MHC — Audit Report / Information 2018

Nov 12, 2018

MiTAC HOLDINGS CORPORATION

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND REPORT OF INDEPENDENT

ACCOUNTANTS

DECEMBER 31, 2018 AND 2017

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

REPORT OF INDEPENDENT ACCOUNTANTS

PWCR18000344

To the Board of Directors and Shareholders of MiTAC Holdings Corporation

Opinion

We have audited the accompanying parent company only balance sheets of MiTAC Holdings Corporation (the “Company”) as at December 31, 2018 and 2017, and the 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, based on our audits and the audit reports of other independent accountants, as described in the Other matters section of our report, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of MiTAC Holdings Corporation as at December 31, 2018 and 2017, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

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. Based on our audits and the audit reports 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.

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the parent company 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 forming our opinion thereon, we do not provide a separate opinion on these matters.

As of December 31, 2018, the Company and its subsidiaries recognised MiTAC International Corporation and its subsidiaries (“MiTAC International”), MiTAC Computing Technology Corporation and its subsidiaries (“MiTAC Computing Technology”) and MiTAC Digital Technology Corporation and its subsidiaries (“MiTAC Digital Technology”), as investments accounted for using the equity method of NT$31,508,825 thousand, NT$4,011,066 thousand and NT$1,636,397 thousand, respectively, please refer to Note 6(4) for the details. The aforementioned investments constitute 96.98% of the Company’s total assets, and are considered significant to the parent company only financial statements. Thus, we consider the key audit matters of MiTAC International, MiTAC Computing Technology and MiTAC Digital Technology as a key audit matter of the Company.

Sales revenue recognition

Description

For the accounting policies on sales revenue recognition, please refer to Note 4(31) of the consolidated financial statement. Considering that the sales revenue are material to its financial statements, the types of MiTAC International, MiTAC Computing Technology and MiTAC Digital Technology products and sales terms are various, the timing of revenue recognition can only be determined when the controls of ownership for products are transferred to the customers based on contract terms of each different customer. Thus, we identified the sales revenue recognition as a key audit matter.

How our audit addressed the matter

Our audit procedures in relation to the above key audit matter including discussing with management and evaluating the policy of revenue recognition; tested the effectiveness of design and implementation of internal controls over recognition of revenue; sampled transaction terms and prices of customers and verified the supporting documents for delivery to ensure the accuracy of payment time and amount; selected sales transactions around the fiscal year-end date and verified transaction documents to ensure sales revenue are recorded in the proper period.

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Valuation of inventory

Description

MiTAC Computing Technology and MiTAC Digital Technology’s inventories were mainly engaged in manufacturing and selling computer and their 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. MiTAC Computing Technology and MiTAC Digital Technology’s inventories were measured at the lower of cost and net realisable value. Considering MiTAC Computing Technology and MiTAC Digital Technology’s inventories were significant, items were voluminous and the valuation is associated with subjective judgement, we identified valuation of inventory as 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 appropriate, and tested the materials which were used to determine the net realized of obsolete or slow-moving inventories in order to assess the reasonableness of allowance for inventory valuation losses.

Other matter- reference to reports of other independent accountants

We did not audit certain investments accounted for under the indirect equity method that were included in the parent company only financial statements, whose financial statements were prepared under a different financial reporting framework. The Company converted the financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”. Share of profit (loss) of associates and joint ventures accounted for using equity method amounted to NT$1,108,426 thousand and NT$1,250,651 thousand for the years ended December 31, 2018 and 2017, respectively. Investments accounted for using equity method amounted to NT$10,783,025 thousand and NT$9,238,721 thousand as at December 31, 2018 and 2017, respectively. Those financial statements before adjustments were audited by other independent accountants whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on the audit reports of the other independent accountants.

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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 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 audit committee (Including supervisors), 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 judgement and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the parent company only 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

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resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2.

3.

4.

5.

6.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

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

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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 auditor’s 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 auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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.

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 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.

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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.

Wen, Fang-Yu Cheng, Ya-Huei

For and on behalf of PricewaterhouseCoopers, Taiwan

February 26, 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.

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MiTAC HOLDINGS CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 7 6(2) 6(3) 6(4) 6(5)	December31,2018 AMOUNT % $ 145,995 1 24 - 487,494 1 6,417 - 941 - 640,871 2 429,695 1 - - 37,241,750 97 3,980 - 100 - 37,675,525 98 $ 38,316,396 100	December31,2017	December31,2017
		AMOUNT $ 145,995 24 487,494 6,417 941 640,871 429,695 - 37,241,750 3,980 100 37,675,525 $ 38,316,396	AMOUNT $ 453,595 34 2,056,509 - 730 2,510,868 - 6,427 33,902,725 673 100 33,909,925 $ 36,420,793	%
Current assets 1100 Cash and cash equivalents 1200 Other receivables 1210 Other receivables - related parties 1220 Current income tax assets 1410 Prepayments 11XX Total Current Assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non-current 1523 Available-for-sale financial assets - non-current 1550 Investments accounted for using equity method 1600 Property, plant and equipment 1920 Guarantee deposits paid 15XX Total Non-current assets 1XXX Total assets				1 - 6 - -
				7
				- - 93 - -
				93
				100

(Continued)

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MiTAC HOLDINGS CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December31,2018 December31,2017 Notes AMOUNT % AMOUNT % $ 8,961 - $ 10,644 - 7 449,382 1 1,522,192 4 6(14) 54,622 - 139,336 1 104 - 5 - 513,069 1 1,672,177 5 513,069 1 1,672,177 5 6(7) 9,367,677 25 8,190,022 22 6(8) 23,370,899 61 22,537,691 63 6(9) 837,787 2 579,686 2 4,131,139 11 3,111,427 8 6(10) 448,912 1 852,239 2 6(7) ( 353,087 ) ( 1 ) ( 522,449 ) ( 2) 37,803,327 99 34,748,616 95 $ 38,316,396 100 $ 36,420,793 100

Current liabilities 2200 Other payables 2220 Other payables - related parties 2230 Current income tax liabilities 2300 Other current liabilities 21XX Total Current Liabilities 2XXX Total Liabilities Equity Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity 3X2X Total liabilities and equity

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

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MiTAC HOLDINGS CORPORATION PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

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

Items

YearendedDecember31 2018 2017 Notes AMOUNT % AMOUNT % 6(2)(4) $ 3,301,845 100 $ 2,636,880 100 6(12)(13) and 7 ( 31,195 ) ( 1) ( 34,540) ( 1) 3,270,650 99 2,602,340 99 6(11) and 7 35,268 1 29,320 1 36 - ( 625) - ( 236 ) - - - 35,068 1 28,695 1 3,305,718 100 2,631,035 100 6(14) ( 9,469 ) - ( 50,021) ( 2) $ 3,296,249 100 $ 2,581,014 98 6(2)(10) ($ 23,711 ) ( 1) $ - - 6(4)(10) ( 493,340 ) ( 15) ( 26,340) ( 1) ( 517,051 ) ( 16) ( 26,340) ( 1) 6(3)(10) - - ( 1,073) - 6(4)(10) 212,654 7 ( 423,929) ( 16) 212,654 7 ( 425,002) ( 16) ($ 304,397 ) ( 9) ($ 451,342) ( 17) $ 2,991,852 91 $ 2,129,672 81 6(15) $ 3.58 $ 2.81 6(15) $ 3.55 $ 2.79

4000 Operating revenue Operating expenses 6200 General and administrative expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income 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 8316 Unrealized losses from investments in equity instruments measured at fair value through other comprehensive income 8330 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 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 8362 Unrealized income on valuation of available-for-sale financial assets 8380 Share of other comprehensive income of subsidiaries, 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

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

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MiTAC HOLDINGS CORPORATION PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Year 2017 Balance at January 1, 2017 Profit for 2017 Other comprehensive income (loss) for 2017 Total comprehensive income (loss) Distribution of 2016 earnings Legal reserve Reversal of 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 using equity method Balance at December 31, 2017 Year 2018 Balance at January 1, 2018 Effects on adoption of IFRS 9 Balance at January 1, 2018 after adjustments Profit for 2018 Other comprehensive income (loss) for 2018 Total comprehensive income (loss) Distribution of 2017 earnings Legal reserve Cash dividends Stock dividends Employee stock options exercised Subsidiaries received cash dividends paid by the parent company Change of subsidiaries and associates accounted for using equity method Proceeds from subsidiaries' disposal of investments accounted for using equity method Proceeds from disposal of equity instruments measured at fair value through other comprehensive income Treasury stock retired Balance at December 31, 2018	Notes		Commonstock		Capitalsurplus				Retained earnings					O	therequityinterest			Treasury stocks		Totalequity
							Legal reserve		Special reserve		Unappropriated retained earnings		Exchange differences on translation of foreign financial statements		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income		Unrealized gains or losses on available-for-sale financialassets
	6(9) 6(7)(8) 6(8) 6(8) 12(4) 6(10) 6(9) 6(7)(8) 6(8) 6(8)(10) 6(10)	$ 8,156,048 - - - - - - 33,974 - - $ 8,190,022 $ 8,190,022 - 8,190,022 - - - - - 1,216,899 43,196 - - - - ( 82,440 ) $ 9,367,677		$ 22,446,436 - - - - - - 24,321 30,029 36,905 $ 22,537,691 $ 22,537,691 - 22,537,691 - - - - - - 20,860 15,607 898,481 ( 14,818 ) - ( 86,922 ) $ 23,370,899			$ 307,829 - - - 271,857 - - - - - $ 579,686 $ 579,686 - 579,686 - - - 258,101 - - - - - - - - $ 837,787	$ 65,691 - - - - ( 65,691 ) - - - - $ - $ - - - - - - - - - - - - - - - $ -		$ 2,785,617 2,581,014 ( 26,340 ) 2,554,674 ( 271,857 ) 65,691 ( 2,022,698 ) - - - $ 3,111,427 $ 3,111,427 214,703 3,326,130 3,296,249 4,138 3,300,387 ( 258,101 ) ( 1,054,646 ) ( 1,216,899 ) - - ( 15,584 ) - 49,852 - $ 4,131,139		$ 894,221 - ( 1,169,851 ) ( 1,169,851 ) - - - - - - ($ 275,630 ) ($ 275,630 ) - ( 275,630 ) - 212,654 212,654 - - - - - - - - - ($ 62,976 )		$ - - - - - - - - - - $ - $ - 1,067,345 1,067,345 - ( 521,189 ) ( 521,189 ) - - - - - 15,584 - ( 49,852 ) - $ 511,888		$ 383,020 - 744,849 744,849 - - - - - - $ 1,127,869 $ 1,127,869 ( 1,127,869 ) - - - - - - - - - - - - - $ -		($ 522,449 ) - - - - - - - - - ($ 522,449 ) ($ 522,449 ) - ( 522,449 ) - - - - - - - - - - - 169,362 ($ 353,087 )	$ 34,516,413 2,581,014 ( 451,342 ) 2,129,672 - - ( 2,022,698 ) 58,295 30,029 36,905 $ 34,748,616 $ 34,748,616 154,179 34,902,795 3,296,249 ( 304,397 ) 2,991,852 - ( 1,054,646 ) - 64,056 15,607 898,481 ( 14,818 ) - - $ 37,803,327

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

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MiTAC HOLDINGS CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE 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 Share of profit of associates accounted for using equity method Interest income Dividend income Interest expense Changes in operating assets and liabilities Changes in operating assets Prepayments Other receivables - related parties Changes in operating liabilities Other payables Other payables - related parties Other current liabilities Cash inflow generated from operations Cash dividend received Receipt of interest Payment of interest Payment of income tax Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Loans lent to related parties Loans repaid from related parties Acquisition of financial assets at fair value through other comprehensive income Acquisition of available-for-sale financial assets Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Decrease in refundable deposits Net cash flows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase on loans from related parties Repayment on loans to related parties Employee stock options exercised Cash dividends paid Net cash flows used in financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Notes 2018 2017 $ 3,305,718 $ 2,631,035 6(5)(12) 673 734 6(4) ( 3,295,017 ) ( 2,636,880 ) 6(11) ( 34,770 ) ( 29,320 ) 6(2) ( 6,828 ) - 236 - ( 211 ) 433 77,977 171,025 ( 1,683 ) 1,437 ( 35,918 ) ( 83,543 ) 99 ( 60 ) 10,276 54,861 6(4) 735,583 677,918 36,418 29,296 ( 236 ) - ( 88,092 ) ( 91,953 ) 693,949 670,122 7 ( 6,468,328 ) ( 6,487,920 ) 7 7,997,033 7,189,670 6(2) ( 446,979 ) - 6(3) - ( 7,500 ) 6(4) - ( 91,150 ) 6(5) ( 3,980 ) - - 135 1,077,746 603,235 7 2,764,350 4,330,080 7 ( 3,853,055 ) ( 3,841,830 ) 64,056 58,295 6(9) ( 1,054,646 ) ( 2,022,698 ) ( 2,079,295 ) ( 1,476,153 ) ( 307,600 ) ( 202,796 ) 6(1) 453,595 656,391 6(1) $ 145,995 $ 453,595

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

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MiTAC HOLDINGS CORPORATION

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

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

1. HISTORY AND ORGANISATION

• (1) MiTAC Holdings Corporation (the “Company”) was established by MiTAC International Corp. (“MiTAC International”) through a share conversion on September 12, 2013, and on the same date, the competent authority has approved for the Company’s shares to be listed on the Taiwan Stock Exchange (TWSE). MiTAC International became the Company’s wholly-owned subsidiary after conversion. The main business of the Company is investment holding.

• (2) The Company in order to promote specialization of work for transforming and improving overall competitiveness, the Board of Directors of its subsidiary, MiTAC International, has resolved to divest its cloud computing products group to the newly established company, MiTAC Computing Technology Corporation (collectively referred herein as the “ MiTAC Computing Technology ” ), as the consideration for the acquisition of 220,000 thousand newly issued ordinary shares of MiTAC Technology on the spin-off day, September 1, 2014. In addition, in 2017, the Board of Directors of MiTAC International has resolved to divest its mobile communication products group to the newly established company, MiTAC Digital Technology Corporation (collectively referred herein as the “ MiTAC Digital Technology ” ), as the consideration for the acquisition of 100,000 thousand newly issued ordinary shares of MiTAC Digital Technology on the spin-off day, January 1, 2018. As a result, MiTAC International, MiTAC Computing Technology and MiTAC Digital Technology are the wholly-owned subsidiaries of the Company after the spin-off.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY

FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

• These parent company only financial statements were authorised for issuance by the Board of Directors on February 26, 2019.

• APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATION

• (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting

• Standards (“IFRSs”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

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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, Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 12, Annual improvements to IFRSs 2014-2016 cycle - Amendments to IAS 28,

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

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

• 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 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 subsequent changes in the fair value of an investment in an equity instrument that is not held for trading in other comprehensive income.

• (b) 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 Note 12(4).

• B. Amendments to IAS 7, ‘Disclosure initiative’

• This amendment requires that an entity shall provide more disclosures related to changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.

The Company expects to provide additional disclosure to explain the changes in liabilities arising

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from financing activities, please refer to Note 6(16).

(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:

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

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

(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:

IFRSs issued by IASB but not yet endorsed by the FSC New standards, interpretations and amendments issued by IASB but not as endorsed by the FSC are as follows:	yet included in the IFRSs
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendment 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 these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The parent company only financial statement have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

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(2) Basis of preparation

• A. Except for the following items, this parent company only financial statements have been prepared under the historical cost convention:

  • Financial assets and liabilities at fair value through other comprehensive income/Available-forsale financial assets measured at fair value.

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

• C. In adopting IFRS 9 and 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.

• (3) Foreign currency translation

• Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan Dollars, which is the Company’s functional currency.

Foreign currency transactions and balances

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

• B. Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

• C. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are retranslated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

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(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 realized, 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 realized within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

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

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

• (b) Liabilities arising mainly from trading activities;

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

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(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 that meet the 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 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.

• 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:

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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 Company and the amount of the dividend can be measured reliably.

(7) Available-for-sale financial assets

Prior to 2018

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

• B. On a regular way purchase or sale basis, available-for-sale financial assets are recognized and derecognized using trade date accounting.

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

(8) Impairment of financial assets Effective 2018

For debt instruments measured at fair value through other comprehensive income and financial assets at amortised cost (including accounts receivable or contract assets that have a significant financing component, lease receivables, loan commitments and financial guarantee contracts), 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.

Prior to 2018

• A. 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.

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

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

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

• (c) The 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;

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

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

• (f) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group;

• (g) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered;

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

(9) Derecognition of financial assets

• The Company derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

The Company derecognizes a financial asset when one of the following conditions is met:

• A. The contractual rights of the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Company has not retained control of the financial asset.

(10) Investments accounted for using equity method / subsidiary/ associates

• A. A subsidiary is an entity where the Company has the right to dominate its finance and operating policies (including special purpose entities), normally the Company owns more than 50% 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. Unrealized gains or losses resulting 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 recognizes proportionately the share of profit and loss and other comprehensive income 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

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• subsidiary exceeds the carrying amount of Company’s interest in that subsidiary, the Company continues to recognize its share in the subsidiary's loss proportionately.

• D. According to “Regulations Governing the Preparation 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 equity attributable to owners of parent reported in that entity's consolidated financial statements.

• E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

• F. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the 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 recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

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

• H. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized 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.

• I. 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. 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 recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

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• J. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized 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 recognized in other comprehensive income in relation to the associate 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 recognized 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 recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.

• (11) Property, plant and equipment

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

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of discarded assets is derecognized when critical repairs are incurred, and other repair expenses are charged to profit or loss for the period when they incur.

• C. 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 of transportation equipment are 5 years.

• E. The Company has recognized title of assets with significant risks and compensation not yet transferred and leases to lessees as operating leases. Rental income and expenses of operating leases are recognized over the leasing period on a straight line basis.

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(12) 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 recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

(13) Derecognition of financial liabilities

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

(14) Offsetting financial instruments

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

(15) Employee benefits

• A. Short-term employee benefits

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

• B. Employees’ compensation and directors’ and supervisors’ remuneration

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

- (16) Employee share based payment

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

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(17) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 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 recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only 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 entity 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 income tax asset is realised or the deferred income tax liability is settled.

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

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(18) Share capital

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

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are

~22~

subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(19) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved 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.

• (20) Business combinations and organization restructuring

• A. The Company uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.

• B. If the total of the fair values of the consideration of acquisition and any non-controlling interest in the acquiree as well as the previous equity interest in the acquiree is higher than the fair value of the Company’s identifiable assets acquired and obligations borne, goodwill is recognized at the acquisition-date. If the fair value of the Company’s identifiable assets acquired and obligations borne is higher than the total of the fair values of the consideration of acquisition, non-controlling interest in the acquiree, as well as previous equity interest in the acquire, the difference is recognized in profit or loss for the period at the acquisition date.

• C. The newly established investment holding company through share swap is jointly controlled under business combination. Under regulations of competent authority, the investment holding company is recorded at the carrying value and is included in the consolidated financial statements at the date of establishment.

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

The preparation of these 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. The judgment and assumptions made by the Company in applying its accounting policies and concerning future events do not involve significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year.

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The Company has no uncertainty on critical judgements, estimates and assumptions of accounting policies.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

licies. TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Checking accounts and demand deposits Time deposits Repurchased bonds Total	December 31,2018 5,995 $ 140,000 - 145,995 $	December 31,2017
		153,575 $ - 300,020
		453,595 $

• A. The Company transacts 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.

• (2) Financial assets at fair value through other comprehensive income

B. The Company has no cash and cash equivalents pledged to others. Financial assets at fair value through other comprehensive income
Items Non-current items: Equity instruments Listed stocks Unlisted stocks Subtotal Valuation adjustment Total	December 31,2018
	134,657 $ 319,822 454,479 24,784) ( 429,695 $

• A. The Company recognized ($23,711) in other comprehensive loss for fair value change for the year ended December 31, 2018.

• B. The Company has elected to designate the above investments, which were held mainly for medium to long-term trading purposes, as investments in equity instruments measured at fair value through other comprehensive income. As of December 31, 2018, the fair value of investments was $429,695.

• C. The Company received dividend income of $6,828 for the year ended December 31, 2018.

• (3) Available-for-sale financial assets

Available-for-sale financial assets
Items	December 31,2017
Non-current items:
Unlisted stocks	$	7,500
Adjustments of available-for-sale financial assets	(	1,073)
Total	$	6,427

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The Company recognized ($1,073) in other comprehensive loss for fair value change for the year ended December 31, 2017.

(4) Investments accounted for under the equity method

A.

Investee company Subsidiaries Mitac International Corporation Mitac Computing Technology Corporation Mitac Digital Technology Corporation Associates Infopower Technologies Ltd.	December 31,2018 31,508,825 $ 4,011,066 1,636,397 85,462 37,241,750 $	December 31,2017
		29,443,145 $ 4,368,957 920 89,703
		33,902,725 $

• B. The Company’s recognized share of profit from associates accounted for under the equity method for the years ended December 31, 2018 and 2017 were $3,295,017 and $2,636,880, respectively, and recognized share of other comprehensive loss from associates accounted for under the equity method were ($280,686) and ($450,269), respectively.

• C. The Company received the stock dividends from MiTAC International Corp. for the years ended December 31, 2018 and 2017 were $1,647,006 and $1,765,812, respectively.

• D. The Company received the cash dividends from MiTAC Computing Technology Corp. for the years ended December 31, 2018 and 2017 were $728,755 and $677,918, respectively.

• E. The Board of Directors has resolved to establish MiTAC Digital Technology Corp. on August 10, 2017 and the amount of contribution to capital was $1,000. MiTAC Digital Technology Corp. is wholly-owned by the Company.

• F. For the information on subsidiaries of the Company, please refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2018.

• G. The carrying amount of the Company’s interests in all individually immaterial associates and the Company’s share of the operating results are summarized below:

• As of December 31, 2018 and 2017, the carrying amount of the Company’s individually immaterial associates amounted to $85,462 and $89,703, respectively.

		For the year ended		For the year ended
	December 31,2018		December 31,2017
Loss for the period from continuing	($	4,007)	($	1,795)
operations
Other comprehensive income (loss)		-		-
Total comprehensive loss	($	4,007)	($	1,795)

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(5) Property, plant and equipment

Property, plant and equipment
		For the year ended		For the year ended
Transportation equipment	December 31,2018		December 31,2017
January 1	$	673	$	1,407
Additions		3,980		-
Depreciation	(	673)	(	734)
December 31	$	3,980	$	673
December 31
Cost		3,980		3,670
Accumulated depreciation		-	(	2,997)
Total	$	3,980	$	673

(6) Share-based payment

A. As of December 31, 2018 and 2017, the Company’s share-based payment arrangements were as follows

follows
Type of arrangement	Grant date	Quantity granted (shares in thousands)	Contract period	Vestingconditions
Eleventh stock option incentive plan	2012.10.11	19,375 (Note 1)	6 years	50% can be exercised after 2 years of grant 75% can be exercised after 3 years of grant 100% can be exercised after 4 years of grant

Note : According to the resolution on share conversion, the Company had the performance obligation of stock option certificates issued by MiTAC International Corp. under the authorisation of competent authority from the effective date, and adjusted the conversion price and quantity.

B. A summary of the movements of the Company’s stock option plans is set forth below ：

		For theyear ended December 31,2018	For theyear ended December 31,2018	For theyear ended December 31,2018		For theyear ended December 31,2017	For theyear ended December 31,2017	For theyear ended December 31,2017
			Weighted avarage				Weighted avarage
		No of options		exercise price		No of options		exercise price
		(shares in thousands)		(in dollars)		(shares in thousands)		(in dollars)
Options outstanding at
beginning of the period		6,261	$	16.30		9,956	$	17.40
Options forfeited	(	1,941)		13.71	(	298)		17.40
Options exercised	(	4,320)		14.83	(	3,397)		17.16
Options outstanding at
end of the period		-				6,261		16.30
Options exercisable at
end of the period		-				6,261
Options approved and
not yet issued at the
end of the period		-				-

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• C. The weighted-average stock price of stock options at exercise dates for the years ended December 31, 2018 and 2017 were $33.05 (in dollars) and $33.52 (in dollars), respectively.

• D. As of December 31, 2018 and 2017, outstanding compensatory employee stock option plan is as follows:

As of December 31, 2018 ： None.

As of December 31, 2017

As of December 31, 2017
Range of exercise price (in dollars)(Note) $16.30	Number of options outstandingat the end of theyear
	In thousands of shares 6,261	Expected weighted average residual year 0.75	Weighted average exercise price (in dollars)
			$16.30

Note ： The exercise price had been adjusted according to the ratio of share conversion.

• E. Information about the fair value of the Company’s shared-based payment transactions ：

The fair values of stock options are measured using the Black-Scholes option-pricing model:

Type of arrangement	Grant date	Stock price (in dollars)	Exercise price (in dollars)	Expected price volatility (Note 1)	Expected option life (year)	Expected dividends	Risk-free interest rate	Fair value per unit (in dollars) (Note 2)
Eleventh employee stock options	2012.10.11	10.15	10.15	36.14%	3.47	0%	0.88%	2.79

• Note 1: Expected price volatility rate was estimated by using the stock prices of the most recent period with length of this period equal as the length of the stock options’ expected life, excluding obvious irregularities of changes in stock prices for the observation amount while considering the effect of the appropriation of retained earnings on the transaction price of stocks to calculate expected price volatility rate.

Note 2: Information of fair value from the original issuance by MiTAC International Corp.

• F. Expenses incurred on share-based payment transactions for the years ended December 31, 2018 and 2017 ： None.

(7) Share capital

• A. As of December 31, 2018, the Company’s authorized capital was $11,000,000, consisting of 1.1 billion shares, and the paid-in capital was $9,367,677 with a par value of $10 per share.

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

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Unit: in thousands of shares

Unit: in thousands of shares
2018 Outstanding shares as of January 1 798,732 Capital increase of earnings 121,690 Capital increase of treasury stock acquired by the subsidiaries 1,801) ( Employee stock options exercised 4,320 Changes in outstanding shares during the year 124,209 Outstanding shares as of December 31 922,941	2017
	795,335
	- - 3,397
	3,397
	798,732

• B. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

shares are as follows:
Name of company holdingthe shares Subsidiary - Tsu Fung Investment Corp. Subsidiary - SSDL Name of company holdingthe shares MiTAC Holdings Corp. Subsidiary - Tsu Fung Investment Corp. Subsidiary - SSDL	Reason for reacquisition Stock conversion " Reason for reacquisition Transferred to employees Stock conversion "	December	31,2018
		Number of shares (shares in thousands) 12,174 1,652 December	Carrying amount
			276,085 $ 77,002 31,2017
		Number of shares (shares in thousands) 8,244 10,589 1,437	Carrying amount
			169,362 $ 276,085 77,002

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury shares should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus.

• (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury stock should not be pledged as collateral and is not entitled to dividends before it is reissued to the employees.

• (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition. The numbers of treasury stock for being transferred to employees that were retired during the year ended December 31, 2018, were 8,244 thousand shares.

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• (e) In accordance with the Financial Supervisory Commission, Securities and Futures Bureau, No.1010047490, the Company shall not appropriate special reserve proportionately to the shareholding ratio for the difference of ending market price below the carrying amount of the parent’s stock held by the subsidiaries. If the market price reverses subsequently, the reversal amount shall be appropriated as special reserve proportionately to the shareholding ratio.

• (8) Capital surplus

Share premium At January 1, 2018 21,716,203 $ Employee stock options exercised 44,964 Changes from associates and joint ventures accounted for using the equity method - Subsidiaries received cash dividends paid by the parent company - Proceeds from disposal of investments accounted for using equity method adjustments - Treasury shares retired 189,838) ( At December 31, 2018 21,571,329 $ Share premium At January 1, 2017 21,672,925 $ Employee stock options exercised 43,278 Changes from associates and joint ventures accounted for using the equity method - Subsidiaries received cash dividends paid by the parent company - At December 31, 2017 21,716,203 $

Net equity of associates and joint Treasury ventures accounted stock for under the Employee trnsactions equitymethod stock options Total 223,734 $ 226,836 $ 370,918 $ 22,537,691 $ - - 24,104) ( 20,860 - 898,481 - 898,481 15,607 - - 15,607 - 14,818) ( - 14,818) ( 102,916 - - 86,922) ( 342,257 $ 1,110,499 $ 346,814 $ 23,370,899 $ Net equity of associates and joint Treasury ventures accounted stock for under the Employee trnsactions equitymethod stock options Total 193,705 $ 189,931 $ 389,875 $ 22,446,436 $ - - 18,957) ( 24,321 - 36,905 - 36,905 30,029 - - 30,029 223,734 $ 226,836 $ 370,918 $ 22,537,691 $

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 Act requires that

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the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paidin capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(9) Retained earnings

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. Special reserve shall also be set aside pursuant to the regulations. Appropriation of the remainder plus prior year’s accumulated unappropriated retained earnings shall be proposed by the Board of Directors and resolved by the stockholders.

• B. Earnings appropriation ratio and cash dividends ratio are decided by the Board of Directors, taking into account the Company’s financial structure, future capital requirements and profitability, and cash dividends shall account for at least 10% of the total dividends appropriated. Earnings appropriation ratio and cash dividends ratio are subject to adjustments once approved by the stockholders.

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

• D. 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.

• E. On June 22, 2018, the appropriation of earnings for the year ended December 31, 2017 resolved by the shareholders was as follows:

by the shareholders was as follows:
Legal reserve Cash dividend Stock dividend Total	For theyear ended December 31,2017
	Account 258,101 $ 1,054,646 1,216,899 2,529,646 $	Dividend per share (in dollars)
		1.3 $ 1.5
		2.8 $

~30~

F. On February 26, 2019, the appropriation of earnings for the year ended December 31, 2018 proposed by the Board of Directors and to be approved by the shareholders is as follows:

Legal reserve Special reserve Cash dividend Stock dividend Total	For theyear ended December 31,2018	For theyear ended December 31,2018
	Account 329,625 $ 12,264 1,405,152 1,405,152 3,152,193 $	Dividend per share (in dollars)
		1.5 $ 1.5
		3.0 $

(10) Other equity items

Other equity items
					2018
			Unrealised
			gains (losses)		Currency
			on valuation		translation			Total
At January 1 after adjustments	$		1,067,345	($	275,630)	$		791,715
Reclassified to retained earnings
upon disposal
- Subsidiaries	(		49,852)		-	(		49,852)
- Associates			15,584		-			15,584
Revaluation- The Company	(		23,711)		-	(		23,711)
Revaluation-
Subsidiaries and Associates	(		497,478)		-	(		497,478)
Currency translation differences -
Subsidiaries and Associates			-		212,654			212,654
At December 31	$		511,888	($	62,976)	$		448,912
					2017
		Available-for-sale			Currency
			investments		translation			Total
At January 1		$	383,020	$	894,221		$	1,277,241
Revaluation- The Company	(		1,073)		-	(		1,073)
Revaluation-			745,922		-			745,922
Subsidiaries and Associates
Currency translation differences -
Subsidiaries and Associates			-	(	1,169,851)	(		1,169,851)
At December 31		$	1,127,869	($	275,630)		$	852,239

~31~

(11) Other income

Other income
Expenses by nature Interest income: Interest income from bank deposits Interest income from loan to related parties Other income Total Employee benefit expense Depreciation Total	For the year ended December 31,2018 1,957 $ 32,813 498 35,268 $ For the year ended December31,2018 8,393 $ 673 9,066 $	For the year ended December 31,2017
		2,490 $ 26,830 $ -
		29,320 $
		For the year ended December31,2017
		9,531 $ 734
		10,265 $

(12) Expenses by nature

(13) Employee benefit expense

Wage and salaries

		For the year ended		For the year ended
	December31,2018		December31,2017
	$	8,393	$	9,531

• A. According to the amended articles, the profit (pre-tax profit before deduction of employees’ compensation and directors’ and supervisors’ remuneration) of the current year shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration, which will be resolved by the Board of Directors. The ratio shall not be lower than 0.1% for employees and not be higher than 1% for directors and supervisors. If a company has accmulated deficit, earnings should be reserved to cover losses. Employees’ compensation can be distributed in cash or shares and shall be distributed to the employees of subsidiaries of the Company who meet certain specific requirements. The chairman of the Board is authorized to set the qualification requirements.

• B. For the years ended December 31, 2018 and 2017, employees’ compensation was accrued at 0.1% of gain on pre-tax profit before deduction of employees’ compensation and directors’ and supervisors’ remuneration. Directors’ and supervisors’ remuneration were accrued under 1% of gain on pre-tax profit before deduction of employees’ compensation and directors’ and supervisors’ remuneration.

• C. For the years ended December 31, 2018 and 2017, employees’ compensation was accrued at $3,313 and $2,639, respectively; and directors’ and supervisors’ remuneration was accrued at $3,600 and $5,400, respectively. The aforementioned amounts were recognized in salary expenses. Employees’ cash bonus and directors’ and supervisors’ remuneration of 2018 and 2017 as resolved at the Board of Directors of the Company were in agreement with those amounts recognized in the 2018 and 2017 parent company only financial statements.

~32~

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

(14) Income tax

• A. Components of income tax expense:

Stock Exchange. me tax Components of income tax expense:
Current tax: Current tax on profits for the period Tax on undistributed surplus earnings Total current tax Income tax expense	For the year ended December 31,2018 6,966 $ 2,503 9,469 9,469 $	For the year ended December 31,2017
		4,812 $ 45,209
		50,021
		50,021 $

• B. Reconciliation between income tax expense and accounting profit

		For the year ended		For the year ended
		December 31,2018		December 31,2017
Tax calculated based on profit before
tax and statutory tax rate	$	661,144	$	447,276
Tax effects from expense disallowed by
tax regulation		43		40
Tax exempt income by tax regulation	(	654,221)	(	442,504)
Tax on undistributed earnings		2,503		45,209
Income tax expense	$	9,469	$	50,021

• C. The Company’s income tax returns through 2014 have been assessed and approved by the Tax Authority.

• D. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 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.

~33~

(15) Earnings per share

Earnings per share
Weighted average number of ordinary Amount shares outstanding Earnings per share Basic earnings per share after tax (shares in thousands) (in dollars) Profit attributable to ordinary shareholders of the parent 3,296,249 $ 920,166 3.58 $ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 3,296,249 $ Less: Effect of dilutive potential common stocks issued by investee companies 20,246) ( Assumed conversion of all dilutive potential ordinary shares Employee stock options - 1,524 Employees’ bonus - 155 Net income attributable to common stockholders plus dilutive effect of common stock equivalents 3,276,003 $ 921,845 3.55 $ For theyear ended December 31,2018 Weighted average number of ordinary Amount shares outstanding Earnings per share Basic earnings per share after tax (shares in thousands) (in dollars) Profit attributable to ordinary shareholders of the parent 2,581,014 $ 917,000 2.81 $ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 2,581,014 $ Less: Effect of dilutive potential common stocks issued by investee companies 12,555) ( Assumed conversion of all dilutive potential ordinary shares Employee stock options - 3,812 Employees’ bonus - 95 Net income attributable to common stockholders plus dilutive effect of common stock equivalents 2,568,459 $ 920,907 2.79 $ For theyear ended December 31,2017	For theyear ended December 31,2018
			Earnings per share (in dollars)
			3.58 $
			3.55 $
		Weighted average number of ordinary shares outstanding (shares in thousands) 917,000 3,812 95 920,907	Earnings per share (in dollars)
			2.81 $
			2.79 $

A. Basic earnings per share is calculated with the gain or loss attributable to the shareholders of the ordinary shares issued by the Company, divided with outstanding weighted average ordinary shares during the period, and deducted with weighted average treasury shares.

• B. For the year ended December 31, 2017, the outstanding weighted average shares was retrospectively adjusted based on retained earnings capitalization ratio in 2018.

~34~

(16) Changes in liabilities from financing activities

At January 1, 2018 Changes in cash flow from financing activities At December 31, 2018	Loan to relatedparties	Liabilities from financing activities-gross
	1,488,000 $ 1,088,705) ( 399,295 $	1,488,000 $ 1,088,705) ( 399,295 $

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Group Mitac International Corporation Subsidiary Mitac Computing Technology Corporation Subsidiary Mitac Digital Technology Corporation Subsidiary Silver Star Development Ltd. and subsidiaries Subsidiary Mitac Technology UK, Ltd. and subsidiary Subsidiary Getac Technology Corp. and subsidiaries Associates Synnex Corp. and subsidiaries Associates

Shen Tong Construction & Developments Co., Ltd. and subsidiaries

Infopower Technologies Ltd. Synnex Technology International Corp. and subsidiaries Harbinger Venture Management Company Ltd. Lien Hwa Industrial Corp. and subsidiaries UPC Technology Corp. MITAC Inc. MiTAC Information Technology Corp. and subsidiaries

Associates Associates Common Chairman

Common Chairman Common Chairman Common Chairman Common Chairman

The Company’s chairman was this company’s director

(2) Significant related party transactions and balances

A. Receivables from related parties:

nificant related party transactions and balances Receivables from related parties:
Subsidiary - Mitac International Subsidiary - Mitac Computing Technology Subsidiary - Mitac Digital Technology Total Other receivables (excluding loans to subsidiaries):	December 31,2018 9,781 $ 39,944 38,474 88,199 $	December 31,2017
		494 $ 128,015 -
		128,509 $

Other receivables are mainly about tax paid on behalf of subsidiaries under consolidated tax return.

~35~

B. Payables to related parties:

Payables to related parties:
Subsidiary - Mitac International Subsidiary - Mitac Computing Technology Total Other payables (excluding loan from subsidiary):	December 31,2018 48,193 $ 1,894 50,087 $	December 31,2017
		34,192 $ -
		34,192 $

Other payables are mainly about tax refund received on behalf of subsidiaries under consolidated tax return.

• C. Loans to /from related parties:

• (a) Loans to related parties:

  • i. Outstanding balance:

urn. to /from related parties: ans to related parties: Outstanding balance:
Interest income Subsidiary - Mitac International Subsidiary - Mitac Computing Technology Subsidiary - Mitac Digital Technology Total Subsidiary - Mitac International Subsidiary - Mitac Computing Technology Subsidiary - Mitac Digital Technology Total		December 31,2018
		Balance			ExpiryDate		Balance
				3,838 $ 19,250 9,725 32,813 $					9,267 $ 17,563 - 26,830 $

ii. Interest income

The loans to subsidiaries are with a credit term of 1 year and carry interest at 0.8800%2.400% and 0.8863%-1.7939% per annum for the years ended December 31, 2018 and 2017, respectively. The amounts of loan to and repayment from related parties were $6,468,328 and $7,997,033, respectively, for the year ended December 31, 2018. The amounts of loan to and repayment from to related parties were $6,487,920 and $7,189,670, respectively, for the year ended December 31, 2017.

~36~

(b) Loans from related parties:

Outstanding balance:

Loans from related parties: Outstanding balance:
Subsidiary - Silver Star Development Ltd. and subsidiaries		December 31,2018			December 31,2017
		Balance	ExpiryDate		Balance	ExpiryDate
		399,295 $	2019/4/1		1,488,000 $	2018/8/9

The loans from subsidiaries are with a credit term of 1 year and carry interest at 0% per annum for the years ended December 31, 2018 and 2017. The amounts of loan from and repayment to related parties were $2,764,350 and $3,853,055, respectively, for the year ended December 31, 2018. The amounts of loan from and repayment to related parties were $4,330,080 and $3,841,830, respectively, for the year ended December 31, 2017.

D. Endorsements and guarantees provided to related parties:

Expenses: Subsidiary - Mitac International Subsidiary - Mitac Computing Technology Subsidiary - Mitac Digital Technology Total Subsidiary - Mitac International Other related parties - Lien Hwa Industrial Corp. and subsidiaries Total	December 31,2018 516,495 $ 299,228 110,699 926,422 $ For the year ended December 31,2018 12,400 $ 2,187 14,587 $	December 31,2017
		516,495 $ 626,718 30,294 1,173,507 $ For the year ended December 31,2017 12,400 $ 1,751 14,151 $

E. Expenses:

Expenses mainly pertain to services, rental expenditures for the lease of offices and other miscellaneous expenses.

(3) Key management compensation

Salaries and other short-term employee benefits	For the year ended December 31,2018 8,680 $	For the year ended December 31,2017 8,192 $

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8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

(1) Contingencies

None.

(2) Commitments

None.

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 continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital.

(2) Financial instruments

A. Financial instruments by category

ital structure to reduce the cost of capital. ancial instruments Financial instruments by category
Financial assets Financial assets at fair value through other comprehensive income Designation of equity instrument Available-for-sale financial assets Available-for-sale financial assets Financial assets at amortised cost/Loans and receivables Cash and cash equivalents Other receivables Other receivables - related parties Guarantee deposits paid Financial liabilities Financial liabilities at amortised cost Other accounts payable Other accounts payable - related parties	December 31,2018		December 31,2017
		429,695 $ - $ 145,995 $ 24 487,494 100 633,613 $ 8,961 $ 449,382 458,343 $		- $ 6,427 $ 453,595 $ 34 2,056,509 100 2,510,238 $ 10,644 $ 1,522,192 1,532,836 $

~38~

• B. Financial risk management policies

The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial position and financial performance.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Price risk

• i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and available-for-sale financial assets. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

• ii. The Company’s investments in equity securities comprise domestic listed and unlisted stocks. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, other components of equity would have increased/decreased by $4,297 and $64 for the years ended December 31, 2018 and 2017, respectively, as a result of gains/losses on equity securities classified as at fair value through other comprehensive income and available-for-sale.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of financial instruments settled based on the agreement.

• ii. For banks and financial institutions, only the institutions with good credit quality are accept as counterparties.

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Group treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs.

• ii. The table below analyses 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 nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

~39~

Non-derivative financial liabilities:

December31,2018 Other payables December31,2017 Other payables	Less than 1year 458,343 $ Less than 1year 1,532,836 $	Between 1 and 2year - $ Between 1 and 2year - $	Between 2 and3 years - $ Between 2 and3 years - $	Over 3 years
				- $ Over 3 years
				- $

(3) Fair value information

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

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

• Level 3: Inputs for the asset or liability that are not based on observable market data.

• B. Financial instruments not measured at fair value

• The carrying amounts of cash and cash equivalents, other receivables and other payables are approximate to their fair values.

• C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2018 and 2017 is as follows:

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

December 31, 2018 Recurring fair value measurements Equity securities December 31, 2017 Recurring fair value measurements Equity securities	Level 1 112,975 $ Level 1 - $	Level 2 267,317 $ Level 2 6,427 $	Level 3 49,403 $ Level 3 - $	Total
				429,695 $
				Total
				6,427 $

• (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:

Market quoted price	Listed shares
	Closing price

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes.

~40~

• iii. When assessing non-standard and low-complexity financial instruments, the Company 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.

• iv. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Company’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the parent company only balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• v. The Company takes into account adjustments for credit risk 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 between Level 1 and Level 2.

• E. The following table presents the changes in level 3 instruments as at December 31, 2018 and 2017:

			Equitysecurities	Equitysecurities
		2018			2017
January 1	$		-	$		-
Current purchase			50,322			-
Loss recognized in other
comprehensive income	(		919)			-
December 31	$		49,403	$		-

• F. Investment department is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, and reviewing the information periodically.

~41~

• G. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes significant unobservable inputs to valuation model used in Level 3 fair value measurements:

Non-derivative equityinstrument: Unlisted shares	Fair value at December31,2018 $ 49,403	Valuation technique Net asset value	Significant unobservable input Net asset value	Range (weighted average)	Relationship of inputs to fairvalue
				-	The higher the net asset value, the higher the fair value.

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

Financial assets Input Equity instrument Net asset value	Change ±1%		December	31,2018	31,2018
		Recognized in	Unfavourable change - $ profit or loss	Recognized in other comprehensive income
		Favourable change - $		Favourable change 494 $	Unfavourable change
					494 $

(4) Effects on initial application of IFRS 9 and information on application of IAS 39 in 2017

The reconciliations of carrying amount of financial assets transfered from December 31, 2017, IAS 39, to January 1, 2018, IFRS 9, were as follows:

IFRS9/IAS 39 Investments accounted for using equity method adjustment		Available-for-sale-equity	Effects	Effects
		through other comprehensive income- equity	Retained earnings	Other equity interest
		$6,427	$-	$-
			214,703 $	60,524) ($

• A. Under IAS 39, because the equity instruments, which were classified as: available-for-sale financial assets, amounting to $6,427, were not held for the purpose of trading, they were reclassified as "financial assets at fair value through other comprehensive income" on initial application of IFRS 9.

• B. The Company recognised investments accounted for using equity method to increase retained earnings and decrease other equity interest by $214,703 and $60,524, respectively, under effect on initial application of IFRS 9.

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13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company’s paid-in capital: Please refer to table 4.

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

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

• G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: Please refer to table 5.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 6.

• I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes 6(2) and (14).

• J. Significant inter-company transactions during the reporting periods: Please refer to table 7.

• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 8.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 9.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 9.

~43~

MITAC HOLDINGS CORPORATION AND SUBSIDIARIES Loans to others

For the year ended December 31, 2018

Table 1

Expressed in thousands of NTD

(Except as otherwise indicated)

No. （Note1）	Creditor	Borrower	Is a related party	General ledger account	Maximum outstanding balance during the year ended December 31, 2018	Balance at December 31, 2018	Actual amount drawn down	Interest rate	Nature of loan （Note 2）	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party （Note 3）	Ceiling on total loans granted （Note 3）	Footnote
													Item	Value
0	MiTAC Holdings Corp.	MiTAC International Corp.	Y	Other receivables- relatedparties	2,500,000 $	2,000,000 $	- $	0.880%-1.800%	2	- $	Operations	- $	None	- $	3,651,453 $	7,302,905 $
0	MiTAC Holdings Corp.	MiTAC Computing Technology Corp.	Y	Other receivables- relatedparties	3,000,000	3,000,000	-	0.880%-2.250%	2	-	Operations	-	None	-	3,651,453	7,302,905
0	MiTAC Holdings Corp.	MiTAC Digital Technology Corp.	Y	Other receivables- relatedparties	1,000,000	1,000,000	399,295	0.880%-2.400%	2	-	Operations	-	None	-	3,651,453	7,302,905
1	MiTAC Computing Technology Corp.	MiTAC International Corp.	Y	Other receivables- relatedparties	1,700,000	1,490,000	1,490,000	0.907%	2	-	Operations	-	None	-	1,573,086	1,573,086
1	MiTAC Computing Technology Corp.	MiTAC Information Technology Czech s.r.o.	Y	Other receivables- relatedparties	11,005	10,809	10,809	2.00%	2	-	Operations	-	None	-	1,573,086	1,573,086
2	Silver Star Developments Ltd.	MiTAC International Corp.	Y	Other receivables- relatedparties	3,497,915	3,470,795	2,457,200	0.00%	2	-	Operations	-	None	-	7,259,364	7,259,364
2	Silver Star Developments Ltd.	MiTAC Holdings Corp.	Y	Other receivables- relatedparties	3,347,935	1,935,045	399,295	0.00%	2	-	Operations	-	None	-	7,259,364	7,259,364
2	Silver Star Developments Ltd.	Software Insights Ltd.	Y	Other receivables- relatedparties	30,955	30,715	30,715	0.00%	2	-	Operations	-	None	-	11,401,172	11,401,172
2	Silver Star Developments Ltd.	Best Profit Ltd.	Y	Other receivables- relatedparties	762,763	-	-	0.00%	2	-	Operations	-	None	-	11,401,172	11,401,172
2	Silver Star Developments Ltd.	Start Well Technology Ltd.	Y	Other receivables- relatedparties	947,223	939,879	939,879	0.00%	2	-	Operations	-	None	-	11,401,172	11,401,172
2	Silver Star Developments Ltd.	MiTAC Benelux N.V.	Y	Other receivables- relatedparties	90,600	80,960	80,960	0.00%	2	-	Operations	-	None	-	11,401,172	11,401,172
3	Tyan Computer Corp.(USA)	Mitac Information Systems Corp.	Y	Other receivables- relatedparties	232,163	230,363	230,363	2.83%	2	-	Operations	-	None	-	242,668	242,668
4	Access Wisdom Holdings Ltd.	MiTAC Digital Corp.	Y	Other receivables- relatedparties	2,039,935	1,071,954	1,071,954	0.00%	2	-	Operations	-	None	-	2,979,355	2,979,355
4	Access Wisdom Holdings Ltd.	MiTAC Europe Ltd.	Y	Other receivables- relatedparties	172,272	154,880	154,880	0.00%	2	-	Operations	-	None	-	2,979,355	2,979,355
4	Access Wisdom Holdings Ltd.	Mio Technology (Suzhou) Ltd.	Y	Other receivables- relatedparties	93,720	-	-	0.00%	2	-	Operations	-	None	-	2,979,355	2,979,355
4	Access Wisdom Holdings Ltd.	Silver Star Developments Ltd.	Y	Other receivables- relatedparties	464,325	460,725	245,720	0.00%	2	-	Operations	-	None	-	2,979,355	2,979,355
5	MiTAC Digital Technology Corp.	MiTAC International Corp.	Y	Other receivables- relatedparties	500,000	500,000	400,000	0.907%-0.912%	2	-	Operations	-	None	-	623,112	623,112
6	MiTAC International Corp.	MiTAC Computing Technology Corp.	Y	Other receivables- relatedparties	2,900,000	2,900,000	1,858,258	2.09%-3.10%	2	-	Operations	-	None	-	3,075,339	6,150,677
6	MiTAC International Corp.	MiTAC Digital Technology Corp.	Y	Other receivables- relatedparties	2,000,000	2,000,000	337,865	2.06%-3.10%	2	-	Operations	-	None	-	3,075,339	6,150,677
7	MiTAC Investment Holding Ltd.	MiTAC Technology (KunShan) Co., Ltd.	Y	Other receivables- relatedparties	31,395	13,416	-	4.35%	2	-	Operations	-	None	-	1,193,006	1,193,006

• Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

• (1)The Company is ‘0’.

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

• Note 2: The nature of loan are as follows:

• (1) Ongoing business

• (2) Short-term financing

• Note 3: (1) MiTAC Holdings Corp. (the Company)'s total borrowing amount of short-term financing should not exceed 20% of the net worth on the latest financial statements audited or reviewed by independent accountants. The borrowing amount for each borrowing company should not exceed 10% of the net worth of the Company.

• (2) MiTAC Computing Technology Corp.’s short-term financing limit should not exceed 20% of the net worth on the latest financial statements audited or reviews by independent accountants. Each financing should not exceed 10% of the net worth mentioned above.

• (3) If Silver Star Developments Ltd. was lending to foreign subsidiaries owned 100% directly and indirectly by the ultimate parent company, the borrowing amount to each borrowing company and the total borrowing amount should not be higher than 200% of the paid-in capital on the latest financial statements audited by independent accountants.

• (4) Silver Star Development Ltd.'s borrowing amount to each borrowing company and total borrowing amount of the parent company should not exceed 40% of the net worth on the latest financial statements audited by independent accountants.

• (5) The borrowing amount and the total borrowing amount of Tyan Computer Corp. (USA) lending to the ultimate parent company's direct and indirect wholly-owned foreign subsidiaries should not exceed 200% of the paid-in capital on the

• (6) If Access Wisdom Holdings Ltd. was lending to foreign subsidiaries owned 100% directly and indirectly by the ultimate parent company, the borrowing amount to each borrowing company and the total borrowing amount should not be higher than 200% of the paid-in capital on the latest financial statements audited by independent accountants.

• (7) MiTAC Digital Technology Corp.’s short-term financing limit should not exceed 20% of the net worth on the latest financial statements audited or reviews by independent accountants. Each financing should not exceed 10% of the net worth mentioned above.

• (8) MiTAC International Corp.'s total borrowing amount of short-term financing should not exceed 20% of the net worth on the latest financial statements audited or reviewed by independent accountants. The borrowing amount for each borrowing company should not exceed 10% of the net worth of the Company.

• (9) MiTAC Investment Holding Ltd.’s short-term financing limit should not exceed 20% of the net worth on the latest financial statements audited or reviews by independent accountants. Each financing should not exceed 10% of the net worth mentioned above.

Table 1-1

MITAC HOLDINGS CORPORATION AND SUBSIDIARIES

Table 2

Expressed in thousands of NTD

Provision of endorsements and guarantees to others

For the year ended December 31, 2018

(Except as otherwise indicated)

Number （Note 1）	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party ( Note 3 )	Maximum outstanding endorsement/ guarantee amount as of December 31, 2018	Outstanding endorsement/ guarantee amount at December 31, 2018	Actual amount drawn down	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/guarantee amount to net asset value of the endorser/guarantor company	Ceiling on total amount of endorsements/ guarantees provided （Note 3）	Provision of endorsements/ guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser/ guarantor （Note 2）
0	MiTAC Holdings Corp.	Tyan Computer Corp.(USA)	3	18,257,263 $	299,228 $	299,228 $	299,228 $	- $	0.82%	18,257,263 $	Y	N	N
0	MiTAC Holdings Corp.	MiTAC Computing Technology Corp.	2	18,257,263	516,495	516,495	516,495	-	1.41%	18,257,263	Y	N	N
0	MiTAC Holdings Corp.	MiTAC Information Systems Corp.	3	18,257,263	452,850	-	-	-	0.00%	18,257,263	Y	N	N
0	MiTAC Holdings Corp.	MiTAC International Corp.	2	18,257,263	24,091	230	230	-	0.00%	18,257,263	Y	N	N
0	MiTAC Holdings Corp.	Mio Technology (Suzhou) Ltd.	3	18,257,263	6,203	-	-	-	0.00%	18,257,263	Y	N	Y
0	MiTAC Holdings Corp.	MiTAC Digital Technology Corp.	2	18,257,263	18,894	18,894	18,894	-	0.05%	18,257,263	Y	N	N
0	MiTAC Holdings Corp.	MiTAC Digital Corp.	3	18,257,263	91,575	91,575	-	-	0.25%	18,257,263	Y	N	N
1	MiTAC International Corp.	MiTAC Digital Corp.	3	15,376,693	136,620	-	-	-	0.00%	15,376,693	N	N	N
1	MiTAC International Corp.	MiTAC Digital Technology Corp.	3	15,376,693	300,000	-	-	-	0.00%	15,376,693	N	N	N

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

• (1) The Company is ‘0’.

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

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories; fill in the number of category each case belongs to:

• (1) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.

• (2) The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.

• Note 3: (1) The endorsement and guarantees amount provided by MiTAC Holdings Corp. to each entity which is directly or indirectly held 50% or more of the voting power by the company should not exceed 50% of the net worth on the latest financial statements audited or reviewed by independent accountants.

• (2) MiTAC Holding Corp's total endorsements and guarantees should not exceed 50% of the net worth on the latest financial statements audited or reviewed by independent accountants.

• (3) The endorsement and guarantees amount provided by MiTAC International Corp. to each entity which is directly or indirectly held 100% of the voting power should not exceed 50% of its net worth on

• (4) MiTAC Internatioal Corp.'s total endorsements and guarantees should not exceed 50% of the net worth on the latest financial statmeents audited or reviewed by independent accountants.

Table 2-1

MITAC HOLDINGS CORPORATION AND SUBSIDIARIES

Holding of marketable securities at the end of period (not including subsidiaries, associates and joint ventures) December 31, 2018 Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	As of December 31, 2018	As of December 31, 2018	As of December 31, 2018	As of December 31, 2018	Footnote
				Number of shares	Book value	Ownership (%)	Fair value
MiTAC Holdings Corp.	Synnex Technology International Corp.	Same board chairman	Financial assets at fair value through other comprehensive income-non current	3,103,717	112,975 $	0.19	112,975 $
MiTAC Holdings Corp.	The. Note. Co. Ltd.	None	Financial assets at fair value through other comprehensive income-non current	243,746	5,317	5.63	5,317
MiTAC Holdings Corp.	JVP VIII, L.P.	None	Financial assets at fair value through other comprehensive income-non current	425,000	11,903	1.46	11,903
MiTAC Holdings Corp.	WHETRON ELECTRONICS CO., LTD.	None	Financial assets at fair value through other comprehensive income-non current	6,550,000	262,000	9.05	262,000
MiTAC Holdings Corp.	Harbinger VIII Venture Capital Corp.	None	Financial assets at fair value through other comprehensive income-non current	3,750,000	37,500	19.05	37,500
MiTAC International Corp.	Lien Hwa Industrial Corp.	Same board chairman	Financial assets at fair value through other comprehensive income-non current	29,351,945	870,285	2.79	870,285
MiTAC International Corp.	UPC Technology Corp.	Same board chairman	Financial assets at fair value through other comprehensive income-non current	15,711,849	182,257	1.21	182,257
MiTAC International Corp.	COMPUCASE ENTERPRISE CO., LTD.	None	Financial assets at fair value through other comprehensive income-non current	10,000,000	234,200	8.83	234,200
MiTAC International Corp.	MiTAC INC.	Same board chairman	Financial assets at fair value through other comprehensive income-non current	28,196,998	658,964	8.69	658,964
MiTAC International Corp.	MiTAC Information Technology Corp.	The Company's chairman was this company's director.	Financial assets at fair value through other comprehensive income-non current	3,912,334	38,752	4.35	38,752
MiTAC International Corp.	Overseas Investment & Development Corp.	MiTAC Inc.'s director.	Financial assets at fair value through other comprehensive income-non current	1,000,000	11,144	1.11	11,144
MiTAC International Corp.	Harbinger Venture Capital Corp.	Same board chairman	Financial assets at fair value through other comprehensive income-non current	1,447,098	14,284	14.05	14,284
MiTAC International Corp.	Harbinger VI Venture Capital Corp.	Same board chairman	Financial assets at fair value through other comprehensive income-non current	4,648,075	56,740	13.28	56,740
MiTAC International Corp.	Harbinger VII Venture Capital Corp.	Same board chairman	Financial assets at fair value through other comprehensive income-non current	10,000,000	100,327	9.39	100,327
Tsu Fung Investment Corp.	MiTAC Holdings Corp.	Ultimate parent company	Financial assets at fair value through other comprehensive income-current	12,174,313	300,097	1.30	300,097	Note 1
Tsu Fung Investment Corp.	Getac Technology Corp.	None	Financial assets at fair value through other comprehensive income-current	7,783,741	312,906	1.34	312,906
Tsu Fung Investment Corp.	UPC Technology Corp.	None	Financial assets at fair value through other comprehensive income-current	15,887,296	184,293	1.23	184,293
Tsu Fung Investment Corp.	Synnex Technology International Corp.	None	Financial assets at fair value through other comprehensive income-current	4,586,974	166,966	0.28	166,966
Tsu Fung Investment Corp.	Lien Hwa Industrial Corp.	None	Financial assets at fair value through other comprehensive income-current	3,532,157	104,728	0.34	104,728
Tsu Fung Investment Corp.	National Aerospace Fasteners Corporation	None	Financial assets at fair value through other comprehensive income-current	474,188	28,404	0.90	28,404
Tsu Fung Investment Corp.	PROMISE Technology Inc.	None	Financial assets at fair value through other comprehensive income-current	5,000,000	40,200	3.10	40,200
Tsu Fung Investment Corp.	MiTAC INC.	None	Financial assets at fair value through other comprehensive income-non current	14,717,192	343,941	4.54	343,941
Tsu Fung Investment Corp.	MiTAC Information Technology Corp.	None	Financial assets at fair value through other comprehensive income-non current	2,380,122	23,575	2.64	23,575
Tsu Fung Investment Corp.	Tung Da Investment Co., Ltd.	None	Financial assets at fair value through other comprehensive income-non current	4,848,125	87,178	19.99	87,178	Note 2
Tsu Fung Investment Corp.	Harbinger Venture Management Co., Ltd.	None	Financial assets at fair value through other comprehensive income-non current	862,922	11,918	19.99	11,918
Tsu Fung Investment Corp.	Lien Yung Investment Corp.	None	Financial assets at fair value through other comprehensive income-non current	9,217,196	90,992	19.99	90,992
Tsu Fung Investment Corp.	Uni-President Assets Management Corp.	None	Financial assets at fair value through profit or loss-current	4,554,531	75,994	-	75,994
Tsu Fung Investment Corp.	Prudential Financial Money Market Fund	None	Financial assets at fair value through profit or loss-current	2,121,345	33,504	-	33,504
Silver Star Developments Ltd. and its ~~subsidiaries~~	MiTAC Holdings Corp.	Ultimate parent company	Financial assets at fair value through other comprehensive income-non current	1,652,139	40,725	0.18	40,725	Note 1
Silver Star Developments Ltd. and its ~~subsidiaries~~	Global Strategic Investment Inc.(SAMOA)	None	Financial assets at fair value through other comprehensive income-non current	434,946	5,631	1.23	5,631
Silver Star Developments Ltd. and its ~~subsidiaries~~	Global Strategic Investment Inc.	None	Financial assets at fair value through other comprehensive income-non current	245,000	7,954	1.26	7,954
Silver Star Developments Ltd. and its ~~subsidiaries~~	Budworth Investments Ltd.	None	Financial assets at fair value through other comprehensive income-non current	853,920	22,454	14.83	22,454
Silver Star Developments Ltd. and its ~~subsidiaries~~	Panasas Inc.	None	Financial assets at fair value through profit or loss-non current	13,913	-	0.04	-
Silver Star Developments Ltd. and its ~~subsidiaries~~	Physi-Cal Enterprises	None	Financial assets at fair value through profit or loss-non current	354,080	-	3.54	-

Note 1: The Company's shares held by Tsu Fung Investment Corp. and Silver Star Developments Ltd. are accounted for as treasury stocks. Note 2: MiTAC International Corp. sold its shares of Tung Da Investment Co., Ltd. to Tsu Fung Investment Corp.,and such disposal gain has not yet been realised.

Table 3-1

MITAC HOLDINGS CORPORATION AND SUBSIDIARIES

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

For the year ended December 31, 2018

					For the year ended December 31, 2018	For the year ended December 31, 2018	For the year ended December 31, 2018	For the year ended December 31, 2018	For the year ended December 31, 2018	For the year ended December 31, 2018	For the year ended December 31, 2018	For the year ended December 31, 2018	For the year ended December 31, 2018	For the year ended December 31, 2018
Table 4					Expressed in thousands of NTD (Except as otherwise indicated)
Investor	Marketable securities	General ledger account	Counterparty	Relationship with the investor	Balance as at Januart 1, 2018		Addition		Disposal				Balance as at December 31, 2018
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain(loss)on disposal	Number of shares	Amount
Silver Star Developments Ltd.	Synnex Corp.	Investments accounted for under equity method	-	-	5,448,878	$ 9,251,465	242,102	$ 580,703	451,000	$ 1,716,328	$ 753,912	$ 962,416	5,239,980	$ 10,802,228

Note 1: Including cost of sales, capital surplus and transfers of other equity interest preciously recognized.

Note 2: Including recognition for share of profit (loss) of and other comprehensive income of associates accounted for using equity method and adjustments of changes in net equity.

Table 4-1

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

MITAC HOLDINGS CORPORATION AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

For the year ended December 31, 2018

Purchaser/seller	Counterparty	Relationship with the counterparty	Transaction	Transaction	Transaction	Transaction	Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
MiTAC Computing Technology Corp.	MiTAC Information Systems Corp.	Subsidary	Sales	3,564,787	24.50%	Note1	Note3	Note1	1,813,079	55.06%
MiTAC Computing Technology Corp.	MiTAC Computer (Shunde) Ltd.	Affiliate	Purchases	5,548,403	46.12%	Note2	Note3	Note2	1,539,424) (	44.66%
MiTAC Computing Technology Corp.	Tyan Computer Corp.(USA)	Subsidary	Sales	639,602	4.40%	Note1	Note3	Note1	-	-
MiTAC Computing Technology Corp.	MiTAC Logistics Corp.	Subsidary	Sales	1,939,064	13.33%	Note1	Note3	Note1	350,627	10.65%
MiTAC Computing Technology Corp.	Synnex Corp. and its subsidiaries	Associate of affiliate	Sales	615,334	4.23%	Note1	Note3	Note1	80,710	2.45%
MiTAC Computing Technology Corp.	MiTAC Computer (Kunshan) Ltd.	Affiliate	Purchases	164,584	1.37%	Note2	Note3	Note2	95,190) (	2.76%	Note4
MiTAC Digital Technology Corp.	MiTAC Europe Ltd.	Subsidary	Sales	322,222	7.95%	Note1	Note3	Note1	244,744	23.07%
MiTAC Digital Technology Corp.	MiTAC Australia Pty Ltd.	Subsidary	Sales	240,993	5.95%	Note1	Note3	Note1	135,286	12.75%
MiTAC Digital Technology Corp.	MiTAC Computer (Kunshan) Ltd.	Affiliate	Purchases	1,249,360	38.50%	Note2	Note3	Note2	598,726) (	56.55%	Note4
Silver Star Developments Ltd. and its subsidiaries	MiTAC Computing Technology Corp.	Affiliate	Sales	5,713,023	36.66%	Note1	Note3	Note1	1,634,614	23.72%
Silver Star Developments Ltd. and its subsidiaries	MiTAC Digital Technology Corp.	Affiliate	Sales	1,311,476	8.42%	Note1	Note3	Note1	620,224	9.00%	Note4
MiTAC Technology UK Ltd. and its subsidiaries	MiTAC Computing Technology Corp.	Parent Company	Purchases	6,143,453	46.19%	Note2	Note3	Note2	2,163,706) (	60.72%
MiTAC Technology UK Ltd. and its subsidiaries	Synnex Corp. and its subsidiaries	Associate of affiliate	Sales	2,027,564	14.85%	Note1	Note3	Note1	280,225	15.49%
Access Wisdom Holdings Ltd and its subsidiaries	MiTAC Digital Technology Corp.	Parent Company	Purchases	604,814	71.31%	Note2	Note3	Note2	400,772) (	93.34%

• Note 1: The Group's credit term for foreign related parties is to collect within 5 months based on the net amount of receivables after offseting against payables, which takes into consideration the reasonable amount of time for the Company to ship products to each company and for the companies to sell the products and collect the sales. The Group's credit term for domestic related parties is 3 months from the date of

shiipment for the collection of the net amount of receivables after offsetting against payables; the credit term for third parties is an average of 3 months after the date of shipment.

• Note 2: The Group's payment term for foreign related parties is within 5 months for the collection of the net amount of receivables after offsetting against payables, which is in accordance with the Group's credit

policies of accounts receivable with foreign related parties, the Grouup's payment term for domestic related parties is 3 months from the date of shipment from the counterparty for the net amount of receivables

after offsetting against payables; the payment term for third parties is an average of 3 months after the date of shipment from the counterparty. Note 3: The selling price to related parties is based on market value.

• Note 4: There were certain transaction made through MiTAC Digital Technology Corp.’s subsidiary, Mio International Ltd.

Table 5-1

MITAC HOLDINGS CORPORATION AND SUBSIDIARIES

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

December 31, 2018

Table 6	Table 6	Table 6				Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)
Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2018		Turnover rate	Overdue receivables		Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
			Amount receivables	Other receivables		Amount	Action taken
MiTAC Computing Technology Corp.	MiTAC Information Systems Corp.	Subsidary	1,813,079 $	1,338 $	1.36	- $	Not Applicable	154,629 $	- $
MiTAC Computing Technology Corp.	MiTAC Logistics Corp.	Subsidary	350,627	-	4.23	-	Not Applicable	152,840	-
MiTAC Digital Technology Corp.	MiTAC Europe Ltd.	Subsidary	244,744	38	1.15	89,077	Not Applicable	31,571	-
MiTAC Digital Technology Corp.	MiTAC Australia Pty Ltd.	Subsidary	135,286	69	1.57	5,693	Not Applicable	38,526	-
Silver Star Developments Ltd. and its subsidiaries	MiTAC Computing Technology Corp.	Affiliate	1,634,614	27,960	2.24	-	Not Applicable	-	-
Silver Star Developments Ltd. and its subsidiaries	MiTAC Digital Technology Corp.	Affiliate	620,224	4,506	1.54	-	Not Applicable	-	Note1
MiTAC Technology UK Ltd. and its subsidiaries	Synnex Corp. and its subsidiaries	Associate of affiliate	280,225	-	7.49	-	Not Applicable	-	-

Note 1: There were certain transaction made through MiTAC Digital Technology Corp.’s subsidiary, Mio International Ltd.

Table 6-1

MITAC HOLDINGS CORPORATION AND SUBSIDIARIES Significant inter-company transactions during the reporting periods For the year ended December 31, 2018

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	Transaction	Transaction	Transaction	Transaction	Footnote
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0	MiTAC Holdings Corp.	MiTAC Digital Technology Corp.	1	Other receivables	438,606 $		0.91%
1	MiTAC International Corp.	MiTAC Computing Technology Corp.	3	Other income	141,758		0.46%
1	MiTAC International Corp.	MiTAC Computing Technology Corp.	3	Other receivables	1,889,273		3.93%
2	MiTAC Computing Technology Corp.	MiTAC Technology UK Ltd. and its subsidiaries	3	Sales	6,143,453	Note4	19.98%
2	MiTAC Computing Technology Corp.	MiTAC Technology UK Ltd. and its subsidiaries	3	Accounts receivable	2,163,706	Note4	4.50%
2	MiTAC Computing Technology Corp.	MiTAC International Corp.	3	Other receivables	1,490,000	Note4	3.10%
2	MiTAC Computing Technology Corp.	Silver Star Develpoments Ltd. and its subsidiaries	3	Purchases	5,713,023	Note5	18.58%
2	MiTAC Computing Technology Corp.	Silver Star Develpoments Ltd. and its subsidiaries	3	Accounts payable	1,634,614	Note5	3.40%
3	MiTAC Digital Technology Corp.	MiTAC International Corp.	3	Other receivables	400,000		0.83%
3	MiTAC Digital Technology Corp.	Access Wisdom Holdings Ltd and its subsidiaries	3	Sales	604,814		1.97%
3	MiTAC Digital Technology Corp.	Access Wisdom Holdings Ltd and its subsidiaries	3	Accounts receivable	400,772		0.83%
3	MiTAC Digital Technology Corp.	Silver Star Develpoments Ltd. and its subsidiaries	3	Purchases	1,311,476		4.26%	Note7
3	MiTAC Digital Technology Corp.	Silver Star Develpoments Ltd. and its subsidiaries	3	Accounts payable	620,224		1.29%	Note7
4	Silver Star Develpoments Ltd. and its subsidiaries	MiTAC Holdings Corp.	2	Other receivables	399,295		0.83%
4	Silver Star Develpoments Ltd. and its subsidiaries	MiTAC International Corp.	3	Other receivables	2,458,036		5.12%
5	Access Wisdom Holdings Ltd.	Silver Star Developments Ltd.	3	Other receivables	245,720		0.51%

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

(1) Parent company is "0".

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

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

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on Note 4: The Group's credit term for foreign related parties is 5 months for the collection of the net amount of receivables after offsetting against payables, which takes into consideration the reasonable amount of time for the Company Note 5: The Group's payment term for foreign related parties is 5 months for the collection of the net amount of receivables after offsetting against payables after checking and the transaction price is based on the international market Note 6: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

Note 7: There were certain transaction made through MiTAC Digital Technology Corp.’s subsidiary, Mio International Ltd.

Table 7-1

MITAC HOLDINGS CORPORATION AND SUBSIDIARIES

Information on investees (Does not include Mainland China invested companies)

For the year ended December 31, 2018

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2018	Shares held as at December 31,2018	Shares held as at December 31,2018	Net profit (loss) of the investee for the year ended December 31, 2018	Investment income (loss) recognized by the Company for the year ended December 31, 2018	Footnote
				Balance as at December 31, 2018	Balance as at December 31, 2017	Number of shares （Note）	Ownership (%)	Book value
MiTAC Holding Corp.	MiTAC International Corp.	Taiwan	Development, design and manufacturing and sale of computers and its peripherals, telecommunication related products	24,739,187 $	26,239,187 $	1,695,026,630	100.00	31,508,825 $	2,884,461 $	2,868,854 $	Subsidiary
MiTAC Holding Corp.	MiTAC Computing Technology Corp.	Taiwan	Development, design and manufacturing and sale of computers and its peripherals, telecommunication related products	3,419,621	3,419,621	232,757,102	100.00	4,011,066	305,461	305,461	Subsidiary
MiTAC Holding Corp.	MiTAC Digital Technology Corp.	Taiwan	Sales and service of electronic telecommunication, communication and software, etc.	1,501,000	1,000	100,100,000	100.00	1,636,397	122,038	122,038	Subsidiary
MiTAC Holding Corp.	Infopower Technologies Ltd.	India	Manufacture and sale of electronic product.	84,500	84,500	6,774,199	33.33	85,462	4,007) (	1,336) (	Associate
MiTAC International Corp.	Getac Technology Corp.	Taiwan	Manufacturing and sale of notebook computers, military and industrial computer systems, etc.	1,391,549	1,391,549	190,396,939	32.87	4,850,015	2,212,459	-	Associate
MiTAC International Corp.	Tsu Fung Investment Corp.	Taiwan	Investment	625,000	625,000	132,184,651	100.00	1,906,088	91,936	-	Subsidiary
MiTAC International Corp.	3Probe Technologies Corp.	Taiwan	Information process service, sales of software and international trading.	16,839	16,839	1,086,000	23.25	12,391	3,805	-	Associate
MiTAC International Corp.	Lian Jie Investment Co., Ltd.	Taiwan	Investment	113,057	113,057	11,305,650	49.98	109,208	3,435	-	Associate
MiTAC International Corp.	Lian Jie II Investment Co., Ltd.	Taiwan	Investment	32,500	32,500	3,250,000	32.50	37,060	2,988) (	-	Associate
MiTAC International Corp.	Silver Star Developments Ltd.and its subsidiary	British Virgin Islands	Investment	5,650,607	5,700,586	183,968,961	100.00	20,599,422	1,143,061	-	Subsidiary
MiTAC International Corp.	Shen-Tong Construction & Development Co., ltd.	Taiwan	Building and factory construction, leasing and sales	90,349	85,594	9,034,922	47.55	86,590	1,926) (	-	Associate
MiTAC International Corp.	Mio Technology Corp.	Taiwan	Sale of communication products and related after-sale services	13,204	13,204	250,000	100.00	3,695	44) (	-	Subsidiary
MiTAC International Corp.	Green Share Corp.	Taiwan	Sale of computers and its peripherals, and hardware, software and related products	7,839	7,839	783,900	48.99	4,032	1,048) (	-	Associate

Table 8-1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2018	Shares held as at December 31,2018	Shares held as at December 31,2018	Net profit (loss) of the investee for the year ended December 31, 2018	Investment income (loss) recognized by the Company for the year ended December 31, 2018	Footnote
				Balance as at December 31, 2018	Balance as at December 31, 2017	Number of shares （Note）	Ownership (%)	Book value
MiTAC International Corp.	LFE AEROSPACE INDUSTRY CORP.	Taiwan	Electronic components manufacturing, aircraft and its parts manufacturing and wholesale industry.	121,475	121,475	11,233,750	17.85	118,267	32,926) (	-	Associate
MiTAC Computing Technology Corp.	MiTAC Technology UK Ltd. and its subsidiary	UK	Investment	1,815,642	1,815,642	62,909,737	100.00	2,012,849	4,774	-	Subsidiary
MiTAC Computing Technology Corp.	Mitac Information Technology Czech s.r.o.	Czech Republic	Assemble and sales of computer and peripheral equipment.	11,054	11,054	-	100.00	2,278	4,738) (	-	Subsidiary
MiTAC Digital Technology Corp.	Mio International Ltd. and its subsidiary	British Virgin Islands	Investment	69,959	-	1,275,001	100.00	77,052	8,407	-	Subsidiary
MiTAC Digital Technology Corp.	Access Wisdom Holdings Limited. and its subsidiary	British Virgin Islands	Investment	-	-	48,500,000	100.00	11,829	125	-	Subsidiary
Silver Star Developments Ltd. and its subsidiaries	Harbinger II(BVI) Venture Capital Corp.	British Virgin Islands	Investment	27,898	27,898	908,284	49.96	16,996	183	-	Associate
Silver Star Developments Ltd. and its subsidiaries	Mainpower International Ltd.	British Virgin Islands	Investment	168,933	168,933	5,500,001	13.28	211,991	71,100	-	Associate
Silver Star Developments Ltd. and its subsidiaries	Synnex Corp.	USA	Information process services, sales of computer peripheral, system and network products	1,041,924	490,958	5,239,980	10.23	10,802,228	9,007,963	-	Associate
Silver Star Developments Ltd. and its subsidiaries	Harbinger Ruyi Venture Ltd.	British Virgin Islands	Investment	30,715	30,715	1,000,000	28.57	28,350	2,146) (	-	Associate
Silver Star Developments Ltd. and its subsidiaries	Harbinger Ruyi II Venture Ltd.	British Virgin Islands	Investment	30,715	30,715	10,000	32.26	25,771	1,869) (	-	Associate
Tsu Fung Investment Corp.	LFE AEROSPACE INDUSTRY CORP.	Taiwan	Electronic components manufacturing, aircraft and its parts manufacturing and wholesale industry.	15,504	15,504	1,433,740	2.28	14,104	32,926) (	-	Associate

Table 8-2

Table 9

MITAC HOLDINGS CORPORATION AND SUBSIDIARIES

Information on investments in Mainland China

For the year ended December 31, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Table 9	Table 9	Table 9	Table 9	Table 9	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)
					~~Amount remitted from~~
Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2018	Taiwan to Mainland China/		Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2018	Net income of investee as of December 31, 2018	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the year ended December 31, 2018 (Note 2)	Book value of investments in Mainland China as of December 31, 2018	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2018	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
MiTAC Computer (Shunde) Corp.	Manufacturing of computer cases and monitors. Etc.	1,863,507 $	2	1,225,551 $	- $	- $	1,225,551 $	92,480 $	100.00	92,480 $	2,617,403 $	- $
MiTAC Computer (Kunshan) Co., Ltd.	Sales and manufacturing of computer accessories, hardware, software and related services	2,282,978	2	1,799,899	-	-	1,799,899	41,474	100.00	41,474	2,878,350	-	Note3
MiTAC Technology (Kunshan) Co., Ltd.	Testing, repair and display of computer components and related products, and related technical advisory services and after-sale services	37,015	2	30,715	-	-	30,715	2,338	100.00	2,338	34,904	-
MiTAC Research (ShangHai) Ltd.	Research, development and production of computer software, sales of own- produced products and related technical advisory services	192,475	2	159,718	-	-	159,718	22,973	100.00	22,973	456,730	-
Shzhou MiTAC Precision Technology Co., Ltd.	Design and manufacturing of computer chassis and its components, percision plastic injection mould, molding parts and molding equipment processing and maintenance and repair services.	1,578,516	2	414,653	-	-	414,653	82,214	27.44	22,566	523,641	-
Mio Technology (Suzhou) Ltd.	Sales of communication products and related after-sale services	8,397	2	7,679	22,883	-	30,561	8,407	100.00	8,407	29,738	-
MiTAC Logistic Service (Kunshan) Ltd.	Agency of freight transport, export and import trading and warehousing services	30,502	2	30,715	-	-	30,715	2,733	100.00	2,733	36,635	-
MiTAC Information Technology Ltd.	After-sales maintenance, testing, consulting services and related support technology services	9,161	2	9,215	-	-	9,215	4,385	100.00	4,385	48,872	-
MiTAC Innovation (Kunshan) Ltd.	Research and development of computer, server, mobile phone, PDA, GNSS and GPS, and related technology transfer, technical services	29,384	2	30,715	-	-	30,715	7,435	100.00	7,435	69,540	-
CGK Zhong Shan Co., Ltd.	Manufacture and sales of optical glass, in-touch display system components and touch display mode Organizations.	225,909	2	1,710	-	-	1,710	197	0.70	-	1,710	-

Table 9-1

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2018	Taiwan to Mainland China/	Taiwan to Mainland China/	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2018	Net income of investee as of December 31, 2018	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the year ended December 31, 2018 (Note 2)	Book value of investments in Mainland China as of December 31, 2018	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2018	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Orient Optical Crystal Mfg. CO.	Manufacturing of protective cover glass	18,190	2	138	-	-	138	25,571) (	0.70	-	138	-
MiTAC Telematics Technology Corporation	Sales of self-produced products and related after-sale services	8,944	1	2,241	-	-	2,241	1,722	100.00	1,722	4,940	-
Vango Technologies Inc.	Research and development and manufacture and sales of integrated circuit and modular software, and related technology transfer, technical services	134,160	2	12,756	-	-	12,756	32,384	4.51	-	12,756	-
MiTAC Investment Holding Ltd.	Investment Holdings	2,098,674	2	921,450	-	-	921,450	63,099	100.00	63,099	3,044,394	-	Note3
MiTAC Information Systems (Kunshan) Co., Ltd.	Sales and manufacturing of computer accessories, hardware, software and related services	670,800	3	-	-	-	-	1,269) (	100.00	1,269) (	667,290	-

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

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

• (2) Invest in the investees in Mainland China through the company which are located in the third area.

• (3) Others:Invest in Mainland China through investees in Mainland Chian.

Note 2: In the 'Investment income (loss)recognised by the Company for the year ended December 31, 2018 column:

• (1) It should be indicated if the investee was still in the incorporation arrangements and had not yet generated any profit during this period.

• (2) Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:

• A. The financial statements were audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C..

• B. The financial statements were audited and attested by R.O.C. parent company's CPA.

• C. The financial statements were not audited and attested by independent accountants.

• (3) The basis for investment income (loss) recognition for MiTAC computer (Shunde) Corp., MiTAC Computer (Kunshan) Co., Ltd., MiTAC Research (ShangHai) Ltd., and Shzhou MiTAC Precision Technology Co., Ltd. is category B, the others are category C.

Note 3:Among the accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2018 of MiTAC Computer (Kunshan) Co., Ltd., MiTAC Investment Holding Ltd remitted out USD 29,900 thousand.

Table 9-2

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2017	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
MiTAC International Corp.	4,125,095 $	5,008,151 $	Note 4
MiTAC Computing Technology Corp.	2,241	2,241	Note 5
MiTAC Digital Technology Corp.	22,883	22,883	981,838

Note 4: In accordance with the "Regulations Governing the Permission of Investment or Techical Cooperation in Mainland Area", MiTAC International Corp. has acquired the Business Operation Headquarter Certificate

(Jing-Shou-Gong-Zi Ltetter. No. 10520407530) issued by the Industrial Development Bureau of the Ministry of Economic Affairs, which exempts the Company form the limitation on the amount of investment in Mainland China..

Note 5: In accordance with the "Regulations Governing the Permission of Investment or Techical Cooperation in Mainland Area", MiTAC Computing Technology Corp. has acquired the Business Operation Headquarter Certificate (Jing-Shou-Gong-Zi Ltetter. No. 10520407530) issued by the Industrial Development Bureau of the Ministry of Economic Affairs, which exempts the Company form the limitation on the amount of investment in Mainland China..

B. Significant transactions conducted with investees in Mainland China:

MiTAC Digital Technology Corp. and MiTAC Computing Technology Corp's delivery service expenses with investees in Mainland China for the year ended December 31, 2018 amounted to $37,512, for details of other significanttransactions, please refer to table 1, table 2, table 5 and table 7.

Table 9-3

MiTAC HOLDINGS CORPORATION DETAILS OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 1 (Remainder of page intentionally left blank) Item Summary Cash Bank seposits Checking accounts Demand deposits Time deposits	Amount
	91 $ 5,904 140,000
	145,995 $

Statement 1, Page.1

MiTAC HOLDINGS CORPORATION MOVEMENT SUMMARY OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD YEAR ENDED DECEMBER 31, 2018 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 2

Name	Number of shares Amounts 1,680,326 29,443,145 $ 232,757 4,368,957 100 920 6,774 89,703 33,902,725 $ Openingbalance	Number of shares Amounts (Note) Additions(Reduction)	Number of shares Amounts (Note) Additions(Reduction)	Gain (loss) on investments	Number of shares	Ownership % Amounts 100% 31,508,825 $ 100% 4,011,066 100% 1,636,397 33.33% 85,462 37,241,750 $ Endingbalance	Price Totalprice 18.59 31,508,825 $ 17.23 4,011,066 16.35 1,636,397 12.62 85,462 37,241,750 $ Marketprice or valueper share	Pledged to other as collateral
						Ownership % 100% 100% 100% 33.33%	Price 18.59 17.23 16.35 12.62
MiTAC International Corporation MiTAC Computing Technology Corporation MiTAC Digital Technology Infopower Technologies Ltd.		14,701 - 100,000 -	803,174) ($ 663,352) ( 1,513,439 2,905) ( 44,008 $	2,868,854 $ 305,461 122,038 1,336) ( 3,295,017 $	1,695,027 232,757 100,100 6,774			None None None None

Note: The amount of additions or reduction was investments of additions, cash dividend paid through financial statements translation differences of foreign operations as well as unrealised gains or losses on available-for-sale adjusted by shareholders’equity of subsidiaries, capital surplus and retained earnings were recognised proportionally to their interest.

Statement 2, Page.1

MiTAC HOLDINGS CORPORATION

EMPLOYEE BENEFITS, DEPRECIATION AND AMORTISATION EXPENSES SUMMARISED BY FUNCTION YEAR ENDED DECEMBER 31, 2018 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 3

By nature By function	Year ended December 31,2018	Year ended December 31,2018	Year ended December 31,2018	Year ended December 31,2017	Year ended December 31,2017	Year ended December 31,2017
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefit expense	-	-	-	-	-	-
Wages and salaries	-	4,921	4,921	-	4,647	4,647
Labor and health insurance fees	-	-	-	-	-	-
Pension costs	-	-	-	-	-	-
Directors'and surpervisors'remuneration	-	3,472	3,472		4,884	4,884
Other employee benefit expense	-	-	-	-	-	-
Depreciation	-	673	673	-	734	734

Note: For the years ended December 31, 2018 and 2017, the Company had 9 employees. The numbers of directors who are not concurrently employees were 5 for the years ended December 31, 2018 and 2017.

Statement 3, Page.1