FTC — Audit Report / Information 2018

Nov 14, 2018

FOXCONN TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND REPORT OF INDEPENDENT

ACCOUNTANTS

DECEMBER 31, 2018 AND 2017

-----------------------------------------------------------------------------------------------------------------------------------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 parent company only balance sheets of Foxconn Technology Co., Ltd. (the “Company”) as at December 31, 2018 and 2017, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and its financial performance and its 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 Parent Company Only Financial Statements section of our report. We are independent of the Company 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 parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in

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

Key audit matters for the Company’s parent company only financial statements of the year ended December 31, 2018 are stated as follows:

Revenue cutoff

Description

Refer to Note 4(26) for accounting policy on revenue recognition and Note 6(18) for details of revenues.

The Company has three revenue types, including (1) direct shipment from the factory, (2) FOB destination, and (3) hub. For FOB destination and hub, revenue is recognised when goods are shipped to destination or picked up by customers (when control of the products is transferred). The supporting documents for revenue recognition include receipts from customers (FOB destination), reports or other information provided by hub custodians and inventory movement record of hub. As the hubs are located around the world with numerous custodians, the frequency and contents of statements provided by custodians vary, and the process of revenue recognition involves numerous manual procedures, these factors may potentially result in inaccurate timing of sales revenue recognition and discrepancy between the physical inventory quantities in the hubs and the quantities as reflected in accounting records.

Since there are numerous daily revenue transactions from hubs and from FOB destination and the transaction amounts prior to and after the balance sheet date are significant to the financial statements, revenue cutoff has been identified as a key audit matter.

How our audit addressed the matter

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

1. Evaluated and tested the Company’s internal controls over revenue recognition.

2. Tested sales transactions that took place shortly before and after the balance sheet date by verifying the customers’ receipt notes, supporting documents provided by hub custodian, and inventory movement records, and ascertained whether cost of goods sold was recognised in the correct reporting period.

3. Confirmed physical inventory quantities held by distribution warehouses and agreed to

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accounting records. 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

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(6) for details of inventories.

The Company is primarily engaged in the sales of 3C electronic products manufactured by its subsidiaries. Due to rapid technological innovations, short electronic product life cycles and fluctuation of market prices, there is a higher risk of inventory losses arising from market value decline or obsolescence. The Company and its subsidiaries recognise inventories at the lower of cost and net realisable value which is determined based on historical data of inventory closeout and range of discount. Inventory valuation losses are provided against inventory aged over a certain time period and individually identified as obsolete or damaged.

As the amounts of the Company and its subsidiaries’ 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 judgement, we consider provision for inventory valuation losses 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. Ensured consistent application of accounting policies on provision for inventory valuation losses and ascertain 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. Assessed the reasonableness of inventory valuation losses through discussion with management

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as to the determination of net realisable value of obsolete or damaged inventories and validating related supporting documents.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only 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 parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’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 Company 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 Company’s financial reporting process.

Auditor’s responsibilities for the audit of the parent company only financial statements

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

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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 control.

• 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 Company’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 Company’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 parent company only 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 Company to cease to continue as a going concern.

• E. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only 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 Company to express an opinion on the parent company only 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

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

Hsu, Sheng-Chung Wu, Han-Chi

For and on behalf of PricewaterhouseCoopers, Taiwan March 27, 2019

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only 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 parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

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

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FOXCONN TECHNOLOGY CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 6(6) 6(7) 6(3) 6(8) 6(9) 6(10) 6(23)	December 31, 2018 AMOUNT % $ 11,123,840 8 567,640 1 500,000 - 12,734,403 9 974,348 1 380,117 - 269,161 - 15,407 - 26,564,916 19 1,415,846 1 - - 109,456,141 80 77,567 - 127,279 - 60,268 - 9,146 - 111,146,247 81 $ 137,711,163 100	December 31, 2017	December 31, 2017
		AMOUNT $ 11,123,840 567,640 500,000 12,734,403 974,348 380,117 269,161 15,407 26,564,916 1,415,846 - 109,456,141 77,567 127,279 60,268 9,146 111,146,247 $ 137,711,163	AMOUNT $ 18,114,095 1,446 - 14,080,612 1,336,791 1,011,989 1,220,920 6,652,418 42,418,271 - 1,791,255 141,841,293 95,304 127,387 30,294 11,057 143,896,590 $ 186,314,861	%
Current assets 1100 Cash and cash equivalents 1110 Current financial assets at fair value through profit or loss 1136 Financial assets at amortised cost - current 1170 Accounts receivable, net 1180 Accounts receivable due from related parties, net 1200 Other receivables 130X Inventories 1470 Other current assets 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non-current 1523 Non-current available-for-sale financial assets 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1760 Investment property-net 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				10 - - 7 1 - 1 4
				23
				- 1 76 - - - -
				77
				100

(Continued)

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FOXCONN TECHNOLOGY CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2018 Notes AMOUNT % 6(11) $ 13,689,160 10 6(2) 39,992 - 1,325,536 1 19,347,339 14 6(12) 2,100,239 1 6(23) 989,355 1 84,419 - 37,576,040 27 6(23) 610,671 1 6(13) 12,791 - 623,462 1 38,199,502 28 6(14) 14,144,852 10 6(15) 7,767,553 6 6(16) 11,103,487 8 66,542,261 48 6(17) ( 46,492) - 99,511,661 72 $ 137,711,163 100	December 31, 2017	December 31, 2017
		AMOUNT $ 22,449,280 47,417 778,929 24,906,383 2,187,453 840,369 10,198 51,220,029 561,389 14,304 575,693 51,795,722 14,144,852 7,768,067 10,106,948 63,516,070 38,983,202 134,519,139 $ 186,314,861	%
Current liabilities 2100 Short-term borrowings 2120 Current financial liabilities at fair value through profit or loss 2170 Accounts payable 2180 Accounts payable to related parties 2200 Other payables 2230 Current tax liabilities 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2570 Deferred tax liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Ordinary share Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3XXX Total equity Commitments and Contingent Liabilities 3X2X Total liabilities and equity			12 - 1 13 1 1 -
			28
			- -
			-
			28
			8 4 5 34 21
			72
			100

The accompanying notes are an integral part of these parent company only financial statements.

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FOXCONN TECHNOLOGY CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2018 AND 2017

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

Items

Years ended December 31 2018 2017 Notes AMOUNT % AMOUNT % 6(18) $ 93,824,119 100 $ 84,414,971 100 6(6)(21) ( 88,948,243 ) ( 95) ( 80,118,144) ( 95) 4,875,876 5 4,296,827 5 6(21) ( 221,299 ) - ( 133,444) - ( 247,425 ) - ( 127,343) - ( 254,194 ) ( 1) ( 156,700) - ( 722,918 ) ( 1) ( 417,487) - 4,152,958 4 3,879,340 5 6(19) 508,693 1 463,267 - 6(20) 30,445 - ( 445,212) ( 1) ( 521,117 ) ( 1) ( 235,787) - 6(8) 6,310,617 7 7,326,434 9 6,328,638 7 7,108,702 8 10,481,596 11 10,988,042 13 6(23) ( 1,334,937 ) ( 1) ( 1,022,656) ( 1) $ 9,146,659 10 $ 9,965,386 12 6(13) ( $ 93 ) - ( $ 11,866) - 6(17) ( 375,409 ) ( 1) - - 6(17) ( 38,662,563 ) ( 41) - - 6(23) 869 - 2,017 - ( 39,037,196 ) ( 42) ( 9,849) - 6(16) 8,278 - ( 4,166,406) ( 5) - - 91,275 - - - 27,366,987 32 8,278 - 23,291,856 27 ( $ 29,882,259 ) ( 32) $ 33,247,393 39 6(24) $ 6.47 $ 7.05 $ 6.41 $ 7.01

4000 Operating revenue 5000 Operating costs 5900 Gross profit from operations Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Net operating income Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profits of associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Tax expense 8200 Profit Components of other comprehensive income that will not be reclassified to profit or loss 8311 Actuarial losses on defined benefit plans 8316 Unrealised loss on valuation of financial assets at fair value through other comprehensive loss 8330 Share of other comprehensive loss of associates and joint ventures accounted for using equity method 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Other comprehensive loss that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation 8362 Unrealised gains (losses) on valuation of available-for-sale financial assets 8380 Share of other comprehensive income of associates and joint ventures accounted for using equity method 8360 Other comprehensive income that will be reclassified to profit or loss 8500 Total comprehensive (loss) income Earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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FOXCONN TECHNOLOGY CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

2017 Balance at January 1, 2017 Profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriations of 2016 earnings Legal reserve Cash dividends Changes in equity of associates and joint ventures accounted for using equity method Balance at December 31, 2017 2018 Balance at January 1, 2018 Effects of retrospective application and retrospective restatement Balance at January 1 after adjustments Profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriations of 2017 earnings Legal reserve Cash dividends Changes in equity of associates and joint ventures accounted for using equity method Balance at December 31, 2018	Notes		Ordinary share		Capital surplus		Retained	Earnings	Earnings			Other Equity Interest				Total
							Legal reserve		Unappropriated retained earnings		Exchange differences on translation of foreign financial statements	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income		Unrealised gains (losses) on available-for-sale financial assets
	6(16) 6(16) 6(16)		$ 14,144,852 - - - - - - $ 14,144,852 $ 14,144,852 - 14,144,852 - - - - - - $ 14,144,852	$ 7,793,643 - - - - - ( 25,576 ) $ 7,768,067 $ 7,768,067 - 7,768,067 - - - - - ( 514 ) $ 7,767,553			$ 9,034,837 - - - 1,072,111 - - $ 10,106,948 $ 10,106,948 - 10,106,948 - - - 996,539 - - $ 11,103,487	$ 60,007,688 9,965,386 ( 9,849 ) 9,955,537 ( 1,072,111 ) ( 5,375,044 ) - $ 63,516,070 $ 63,516,070 ( 16,843 ) 63,499,227 9,146,659 776 9,147,435 ( 996,539 ) ( 5,092,147 ) ( 15,715 ) $ 66,542,261		$ 1,580,117 - ( 4,166,406 ) ( 4,166,406 ) - - - ($ 2,586,289 ) ($ 2,586,289 ) - ( 2,586,289 ) - 8,278 8,278 - - - ($ 2,578,011 )		$ - - - - - - - $ - $ - 41,569,491 41,569,491 - ( 39,037,972 ) ( 39,037,972 ) - - - $ 2,531,519	$ 14,111,229 - 27,458,262 27,458,262 - - - $ 41,569,491 $ 41,569,491 ( 41,569,491 ) - - - - - - - $ -		$ 106,672,366 9,965,386 23,282,007 33,247,393 - ( 5,375,044 ) ( 25,576 ) $ 134,519,139 $ 134,519,139 ( 16,843 ) 134,502,296 9,146,659 ( 39,028,918 ) ( 29,882,259 ) - ( 5,092,147 ) ( 16,229 ) $ 99,511,661

The accompanying notes are an integral part of these parent company only financial statements.

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FOXCONN TECHNOLOGY CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation (including investment property) Amortisation Expected credit gain Interest expense Share of profits of associates and joint ventures accounted for using equity method Net loss on financial assets or liabilities at fair value through profit or loss Dividend income Interest income Changes in operating assets and liabilities Changes in operating assets Accounts receivable, net Accounts receivable due from related parties Other receivables Inventories Other current assets Changes in operating liabilities Accounts payable Accounts payable to related parties Other payables Other current liabilities Other non-current liabilities Cash inflow generated from operations Income taxes paid Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Net decrease in financial assets at amortised cost-current Acquisition of property, plant and equipment Increase in other financial assets Decrease (increase) in other non-current assets Interest received Dividends received Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term borrowings Cash dividends paid Interest paid Net cash flows (used in) from financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Notes 2018 2017 $ 10,481,596 $ 10,988,042 6(21) 16,718 15,200 6(21) 1,250 1,250 ( 887 ) - 521,116 235,787 6(8) ( 6,310,617 ) ( 7,326,434 ) 6(2) ( 573,619 ) 293,209 6(19) ( 106,424 ) ( 21,543 ) 6(19) ( 293,720 ) ( 181,804 ) 1,352,682 ( 7,474,102 ) 351,877 278,437 52,448 122,922 951,759 544,308 ( 10,689 ) ( 305 ) 546,607 349,993 ( 5,559,044 ) 14,004,692 452,863 ( 5,442 ) 74,221 4,586 ( 1,606 ) ( 4,208 ) 1,946,531 11,824,588 ( 1,165,774 ) ( 1,166,685 ) 780,757 10,657,903 6,147,700 - ( 2,482 ) ( 30,113 ) - ( 6,647,700 ) 661 ( 660 ) 329,768 142,768 119,816 53,985 6,595,463 ( 6,481,720 ) ( 8,760,120 ) 16,579,780 6(15) ( 5,092,147 ) ( 5,375,044 ) ( 514,208 ) ( 222,818 ) ( 14,366,475 ) 10,981,918 ( 6,990,255 ) 15,158,101 18,114,095 2,955,994 $ 11,123,840 $ 18,114,095

The accompanying notes are an integral part of these parent company only financial statements.

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FOXCONN TECHNOLOGY CO., LTD.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2018 AND 2017

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

1. HISTORY AND ORGANISATION

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 as Foxconn Technology Co., Ltd. The Company is primarily engaged in manufacturing, processing and sales of case, heat dissipation modules and consumer electronics products.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE FINANCIAL STATEMENTS AND

PROCEDURES FOR AUTHORISATION

The accompanying parent company only financial statements were authorised for issuance by the Board of Directors on March 27, 2019.

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 2018 are as follows:

New Standards,Interpretations and Amendments

Effective Date by International Accounting Standards Board

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

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

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

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.

• (c) The Company has elected not to restate prior period financial statements using the modified retrospective approach under IFRS 9. For details of the significant effect as at January 1, 2018, please refer to Notes 12(4) B and C.

• B. IFRS 15, ‘Revenue from contracts with customers’ and amendments

• (a) The Company has elected not to restate prior period financial statements when initially applying IFRS 15.

• (b) Presentation of assets and liabilities in relation to contracts with customers

The Company will recognise revenue at the amount of consideration which the Company expects to be entitled. Revenue is not recognised for products that the Company expects to be returned. The Company recognises a refund liability and an asset, and the asset is presented separately from the refund liability.

• (c) Under IFRS 15, liabilities in relation to expected volume discounts and refunds to customers are recognised as refund liabilities, but were previously presented as accounts receivable -

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allowance for sales returns and discounts in the balance sheet. The balance was $52,399 on January 1, 2018.

(d) Please refer to Note 12(5) for other disclosures in relation to the first application of IFRS 15.

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

New standards, interpretations and amendments endorsed by the FSC effective from 2019 are as follows:

New Standards,Interpretations and Amendments	Effective Date by International Accounting Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative compensation’ IFRS 16, ‘Leases’ Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ Amendments to IAS 28, ‘Long-term interests in associates and joint ventures’ IFRIC 23, ‘Uncertainty over income tax treatments’ Annual improvements to IFRSs 2015-2017 cycle	January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019

Effects on the Company’s financial condition and financial performance arising from the above standards and interpretations based on the Company’s assessment are 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 Company expects to recognise the lease contract of lessees in line with IFRS 16. However, the Company intends not to restate the financial statements of prior period (referred herein as the “modified retrospective approach”). On January 1, 2019, it is expected that ‘right-of-use asset’ and lease liability will both be increased by $2,687, and there is no impact on retained earnings.

(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:

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New Standards,Interpretations andAmendments	Effective Date by International Accounting StandardsBoard
Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of Material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’	January 1, 2020 January 1, 2020 To be determined by International Accounting Standards Board January 1, 2021

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the accompanying parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stat ed.

(1) Compliance statement

The accompanying parent company only financial statements of the Company 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 accompanying parent company only 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) Financial assets at fair value through other comprehensive income / Available-for-sale financial assets measured at fair value.

• (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the accompanying parent company only financial statements are disclosed in Note 5.

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• C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Company has elected to apply modified retrospective approach whereby the cumulative impact of the adoption was recognised as retained earnings or other equity as of January 1, 2018 and the financial statements for the year ended December 31, 2017 were not restated. The financial statements for the year ended December 31, 2017 were prepared in compliance with International Accounting Standard 39 (‘IAS 39’), International Accounting Standard 11 (‘IAS 11’), International Accounting Standard 18 (‘IAS 18’) and related financial reporting interpretations. Please refer to Notes 12(4) and (5) for details of significant accounting policies and details of significant accounts.

(3) Foreign currency translation

The accompanying parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional and presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• (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 recognised in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary 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 company, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

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     - i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

     - ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

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

  - (b) When the foreign operation partially disposed of or sold is an associate, 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.

  - (c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even the Company still retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

• (4) 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 pay off liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

  • (a) Liabilities that are expected to be paid off within the normal operating cycle;

  • (b) Liabilities arising mainly from trading activities;

  • (c) Liabilities that are to be paid off within twelve months from the balance sheet date;

  • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the

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counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) 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 bands sold under repru chase agveement that meet definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

• (6) Financial assets at fair value through profit or loss Effective 2018

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income. Financial assets at amortised cost or fair value through other comprehensive income are designated as at fair value through profit or loss at initial recognition when they eliminate or significantly reduce a measurement or recognition inconsistency.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

• (7) Financial assets at fair value through other comprehensive income Effective 2018

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

  • (a) The objective of the Company’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

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• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:

• (a) The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognised in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss.

(8) Financial assets at amortised cost

Effective 2018

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Company’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

The Company’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (9) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(10) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income and financial

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assets at amortised cost including accounts receivable or contract assets that have a significant financing component, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

• (11) Derecognition of financial assets

The Company 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 recognised 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 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. Subsidiary is an entity where the Company has the right to dominate its finance and operation policies (includes special purpose entity), normally the Company owns more than 50 percent of the voting rights directly or indirectly in that entity. Subsidiaries are accounted for under the equity method in the Company's parent company only financial statements.

• B. Unrealised gains or losses resulted from inter-company transactions with subsidiaries are eliminated. Necessary adjustments are made to the accounting policies of subsidiaries, to be consistent with the accounting policies of the Company.

• C. After acquisition of subsidiaries, the Company recognises proportionately for the share of profit and loss and other comprehensive incomes in the income statement as part of the Company's profit and loss and other comprehensive income, respectively. When the share of loss from a subsidiary exceeds the carrying amount of Company's interests in that subsidiary, the Company continues to recognise its shares in the subsidiary's loss proportionately.

• D. Associates are all entities over which the Company has significant influence but not control. In

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general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 per cent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

• E. The Company’s share of its investements’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• F. When changes in an associate’s equity are not recognised in profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognises change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

• G. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’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 Company.

• H. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’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 Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• I. Upon loss of significant influence over an associate, the Company remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.

• J. When the Company 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

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are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• K. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

• L. According to “Rules Governing the Preparations of Financial Statements by Securities Issuers”, 'profit for the year' and 'other comprehensive income for the year' reported in an entity's parent company only statement of comprehensive income, shall equal to 'profit for the year' and 'other comprehensive income' attributable to owners of the parent reported in that entity's consolidated statement of comprehensive income. Total equity reported in an entity's parent company only financial statements, shall be equal to the equity attributable to owners of parent reported in that entity's consolidated financial statements.

(15) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company 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 part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives for buildings and structures machinery and equipment and other equipment are 3~55 years, 1~10 years and 1~10 years, respectively.

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(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 ~ 55 years.

(17) Impairment of non-financial assets

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

(18) Borrowings

• A. Borrowings comprise long-term and short-term bank borrowings and other long-term and shortterm loans. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised 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 recognised 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 draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

(19) Accounts and notes payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and 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 are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges.

• B. At initial recognition, the Company measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Company subsequently measures these

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financial liabilities at fair value with any gain or loss recognised in profit or loss.

(21) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either 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 recognised 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 recognised as expenses in that period when the employees render service.

B. Pensions

• (a) Defined contribution plans

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

(b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The 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, directors’ and supervisors’ remuneration

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Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employees compensation is paid 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 recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax 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 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 tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally

~25~

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

• A. The Company is primarily engaged in manufacturing and sales of consumer electronics products. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

• B. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated sales discounts and allowances. Revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Company does not adjust the transaction price to reflect the time value of money.

• C. A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of the accompanying parent company only financial statements requires management to make critical judgements in applying the Company’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:

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

A. Revenue recognition

The Company determines whether the nature of its performance obligation is to provide the specified goods or services itself (i.e. the Company is a principal) or to arrange for the other party to provide those goods or services (i.e. the Company is an agent) based on the transaction model and its economic substance. The Company is a principal if it controls a promised good or service before it transfers the good or service to a customer. The Company recognises revenue at gross amount of consideration to which it expects to be entitled in exchange for those goods or services transferred. The Company is an agent if its performance obligation is to arrange for the provision of goods or services by another party. The Company recognises revenue at the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the other party to provide its goods or services. Indicators that the Company controls the good or service before it is provided to a customer include the following:

The Company provides integrated electronics manufacturing services to meet the following criteria by judgment, and recognises revenue on a gross basis:

• (a) The Company is primarily responsible for the provision of goods or services;

• (b) The Company assumes the inventory risk before transferring the specified goods or services to the customer or after transferring control of the goods or services to the customer.

• (c) The Company has discretion in establishing prices for the goods or services.

(2) Critical accounting estimates and assumptions

Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company 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.

As of December 31, 2018, information on the carrying amount of inventories is provided in Note 6(6).

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Checking accounts and demand deposits Cash equivalents Time deposits	December31,2018 9,791,840 $ 1,332,000 11,123,840 $	December31,2017
		6,589,095 $ 11,525,000 18,114,095 $

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• A. The Company 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 Company has no cash and cash equivalents pledged to others. Time deposits with maturity in excess of three months on December 31, 2018 and 2017 have been listed under “financial assets at amortised cost-current” and “other current assets”, respectively.

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

Assets December 31, 2018 Current items: Financial assets mandatorily measured at fair value through profit or loss Derivatives $ 567,640 Liabilities Current items: Financial liabilities mandatorily measured at fair value through profit or loss Derivatives $ 39,992

• A. For the year ended December 31, 2018, the Company recognised net profit of $769,013 (including unrealised gain on valuation of $573,619) on the financial assets and liabilities.

• B. The Company entered into contracts relating to derivative financial assets or liabilities which were not accounted for under hedge accounting. The information is listed below:

Derivativeinstruments Current items: Cross currency swap contracts Foreign exchange contracts	December31,2018	December31,2018
	TWD (SELL) 4,443,720 USD (BUY) 152,000 TWD (SELL) 1,900,275 USD (BUY) 65,000 TWD (SELL) 2,186,925 USD (BUY) 75,000 TWD (SELL) 7,708,750 USD (BUY) 250,000 Contract amount (Nominal Principal inthousands)	Contract period
		2018/03~2019/03 2018/03~2019/03 2018/04~2019/04 2018/12~2019/01

(a) Cross currency swap contracts

The Company signed cross currency swap contracts aiming to satisfy capital requirement. In

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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) Foreign exchange contracts

The Company entered into foreign exchange contracts 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.

• C. The counterparties of derivative instruments held by the Company are all banks with good credit quality or financial institutions with investment grade credit ratings that are above A.

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

• E. Information on December 31, 2017 is provided in Note 12(4).

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

Items December 31, 2018

Non-current items: Equity instruments $ 1,415,846

• A. The Company has elected to classify equity instruments that are considered to be strategic investments as financial assets at fair value through other comprehensive income.

• B. The Company recognised other comprehensive income of $375,409 for fair value change for the year ended December 31, 2018.

• C. As of December 31, 2018, the Company has no financial assets at fair value through other comprehensive income pledged to others.

• D. Information on available-for-sale financial assets as of December 31, 2017 is provided in Note 12(4).

(4) Financial assets at amortised cost

Items December 31, 2018 Current items: Time deposits with maturity in excess of three months $ 500,000

• A. As of December 31, 2018, the Company has no financial assets at amortised cost pledged to others.

• B. The financial institutions of the Company's financial institutions are of good quality and the probability of default is expected to be very low.

• C. Information on December 31, 2017 is provided in Notes 6(7) and 12(4).

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(5) Notes and accounts receivable

December31,2018 Accounts receivable 12,738,341 $ Less: Allowance for bad debts 3,938) ( Less: Allowance for sales discounts - ( 12,734,403 $	December31,2017 14,133,011 $ - 52,399) 14,080,612 $

• A. The Company does not hold any collateral as security.

• B. Information relating to credit risk is provided in Note 12(2).

• C. Information on the Company’s expected volume discounts reclassified to refund liabilities (shown as “other current liabilities”) under IFRS 15 is provided in Note 12(5).

(6) Inventories

Finished goods Less: Allowance for inventory obsolescence and market price decline (	December31,2018 284,890 $ 15,729) ( 269,161 $	December31,2017 1,236,649 $ 15,729) 1,220,920 $

The cost of inventories recognised as expense for the year:

(7)	Other current assets Cost of inventories sold Time deposits with maturity over three months Others	2018 2017 88,948,243 $ 80,118,144 $ Years endedDecember31, December31,2018 December31,2017 - $ 6,647,700 $ 15,407 4,718 15,407 $ 6,652,418 $
		2018 88,948,243 $ December31,2018 - $ 15,407 15,407 $

(8) Investments accounted for using equity method

Investees Q-RUN HOLDINGS LTD. FOXCONN PRECISION COMPONENTS HOLDING CO., LTD. HUAZHUN INVESTMENT CO., LTD. SYNTREND CREATIVE PARK CO., LTD.	December31,2018 92,037,098 $ 15,692,164 1,440,657 286,222 109,456,141 $	December31,2017 124,455,611 $ 15,250,593 1,831,805 303,284 141,841,293 $

• A. The Company’s subsidiary:

• (a) Details of the Company’s subsidiaries are provided in Note 4(3) of the Company’s

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consolidated financial statements as of and for the year ended December 31, 2018.

• (b) The Company's investments in China through FOXCONN PRECISION COMPONENTS HOLDING CO., LTD. and Q-RUN HOLDINGS LTD. are based on the production and sales of computer components (computer radiators, magnesium alloys and computer components). Please refer to Note 13 for the disclosure of information on investments in China.

• B. The Company’s associates:

The operating results of the Company’s share in all individually immaterial associates are summarized below:

Other comprehensive income, net of tax (	2018 2017 85,477) $ 137,433) ($ Years ended December31,
	2018 85,477) $ (

• C. The Company’s subsidiary, HUAZHUN INVESTMENT CO., LTD., issued cash dividends of $13,392 and $32,442 in October 2018 and October 2017, respectively, which resulted in the decrease of investments accounted for using equity method.

• D. The Company’s share of profit of associates accounted for using equity method in 2018 and 2017 is $6,310,617 and $7,326,434, respectively.

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(9) Property, plant and equipment

At January 1, 2018 Cost Accumulated depreciation 2018 Opening net book amount as at January 1 Additions Transfer Disposals Depreciation charge Closing net book amount as at December 31 At December 31, 2018 Cost Accumulated depreciation At January 1, 2017 Cost Accumulated depreciation 2017 Opening net book amount as at January 1 Additions Transfer Depreciation charge Closing net book amount as at December 31 At December 31, 2017 Cost Accumulated depreciation	Land	Buildings and structures Machinery and equipment 52,938 $ 83,626 $ 38,384) ( 72,793) ( 14,554 $ 10,833 $ 14,554 $ 10,833 $ - 80 1,189) ( - - 2,668) ( 3,156) ( 5,259) ( 10,209 $ 2,986 $ 51,749 $ 81,038 $ 41,540) ( 78,052) ( 10,209 $ 2,986 $ Buildings and structures Machinery and equipment 54,630 $ 71,494 $ 33,190) ( 71,306) ( ( 21,440 $ 188 $ 21,440 $ 188 $ - 12,132 1,692) ( - 5,194) ( 1,487) ( ( 14,554 $ 10,833 $ 52,938 $ 83,626 $ 38,384) ( 72,793) ( ( 14,554 $ 10,833 $	Buildings and structures Machinery and equipment 52,938 $ 83,626 $ 38,384) ( 72,793) ( 14,554 $ 10,833 $ 14,554 $ 10,833 $ - 80 1,189) ( - - 2,668) ( 3,156) ( 5,259) ( 10,209 $ 2,986 $ 51,749 $ 81,038 $ 41,540) ( 78,052) ( 10,209 $ 2,986 $ Buildings and structures Machinery and equipment 54,630 $ 71,494 $ 33,190) ( 71,306) ( ( 21,440 $ 188 $ 21,440 $ 188 $ - 12,132 1,692) ( - 5,194) ( 1,487) ( ( 14,554 $ 10,833 $ 52,938 $ 83,626 $ 38,384) ( 72,793) ( ( 14,554 $ 10,833 $	Others Total 77,600 $ 266,014 $ 59,533) ( 170,710) ( 18,067 $ 95,304 $ 18,067 $ 95,304 $ 1,461 1,541 - 1,189) ( - 2,668) ( 7,006) ( 15,421) ( 12,522 $ 77,567 $ 79,061 $ 263,698 $ 66,539) ( 186,131) ( 12,522 $ 77,567 $ Others Total 76,585 $ 254,559 $ 52,267) 156,763) ( 24,318 $ 97,796 $ 24,318 $ 97,796 $ 1,015 13,147 - 1,692) ( 7,266) 13,947) ( 18,067 $ 95,304 $ 77,600 $ 266,014 $ 59,533) 170,710) ( 18,067 $ 95,304 $
	51,850 $ - 51,850 $ 51,850 $ - - - - 51,850 $ 51,850 $ - 51,850 $ Land 51,850 $ - 51,850 $ 51,850 $ - - - 51,850 $ 51,850 $ - 51,850 $
		54,630 $ 33,190) ( 21,440 $ 21,440 $ - 1,692) ( 5,194) ( 14,554 $ 52,938 $ 38,384) ( 14,554 $	( ( (

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(10) Investment property

Investment property
At January 1, 2018 Cost Accumulated depreciation and impairment 2018 Opening net book amount as at January 1 Transfer in Depreciation charge Closing net book amount as at December 31 At December 31, 2018 Cost Accumulated depreciation and impairment At January 1, 2017 Cost Accumulated depreciation and impairment 2017 Opening net book amount as at January 1 Transfer in Depreciation charge Closing net book amount as at December 31 At December 31, 2017 Cost Net exchange differences	Land $ 95,910 - 95,910 $ $ 95,910 - - 95,910 $ $ 95,910 - 95,910 $ Land $ 95,910 - 95,910 $ $ 95,910 - - 95,910 $ $ 95,910 - 95,910 $	Buildings and structures Total 69,816 $ 165,726 $ 38,339) ( 38,339) ( 31,477 $ 127,387 $ $ 31,477 127,387 $ 1,189 1,189 1,297) ( 1,297) ( 31,369 $ 127,279 $ 72,454 $ 168,364 $ 41,085) ( 41,085) ( 31,369 $ 127,279 $ Buildings and structures Total 66,208 $ 162,118 $ 35,170) ( 35,170) ( 31,038 $ 126,948 $ $ 31,038 126,948 $ 1,692 1,692 1,253) ( 1,253) ( 31,477 $ 127,387 $ 69,816 $ 165,726 $ 38,339) ( 38,339) ( 31,477 $ 127,387 $
		( ( (

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

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year	Years ended December31,
	2018 21,487 $ 1,297 $	2017
		20,805 $ 1,253 $

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• B. The fair value of the investment property held by the Company as at December 31, 2018 and 2017 was $783,686 and $313,507, respectively. Valuations were made using the income approach which is categorised within Level 3 in the fair value hierarchy.

(11) Short-term borrowings

(11) Short-term borrowings
(12) Other payables Type ofborrowings December31,2018 Bank borrowings Unsecured borrowings 13,689,160 $ Type ofborrowings December31,2017 Bank borrowings Unsecured borrowings 22,449,280 $ Employees’ compensation payable Payable for purchases made by parties on behalf of others Awards and salaries payable Others		Interestraterange	Collateral
		0.69%~3.05563% Interestraterange	None Collateral
		0.49%~2.0521% December31,2018 1,398,777 $ 361,663 29,662 310,137 2,100,239 $	None December31,2017 1,172,315 $ 901,649 35,961 77,528 2,187,453 $

(13) Pensions

A. Defined benefit plans

• (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.

• (b) The amounts recognised in the balance sheet are as follows (shown as ‘other non-current liabilities’):

liabilities’):
	December	31,2018	December	31,2017
Present value of defined benefit obligations	($	51,634)	($	55,950)
Fair value of plan assets		38,843		41,646
Net defined benefit liability	($	12,791)	($	14,304)

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

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		Present value of	Present value of
			defined benefit		Fair value of			Net defined
			obligations		plan assets		benefit liability
Year ended December 31, 2018
Balance at January 1	($		55,950)	$	41,646	($		14,304)
Current service cost	(		71)		-	(		71)
Interest income	(		699)		532	(		167)
	(		56,720)		42,178	(		14,542)
Remeasurements
Return on plan assets (Note)			-		1,154			1,154
Change in demographic
assumptions	(		121)		-	(		121)
Change in financial assumptions	(		604)		-	(		604)
Experience adjustments	(		522)		-	(		522)
	(		1,247)		1,154	(		93)
Pension fund contribution			-		1,844			1,844
Paid pension			6,333	(	6,333)			-
			6,333	(	4,489)			1,844
Balance at December 31	($		51,634)	$	38,843	($		12,791)
		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
assumptions	(		127)		-	(		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)	$	41,646	($		14,304)

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 defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the

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“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 securitisation 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, 2018 and 2017 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

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

Discount rate Future salary increases	Years endedDecember31,	Years endedDecember31,
	2018 1.125% 2.00%	2017
		1.25%
		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:

December31,2018 Effect on present value of defined benefit obligation December31,2017 Effect on present value of defined benefit obligation	Increase Decrease 0.25% 0.25% $ 1,231 ($ 1,272) ( $ 1,294 ($ 1,340) ( Discountrate	Future salaryincreases	Future salaryincreases
	Increase 0.25% $ 1,231 ( $ 1,294 (	Increase 0.25% $ 1,225) $ 1,288)	Decrease 0.25%
			$ 1,191
			$ 1,251

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 Company for the year ending December 31, 2019 are $1,600.

B. Defined contribution plans

(a) Effective July 1, 2005, the Company has 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 contributes 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

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sum upon termination of employment.

• (b) The pension costs under the defined contribution pension plans of the Company for the years ended December 31, 2018 and 2017 were $11,076 and $11,230, respectively.

• (14) Share capital

As of December 31, 2018, the Company’s authorised capital was $15,000,000 (including subscription warrant or 50 million shares reserved for convertible bonds issued by the Company), outstanding ordinary shares were 1,414,485 thousand shares with a par value of $10 (in dollars) per share, and the paid-in capital was $14,144,852.

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

At January 1 (December 31)	2018 Number of ordinary shares (inthousands) 1,414,485	2017
		Number of ordinary shares (inthousands)
		1,414,485

(15) Capital surplus

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

(16) Retained earnings

• A. In accordance with the Company’s Articles of Incorporation, 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 after tax and distribution pursuant to clause (A);

• (c) Setting aside a special reserve in accordance with applicable legal 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 such legal reserve amount reaches the total authorised 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

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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 2017 and 2016 had been resolved at the stockholders’ meeting on June 22, 2018 and June 22, 2017, respectively. Details are summarised below:

Legal reserve Cash dividends	Years endedDecember31,	Years endedDecember31,	Years endedDecember31,
	Dividends per Amount share (indollars) 996,539 $ - $ 5,092,147 3.6 6,088,686 $ 3.6 $ 2017	2016
	Amount 996,539 $ 5,092,147 6,088,686 $	Amount 1,072,111 $ 5,375,044 6,447,155 $	Dividends per share (indollars)
			- $ 3.8 3.8 $

The appropriations of earnings for 2018 has not yet been approved at the Board of Directors’ meeting as of March 27, 2019. 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, please refer to Note 6(22).

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(17) Other equity items

(18) (19)

Operating revenue Other income Unrealised gain (loss) on financial asset at fair value Unrealised through other gain (loss) on Currency comprehensive available-for-sale translation income financialassets adjustments Total At January 1, 2018 - $ 41,569,491 $ 2,586,289) ($ 38,983,202 $ Adjustments under new standards 41,569,491 41,569,491) ( - - Revaluation of fair value - - Parent 375,409) ( - - 375,409) ( - Subsidaries 38,662,563) ( - - 38,662,563) ( Currency translation - Parent and subsidaries - - 8,278 8,278 At December 31, 2018 2,531,519 $ - $ 2,578,011) ($ 46,492) ($ Unrealised gain (loss) on Currency available-for-sale translation financialassets adjustments Total At January 1, 2017 14,111,229 $ 1,580,117 $ 15,691,346 $ Revaluation of fair value - Parent 91,275 - 91,275 - Subsidaries 27,366,987 - 27,366,987 Currency translation differences: - Parent and subsidaries - 4,166,406) ( 4,166,406) ( At December 31, 2017 41,569,491 $ 2,586,289) ($ 38,983,202 $ YearendedDecember31,2018 Revenue from contracts with customers 93,824,119 $ 2018 2017 Interest income from bank deposits 293,720 $ 181,804 $ Dividend income 106,424 21,543 Rental revenue 21,487 20,805 Others 87,062 239,115 508,693 $ 463,267 $ Years endedDecember31,

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(20) Other gains and losses

Other gains and losses
		Years ended	December31,
		2018		2017
Gains (losses) on financial assets (liabilities) at fair
value through profit or loss	$	769,013	($	747,827)
Net currency exchange (losses) gains	(	738,994)		304,086
Others		426	(	1,471)
	$	30,445	($	445,212)

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

(21) Expenses by nature

in Note 6(2). Expenses by nature
Employee benefit expense Depreciation (Note) Amortisation	Years endedDecember31,
	2018 988,242 $ 16,718 1,250 1,006,210 $	2017
		539,111 $ 15,200 1,250
		555,561 $

Note: Including investment property

(22) Employee benefit expense

Employee benefit expense Note: Including investment property
Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	Years endedDecember31,
	2018 899,886 $ 24,782 11,314 52,260 988,242 $	2017
		461,858 $ 17,262 11,374 48,617 539,111 $

• A. According to the Company’s Articles of Incorporation, if the Company accrues profit (referring to profit before tax prior to deducting the appropriation for employees’ compensation and directors’ remuneration), 4%~6% should be appropriated as employees’ compensation.

• B. For the years ended December 31, 2018 and 2017, employees’ compensation was accrued at $666,180 and $457,835, respectively. The aforementioned amounts were recognised in salary expenses and share of profit of associates and joint ventures accounted for using equity method. For the year ended December 31, 2018, the employees’ compensation was estimated and accrued based on 6% of profit of current year distributable as of the end of reporting period.

• C. Employees’ compensation for 2017 as resolved by the Board of Directors was in agreement with the amount recognised in the 2017 financial statements. In 2017, the employees’ compensation was distributed in the form of cash amounting to $457,835.

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

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(23) Income tax

A. Components of income tax expense:

Income tax A. Components of income tax expense:
		Years endedDecember31,
		2018			2017
Current tax:
Current tax on profits for the year	$	1,192,235	$		1,026,341
Prior year income tax underestimation		122,525			9,666
Total current tax		1,314,760			1,036,007
Deferred tax:
Impact of change in tax rate		94,573			-
Origination and reversal of temporary
differences	(	74,396)	(		13,351)
Income tax expense	$	1,334,937	$		1,022,656
B. Reconciliation between income tax expense and accounting		profit:
		Years ended	December31,
		2018			2017
Tax calculated based on profit before tax and
statutory tax rate (Note)	$	2,096,319		$	1,867,967
Tax effects of unrecognised deferred tax assets	(	1,365,165)	(		1,282,149)
Impact of change in tax rate		94,573			-
Additional 10% tax on undistributed earnings		386,685			427,172
Prior year income tax underestimation		122,525			9,666
Income tax expenses		1,334,937			1,022,656
Origination and reversal of temporary differences	(	20,177)			13,351
Prior year income tax overestimation	(	2,525)	(		9,666)
Prepaid income tax	(	322,880)	(		185,972)
Current income tax liabilities	$	989,355		$	840,369

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

2018

Recognised in profit January1 or loss Temporary differences: Deferred tax assets: Reserve for inventory obsolescence 2,674 $ 472 $ Permanent loss on market value decline of long-term equity investments 13,789 2,433 Unused compensated absences for employees 2,747 105 Unrealised loss on financial instruments 7,815 7,815) ( Others 3,269 33,910 30,294 $ 29,105 $ Deferred tax liabilities: Foreign investment income using equity method 498,863) ($ 6,278) ($ Unrealised valuation gain on financial instruments - 105,530) ( Others 62,526) ( 62,526 561,389) ($ 49,282) ($

Recognised in other comprehensive income December31 - $ 3,146 $ - 16,222 - 2,852 - - 869 38,048 869 $ 60,268 $ - $ 505,141) ($ - 105,530) ( - - - $ 610,671) ($

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Recognised Recognised in other in profit comprehensive January1 or loss income December31 Temporary differences: Deferred tax assets: Reserve for inventory obsolescence 2,674 $ - $ - $ 2,674 $ Permanent loss on market value decline of long-term equity investments 13,789 - - 13,789 Unused compensated absences for employees 2,818 71) ( - 2,747 Unrealised loss on financial instruments - 7,815 - 7,815 Others 8,144 6,892) ( 2,017 3,269 27,425 $ 852 $ 2,017 $ 30,294 $ Deferred tax liabilities: Foreign investment income using equity method 531,857) ($ 32,994 $ - $ 498,863) ($ Unrealised valuation gain on financial instruments 42,031) ( 42,031 - - Others - 62,526) ( - 62,526) ( 573,888) ($ 12,499 $ - $ 561,389) ($ 2017		2017	2017
			Recognised in other comprehensive income December31 - $ 2,674 $ - 13,789 - 2,747 - 7,815 2,017 3,269 2,017 $ 30,294 $ - $ 498,863) ($ - - - 62,526) ( - $ 561,389) ($	December31

• D. The Company did not recognise taxable temporary differences associated with investment in subsidiaries as deferred tax liabilities. As of December 31, 2018 and 2017, the temporary differences unrecognised as deferred tax liabilities were $87,657,473 and $116,426,043, 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 2016 have been assessed and approved by the Tax Authority.

• F. 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 was raised from 17% to 20% effective from January 1, 2018. The Company has assessed the impact of the change in income tax rate.

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(24) Earnings per share

	(24) Earnings per share	(24) Earnings per share	(24) Earnings per share	(24) Earnings per share	(24) Earnings per share
7.	RELATED PARTY TRANSACTIONS (1) Names of related parties and relationship Weighted average number of ordinary Earnings Amount shares outstanding per share aftertax (sharesinthousands) (indollars) Basic earnings per share Net income 9,146,659 $ 1,414,485 6.47 $ Diluted earnings per share Net income 9,146,659 $ Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 13,146 Net income plus assumed conversion of all dilutive potential ordinary shares 9,146,659 $ 1,427,631 6.41 $ Year ended December31,2018 Weighted average number of ordinary Earnings Amount shares outstanding per share aftertax (sharesinthousands) (indollars) Basic earnings per share Net income 9,965,386 $ 1,414,485 7.05 $ Diluted earnings per share Net income 9,965,386 $ Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 6,807 Net income plus assumed conversion of all dilutive potential ordinary shares 9,965,386 $ 1,421,292 7.01 $ Year ended December31,2017 Names of related parties Relationship withthe Company Hon Hai Precision Industry Co., Ltd. and Subsidiaries Entity with significant influence to (Hon Hai and Subsidiaries) the Company Hongfujin Precision Electronics (Yantai) Co., Ltd. 〞 Pan-International Industrial Corporation Other related party Innolux Corporation 〞 Sharp-Roxy Sales (Singapore) Pte., Ltd. 〞 CyberTAN Technology, Inc. 〞
			Amount aftertax 9,965,386 $ 9,965,386 $ - 9,965,386 $
	(1)
		Hon Hai Precision Industry Co., Ltd. and Subsidiaries (Hon Hai and Subsidiaries) Hongfujin Precision Electronics (Yantai) Co., Ltd. Pan-International Industrial Corporation Innolux Corporation Sharp-Roxy Sales (Singapore) Pte., Ltd. CyberTAN Technology, Inc.			Entity with significant influence to the Company 〞 Other related party 〞 〞 〞

For the more information about the Company and other subsidiaries, please refer to Note 7.

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(2) Significant related party transactions

A. Sales

nificant related party transactions Sales
Sales of goods and services: Entities with significant influence to the Company -Hon Hai and Subsidiaries Subsidiaries Other related parties	Years endedDecember31,
	2018 2,675,632 $ 177,078 24,848 2,877,558 $	2017
		1,673,392 $ 153,955 5,208
		1,832,555 $

Except for circumstances in which there are no similar transactions for reference and the prices and credit periods are negotiated by both parties, the aforementioned related party is offered prices very close to those offered to other customers and given a payment period of 30 to 90 days. For transactions involving the sale of raw materials to the aforementioned related party and subsequent repurchase of goods made from the same raw materials from the same party, the initial sale of raw materials is eliminated due to economic substance.

• B. Management service revenue

B. Management service revenue
C. Purchases Management service revenue: Subsidiaries Purchases of goods and services: Entities with significant influence to the Company -Hon Hai and Subsidiaries Other related parties Subsidiaries		Years endedDecember31,
			2017
			149,702 $

Except for circumstances in which there are no similar transactions for reference and the prices and payment terms are negotiated by both parties, the Company makes purchases from the aforementioned related party at the prevailing market price, with payment periods of 30 to 90 days.

• D. Receivables from related parties

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December 31, 2018 December 31, 2017

Accounts receivable: Entities with significant influence to the Company -Hon Hai and Subsidiaries Subsidiaries Other related parties Less: Allowance for uncollectible accounts (	502,096 $ 469,451 2,955 974,502 154) 974,348 $	1,266,282 $ 68,337 2,172
		1,336,791 -
		1,336,791 $

The receivables from related parties arise mainly from sales 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.

• E. Payables to related parties

Payables to related parties
D Accounts payable: Entities with significant influence to the Company -Hon Hai and Subsidiaries Subsidiaries Other related parties	ecember31,2018 D 14,946,070 $ 3,984,399 416,870 19,347,339	ecember31,2017
		23,245,703 $ 1,198,116 462,564
		24,906,383

The payables to related parties arise mainly from purchase transactions and are made at arm’slength, non-interest bearing and payable within 30~90 days.

• F. Raw materials purchased on behalf of others

	length, non-interest bearing and payable within 30~90 days. F. Raw materials purchased on behalf of others	days.	days.
(3)	Key management compensation 2018 2017 Raw materials purchased on behalf of others Entities with significant influence to the Company 26,887,244 $ 27,973,506 $ December31,2018 December31,2017 Receivable for raw materials purchased on behalf of others Entities with significant influence to the Company 358,273 $ 901,649 $ Years endedDecember31, 2018 2017 Salaries and other short-term employee benefits 51,363 $ 22,872 $ Post-employment benefits 495 514 Share-based payments 24,818 23,985 76,676 $ 47,371 $ Years ended December31,	Years endedDecember31,
			2017
			27,973,506 $ December31,2017
		2018 51,363 $ 495 24,818 76,676 $	2017 22,872 $ 514 23,985 47,371 $

8. PLEDGED ASSETS

None.

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

Operating lease commitments:

The future aggregate minimum lease payments for operating lease commitments of leasing dormitory are as follows:

are as follows:
Not later than one year Later than one year but not later than five years	December31,2018 753 $ 2,256 3,009 $	December31,2017
		3,497 $ 7,555 11,052 $

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’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 Company may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt. The Company 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 noncurrent 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 2018, the Company’s strategy, which was unchanged from 2017, was to maintain the gearing ratio below 70%.

(2) Financial instruments

• A. Financial instruments by category

o below 70%. ancial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets at fair value through comprehensive income Available-for-sale financial assets Financial assets at amortised cost Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities at amortised cost	December31,2018 567,640 $ 1,415,846 - 25,712,708 27,696,194 $ 39,992 $ 36,462,274 36,502,266 $	December31,2017
		1,446 $ - 1,791,255 34,543,487 36,336,188 $ 47,417 $ 50,332,045 50,379,462 $

Note: Financial assets at amortised cost included cash, accounts receivable, accounts receivable due from related parties and other receivables; financial liabilities at amortised cost included short-term borrowings, accounts payable, accounts payable to related parties and other payables.

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B. Risk management policies

(a) Risk categories

The Company 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 Company’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 Company’s financial position and financial performance.

  - iv. For the information on the derivative financial instruments that the Company enters into, please refer to Note 6(2).

• (c) Management system:

  • i. Risk management is executed by the Company’s finance department by following policies approved by the Board. Through cooperation with the Company'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 Company 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 Company 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.

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• (iii) Except for the above transactions (operating activities) recognised in the income statement, assets and liabilities recognised 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 Company has set up policies requiring the Company 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 parent company only financial statements, it is managed by the Company’s finance department.

• iii. Sources of risk:

U.S. dollars and NT dollars:

Foreign exchange risk arises primarily from gains or losses from translating U.S. dollardenominated assets, such as cash, cash equivalents, accounts receivable, other receivables and time deposits mature in excess of three months, and U.S. dollar-denominated liabilities, such as loans, accounts payable and other payables, into New Taiwan dollars.

• 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:

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December 31, 2018

		December31,2018	December31,2018
(Foreign currency: functional currency) Financial assets Monetary items USD：NTD Non-monetary items Foreign operations USD：NTD Financial liabilities Monetary items USD：NTD (Foreign currency: functional currency) Financial assets Monetary items USD：NTD Non-monetary items Foreign operations USD：NTD Financial liabilities Monetary items USD：NTD	Foreign currency amount (in thousands) 512,724 3,506,812 779,846	Exchange Book value rate (NTD) 30.72 15,750,881 $ 30.72 107,729,262 30.72 23,956,869 December31,2017		Degree of variation 1% 1%	Effect on profit or loss
					157,509 $ 239,569
	Foreign currency amount (in thousands) 1,329,814 4,694,429 1,421,975	Exchange rate 29.76 29.76 29.76	Book value (NTD) 39,575,265 $ 139,706,204 42,317,976	Degree of variation 1% 1%	Effect on profit or loss
					395,753 $ 423,180

v. Total exchange (loss) gain, including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2018 and 2017 amounted to ($738,994) and $304,086, respectively.

Price risk

• i. Nature

The Company primarily invests in domestic and foreign publicly traded and unlisted equity instruments, which are accounted for as financial assets at fair value through other comprehensive income and available-for-sale financial assets. The price of those equity

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instruments will be affected by the uncertainty of the future value of the investment.

ii. Extent

If the price of such equity instrument rises or falls by 1%, with all other factors held constant, the impact on other comprehensive income due to equity instruments measured at fair value through other comprehensive income and available-for-sale equity instruments are $14,158 and $17,913, respectively, for the years ended December 31, 2018 and 2017.

Cash flow and fair value interest rate risk

The Company’s interest rate risk arises from short-term loans. Short-term loans with floating rates expose the Company 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 $109,513 and $186,329 for the years ended December 31, 2018 and 2017, respectively.

(b) Credit risk

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

• i. According to the Company’s credit policy, the Company 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 Company 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.

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, deposits and short-term investments with banks and financial institutions, and other financial instruments. The counterparties are banks with good credit quality, financial institutions with investment grade credit ratings and government agencies, so there is no significant default concerns and credit risk.

• ii. If the contract payments were past due over 90 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iii. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

• (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganisation due to their financial difficulties;

• (ii) The disappearance of an active market for that financial asset because of financial difficulties;

• (iii) Default or delinquency in interest or principal repayments;

• (iv) Adverse changes in national or regional economic conditions that are expected to cause a default.

• iv. The ageing analysis of accounts receivable (including related parties) that were past due but not impaired is as follows:

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Not past due 0 to 90 days 91 to 180 days 181 to 270 days 271 to 360 days Over 361 days	December31,2018 11,332,370 $ 2,380,346 - - 127 - 13,712,843 $	December31,2017
		15,277,115 $ 139,839 109 - - 340 15,417,403 $

The above ageing analysis was based on past due date.

• v. The Company assesses the expected credit losses of accounts receivable (including those from related parties) as follows:

• (i) Accounts receivable are divided into segments according to the Company’s credit rating standards; expected credit losses for each segment are assessed based on the specific loss rate or provision matrix for the segment.

• (ii) Loss rates are calculated based on past and current information, taking into account forward-looking information provided by the Business Indicators Database of the National Development Council and the Basel Committee on Banking Supervision.

• (iii) As of December 31, 2018, the loss allowance for accounts receivable (including those from related parties), assessed using loss rate or provision matrix, is as follows:

December31,2018 Expected loss rate Total book value Allowance for uncollectible accounts	Group1 0.03% 12,914,823 $ 3,744 $	Group2 0.03% 438,719 $ 132 $	Group 3 0.07% 309,323 $ 216 $	Group4 0%~1% 49,978 $ - $	Total
					13,712,843 $
					4,092 $

• 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.

• vi. The ageing analysis of accounts receivable (including related parties) that were past due but not impaired is as follows:

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		YearendedDecember31,2018
At January 1_IAS 39	$	-
Adjustments under new standards		4,979
At January 1_IFRS 9		4,979
Gain on reversal of expected credit
impairment loss	(	887)
Effect of foreign exchange		-
At December 31	$	4,092

vii. Credit risk information for 2017 is provided in Note 12(4).

(c) Liquidity risk

• i. Cash flow forecasting is performed by each of the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’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 Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’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 Company’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 non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities.

As of December 31, 2018 and 2017, the Company’s non-derivative financial liabilities (including short-term borrowings, accounts payable and other payables) and derivative financial liabilities (including foreign exchange contracts, cross currency swap contracts and forward foreign exchange contracts) will expire within 1 year.

(3) Fair value estimation

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability takes place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’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 Company’s investment in derivative instruments is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability.

• B. Fair value information of investment property at cost is provided in Note 6(10).

• 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 is as follows:

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(a) The related information of the nature of the assets and liabilities is as follows:

December 31, 2018		Level 1		Level 2		Level3		Total
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Derivative instruments	$	-	$	567,640	$	-	$	567,640
Financial assets at fair value
through other comprehensive
income
Equity instruments	$	1,415,846	$	-	$	-	$	1,415,846
Liabilities
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Derivative instruments	$	-	$	39,992	$	-	$	39,992
December31,2017		Level 1		Level 2		Level3		Total
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Derivative instruments	$	-	$	1,446	$	-	$	1,446
Available-for-sale financial
assets
Equity instruments	$	1,791,255	$	-	$	-	$	1,791,255
Liabilities
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Derivative instruments	$	-	$	47,417	$	-	$	47,417

• (b) The methods and assumptions the Company used to measure fair value are as follows:

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

Listed shares

Market quoted price Closing price

• ii. When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange contracts and options, 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.

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• iii. 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.

• iv. The Company 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 Company’s credit quality.

• D. For the years ended December 31, 2018 and 2017, there was no transfer into or out from Level 1 to Level 2.

• E. For the years ended December 31, 2018 and 2017, there was no transfer into or out from Level 3.

(4) Effects on initial application of IFRS 9

• A. Summary of significant accounting policies adopted for the year ended December 31, 2017:

• (a) Financial assets at fair value through profit or loss

  • i. Financial assets held for trading 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 categorised 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:

    • (i) Hybrid (combined) contracts; or

    • (ii) They eliminate or significantly reduce a measurement or recognition inconsistency; or

    • (iii) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy.

  • ii. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

  • iii. Financial liabilities at fair value through profit or loss are initially recognised 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 recognised in profit or loss.

• (b) Available-for-sale financial assets

  • i. Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.

  • ii. On a regular way purchase or sale basis, available-for-sale financial assets are recognised and derecognised using trade date accounting.

  • iii. Available-for-sale financial assets are initially recognised at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognised in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets measured at cost’.

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(c) Loans and receivables

• i. Accounts receivable

Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. They are recognised initially at fair value and subsequently measured at amortised 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.

• ii. Investments in debt instruments without active markets

• (i) Investments in debt instruments without active markets 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:

  • a. Not designated on initial recognition as at fair value through profit or loss;

  • b. Not designated on initial recognition as available-for-sale;

  • c. Not for which the holder may not recover substantially all of its initial investment, other than because of credit deterioration.

• (ii) On a regular way purchase or sale basis, investments in debt instrument without active market are recognised and derecognised using trade date accounting.

• (iii) They 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.

(d) Impairment of financial assets

• i. The Company 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.

• ii. The criteria that the Company uses to determine whether there is objective evidence of an impairment loss is as follows:

• (i) Significant financial difficulty of the issuer or debtor;

• (ii) A breach of contract, such as a default or delinquency in interest or principal payments;

• (iii) The Company, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider;

• (iv) It becomes probable that the borrower will enter bankruptcy or other financial reorganisation;

• (v) The disappearance of an active market for that financial asset because of financial difficulties;

• (vi) Observable data indicating that there is a measurable decrease in the estimated future

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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;

• (vii) 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;

• (viii)A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.

• iii. When the Company 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:

• (i) 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.

• (ii) 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’. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognised, such impairment loss is reversed through profit or loss. Impairment loss of an investment in an equity instrument recognised in profit or loss shall not be reversed through profit or loss. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

• B. The reconciliations of carrying amount of financial assets transferred from December 31, 2017, IAS 39, to January 1, IFRS 9, were as follows:

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Available-for- sale-equity 1,791,255 $ -	Other current assets - $ 6,647,700	Total
		1,791,255 $ 6,647,700

• (a) Under IAS 39, because the equity instruments, which were classified as available-for-sale financial assets amounting to $1,791,255, were not held for the purpose of trading, they were reclassified as "financial assets at fair value through other comprehensive income (equity instruments)" amounting to $1,791,255 on initial application of IFRS 9.

• (c) Under IAS 39, capital guarantee financial products and time deposits with maturity in excess of three months which were classified as “other current assets” amounting to $6,647,700, were reclassified as “financial assets at amortised cost” amounting to $6,647,700 in accordance with IFRS 9.

• (d) Information relating to credit risk of allowance for impairment from December 31, 2017, as these are impaired under IAS 39, to January 1, 2018, as these are expected to be impaired under IFRS 9, is provided in Note 12(2) C (b).

• C. The significant accounts as of December 31, 2017 are as follows:

• (a) Financial assets at fair value through profit or loss

e significant accounts as of December 31, 2017 are as follows: Financial assets at fair value through profit or loss
Assets Current items: Cross currency swap contracts Liabilities Current items: Foreign exchange contracts Cross currency swap contracts	December31,2017
	1,446 $ December31,2017
	39,168 $ 8,249 47,417 $

• i. Due to the financial assets and liabilities recognised above for the year ended December 31, 2017, the Group recognised net loss of $747,827 (including unrealised loss on valuation of $293,209).

• ii. 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.

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

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		December31,2017	December31,2017
	Contract	amount
Derivative Financial Assets	(Nominal Principal inthousands)		Contract period
Current items:
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
Cross currency swap contracts	TWD (sell)	1,204,000	2017/09~2018/03
	USD (buy)	40,000

• (i) 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.

• (ii) 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.

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

• (b) Available-for-sale financial assets

Items Non-current items: Listed and emerging stocks Adjustment of available-for-sale financial assets	December31,2017 1,393,043 $ 398,212 1,791,255 $

  - i. The Company recognised net loss or gain in other comprehensive income for fair value change for the year ended December 31, 2017. Please refer to Note 6(16) for details.

  - ii. The Company has no available-for-sale financial assets pledged to others.

• D. Credit risk information for the year ended December 31, 2017 is as follows:

• (a) Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments.

  • i. According to the Company’s credit policy, each local entity in the Company 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 Company 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

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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.

• (b) As of December 31, 2017, no credit limits were exceeded during the reporting period, and management does not expect any significant losses from non-performance by these counterparties.

• (c) 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 Company’s Credit Quality Control Policy:

Quality Control Policy:
Group 1 Group 2 Group 3 Group 4	December31,2017
	14,956,363 $ 198,623 74,573 99,955 15,329,514 $

• 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.

• (d) The ageing analysis of accounts receivable (including related parties) that were past due but not impaired is as follows:

not impaired is as follows:
Up to 30 days 31 to 90 days 91 to 180 days 181 to 360 days	December31,2017
	77,973 $ 61,866 109 340 140,288 $

(5) Effects on initial application of IFRS 15

• A. The significant accounting policies applied on revenue recognition for the year ended December 31, 2017 are set out below.

The Company 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 Company’s activities. Revenue arising from the sales of goods is recognised when the Company 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

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the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.

• B. The revenue recognised by using above accounting policies for 2017 are as follows:

Year ended December 31, 2017

3C products (Including components and

related electronic products)

$                84,414,971

• C. The effects and description of current balance sheet and comprehensive income statement if the Group continues adopting above accounting policies for the year ended December 31, 2018 are as follows:

as follows:
		December31,2018
		Balance by	Effects from
	Balance by using	using previous	changes in
Balance sheetitems	IFRS15	accounting policies	accounting policy
Accounts receivable, net	12,734,403 $	12,682,004 $	52,399 $
Other current liabilities	84,419) (	32,020) (	52,399) (
Under IFRS 15, liabilities in relation to expected volume discounts and refunds to customers are
recognised as refund liabilities (shown as other current liabilities), but were previously presented
as accounts receivable - allowance for sales returns		and discounts in the balance sheet.

13. SEGMENT INFORMATION

(1) Significant transactions information

• 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 $300 million or 20% of paid-in capital or more: Please refer to table 3.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• H. Receivables from related parties reaching $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(19) 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.

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(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

• None.

~62~

Foxconn Technology Co., Ltd. and Subsidiaries

Table 1

Loans to others Year ended December 31, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

No.	Creditor	Borrower	General ledger account	Is a relatedparty	Maximum outstanding balance during the year ended December 31, 2018	Balance at December 31, 2018	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Col	lateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted Note
													Item	Value
1 2 3	Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Fu Rui Precision Components (Kunshan) Co., Ltd. Q-Run Holdings Ltd.	Qingdao Hiyn Materials Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. YanTai Fuzhun Precision Electronics Co., Ltd.	Other receivables Other receivables Other receivables	Y Y Y	692,714 $ 462,970 619,700	661,353 $ - 615,720	661,353 $ - 615,720	4.35000% - 2.66513%	Short-term financing Short-term financing Short-term financing	$ - - -	Business operation Business operation Business operation	$ - - -	None None None	$ - - -	3,969,488 $ 29,853,499 29,853,499	15,877,951 $ Note 1 59,706,999 Note 2 59,706,999 Note 2

Note 1: For short-term borrowings, limit on loans granted for a single party is 10% of the lending company’s net assets and ceiling on total loans is 40% of the Company’s net assets based on the latest audited or reviewed financial statements. Note 2: Limit on loans granted for a single foreign company whose voting rights are 100% owned directly and indirectly by the Company is 30% of the Company’s net assets and 60% for ceiling on total loans.

Table 1, Page 1

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) Year ended December 31, 2018

Foxconn Technology Co., Ltd. and Subsidiaries

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of Decem	ber31,2018		Note
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Foxconn Technology Co., Ltd. 〞 〞 〞 Huazhun Investment Co., Ltd. 〞 Q-Run Holdings Ltd. Foxconn Technology Pte. Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd 〞 〞 〞 〞 〞 〞 Fuzhun Precision (Hebi) Electronics Co., Ltd. 〞 Fu Rui Precision Components (Kunshan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd 〞 Fuzhun Precision (Shenzhen) Industry Co., Ltd.	Common stock of CyberTAN Technology Inc. Common stock of Pan-International Industrial Corp. Common stock of Innolux Corporation Common stock of Advanced Optoelectronic Technology, Inc. Common stock of Innolux Corporation Common stock of Advanced Optoelectronic Technology, Inc. Common stock of China Harmony Auto Holding Ltd. Common stock of Sharp Corporation Shanghai Pudong Development Bank for Liduoduo（ 18JG2061）RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（ 18JG2060）RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（ 18JG2704）RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（ 18JG2675）RMB public structured deposits Yun Tong Fortune Increasing Profits 32 Days Financial Products Yun Tong Fortune Increasing Profits 33 Days Financial Products Yun Tong Fortune Increasing Profits 34 Days Financial Products Liduoduo（18JG2528）RMB public structured deposits Liduoduo（18JG2723）RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（ 18JG2621）RMB public structured deposits Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust	None 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	Financial assets at fair value through other comprehensive income - non-current 〞 〞 〞 〞 〞 〞 〞 Financial assets at amortised cost - current 〞 〞 〞 〞 〞 〞 〞 〞 〞 Financial assets at amortised cost - non-current 〞 〞	10,035,348 1,079,986 127,556,349 1,000 121,036,800 7,672,000 38,452,340 64,640,000 - - - - - - - - - - - - -	154,544 $ 21,438 1,239,847 17 1,176,478 128,890 450,618 19,913,406 2,236,400 1,341,840 1,341,840 2,236,400 2,236,400 2,236,400 2,236,400 581,464 1,568,699 1,120,768 1,565,480 2,236,400 1,565,519	3.05 0.21 1.28 - 1.22 5.13 2.51 12.14 - - - - - - - - - - - -	154,544 $ 21,438 1,239,847 17 1,176,478 128,890 450,618 19,913,406 - 2,236,400 1,341,840 1,341,840 2,236,400 2,236,400 2,236,400 2,236,400 581,464 1,568,699 1,120,768 1,565,480 2,236,400 1,565,519

Table 2, Page 1

Foxconn Technology Co., Ltd. and Subsidiaries

Aggregate purchases or sale of the same securities reaching $300 million or 20% of paid-in capital or more

Year ended December 31, 2018

Table 3

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor	Marketable securities	General ledger account	Counterparty	Relationship with the investor	Balance as at January1,2018	Balance as at January1,2018	Addition	Disposal		Balance as at	December31,2018
					Number of shares	Amount	Amount Number of shares	Selling price Book value Number of shares	Gain (loss) on disposal	Number of shares	Amount
Q-RUN HOLDING LTD. Q-RUN HOLDING LTD. Q-RUN HOLDING LTD. Q-RUN HOLDING LTD. Q-RUN HOLDING LTD. FOXCONN TECHNOLOGY PTE. LTD. HIGH TEMPO INTERNATIONAL LTD. WORLD TRADE TRADING LTD. Fuzhun Precision (Shenzhen) Industry Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Fuzhun Precision (Shenzhen) Industry Co., Ltd. Fuzhun Precision (Shenzhen) Industry Co., Ltd. Fuzhun Precision (Shenzhen) Industry Co., Ltd. Fuzhun Precision (Shenzhen) Industry Co., Ltd.	Q-RUN FAR EAST CORP. WORLD TRADE TRADING LTD. FE HOLDINGS USA, INC IDG Energy Investment Limited IDG Energy Investment Limited IDG Energy Investment Limited IDG Energy Investment Limited IDG Energy Investment Limited Champ Tech Optical (Foshan) Corporation Champ Tech Optical (Foshan) Corporation Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle)(WG17151S) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle)(WG18028S) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG18054S) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG18067S) financial products	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 2 Note 2 Note 2 Note 2	Q-RUN HOLDING LTD. WORLD TRADE TRADING LTD. FE HOLDINGS USA, INC IDG Energy Investment Limited 〞 〞 〞 〞 Function Well Limited Function Well Limited Bank of Shanghai Bank of Shanghai Bank of Shanghai Bank of Shanghai	Subsidiary 〞 None 〞 〞 〞 〞 〞 Subsidiary Subsidiary None 〞 〞 〞	1,013,973 - - - - - - - - - - - - -	USD 1,013,973 thousand - - - - - - - - - RMB 450,000 thousand - - -	38,100 USD 38,100 thousand 38,100 USD 38,100 thousand 80,400 USD 80,400 thousand 297,000 HKD 297,000 thousand 297,000 HKD 297,000 thousand 297,000 HKD 297,000 thousand 297,000 HKD 297,000 thousand 297,000 HKD 297,000 thousand 225,291 RMB 642,993 thousand 121,310 RMB 346,227 thousand - - - RMB 280,000 thousand - RMB 490,000 thousand - RMB 500,000 thousand	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - RMB 454,242 thousand RMB 450,000 thousand - RMB 282,126 thousand RMB 280,000 thousand - RMB 493,679 thousand RMB 490,000 thousand - RMB 201,461 thousand RMB 500,000 thousand	- - - - - - - - - - RMB 4,242 thousand RMB 2,126 thousand RMB 3,679 thousand RMB 1,726 thousand	1,052,073 38,100 80,400 297,000 297,000 297,000 297,000 297,000 225,291 121,310 - - - -	USD1,052,073 thousand USD 38,100 thousand USD 80,400 thousand HKD 297,000 thousand HKD 297,000 thousand HKD 297,000 thousand HKD 297,000 thousand HKD 297,000 thousand RMB 636,852 thousand RMB 342,920 thousand - - - -

Table 3, Page 1

Investor	Marketable securities	General ledger account	Counterparty	Relationship with the investor	Balance as at January1,2018	Balance as at January1,2018	Addition	Disposal		Balance as at	December31,2018
					Number of shares	Amount	Amount Number of shares	Selling price Book value Number of shares	Gain (loss) on disposal	Number of shares	Amount
Fuzhun Precision (Shenzhen) Industry Co., Ltd. Fuzhun Precision (Shenzhen) Industry Co., Ltd. Fuhuigang Industrial (Shenzhen) Co., Ltd. Fuhuigang Industrial (Shenzhen) Co., Ltd. Fuhuigang Industrial (Shenzhen) Co., Ltd. Fuhuigang Industrial (Shenzhen) Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd.	Agricultural Bank of China "Ben Li Feng" Targeted (BFDG180170) RMB Wealth Managements Products Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust RMB Continuous Serial Deposits Financial Products RMB Continuous Serial Deposits Financial Products RMB Continuous Serial Deposits Financial Products RMB Continuous Serial Deposits Financial Products Liduoduo Huizhi 28 Days Financial Products Liduoduo RMB public structured deposits in 2018 JG470 period Liduoduo（18JG2184）RMB public structured deposits Liduoduo（18JG2466）RMB public structured deposits Yun Tong Fortune Increasing Profits 32 Days Financial Products Yun Tong Fortune Increasing Profits 33 Days Financial Products Yun Tong Fortune Increasing Profits 32 Days Financial Products Yun Tong Fortune Increasing Profits 33 Days Financial Products Yun Tong Fortune Increasing Profits 33 Days Financial Products Liduoduo（18JG2528）RMB public structured deposits	Note 2 Note 3 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	Agricultural Bank of China Guangdong Yuecai Intrust & Investment Company Bank of China Bank of China Bank of China Bank of China Shanghai Pudong Development Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank Bank of Communications Bank of Communications Bank of Communications Bank of Communications Bank of Communications Shanghai Pudong Development Bank	〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	- - - - - - - - - - - - - - - -	- RMB 500,000 thousand RMB 65,000 thousand - - - - - - - - - - - - -	- RMB 200,000 thousand - - - - - RMB 64,000 thousand - RMB 64,000 thousand - RMB 64,000 thousand - RMB 60,000 thousand - RMB 250,000 thousand - RMB 250,000 thousand - RMB 120,000 thousand - RMB 300,000 thousand - RMB 100,000 thousand - RMB 50,000 thousand - RMB 100,000 thousand - RMB 300,000 thousand - RMB 130,000 thousand	- RMB 501,727 thousand RMB 200,000 thousand - RMB 164,780 thousand RMB 150,000 thousand - RMB 65,415 thousand RMB 65,000 thousand - RMB 64,477 thousand RMB 64,000 thousand - RMB 64,423 thousand RMB 64,000 thousand - RMB 64,423 thousand RMB 64,000 thousand - RMB 60,189 thousand RMB 60,000 thousand - RMB 250,947 thousand RMB 250,000 thousand - RMB 250,833 thousand RMB 250,000 thousand - RMB 120,400 thousand RMB 120,000 thousand - RMB 301,236 thousand RMB 300,000 thousand - RMB 100,411 thousand RMB 100,000 thousand - RMB 50,202 thousand RMB 50,000 thousand - RMB 100,398 thousand RMB 100,000 thousand - RMB 301,180 thousand RMB 300,000 thousand - - -	RMB 1,461 thousand RMB 14,780 thousand RMB 415 thousand RMB 477 thousand RMB 423 thousand RMB 423 thousand RMB 189 thousand RMB 947 thousand RMB 833 thousand RMB 400 thousand RMB 1,236 thousand RMB 411 thousand RMB 202 thousand RMB 398 thousand RMB 1,180 thousand -	- - - - - - - - - - - - - - - -	- RMB 350,000 thousand - - - - - - - - - - - - - RMB 130,431 thousand

Table 3, Page 2

Investor	Marketable securities	General ledger account	Counterparty	Relationship with the investor	Balance as at January1,2018	Balance as at January1,2018	Addition	Disposal		Balance as at	December31,2018
					Number of shares	Amount	Amount Number of shares	Selling price Book value Number of shares	Gain (loss) on disposal	Number of shares	Amount
Fuzhun Precision (Hebi) Electronics Co., Ltd. Fu Rui Precision Components (Kunshan) Co., Ltd Fu Rui Precision Components (Kunshan) Co., Ltd Fu Rui Precision Components (Kunshan) Co., Ltd Fu Rui Precision Components (Kunshan) Co., Ltd Fu Rui Precision Components (Kunshan) Co., Ltd Fu Rui Precision Components (Kunshan) Co., Ltd Fu Rui Precision Components (Kunshan) Co., Ltd Fu Rui Precision Components (Kunshan) Co., Ltd Fu Rui Precision Components (Kunshan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd	Liduoduo（18JG2723）RMB public structured deposits Yun Tong Fortune Increasing Profits 40 Days Financial Products Yun Tong Fortune Increasing Profits 67 Days Financial Products Yun Tong Fortune Increasing Profits 40 Days Financial Products Yun Tong Fortune Increasing Profits 48 Days Financial Products Yun Tong Fortune Increasing Profits 90 Days Financial Products Yun Tong Fortune Increasing Profits 90 Days Financial Products Yun Tong Fortune Increasing Profits 90 Days Financial Products Shanghai Pudong Development Bank for Liduoduo（18JG2161） RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（18JG2621） RMB public structured deposits Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG17144SA) financial products Yun Tong Fortune Increasing Profits 35 Days Financial Products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG17144SB) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG17145SA) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG17145SB) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG18020SA) financial products	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	Shanghai Pudong Development Bank Bank of Communications Bank of Communications Bank of Communications Bank of Communications Bank of Communications Bank of Communications Bank of Communications Shanghai Pudong Development Bank Shanghai Pudong Development Bank Bank of Shanghai Bank of Communications Bank of Shanghai Bank of Shanghai Bank of Shanghai Bank of Shanghai	〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	- - - - - - - - - - - - - - - -	- RMB 110,000 thousand RMB 130,000 thousand - - - - - - - RMB 500,000 thousand RMB 200,000 thousand RMB 400,000 thousand RMB 500,000 thousand RMB 400,000 thousand -	- RMB 350,000 thousand - - - - - RMB 130,000 thousand - RMB 35,000 thousand - RMB 250,000 thousand - RMB 100,000 thousand - RMB 250,000 thousand - RMB 250,000 thousand - RMB 250,000 thousand - - - - - - - - - - - RMB 500,000 thousand	- - - - RMB 110,579 thousand RMB 110,000 thousand - RMB 131,145 thousand RMB 130,000 thousand - RMB 130,670 thousand RMB 130,000 thousand - RMB 35,221 thousand RMB 35,000 thousand - RMB 253,021 thousand RMB 250,000 thousand - RMB 101,171 thousand RMB 100,000 thousand - RMB 252,651 thousand RMB 250,000 thousand - RMB 251,172 thousand RMB 250,000 thousand - - - - RMB 502,047 thousand RMB 500,000 thousand - RMB 200,786 thousand RMB 200,000 thousand - RMB 401,637 thousand RMB 400,000 thousand - RMB 501,990 thousand RMB 500,000 thousand - RMB 401,592 thousand RMB 400,000 thousand - RMB 501,938 thousand RMB 500,000 thousand	- RMB 579 thousand RMB 1,145 thousand RMB 670 thousand RMB 221 thousand RMB 3,021 thousand RMB 1,171 thousand RMB 2,651 thousand RMB 1,172 thousand - RMB 2,047 thousand RMB 786 thousand RMB 1,637 thousand RMB 1,990 thousand RMB 1,592 thousand RMB 1,938 thousand	- - - - - - - - - - - - - - - -	RMB 350,196 thousand - - - - - - - - RMB 250,604 thousand - - - - - -

Table 3, Page 3

Investor	Marketable securities	General ledger account	Counterparty	Relationship with the investor	Balance as at January1,2018	Balance as at January1,2018	Addition	Disposal		Balance as at	December31,2018
					Number of shares	Amount	Amount Number of shares	Selling price Book value Number of shares	Gain (loss) on disposal	Number of shares	Amount
Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd	Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) WG18032SA) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG18049SA) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG18049SB) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle)(WG18061SB) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle)(WG18061SA) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG18068S) financial products Yun Tong Fortune Increasing Profits 35 Days Financial Products Yun Tong Fortune Increasing Profits 36 Days Financial Products Yun Tong Fortune Increasing Profits 40 Days Financial Products Yun Tong Fortune Increasing Profits 46 Days Financial Products Yun Tong Fortune Increasing Profits 49 Days Financial Products Yun Tong Fortune Increasing Profits 54 Days Financial Products Yun Tong Fortune Increasing Profits 62 Days Financial Products Yun Tong Fortune Increasing Profits 67 Days Financial Products Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 3	Bank of Shanghai Bank of Shanghai Bank of Shanghai Bank of Shanghai Bank of Shanghai Bank of Shanghai Bank of Communications Bank of Communications Bank of Communications Bank of Communications Bank of Communications Bank of Communications Bank of Communications Bank of Communications Guangdong Yuecai Intrust & Investment Company	〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	- - - - - - - - - - - - - - -	- - - - - - - - - - - - - - RMB 500,000 thousand	- RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 300,000 thousand - RMB 500,000 thousand - RMB 300,000 thousand - RMB 400,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand	- RMB 502,182 thousand RMB 500,000 thousand - RMB 502,356 thousand RMB 500,000 thousand - RMB 502,356 thousand RMB 500,000 thousand - RMB 502,030 thousand RMB 500,000 thousand - RMB 502,030 thousand RMB 500,000 thousand - RMB 302,071 thousand RMB 300,000 thousand - RMB 502,182 thousand RMB 500,000 thousand - RMB 301,287 thousand RMB 300,000 thousand - RMB 401,907 thousand RMB 400,000 thousand - RMB 502,458 thousand RMB 500,000 thousand - RMB 502,618 thousand RMB 500,000 thousand - RMB 502,885 thousand RMB 500,000 thousand - RMB 503,567 thousand RMB 500,000 thousand - RMB 503,304 thousand RMB 500,000 thousand - RMB 173,356 thousand RMB 150,000 thousand	RMB 2,182 thousand RMB 2,356 thousand RMB 2,356 thousand RMB 2,030 thousand RMB 2,030 thousand RMB 2,071 thousand RMB 2,182 thousand RMB 1,287 thousand RMB 1,907 thousand RMB 2,458 thousand RMB 2,618 thousand RMB 2,885 thousand RMB 3,567 thousand RMB 3,304 thousand RMB23,356 thousand	- - - - - - - - - - - - - - -	- - - - - - - - - - - - - - RMB 850,000 thousand

Table 3, Page 4

Investor	Marketable securities	General ledger account	Counterparty	Relationship with the investor	Balance as at January1,2018	Balance as at January1,2018	Addition	Disposal		Balance as at	December31,2018
					Number of shares	Amount	Amount Number of shares	Selling price Book value Number of shares	Gain (loss) on disposal	Number of shares	Amount
Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd	Industrial Bank "Golden Snowball-selected" 2018 9th Guaranteed return Closed-end Industrial Bank "Golden Snowball-selected" 2018 9th Guaranteed return Closed-end Wealth Bus No. 3 Wealth Bus No. 2 Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG18074S) financial products Bank of Shanghai for "Winer" currency and bonds series (bit by bit make a mickle) (WG18077S) financial products Industrial Bank "Golden Snowball- selected" 2018 8th Guaranteed return Closed-end Industrial Bank "Golden Snowball- selected" 2018 8th Guaranteed return Closed-end Shanghai Pudong Development Bank for Liduoduo（18JG2081） RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（18JG2016） RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（18JG2017） RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（18JG2059） RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（18JG2424） RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（18JG2435） RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（18JG2425） RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo（18JG2061） RMB public structured deposits	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	Industrial Bank Industrial Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank Bank of Shanghai Bank of Shanghai Industrial Bank Industrial Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank	〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	- - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - -	- RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 300,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 400,000 thousand - RMB 500,000 thousand - RMB 300,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand	- RMB 503,593 thousand RMB 500,000 thousand - RMB 503,593 thousand RMB 500,000 thousand - RMB 505,610 thousand RMB 500,000 thousand - RMB 503,411 thousand RMB 500,000 thousand RMB 503,279 thousand RMB 500,000 thousand RMB 301,812 thousand RMB 300,000 thousand RMB 505,293 thousand RMB 500,000 thousand RMB 505,293 thousand RMB 500,000 thousand RMB 501,658 thousand RMB 500,000 thousand RMB 401,497 thousand RMB 400,000 thousand RMB 503,470 thousand RMB 500,000 thousand RMB 301,975 thousand RMB 300,000 thousand RMB 501,794 thousand RMB 500,000 thousand RMB 501,742 thousand RMB 500,000 thousand RMB 501,874 thousand RMB 500,000 thousand - -	RMB 3,593 thousand RMB 3,593 thousand RMB 5,610 thousand RMB 3,411 thousand RMB 3,279 thousand RMB 1,812 thousand RMB 5,293 thousand RMB 5,293 thousand RMB 1,658 thousand RMB 1,497 thousand RMB 3,470 thousand RMB 1,975 thousand RMB 1,794 thousand RMB 1,742 thousand RMB 1,847 thousand -	- - - -	- - - - - - - - - - - - - - - RMB 504,315 thousand

Table 3, Page 5

Investor	Marketable securities	General ledger account	Counterparty	Relationship with the investor	Balance as at January1,2018	Balance as at January1,2018	Addition	Disposal		Balance as at	December31,2018
					Number of shares	Amount	Amount Number of shares	Selling price Book value Number of shares	Gain (loss) on disposal	Number of shares	Amount
Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd Fu Yu Precision Components (Kunshan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Nanning Funing Precision Electronics Co., Ltd. Nanning Funing Precision Electronics Co., Ltd. Champ Tech Optical (Foshan) Corporation Champ Tech Optical (Foshan) Corporation Champ Tech Optical (Foshan) Corporation Champ Tech Optical (Foshan) Corporation Champ Tech Optical (Foshan) Corporation	Shanghai Pudong Development Bank for Liduoduo (18JG2060) RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo (18JG2704) RMB public structured deposits Shanghai Pudong Development Bank for Liduoduo (18JG2675) RMB public structured deposits Yun Tong Fortune Increasing Profits 32 Days Financial Products Yun Tong Fortune Increasing Profits 33 Days Financial Products Yun Tong Fortune Increasing Profits 34 Days Financial Products Yun Tong Fortune Increasing Profits 48 Days Financial Products Yun Tong Fortune Increasing Profits 90 Days Financial Products Wealth Bus No. 3 Agricultural Bank of China "Ben Li Feng" Targeted RMB Wealth Managements Products (BFDG180013) Agricultural Bank of China "Ben Li Feng" Targeted RMB Wealth Managements Products (BFDG170475) RMB Continuous Serial Deposits Financial Products Yun Tong Fortune Increasing Profits 34 Days Financial Products Yun Tong Fortune Increasing Profits 32 Days Financial Products Yun Tong Fortune Increasing Profits 32 Days Financial Products Yun Tong Fortune Increasing Profits 34 Days Financial Products	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	Shanghai Pudong Development Bank Shanghai Pudong Development Bank Shanghai Pudong Development Bank Bank of Communications Bank of Communications Bank of Communications Bank of Communications Bank of Communications Shanghai Pudong Development Bank Agricultural Bank of China Agricultural Bank of China Bank of China Bank of Communications Bank of Communications Bank of Communications Bank of Communications	〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	- - - - - - - - - - - - - - - -	- - - - - - - - - - RMB 250,000 thousand - - - - -	- RMB 300,000 thousand - RMB 300,000 thousand - RMB 300,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 60,000 thousand - RMB 300,000 thousand - RMB 200,000 thousand - RMB 200,000 thousand - - - RMB 100,000 thousand - RMB 100,000 thousand - RMB 100,000 thousand - RMB 100,000 thousand - RMB 80,000 thousand	- - - - - - - - - - - - RMB 60,379 thousand RMB 60,000 thousand RMB 303,513 thousand RMB 300,000 thousand RMB 202,219 thousand RMB 200,000 thousand RMB 201,325 thousand RMB 200,000 thousand RMB 251,812 thousand RMB 250,000 thousand RMB 100,335 thousand RMB 100,000 thousand - RMB 100,419 thousand RMB 100,000 thousand - RMB 100,395 thousand RMB 100,000 thousand - RMB 100,395 thousand RMB 100,000 thousand RMB 80,320 thousand RMB 80,000 thousand	- - - - - - RMB 379 thousand RMB 3,513 thousand RMB 2,219 thousand RMB 1,325 thousand RMB 1,812 thousand RMB 335 thousand RMB 419 thousand RMB 395 thousand RMB 395 thousand RMB 320 thousand	- - -	RMB 302,558 thousand RMB 300,395 thousand RMB 500,666 thousand RMB 500,284 thousand RMB 500,284 thousand RMB 500,284 thousand - - - - - - - - - -

Note 1 ： Recorded in "investments accounted for using equity method".

Note 2 ： Recorded in "financial assets at amortised cost-current".

Note 3 ： Recorded in "financial assets at amortised cost-non-current".

Note 4 ： Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.

Table 3, Page 6

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more Year ended December 31, 2018

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Foxconn Technology Co., Ltd. and Subsidiaries

									(Except as otherwise	(Except as otherwise	indicated)
Purchaser/seller	Counterparty	Relationship withthe counterparty		Tra	nsaction		Differences in transaction terms compared to third party transactions		Notes/accountsreceivable (payable)		Note
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Qingdao Hiyn Materials Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Foxconn Technology Pte. Ltd.	Foxconn (Far East) Ltd. and subsidiaries Hon Hai Precision Industry Co., Ltd. HIGH TEMPO INTERNATIONAL LTD. FTC Technology Inc. Foxconn (Far East) Ltd. and subsidiaries Foxconn Technology Pte. Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Foxconn (Far East) Ltd. and subsidiaries Foxconn Technology Pte. Ltd. Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries	The indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. Associate which accounted the Company by using equity method The investee is an indirect subsidiary of the Company The investee is an indirect subsidiary of the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The investee is an indirect subsidiary of the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	2,286,740 $ 348,952 148,541 145,309 30,344,085 3,785,406 239,347 515,278 4,476,543 184,162 5,111,453 4,966,603	2 - - - 86 11 1 10 88 33 87 33	90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 60 days 90 days 90 days 90 days	Note Note Note Note Note Note Note Note Note Note Note Note	Note Note Note Note Note Note Note Note Note Note Note Note	388,612 $ 106,979 23,080 112,541 11,531,115 327,762 11,856 137,023 2,211,723 144,367 1,813,097 647,082	3 1 - 1 96 3 - 6 93 57 79 14	Note 2

Table 4, Page 1

Purchaser/seller	Counterparty	Relationship withthe counterparty		Tra	nsaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accountsreceivable (payable)	Notes/accountsreceivable (payable)	Note
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Foxconn Technology Pte. Ltd. Fuzhun Precision (Shenzhen) Industry Co., Ltd. Nanning Funing Precision Electronics Co., Ltd. YanTai Fuzhun Precision Electronics Co., Ltd. YanTai Fuzhun Precision Electronics Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd.	Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Fu Yu Precision Components (Kunshan) Co., Ltd. YanTai Fuzhun Precision Electronics Co., Ltd. Champ Tech Optical (Foshan) Corporation Foxconn (Far East) Ltd. and subsidiaries Nanning Funing Precision Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. INNOLUX CORPORATION SHARP CORPORATION Foxconn (Far East) Ltd. and subsidiaries Hon Hai Precision Industry Co., Ltd.	The investee is an indirect subsidiary of the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The investee is an indirect subsidiary of the Company The investee is an indirect subsidiary of the Company The indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. The investee is an indirect subsidiary of the Company The investee is an indirect subsidiary of the Company Other related parties Other related parties The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparty of the investee is an investment company which accounts the Company using equity method	Sales Sales Sales Sales Sales Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases	2,549,704 $ 150,863 191,530 629,446 595,739 175,260 399,463 80,260,884 1,858,404 675,589 2,286,490 1,219,329 4,983,346 674,569	17 94 8 44 42 - - 91 2 1 3 1 18 2	90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 30 days 90 days 60 days 60 days 90 days 90 days	Note Note Note Note Note Note Note Note Note Note 1 Note Note Note Note	Note Note Note Note Note Note Note Note Note Note 1 Note Note Note Note	1,401,047 $ 10,835 54,799 293,851 114,134 - 2,163,732) ( 14,941,798) ( - 446,545) ( 14,423) ( 402,447) ( 1,079,014) ( 10,456) (	31 100 4 65 25 - 10) ( 72) ( - 2) ( - 2) ( 30) ( -	Note 3

Table 4, Page 2

Purchaser/seller	Counterparty	Relationship withthe counterparty		Tra	nsaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accountsreceivable (payable)	Notes/accountsreceivable (payable)	Note
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Fu Yu Precision Components (Kunshan) Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Foxconn Technology Pte. Ltd. Foxconn Technology Pte. Ltd. YanTai Fuzhun Precision Electronics Co., Ltd.	Pan-International Industrial Corp. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Ltd. and subsidiaries	The company and its subsidiaries accounted for using equity method The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparty of the investee is an investment company which accounts the Company using equity method The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries	Purchases Purchases Purchases Purchases Purchases	339,773 $ 775,858 1,887,881 935,457 326,435	8 18 13 6 25	90 days 90 days 90 days 90 days 90 days	Note Note Note Note Note	Note Note Note Note Note	193,558) ($ 49,675) ( 406,512) ( 548,523) ( 28,526) (	14) ( 3) ( 7) ( 10) ( 14) (

Note 1:Except for circumstances in which there are no similar transactions for reference and the prices and credit periods are negotiated by both parties,

the aforementioned related party is offered prices very close to those offered to other customers and given a payment period of 30 to 90 days.

Note 2:For transactions involving the sale of raw materials to the aforementioned related party and subsequent repurchase of goods made from the same raw materials from the same party, the initial sale of raw materials is eliminated due to economic substance.

Table 4, Page 3

Foxconn Technology Co., Ltd. and Subsidiaries

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

December 31, 2018

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationshipwith the counterparty	Balance as at December 31,2018	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Qingdao Hiyn Materials Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. FOXCONN TECHNOLOGY PTE. LTD. FOXCONN TECHNOLOGY PTE. LTD.	Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Hon Hai Precision Industry Co., Ltd. FTC Technology Inc. Foxconn (Far East) Ltd. and subsidiaries FOXCONN TECHNOLOGY PTE. LTD. Foxconn (Far East) Ltd. and subsidiaries FOXCONN TECHNOLOGY PTE. LTD. Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Foxconn Technology Pte Ltd. Foxconn (Far East) Ltd. and subsidiaries Hon Fujin Precision Industry (Taiyuan) Co., Ltd.	The indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. The indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. Associate which accounted the Company by using equity method Subsidiary which indirectly reinvested by the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The Company's ultimate parent company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company	388,612 $ 3.97 358,273 Not applicable 106,979 1.16 112,541 2.52 11,531,115 1.63 327,762 1.96 137,023 1.65 2,211,723 2.87 144,367 1.29 1,813,097 2.24 446,545 2.71 647,082 1.75 1,401,047 1.98 (shown as other receivables)(Note 1)		39,350 $ - - 38,104 5,351,028 45,321 1,334 528,605 81,951 722,193 106,555 188,672 178,074	Subsequent collection - - - Subsequent collection Subsequent collection Subsequent collection Subsequent collection Subsequent collection Subsequent collection Subsequent collection Subsequent collection Subsequent collection	219,855 $ - 62,533 112,541 4,238,344 34,287 215,423 1,814,020 144,367 168,863 42,972 251,595 15,685	- $ - - - - - - - - - - - -

Table 5, Page 1

Creditor	Counterparty	Relationshipwith the counterparty	Balance as at December 31,2018	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
YanTai Fuzhun Precision Electronics Co., Ltd. YanTai Fuzhun Precision Electronics Co., Ltd. Champ Tech Optical (Foshan) Corporation HIGH TEMPO INTERNATIONAL LTD.	Foxconn (Far East) Ltd. and subsidiaries Fu Yu Precision Components (Kunshan) Co., Ltd. Foxconn Technology Pte Ltd. Foxconn Technology Pte Ltd.	The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The Company's ultimate parent company The Company's ultimate parent company	293,851 $ 1.56 114,134 4.48 2,163,732 0.17 1,362,382 Not applicable (shown as other receivables)(Note 2)		152,713 $ - 585,141 -	Subsequent collection - Subsequent collection -	174,669 $ 121,959 1,837,843 -	- - - -

Note 1: Receivables from purchases of materials on behalf of Foxconn (Far East) Ltd. and subsidiaries. Note 2: Receivables from purchases of materials by investees on behalf of the final parent company. Note 3: It refers to receivable arising from investee's purchase of materials and raw materials on behalf of subsidiaries in which the Company directly re-invested. Note 4: For information of loans to others, please refer to table 1.

Table 5, Page 2

Foxconn Technology Co., Ltd. and Subsidiaries

Table 6

Significant inter-company transactions during the reporting period

Year ended December 31, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)		Transaction	Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets
0 0 0 0 0 0 0 1 1 1 2 2 3 4 4 5 5 6 7	Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. 〞 〞 Fu Yu Precision Components (Kunshan) Co., Ltd. 〞 〞 Foxconn Technology Pte. Ltd. 〞 YanTai Fuzhun Precision Electronics Co., Ltd. 〞 High Tempo International Ltd. 〞	HIGH TEMPO INTERNATIONAL LTD. Nanning Funing Precision Electronics Co., Ltd. FTC Technology Inc. 〞 Fuzhun Precision (Hebi) Electronics Co., Ltd. YanTai Fuzhun Precision Electronics Co., Ltd. Champ Tech Optical (Foshan) Corporation (Note 7) Foxconn Technology Pte. Ltd. 〞 Fuzhun Precision (Hebi) Electronics Co., Ltd. Foxconn Technology Pte. Ltd. 〞 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd. 〞 Fu Yu Precision Components (Kunshan) Co., Ltd. 〞 Foxconn Technology Co., Ltd. 〞	1 1 1 1 1 1 1 3 3 3 3 3 2 3 3 3 3 2 2	Sales Purchases Sales Accounts receivable Purchases Purchases Purchases Sales Accounts receivable Sales Sales Accounts receivable Accounts receivable Sales Accounts receivable Sales Accounts receivable Other receivable Accounts receivable	148,541 $ 1,858,404 145,309 112,541 675,589 175,260 399,463 3,785,406 327,762 239,347 4,476,543 2,211,723 446,545 2,549,704 1,401,047 595,739 114,134 1,362,382 2,163,732	Note 4 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	0 1 0 0 0 0 0 3 1 0 3 1 0 2 1 0 0 1 1

Note 1: The information of transactions between the Company and the subsidiaries should be noted in “Number” column.

Note 2: (1) Number 0 represents the Company.

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

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

Note 2: (1) The Company to the consolidated subsidiary.

Note 2: (2) The consolidated subsidiaries to the Company.

Note 2: (3) The consolidated subsidiaries to other consolidated subsidiaries.

Note 3: Disclosure standard of transactions between the Company and subsidiaries is when purchases, sales and receivables (payables) from (to) related parties account for at least $100,000 or 20% of capital. Relative related are not disclosed. Note 4: Except for circumstances in which there are no similar transactions for reference and the prices and credit periods are negotiated by both parties, the aforementioned related party is offered prices very close to those offered to other customers and given a payment period of 30 to 90 days.

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: For information of loans to others, please refer to table 1.

Note 7: Champ Tech Optical (Foshan) Corporation is an indirect subsidiary of the Company on December 1, 2018, and the disclosed purchase is starting with the date of acqusition.

Table 6, Page 1

Foxconn Technology Co., Ltd. and Subsidiaries

Table 7

Information on investees

Year ended December 31, 2018

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares he	ld as at December	31,2018	Net profit (loss) of the investee for the year ended December31,2018	Investment income (loss) recognised by the Company for the year ended December31,2018 Note
				Balance as at December31,2018	Balance as at December31,2017	Number of shares	Ownership (%)	Bookvalue
Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd.	Q-Run Holdings Ltd. Foxconn Precision Components Holding Co., Ltd. Huazhun Investment Co., Ltd. Syntrend Creative Park Co., Ltd.	Cayman Islands Cayman Islands Taiwan Taiwan	Investment holding Investment holding Investment Retail of office machinery and equipment and electronic appliances, and information software services.	9,851,192 $ 492,742 1,254,780 490,322	9,851,192 $ 492,742 1,254,780 490,322	480,077,600 135,839,643 125,478,000 49,032,250	100 100 100 20	92,037,098 $ 15,692,164 1,440,657 286,222	5,670,361 $ 555,721 101,597 85,477) (	5,670,361 $ 555,721 101,597 17,062) (

Note 1: Besides Foxconn Precision Components Holding Co., Ltd., Q-Run Holdings Ltd. and Huazhun Investment Co., Ltd. are subsidiaries of the Company, Atkinson Holdings Ltd., Q-Run Far East Corporation, World Trade Trading Ltd., High Tempo International Ltd., FTC Technology Inc., Foxconn Technology Pte. Ltd., Kenny International Ltd., Double Wealth Profits Ltd., Precious Star International Ltd., Eastern Star Limited., Foreign Technology Ltd., Topfry Industrial Ltd., Gold Glory International Ltd., New Glory Holdings Ltd., FTP Technology Inc., Fu Rui Precision Components (Kunshan) Co., Ltd., Fuzhun Precision (Shenzhen) Industry Co., Ltd., Fuyu Technology (Nanyang) Co., Ltd., Hon Fujin Precision Industry (Taiyuan) Co., Ltd., Fuzhun Precision (Hebi) Electronics Co., Ltd., Qingdao Hiyn Materials Co., Ltd., Fuhuigang Industrial (Shenzhen) Co., Ltd., Fu Yu Precision Components (Kunshan) Co., Ltd., YanTai Fuzhun Precision Electronics Co., Ltd., Nanning Funing Precision Electronics Co., Ltd. and Fuzhun Precision (Shenyang) Industry Co., Ltd. are subsidiaries of the Company as well.

Table 7, Page 1

Foxconn Technology Co., Ltd. and Subsidiaries

Table 8

Information on investees in Mainland China

Year ended December 31, 2018

Expressed in thousands of NTD

(Except as otherwise indicated)

Investee in MainlandChina	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2018	Amount remitt to Mainland C remitted back t year Decembe	ed from Taiwan hina / Amount o Taiwan for the ended r31,2018	Accumulated amount of remittance from Taiwan to Mainland China as of December31,2018	Net income of investee for the year ended December31,2018	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2018 (Note 2)	Book value of investments in Mainland China as of December31,2018	Accumulated amount of investment income remitted back to Taiwan as of December31,2018	Note
					Remitted to MainlandChina	Remitted back to Taiwan
Fuhuigang Industrial (Shenzhen) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Fuzhun Precision (Shenzhen) Industry Co., Ltd. Fu Rui Precision Components (Kunshan) Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Nanning Funing Precision Electronics Co., Ltd. YanTai Fuzhun Precision Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd.	Computer case – electronic and electrical components Manufacturing and marketing of power plug and wall socket, micro ribbon connectors for terminals, etc. Manufacturing and marketing of computer components (computer thermal module) Electrical board components processing; manufacturing and marketing of optoelectronics and computer cables Manufacturing and marketing of computer components and related peripherals, computer cases and metal stamping Manufacturing and marketing of computer components (computer thermal module) Manufacturing and marketing of computer case - electronic and electrical components New alloy material, precision molds, new electronic components, portable computers and their components	238,295 $ 1,203,425 599,040 377,580 12,595,200 301,056 1,213,440 4,537,344	2 2 2 2 2 2 2 2	238,295 $ 604,754 61,440 242,196 4,285,440 - 1,213,440 1,526,784	- $ - - - - - - -	- $ - - - - - - -	238,295 $ 604,754 61,440 242,196 4,285,440 - 1,213,440 1,526,784	10,554 $ 371,194 90,088 22,379 3,543,367 270,146 69,573 1,234,136	100 100 100 100 100 100 100 100	10,554 $ 371,194 90,088 22,379 3,543,367 270,146 69,573 1,234,136	437,350 $ 4,421,617 4,738,787 1,735,310 39,694,878 2,558,462 681,339 6,813,175	- $ - - - - - - -

Table 8, Page 1

Accumulated amount of Investment amount approved Ceiling on investments in remittance from Taiwan to by the Investment Commission Mainland China imposed by Mainland China as of of the Ministry of Economic the Investment Commission Company name December 31, 2018 Affairs (MOEA) of MOEA (Note 3) Foxconn Technology Co., Ltd. $ 8,172,849 $ 21,065,380 $ -

• Note 1: Investment methods are classified into the following three categories:

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

• (2) Through investing in Q-Run Holdings Ltd. or Foxconn Precision Components Holding Co., Ltd., which then invested in Mainland China. (3) Others.

• Note 2: Investment profit or loss for the period was recognised based on the Mainland investees’ financial statements which were audited by independent accountants.

• Note 3: Pursuant to the amended 'Guidelines Governing the Review of Investment or Technical Cooperation in the Mainland Area' dated on August 29, 2008, as the Company has obtained the certificate of being qualified

• Note 3: for operating headquarters, issued by the Industrial Development Bureau, MOEA, the ceiling amount of the investment in Mainland China is not applicable to the Company from May 21, 2015 to May 20, 2018. Note 4: The Company needs no approval by Investment Commission of the Ministry of Economic Affairs for investment in Qingdao Hiyn Materials Co., Ltd., Fuzhun Precision (Shenyang) Industry Co., Ltd. and Fuyu Technology (Nanyang) Co., Ltd., which were reinvestedthrough an existing company in Mainland China.

Table 8, Page 2

FOXCONN TECHNOLOGY CO., LTD. SUMMARY OF CASH AND CASH EQUIVALENTS DECEMBER 31,2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 1

	Items Cash in banks Check deposits Demand deposits Foreign deposits USD 63,852 In thousands Exchange rate 30.72 JPY 303,317 In thousands Exchange rate 0.2782 EUR 245 In thousands Exchange rate 35.20 HKD 5,542 In thousands Exchange rate 3.9210 PLN 132 In thousands Exchange rate 8.1807 SGC 31 In thousands Exchange rate 22.48 RMB 7 In thousands Exchange rate 4.4728 Time deposits USD - In thousands Exchange rate - TWD 1,332,000 In thousands Exchange rate 1.00 Abstract	Amount
		3,086 $ 7,710,677 1,961,544 84,383 8,613 21,730 1,080 696 31 - 1,332,000
		11,123,840 $

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Summary 1, Page 1

FOXCONN TECHNOLOGY CO., LTD. SUMMARY OF ACCOUNTS RECEIVABLE DECEMBER 31,2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 2

	Items PKM CORPORATION Others Less：Allowance for sales discounts	Abstract (	Amount Remark 11,267,139 $ 1,471,202 Balance of individual customers is under 5% of this account's balance. 12,738,341 3,938) 12,734,403 $

(Remainder of page intentionally left blank)

Summary 2, Page 1

FOXCONN TECHNOLOGY CO., LTD.
MOVEMENT SUMMARY OF INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD
FOR THE YEAR ENDED DECEMBER 31, 2018
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 3

Company name Q-RUN HOLDINGS LTD. FOXCONN PRECISION CONPONENTS HOLDING CO., LTD. HUAZHUN INVESTMENT CO., LTD. SYNTREND CREATIVE PARK CO., LTD.	In thousand shares Amount 480,078 124,455,611 $ 135,840 15,250,593 125,478 1,831,805 49,032 303,284 141,841,293 $ As of January 1,2018	In thousand shares Amount - 5,657,983 $ - 555,721 - 101,597 - - 6,315,301 $ Additions (Note 1)	In thousand shares Amount - 38,076,496) ($ - 114,150) ( - 492,745) ( - 17,062) ( 38,700,453) ($ Deductions (Note 2)	In thousand Ownership shares (%) Amount 480,078 - 92,037,098 $ 135,840 - 15,692,164 125,478 - 1,440,657 49,032 - 286,222 109,456,141 $ As of December 31,2018	In thousand Ownership shares (%) Amount 480,078 - 92,037,098 $ 135,840 - 15,692,164 125,478 - 1,440,657 49,032 - 286,222 109,456,141 $ As of December 31,2018		Valuation Total price basis 92,037,098 $ Equity method 15,692,164 〃 1,440,657 〃 286,222 〃 109,456,141 $ Market value or net equiry value	Pledged as collateral
	In thousand shares 480,078 135,840 125,478 49,032	In thousand shares - - - -		In thousand shares 480,078 135,840 125,478 49,032	Ownership (%) - - - -		Total price 92,037,098 $ 15,692,164 1,440,657 286,222 109,456,141 $
								None 〃 〃 〃

Note 1：Additions include gains on investment accounted for using equity method and change in capital surplus.�

Note 2：Deductions include losses on investment accounted for using equity method, cash dividends received, recognition of valuation adjustment for FVTPL financial assets loss on
        investees' financial instruments and exchange differences on translation of foreign financial statements

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Summary 3, Page 1

FOXCONN TECHNOLOGY CO., LTD. - Summary of Short term loans DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 4

Items Bank Unsecured bank loans Citibank Taiwan Ltd. 〞 HSBC Bank (Taiwan) Limited 〞 TAIPEI FUBON COMMERCIAL BANK 〞 MIZUHO BANK	Amount Term of Contract Rate Financing amount (In thousands) Collateral Footnote 3,471,360 $ 2018/10/24~2019/1/24 2.7% USD 113,000 None 4,300,800 2018/12/10~2019/3/22 2.9333%~3.0556% USD 140,000 〞 1,350,000 2018/12/26~2019/1/2 0.86% NTD 1,350,000 〞 4,567,000 2018/12/24~2019/1/7 0.69% NTD 4,567,000 〞 13,689,160 $

Summary 4, Page 1

FOXCONN TECHNOLOGY CO., LTD.
SUMMARY OF OPERATING REVENUE
FOR THE YEAR ENDED DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 5

	Items Electronic products Others Less：Sales returns and discounts	Quantity(in thousands) Note (	Amount 96,587,516 $ 83,161 96,670,677 2,846,558) 93,824,119 $	Remark

Note：The number of products sold is varied and the units of pricing are different,
      so the quantity is not listed.

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Summary 5, Page 1

FOXCONN TECHNOLOGY CO., LTD. SUMMARY OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 6 Beginning raw materials Add: Incoming inventory Less: Ending raw materials Material consumption Manufacturing expenses Manufacturing costs Add: Beginning work in process Incoming inventory Cost of finished goods Add: Beginning finished goods Acquisition of finished goods Less: Ending finished goods ( Gain on reversal of decline in inventory valuation Others Items	Amount - $ - - - 428,610 428,610 - - 428,610 1,170,690 87,633,833 284,890) - - 88,948,243 $

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Summary 6, Page 1

FOXCONN TECHNOLOGY CO., LTD. SUMMARY OF MANUFACTURING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 7

	Items Wages and salaries Labor and health insurance Pension Processing fee Others	Abstract	Amount Remark 333,899 $ 6,341 3,948 2,644 81,778 Balance of individual accounts is under 5% of this account's 428,610 $	Remark

Summary 7, Page 1

FOXCONN TECHNOLOGY CO., LTD. SUMMARY OF SELLING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 8

	Items Wages and salaries Freight Storage Pension Others	Abstract	Amount Remark 160,851 $ 22,079 2,953 1,950 33,466 Balance of individual accounts is under 5% of this account's balance. 221,299 $	Remark

Summary 8, Page 1

FOXCONN TECHNOLOGY CO., LTD. SUMMARY OF GENERAL AND ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 9

==> picture [485 x 232] intentionally omitted <==

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

Items Abstract Amount Remark
Wages and salaries $ 187,964
Other professional
service xpenses 9,048
Pension 2,653
Balance of
individual
accounts is under 5%
of this account's
Others 47,760 balance.
$ 247,425
----- End of picture text -----

Summary 9, Page 1

FOXCONN TECHNOLOGY CO., LTD. SUMMARY OF RESEARCH AND DEVELOPMENT EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 10

ItemsAbstractAmountRemark
 Wages and salaries$      217,172
 Labor and health
  insurance4,780
Pension2,763
Balance of
individual
accounts is under 5%
of this account's
Others29,479balance.
$     254,194

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Summary 10, Page 1

FOXCONN TECHNOLOGY CO., LTD. SUMMARY OF EMPLOYEE BENEFITS EXPENSES, DEPRECIATION AND AMORTIZATION BY FUNCTION FOR THE YEAR ENDED DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 11

Classified as Operating By nature Costs Employee benefits expenses (Note) Wages and salaries 333,899 $ Labor and health insurance 6,341 Pension 3,948 Directors' compensation - Others 17,689 361,877 $ Depreciation 5,581 $ Amortisation - $		Year ended December 31,2018	Classified as Operating Total Costs 899,886 $ 191,601 $ 24,782 6,525 11,314 4,333 1,872 - 50,388 16,822 988,242 $ 219,281 $ 16,718 $ 1,299 $ 1,250 $ - $		Year ended December 31,2017
		Classified as Classified as Operating Non-operating Expenses Expenses 565,987 $ - $ 18,441 - 7,366 - 1,872 - 32,699 - 626,365 $ - $ 9,840 $ 1,297 $ 1,250 $ - $			Classified as Classified as Operating Non-operating Expenses Expenses 270,257 $ - $ 10,737 - 7,041 - 1,872 - 29,923 - 319,830 $ - $ 12,648 $ 1,253 $ 1,250 $ - $	Total
						461,858 $ 17,262 11,374 1,872 46,745
						539,111 $
						15,200 $
						1,250 $

Note：As of December 31, 2018 and 2017, the Company had 151 and 195 employees, respectively. There were 6 non-employee directors for both years.

Summary 11, Page 1