precision E,	currency and bonds series (bit by bit make a mickley WG1703SA) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None			RMB 500.000 thousand	RUB 502.247 thousand	thousand	RMB 500,000	RMB 2.247 housand
Industry (Taiyuan) Co., Hon Fujin Precision $\mathbb{E}$	currency and bonds series (bit by bit make a mickleX WG17045SB) Bank of Shanghai for "Wincr"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None		thousand	RMB 500,000	RMB 501 819 thousand	thousand	RMB 500,000	RMB1.819 thousand
Industry (Taiyuan) Co., Financial Products Ilon Fujin Precision 3	"Li Duo Duo" 28 Days	Note 1	Development Bank Shanghai Pudong Co.1nd.	None		thousand	RMB 500,000	RMB 501,458 thousand	thousand	RMB 500,000	RMB1,458 thousand
Industry (Taiyuan) Co., Hon Fujin Precision E	currency and bonds series (bit by bit make a micklex WG17075SA) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	N one		thousand	RMB 500,000	RMB 502.004 thousand	thousand	RMB 500,000	RMB 2,004 thousand
Industry (Taiyuan) Co., Hon Fujin Precision ដ	currency and bonds series (bit by bit make a mickle)(WGI7075SB) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None			RMB 200.000 thousand	RMB 200.802 thousand	thousand	RMB 200,000	RMB 802 thousand
Industry (Taiyuan) Co., Hon Fujin Precision 콬	currency and bonds series (bit by bit Bank of Shanghai for "Winer" make a mickle)(WG17080SA)	Note 1	Shanghai Commercial & Savings Bank, Ltd.	Sex		thousand	RMB 500,000	RMB. 01.995 thousand	thousand	RMB 500,000	RMB 1,995 thousand
Industry (Taiyuan) Co., Hon Fujin Precision Ed.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None		thousand	RMB 500,000	RMB 501,678 thousand	thousand	RL1B 500,000	RMB 1,678 thousand
Industry (Taiyuan) Co., Hon Fujin Precision 궠	Yun Tong Fortune Increasing Profits 35 Days Financial Products	Note 1	Communications Bank of	Nore		thousand	RMB 300,000	RMB 301.007 thousand	thousand	RMB 300,000	RMB 1,007 thousand
Industry (Taiyuan) Co., Hon Fujin Precision $\vec{E}$	currency and bonds series (bit by bit make a mickle)(WG17101SB) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None		thousand	RMB 500,000	RMB 502,096 thousand	housand	RMB 500,000	RMB 2,096 thousand
Industry (Taiyuan) Co., Hon Fujin Precision 3	currency and bonds series (bit by bit Bank of Shanghai for "Winer" nake a mickle)(WGI7I0ISA)	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None X		thousand	RMB 500,000	RMB 502,096 thousand	housand	RMB 500,000	RMB 2.096 thousand

		General		kelationship	Balance as at January 1, 2017	Addition			Disposal			Balance as at December 31, 2017
		ledger		with the	Number of	Number	Number of			Gain (loss)	Number of
Investor	Marketable securities(Note 1)	account	Counterparty	investor	Amount shares	Amount of shares	shares	Selling price	Book value	on disposa	shares	Amount
(Shenzhen) Industry Fuzhun Precision $\mathbb{C}_0$ . Ltd.	RMB Continuous Serial Deposits Financial Products	Note 1	Bank of China Limited	None	RMB 800,000 thousand			RMB 303.879 thousand	RMB 800,000 thousand	RMB3.879 thousand
Hon Fujin Precision É	Industry (Taiyuan) Co., (BFDG170292) RMB Wealth "Ben Li Feng" Targeted Managements Products	Note 1	Agricultural Bank of China Ltd.	None		RMB 500,000 thousand		RMB 501.966 thousand	RMB 500,000 diousand	RMB 1,966 thousand
Hon Fujin Precision Lid.	Industry (Taiyuati) Co., (BFDG170328) RMB Wealth "Ben Li Feng" Targeted Managements Products	Note 1	Agricultural Bank of China Ltd.	None		RMB 200,000 thousand		RMB 200.955 thousand	RMB 200,000 thousand	RMB 955 thousand
Industry (Taiyuan) Co. Hon Fujin Precision 马	Yun Tong Fortune Increasing Profits 41 Days Financial Products	Note 1	Communications Bank of	None		RMB 300,000 thousand		RMB 301.432 thousand	RMB 300,000 thousand	RMB 1,432 drousand
Industry (Taiyuan) Co Hon Fujin Precision Ż	currency and bonds series (bit by bit Bank of Shanghai for "Winer" make a mickle)(WG17118S)	Note 1	Shanghai Commercial & Savings Bank, Ltd	None		RMB 500,000 thousand		RMB 501 921 thousand	RMB 500 000 thousand	RMB 1.92 thousand
Industry (Taiyuan) Co., Hon Fujin Precision 1d.	currency and bonds series (bit by bit make a mickle)(WG17119SA) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None		RMB 500.000 thousand		RMB 502 329 thousand	RNIB 500,000 thousand	RMB 2.329 thousand
Industry (Taiyuan) Co., Hon Fujin Precision 콬	currency and bonds series (bit by bit make a mickley(WG17119SB) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None		RMB 500,000 thousand		RMB 502 329 thousand	RMB 500,000 thousand	RMB 2.329 thousand
Industry (Taiyuan) Co Hon Fujin Precision 콬	currency and bonds series (bit by bit make a mickle)(WG17144SB) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None		RMB 400,000 housand						RMB-100.000 thousand
Industry (Taiyuan) Co Hon Fujin Precision ョ	currency and bonds series (bit by bit make a mickle)(WG17144SA) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None		RMB 500,000 thousand						RMB 500,000 thousand
Industry (Taiyuan) Co., Hon Fujin Precision 3	currency and bonds series (bit by bit make a mickle)(WG17145SB) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank, Ltd.	None		RMB 400,000 thousand						RMB 400,000 thousand
Industry (Taivuan) Co., Hon Fujin Precision 马	currency and bonds series (bit by bit make a mickle)(WGI 7145SA) Bank of Shanghai for "Winer"	Note 1	Shanghai Commercial & Savings Bank. Ltd.	None		RMB 500,000 thousand						RLIB 500,000 thousand
Industry (Taivuan) Co., Hon Fujin Precision E,	Yun Tong Fortune Increasing Profits 35 Days Financial Products	Note 1	Communications Bank of	None		RMB 200,000 thousand						RMB 200,000 thousand
Industry (Taiyuan) Co., Yun Tian Hua Hon Fujin Precision 3	Guangdong Finance Trust - Peng	Note 2	Guangdong Finance Trust Co.,Ltd.	None		RMB 500,000 thousand						RMB 500,000 thousand
Precision Electronics Nanning Funing $\mathbb{C}^{\circ}$ , Ltd.	Collection Fund Trust	Note 1	Bank of China Limited	None		RMB 300.000 thousand		RMB 300,976 thousand	RMB 300,000 thousand	RMB 976 thousand
Precision Electronics Nanning Funing Co., Ltd.	(BFDG170262) RMB Wealth "Ben Li Feng" Targeted Managements Products	Note 1	Agricultural Bank of China Ltd.	None		RMB 250 000 thousand		RMB 251 713 thousand	RMB 250,000 thousand	RMB 1.713 thousand
Precision Electronics Nanning Funing Co., Ltd.	(BFDG170475) RMB Wealth "Ben Li Feng" Targeted Managements Products	Note 1	Agricultural Bank of China Ltd.	None		RMB 250,000 $th$ ousand					$\mathbf{I}$	RMB 250,000 thousand
Precision Electronics Nanning Funing Co.1id	RMB Continuous Serial Deposits Financial Products	$\frac{1}{2}$	Bank of China Limited	None		RMB 150,000 thousand		RMB 150.547 thousand	RMB 150,000 thousand	RMB 547 thousand

Note 1: Code of general ledger accounts is other current asses.
Note 2: It is recorded as 'Non-current investments in debt instrument without active market.

contributed and Subsidiance Superint CONTRACTOR	i more f naid-in canital ar İ 00 million or 20% of ds imm or to related r calco at any
---------------------------------------------------------------------	-------------------------------------------------------------------------------------------------------

Year ended December 31, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

Differences in transaction terms

								compared to third party
					Transaction			transactions		Notes/accounts receivable (payable)
										Percentage of total
			Purchases		Percentage of total					notes/accounts
Purchaser/seller	Counterparty	Relationship with the counterparty	(sales)	Amount	purchases (sales)	Credit term	Unit price	Credit term	Balance	receivable (payable)	Note
Foxcom Technology Co., Ltd.	Foxcom (Far East) Ltd. and subsidiaries	The indirect subsidiaries of Hon Hai Precision Industry Co., Ltd.	Sales	884, 145 U)		90 days	Note 1	Note 1	763,225 U)	č
Foxcom Technology Co, Lid	Hon Hai Precision Industry Co, Id	The investor company which accounts the Company using equity method	Sales	781,713		90 days	Note 1	Note 1	495,787	ĉh
Foxcom Technology Co., Ltd.	High Tempo International Ltd.	The investee is an indirect subsidiary of the Company	Sales	149,702		90 days	Note 1	Note 1	25,733
Hon Fujin Precisson Industry (Taiyuan) Co., L1d	Foxcorn (Far East) Ltd. and subsidiaries	The counterparties of the investee are Precision Industry Co, Ltd. and its indirect subsidiaries of Hon Hai subsidiaries	Sales	42,424,217	53	90 days	Note 1	Note 1	25,637,430	86	Note 2
Hon Fujin Precision Industry (Taiyuan) $Co.,$ Ltd	Foxcom Technology Pte. Ltd	The investee is an indirect subsidiary of the Company	Sales	5,693,562	Ξ	90 days	Note 1	Note 1	3,544,633	$\mathbf{C}$
Hon Fujin Precision Industry (Taiyuan) Co, Lld	Fuzhun Precision (Hebi) Electronics Co., Ltd.	The investee is an indirect subsidiary of the Company	Sales	705,623		90 days	Note 1	Note 1	OIFFOR
(Kunshan) Co., Ltd Fu Yu Precision Components	Foxcom (Far East) Ltd. and subsidianes	The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidianes	Sales	517,503	$\equiv$	90 days	Note 1	Note 1	486,740	丸
(Kunshan) Co., Ltd. Fu Yu Precision Components	Foxcom Technology Pte. Ltd.	The investee is an indirect subsidiary of the Company	Sales	4.307,239	88	$60 \text{ days}$	Note 1	Note 1	910,144	\$
Materials Co., Ltd Qingdao Hiyn	Foxcom (Far East) Ltd. and subsidiaries	The counterparties of the investee are Precision Industry Co., Ltd. and its indirect subsidiaries of Hon Hai subsidiaries	Sales	452,693	74	90 days	Note 1	Note .	142.135	E
Materials Co., Ltd Qingdao Hivn	Hon Fujin Precision Industry (Taiyuan) Co., Ltd	The investee is an indirect subsidiary of the Company	Sales	115,309	ግ	30 days	Note 1	Note 1	38.865	គ
(Hebi) Electronics Fuzhun Precision Co, Lid	Foxcom (Far East) Ltd. and subsidianes	The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries	Sales	5,484,886	g	90 days	Note 1	Note 1	2,743,070	S

$\ddot{\phantom{0}}$

							Differences in transaction terms compared to third party
					Transaction		transactions			Notes/accounts receivable (payable)
			Purchases		Percentage of total					Percentage of total notes/accounts
Purchaser/seller	Counterparty	Relationship with the counterparty	(sales)	Amount	purchases (sales)	Credit term	Unit price	Credit term	Balance	receivable (payable)	Note
(Hebi) Electronics Fuzhun Precision Co, Lid	Foxcom Technology Ptc. Ltd.	The investee is an indirect subsidiary of the Company	Sales	287,007 s	S	90 days	Note 1	Note 1	138713 S	÷
(Hebi) Electronics Fuzhun Precision $C_0$ , Ltd	Hon Fujin Precision Industry (Taiyuan) Co., Ltd	The investee is an indirect subsidiary of the Company	Sales	161,877	$\overline{\phantom{a}}$	90 days	Note 1	Note 1	170,949	s
Foxcom Technology Pre, Ltd	Foxcom (Far East) Ltd. and subsidiaries	The counterparties of the investee are Precision Industry Co., Ltd and its indirect subsidiaries of Hon Hai subsidiaries	Sales	6,961,938	å.	90 days	Note 1	Note 1	5,043,197	s.
Foxcom Technology Pic, Ltd	Hon Hai Precision Industry Co., Ltd.	investment company which accounts The counterparty of the investee is an the Company using equity method	Sales	221,442	-	90 days	Note 1	Note 1	53,487
Foxcom Technology Pre, Ltd.	Hon Fujin Precision Industry (Taiyuan) Co., Ltd	The investee is an indirect subsidiary of the Company	Sales	2,775,462	$\overline{2}$	90 days	Note 1	Note 1	1,170,427	Ā,
FTC Technology Inc.	ECMMS Precision Singapore Pid Ltd	The counterparty of the investee is an indirect subsidiary of Hon Hai Precision Industry Co., Ltd.	Sales	103,501	83	90 days	Note 1	Note 1	17,801	100
(Shenzhou) Indusury Puzhun Preeision Co., Ltd.	Foxcom (Far East) Ltd. and subsidiancs	The counterparties of the investee are Precision Industry Co., Ltd. and its indirect subsidiaries of Hon Hai subsidiaries	Sales	292,026	86	90 days	Note 1	Note 1	15,217	$\frac{1}{2}$
Precision Electronics Naming Funne Co., Ltd.	Foxcom (Far East) Ltd. and subsidiancs	The counterparties of the investee are Precision Industry Co., Ltd. and its indirect subsidiaries of Hon Hai subsidiaries	Sales	146,334	s	90 days	Note 1	Note 1	43,848	4
Precision Electronics YanTai Fuzhun Co, Lid.	Foxcom (Far East) Ltd. and subsidiancs	The counterparties of the investee are Precision Industry Co., Ltd. and its indirect subsidiaries of Hon Hai subsidiaries	Sales	076,508	ុ	90 days	Note 1	Note 1	515,320	6
Precision Electronics YanTai Fuzhun Co, Lid	Fu Yu Precision Components (Kunshan) Co., Ltd.	The investee is an indirect subsidiary of the Company	Sales	735,320	47	90 days	Note 1	Note 1	151,757	≌
Precision Electronics YanTai Fuzhun Co, Lid.	Foxcom Technology Co., Ltd.	company The Company's ultimate parent	Sales	242,135	4	90 days	Note 1	Note 1	109,127	≘
Foxcom Technology Co., Ltd.	Foxcom (Far East) Ltd. and subsidiaries	The indirect subsidiaries of Hon Hai Precision Industry Co., Ltd.	Purchases	14,041,260	S,	90 days	Note 1	Note 1	23,243,890) (	බ
Foxconn Technology Co., Ltd.	Naming Funing Precision Electronics Co., Ltd.	The investee is an indirect subsidiary of the Company	Purchases	1,364,872	$\overline{\phantom{0}}$	30 days	Note 1	Note 1	385)	$\blacksquare$
Foxcom Technology Co., Ltd	Fu Rui Precision Components (Kunshan) Co., Ltd	The investee is an indirect subsidiary of the Company	Purchases	109,714		90 days	Note 1	Note 1	19,793)	×
Foxconn Technology Co, Lid	INNOLUX CORPORATION	Other related party	v, Purchases	1,679,980	$\sim$	60 days	Note 1	Note 1	397,026) ( అ	$\widehat{\mathcal{E}}$
Foxcom Technology $Co.$ Lid		Pan-International Industrial Corp. The investee accounted for using equity method and its subsidiaries	Purchases	387,394		90 days	Note 1	Note 1	65,538)

Table 4, Page 2

				Transaction			Differences in transaction terms compared to third party	transactions	Notes/accounts receivable (payable)
										Percentage of total
Purchaser/seller	Counterparty	Relationship with the counterparty	Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	receivable (payable) notes/accounts	Note
Ilon Fujin Precision Industry (Taiyuan) Co, Ld	Foxconn (Far East) Ltd. and subsidiaries	tee are Precision Industry Co., Ltd. and its indirect subsidiaries of Hon Hai The counterparties of the invest subsidiaries	Purchases	10264854	Ź,	90 days	Note	Note 1	8,186,236)	63)
Hon Fujin Precision Industry (Taiyuan) Co., Ltd.	Hon Hai Precision Industry $Co.$ Lid.	The counterparties of the investee is an investment company which accounts the Company using equity method	Purchases	3,537,182	œ	90 days	Note	Note 1	1,107,686)	e)
(Kunshan) Co., Ltd. Fu Yu Precision Components	Hon Hai Precision Industry Co, Lid	investment company which accounts the The counterparties of the investee is an Company using equity method	Purchases	149,434	O	90 days	Note 1	Note 1	103,710)	6
(Kunshan) Co., Ltd. Fu Yu Precision Components		Pan-International Industrial Corp. The investee accounted for using equity method and its subsidiaries	Purchases	120,496	m	90 days	Note 1	Note 1	$62,619$ )	ົດ
(Ilebi) Electronics Fuzhun Precision Co., Ltd.	Foxconn (Far East) Ltd. and subsidiaries	The counterparties of the investee are Precision Industry Co., Ltd. and its indirect subsidiaries of Hon Hai subsidiaries	Purchases	416,729	ò,	90 days	Note 1	Note 1	$-82,444)$	$\overline{3}$
Foxcom Technology Pre, Ltd	Foxcom (Far East) Ltd. and subsidiaries	The counterparties of the investee are Precision Industry Co., Ltd. and its indirect subsidiaries of Hon Hai subsidiaries	Purchases	743,870	₹	90 days	Note 1	Note 1	562,219)	ౚ
Foxcom Technology Pre, Ltd.	Hon IIai Precision Industry Co., Ltd.	investment company which accounts The counterparty of the investee is an the Company using equity method	Purchases	2,279,858	n	90 days	Note 1	Note 1	699,591)	Ê
Precision Electronics YanTai Fuzhun Co, Lld	Foxcom (Far East) Ltd. and subsidiaries	The counterparties of the investee are indirect subsidiances of Hon Hai Precision Industry Co., Ltd. and its subsidiaries	Purchases	398,579	27	90 days	Note I	Note 1	$220,480$ )	39)

Note 1. The price and credit term are identical with that of general transactions. When the similar transaction is not available, the price and credit term are based on mutual agreement.
Note 2: In the purchases of finishe

Table 4, Page 3

Receivables from related parties reaching NTS100 million or 20% of paid-in capital or more Toxcoun Technology Co., Ltd and Subsidiaries
--------------------------------------------------------------------------------------------------------------------------------------------

December 31, 2017

Expressed in thousands of NTD
(Except as otherwise indicated)

						Overdue receivables	Amount collected
			Balance as at				subsequent to the	Allowarce for
Creditor	Counterparty	Relationship with the counterparty	December 31, 2017	Turnover rate	Amount	Action taken	balance sheet date	doubtful accounts
Foxconn Technology $Co.,$ Lid.	Foxconn (Far East) Ltd. and subsidiaries	The indirect subsidiaries of Hon Hai $\Xi$ Precision Industry Co.,	763,225 $\bullet$	S 1.20	124,997	Subsequent collection	563,188 ç,
Foxconn Technology Co., Ltd.	Foxcom (Far East) Ltd. and subsidiaries	The indirect subsidiaries of Hon Hai İd. Precision Industry Co.,	901,649	Not applicable
			(shown as other receivables) $(N$ ote 1)
Foxcom Technology Co., Ltd.	Hon Hai Precision Industry Co., Ltd.	The investor company which accounts the Company using equity method	495,787	2.96	S)		494,406
Hon Fujin Precision Industry (Taivuan) Co, Lid	Foxconn (Far East) Ltd. and subsidiaries	The counterparties of the investee are Ltd. and its indirect subsidiaries of Hon Hai Precision Industry Co., subsidiaries	25,637,430	2.77	227,434	Subsequent collection	9,793,946
Hon Fujin Precision Industry (Taiyuan) Co., Ltd.	Foxconn Technology Pre. E,	The investee is an indirect subsidiary of the Company	3,544.633	2.87			2,248,089
Hon Fujin Precision Industry (Taiyuan) $Co.,$ Ltd.	Fuzhun Precision (Hebi) Electronics Co., Ltd.	The investee is an indirect subsidiary of the Company	104,410	1.57	$\blacksquare$	Subsequent collection	175,333
Components (Kunshan) Fu Yu Precision Co., Ltd.	Foxcoun (Far East) Ltd. and subsidiaries	The investee is an indirect subsidiary of the Company	486,740	2.01	177,533	Subsequent collection	148,859
Components (Kunshan) Fu Yu Precision Co., Ltd.	Foxcom Technology Ptc. Ltd. and subsidiaries	The investee is an indirect subsidiaries of Company	910,144	2.51	ı	Subsequent collection
Oingdao Hivn Materials Co., Ltd.	Foxconn (Far East) Ltd. and subsidiaries	The counterparties of the investee are Ltd. and its indirect subsidiaries of Hon Hai Precision Industry Co., subsidiaries	142,135	2.73	6,440	Subsequent collection	44,344
Fuzhun Precision (Hebi) Electronics Co., Ltd.	Foxcom (Far East) Ltd. and subsidiaries	The counterparties of the investee are Precision Industry Co., Ltd. and its indirect subsidiaries of Hon Hai subsidiaries	2,743,070	1.85	1,201,375	Subsequent collection	532,810
Fuzhun Precision (Hebi) Electronics Co., Ltd.	Foxconn Technology Pte. E Lid	The investee is an indirect subsidiary of the Company	138,713	1.97	138,557	Subsequent collection
Fuzhun Precision (Hebi) Electronics Co., Ltd.	Industry (Taiyuan) Co., Hon Fujin Precision	The investee is an indirect subsidiary of the Company	170,949 s,	U) 1.78	100,181	Subsequent collection	170,418 $\mathbf{G}$

Table 5, Page 1

						Overdue receivables	Amount collected
			Balance as at				subsequent to the	Allowance for
Creditor	Counterparty	Relationship with the counterparty	December 31, 2017	Turnover rate	Amount	Action taken	balance sheet date	doubtful accounts
Foxcom Technology Pre. Ltd.	Hon Fujin Precision Industry (Taiyuan) Co., Ltd	The investee is an indirect subsidiary of the Company	5,043,192	2.24	279,633	Subsequent collection	3,544,338
Foxcom Technology Pie, Ltd.	Foxconn (Far East) Ltd. and subsidiaries	The counterparties of the investee are Precision Industry Co., Ltd. and its indirect subsidiaries of Hon Hai subsidiaries	1,170,427	2.33	55,116	Subsequent collection	192.635
Precision Electronics YanTai Fuzhun Co., Ltd.	Foxconn (Far East) Ltd. and subsidiaries	The counterparties of the investee are Precision Industry Co., Ltd. and its indirect subsidiaries of Hon Hai subsidaries	515,320	$\frac{8}{2}$	153,008	Subsequent collection	80,472
Precision Electronics YanTai Fuzhun Co., Ltd.	Components (Kunshan) Fu Yu Precision Co, Lld	The investee is an indirect subsidiary of the Company	151,757	2.89			75,476
Precision Electronics YanTai Fuzhun Co, Lld	Foxcom Technology Pte. E,	Ultimate parent	109,127	4,05	47,743	Subsequent collection	72,296
International Ltd. High Tempo	Foxcom Technology $\mathsf{Co}, \mathsf{Id}$	Ultimate parent	1,017,824	Not applicable
			(shown as other receivables) (Note 2)

$\frac{1}{2}$

Note 1: Receivables from purchases of materials by parent company on behalf of Foxconn (Far East) Ltd. and subsidiaries.
Note 2: Receivables from purchases of materials by investers on behalf of the parent company.

Table 5, Page 2

Significant inter-company transactions during the reporting period Foxconn Technology Co., Ltd. and Subsidiaries

Year ended December 31, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

Number			Relationship			Transaction	Percentage of consolidated total operating revenues or total
(Note 1)	Company name	Counterparty	(Note 2)	General ledger account	Amount	terms	assets
	Foxcoun Technology Co., Ltd.	HIGH TEMPO INTERNATIONAL LTD		Sales	149,702	Note 4
		Naming Funing Precision Electronics Co., Ltd.		Purchases	364,872
		Fu Rui Precision Components (Kunshan) Co., Ltd		Purchases	109,714
	Hon Fujin Precision Industry (Taiyuan) Co., Ltd.	FOXCONN TECHNOLOGY PTE LTD.		Sales	693,562
				Accounts receivable	1,544,633
		Fuzhun Precision (Hebi) Electronics Co., Ltd.		Sales	705,623
				Accounts receivable	404,410
	Fu Yu Precision Components (Kunshan) Co., Ltd.	FOXCONN TECINOLOGY PTE. LTD.		Sales	1,307,239
				Accounts receivable	910,144
	Qingdao Hiyn Materials Co., Ltd.	Hon Fujin Precision Industry (Taiyuan) Co., Ltd		Sales	115,309 287,007
	Fuzhun Precision (Hebi) Electronics Co., Ltd.	FOXCONN TECHNOLOGY PTE. LTD.		Sales
				Accounts receivable	138,713
		Hon Fujin Precision Industry (Taiyuan) Co., Ltd		Sales	161,877
				Accounts receivable	170,949
	FOXCONN TECINOLOGY PTE. LTD.	Hon Fujin Precision Industry (Taiyuan) Co., Ltd.		Sales	1775,462
				Accounts receivable	,170,427
	YanTai Fuzltun Precision Electronics Co., Ltd.	Fu Yu Precision Components (Kunshan) Co., Ltd		Sales	735.320
				Accounts receivable	151,757
		Foxcom Technology Co., Ltd.		Sales	242,135
				Accounts receivable	109,127
	HIGH TEMPO INTERNATIONAL LTD.	Foxcom Technology Co., Ltd.		Other receivable	017,824

Note 1: The information of transactions between the Company and the subsidiaries should be noted in "Number" column. (1) Number 0 represents the Company.

(2) The consolidated subsidiaries are numbered in order from number 1.

Note 2: The transaction relationships with counterparties are as follows:

(1) The Company to the consolidated subsidiary.

(2) The consolidated subsidiaries to the Company.
$(3)$ The consolidated subsidiaries to other consolidated subsidiaries.

Note 3: Disclosure standard of transactions between the Company and subsidiaries is when purchas the papables) from (to) related parties account for at least NTS100,000 or 20% of capital. Relative related are not disclosed Note 4: The prices and terms to related parties were not significantly different from tensactions with third parties, except for particular transactions with no similar transactions to compare with. For these transactions,

Note 5: In calculating the ratio, the transaction amount is divided by consolidated total assets for balance sheet accounts and is divided by consolidated total revenues for income statement accounts.
Note 6: Please refer were determined in accordance with mutual agreements.

				Initial investment amount		Shares held as at December 31, 2017			investee for the year recognised by the Company Net profit (loss) of the Investment income (loss)
			Balance as at	Balance as at				ended December 31,	for the year ended
Investee		Location Main business activities		December 31, 2017 December 31, 2016 Number of shares Ownership (%) Book value				LIO.	December 31, 2017	S
Foxconn Technology Q-Run Holdings Ltd.	Islands	Cayman Investment holding	9,851,192 \$	9,851,192	480,077,600		100 \$ 124,455,611 \$	6,540,869	6,540,869
Components Holding Co., Foxconn Technology Foxconn Precision	Islands	Cayman Investment holding	492,742	192,742	135,839,643	S	15,250,593	798,116	798,116
Foxcom Technology Huazhun Investment Co., Ltd.		Taiwan Investment	$-254,730$	1,254,780	125,478,000	S	1,531,805	14,881	14,881
Foxconn Technology Syntrend Creative Park Co.,	Taiwan	and equipment and electronic appliances, and information Retail of office machinery software services.	490,322	490,322	49,032,250	å	303,284	137,433)	27,432)

Note Besides Foxoam Precision Componens Holding Co.,1d, Q-Run Holdings 1:d and Huazhum Investment Co., 1:d are subsidiaries of the Company, Akinson Holdings I:d, Q-Run Far Ess Corporation,
World Trade Trading I:d, , Then

Foxconn Technology Co., Ltd and Subsidiaries

Year ended December 31, 2017 Information on investees

(Fxeen as otherwise indicated) Expressed in thousands of NTD

												(Except as otherwise indicated)
			Investment	aiwan to Mainland Accumulated amount of remittance from	Amount remitted from Taiwan to remitted back to Taiwan for the year ended December 31, 2017 Mainland China / Amount		Taiwan to Mainland Accumulated amount of remittance from	investee for the Net income of	held by the Ownership Company	the Company for the Investment income (loss) recognised by	Mainland China as Book value of investments in	Accumulated amount of investment income remined back to
Investee in Mainland China	Main business activities	Paid-in capital	method $(N$ ote $1)$	China as of January 1, 2017	Mainland China Remitted to	Remitted back to Taiwan	China as of December 31,2017	December 31, 2017 year ended	direct or indirect)	year ended December 31, 2017 (Note 2)	of December 31, 7017	December 31, 2017 Taiwan as of	Note
(Shenzhen) Co., Ltd. Fuhuigang Industrial	Computer case - electronic and electrical components	230,848		230,848 S	v,	v,	230,848	10,518	$\mathbf{S}$	10,518 U)	416,779 U)	ø
Components (Kunshan) Fu Yu Precision Co, Ltd.	Manufacturing and marketing of power plug and wall socket, micro ribbon connectors for terminals, etc.	1,165,818		585,855			585,855	156,440	$\frac{8}{2}$	156,440	4,146,588
(Shenzhen) Industry Fuzhun Precision Co, Lid	Manufacturing and marketing of (computer thermal module) computer components	580,320		59,520			59,520	86,623	$\overline{6}$	86,623	1,752,600
Components (Kunshan) Fu Rui Precision $Co.,$ Lid.	processing, manufacturing and marketing of optoelectronics Electrical board components and computer cables	365,780		234,628			134,678	83,765	9	83,265)	1,751,007
Industry (Taiyuan) Co., Hon Fujin Precision	Manufacturing and marketing of related peripherals, computer computer components and cases and metal stamping	12,201,600		4,151,520			4,151,520	6,366,555	g	6,366,555	37,014,258
Precision Electronics Naming Funing Co., Ltd.	Manufacturing and marketing of (computer thermal module) computer components	291,648						129,630	$\frac{6}{2}$	129,630	2,343,809
Precision Electronics YanTai Fuzhun Co., Ltd.	Manufacturing and marketing of computer case - electronic and electrical components	1,175,520		1,175,520			1,175,520	246,779	ă	246,779	626,551
(Hebi) Electronics Co., Fuzhun Precision	components, portable computers New alloy material, precision molds, new electronic and their components	4,395,552		1,479,072			1,479,072	219,069	100	219.069	5,725,417

Foxconn Technology Co., Ltd and Subsidiaries Information on investees in Mainland China Year ended December 31, 2017

$\begin{array}{c} \text{Expressed in thousands of NTD}\ \text{(Exercise a otherwise indicated)} \end{array}$

Table 8, Page 1

	Company name	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2017	Investment Commission of the nvestment amount approved by the Ministry of Economic Aflairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA (Note 3)
$-$ 21,226,796 7,916,963 Foxconn Technology Co., Ltd.

Note 1: Investment methods are classified into the following direc categories:
(1) Directly invest in a company in Maniland China.
(2) Through investing in Q-Run Holdings Ltd. or Foxcom Precision Components Holding Co., Lt

$(3)$ Others.

Note 2: Investment profit or loss for the period was recognized based on the Mainland investees' financial saturancus which were audited by independent accountants.
Note 3: Pursuant to the amended Guidelines Governing the

which were reinvested through an existing company in Mainland China.