TMC - Interim / Quarterly Report 2019

TAIWAN MASK CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report Thereon

June 30, 2019 and 2018 (Stock code: 2338)

Address ： No. 11, Innovation Rd. I, Science-Based Industrial Park, Hsinchu, Taiwan, R.O.C

Telephone ： (03)563-4370

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Independent Auditors `’` Review Report

To the Board of Directors and Shareholders of ：

TAIWAN MASK CORPORATION

Introduction

We have reviewed the accompanying consolidated balance sheets of TAIWAN MASK CORPORATION and subsidiaries (the “Group”) as of June 30, 2019 and 2018, and the related consolidated statements of comprehensive income for the three-month periods ended June 30, 2019 and 2018, and for the six-month periods ended June 30, 2019 and 2018, as well as the consolidated statements of changes in equity and of cash flows for the six-month periods ended June 30, 2019 and 2018, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with “Regulations Governing the Preparations of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

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

Basis for Qualified Conclusion

As explained in Note 4(3) and 6(6), the accompanying consolidated financial statements included certain nonsignificant consolidated subsidiaries and investments accounted for under equity method,(including investments accounted for under equity method amounting to $403,247 thousand and $148,992 thousand), constituting 7.95% and 4.03% of consolidated total assets as of June 30, 2019 and 2018, respectively, total liabilities amounting to $36,719 thousand and $18,920 thousand, constituting

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1.51% and 1.97% of consolidated total liabilities as of June 30, 2019 and 2018, and total comprehensive income (loss) amounting to $19,865 thousand, ($644) thousand, ($55,028) thousand and ($1,713) thousand, constituting 18.07%, (0.34%), (33.70%) and (0.63%) of consolidated total comprehensive income (loss) for the three-month periods ended June 30, 2019 and 2018, and for the six-month periods ended June 30, 2019 and 2018, respectively. These amounts and the related information disclosed in the accompanying consolidated financial statements were based on the unreviewed financial statements of consolidated subsidiaries and investments accounted for under equity method.

Qualified Conclusion

Based on our reviews and the reports of other independent auditors (please refer to other matter), except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain non-significant consolidated subsidiaries and investments accounted for under equity method been reviewed by independent auditors, that we might have become aware of had it not been for the situation described above, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of June 30, 2019 and 2018, and of its consolidated financial performance for the three-month periods ended June 30, 2019 and 2018, and for the six-month periods ended June 30, 2019 and 2018 and its consolidated cash flows for the sixmonth periods ended June 30, 2019 and 2018 in accordance with “Regulations Governing the Preparations of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

For and on behalf of PricewaterhouseCoopers, Taiwan

Daniel Lee

Certified Public Accountants

Tina Cheng

Auguest 7, 2019

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Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets Jun., 30[th] 2019 and 2018; Dec., 31[st] 2018

(Jun., 30[th] 2019 and 2018 Consolidated Balance Sheets were only reviewed, not audited.)

in thousand NTD

Jun.,30th2019 Amount % $ 680,376 14 500 - 169,511 3 15,503 - 917 - 636,863 13 9,788 - 7,614 - 203,361 4 156 - 265,646 5 82,137 2 9,831 - 2,082,203 41 878,397 17 199 - 34,244 1 114,343 2 1,051,323 21 388,433 8 39,026 1 118,701 2 6,507 - 360,781 7 2,991,954 59 $ 5,074,157 100	Dec.,31st2018 Amount % $ 563,408 15 - - 54,335 1 - - 1,277 - 597,152 16 4,178 - 13,607 - 4,636 - 710 - 408,575 11 77,026 2 9,479 - 1,734,383 45 731,826 19 - - 29,727 1 126,760 3 966,563 25 - - - - 112,544 3 5,238 - 157,277 4 2,129,935 55 $ 3,864,318 100	Jun.,30th2018	Jun.,30th2018
Amount $ 680,376 500 169,511 15,503 917 636,863 9,788 7,614 203,361 156 265,646 82,137 9,831 2,082,203 878,397 199 34,244 114,343 1,051,323 388,433 39,026 118,701 6,507 360,781 2,991,954 $ 5,074,157	Amount $ 563,408 - 54,335 - 1,277 597,152 4,178 13,607 4,636 710 408,575 77,026 9,479 1,734,383 731,826 - 29,727 126,760 966,563 - - 112,544 5,238 157,277 2,129,935 $ 3,864,318	Amount $ 557,196 - 106,518 - 585 621,502 7,473 24,481 - - 337,619 90,934 5,347 1,751,655 727,067 - 29,723 69,852 976,016 - - 31,824 19,698 92,057 1,946,237 $ 3,697,892	%
			15 - 3 - - 17 - 1 - - 9 2 -
			47
			20 - 1 2 26 - - 1 1 2
			53
			100

(Continued)

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Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets

Jun., 30[th] 2019 and 2018; Dec., 31[st] 2018

(Jun., 30[th] 2019 and 2018 Consolidated Balance Sheets were only reviewed, not audited.)

in thousand NTD

Liabilities and Equities Current Liabilities 2100 Short Term Loans 2130 Contract Liabilities- Current 2150 Notes Payables 2170 Accounts Payables 2180 Accounts Payables`－`Related Parties 2200 Other Payables 2220 Other Payables`－`Related Parties 2230 Current Income Tax Liabilities 2280 Lease liability -Current 2300 Other Current Liabilities 21XX Total Current Liabilities Non-Current Liabilities 2540 Long-term Loans 2570 Deferred Income Tax 2580 Lease liability –Non Current 2640 Defined Benefit Liabilities- Non Current 2645 Guarantee deposits received 2670 Other Non-Current Liabilities 25XX Total Non-Current Liabilities 2XXX Total Liabilities Equities Attributable to Parent Company Stock 3110 Common Stock Additional Paid-in Capital 3200 Additional Paid-in Capital Retained Earnings 3310 Legal Reserve 3320 Special Reserve 3350 Uncompensated Deficit Other Equities 3400 Other Equities 3500 Treasury Stock 31XX Total Equities Attributable to Parent Company 36XX Non-Controlling Interests 3XXX Total Equities Major Commitments and Contingencies Major Events after Financial Statement Date 3X2X Total Liabilities and Equities	Jun.,30th2019 Amount % $ 1,014,783 20 70,603 1 66 - 245,313 5 - - 602,360 12 1,728 - 30,356 1 33,603 1 17,552 - 2,016,364 40 4,670 - 26,759 1 357,186 7 21,871 - 2,495 - - - 412,981 8 2,429,345 48 2,527,136 50 172,606 3 544,712 11 - - 177,466 3 8,426 - ( 884,741 ) ( 17) 2,545,605 50 99,207 2 2,644,812 52 $ 5,074,157 100	Dec.,31st2018 Amount % $ 591,000 15 58,701 2 54 - 236,387 6 - - 287,675 7 1,003 - 17,744 1 - - 45,733 1 1,238,297 32 - - 17,189 - - - 21,917 1 3,223 - 9,881 - 52,210 1 1,290,507 33 2,527,136 65 169,431 5 524,792 14 14,287 - 199,736 5 7,853 - ( 884,741) ( 23) 2,558,494 66 15,317 1 2,573,811 67 $ 3,864,318 100	Jun.,30th2018 Amount % $ 287,085 8 55,530 1 55 - 252,100 7 19,662 - 210,616 6 - - 3,879 - - - 57,777 2 886,704 24 23,779 1 16,601 - - - 19,498 1 91 - 14,061 - 74,030 2 960,734 26 2,527,136 69 199,456 5 524,792 14 14,287 1 293,031 8 8,341 - ( 884,741) ( 24) 2,682,302 73 54,856 1 2,737,158 74 $ 3,697,892 100
	Amount $ 1,014,783 70,603 66 245,313 - 602,360 1,728 30,356 33,603 17,552 2,016,364 4,670 26,759 357,186 21,871 2,495 - 412,981 2,429,345 2,527,136 172,606 544,712 - 177,466 8,426 ( 884,741 ) 2,545,605 99,207 2,644,812 $ 5,074,157	Amount $ 591,000 58,701 54 236,387 - 287,675 1,003 17,744 - 45,733 1,238,297 - 17,189 - 21,917 3,223 9,881 52,210 1,290,507 2,527,136 169,431 524,792 14,287 199,736 7,853 ( 884,741) 2,558,494 15,317 2,573,811 $ 3,864,318	Amount $ 287,085 55,530 55 252,100 19,662 210,616 - 3,879 - 57,777 886,704 23,779 16,601 - 19,498 91 14,061 74,030 960,734 2,527,136 199,456 524,792 14,287 293,031 8,341 ( 884,741) 2,682,302 54,856 2,737,158 $ 3,697,892

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

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Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets

Jun., 30[th] 2019 and 2018; Dec., 31[st] 2018

(Jun., 30[th] 2019 and 2018 Consolidated Balance Sheets were only reviewed, not audited.)

in thousand NTD

			2019/4/1-				2018/4/1-				2019/1/1-				2018/1/1-
			2019/6/30				2018/6/30				2019/6/30				2018/6/30
	Items		Amount	%			Amount	%			Amount	%			Amount	%
4000	Operating Incomes	$	726,964	100		$	742,674	100		$	1,438,218	100		$	1,374,298	100
5000	Operating Costs		528,806 ) (	73) (			592,236 ) (	80)	(		1,085,279) (	75) (			1,099,300) (	80)
5900	Gross Income from Operations		198,158	27			150,438	20			352,939	25			274,998	20
	Operating Expenses
6100	Selling Expenses		35,105 ) (		5) (		33,015 ) (	4)	(		68,524) (		5) (		44,727) (	3)
6200	Administrative Expenses		36,647 ) (		5) (		38,171 ) (	5)	(		72,905) (		5) (		68,818) (	5)
6300	R & D Expenses		45,083 ) (		6) (		23,047 ) (	3)	(		90,836) (		6) (		36,173) (	3)
6450	Expected Credit Impairment (Loss)
	Benefit		6,025 ) (		1)		902	-	(		23,538) (		2)		1,625	-
6000	Total Operating Expense		122,860 ) (	17) (			93,331 ) (	12)	(		255,803) (	18) (			148,093) (	11)
6900	Operating Gain		75,298	10			57,107	8			97,136		7		126,905	9
	Non-Operating Incomes and Losses
7010	Other Incomes		4,055		1		16,243	2			7,898		1		17,367	1
7020	Other Gains and Losses		92,455	13			161,664	22			131,042		9		171,992	13
7050	Financial Costs		3,596 ) (		1) (		1,298 )	-	(		6,687) (		1) (		1,605)	-
7060	The share of affiliates and joint
	venture profits and losses recognized
	by the equity method		18,943 ) (		3) (		14,130 ) (	2)	(		24,800) (		2) (		26,435) (	2)
7000	Total Non-Operating Incomes and
	Losses		73,971	10			162,479	22			107,453		7		161,319	12
7900	Earnings Before Tax		149,269	20			219,586	30			204,589	14			288,224	21
7950	Income Tax Expense (Benefit)		36,379 ) (		5) (		28,107 ) (	4)	(		41,857) (		3) (		16,985) (	1)
8200	Net Income (Loss)	$	112,890	15		$	191,479	26		$	162,732	11		$	271,239	20

(Continued)

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Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets

Jun., 30[th] 2019 and 2018; Dec., 31[st] 2018

(Jun., 30[th] 2019 and 2018 Consolidated Balance Sheets were only reviewed, not audited.)

																	in thousand NTD	in thousand NTD	in thousand NTD	in thousand NTD
				2019/4/1-				2018/4/1-					2019/1/1-				2018/1/1-
				2019/6/30				2018/6/30					2019/6/30				2018/6/30
	Items			Amount	%			Amount		%			Amount	%			Amount		%
	Other Comprehensive Incomes (Net)
	Items that will not be reclassified
	subsequently to profit or loss
8316	Unrealized gain/(loss) on investments
	in equity instruments at fair value
	through other comprehensive income	($		2,590)		-	$		-	-	($		2,590)		-	$		-		-
8310	Total items that will not be
	reclassified subsequently to profit
	or loss	(		2,590)		-			-	-	(		2,590)		-			-		-
	Items that may be reclassified
	subsequently to profit or loss
8361	Financial statement translation
	differences of foreign operations	(		359)		-		878		-			3,144		-			43		-
8360	Total Components of other
	comprehensive income that will be
	reclassified to profit or loss	(		359)		-		878		-			3,144		-			43		-
8500	Total Comprehensive Incomes		$	109,941	15		$	192,357		26		$	163,286	11		$	271,282		20
	Net Incomes (Losses) Attributable to`：`
8610	Parent Company		$	116,642	16		$	206,699		28		$	177,446	12		$	289,274		21
8620	Non-Controlling Interest	(		3,752) (		1)(		15,220) (		2)	(		14,714)(		1) (		18,035) (			1)
	Total		$	112,890	15		$	191,479		26		$	162,732	11		$	271,239		20
	Total Comprehensive Incomes (Losses)
	Attributable to`：`
8710	Parent Company		$	113,637	16		$	207,766		28		$	178,019	12		$	290,164		21
8720	Non-Controlling Interest	(		3,696) (		1)(		15,409) (		2)	(		14,733)(		1) (		18,882) (			1)
	Total		$	109,941	15		$	192,357		26		$	163,286	11		$	271,282		20
	Basic Gain per Share
9750	Net Gain (Loss)		$		0.60		$			1.06		$		0.91		$			1.48
	Diluted Gain or Loss per Share
9850	Net Gain		$		0.59		$			1.06		$		0.90		$			1.47

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

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Taiwan Mask Corporation and Subsidiaries Consolidated Changes of Equities Statements For the Second 2 Quarter Ended Jun., 30[th] , 2019 and 2018 (Consolidated Changes of Equities Statements in the period mentioned above were only reviewed, not audited.)

in thousand NTD

																				in thousand N
Common Stock Additional Paid-in Capital 2018/1/1-2018/6/30 Beginning Balance as of 2018/1/1 $ 2,527,136 $ Impact of Retroactive Applications - Adjusted Balance as of January 1, 2018 2,527,136 Net Income - Other Comprehensive Profit or Loss - Total Comprehensive Profit or Loss - Year 2017 Deficit Compensated with Legal Reserves - Changes of the Shares Invested in Subsidiaries - ( Increase of Non-Controlling Interest - Ending Balance as of 2018/6/30 $ 2,527,136 $ 2019/1/1-2019/6/30 Beginning Balance as of 2019/1/1 $ 2,527,136 $ Net Income - Other Comprehensive Profit or Loss - Total Comprehensive Profit or Loss - Year 2018 appropriations of earnings Legal capital reserve - Cash dividends to shareholders - Reversal of Special capital - Adjustments to share of changes in equities of associates - Changes of the Shares Invested in Subsidiaries - Share-based payment transaction - Reduction in non-controlling interests in mergers - Increase in non-controlling interests in mergers - Ending Balance as of 2019/6/30 $ 2,527,136 $					Equities Attributable to Parent Company													Non-Control lingInterest		Total Equities 73,510 $ 2,479,140 - - 73,510 2,479,140 18,035 ) 271,239 847 ) 43 18,882 ) 271,282 - - - ( 13,492 ) 228 228 54,856 $ 2,737,158 15,317 $ 2,573,811 14,714 ) 162,732 19 ) 554 14,733 ) 163,286 - - - ( 194,083 ) - - - 40 - 135 - 3,000 584 ) ( 584 ) 99,207 99,207 99,207 $ 2,644,812
	Common Stock	Additional Paid-in Capital			Retained Earnings						Other Equities				TreasuryStock		Total
				Legal Reserves		Special Reserves	Uncompensated Deficit $ 14,287 ($ - 14,287 ( - - - - - - $ 14,287 $ $ 14,287 $ - - - - ( - ( ( 14,287 ) - - - - - $ - $		Conversion balance of financial statement translation of foreign operating agencies		Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income		Unrealized Evaluation Profit and Loss of Available-for-Sal es Financial Assets
			$	212,948 - 212,948 - - - - 13,492 ) - 199,456 169,431 - - - - - - 40 135 3,000 - - 172,606	$	599,009 - 599,009 - - - 74,217 ) - - 524,792 524,792 - - - 19,920 - - - - - - - 544,712		($	74,216 ) 3,756 70,460 ) 289,274 - 289,274 74,217 - - 293,031 199,736 177,446 - 177,446 19,920 ) 194,083 ) 14,287 - - - - - 177,466	$	7,451 - 7,451 - 890 890 - - - 8,341 7,853 - 3,163 3,163 - - - - - - - - 11,016	$	- - - - - - - - - - - - 2,590 ) 2,590 ) - - - - - - - - 2,590 )	$ (	3,756 3,756 ) - - - - - - - - - - - - - - - - - - - - -	($	884,741 ) - 884,741 ) - - - - - - 884,741 ) 884,741 ) - - - - - - - - - - - 884,741 )		$
								(								(
																			( (
																			(
			(		(
			$		$			$		$		$		$		($			$
			$		$			$		$		$		$		($			$
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			$		$			$		$		($		$		($			$

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

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Taiwan Mask Corporation and Subsidiaries Consolidated Statements of Cash Flow

For the Second 2 Quarter Ended Jun., 30[th] , 2019 and 2018 ( Consolidated Statements of Cash Flow in the period mentioned above were only reviewed, not audited. ) in thousand NTD

			2019/1/1-	2018/1/1-
			2019/6/30	2018/6/30
Cash Flow from Operating Activities
Net Income(Loss) Before Tax		$	204,589 $	288,224
Adjustments to Reconcile Net Income to Net Cash Flow from Operating
Activities
Revenues and Expenses
Depreciation			81,284	71,205
Amortization			3,675	538
Expected Credit Impairment (Loss) Benefit			23,538 (	1,625 )
Interest Incomes	(		2,988 ) (	1,504 )
Interest Expenses			6,687	1,605
Net Profit of Financial Asset at Fair Value Through Profit or Loss	(		95,749 ) (	175,797 )
Dividends Income	(		1,866 ) (	2,387 )
Share-based payment transaction			3,000	-
The Share of Affiliates Profits and Losses Recognized by the Equity
Method			24,800	26,435
Disposal of Property, Plants and Equipment	(		1,336 )	-
loss (Gain) on disposal of investments	(		30,779 )	7,750
The Changes of Assets/ Liabilities related to Operating Activities
The Changes of Assets related to Operating Activities
Force of Financial Asset at Fair Value Through Profit or Loss	(		29,005 ) (	305,143 )
Notes Receivable			324	2,049
Accounts Receivable	(		19,510 ) (	150,207 )
Accounts Receivable-related Parties	(		5,609 ) (	6,384 )
Other Receivables			7,337 (	6,959 )
Other Receivables-related Parties	(		38,730 )	7,590
Inventories			18,530	7,938
Prepayments	(		4,407 ) (	2,831 )
Other Current Assets	(		264 )	6,732
Other Non-Current Assets	(		12 )	-
The Changes of Liabilities related to Operating Activities
Contract Liabilities			12,206 (	28,059 )
Notes Payable			- (	180 )
Accounts Payable	(		29,952 )	78,905
Accounts Payable- related Parties			-	19,662
Other Payables			45,320	35,827
Other Payables- related Parties			8,575	-
Other Current Liabilities			8,067	8,768
Accrued Pension Liability	(		46 ) (	9,415 )
Net Cash In-Flow (Out-Flow) from Operating Activities			187,679 (	127,263 )
Interest Received			2,859	1,403
Dividends Received			1,866	2,387
Interest Paid	(		6,608 ) (	1,281 )
Income Tax Paid	(		20,768 ) (	11,327 )
Net Cash In-Flow(Out-Flow) from Operating Activities			165,028 (	136,081 )

(Continued)

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Taiwan Mask Corporation and Subsidiaries Consolidated Statements of Cash Flow

For the Second 2 Quarter Ended Jun., 30[th] , 2019 and 2018

( Consolidated Statements of Cash Flow in the period mentioned above were only reviewed, not audited. ) in thousand NTD

		2019/1/1-	2018/1/1-
		2019/6/30	2018/6/30
Cash Flow from Investment Activities
Acquisition of Amortized Cost Financial Assets	( $	90,538 ) ( $	68,820 )
Acquisition of investment property by the Equity Method (		65,000 )	-
Consolidation of individual changes in cash inflows		86,656	6,403
Consolidation of individual changes in cash outflows	(	25,037 )	-
Acquisition of Property, Plants and Equipment	(	240,683 ) (	128,458 )
Disposal of Property, Plants and Equipment		3,816	28,279
Acquisition of Intangible Assets	(	2,558 ) (	148 )
Increase of Refundable Deposits	(	257 ) (	1,994 )
Net Cash Out-Flow from Investment Activities (		333,601 ) (	164,738 )
Cash Flow from Funding Activities
Increase of Short Term Loan		622,495	316,528
Redemption of Short Term Loan	(	330,000 ) (	110,696 )
Redemption of Long Term Loan		- (	835 )
Redemption ofLease Principal	(	8,467 )	-
Reduction of Guarantee Deposits	(	1,561 ) (	3 )
Lease account payable		-	16,019
Net Cash In-Flow from Funding Activities		282,467	221,013
Adjustments of Exchange Rate		3,074	47
Increase (Decrease) of Cash and Cash Equivalents		116,968 (	79,759 )
Beginning Balance of Cash and Cash Equivalents		563,408	636,955
Ending Balance of Cash and Cash Equivalents	$	680,376 $	557,196

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

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TAIWAN MASK CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX -MONTH PERIODS ENDED JUNE 30, 2019 AND 2018 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED) (UNAUDITED)

1 `、` HISTORY AND ORGANISATION

TAIWAN MASK CORPORATION (TMC or the Company) was established in the Republic of China (R.O.C.) on 1988/10/21 and first operated in March, 1989. Based on the resolution made on 2000/6/12 shareholders ‟ meeting, TMC merged Shin -Tai Corporation on 2000/12/1. The Company and the subsidiaries (the Group) is primarily engaged in the research, development, manufacturing and selling of Mask and Circuit, and also provide technology assistance, consultation, inspection and maintenance services for Mask and Circuit. The Group is also manufacturing and selling medical wares.

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

These consolidated financial statements were reported to the Board of Directors and issued on Auguest 7, 2019.

3 、 APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

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

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

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. IFRS 16, “Leases”

A. IFRS 16, “Leases”, replaces IAS 17, “Leases” and related

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interpretations and Standing Interpretations Committee (SICs). The standard requires lessees to recognize a “right-of-use asset” and a lease liability (except for those leases with terms of 12 months or less and leases of low value assets). Lessor accounting still uses the dual classification approach: operating lease and finance lease, and only increases the related disclosures.

B. When applying the version of the International Financial Reporting Standards, International Accounting Standards, Interpretation and Interpretation (hereinafter referred to as IFRSs), which is recognized by Financial Supervisory Commission, t he Group expects to recognize the lease contract of lessees in line with IFRS 16. Accordingly, on January 1, 2018, the Group will have to increase ‘right-of-use asset’ by $358,566 and increase lease liability by$348,133, respectively.
C. The Group has used the following practical expedients permitted by the standard at the date of initial application of IFRS 16:
(A) Reassessment as to whether a contract is, or contains, a lease is not required, and instead, the application of IFRS 16 depends on whether or not the contracts were previously identified as leases applying IAS 17 and IFRIC 4.
(B) The use of single discount rate to a portfolio of leases with
- reasonably similar characteristics.
(C) The accounting for operating leases whose period will end before December 31, 2019 as short term lease and accordingly, rent expense of $732 was recognized in the second quarters of 2019.
(D) The exclusion of initial direct costs for the measurement of ‘right-of-use asset’.
(E) The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
D. The Group calculated the present value of lease liabilities by using the incremental borrowing interest rate which ranging from 1.136% to 7.223%.

‘right-of-use asset’. (E) The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease. D. The Group calculated the present value of lease liabilities by using the incremental borrowing interest rate which ranging from 1.136% to 7.223%.	‘right-of-use asset’. (E) The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease. D. The Group calculated the present value of lease liabilities by using the incremental borrowing interest rate which ranging from 1.136% to 7.223%.
E. The Group recognized lease liabilities which had previously been classified as ‘operating leases’ under the principles of IAS 17, ‘Leases’. The reconciliation between operating lease commitments under IAS 17 measured at the present value of the remaining lease payments, discounted using the leasee’s incremental borrowing rate and lease liabilities recognized as of January 1, 2019 is as follows:
Operating lease commitments disclosed under IAS 17 as of $	130,929
December 31, 2018
Add: Lease payable recognised under finance lease by
applying IAS 17 as at December 31, 2018	18,119
Less: Low-value assets (	1,102)
Add/Less: Adjustments as a result of a different treatment of
extension and termination options	318,759
Total lease contracts amount recognised as lease liabilities by
applying IFRS 16 on January 1, 2019 $	466,705
Incremental borrowing interest rate at the date of initial
application	1.136%~7.223%
Lease liabilities recognised as at January 1, 2019 by applying
IFRS 16 $	348,133

~1~

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

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

Effective date by International Accounting Standards New Standards, Interpretations and Amendments Board “ Amendments to IAS 1 and IAS 8, Disclosure Initiative - January 1, 2020 Definition of Material” Amendments to IFRS 3, “Definition of a business” January 1, 2020 The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. (3) International Financial Reporting Standards issued by IASB but not yet endorsed by the FSC

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

Effective date by International Accounting Standards New Standards, Interpretations and Amendments Board Amendments to IFRS 10 and IAS 28, “ Sale or contribution of To be determined by assets between an investor and its associate or joint venture” International Accounting Standards Board IFRS 17, “Insurance contracts” January 1, 2021

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

4 `、` SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2018, except for the compliance statement, basis of preparations, basis of consolidation and additional policies as set out below. These poli cies have been consistently applied to all the periods presented, unless otherwise stated.

`(1)` Compliance statement

A. These consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and IAS 34, “Interim Financial Reporting” as endorsed by the FSC.
B. These consolidated financial statements are to be read in conjunction

~2~

with the consolidated financial statements for the year ended December 31, 2018.

(2) Basis of preparation
A. Except for the following significant items, these consolidated financial statements have been prepared under the historical cost convention:
- (A) Financial assets and financial liabilities (including derivative
  - instruments) at fair value through profit or loss.
- (B) Financial assets at fair value through other comprehensive income.
- (C) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
A. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.
(3) Basis of consolidation
A. Basis for preparation of consolidated financial statements

The principles applied in the preparation of these financial statements are the same as the ones applied in 2018.

B. Subsidiaries included in the consolidated financial statements:

Investor	Subsidiary	Main business activities Investing in communication business Investing in communication business Investing in communication business Medical device manufacturing, wholesale and trading Electronic component manufacturing, wholesale of electronic materials and precision instruments, power component design, etc.		Ownership (%)	June 30,2018 100 100 100 30.26 100	Remark
			June 30,2019 100 - 100 - 100	December 31,2018 100 - 100 30.26 100
Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation	SunnyLake Park International Holding, Inc. Taiwan Mask Corp.-USA Youe Chung Capital Corporation Innova Vision INC. Miracle Technology CO., LTD.					Note 1 Note 2`、` Note 6 Note 8

~3~

Investor	Subsidiary	Main business activities Research, design, development, manufacturing and sales of display panel control chips and modules Medical device manufacturing, wholesale and trading Design, packaging and testing of NAND flash memory and solid state hard disk and other related products Electronic components Investing in communication business Investing in communication business Investing in communication business Investing in communication business Investing in communication business Electronic component manufacturing, wholesale of electronic materials and precision instruments, power component design, etc. Electronic component manufacturing, wholesale of electronic materials and precision instruments, power component design, etc. Investing in communication business		Ownership (%)	June 30,2018 - 32.06 - - - - - 100 100 100 100 100	Remark
			June 30,2019 100 - 29.55 52.19 100 100 100 100 100 100 100 100	December 31,2018 100 32.06 8.74 - - - - 100 100 100 100 100
Taiwan Mask Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Aptos Technology INC. Aptos Technology INC. Adl Engineering INC. Aptos Global Holding Corp. Miracle Technology CO., LTD. Miracle Technology CO., LTD. Jingjing Investment Co., Ltd. Jingjing Investment Co., Ltd. Miracle Technology (Samoa)Co., Ltd.	Weida Hi-Tech CO., LTD. Innova Vision INC. Aptos Technology INC. Adl Engineering INC. New Sunrise Limited Aptos Global Holding Corp. Aptos Technology Co.,Limited Jingjing Investment Co., Ltd. Miracle Technology (Samoa)Co., Ltd. Miko-China Enterprise (Shanghai) Co., Ltd. MIKO Technology Co., Ltd. Misun Technology Co., Ltd.					Note 3`、` Note 7 Note 8 Note 9 Note 9 Note 9`、` Note 10 Note 9 Note 9

~4~

Investor	Subsidiary	Main business activities Electronic component manufacturing, wholesale of electronic materials and precision instruments, power component design, etc. IC product design, production and sales IC product design, production and sales Medical device manufacturing, wholesale and trading Investing in communication business Medical device manufacturing, wholesale and trading Investing in communication business Medical device manufacturing, wholesale and trading Medical device manufacturing, wholesale and trading Touch screen system hardware design and software development and production Investing in communication business Investing in communication business Investing in communication business		Ownership (%)	June 30,2018 100 35.71 35.71 100 100 - 100 100 100 - - - -	Remark
			June 30,2019 100 64.29 35.71 - - - - - - 100 100 22.3 77.7	December 31,2018 100 64.29 35.71 100 100 9.23 100 90.77 100 100 100 22.30 77.70
Misun Technology Co., Ltd. Miko-China Enterprise (Shanghai) Co., Ltd. Miracle International Enterprise(Sha nHai) Co., Ltd. Innova Vision INC. Innova Vision INC. Innova Vision INC. Innova Vision INC. Innova Vision (B.V.I.) Inc. Calaview International Holding Company Limited Weida Hi- Tech CO., LTD. Weida Hi- Tech CO., LTD. Weida Hi- Tech CO., LTD. Smart Touch Co., Ltd.	Miracle International Enterprise(Sha nHai) Co., Ltd. Sichuan Miracle Power Technology Co., Ltd. Sichuan Miracle Power Technology Co., Ltd. Innova Technology Company Innova Vision (B.V.I.) Inc. Innova Vision Kabushiki Kaisha Calaview International Holding Company Limited Innova Vision Kabushiki Kaisha Innova Vision Shenzen Touch Hi-Tech Smart Touch Co., Ltd. Central Star Ltd. Central Star Ltd.					Note 5 Note 5 Note 2`、` Note 8 Note 2`、` Note 8 Note 8 Note 2`、` Note 4`、` Note 8 Note 2`、` Note 8 Note 2`、` Note 4`、` Note 8 Note 3`、` Note 7 Note 3`、` Note 7 Note 3`、` Note 7 Note 3`、` Note 7

~5~

Note1 ： The financial statements of the entity as of and for the ended June 30, 2019 and 2018 were not reviewed by the independent accountants as the entity did not meet the definition of a significant subsidiary.
Note2 ： The financial statements of the entity as of and for the ended June 30, 2018 were not reviewed by the independent accountants as the entity did not meet the definition of a significant subsidiary.
Note3 ： The financial statements of the entity as of and for the ended June 30, 2019 were not reviewed by the independent accountants as the entity did not meet the definition of a significant subsidiary.
Note4 ： The Group acquired Calaview International Holding Company Limited 100% shares, also acquired its subsidiary Innova Vision Shenzen 100% shares indirectly. Starting from that time, the income and loss from Calaview and its subsidiary were combined into the consolidated financial statements of the company.
Note5 ： In March 2018, the Group jointly invested and established Sichuan Miracle Electronic Technology Co., Ltd., and held 71.42% of the shares. The company's income and loss were included in the consolidated statement since the acquisition of control, and it was obtained in December 2018 100% equity.
Note6 ： The Company was dissolved in 2018.
Note7 ： In August 2018, the company obtained control through the acquisition of the equity of Weida Hi-Tech Co., Ltd., and incorporated the income and loss of the company and its subsidiaries into the consolidated statement since the acquisition of control 100% equity in November 2018.
Note8 ： Innova Vision INC. issued new shares to increase cash on May 3, 2019. The Group did not apply for the shareholding ratio, resulting in 17.81% of its comprehensive shareholding and loss of control over the company. Therefore, the Group has not included Innova Vision INC. and its subsidiaries in the consolidated financial report since that date. For cash flow information related to this subsidiary, please refer to Note 6 (32) Cash Flow Information.
Note9 ： On June 28, 2019, Aptos Technology INC. held a shareholders' meeting to select the directors. The company's subsidiary, Youe Chung Capital Corporation was elected as the company's board of directors and obtained substantial control over the company. Thus, the Group included Aptos in the consolidated financial statements from that date.
Note10 ： As of the end of the June 30, 108, the cash have not been remitted.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: As of June 30, 2019, December 31, 2018 and June 30, 2018 the non-controlling interest amounted to $99,207, $15,317 and $70,265,

~6~

respectively. The information of non-controlling interest and respective subsidiaries is as follows:

Name of subsidiary	Principal place of business	Amount Ownership (%) $ - - 99,207 70.45% June 30,2019	Amount Ownership (%) $ 15,317 37.68% - - Non-controllinginterest December 31,2018	June 30,2018	June 30,2018	Description
		Amount $ - 99,207	Amount $ 15,317 -	Amount $ 45,086 -	Ownership (%)
Innova Vision INC. and Subsidiaries Aptos Technology INC. and Subsidiaries	Taiwan Taiwan				37.68% -

Summarized financial information of the subsidiaries: Balance sheets

Balance sheets
Current assets Non-current assets Current liabilities Non-current liabilities Total net assets Current assets Non-current assets Current liabilities Non-current liabilities Total net assets


	$
		Innova Vision INC.

Statements of comprehensive income

~7~

For the three-month periods ended June 30, 2019 For the six-month periods ended June 30, 2019 Revenue 146,662 $ 270,871 $ Loss before income tax 44,566) ( 56,046) ( Income tax expense - - Loss for the period from continuing operations 44,566) ( 56,046) ( Loss for the period 44,566) ( 56,046) ( Other comprehensive income, net of tax 8,780) ( 8,780) ( Total comprehensive income for the period 53,346) ($ 64,826) ($ Comprehensive income attributable to non-controlling interest 53,346) ($ 64,826) ($ Dividends paid to noncontronlling interest - $ - $ Aptos TechnologyINC. and Subsidiaries For the three-month periods ended June 30, 2018 For the six-month periods ended June 30, 2018 Revenue 37,602 $ 86,482 $ Loss before income tax 38,525) ($ 45,415) ($ Income tax expense 5,206) ( 5,472) ( Loss for the period from continuing operations 43,731) ( 50,887) ( Loss for the period 43,731) ( 50,887) ( Other comprehensive income, net of tax 202) ( 1,927) ( Total comprehensive income for 43,933) ($ 52,814) ($ Comprehensive income 17,023) ($ 19,889) ($ Dividends paid to noncontronlling - $ - $ Innova Vision INC. and Subsidiaries		Aptos TechnologyINC. and Subsidiaries	Aptos TechnologyINC. and Subsidiaries
			For the six-month periods ended June 30, 2019
			86,482 $ 45,415) ($ 5,472) ( 50,887) ( 50,887) ( 1,927) ( 52,814) ($ 19,889) ($ - $

Statements of cash flows

~8~

Net cash provided by operating activities Net cash provided by investing activities Net cash provided by financing activities Increase in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period Net cash provided by Net cash provided by investing Net cash provided by financing Effect of exchange rates on cash and cash equivalents Increase in cash and cash equivalents Cash and cash equivalents, Cash and cash equivalents, end of		Aptos Technology INC. and Subsidiaries
		For the six-month periods ended June 30,2019
		70,758) ($ 28,947 74,101 32,290 54,366 86,656 $ Innova Vision INC. and Subsidiaries
		For the six-month periods ended June 30,2018
	115,522) ($ 3,245) ( 124,907 1,928) ( 4,212 17,612 21,824 $

(4) Fair value through other comprehensive income financial assets

A. At initial recognition, the Group makes an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

~9~

C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value. The changes in fair value of equity investments that are recognized in other comprehensive income are reclassified to retained earnings. When the equity instruments are derecognized the cumulative gain or loss previously recognized in other comprehensive income is not reclassified from equity to profit or loss. Dividends are recognized as revenue when the Group’s right to receive payment is established, it is probable the economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

`(5)` Leasing arrangements (lessee) - right-of-use assets/lease liabilities Effective 2019

A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of low value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are fixed payment, less any lease incentives receivable. The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is re-measured and the amount of re-measurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.
C. At the commencement date, the right-of-use asset is stated at cost
comprising the following:
(A) The amount of the initial measurement of lease liability; (B) Any lease payments made at or before the commencement date; and;
(C) Any initial direct costs incurred by the lessee.
(D) Estimated cost of requisitioning, removing the underlying asset and restoring its location, or restoring the underlying asset to the state required by the terms and conditions of the lease.
The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is re-measured, the amount of re-measurement is recognized as an adjustment to the right-of-use asset.

`(6)` Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 45 years.

(7) Employee benefits Pensions

Defined benefit plans

Pension cost for the interim period is calculated on a year-to-date basis

~10~

by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. Also, the related information is disclosed accordingly.

(8) 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 non -market 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 the end of the financial reporting period. Ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

`(9)` Income tax

A. The interim period income tax expense is calculated according to pretax income time effective income tax rate, and the related information is disclosed accordingly.
B. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognizes the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognized outside profit or loss is recognized in other comprehensive income or equity while the effect of the change on items recognized in profit or loss is recognized in profit or loss.

`(10)` Revenue recognition

Labor income

The Group mainly provides integrated circuit packaging services. The actual services and fees provided will be different according to different customers, and will be negotiated separately before the service is provided, and the market price will be at that time. The recognition of performance obligations under the client's contract is primarily a packaged service, and the revenue is recognized by measuring the degree of completion of the performance obligation during the service period.

With the packaged services provided, the customer obtains and consumes the performance benefits at the same time, and the customer controls the assets when the assets are created or strengthened. The relevant income is recognized by the degree of completion of the performance obligation during the service provision. The packaging service measures the completion rate based on the proportion of incurred costs to the estimated total cost. After completion of the agreed contract agreed with the customer service or shipping open bill, it is to provide service when the system is recognized contract assets, to be customers of the Group agreed to open a bill transferred receivables when billing.

~11~

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

No major changes in this period, please see Note 5 in the consolidated financial statements of 2018.

6 `、` DETAILS OF SIGNIFICANT ACCOUNTS

`(1)` Cash and cash equivalents

sh and cash equivalents
Cash on hand and revolving funds Checking accounts and demand d Time deposits Total	June 30,2019 December 31, 2018 1,237 $ 3,182 $ 618,839 535,426 60,300 24,800 680,376 $ 563,408 $	June 30,2018
		2,473 $ 532,395 22,328
		557,196 $

A. The Group 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 Group has no cash and cash equivalents pledged to others.
(2) Financial assets at fair value through profit or loss

Items Current items: Force of Financial Asset at Fair Value Through Profit or Loss Beneficiary certificate Valuation adjustment Total Non-current items: Financial assets mandatorily measured at fair value through profit or loss Listed stocks Unlisted stocks Private Offered Fund Valuation adjustment Total	June 30,2019 December 31,2018 500 $ - $ - - 500 $ - $ 768,362 $ 613,771 $ 49,785 63,926 - 110,247 818,147 787,944 60,250 56,118) ( 878,397 $ 731,826 $	June 30,2018
		- $ -
		- $
		409,853 $ 91,633 96,995
		598,481 128,586
		727,067 $

A. Amounts recognized in profit or loss in relation to financial ass ets at fair value through profit or loss is listed below:

~12~

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

	For the three-month periods ended June 30, 2019	For the three-month periods ended June 30, 2018
Force of Financial Asset at Fair Value Through Profit or Loss Listed stocks Unlisted stocks Private Offered Fund Total Force of Financial Asset at Fair Value Through Profit or Loss Listed stocks Unlisted stocks Beneficiary certificate Private Offered Fund Total	38,657 $ 12,327 39,308 90,292 $ For the six-month periods ended June 30, 2019	150,876 $ - -
		150,876 $
		For the six-month periods ended June 30, 2018
	93,763 $ 12,672 - 20,093 126,528 $	167,958 $ - 89 -
		168,047 $

B. The Group has no financial assets at fair value through profit or loss pledged to others.
C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).
(3) Fair value through other comprehensive income financial assets

Items Non-current items: Equity Instrument Unlisted stocks Valuation adjustment Total	June 30,2019 199 $ - 199 $	December 31,2018 - $ - - $	June 30,2018
			- $ -
			- $

A. The Group has elected to classify equity investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $199, $0 and $0 as at June 30, 2019, December 31, 2018 and June 30, 2018, respectively.
B. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

~13~

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

Equity Instrument at fair value through other comprehensive income

Changes in fair value recognized in other comprehensive gains and losses ($ 2,590) $ - For the six-month For the six-month periods ended June 30, periods ended June 30, 2019 2018

Equity Instrument at fair value through other comprehensive income

Changes in fair value recognized in other comprehensive gains and losses ($ 2,590) $ -
C. As at June 30, 2019, December 31, 2018 and June 30, 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group was $199, $0 and $0, respectively.
D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

`(4)` Financial assets at amortized cost

Items Ccurrent items: Deposits in banks Time deposits Total Non-current items: Time deposits	June 30,2019 4,436 $ 165,075 169,511 $ 34,244 $	December 31,2018 - $ 54,335 54,335 $ 29,727 $	June 30,2018
			- $ 106,518
			106,518 $
			29,723 $

A. Amounts recognized in profit or loss in relation to financial assets at amortized cost is listed below:

~14~

Interest income Interest income	For the three-month periods ended June 30, 2019 $46 For the six-month periods ended June 30, 2019 $99	For the three-month periods ended June 30, 2018 $405
		For the six-month periods ended June 30, 2018
		$517

B. As of June 30, 2019, December 31, 2018 and June 30, 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortized cost held by the Group were $203,755, $84,062 and $136,241, respectively.
C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.
(5) Notes and accounts receivable

Notes receivable Accounts receivable Accounts receivable-related parties Less: Allowance for uncollectible accounts (	June 30,2019 December 31,2018 917 $ 1,277 $ 661,216 $ 599,932 $ 9,788 4,178 671,004 604,110 24,353) 2,780) ( 646,651 $ 601,330 $	June 30,2018 585 $ 627,709 $ 7,473 635,182 6,207) ( 628,975 $

A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

Accounts receivable Notes receivable 587,863 $ 917 $ 52,963 - 15,344 - 10,485 - 4,349 - 671,004 $ 917 $ June 30,2019	December 31,2018	December 31,2018
Accounts receivable 587,863 $ 52,963 15,344 10,485 4,349 671,004 $	Accounts receivable 483,098 $ 76,987 32,436 2,288 9,301 604,110 $	Notes receivable
		1,277 $ - - - -
		1,277 $

~15~

Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	Accounts receivable Notes receivable 533,250 $ 585 $ 42,917 - 51,204 - 1,824 - 5,987 - 635,182 $ 585 $ June 30,2018	Accounts receivable Notes receivable 533,250 $ 585 $ 42,917 - 51,204 - 1,824 - 5,987 - 635,182 $ 585 $ June 30,2018
		585 $ - - - -
		585 $

The above ageing analysis was based on past due date.
B. As of June 30, 2019 and June 30, 2018, the balances of receivables (including notes receivable) from contracts with customers. As of January 1, 2018, the balances of receivables amounted to $496,749, respectively.
C. Details of the Group’s notes and accounts receivable pledged to others as collateral are provided in Note 8.
D. As of June 30, 2019, December 31, 2018 and June 30, 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $646,651, $601,330 and $628,975, respectively.
E. Information about credit risk of notes and accounts receivable is provided in Note 12(2).

`(6)` Transfer of financial assets

A. The Group’s subsidiary, Aptos Technology INC., signed a contract for the sale of accounts receivable with the bank in 2018. Under the agreement, it should bear the risk that the accounts receivable cannot be received, and it bear the burden of commercial disputes and loss, thus, the Group recognized the transferred accounts receivable, as of June 30, 2019 the transferred accounts receivable amount is $ 8,949 , related to the advance amount of short-term borrowings is $7,159. As of December 31, 2018 and June 30: None.
B. The carrying amount of the above-mentioned account receivable and the advance payment is reasonable approximation of the fair value.

`(7)` Inventories

ventories
Raw materials Work in progress Finished goods Merchandise inventories Total		June 30,2019
	Cost 149,951 $ 53,334 46,750 54,092 304,127 $	Allowance for valuation loss 17,277) ($ 1,906) ( 8,650) ( 10,648) ( 38,481) ($	Book value
			132,674 $ 51,428 38,100 43,444
			265,646 $

~16~

Raw materials Work in progress Finished goods Merchandise inventories Total Raw materials Work in progress Finished goods Merchandise inventories Total	Cost 140,121 $ 151,214 216,131 62,081 569,547 $	Allowance for valuation loss 33,540) ($ 39,685) ( 85,464) ( 2,283) ( 160,972) ($ December 31,2018 June 30,2018	Book value
			106,581 $ 111,529 130,667 59,798
			408,575 $

	Cost 116,252 $ 128,603 190,295 65,067 500,217 $		Book value
			82,239 $ 67,339 125,345 62,696
			337,619 $

The cost of inventories recognized as expense for the period:

Cost of goods sold Allowance(reversal) for valuation and obsolescence loss Revenue from sale of scraps Others Cost of goods sold Allowance for valuation and obsolescence loss Revenue from sale of scraps Others	For the three-month periods ended June 30, 2019	For the three-month periods ended June 30, 2018
	531,755 $ 3,024) ( - 75 528,806 $ For the six-month periods ended June 30, 2019	572,735 $ 18,043 245) ( 1,703 592,236 $ For the six-month periods ended June 30, 2018
	1,060,092 $ 24,240 141) ( 1,088 1,085,279 $	1,083,888 $ 14,037 349) ( 1,724 1,099,300 $

~17~

`(8)`	Investments accounted for using equity method The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below: June 30,2019 December 31,2018 June 30,2018 Associates: Advagene Biopharma Co., Ltd. 114,343 $ 126,760 $ 69,852 $ periods endedJune 30, periods endedJune 30, Loss for the period from continuing operations 7,071) ($ 34,007) ($ Other comprehensive income, net of tax - - Total comprehensive income 7,071) ($ 34,007) ($ periods endedJune 30, periods endedJune 30, Loss for the period from 34,601) ($ 63,624) ($ Other comprehensive income, net of tax - - Total comprehensive income 34,601) ($ 63,624) ($	Investments accounted for using equity method The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below: June 30,2019 December 31,2018 June 30,2018 Associates: Advagene Biopharma Co., Ltd. 114,343 $ 126,760 $ 69,852 $ periods endedJune 30, periods endedJune 30, Loss for the period from continuing operations 7,071) ($ 34,007) ($ Other comprehensive income, net of tax - - Total comprehensive income 7,071) ($ 34,007) ($ periods endedJune 30, periods endedJune 30, Loss for the period from 34,601) ($ 63,624) ($ Other comprehensive income, net of tax - - Total comprehensive income 34,601) ($ 63,624) ($	Investments accounted for using equity method The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below: June 30,2019 December 31,2018 June 30,2018 Associates: Advagene Biopharma Co., Ltd. 114,343 $ 126,760 $ 69,852 $ periods endedJune 30, periods endedJune 30, Loss for the period from continuing operations 7,071) ($ 34,007) ($ Other comprehensive income, net of tax - - Total comprehensive income 7,071) ($ 34,007) ($ periods endedJune 30, periods endedJune 30, Loss for the period from 34,601) ($ 63,624) ($ Other comprehensive income, net of tax - - Total comprehensive income 34,601) ($ 63,624) ($
		7,071) ($ - 7,071) ($ periods endedJune 30,	34,007) ($ - 34,007) ($ periods endedJune 30,
		34,601) ($ - 34,601) ($	63,624) ($ - 63,624) ($

~18~

`(9)` Property, plant and equipment

At January 1, 2019 Cost Accumulated depreciation and impairment 2019 January 1 Combined transfer number Merging individuals to reduce the number of transfers-cost Merging individuals to reduce the number of transfers- Accumulated depreciation Merging individuals to reduce the number of transfers- Accumulated impairment Acquisitions Disposals-Cost Disposals-Accumulated depreciation Depreciation Reclassification-Cost Reclassification-Accumulated depreciation Net exchange differences-Cost Net exchange differences- Accumulated depreciation June 30 June 30,2019 Cost Accumulated depreciation and impairment	Buildings (Land) Machinery and equipment Office Equipment 1,543,908 $ 2,217,354 $ 28,424 $ 1,003,788) ( 1,840,719) ( 14,694) ( 540,120 $ 376,635 $ 13,730 $ 540,120 $ 376,635 $ 13,730 $ - 120,097 - 3,480) ( 227,855) ( 2,256) ( 795 146,348 2,217 - 65,308 10,741 79,052 260 509,460) ( 796,857) ( 5,788) ( 506,980 796,857 5,788 19,549) ( 43,802) ( 2,370) ( 40,620) ( 28,279) ( - 4,641 6,060 - 1) ( 1) ( 2 1 - - 490,168 $ 493,563 $ 11,583 $ 1,001,088 $ 1,363,511 $ 20,642 $ 510,920) ( 869,948) ( 9,059) ( 490,168 $ 493,563 $ 11,583 $	Transportation 4,292 $ 3,029) ( 1,263 $ 1,263 $ - 1,167) ( 1,167 - - - - 184) ( - - 9 9) ( 1,079 $ 3,134 $ 2,055) ( 1,079 $	Leasehold Improvements Molding Equipment Other Equipment Leasing assets Construction in progress and equipment under installation Total 28,161 $ 5,087 $ 24,578 $ 9,537 $ 15,345 $ 3,876,686 $ 23,515) ( 3,148) ( 18,026) ( 3,204) ( - 2,910,123) ( 4,646 $ 1,939 $ 6,552 $ 6,333 $ 15,345 $ 966,563 $ 4,646 $ 1,939 $ 6,552 $ 6,333 $ 15,345 $ 966,563 $ - 5,129 18,387 - - 143,613 28,161) ( 5,087) ( 11,941) ( - - 279,947) ( 24,119 3,556 11,123 - - 189,325 - - - - - 65,308 - - 3,287 - 13,910 107,250 - - - - - 1,312,105) ( - - - - - 1,309,625 604) ( 408) ( 3,475) ( - - 70,392) ( - - - 9,537) ( 3,387) ( 81,823) ( - - - 3,204 - 13,905 - - - - - 9 - - - - - 8) ( - $ 5,129 $ 23,933 $ - $ 25,868 $ 1,051,323 $ - $ 5,129 $ 34,311 $ - $ 25,868 $ 2,453,683 $ - - 10,378) ( - - 1,402,360) ( - $ 5,129 $ 23,933 $ - $ 25,868 $ 1,051,323 $	Total
				3,876,686 $ 2,910,123) (
				966,563 $
				1,051,323 $
				2,453,683 $ 1,402,360) (
				1,051,323 $

~19~

At January 1, 2018 Cost Accumulated depreciation and impairment 2018 January 1 Combined transfer number Acquisitions Disposals Depreciation Net exchange differences June 30 June 30,2018 Cost Accumulated depreciation and impairment	Buildings (Land) Machinery and equipment Office Equipment 1,490,342 $ 2,201,484 $ 18,474 $ 965,516) ( 1,812,298) ( 10,905) ( 524,826 $ 389,186 $ 7,569 $ 524,826 $ 389,186 $ 7,569 $ - - 16 - 52,927 36 - 28,279) ( - 19,020) ( 42,110) ( 1,741) ( - - 2 505,806 $ 371,724 $ 5,882 $ 1,490,353 $ 2,183,654 $ 18,603 $ 984,547) ( 1,811,930) ( 12,721) ( 505,806 $ 371,724 $ 5,882 $	Transportation 4,848 $ 3,199) ( 1,649 $ 1,649 $ - - - 202) ( - 1,447 $ 4,318 $ 2,871) ( 1,447 $	Leasehold Improvements Molding Equipment Other Equipment Leasing assets 112,728 $ 16,837 $ 12,137 $ 5,903 $ 68,800) ( 12,479) ( 11,002) ( - 43,928 $ 4,358 $ 1,135 $ 5,903 $ 43,928 $ 4,358 $ 1,135 $ 5,903 $ - - - - 695 630 170 3,634 - - - - 4,616) ( 1,638) ( 263) ( 1,615) ( - - - - 40,007 $ 3,350 $ 1,042 $ 7,922 $ 113,423 $ 17,468 $ 12,306 $ 9,537 $ 73,416) ( 14,118) ( 11,264) ( 1,615) ( 40,007 $ 3,350 $ 1,042 $ 7,922 $	Construction in progress and equipment under installation Total 10,666 $ 3,873,419 $ - 2,884,199) ( 10,666 $ 989,220 $ 10,666 $ 989,220 $ - 16 28,170 86,262 - 28,279) ( - 71,205) ( - 2 38,836 $ 976,016 $ 38,836 $ 3,888,498 $ - 2,912,482) ( 38,836 $ 976,016 $	Total
					3,873,419 $ 2,884,199) (
					989,220 $
					976,016 $
					3,888,498 $ 2,912,482) (
					976,016 $

A. The significant components of buildings include main land, building and factory, which is/are depreciated over 3 and 56 years, respectively.

B. Amount of borrowing costs for the six-month periods ended June 30, 2019 and 2018 capitalized as part of property, plant and equipment were $0.

C. Information about the property, plant and equipment that were pledged to others as collaterals is provided in Note 8.

D. The property, plant and equipment of the Group are used for their own use.

~20~

(10) Leasing arrangements - lessee Effective 2019
A. The Group leases various assets including lands, buildings, machinery equipment, transportation equipment, and so on. Rental contracts are typically made for periods of 3 to 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. The carrying amount of right-of-use assets and the depreciation are as follows:

follows:
Land Buildings Machinery and equipment Transportation Land Buildings Machinery and equipment Transportation		For the three-month periods ended June 30, 2019		June 30,2019 Book value 319,692 $ 63,091 - 5,650 388,433 $ For the six-month periods endedJune 30,2019
		Depreciation 2,891 $ 225 673 796 4,585 $		Depreciation 5,782 $ 487 2,693 1,590 10,552 $

C. For the three-month periods ended June 30, 2019 and 2018, the reduces to right-of-use assets were $0 and $826. Due to merger individual transfer in and out, for three –month periods ended June 30, 2019, right-of –use assets was increased $60,772 and reduced $19,525.
D. The information on income and expense accounts relating to lease contracts is as follows:

contracts is as follows:
Items affecting profit or loss Interest expense of lease liabilities Expenses of leases of low- value assets	For the three-month periods ended June 30, 2019	For the six-month periods ended June 30, 2019
	1,025 $ 432	2,191 $ 732

E. For the three-month period ended June 30, 2019 and for the six-month periods ended June 30, 2019, the Group’s total cash outflow for leases were $5,195 and $11,390, respectively.

~21~

F. Lease extension option and lease termination option

When the Group determines the lease term, it considers all the facts and circumstances in which the exercise of the option is extended or the termination of the option does not result in an economic incentive. The lease period will be re-estimated when a significant event occurs that affects the exercise of the extension option or the non -exercise termination option.

－
(11) Leasing arrangements lessor

Effective 2019

A. The underlying assets leased by the Group are construction. The duration of the lease contract is usually between 1 and 2 years. The lease contract is negotiated separately and contains various terms and conditions. In order to preserve the use of leased assets, the lessee is usually required not to use the leased assets as a loan guarantee.
B. The maturity date of the Group's undiscounted lease payments leased under operating leases is as follows:

	leased under operating leases is as follows:
`(12)`	Investment Property 2019 2018 Total At January 1, 2019 Cost Accumulated depreciation and impairment 2019 January 1 Reclassifications-Cost Reclassifications-Accumulated Depreciation Depreciation June 30 At June 30, 2019 Cost Accumulated depreciation and impairment	June 30,2019 1,114 $ 2,043 3,157 $ Buildings - $ - - $ - $ 44,007 4,641) ( 340) ( 39,026 $ 44,007 $ 4,981) ( 39,026 $

As of December 31, 2018 and June 30, 2018: None.

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

~22~

For the three-month For the six-month periods ended June 30, periods ended June 30, 2019 2019 Rental income from investment property $ 557 $ 1,114 Direct operating expenses arising from the investment property that generated rental income during the period $ 189 $ 379

B. The fair value of the investment property held by the Group as at June 30, 2019 was $3,936, respectively. Valuations were made using the income approach which is categorized within Level 3 in the fair value hierarchy. Key assumptions are as follows:

June 30, 2019 Discount rate 9.24% Rental income Yearly (net) 2,245 Years 2 C. There was no amount of borrowing costs capitalized as part of investment property for the six-month periods ended June 30, 2019.

D. There was no investment property that was pledged to others as collaterals for the six-month periods ended June 30, 2019.

`(13)` Short-term borrowings

Type of borrowings		June 30,2019	June 30,2019	range	Collateral
Bank borrowings
					Time deposits,
Secured Loan	$		42,590	1.63%-3.614%	reserves and
					accounts receivable
Credit borrowings			942,495	1.14%-2.8%	Reserves accounts
Purchase Borrowings			29,698	1.596%-3.841%	Joint guarantor
	$		1,014,783
Type of borrowings	December 31,2018			Interest rate range Collateral
Bank borrowings
Credit borrowings	$		591,000	1.138%~1.35%	-
Type of borrowings		June 30,2018		Interest rate range Collateral
Bank borrowings
Interest expense recognized Credit borrowings $			in profit or 287,085	loss amounted to $2,571, $873, 1.2%~3.78% -
$4,496 and $1,061 for	the	three-month periods ended June 30, 2019 and
2018, and for the six-month periods ended June 30,					2019 and 2018,
respectively.

~23~

`(14)` Other Payables

ther Payables
		June 30,2019	December	31,2018		June 30,2018
Salary and Wages	$	25,620	$	39,112	$		23,113
Payable
Employee Bonus		64,766		31,091			41,080
Payable and
Commensation Due
to Directors
Balance Payable-		159,010		75,777			-
Machinery and
Equipment
Machine		40,009		33,765			59,647
Maintenance Payable
Dividend payable		194,083		-			-
Others		118,872		107,930			86,776
	$	602,360	$	287,675	$		210,616
ong-term borrowings
borrowings	repayment term		rate range	Collateral			June 30,2019
Long-term bank borrowing
Bank borrowings secured	From March 11, 2015 to
borrowings	March 11, 2020, and pay interest on a monthly			Guaranteed machine
	basis, and from March		2.00%	equipment		$	8,579
	11, 2016, the principal			And other
	will be	repaid in three		equipment
	installments.
	The principal will be
Credit borrowings	repaid monthly from October 27, 2017 to		2.74%	Reserves accounts			6,654
	September 27, 2022.
							15,233
Less: Current portion of long-term borrowings						(	10,563)
						$	4,670

- `(15)` Long term borrowings

December 31, 2018: None.

~24~

Type of borrowings	Borrowing period and repayment term	Interest rate range	Collateral Land and buildings	June 30,2018 25,469 $ 1,690) ( 23,779 $

For the long-term loan contract of the Group from November 11, 2012 to January 11, 2032, the Group had settled the loan in advance in July 2018 due to financial planning considerations.

`(16)` Finance lease liabilities

Effective 2018

The Group leases in transportation and machine equipment under finance lease. Future minimum lease payments and their present values as at December 31, 2018 and June 30, 2018 are as follows:

		December 31,2018	Present value of
Total finance lease		Future finance
8,987 $ 10,132 - 10,132 19,119 $	749) ($ 251) ( - 251) ( 1,000) ($ June 30,2018		8,238 $ 9,881 - 9,881 18,119 $ Present value of finance lease liabilities
Total finance lease liabilities		Future finance charges
8,988 $ 14,626 - 14,626 23,614 $	990) ($ 565) ( - 565) ( 1,555) ($		7,998 $ 14,061 - 14,061 22,059 $

~25~

`(17)` Pensions

A.(A) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March.
(B) The pension costs under the defined benefit pension plans of the Group were $105, $174, $221 and $411 for the three-month periods ended June 30, 2019 and 2018, and for the six-month .
periods ended June 30, 2019 and 2018, respectively
(C) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2020 amount to $635.
B.(A) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(B) The pension costs under defined contribution pension plans of the Group for the three-month periods ended June 30, 2019 and 2018, and for the six-month periods ended June 30, 2019 and 2018 were $2,967, $2,897, $6,805 and $5,520, respectively.

~26~

`(18)` Share capital

A. As of March 31, 2019, the Company’s authorized capital was $5,000,000, consisting of 500,000 thousand shares of ordinary stock (including 20,000 thousand shares reserved for employee stock options issued by the Company), and the paid-in capital was $2,527,136 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

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

==> picture [435 x 51] intentionally omitted <==

B. Treasury shares
(A) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

Shares held by	Reason for reacquisition	June 30,2019	June 30,2019
		Number of shares Book value 37,081 527,678 $ 20,000 357,063 57,081 884,741 $ December 31,2018	Book value
Subsidiary- Youe Chung Capital Corporation Corporation Shares held by	Subsidiary holds shares of the company employees Total Reason for reacquisition		527,678 $ 357,063
			884,741 $
		of shares Book value 37,081 527,678 $ 20,000 357,063 57,081 884,741 $ June 30,2018	Book value
Subsidiary- Youe Chung Capital Corporation Corporation Shares held by	Subsidiary holds shares of the company employees Total Reason for reacquisition		527,678 $ 357,063
			884,741 $
		of shares 37,081 20,000 57,081	Book value
Subsidiary- Youe Chung Capital Corporation Corporation	Subsidiary holds shares of the company employees Total		527,678 $ 357,063
			884,741 $

(B) The book value of the company's treasury shares is NT$17.85 per share. As of June 30, 2019, the company has transferred 20,000 shares of the treasury shares bought back to the employees and immediately acquired them on the date of the grant. But the transfer process still on going.

~27~

(C) The Company's remuneration costs incurred for the transfer of treasury shares from January 1 to June 30, 2019 were $NT3, 000.
(D) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share 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.
(E) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.
(F) 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.
(G) The Group organized and reorganized in May 2018, and merged Suichang Investment Co., Ltd. and Youe Win Capital Corporation into Youe Chung Capital Corporation (hereinafter referred to as “Suichang Campany”, “Youe Win Campany” and “Youe Chung Company”). Suichang Campany and Youe Win Campany were closed and transferred the relevant assets and liabilities to Youe Chung Company. Before the reorganization, Suichang Company held the shares, and after reorganization, Youe Chung Company held the shares of the company. As of June 30, 2019, December 31, 2018 and June 30, 2018, Suichang Company held 37,081, 37,081 and 37,081 shares, with an average book value of $14.23 per share. The fair values per share were $23.2, $18.35 and $33.05. The transfer of treasury stock costs is based on the book value of the shares held by Youe Chung Company and Suichang Company in each period, .
based on the indirect shareholding ratio of the Company

`(19)` Capital surplus

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

~28~

January 1, 2019 Equity method Recognition Affiliates Number of changes Adjustment of the shareholding ratio of the invested company Share-based payment transaction June 30, 2019 January 1, 2018 Adjustment of the shareholding ratio of the invested company June 30, 2018	Treasury shares 145,471 $ - - - 145,471 $ Treasury shares 145,471 $ - 145,471 $	Recognition of changes in ownership interest in subsidiaries	Employee stock options 7,056 $ 7,056) ( - 3,000 3,000 $ Employee stock options 4,518 $ - 4,518 $	Changes in equity of affiliated companies - $ 5,318 105 - 5,423 $ Changes in equity of affiliated companies - $ 4,418 ( 4,418 $	Total 169,431 $ 40 135 3,000 172,606 $ Total 212,948 $ 13,492) 199,456 $
		16,904 $ 1,778 30 - 18,712 $ Recognition of changes in ownership interest in subsidiaries 62,959 $ 17,910) ( 45,049 $

(20) Retained earnings (deficit to be compensated)

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. When such legal reserve amounts to the total authorized capital, the Company shall not be subject to this requirement. The Company may then appropriate or reverse a certain amount as special reserve according to the demand for the business or relevant regulations. After the distribution of earnings, the remaining earnings and prior years’ undistributed earnings may be appropriated according to a resolution of the Board of Dire ctors adopted in the shareholders’ meeting.

~29~

B. To well design a long term financial plan and stabilize the operation, the company chose a residual dividend policy to plan the future capital fund needs based on capital investment budget. First to appropriate the retained earnings to get capital funds fulfilled and residual earnings will be paid off as dividends. The steps are:
- (A) Define an optimized capital budget.
- (B) Define the fund needs to fulfill one capital budget.
- (C) Define how much fund shall be fulfilled by retained earnings. (Unfulfilled part shall be fulfilled by fund raising or bond issuing.)
- (D) To reserve a certain amount of residual earnings, then dividends shall be paid off to shareholders. According to the dividend policy of the company, cash dividend ratio shall not be lower than 20% of total dividends.
C. Except for covering accumulated deficit, increasing capital or payment of cash in proportion to ownership percentage, the legal reserve shall not be used for any other purpose. The amount capitalized or the cash payment shall be limited to the portion of legal reserve which exceeds 25% of the 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 end of the financial reporting period before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
E. As resolved by the shareholders on June 13, 2018, the deficit in 2017 shall be compensated by legal reserve for $74,217.
F. On June 11, 2019, the Shareholders resolved to distribute cash dividends amounting to $194,083 ($0.834 (in dollars) per share) for the appropriation of 2018 earnings.
G. For the information relating to employees’ compensation (bonuses) and directors’ and supervisors’ remuneration, please refer to Note 6(27).
(21) Other equity items

2019

			2019
January 1 Evaluation adjustment –Group Foreign currency conversion difference: –Group June 30	Unrealized evaluation of profit and loss		Foreign currency translation Total 7,853 $ 7,853 $ - 2,590) ( 3,163 3,163 11,016 $ 8,426 $
	- $ 2,590) ( - 2,590) ($

~30~

2018

January 1 Effect on retrospective application Foreign currency conversion difference: –Group June 30	Unrealized evaluation of profit and loss 3,756 $ 3,756) ( - - $	Foreign currency translation Total 7,451 $ 11,207 $ - 3,756) ( 890 890 8,341 $ 8,341 $

(22) Operating revenue

perating revenue
Revenue from contracts with customers Revenue from contracts with customers	For the three-month periods ended June 30, 2019	For the three-month periods ended June 30, 2018
	726,964 $ For the six-month periods ended June 30, 2019	742,674 $ For the six-month periods ended June 30, 2018
	1,438,218 $	1,374,298 $

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines:

~31~

For the three-month periods ended June 30, 2019 Revenue from dept. Revenue from internal dept. contracts Revenue from external customer contracts Timing of revenue recognition At a point in time For the three-month periods ended June 30, 2018 Revenue from dept. Revenue from internal dept. contracts Revenue from external customer contracts Timing of revenue recognition At a point in time	Mask and Semiconductor division 741,110 $ 27,709) ( 713,401 $ 713,401 $ Mask and Semiconductor division 714,648 $ 9,581) ( 705,067 $ 705,067 $	Medical division 34,857 $ 21,294) ( 13,563 $ 13,563 $ Medical division 37,603 $ 4 37,607 $ 37,607 $	Total 775,967 $ 49,003) ( 726,964 $ 726,964 $ Total 752,251 $ 9,577) ( 742,674 $ 742,674 $

~32~

For the six-month				Mask and	Mask and	Mask and
periods ended June 30,			Semiconductor
2019				division				Medical			division				Total
Revenue from dept.	$					1,433,243	$					67,606	$		1,500,849
Revenue from internal
dept. contracts	(					41,337)	(					21,294)	(			62,631)
Revenue from external
customer contracts	$					1,391,906	$					46,312	$		1,438,218
Timing of revenue
recognition
At a point in time	$					1,391,906	$					46,312	$		1,438,218
For the six-month				Mask and
periods ended June 30,			Semiconductor
2018				division				Medical			division				Total
Revenue from dept.	$					1,317,945	$					86,482	$		1,404,427
Revenue from internal
dept. contracts	(					29,423)	(					706)	(			30,129)
Revenue from external
customer contracts	$					1,288,522	$					85,776	$		1,374,298
Timing of revenue
recognition
At a point in time	$					1,288,522	$					85,776	$		1,374,298
	$					1,288,522	$					85,776	$		1,374,298
B.Contract liabilities
(A)The Group has	recognized the following										revenue-related contract
liabilities:
June 30,		2019				December 31,2018					June 30,2018				January	1,2018
Contract asset $		15,503			$				-	$				-	$	-
Contract liability $		70,603			$			58,701		$		55,530			$	83,589
(B) Initial contract period:			liabilities recognized								income		in		the current
					periods endedJune					30,		periods endedJune 30,
The revenue recognized	from
the beginning balance of
contract liability					($				6,768)			$				7,058
					periods endedJune					30,		periods endedJune 30,
The revenue recognized	from
the beginning balance of
contract liability					$			24,956				$			56,053

~33~

`(23)` Other income

ther income
Interest income`：` Bank deposits Financial assets at amortised cost Interest income Other interest income Total interest income Rent income Dividend income Others Interest income`：` Bank deposits Financial assets at amortised cost Interest income Other interest income Total interest income Rent income Dividend income Others	For the three-month periods ended June 30, 2019	For the three-month periods ended June 30, 2018
	1,361 $ 46 810 2,217 1,359 - 479 4,055 $ For the six-month periods ended June 30, 2019	395 $ 405 5 805 68 2,387 12,983 16,243 $ For the six-month periods ended June 30, 2018
	2,072 $ 99 817 2,988 2,000 1,866 1,044 7,898 $	975 517 12 1,504 151 2,387 13,325 17,367 $

~34~

`(24)` Other gains and losses

`(24)`	Other gains and losses
`(25)`	Finance costs Gains(Loss) on disposal of investments Currency exchange gains(loss) Gains(Loss) on financial assets at fair value through profit or loss Other expenses Other Non-operating loss- Investment Property Depreciation Gains(Losses) on disposals of property, plant and equipment Gains(Loss) on disposal of investments Currency exchange gains(loss) Gains(Loss) on financial assets at fair value through profit or loss Other expenses Other Non-operating loss- Investment Property Depreciation Interest expense Other finance expense	For the three-month periods ended June 30, 2019 51,635 $ 2,336 38,657 3) ( 170) ( 92,455 $ For the six-month periods ended June 30, 2019 1,336 $ 30,779 4,245 95,749 727) ( 340) ( 131,042 $ For the three-month periods ended June 30, 2019 3,596 $ - 3,596 $		For the three-month periods ended June 30, 2018
				- $ 12,850 150,876 2,062) ( - 161,664 $ For the six-month periods ended June 30, 2018
				- $ 7,750) ( 9,064 175,797 5,119) ( - 171,992 $ For the three-month periods ended June 30, 2018

			3,596 $ - 3,596 $	978 $ 320 1,298 $

~35~

`(26)`	Expenses by nature Interest expense Other finance expense Employee benefit expenses Depreciation charges on property, plant and equipment Amortisation charges on intangible assets Employee benefit expenses Depreciation charges on property, plant and equipment Amortisation charges on		For the six-month periods ended June 30, 2019		For the six-month periods ended June 30, 2018
			6,687 $ - 6,687 $ For the three-month periods ended June 30, 2019		1,248 $ 357 1,605 $ For the three-month periods ended June 30, 2018
			102,566 $ 39,062 1,902 For the six-month		104,146 $ 33,796 286 For the six-month
			222,597 $ 81,284 3,675		190,024 $ 71,205 538

~36~

`(27)` Employee benefit expense

mployee benefit expense
Wages and salaries Labour and health insurance fees Pension costs Other personnel expenses Wages and salaries Labour and health insurance fees Pension costs Other personnel expenses	For the three-month periods ended June 30, 2019	For the three-month periods ended June 30, 2018
	90,300 $ 6,187 3,072 3,007 102,566 $ For the six-month periods ended June 30, 2019	92,178 $ 5,585 3,071 3,312 104,146 $ For the six-month periods ended June 30, 2018
	193,970 $ 14,306 7,026 7,295 222,597 $	166,667 $ 10,923 5,931 6,503 190,024 $

A. According to the Articles of Incorporation of the Company, the current year’s profit shall be used first to cover accumulated deficit, if any, and then the remaining balance shall be distributed as follows: no less than 10% as employees’ compensation, and no more than 2% as directors’ remuneration.

B. For the three-month periods ended June 30, 2019 and 2018, and for the six-month periods ended June 30, 2019 and 2018, employees’ compensation were accrued at $16,543, $23,580, $23,304 and $29,730, respectively; directors’ and supervisors’ remuneration were accrued at $3,245, $4,688, $4,591 and $5,910, respectively. The aforementioned amounts were recognized in salary expenses. The employees’ compensation and directors’ remuneration amounting to $25,965 and $5,108, respectively, for 2018 as resolved by the Board of Directors were in agreement with the amounts recognized in the 2018 financial statements. The employees’ compensation and directors’ remuneration will be distributed in cash. Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors during its meeting is available at the Market Observation Post System website.

~37~

`(28)` Income tax

A. Income tax expense

Components of income tax expense:

ncome tax A.Income tax expense Components of income	tax expense:
Current tax: Current tax on profits for the year Tax on undistributed surplus earnings Previous income tax low (high) estimate Total current tax Deferred tax: Origination and reversal of temporary differences Impact of change in tax rate Total deferred tax Income tax expense Current tax: Current tax on profits for the year Tax on undistributed surplus earnings Previous income tax low (high) estimate Total current tax Deferred tax: Origination and reversal of temporary differences Impact of change in tax rate Total deferred tax Income tax expense	For the three-month periods ended June 30, 2019	For the three-month periods ended June 30, 2018
	28,315 $ 1 - 28,316 8,063 - 8,063 36,379 $ For the six-month periods ended June 30, 2019	9,999 $ - 2,471) ( 7,528 20,579 - 20,579 28,107 $ For the six-month periods ended June 30, 2018
	33,681 $ 1 - 33,682 8,175 - 8,175 41,857 $	11,306 $ - 2,471) ( 8,835 9,807 1,657) ( 8,150 16,985 $

B. The Company’s income tax returns through 2016 have been assessed and approved by the Tax Authority.

C. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China in February, 2018, the Company’s applicable income tax rate was raised from 17%

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to 20% effective from January 1, 2018. The Group has accessed the impact of the change in income tax rate.

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`(29)` Earnings per share

For the three-month periods ended June 30, 2019

Amount after tax	Weighted average number of ordinary shares outstanding (share in thousands)	Earnings per share (in dollars)
		share
Amount after tax	Weighted average number of ordinary shares outstanding (share in thousands)
206,699 $ 206,699 $ - 206,699 $	195,632 195,632 185 195,817	1.06 $ 1.06 $

~40~

For the six-month periods ended June 30, 2019

Amount after tax	Weighted average number of ordinary shares outstanding (share in thousands)	Earnings per share (in dollars)

Amount after tax	Weighted average number of ordinary shares outstanding (share in thousands)
289,274 $ 289,274 $ - 289,274 $	195,632 195,632 1,078 196,710	1.48 $ 1.47 $

~41~

The weighted average number of shares outstanding for the three-month periods ended June 30, 2019 and 2018, and for the six-month periods ended June 30, 2019 and 2018, which has been deducted from the number of shares held by the subsidiary company, Yu Chuan Investment company, which are regarded as treasury shares of the company (the number of shares is calculated according to the shareholding ratio of the company).

(30) Business combinations
A. The Group acquired 29.55% equity of Aptos Technology INC. On June 28, 2019, Aptos Technology INC. held a shareholders' meeting to select the directors. The company's subsidiary, Youe Chung Capital Corporation was elected as the company's board of directors and obtained control over the company. Thus, the Group included Aptos in the consolidated financial statements from that date.
- (A) The following table summarizes the consideration paid for Aptos Technology INC. and the fair values of the assets acquired and liabilities assumed at the acquisition date, as well as the the non-controlling interest’s proportionate share of the recognized amounts of acquiree’s identifiable net assets at the acquisition date:

~42~

		June 28,2019
Fair value of equity interest in Aptos Technology INC. held
before the business combination	$	60,129
Non-controlling interests account for the identifiable net
assets share of the acquiree		99,207
		159,336
Fair value of the identifiable assets acquired and liabilities
assumed
Cash		86,656
Financial assets at fair value through profit or loss		500
Financial Assets at Amortized Cost		24,638
Contract asset`－`Cur.		15,503
Accounts Receivables		72,998
Other Receivables		1,235
Tax Assets		144
Inventories		35,257
Other Current Assets		6,899
Financial assets measured at fair value through other
comprehensive income`－`Non Cur.		199
Financial Assets at Amortized Cost`－`Non Cur.		4,517
Properties, Plants and Equipment		143,613
Right-of-use asset		60,772
Intangible Assets		7,832
Prepayments		1,233
Refundable deposits		4,860
Bank loan	(	131,288)
Contract Liabilities	(	7,138)
Notes Payables	(	66)
Accounts Payables	(	56,475)
Other Payables	(	33,037)
Other Payables`－`Related Parties	(	333)
Lease liability -Current	(	20,506)
Other Current Liabilities	(	2,209)
Long-Term Liabilities-Current Portion	(	10,563)
Long-term Loans	(	4,670)
Deferred Income Tax	(	62)
Lease liability –Non Current	(	40,273)
Guarantee deposits received	(	900)
Identifiable net assets	$	159,336

~43~

(B) The fair value of the acquired identifiable properties, plants and equipment and intangible assets are provisional pending receipt of the final valuations for those assets.
(C) The operating revenue included in the consolidated statement of comprehensive income since June 28, 2019 contributed by Aptos Technology INC. was $0 and profit before income tax of $0. Had Aptos Technology INC. been consolidated from January 1, 2019, the consolidated statement of comprehensive income would show operating revenue of $1,709,089 and profit before income tax of $148,543.
B. In August, 2018, the Group acquired 65.35% equity of Wei Da Hi-Tech Co., Ltd. in cash of $ 191,710 and obtained control of the company. The main business items of the company are research, design and development of display panel control chips and their modules, manufacturing and sales. The Group expects to combine semiconductor industry resources and expand its business scale after the acquisition.
(A) The following table summarizes the consideration paid for Wei Da Hi-Tech Co., Ltd. and the fair values of the assets acquired and liabilities assumed at the acquisition date, as well as the fair value of the non-controlling interest at the acquisition date:

		Merger date
Purchase consideration
Purchase consideration-Cash	$	191,710
Non-controlling interests account for the
identifiable net assets share of the acquiree		66,179
		257,889
Fair value of the identifiable assets acquired and
liabilities assumed
Cash		107,824
Accounts Receivables		32,147
Other Receivables		1,704
Inventories		50,274
Other Current Assets		5,620
Properties, Plants and Equipment		4,357
Intangible Assets		20,701
Other Non-Current Assets		938
Accounts Payables	(	19,705)
Other Payables	(	10,995)
Other Current Liabilities	(	1,788)
Other Non-Current Liabilities	(	100)
Identifiable net assets		190,977
Goodwill	$	66,912

(B) The fair value of the acquired identifiable intangible assets is provisional pending receipt of the final valuations for those assets.

~44~

comprehensive income since August, 2018 contributed by Weida Hi-Tech Company was $43,582 and loss before income tax of ($24,536). Had Weida Hi-Tech Company been consolidated from January 1, 2018, the consolidated statement of comprehensive income would show operating revenue of $3,047,757 and profit before income tax of $187,218.

`(31)` Operating leases

Effective 2018

The Group leases in land and building assets under non-cancellable operating lease agreements. The lease terms to 2034. The Group recognized rental expenses of $7,473 and $16,265 in profit or loss for the three-month periods ended June 30, 2018 and for the six-month periods ended June 30, 2018, respectively.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

operating leases are as follows:
Not later than one year Later than one year but not later than Later than five years	December 31,2018 15,891 $ 54,954 60,084 130,929 $	June 30,2018
		23,281 $ 61,379 66,844
		151,504 $

`(32)` Supplemental cash flow information

A. Investing activities with partial cash payments:

B.Financing activities with Purchase of property, plant and equipment Add: Opening balance of payable on equipment Ending balance of advanced on equipment Less: Opening balance of advanced on equipment Ending balance of payable on i Cash paid during the period Dividend Payable	For the six-month periods ended June 30, 2019	For the six-month periods ended June 30, 2019	For the six-month periods ended June 30, 2018	For the six-month periods ended June 30, 2018
	no cash flow effects: 107,250 $ 75,777 350,301 133,635) ( 159,010) ( 240,683 $ For the six-month periods ended June 30, 2019		86,262 $ 11,606 79,234 48,644) ( - 128,458 $ For the six-month periods ended June 30, 2018
		194,083 $		- $

C. Innova Vision INC. issued new shares to increase cash on May 3, 2019. The Group did not apply for the shareholding ratio, resulting in 17.81% of its comprehensive shareholding and loss of control

~45~

over the subsidiary (please refer to Note 4(3) B. (Note 8)). The details of the consideration received from the transaction and assets and liabilities relating to the subsidiary are as follows:

		May3,2019
Innova Vision INC. Assets and Liabilities Book Value
Cash	$	25,037
Notes Receivables		36
Accounts Receivables		29,328
Other Receivables		20
Inventories		159,656
Prepayments		2,774
Other Current Assets		1,125
Properties, Plants and Equipment		25,314
Right-of-use asset		19,525
Intangible Assets		558
Other Non-Current Assets		22,194
Contract Liabilities	(	7,443)
Notes Payables	(	53)
Accounts Payables	(	17,598)
Other Payables	(	41,068)
Other Payables`－`Related Parties	(	168,177)
Lease liability -Current	(	6,139)
Other Current Liabilities	(	40,781)
Lease liability –Non Current	(	2,691)
Guarantee deposits received	(	67)
Total Net Assets	$	1,550

~46~

`(33)` Changes in liabilities from financing activities

Short-term borrowings	Long-term borrowings	Lease obligations	Guarantee Deposits Received	Guarantee Deposits Received
			2,495 $

81,253 $ 205,832 287,085 $	26,303 $ 835) ( 25,469 $	94 $ 3) ( 91 $		107,650 $ 204,994 312,554 $

7 、 RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

~47~

Names of relatedparties	Relationshipwith the Group
Weida Hi-Tech CO., LTD.	The general manager of the company is the
	chairman of the company (note1)
WishRich Technology Co., Ltd.	The director of the subsidiary of the
	company is the chairman of the company
	(note2)
Maxchip Electronics Corporation	The director of the company is the chairman
	of the company
Advanced Silicon SA	The chairman of the subsidiary of the
	company is the director of the company
INNOVA VISION INC.	The company is a director of the company(note3)

Note1: Merged into the Group in September, 2018.

Note2: The chairman of the company resigned as a director of the company's subsidiary in December 2018.

Note3: The Group loss of control over Innova Vision INC. and significant influence in May 2019, but still keep a member of direct.

(2) Significant related party transactions
A. Operating revenue:

Operating revenue:
Goods are sold based on the available to third parties. Sales of goods: Other Related Parties Sales of goods: Other Related Parties	price lists in force and terms that would be For the three-month periods ended June 30, 2019 For the three-month periods ended June 30, 2018 17,392 $ 9,648 $ For the six-month periods ended June 30, 2019 For the six-month periods ended June 30, 2018 19,403 $ 12,870 $	For the three-month periods ended June 30, 2018
		9,648 $ For the six-month periods ended June 30, 2018

B. Purchases:

available to third parties. Purchases:
Purchases of goods: Other Related Parties	For the three-month periods ended June 30, 2019 - $	For the three-month periods ended June 30, 2018
		18,219 $

~48~

				For the six-month	For the six-month	For the six-month	For the six-month	For the six-month	For the six-month				For the six-month	For the six-month	For the six-month	For the six-month
			periods ended June 30,									periods ended June 30,
					2019										2018
Purchases of goods:
Other Related Parties			$							-		$				26,774
Goods and services are	purchased				from	associates					on normal commercial
terms and conditions.
C.Receivables from related parties:
			June	30,	2019		December				31,		2018		June 30,2018
Trade receivables:
Other Related Parties	$				9,788		$						4,178		$	7,473
Other receivables:
INNOVA VISION INC.					16,190									-			-
Other Related Parties					-								4,636				-
Total	$				25,978		$						8,814		$	7,473
D.Payables to related parties:
			June	30,	2019			December			31,		2018		June 30,2018
Accounts payable:
Other Related Parties	$				-		$							-	$	19,662
Other accounts payable:
Other Related Parties					1,728								1,003				-
Total	$				1,728		$						1,003		$	19,662
E.Loans to /from related	parties:			(`「`Other			Receivables－Related Parties`」`)
Loans to related parties
(A)Outstanding balance
	June 30,2019					December				31,		2018			June 30,2018
INNOVA VISION INC.	$			187,171 $									-	$			-
(B)Interest income
			For the three-month										For the three-month
	periods			endedJune 30,2019						periods endedJune 30,2018
INNOVA VISION INC.	$							802		$							-
		For the six-month						periods			For the			six-month periods
			endedJune 30,					2019					ended		June 30,2018
INNOVA VISION INC.		$							802		$						-

The loans to associates are reimbusement within 1 year and carry interest at 2.616% per annum for the six-month periods ended June 30, 2019, respectively.

(3) Key management compensation

~49~

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

	For the three-month periods ended June 30, 2019	For the three-month periods ended June 30, 2018
Salaries and short-term employee benefits Post-employment benefits Total Salaries and short-term employee benefits Post-employment benefits Total	4,887 $ - 4,887 $ For the six-month periods ended June 30, 2019	4,499 $ -
		4,499 $
		For the six-month periods ended June 30, 2018
	11,757 $ - 11,757 $	7,214 $ 14,000
		21,214 $

8 `、` PLEDGED ASSETS

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

Asset item Cash in Banks(Financial assets at amortised cost-Non current) Time deposits(Financial assets at amortised cost-Non current) Accounts Receivable Land and buildings Machinery and equipment Other equipment	Book value
	June 30,2019 December 31,2018 4,436 $ - $ 54,446 29,727 8,949 - - - 79,205 - 6,659 - 153,695 $ 29,727 $	June 30,2018
		- $ 29,723 - 298,015 27,313 -
		355,051 $

9 、 SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

(1) Contingencies

Subidiary - Innova Vision International Inc. (IVKK) imported contact lenses in March 2015 contained anti-UV material, which did not match up with the materials disclosed in the certification issued by Japanese government. Japanese government issued an oral order to ask IVKK make announcements on the newspapers about the material unmatched and stopped the selling activities in Japan. IVKK then discussed with its major agents to return the goods and negotiated a “return and change of the

~50~

goods plan”. Some of the agents have already returned the goods one after plan.

Innova Vision INC. issued new shares to increase cash on May 3, 2019. The Group did not apply for the shareholding ratio, thus, loss of control over the subsidiary.

`(2)` Commitment

Signed but not yet paid equipment maintenance contracts

June 30, 2019 December 31, 2018 June 30, 2018 Machine maintenance $ 40,009 $ 33,765 $ 59,648

10 `、` SIGNIFICANT DISASTER LOSS

None.

11 、 SIGNIFICANT EVENTS AFTER THE END OF THE FINANCIAL

REPORTING PERIOD

None.

12 `、` OTHERS

`(1)` Capital management

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

During the year ended December 31, 2019, the Group’s strategy, w hich was unchanged from 2018, was to maintain the gearing ratio within reasonable security range. The gearing ratios at June 30, 2019 and 2018, and December 31, 2018 were as follows:

Total borrowings Less: Cash and cash equivalents Net debt Total equity Total capital Gearing ratio	June 30,2019 1,030,016 $ 680,376) ( 349,640 2,644,812 2,994,452 $ 11.68%	December 31,2018 June 30,2018 591,000 $ 312,554 $ 563,408) ( 557,196) ( 27,592 244,642) ( 2,573,811 2,737,158 2,601,403 $ 2,492,516 $ 1.06% -

(2) Financial instruments

A. Financial instruments by category

~51~

December 31, 2018 June 30, 2018

June 30, 2019

Financial assets

Financial assets	June 30,2019	December 31,2018	June 30,2018
Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Fair value through other comprehensive income financial assets Select the designated equity instrument investment Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at amortised cost Short-term borrowings Notes payable Accounts payable Other accounts payable Lease obligations Lease account payable Long-Term Borrowings-Current Portion Guarantee Deposits Received	878,897 $ 199 $ 680,376 $ 203,755 917 646,651 210,975 9,066 1,751,740 $ June 30,2019 1,014,783 $ 66 245,313 604,088 390,789 - 15,233 2,495 2,272,767 $	731,826 $ - $ 563,408 $ 84,062 1,277 601,330 18,243 12,867 1,281,187 $ December 31,2018 591,000 $ 54 236,387 288,678 - 18,119 - 3,223 1,137,461 $	727,067 $
			- $
			557,196 $ 136,241 585 628,975 24,481 12,823
			1,360,301 $
			June 30,2018
			287,085 $ 55 271,762 210,616 - 22,059 25,469 91
			817,137 $

B. Financial risk management policies

No major changes in the period, please see Note 12 in 2018 consolidated financial statements.

~52~

C. Significant financial risks and degrees of financial risks

(A) Market risks

i. Foreign exchange risk

The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD, JPY and CNY). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

	June 30,2019	June 30,2019	Book value (NTD)
	Foreign currency amount (In thousands)	Exchange rate
	Foreign currency amount (In thousands)	Exchange rate
USD 6,179 CNY 45,477 USD 2,576 JPY 113,393		30.715 4.472 30.715 0.2782	189,786 $ 203,372 79,124 31,546

~53~

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD JPY:NTD	Exchange rate USD 8,718 30.46 CNY 32,026 4.593 USD 29,874 30.46 JPY 90,262 0.2754 June 30,2018 Foreign currency amount (In thousands)	Exchange rate USD 8,718 30.46 CNY 32,026 4.593 USD 29,874 30.46 JPY 90,262 0.2754 June 30,2018 Foreign currency amount (In thousands)	Book value (NTD)
		Exchange rate
	USD 8,718 CNY 32,026 USD 29,874 JPY 90,262	30.46 4.593 30.46 0.2754	265,542 $ 147,097 909,953 24,858

ii. The total exchange gain (loss), including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the three-month periods ended June 30, 2019 and 2018 and for the six-month periods ended June 30, 2019 and 2018, amounted to $2,336, $12,850, $4,245 and $9,064.
iii. Analysis of foreign currency risk arising from significant foreign exchange variation:

For the six-month periods ended June 30, 2019

	Effect on profit or loss Effect on other comprehensive income 7,417 $ - $ 2,350 - 889) ($ - 484) ( - SensitivityAnalysis	Effect on profit or loss Effect on other comprehensive income 7,417 $ - $ 2,350 - 889) ($ - 484) ( - SensitivityAnalysis
Degree of variation	Effect on profit or loss
1% 1% 1% 1%	7,417 $ 2,350 889) ($ 484) (	- $ - - -

~54~

For the three-month periods ended March 31, 2018

	Effect on profit or loss Effect on other comprehensive income 2,655 $ - $ 1,471 - 9,100) ($ - 249) ( - SensitivityAnalysis	Effect on profit or loss Effect on other comprehensive income 2,655 $ - $ 1,471 - 9,100) ($ - 249) ( - SensitivityAnalysis
Degree of variation	Effect on profit or loss
1% 1% 1% 1%	2,655 $ 1,471 9,100) ($ 249) (	- $ - - -

Price risk

i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and fair value through other comprehensive income financial assets.
ii. The Group mainly invests in equity instruments comprised of shares and open-end funds. The value of equity instruments are susceptible to market price risk arising from uncertainties about future performance of equity markets. Assuming a hypothetical increase of 1% in the price of the aforementioned financial assets at fair value through profit or loss while the other conditions remain unchanged could increase the Group’s non-operating revenue for the six-month periods ended June 30, 2019 and 2018 by $8,789 and $7,271, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $2 and $0, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value Interest rate risk

i. The Group’s main interest rate risk arises from long (short)-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. For the six-month periods ended June 30, 2019 and 2018, the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars and US Dollars.
ii. The Group’s borrowings are measured at amortized cost. The borrowings are periodically contractually reprised and to that extent are also exposed to the risk of future changes in market interest rates.
iii. If the long (short)-term borrowing short term interest rate had increased/decreased by 1% with all other variables held constant, profit, net of tax for the six-month periods ended June

~55~

30, 2019 and 2018 would have decreased / increased by $10,300 and $2,871, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

(B) Credit risk
i. Credit risk refers to the risk of financial loss to the Group 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 debt instruments stated at amortized cost and fair value through profit or loss.
ii. According to the Group’s credit policy, each operating entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors, and the utilization of credit limits is regularly monitored.
iii. The Group refers to the forecast ability of global economic indicators to adjust the loss rate which is based on historical and current information when assessing the future default possibility of notes receivables, contract assets, accounts receivable, rents receivable and other receivables. The provision matrix as of June 30, 2019, December 31, 2018 and June 30, 2018 is as follows:

Expected loss

	Expected loss
June 30,2019 Not past due Up to 30 days past due 31~90 days past due 91~180 days past due 181~360 days past due More than 360 days Individual provision Total	rate		Total book value		Loss allowance
	0% 0% 5% 35% 50% 100% 7.46%		533,568 $ 36,749 8,434 325 - - 319,323 898,399 $		- $ - 422 114 - - 23,817 24,353 $

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Expected loss

	Expected loss
December 31,2018	rate	Total book value	Loss allowance
	0% 0% 5% 35% 50% 100% 0.77% Expected loss rate	281,845 $ 70,170 11,816 498 22 - 259,279 623,630 $ Total book value	- $ - 590 174 11 - 2,005 2,780 $ Loss allowance
Not past due Up to 30 days past due 31~90 days past due 91~180 days past due 181~360 days past due More than 360 days Individual provision Total June 30,2018 Not past due Up to 30 days past due 31~90 days past due 91~180 days past due 181~360 days past due More than 360 days Individual provision Total
	0% 0% 5% 35% 50% 100% 1.11%	307,057 $ 38,894 28,097 168 - 1,573 284,459 660,248 $	- $ - 1,405 59 - 1,573 3,170 6,207 $

iv. Movement in relation to the group applying the simplified approach to provide loss allowance for notes and trade receivable is as follows:

2019

Accounts receivable At January 1 2,780 $ Provision for impairment 23,538 Foreign currency conversion difference 68) ( Loss of changes in control of su 1,897) ( June 30 24,353 $	Contract assets
	- $ - - -
	- $

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			2018	2018
		Accounts	receivable		Contract assets
At January 1		$	21,655	$		-
Reversal of impairment	(		1,643)			-
Write-offs during the period	(		12,628)			-
Reorganisation	(		1,177)			-
June 30		$	6,207	$		-

(C) Liquidity risks
- i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by the Group treasury. The Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.
ii. The surplus cash generated by each operating entities of the Group will be gathered back to the Group treasury. The Group treasury then invests surplus cash in demand deposits, time deposits, financial assets at fair value through profit or loss, financial assets at amortized cost and debt investments in no active market (time deposits with 3-12 months period), choosing instruments with appropriate maturities or sufficient to sufficient headroom as liquidity provide
determined by the abovementioned forecasts. As of June 30 , 2019, December 31, 2018 and June 30, 2018, the Group held financial assets at monetary market of $ 849,150, $614,561 and $1,243,714, respectively. Those are expected to readily generate cash inflows for managing liquidity risk.
iii. Non-derivative financial liabilities: June 30, 2019 December 31, 2018 June 30, 2018
Floating rate Expiring within $ 302 $ - $ - one year
Fixed rate: -
Expiring within 197,818 249,000 one year Over one year 31,032 - - $ 229,152 $ 249,000 $ -
- iv. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non- derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

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`(3)`	Fair value information June 30, 2019 Short-term borrowings Notes payable Accounts payable Other payables Long-Term Borrowings Guarantee deposit received Lease Obligations December 31, 2018 Short-Term Borrowings Notes payable Accounts payable Other payables Guarantee deposit received Lease payable June 30, 2018 Short-Term Borrowings Notes payable Accounts payable Other payables Long-Term Borrowings Guarantee deposit received Lease payable	Less than 1year 1,014,783 $ 66 245,313 604,088 10,796 - 45,895 Less than 1year 591,000 $ 54 236,387 288,678 - 8,987 Less than 1year 287,085 $ 55 271,762 210,616 2,090 - 8,988	Over 1year - $ - - - 4,820 2,495 402,288 Over 1year - $ - - - 3,223 10,132 Over 1year - $ - - - 26,301 91 14,626	Total
				1,014,783 $ 66 245,313 604,088 15,616 2,495 448,183 Total
				591,000 $ 54 236,387 288,678 3,223 19,119 Total
				287,085 $ 55 271,762 210,616 28,391 91 23,614

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability takes place with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability, including

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financial assets available for sale in the Group.

B. Financial instruments not measured at fair value

The carrying amounts of cash and cash equivalents, notes and trade receivables, other receivables, short-term borrowings, notes and trade payables, and other payables are reasonably approximate to the fair values.

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

June 30, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Beneficiary's Certificates Fair value through other comprehensive income financial assets Equity securities Total December 31, 2018 Assets Recurring fair value measurements Fair value through profit or loss financial assets Equity securities June 30, 2018 Assets Recurring fair value measurements Fair value through profit or loss financial assets Equity securities	Level 1 848,503 $ 500 - 849,003 $ Level 1 598,163 $ Level 1 582,473 $	Level 2 - $ - - - $ Level 2 - $ Level 2 - $	Level 3 29,894 $ - 199 30,093 $ Level 3 133,663 $ Level 3 144,594 $	Total
				878,397 $ 500 199
				879,096 $
				Total
				731,826 $
				Total
				727,067 $

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

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Listed and OTC stocks O en-end fund p

Market quoted price Closing price Net asset value

(B) 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. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the financial reporting date.
(C) The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheets. The pricing and inputs information used during valuation are carefully assessed and adjusted based on current market conditions.
(D) The Group adjusted credit risks assessment into fair value calculation of financial and non-financial instruments to reflect the credit risk of counterparty and quality of the Group.
E. For the six-month periods ended June 30, 2019 and 2018, there was no transfer between Level 1 and Level 2.
F. The movement for the six-month periods ended June 30, 2019 and 2018 of Level 3 is as follows:

2018 of Level 3 is as follows:
		Equitysecurities
January 1, 2019	$	133,663
Acquired in the period		12,464
Combined transfer number		199
Recognised in profit or loss		21,161
Sold in the period	(	127,466)
Transfers out from level 3	(	9,928)
June 30, 2019	$	30,093

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		Equitysecurities
January 1, 2018	$	143,502
Acquired in the period		3,198
The invested company reduces and returns the capital	(	9,000)
Recognised in profit or loss		6,894
June 30, 2018	$	144,594

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

June 30, 2019

measurement: June 30, 2019	nt:	nt:
Fair value Valuation technique Significant unobservable input Unlisted shares $ 29,894 Net asset value Net asset value Unlisted shares 199 Analogous Listed company approach Lack of liquidity discount Nonderivative equity instrument: December 31, 2018 Fair value Valuation technique Significant unobservable input Unlisted shares $ 48,915 Net asset value Net asset value Venture capital shares Private equity fund 84,748 Net asset value Net asset value Nonderivative equity instrument:	Fair value		Valuation technique		Significant unobservable input		Range (weighted average)	Relationship of inputs to fair value
							- 10%~10% Range (weighted average) - -	The higher the net asset value, the higher the fair value The higher of lack of liquidity discount, the lower the fair value. Relationship of inputs to fair value
		$ 48,915 84,748 instrument:		Net asset value Net asset value		Net asset value Net asset value		The higher the net asset value, the higher the fair value The higher the net asset value, the higher the fair value

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June 30, 2018

Significant Range Valuation unobservable (weighted Relationship of Fair value technique input average) inputs to fair value Nonderivative equity instrument: Unlisted shares $ 72,886 Net asset value Net asset value - The higher the net asset value, the higher the fair value Venture capital 71,708 Net asset value Net asset value - The higher the net shares asset value, the Private equity higher the fair value fund

H. The Group 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 a different outcome. For financial assets and liabilities classified as Level 3, if the factors of assessment changed, then the impact to income or other comprehensive income is:

June 30, 2019

Recognised in profit or loss	Recognised in other comprehensive income

Favourable Unfavourab Favourable Unfavourab Input Change change le change change le change Financial assets Equity Net asset instrument value ± 1% $ 299 ($ 299) $ 2 ($ 2) December 31, 2018 Recognised in profit or Recognised in other loss com rehensive income p Favourable Unfavourab Favourable Unfavourab Input Change change le change change le change Financial assets Equity Net asset instrument value ± 1% $ 1,337 ($ 1,337) $ - $ -

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June 30, 2018

Reco nised in rofit or Reco nised in other g p g

Input Change Financial assets Equity instrument Net asset value ± 1%		Favourable change	Unfavourab le change	Unfavourab le change		Favourable change	Unfavourab le change	Unfavourab le change
		1,446 $		1,446) ($		- $		- $

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: None.
E. Total purchases from or sales to related parties of at least $100 million or 20% of the paid-in capital: None .
F. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.
G. The amount of real estate acquired is NT$300 million or the paid -up capital is over 20%. ： None.
H. Disposal of real estate reaching NT$300 million or 20% of paid -in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Please refer to table 4.
(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 5.

`(3)` Information on investments in Mainland China

Please refer to table 6.

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14 `、` SEGMENT INFORMATION

`(1)` General information

Management has determined the reportable operating segments based on the reports reviewed by the chief operating decision maker that are used to make strategic decisions.

The basis of the Group's corporate composition, divisional basis and departmental information has not changed significantly during the period.

`(2)` Segment information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows: For the six -month period ended June 30, 2019 ：

Mask and

		Mask and
Revenue from external customers Inter-segment revenue Total segment revenue Segment income (loss) including: Depreciation Amortisation Financial cost Interest income Recognised investment profit or loss which is adopting equity method Segment assets		Semiconductor division		Medical division 46,312 $ 21,294 $ 39,051) ($ 6,039) ($ 38) ($ 242) ($ 1 $ - $ - $	Total 1,438,218 $ 62,631 $ 204,589 $ 81,284) ($ 3,675) ($ 6,687) ($ 2,988 $ 24,800) ($ 5,074,157 $
		1,391,906 $ 41,337 $ 243,640 $ 75,245) ($ 3,637) ($ 6,445) ($ 2,987 $ 24,800) ($ 5,074,157 $

For the six -month period ended June 30, 2018 ：

~65~

		Mask and
		Semiconductor		Medical
		division		division		Total
customers	$	1,288,522	$	85,776	$	1,374,298
Inter-segment revenue	$	29,423	$	706	$	30,129
Total segment revenue	$	333,639	($	45,415)	$	288,224
Segment income (loss)
including:
Depreciation	$	58,506	$	12,699	$	71,205
Amortisation	$	467	$	71	$	538
Financial cost	($	1,342)	($	263)	($	1,605)
Interest income	$	1,316	$	188	$	1,504
Recognised investment profit	($	26,435)	$	-	($	26,435)
or loss which is adopting
equity method
Segment assets	$	3,354,655	$	343,237	$	3,697,892

(3) Reconciliation for segment income (loss)

Inter-department sales are conducted on a fair-trade basis. External income reported to the chief operating decision is measured in a consistent manner with income in the income statement.

The consolidated profit and loss, assets and liabilities of the relevant departments are consistent with the consolidated profit and loss, consolidated assets and consolidated liabilities, so there is no adjustment information.

~66~

TAIWAN MASK CORPORATION AND SUBSIDIARIES

FINANCINGS PROVIDED

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2019

Table 1

(Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise)

No.	Financing Company	Counterparty	Financial Statement Account	Related Party	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Interest Rate (%)	Nature for Financing	Transaction Amounts	Reason for Financing	Loss Ending Balance allowance	Collateral	Collateral	Financing Limits for Each Borrowing Company	Financing Company’s Total Financing Amount Limits	Note
													Item	Value
0 0 0 1	TAIWAN MASK CORPORATIO N TAIWAN MASK CORPORATIO N TAIWAN MASK Adl Engineering INC.	Miracle Technology CO., LTD. Youe Chung Capital Corporation Innova Vision INC. Aptos Technolog y INC.	Accounts Receivables `－`Related Parties Accounts Receivables `－`Related Parties Other receivable Accounts Receivables `－`Related Parties	Y Y N Y	200,000 $ 300,000 200,000 30,000	200,000 $ 300,000 200,000 30,000	65,780 $ 293,000 180,000 30,000	- - - 3%	The need for short- term financing The need for short- term financing The need for short- The need for short- term financing	- - - -	Ccapital turnover Capital turnover Capital turnover Operating capital	- - - -	- - - Aptos's Machinery and Other equipment	- - - 23,107	1,018,242 $ 1,018,242 1,018,242 34,994	1,018,242 $ 1,018,242 1,018,242 34,994	1 1 1 2

TAIWAN MASK CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2019

Table 2

(Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise)

No.	Endorsement/ Guarantee Provider	Guaranteed Party	Guaranteed Party	Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Amount of Endorsement / Guarantee Collateralized byProperties	Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements	Maximum Endorsement / Guarantee Amount Allowable	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China	Remark
		Name	Nature of Relationship
0	Adl Engineering INC.	Aptos Technology INC.	3	26,245 $	20,000 $	20,000 $	20,000 $	20,000 $	22.86	34,994 $	N	Y	N

TAIWAN MASK CORPORATION AND SUBSIDIARIES MARKETABLE SECURITIES HELD

(EXCLUDING INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES)

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2019

			FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2019	FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2019
Held Company Table 3	Marketable Securities Type and Name	Relationship with the Company	Shares Financial Asset at Fair Value Through Profit or Loss-Non Cur. 806,400 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 652,129 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 1,743,000 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 605,157 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 10,000,000 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 2,229,000 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 3,422,000 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 3,647,609 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 4,261,000 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 37,081,440 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 641,281 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 1,097,092 Financial Asset at Fair Value Through Profit or Loss-Non Cur. 187,915 Financial assets measured at fair value through other comprehensive income`－`Non Cur. 475,000 Financial assets measured at fair value through other comprehensive income`－`Non Cur. 350,000 Financial assets measured at fair value through other comprehensive income`－`Non Cur. 1,077,107 Financial assets measured at fair value through other comprehensive income`－`Non Cur. 250,000 Financial assets measured at fair value through other comprehensive income`－`Non Cur. 100,000 Financial assets measured at fair value through other comprehensive income`－`Non Cur. 226,759 Financial assets measured at fair value through other comprehensive income`－`Non Cur. 66,050 Financial Asset at Fair Value Through Profit or Loss-Cur. 50,000 Financial Statement Account Fo (Amounts in thousands o		CarryingValue % Fair Value - $ 1.89% - $ - 2.07% - 17,430 10.53% 17,430 6,052 8.65% 6,052 110,900 5.89% 110,900 57,508 2.18% 57,508 88,288 3.34% 88,288 415,827 8.96% 415,827 175,979 4.05% 175,979 860,289 14.67% 860,289 6,413 9.16% 6,413 - 8.08% - - 3.13% - - 17.72% - 199 0.85% 199 - 8.14% - - 1.33% - - 14.29% - - 1.71% - - 8.80% - 500 - 514 Note r the six-monthperiods endedJune 30,2019 f new Taiwan dollars and foreign currencies,Unless Specified Otherwise)
				Shares	CarryingValue	%	Fair Value
TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Jingjing Investment Co., Ltd. Jingjing Investment Co., Ltd. Aptos Technology Co.,Limited Aptos Technology Co.,Limited Aptos Technology Co.,Limited Aptos Technology Co.,Limited Aptos Technology Co.,Limited Adl Engineering INC. Adl Engineering INC. Adl Engineering INC.	Wk Technology Fund-Common Stock Tech Alliance Corp.-Common Stock Furun Investment Co., Ltd.-Common Stock Innova Vision INC.-Common Stock Unicon Optical Co., Ltd.-Common Stock Spirox Corporation-Common Stock Spirox Corporation-Common Stock Macroblock, INC.-Common Stock P-TWO INDUSTRIES INC.-Common Stock TAIWAN MASK CORPORATION- Common Stock Innova Vision INC.-Common Stock G-TECH ELECTRONICS LTD. MEMCHIP TECHNOLOGY CO., LTD. Ten Ying Technology Co., Ltd.-Common Stock ACCELSTOR, INC.-Common Stock TOKAI OPTRONICS CO., LTD.- Common Stock Athentek Holding Inc.-Common Stock TOPFUN TECHNOLOGY INC.- Common Stock TOKAI OPTRONICS CO., LTD.- Common Stock SKLink CO., LTD.-Common Stock Franklin Templeton SAm Asia Pac Bal Acc-Beneficiary Certificate	- - - The company is director - - - The company is director - Parent Company Parent Company is director - - - - - - - - - -	Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial Asset at Fair Value Through Profit or Loss-Non Cur. Financial assets measured at fair value through other comprehensive income`－`Non Cur. Financial assets measured at fair value through other comprehensive income`－`Non Cur. Financial assets measured at fair value through other comprehensive income`－`Non Cur. Financial assets measured at fair value through other comprehensive income`－`Non Cur. Financial assets measured at fair value through other comprehensive income`－`Non Cur. Financial assets measured at fair value through other comprehensive income`－`Non Cur. Financial assets measured at fair value through other comprehensive income`－`Non Cur. Financial Asset at Fair Value Through Profit or Loss-Cur.	806,400 652,129 1,743,000 605,157 10,000,000 2,229,000 3,422,000 3,647,609 4,261,000 37,081,440 641,281 1,097,092 187,915 475,000 350,000 1,077,107 250,000 100,000 226,759 66,050 50,000	- $ - 17,430 6,052 110,900 57,508 88,288 415,827 175,979 860,289 6,413 - - - 199 - - - - - 500	1.89% 2.07% 10.53% 8.65% 5.89% 2.18% 3.34% 8.96% 4.05% 14.67% 9.16% 8.08% 3.13% 17.72% 0.85% 8.14% 1.33% 14.29% 1.71% 8.80% -	- $ - 17,430 6,052 110,900 57,508 88,288 415,827 175,979 860,289 6,413 - - - 199 - - - - - 514

TAIWAN MASK CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2019

Table 4

(Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Intercompany Transactions

No. (Note 1)	CompanyName	Related Party	Nature of Relationship (Note 2)	Financial Statements Account	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets (Note 3)
0 0 0 0 0 0 0 0 1 1 2 2 3 3 4 5	TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION TAIWAN MASK CORPORATION Miracle Technology CO., LTD. Miracle Technology CO., LTD. MIKO Technology co., Ltd. MIKO Technology co., Ltd. Miracle International Enterprise(ShanHai) Co., Ltd. Miracle International Enterprise(ShanHai) Co., Ltd. Aptos Technology INC. Adl Engineering INC.	Youe Chung Capital Corporation Youe Chung Capital Corporation Miracle Technology CO., LTD. Miracle Technology CO., LTD. Miracle International Enterprise(ShanHai) Co., Ltd. Miracle International Enterprise(ShanHai) Co., Ltd. MIKO Technology co., Ltd. Weida Hi-Tech CO., LTD. MIKO Technology co., Ltd. MIKO Technology co., Ltd. Miracle International Enterprise(ShanHai) Co., Ltd. Miracle International Enterprise(ShanHai) Co., Ltd. Sichuan Miracle Power Technology Co., Ltd. Sichuan Miracle Power Technology Co., Ltd. Adl Engineering INC. Aptos Technology INC.	1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3	Other receivables Interest income Other receivables Sales Trade receivables Sales Sales Rantal income Sales Other current liabilities Sales Trade receivables Sales Trade receivables short-term borrowing Endorsements/Guarantees	295,767 $ 2,767 66,634 1,486 7,318 7,530 10,404 1,650 1,300 43,218 5,868 13,132 8,396 1,764 30,000 20,000	Pay by agreed time Pay by agreed time Pay by agreed time Month-end 60 days Month-end 60 days Month-end 60 days Month-end 60 days Pay by agreed time Month-end 60 days Pay by agreed time Month-end 30 days Month-end 30 days Month-end 30 days Month-end 30 days The same with general customers term The same with general customers term	5.83% 0.19% 1.31% 0.10% 0.14% 0.52% 0.72% 0.11% 0.09% 0.85% 0.41% 0.26% 0.58% 0.03% 0.59% 0.39%

Note 1: TAIWAN MASK CORPORATION and its subsidiaries are coded as follows:

a. TAIWAN MASK CORPORATION is coded 0.

b.The subsidiaries are coded consecutively beginning from 1 in the order presented in the table above.

Note 2: Transactions are categorized as follows:

a. The parent company to subsidiary.

b. Subsidiary to parent company.

c. Subsidiary to subsidiary.

Note 3: The transaction amount accounts for the calculation of the combined total revenue or total assets ratio. In the case of assets and liabilities, the ending balance is calculated as the total assets. If it is a profit or loss item, the accumulated amount in the period accounts for the total

Note 4: Only transactions with a total amount of NT$1 million or more will be disclosed, and the transaction will not be disclosed separately.

TAIWAN MASK CORPORATION AND SUBSIDIARIES

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA) FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2019

Table 5 Investor Company	Investee Company	Location	Main Businesses	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 203,026 203,026 6,344,000 100 105,947 $ 20,170 $ 20,170 $ 1,697,627 1,697,627 142,329,470 100 476,201 258,656 64,884 165,691 165,691 12,549,652 28.38 89,104 34,601) ( 9,806) ( 330,252 330,252 18,287,168 100 293,979 21,895) ( 21,895) ( 293,371 293,371 25,510,500 100 213,283 20,374) ( 20,374) ( 65,719 65,719 3,550,223 8.03 25,207 34,601) ( 2,774) ( 77,411 - 18,723,108 29.55 60,130 52,832) ( 12,220) ( (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 203,026 203,026 6,344,000 100 105,947 $ 20,170 $ 20,170 $ 1,697,627 1,697,627 142,329,470 100 476,201 258,656 64,884 165,691 165,691 12,549,652 28.38 89,104 34,601) ( 9,806) ( 330,252 330,252 18,287,168 100 293,979 21,895) ( 21,895) ( 293,371 293,371 25,510,500 100 213,283 20,374) ( 20,374) ( 65,719 65,719 3,550,223 8.03 25,207 34,601) ( 2,774) ( 77,411 - 18,723,108 29.55 60,130 52,832) ( 12,220) ( (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 203,026 203,026 6,344,000 100 105,947 $ 20,170 $ 20,170 $ 1,697,627 1,697,627 142,329,470 100 476,201 258,656 64,884 165,691 165,691 12,549,652 28.38 89,104 34,601) ( 9,806) ( 330,252 330,252 18,287,168 100 293,979 21,895) ( 21,895) ( 293,371 293,371 25,510,500 100 213,283 20,374) ( 20,374) ( 65,719 65,719 3,550,223 8.03 25,207 34,601) ( 2,774) ( 77,411 - 18,723,108 29.55 60,130 52,832) ( 12,220) ( (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 203,026 203,026 6,344,000 100 105,947 $ 20,170 $ 20,170 $ 1,697,627 1,697,627 142,329,470 100 476,201 258,656 64,884 165,691 165,691 12,549,652 28.38 89,104 34,601) ( 9,806) ( 330,252 330,252 18,287,168 100 293,979 21,895) ( 21,895) ( 293,371 293,371 25,510,500 100 213,283 20,374) ( 20,374) ( 65,719 65,719 3,550,223 8.03 25,207 34,601) ( 2,774) ( 77,411 - 18,723,108 29.55 60,130 52,832) ( 12,220) ( (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 203,026 203,026 6,344,000 100 105,947 $ 20,170 $ 20,170 $ 1,697,627 1,697,627 142,329,470 100 476,201 258,656 64,884 165,691 165,691 12,549,652 28.38 89,104 34,601) ( 9,806) ( 330,252 330,252 18,287,168 100 293,979 21,895) ( 21,895) ( 293,371 293,371 25,510,500 100 213,283 20,374) ( 20,374) ( 65,719 65,719 3,550,223 8.03 25,207 34,601) ( 2,774) ( 77,411 - 18,723,108 29.55 60,130 52,832) ( 12,220) ( (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 203,026 203,026 6,344,000 100 105,947 $ 20,170 $ 20,170 $ 1,697,627 1,697,627 142,329,470 100 476,201 258,656 64,884 165,691 165,691 12,549,652 28.38 89,104 34,601) ( 9,806) ( 330,252 330,252 18,287,168 100 293,979 21,895) ( 21,895) ( 293,371 293,371 25,510,500 100 213,283 20,374) ( 20,374) ( 65,719 65,719 3,550,223 8.03 25,207 34,601) ( 2,774) ( 77,411 - 18,723,108 29.55 60,130 52,832) ( 12,220) ( (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 203,026 203,026 6,344,000 100 105,947 $ 20,170 $ 20,170 $ 1,697,627 1,697,627 142,329,470 100 476,201 258,656 64,884 165,691 165,691 12,549,652 28.38 89,104 34,601) ( 9,806) ( 330,252 330,252 18,287,168 100 293,979 21,895) ( 21,895) ( 293,371 293,371 25,510,500 100 213,283 20,374) ( 20,374) ( 65,719 65,719 3,550,223 8.03 25,207 34,601) ( 2,774) ( 77,411 - 18,723,108 29.55 60,130 52,832) ( 12,220) ( (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 203,026 203,026 6,344,000 100 105,947 $ 20,170 $ 20,170 $ 1,697,627 1,697,627 142,329,470 100 476,201 258,656 64,884 165,691 165,691 12,549,652 28.38 89,104 34,601) ( 9,806) ( 330,252 330,252 18,287,168 100 293,979 21,895) ( 21,895) ( 293,371 293,371 25,510,500 100 213,283 20,374) ( 20,374) ( 65,719 65,719 3,550,223 8.03 25,207 34,601) ( 2,774) ( 77,411 - 18,723,108 29.55 60,130 52,832) ( 12,220) ( (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019
				June 30, 2019	December 31, 2018	Shares	Percentage of Ownership	Carrying Value
Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation	SunnyLake Park International Holdings, Inc. Youe Chung Capital Corporation ADVAGENE BIOPHARMA CO., LTD. Miracle Technology CO., LTD. Weida Hi-Tech CO., LTD. ADVAGENE BIOPHARMA CO., LTD. Aptos Technology INC.	British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Investing in communication business Investing in communication business Medical, research and development, manufacturing Electronic component manufacturing, wholesale of electronic materials and precision instruments, power component design, etc. Research, design, development, manufacturing and sales of display panel control chips and modules Medical, research and development, manufacturing Design, packaging and testing of NAND flash memory and solid state hard disk and other related products	203,026 1,697,627 165,691 330,252 293,371 65,719 77,411	203,026 1,697,627 165,691 330,252 293,371 65,719 -	6,344,000 142,329,470 12,549,652 18,287,168 25,510,500 3,550,223 18,723,108	100 100 28.38 100 100 8.03 29.55	105,947 $ 476,201 89,104 293,979 213,283 25,207 60,130	20,170 $ 258,656 34,601) ( 21,895) ( 20,374) ( 34,601) ( 52,832) (	20,170 $ 64,884 9,806) ( 21,895) ( 20,374) ( 2,774) ( 12,220) (

TAIWAN MASK CORPORATION AND SUBSIDIARIES

Table 5 Investor Company	Investee Company	Location	Main Businesses	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 375,809 - 6,255,069 52.19 41,062 6,723) ( 3,509) ( - - - 100 - - - `Note` 29,795 - 10,000,000 100 - - - 29,795 - 78,000,000 100 - - - 10,012 10,012 1,400,000 100 167,943 5,454 5,454 10,215 10,215 - 100 7,605 13,040) ( 13,040) ( 10,215 10,215 - 100 7,569 13,040) ( 13,040) ( 37 37 10,000 100 65,763 172 172 14,602 14,602 4,573 100 3 - - 4,076 4,076 129,200 22.3 - - - 13,714 13,714 450,000 77.7 1 - - (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 375,809 - 6,255,069 52.19 41,062 6,723) ( 3,509) ( - - - 100 - - - `Note` 29,795 - 10,000,000 100 - - - 29,795 - 78,000,000 100 - - - 10,012 10,012 1,400,000 100 167,943 5,454 5,454 10,215 10,215 - 100 7,605 13,040) ( 13,040) ( 10,215 10,215 - 100 7,569 13,040) ( 13,040) ( 37 37 10,000 100 65,763 172 172 14,602 14,602 4,573 100 3 - - 4,076 4,076 129,200 22.3 - - - 13,714 13,714 450,000 77.7 1 - - (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 375,809 - 6,255,069 52.19 41,062 6,723) ( 3,509) ( - - - 100 - - - `Note` 29,795 - 10,000,000 100 - - - 29,795 - 78,000,000 100 - - - 10,012 10,012 1,400,000 100 167,943 5,454 5,454 10,215 10,215 - 100 7,605 13,040) ( 13,040) ( 10,215 10,215 - 100 7,569 13,040) ( 13,040) ( 37 37 10,000 100 65,763 172 172 14,602 14,602 4,573 100 3 - - 4,076 4,076 129,200 22.3 - - - 13,714 13,714 450,000 77.7 1 - - (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 375,809 - 6,255,069 52.19 41,062 6,723) ( 3,509) ( - - - 100 - - - `Note` 29,795 - 10,000,000 100 - - - 29,795 - 78,000,000 100 - - - 10,012 10,012 1,400,000 100 167,943 5,454 5,454 10,215 10,215 - 100 7,605 13,040) ( 13,040) ( 10,215 10,215 - 100 7,569 13,040) ( 13,040) ( 37 37 10,000 100 65,763 172 172 14,602 14,602 4,573 100 3 - - 4,076 4,076 129,200 22.3 - - - 13,714 13,714 450,000 77.7 1 - - (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 375,809 - 6,255,069 52.19 41,062 6,723) ( 3,509) ( - - - 100 - - - `Note` 29,795 - 10,000,000 100 - - - 29,795 - 78,000,000 100 - - - 10,012 10,012 1,400,000 100 167,943 5,454 5,454 10,215 10,215 - 100 7,605 13,040) ( 13,040) ( 10,215 10,215 - 100 7,569 13,040) ( 13,040) ( 37 37 10,000 100 65,763 172 172 14,602 14,602 4,573 100 3 - - 4,076 4,076 129,200 22.3 - - - 13,714 13,714 450,000 77.7 1 - - (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 375,809 - 6,255,069 52.19 41,062 6,723) ( 3,509) ( - - - 100 - - - `Note` 29,795 - 10,000,000 100 - - - 29,795 - 78,000,000 100 - - - 10,012 10,012 1,400,000 100 167,943 5,454 5,454 10,215 10,215 - 100 7,605 13,040) ( 13,040) ( 10,215 10,215 - 100 7,569 13,040) ( 13,040) ( 37 37 10,000 100 65,763 172 172 14,602 14,602 4,573 100 3 - - 4,076 4,076 129,200 22.3 - - - 13,714 13,714 450,000 77.7 1 - - (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 375,809 - 6,255,069 52.19 41,062 6,723) ( 3,509) ( - - - 100 - - - `Note` 29,795 - 10,000,000 100 - - - 29,795 - 78,000,000 100 - - - 10,012 10,012 1,400,000 100 167,943 5,454 5,454 10,215 10,215 - 100 7,605 13,040) ( 13,040) ( 10,215 10,215 - 100 7,569 13,040) ( 13,040) ( 37 37 10,000 100 65,763 172 172 14,602 14,602 4,573 100 3 - - 4,076 4,076 129,200 22.3 - - - 13,714 13,714 450,000 77.7 1 - - (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019	June 30, 2019 December 31, 2018 Shares Percentage of Ownership Carrying Value 375,809 - 6,255,069 52.19 41,062 6,723) ( 3,509) ( - - - 100 - - - `Note` 29,795 - 10,000,000 100 - - - 29,795 - 78,000,000 100 - - - 10,012 10,012 1,400,000 100 167,943 5,454 5,454 10,215 10,215 - 100 7,605 13,040) ( 13,040) ( 10,215 10,215 - 100 7,569 13,040) ( 13,040) ( 37 37 10,000 100 65,763 172 172 14,602 14,602 4,573 100 3 - - 4,076 4,076 129,200 22.3 - - - 13,714 13,714 450,000 77.7 1 - - (Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise) Net Income (Loss) of the Investee Share of Profit/Loss of Investee Note Original Investment Amount Balance as ofJune 30,2019
				June 30, 2019	December 31, 2018	Shares	Percentage of Ownership	Carrying Value
Aptos Technology INC. Aptos Technology INC. Adl Engineering INC. Apotos Global Holding Corp. Miracle Technology CO., LTD. Miracle Technology CO., LTD. MIRACLE(SAMOA)CO.,LTD Jingjing Investment Co., Ltd. Weida Hi-Tech CO., LTD. Weida Hi-Tech CO., LTD. Smart Touch Co.,Ltd	Adl Engineering INC. New Sunrise Limited Aptos Global Holding Corp. Aptos Global Holding Co.,Limited Jingjing Investment Co., Ltd. Miracle(Samoa)Co., Ltd Misun Technology Co., Ltd Miko Technology Co., Ltd Smart Touch Co.,Ltd Central Star Ltd Central Star Ltd	Taiwan Samoa Seychelles Hong Kong Taiwan Samoa Mauritius Hong Kong British Virgin Islands Seychelles British Virgin Islands	Electronic components Investing in communication business Investing in communication business Investing in communication business Investing in communication business Investing in communication business Investing in communication business Investing in communication business Investing in communication business Investing in communication business Investing in communication business	375,809 - 29,795 29,795 10,012 10,215 10,215 37 14,602 4,076 13,714	- - - - 10,012 10,215 10,215 37 14,602 4,076 13,714	6,255,069 - 10,000,000 78,000,000 1,400,000 - - 10,000 4,573 129,200 450,000	52.19 100 100 100 100 100 100 100 100 22.3 77.7	41,062 - - - 167,943 7,605 7,569 65,763 3 - 1	6,723) ( - - - 5,454 13,040) ( 13,040) ( 172 - - -	3,509) ( - - - 5,454 13,040) ( 13,040) ( 172 - - -	`Note`

Note: As of the end of June 30, 2019, investment amount have not been remitted.

TAIWAN MASK CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2019

Investee Company Table 6	Main Businesses	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Beginning Balance of Accumulated Outflow of Investment from Taiwan	Investment Flows	(Amounts in tho Ending Balance Accumulated Outflow of Investment from Taiwan Net Income (Loss) of the Investee Company	(Amounts in tho Ending Balance Accumulated Outflow of Investment from Taiwan Net Income (Loss) of the Investee Company	usands of new Taiwa Percentage of Ownership (%)	n dollars and foreign currencies,Unless Specified Carrying Amount as of December 31, 2018 Ending Balance of Accumulated Inward Remittance of Earnings Investment Income (Loss) Recognized in Current Period (Note 2 )	n dollars and foreign currencies,Unless Specified Carrying Amount as of December 31, 2018 Ending Balance of Accumulated Inward Remittance of Earnings Investment Income (Loss) Recognized in Current Period (Note 2 )	Otherwise) Note
					Outflow Inflow
Miko-China Enterprise (Shanghai) Co., Ltd. Miracle International Enterprise(ShanHai) Co., Ltd. Sichuan Miracle Power Technology Co., Ltd. Touch Hi-Tech Company Name	Electronic component manufacturing, wholesale of electronic materials and precision instruments, power component design, etc. Electronic component manufacturing, wholesale of electronic materials and precision instruments, power component design, etc. IC product design, production and sales Research, design, development, manufacturing and sales of display panel control chips and modules Ending Balance of Accumulated Investment in Mainland China	3,283 $ 10,215 11,618 25,684 Investment Amounts Authorized by Investment Commission, MOEA	2 2 2 2 Upper Limit on Investment Authorized by Investment Commission, MOEA	3,283 $ 10,215 - 25,684	- $ - $ - - - - - -	3,283 $ 10,215 - 25,684	16,707 $ 13,040) ( 1,285) ( 1,398) (	100% 100% 100% 100%	16,707 $ 13,040) ( 1,285) ( 1,398) (	127,486 $ - $ 7,569 - 24,385 - 682 -	Note2(2)B Note2(2)B Note2(2)B Note2(2)C
Miko-China Enterprise (Shanghai) Co., Ltd. Miracle International Enterprise(ShanHai) Co., Ltd. Sichuan Miracle Power Technology Co., Ltd. Touch Hi-Tech	3,283 $ 10,215 - 25,684	3,283 $ 10,215 - 25,684	$ 154,722 154,722 154,722 87,823

Note 1 ： The methods for engaging in investment in Mainland China include the following:

a. Direct investment in Mainland China.
b. Indirectly investment in Mainland China through companies registered in a third region (Please specify the name of the company in third region).

c. Other methods.

Note 2 ： The investment income (loss) recognized in current period:Please specify no investment income (loss) has been recognized due to the investment is still during development stage. The investment income (loss) were determined based on the following basis:

a. The financial report was audited and certified by an international accounting firm in cooperation with an R.O.C. accounting firm.
b. The financial statements was audited and certificated by independent auditors of the parent company in Taiwan.
c. Others.

Note 3: The relevant figures in this table should be listed in NTD.

AI assistant

TMC — Interim / Quarterly Report 2019

52014_rns_2019-12-06_041a0793-556b-474d-b1fa-b8e4b268e4b6.pdf

TAIWAN MASK CORPORATION AND SUBSIDIARIES

Independent Auditors ’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets Jun., 30[th] 2019 and 2018; Dec., 31[st] 2018

Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets

Jun., 30[th] 2019 and 2018; Dec., 31[st] 2018

Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets

Jun., 30[th] 2019 and 2018; Dec., 31[st] 2018

Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets

Jun., 30[th] 2019 and 2018; Dec., 31[st] 2018

Taiwan Mask Corporation and Subsidiaries Consolidated Changes of Equities Statements For the Second 2 Quarter Ended Jun., 30[th] , 2019 and 2018 (Consolidated Changes of Equities Statements in the period mentioned above were only reviewed, not audited.)

Taiwan Mask Corporation and Subsidiaries Consolidated Statements of Cash Flow

Taiwan Mask Corporation and Subsidiaries Consolidated Statements of Cash Flow

For the Second 2 Quarter Ended Jun., 30[th] , 2019 and 2018

TAIWAN MASK CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX -MONTH PERIODS ENDED JUNE 30, 2019 AND 2018 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED) (UNAUDITED)

1 、 HISTORY AND ORGANISATION

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

4 、 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

Statements of comprehensive income

(5) Leasing arrangements (lessee) - right-of-use assets/lease liabilities Effective 2019

(6) Investment property

(9) Income tax

(10) Revenue recognition

Labor income

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

6 、 DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Equity Instrument at fair value through other comprehensive income

Equity Instrument at fair value through other comprehensive income

(4) Financial assets at amortized cost

(6) Transfer of financial assets

(7) Inventories

(9) Property, plant and equipment

(13) Short-term borrowings

(14) Other Payables

- (15) Long term borrowings

(16) Finance lease liabilities

Effective 2018

(17) Pensions

(18) Share capital

(19) Capital surplus

(23) Other income

(24) Other gains and losses

(27) Employee benefit expense

(28) Income tax

A. Income tax expense

(29) Earnings per share

(31) Operating leases

Effective 2018

(32) Supplemental cash flow information

(33) Changes in liabilities from financing activities

8 、 PLEDGED ASSETS

(2) Commitment

10 、 SIGNIFICANT DISASTER LOSS

12 、 OTHERS

(1) Capital management

Financial assets

C. Significant financial risks and degrees of financial risks

(A) Market risks

i. Foreign exchange risk

Price risk

Cash flow and fair value Interest rate risk

Expected loss

13 、 SUPPLEMENTARY DISCLOSURES

(3) Information on investments in Mainland China

14 、 SEGMENT INFORMATION

(1) General information

(2) Segment information

Mask and

TAIWAN MASK CORPORATION AND SUBSIDIARIES

FINANCINGS PROVIDED

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2019

TAIWAN MASK CORPORATION AND SUBSIDIARIES

TMC Interim / Quarterly Report 2019

Independent Auditors `’` Review Report

1 `、` HISTORY AND ORGANISATION

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

4 `、` SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

`(1)` Compliance statement

`(5)` Leasing arrangements (lessee) - right-of-use assets/lease liabilities Effective 2019

`(6)` Investment property

`(9)` Income tax

`(10)` Revenue recognition

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

6 `、` DETAILS OF SIGNIFICANT ACCOUNTS

`(1)` Cash and cash equivalents

`(4)` Financial assets at amortized cost

`(6)` Transfer of financial assets

`(7)` Inventories

`(9)` Property, plant and equipment

`(13)` Short-term borrowings

`(14)` Other Payables

- `(15)` Long term borrowings

`(16)` Finance lease liabilities

`(17)` Pensions

`(18)` Share capital

`(19)` Capital surplus

`(23)` Other income

`(24)` Other gains and losses

`(27)` Employee benefit expense

`(28)` Income tax

`(29)` Earnings per share

`(31)` Operating leases

`(32)` Supplemental cash flow information

`(33)` Changes in liabilities from financing activities

8 `、` PLEDGED ASSETS

`(2)` Commitment

10 `、` SIGNIFICANT DISASTER LOSS

12 `、` OTHERS

`(1)` Capital management

13 `、` SUPPLEMENTARY DISCLOSURES

`(3)` Information on investments in Mainland China

14 `、` SEGMENT INFORMATION

`(1)` General information

`(2)` Segment information