MHC — AGM Information 2018

Jul 3, 2018

Stock Code: 3706

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MiTAC Holdings Corporation

2018 Annual Meeting of Shareholders Handbook

The original of this handbook is written in Chinese language. If there is any discrepancy between the Chinese version and this English translation, the Chinese version shall prevail.

June 22, 2018

Table of Contents

Page No. Meeting Agenda……………………………………………………….… .................................... ……….1 Matters to Report………………………………………… ............................................... ………….……2 Matters for Adoption……………………………………………… ................................... ……………....3 Matters for Discussion…..…………………………………… ..................................... ………………… 5 Questions and Motions……………………………………… ........................................... ………………7 Attachments Attachment 1: 2017 Business Report………............................................................................... ………...8 Attachment 2: Supervisors Review Report………… .................................................. …………………..11 Attachment 3: 2017 Financial Statements…………………… ...................................................... ……..12 Attachment 4: Comparison Table for Amendments of the Articles of Incorporation ............................... 22 Appendix (Omission)

MiTAC Holdings Corporation

2018 Annual Meeting of Shareholders

Agenda

Date/Time: June 22, 2018, 09:00 a.m.

Location: 101 meeting room, 1F., No.2, Zhanye 1st Rd., East Dist., Hsinchu City

1. Call the Meeting to Order

2. Chairman Remarks

3. Matters to Report

No. 1: 2017 Business Report

• No. 2: Supervisors Review Report

• No. 3: Status reports of 2017 employees, directors, and supervisors compensation distribution

• Matters for Adoption

No. 1: Adoption of the 2017 Business Report and Financial Statements

No. 2: Adoption of the Proposal for Distribution of 2017 Profits

1. Matters for Discussion

No. 1: Proposal for Issue of New Shares Through Capitalization of Earnings

No. 2: Proposal for Amendment to the Articles of Incorporation

No. 3: Release of Directors from Non-competition Restrictions

1. Questions and Motions

2. Adjournment

1

Matters to Report

No. 1

Proposal: 2017 Business Report.

Explanation: Please refer to Attachment 1, Handbook, 2018 Annual Meeting of Shareholders.

No. 2

Proposal: Supervisors Review Report on various 2017 statements and related reports.

• Explanation: Please refer to Attachment 2, Handbook, 2018 Annual Meeting of Shareholders.

No. 3

• Proposal: Status reports of 2017 employees, directors, and supervisors compensation distribution.

• Explanation: According to Article 25 of the Articles of Incorporation, when the Company has a profit for any fiscal year, the Company shall allocate at least 0.1% of the profit as bonus to be issued to its employees and not in excess of 1% of the profit as compensation to directors and supervisors of the Company. The board resolved that the amounts of the compensation distribution, in cash form, to the employees and directors and supervisors are NTD 2,639,074 and NTD 5,400,000, respectively.

2

Matters for Adoption

No. 1 (Proposed by the Board of Directors) Proposal: Adoption of the 2017 Business Report and Financial Statements. Explanation:

• a. 2017 Business Report and Financial Statements have been approved by the board of directors, and reviewed by the supervisors. For the related Business Report and Financial Statements, please refer to Attachments 1 and 3, Handbook, 2018 Annual Meeting of Shareholders.

• b.Adoption is respectively requested.

Resolution:

3

No. 2 (Proposed by the Board of Directors) Proposal: Adoption of the Proposal for Distribution of 2017 Profits. Explanation:

• a. 2017 earnings after taxed is NTD 2,581,014,476. The Profits Distribution Table has been reviewed by the supervisors, and which is listed as follows (2017 earnings after tax has a distribution priority).

Profit Distribution Table

Year 2017

Unit: NTD

	Unit: NTD
Item	Amount
(a) Beginning retained earnings Less: Other comprehensive (Less) income-actuarial gains and losses on defined benefit plans (b) Add: Profit for the year Less: Legal reserve	556,752,697 (26,340,116) 2,581,014,476 (258,101,448)
Distributable netprofit	2,853,325,609
(c) Distribution items： Cash Dividends to Shareholders ($1.30 per share) Stock Dividends to Shareholders($1.50per share)	(1,054,645,758) (1,216,898,950)
Unappropriated retained earnings	581,780,901

• b.The allotment of shares in the above table is based on the number of shares qualified to the allotment, i.e., 811,265,968 shares. Should later the allotment schedule of shares or dividends need to be changed due to the exercises of the employee stock option, share repurchase, or treasury stocks for employee incentive program affecting the number of shares qualified to the allotment, the board of directors is so proposed to be authorized with full rights and authority to management of the consequence accordingly.

• c. The calculation of the cash dividend is based on the proportion of shareholdings up to the round unit of a New Taiwan dollar. Any value less than one NTD will be rounded off. The sum of any such round-off will be recognized as the other income of the Company.

• d.Adoption is respectively requested.

Resolution:

4

Matters for Discussion

No. 1 (Proposed by the Board of Directors) Proposal: Proposal for Issue of New Shares Through Capitalization of Earnings. Explanation:

• a.To enhance the capacity of the working capital, the board plans to appropriate NTD 1,216,898,950 from the distributable earnings as the shareholder bonus by issuing 121,689,895 new shares. As of February 28, 2018, there are totally 811,265,968 shares qualified to participate in the new bonus share issuance, i.e., 150 new bonus shares per one thousand existing shares. However, the actual issuance ratio of new bonus shares should be based on the shareholding ratios on the record date.

• b.For the purpose of this new bonus share issuance, to whom the bonus share distributed involving a fraction of a share, the shareholders themselves should make up the difference to come up a full share within five days after the record date of this capital increase through the Company’s share registrar agency. The alternative option of cash distribution (up to a full New Taiwan dollar) will be applied, if in any case the purchaser exceeds the deadline and the shares will be purchased in cash through a designated agent appointed by the chairman.

• c.The rights and duties of this new issued shares shall be identical to those of the existing shares and which will be effective as soon as they are approved by the annual meeting of shareholders and registered with the authority. For this new bonus share issuance, the board of directors is also authorized to establish a record date that will be announced later.

• d.Should later the allotment schedule of shares or dividends need to be changed due to the exercises of the employee stock option, share repurchase, or treasury stock for employee incentive program affecting the number of shares qualified to the allotment, the board of directors is so proposed to be authorized with full rights and authority to management of the consequence accordingly.

• e.If this new bonus share issuance needs to be revised due to the regulation specifications or requirements from the authorities, the board of directors will be authorized by the annual meeting of shareholders to manage the changes in the issuance accordingly.

• f. Approval is respectively requested.

Resolution:

5

No. 2 (Proposed by the Board of Directors)

Proposal: Proposal for Amendment to the Articles of Incorporation. Explanation:

• a. To comply with the establishment of the audit committee in year 2019 and the practices of operation, it is proposed to amend the Articles of Incorporation. A comparison table of amended articles and current articles is provided in Attachment 4.

• b. Approval is respectively requested.

Resolution:

No. 3 (Proposed by the Board of Directors)

Proposal: Release of directors from Non-competition Restrictions Explanation:

• a. According to Article 209 of the Company Act, the board of directors for himself/herself or on behalf of others conducting business activities within the scope of the business operation of the Company should explain the essential content of his/her business activities to the shareholders’ meeting and obtain its permission for conducting such activities.

• b. Because some directors of the Company, representatives of juristic-person directors or juristic-person shareholders whose representatives are elected as directors may conduct business activities for themselves or others, for the needs of the above fact, it is proposed to release the directors from non-competition restrictions.

• c. The newly added non-competition activities of the directors to be released are as follows:

Name of Directors	Name of the companies	Position of the companies
Miau,Matthew FengChiang	CathaySecurities Corporation	Independent Director
Ho,Jhi-Wu	Promise Technology,Inc.	Director
Way, Yung-Do 【Rep. of UPC Technology Corp.】	CathayFinancial HoldingCo., Ltd..	Independent Director
	Cathay United Bank Company Limited	Independent Director
Lu,Shyue-Ching	CTCI Advanced Systems Inc.	Director

d. Approval is respectively requested. Resolution:

6

Questions and Motions

Adjournment

7

Attachment 1

MiTAC Holdings Corporation 2017 Business Report

In 2018, the global IT expenses are expected to reach US$3.7 trillion, representing an increase of 4.5% as compared to the previous year[1] . Although there are uncertainties remained, such as the potential effect of Brexit and exchange rate fluctuation, corporates continue to invest in IT. They turn to invest in the digital business, the blockchain, Internet of Things, Big Date algorithm, machine learning and AI, which will, in turn, enhance the steady growth of data centers. However, due to the increasing in vehicle legislation and industry compliances regarding safety and cybersecurity of the vehicle, and increasing demand for convenient features, such as navigation, remote diagnostics, and multimedia streaming, the global connected car may boost the market at the CAGR of 14.8% to 2025[2] .

The Analyses of Operation Performance, Budgetary Performance, and Profitability of 2017

In 2017, MiTAC Holdings recorded a consolidated revenue of NTD48.761 billion, net profit before tax of NTD2.902 billion, and the earning per share after tax of NTD3.24. The Company did not publicly announce the financial budget for 2017. Therefore, there is not budget achievement information to be provided.

Business Operation Performance, R&D, Innovations, Applications, and Awards in 2017

1. MiTAC Computing Technology Corp.(MCT) received Intel award to recognize its organization’s exemplary performance for datacenter execution and operations.

2. MCT received the “2016 Supplier Award.” from Fujitsu for its outstanding contribution and performances.

3. MCT and MiTAC Information Systems Corp. received the “2016 Outstanding Partner Award” from Inspur.

1 Source from Gartner

2 Source from ResearchAndMarkets.com

8

1. Received the “2016 Supplier Quality Award” from Symantec in recognition of MiTAC team’s outstanding accomplishments.

2. MiTAC/TYAN released the new generation server platform supporting Intel® Xeon® Scalable Processors.

3. MiTAC/TYAN released the server platform with AMD EPYC, which provides NVMe express storage application services.

4. The Magellan navigation app specially designed for the connected car was officially launched.

5. Mio was recognized as the Best Brand of Dashcam and GPS Products in the 2017 Consumers’ Ideal Brand.

6. MiCor A100 electro cardiograph wristband and MiVue™ dashcam have received “iF Product Design Award.”

7. 10.MiTAC International Corp. was awarded with“ 2017 BOSE Supplier Quality Zero Defect Award”.

8. 11.Mio MiVue™ 792 WIFI dashcam has received the IT Month Top 100 Innovative Elite Award.

9. 12.The “Return to Route” navigation solution of Magellan has been adopted by the New York City Department of Sanitation for all the salt spreading vehicles.

Perspective of 2018 Business Operation

The announcement of introducing the cloud-based, Magellan Navi app, to all the car models for American car brand serves as a meaningful movement, for which proves that our software services can be adopted by the market on a large scale and increase the value of the Company. This year, the mobile telecommunication product business unit was officially spun off and formed as MiTAC Digital Technology Corporation (MDT), completing the strategic deployment of the Group. The general managers and the operation teams of MCT and MDT would respectively be responsible for planning the cloud computing and IoT business, in hope to improve the flexibility and operation efficiency through the reconstruction of the organization; and pursue the value growth leading to steady profitability through the participation of new blood that re-initiates the growth dynamics.

9

MCT is in charge of the cloud computing business that sets cloud data and computing equipment as development core, adjusts the product and business strategy, and creates opportunities in the digital transformation era with diverse cooperation partners, flexible business model, and advanced technical ability. MDT focuses on in-vehicle field and fields related to the Internet of Things such as the connected car and professional tablet and has accumulated years of technology strength within the connected car, premium customer portfolio, and flexible business model, thus becoming the major company in the field of Internet of Things. MiTAC Holdings will continue taking up the work for the planning of development layout, investment, and strategic collaboration of the Group thrive for development in various fields to return to shareholders with operation performances.

Best regards,

Chairman: Miau, Matthew Feng Chiang

President: Ho, Jhi-Wu

Chief Accountant: Huang, Hsiu-Ling

10

Attachment 2

MiTAC Holdings Corporation Supervisors Review Report

2017 financial statements (January 1, 2017 to December 31, 2017) of MiTAC Holdings Corp. are prepared by the board of directors and audited by Wen Fang-Yu and Cheng Ya-Huei, CPAs, PricewaterhouseCoopers (PwC), Taiwan. These financial statements, along with 2017 business reports and earnings distribution plan, have been reviewed by supervisors ourselves and these reports and statements are indeed compliance with the related laws and regulations. Per Article 219, the Company Act, we supervisors submit this review report for your consideration.

Submit to

2018 Annual Meeting of Shareholders, MiTAC Holdings Corp.

Supervisors Chiao, Yu-Cheng

Ching, Hu-Shih

（Rep. of Lien Hwa Industrial Corp.）

March 28, 2018

11

REPORT OF INDEPENDENT ACCOUNTANTS

PWCR17000323

Attachment 3

To the Board of Directors and Shareholders of MiTAC Holdings Corporation

Opinion

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

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

Basis for opinion

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

Key audit matters

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

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

Impairment valuation of non-financial assets Description

As mentioned in Note 14, the MiTAC Group’s mobile communications business group had a deficit balance, therefore, the MiTAC Group adopted impairment valuation to property, plant, equipment, intangible assets and other assets. For description of accounting policy on non-financial assets, please refer to Note 4(17), and for accounting estimates and assumption uncertainty in relation to impairment valuation of property, plant, equipment and intangible assets, please refer to Note 5(2). The MiTAC Group measured recoverable amount of assets through discounting future estimated cash flow, and was the basis of evaluating assets impairment. As a result of assumptions and discounted rate that were used to forecast future cash flow were significant when evaluated the value-in-uses of property, plant, equipment, intangible assets and other assets, we identified the impairment valuation of non-financial assets a key audit matter.

12

How our audit addressed the matter

We conducted audit procedures including discussing the procedures of preparation future estimated cash flow with management, evaluated key assumptions that management used to forecast future cash flow including comparing with historical data in order to evaluate the reasonableness of changing in estimated revenue, gross profit and expense, reviewed each of parameters which were used in discounted rate consisting of the reasonableness of risk-free return rate, industrial risk coefficients and market return rate, and verified the accuracy of calculating in valuation model.

Valuation of inventory Description

The MiTAC Group’s inventories were mainly engaged in manufacturing and selling computer and its peripherals and communications products. Since the industry involved rapidly changing technology and were affected by market demand, there was higher risk of incurring inventory valuation losses or having obsolete inventory, the MiTAC Group’s inventories were measured at the lower of cost and net realisable value. For description of accounting policy on inventory valuation, please refer to Note 4(12), and for accounting estimates and assumption uncertainty in relation to inventory valuation, please refer to Note 5(2). Considering the MiTAC Group’s inventories were significant, items were voluminous and the valuation associated with subjective judgment, we identified valuation of inventory a key audit matter.

How our audit addressed the matter

We performed audit procedures including discussing with management and evaluating the policy of inventory valuation, tested inventory aging report, checked the logic in inventory aging calculation and confirmed that the classification of obsolete or slow-moving inventories was properly, and tested the materials which used to determine the net realized of obsolete or slow-moving inventories in order to value the reasonableness of allowance for inventory valuation losses.

Other matter- audits of the other independent accountants

We did not audit the financial statements which prepared under different framework of financial report of investments recognized partially under the equity method that are included in the consolidated financial statements. The company transferred financial statements in accordance with the “Regulations Governing the Preparations 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. Share of profit (loss) of associates and joint ventures accounted for using equity method of NT$1,250,651 thousand and NT$1,055,881 thousand for the years ended December 31, 2017 and 2016, respectively. Investments accounted for using equity method of NT$9,238,721 thousand and NT$8,702,153 thousand as at December 31, 2017 and 2016, respectively. Those financial statements before adjustments were audited by other independent accountants whose report thereon have been furnished to us, and our opinion expressed herein is based solely on the audit reports of the other independent accountants.

Other matter – Parent company only financial reports

We have audited and expressed an unmodified opinion on the parent company only financial statements of MiTAC Holdings Corporation as at and for the years ended December 31, 2017 and 2016.

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

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

13

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

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

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

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

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

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

2. 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 MiTAC Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. 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 MiTAC Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the MiTAC Group to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

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

14

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our 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.

Wen, Fang-Yu Cheng, Ya-Huei

For and on behalf of PricewaterhouseCoopers, Taiwan March 28, 2018

---

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

15

MiTAC HOLDINGS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

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

Assets	Notes 6(1) 6(2) 6(3) 6(5) 6(5) and 7 7 6(6) 6(7) and 8 6(3) 6(4) 6(8) 6(9) 6(10) 6(11) 6(27) 6(7) and 8	December31,2017 AMOUNT % $ 8,056,991 17 9,313 - 1,091,146 2 85,441 - 4,042,515 9 489,414 1 59,453 - 39,529 - 6,221,954 13 370,565 1 33,140 - 20,499,461 43 1,957,284 4 1,113,478 2 14,903,681 32 6,697,711 14 1,146,830 3 134,987 - 436,762 1 295,069 1 26,685,802 57 $ 47,185,263 100	December31,2016	December31,2016
		AMOUNT $ 8,056,991 9,313 1,091,146 85,441 4,042,515 489,414 59,453 39,529 6,221,954 370,565 33,140 20,499,461 1,957,284 1,113,478 14,903,681 6,697,711 1,146,830 134,987 436,762 295,069 26,685,802 $ 47,185,263	AMOUNT $ 7,634,310 39,331 876,781 13,609 9,079,366 772,712 74,293 88,490 6,678,812 272,553 23,085 25,553,342 1,113,650 1,113,478 14,337,438 6,030,530 1,162,399 96,980 337,033 319,088 24,510,596 $ 50,063,938	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1125 Available-for-sale financial assets - current 1150 Notes receivable - net 1170 Accounts receivable - net 1180 Accounts receivable - related parties 1200 Other receivables 1220 Current income tax assets 130X Inventory - net 1410 Prepayments 1470 Other current assets 11XX Total Current Assets Non-current assets 1523 Available-for-sale financial assets - non-current 1543 Financial assets carried at cost - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment - net 1760 Investment property - net 1780 Intangible assets - net 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				15 - 2 - 18 2 - - 13 1 -
				51
				2 2 29 12 2 - 1 1
				49
				100

(Continued)

16

MiTAC HOLDINGS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

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

Liabilities and Equity

December31,2017 December31,2016 Notes AMOUNT % AMOUNT % 6(12) $ 2,137,655 4 $ 1,150,090 2 6(13) 10,312 - 6,493 - 5,194,178 11 8,961,961 18 7 71,262 - 286,051 1 7 3,467,054 7 3,830,190 8 6(27) 327,433 1 189,414 - 6(16) 291,630 1 333,393 1 261,594 1 129,803 - 11,761,118 25 14,887,395 30 6(27) 320,954 - 329,863 - 6(14) 354,575 1 330,267 1 675,529 1 660,130 1 12,436,647 26 15,547,525 31 6(17) 8,190,022 17 8,156,048 16 6(18) 22,537,691 49 22,446,436 44 6(19) 579,686 1 307,829 1 - - 65,691 - 3,111,427 7 2,785,617 6 6(20) 852,239 1 1,277,241 3 6(17) ( 522,449) ( 1) ( 522,449) ( 1) 34,748,616 74 34,516,413 69 9(1)(2) 11 $ 47,185,263 100 $ 50,063,938 100

Current liabilities 2100 Short-term borrowings 2120 Financial liabilities at fair value through profit or loss - current 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2250 Provisions for liabilities - current 2300 Other current liabilities 21XX Total current Liabilities Non-current liabilities 2570 Deferred income tax liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Share capital 3110 Common shares Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity Significant Contingent Liabilities And Unrecognized Contract Commitments Significant Events After the Balance Sheet Date 3X2X Total liabilities and equity

17

MiTAC HOLDINGS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31

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

Items

Year ended December 31 2017 2016 Notes AMOUNT % AMOUNT % 6(21) and 7 $ 48,760,514 100 $ 48,341,745 100 6(6) and 7 ( 43,095,337) ( 88) ( 42,788,205) ( 88) 5,665,177 12 5,553,540 12 6(25)(26) ( 1,268,344) ( 3) ( 1,251,287) ( 2) ( 1,244,975) ( 2) ( 1,332,719) ( 3) ( 2,411,977) ( 5) ( 2,286,190) ( 5) ( 4,925,296) ( 10) ( 4,870,196) ( 10) 739,881 2 683,344 2 6(22) 377,546 - 410,102 1 6(23) ( 91,506) - 190,511 - 6(24) ( 33,826) - ( 17,270) - 6(8) 1,910,193 4 1,794,250 4 2,162,407 4 2,377,593 5 2,902,288 6 3,060,937 7 6(27) ( 321,274) ( 1) ( 342,369) ( 1) $ 2,581,014 5 $ 2,718,568 6 6(14) ( $ 26,532) - ( $ 40,552) - 6(8) ( 4,318) - ( 3,959) - 6(27) 4,510 - 6,894 - ( 26,340) - ( 37,617) - ( 1,176,850) ( 2) ( 732,642) ( 2) 6(3) 725,541 1 413,751 1 6(8) 26,307 - ( 332,280) ( 1) ( 425,002) ( 1) ( 651,171) ( 2) ( $ 451,342) ( 1) ( $ 688,788) ( 2) $ 2,129,672 4 $ 2,029,780 4 6(28) $ 3.24 $ 3.44 6(28) $ 3.20 $ 3.40

4000 Operating revenue 5000 Operating costs 5900 Gross profit Operating expenses 6100 Selling expenses 6200 General & administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for under equity method 7000 Total non-operating revenue and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Losses on remeasurements of defined benefit plans 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Cumulative translation differences of foreign operations 8362 Unrealized income on valuation of available-for-sale financial assets 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8360 Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive loss for the year 8500 Total comprehensive income for the year 9750 Basic earnings per share 9850 Diluted earnings per share

18

MiTAC HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Year 2016 Balance at January 1, 2016 Distribution of 2015 earnings Legal reserve Special reserve Cash dividends Stock dividends Employee stock options exercised Compensation cost of employees’ share based –payment transactions Subsidiaries received cash dividends paid by the parent company Net change of equity in associates accounted for under equity method Profit for the year Other comprehensive income (loss) for the year Balance at December 31, 2016 Year 2017 Balance at January 1, 2017 Distribution of 2016 earnings Legal reserve Special reserve Cash dividends Employee stock options exercised Subsidiaries received cash dividends paid by the parent company Net change of equity in associates accounted for under equity method Profit for the year Other comprehensive income (loss) for the year Balance at December 31, 2017	Notes						Equityattributable to	Equityattributable to	Equityattributable to	o	wners of theparent	wners of theparent						Total equity
			Share capital - common stock		Total capital surplus, additional paid-in capital				Retained Earnings				Other equityinterest				Treasurystocks
							Legal reserve		Special reserve		Total unappropriated retained earnings (accumulated deficit)		Financial statements translation differences of foreign operations		Unrealized gain or loss on available-for-sa le financial assets
	6(19) 6(19) 6(19) 6(19) 6(15)(18) 6(15)(18) 6(18) 6(18) 6(19) 6(19) 6(19) 6(15)(18) 6(18) 6(18)		$ 7,778,113 - - - 307,934 70,001 - - - - - $ 8,156,048 $ 8,156,048 - - - 33,974 - - - - $ 8,190,022		$ 22,352,475 - - - - 65,873 4,605 18,417 5,066 - - $22,446,436 $ 22,446,436 - - - 24,321 30,029 36,905 - - $22,537,691		$ 132,420 175,409 - - - - - - - - - $ 307,829 $ 307,829 271,857 - - - - - - - $ 579,686		$ 52,117 - 13,574 - - - - - - - - $ 65,691 $ 65,691 - ( 65,691 ) - - - - - - $ -		$ 1,833,321 ( 175,409 ) ( 13,574 ) ( 1,231,738 ) ( 307,934 ) - - - - 2,718,568 ( 37,617 ) $ 2,785,617 $ 2,785,617 ( 271,857 ) 65,691 ( 2,022,698 ) - - - 2,581,014 ( 26,340 ) $ 3,111,427		$ 2,008,508 - - - - - - - - - ( 1,114,287 ) $ 894,221 $ 894,221 - - - - - - - ( 1,169,851 ) ($ 275,630 )		($ 80,096 ) - - - - - - - - - 463,116 $ 383,020 $ 383,020 - - - - - - - 744,849 $ 1,127,869		($ 522,449 ) - - - - - - - - - - ($ 522,449 ) ($ 522,449 ) - - - - - - - - ($ 522,449 )	$ 33,554,409 - - ( 1,231,738 ) - 135,874 4,605 18,417 5,066 2,718,568 ( 688,788 ) $34,516,413 $ 34,516,413 - - ( 2,022,698 ) 58,295 30,029 36,905 2,581,014 ( 451,342 ) $34,748,616

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MiTAC HOLDINGS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Bad debts expense Loss on inventory market value decline(Gain on reversal of decline in market value) Depreciation Amortization Amortization of long-term prepaid rent Compensation cost of employees share-based payment transactions Interest income Interest expense Dividend income Net loss (income) of financial assets/liabilities at fair value through profit or loss Share of profit of associates accounted for under equity method Loss (gain) on disposal of investments Impairment loss Gain on disposal of property, plant and equipment, net Changes in operating assets and liabilities Changes in operating assets Notes receivable Accounts receivable Other receivables Inventories Prepayments Changes in operating liabilities Accounts payable Other payables Other current liabilities Provisions for liabilities - current Accrued pension liabilities Cash inflow generated from operations Payment of interest Receipt of interest Payment of income tax Cash dividend received Net cash flows from operating activities

Forthe years endedDecember31, Notes 2017 2016 $ 2,902,288 $ 3,060,937 6(5) 8,041 14,910 6(6) 58,895 ( 66,083 ) 6(9)(10)(25) 573,363 451,802 6(11)(25) 95,933 98,012 6,855 6,721 6(15) - 4,605 6(22) ( 56,677 ) ( 58,586 ) 6(24) 33,826 17,270 6(22) ( 127,379 ) ( 101,528 ) 6(23) 33,837 ( 43,042 ) 6(8) ( 1,910,193 ) ( 1,794,250 ) 6(23) 1,266 ( 215,995 ) 6(3)(23) - 28,408 6(23) ( 61,703 ) ( 28,037 ) ( 71,832 ) ( 8,965 ) 4,795,933 ( 4,257,805 ) 15,995 ( 13,011 ) 136,660 ( 392,509 ) ( 95,511 ) 13,148 ( 3,548,815 ) 3,776,267 ( 348,692 ) 128,049 131,791 ( 305,805 ) ( 40,361 ) ( 15,579 ) ( 80 ) 6,156 2,533,440 305,090 ( 33,385 ) ( 16,585 ) 55,522 59,905 ( 242,932 ) ( 249,728 ) 873,609 642,739 3,186,254 741,421

(Continued)

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MiTAC HOLDINGS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Increase in other financial assets Acquisition of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Proceeds from capital reduction of available-for-sale financial assets Acquisition of financial assets carried at cost Proceeds from capital reduction of financial assets carried at cost Acquisition of investments accounted for under the equity method Proceeds from disposal of investments accounted for under equity method Net cash inflows from disposal of subsidiaries Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in investment property Increase in intangible assets Decrease in refundable deposits Increase in other non-current assets Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Increase in guarantee deposits Employee stock options exercised Cash dividends paid Net cash flows used in financing activities Effects of changes in exchange rates Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

For the years ended December 31, Notes 2017 2016 $ - ( $ 2,004 ) - 2,210 ( 8,746 ) ( 24,194 ) ( 337,452 ) ( 480,153 ) - 134,357 493 10,794 - ( 25,000 ) 6(4) - 90,007 6(8) ( 89,749 ) ( 136,979 ) - 747,001 6(30) - 5,888 6(9) ( 1,271,080 ) ( 1,323,342 ) 69,718 36,554 6(30) ( 11,474 ) - 6(11)(30) ( 137,453 ) ( 76,277 ) 8,590 9,673 ( 37,933 ) ( 17,090 ) ( 1,815,086 ) ( 1,048,555 ) 987,565 435,574 10,333 273 58,295 135,874 6(19)(30) ( 1,992,669 ) ( 1,213,321 ) ( 936,476 ) ( 641,600 ) ( 12,011 ) ( 203,743 ) 422,681 ( 1,152,477 ) 6(1) 7,634,310 8,786,787 6(1) $ 8,056,991 $ 7,634,310

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Attachment 4

MiTAC Holdings Corporation

Comparison Table for Amendments of the Articles of Incorporation

Current Article		Amended Article	Reason for Amendment
Article 2 The headquarter of the Company is inTaipei City, Republic of China, and set up branches or offices at home or abroad according to business requirements.		Article 2 The headquarter of the Company is in Taoyuan City, Republic of China, and set up branches or offices at home or abroad accordingto business requirements.	To comply with the practices of operation.
Article 16 The Company shall havefive tonine directors and two supervisors, in which there shall be at least two independent directors with the term of office for three years. Directors and supervisors, including independent directors, shall be elected at shareholders meeting according to the competence of individuals and each can be continuous elected and serve. After the election, the Board shall pass the resolution for the purchase of responsibility insurance for the directors and supervisors of the Company. The Boards shall be authorized to determine the remuneration for directors and supervisors according to the recommendations from the remuneration committee of the Company and the general level of payment for within the industry. The number of the registered shares held by all the directors and supervisors shall be regulated according to the standards provided under the “Rules Regulating the Minimum Percentage Held Directors and Supervisors of Public Offering Companies and the Examination.” The election of directors and supervisors of the Company shall be carried out through nomination system, and the shareholders shall elect directors and supervisors from the list of candidates.		Article 16 The Company shall haveseven toten directors andat most two supervisors, in which there shall be at least two independent directors with the term of office for three years. Directors and supervisors, including independent directors, shall be elected at shareholders meeting according to the competence of individuals and each can be continuous elected and serve. After the election, the Board shall pass the resolution for the purchase of responsibility insurance for the directors and supervisors of the Company. The Boards shall be authorized to determine the remuneration for directors and supervisors according to the recommendations from the remuneration committee of the Company and the general level of payment for within the industry. The number of the registered shares held by all the directors and supervisors shall be regulated according to the standards provided under the "Rules Regulating the Minimum Percentage Held Directors and Supervisors of Public Offering Companies and the Examination.” The election of directors and supervisors of the Company shall be carried out through nomination system, and the shareholders shall elect directors and supervisors from the list of candidates.After the expiration of the term of office for directors and supervisors elected in year 2016, the Company shall set up an audit committee to replace the supervisors, so the nomination and election seats shall not include seats of supervisors. The audit committee shall be comprised of all the independent directors, and the provisions applicable to supervisors under this Articles of Incorporation, the Company Act, Securities and Exchange Act and relevant laws shall apply to the	To comply with the establishment of the audit committee in year 2019 and the practices of operation.

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Current Article	Amended Article	Reason for
		Amendment
	**audit committee. **
Article 28 This Articles of Incorporation was enacted on June 24, 2013. The first amendment was made on June 11, 2015. The second amendment was made on June 21, 2016.	Article 28 This Articles of Incorporation was enacted on June 24, 2013. The first amendment was made on June 11, 2015. The second amendment was made on June 21, 2016. The third amendment was made on June 22, 2018.	Adding amendment frequency and dates

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