Stock Code:2404

UNITED INTEGRATED SERVICES CO., LTD

Parent Company Only Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2018 and 2017

Address: 5F., No.3, Ln.7, Baogao Rd., Xindian Dist., New Taipei City 231, Taiwan (ROC) Telephone: (02)2917-4060

The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent company only financial statements, the Chinese version shall prevail.

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses due to major disasters (11) Subsequent events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (14) Segment information List of major account titles	Page
	1 2 3 4 5 6 7 8 8 8～15 15～32 32～33 33～63 63～65 65～66 66～70 70 70 70～72 73～74 74～75 75 75

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Report
4. Balance Sheets
5. Statements of Comprehensive Income
6. Statements of Changes in Equity
7. Statements of Cash Flows
8. Notes to the Financial Statements
(1)
Company history
(2)
Approval date and procedures of the financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of significant accounting policies
(5)
Significant accounting assumptions and judgments, and major sources of
estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Commitments and contingencies
(10) Losses due to major disasters
(11) Subsequent events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(14) Segment information
List of major account titles

Page

1
2
3
4
5
6
7
8
8
8～15
15～32
32～33
33～63
63～65
65～66
66～70
70
70
70～72
73～74
74～75
75
75

Independent Auditors’ Report

To the Board of Directors of United Integrated Services Co., Ltd.:

Opinion

We have audited the financial statements of United Integrated Services Co., Ltd. ("the Company"), which comprise the statement of financial position as of December 31, 2018 and 2017 and the statements of comprehensive income, statement of changes in equity and statement of cash flows for the years ended December 31, 2018 and 2017, and notes to the Company's financial statements, including a summary of significant accounting policies.

In our opinion, based on our audit and the other auditors' report (please refer to other matter section), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years ended December 31, 2018 and 2017, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Other Matter

Other companies included in investments accounted for using equity method of the Company, which like Ablerex Electronics Co., Ltd., Wholetech System Hitech Limited and JG Environmental Technology Co., Ltd. The financial statements have not been audited by us but by other auditors. Therefore, the amounts of the financial statements about Ablerex Electronics Co., Ltd., Wholetech System Hitech Limited and JG Environmental Technology Co., Ltd. are based on the other auditors' report. As of December 31, 2018 and 2017, the Company recognized the amount of investment in the equity method of Ablerex Electronics Co., Ltd., Wholetech System Hitech Limited and JG Environmental Technology Co., Ltd., accounted for 4.26% and 5.71% of total assets, respectively.

3-1

For the years ended December 31, 2018 and 2017, share of profit of associates accounted for using equity method accounted for 2.37% and 4.16% of income before tax, respectively.

Some directors of United Integrated Services Co., Ltd. are judged by the Taiwan High Court, who were involved in the violation of the Securities Exchange Act. For circumstances of these cases, please refer to note12 (b) of the consolidated financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company's financial statements of the current period. These matters were addressed in the context of our audit of the Company's financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In our judgment, the key audit matters we communicated in the auditors' report were as follows:

1. Revenue recognition

For the accounting policies related to revenue recognition, please refer to Note 4 (p) Revenue recognition; Revenue recognition of accounting estimates and assumptions of uncertainty, please refer to Note 5 (b) Income recognition; For the description of revenue recognition, please refer to Note 6 (u) Revenue.

Description of Key Audit Matters:

Construction contract revenue of the Company is recognized by the degree of completion of the contract. The degree of completion is based on the contract costs incurred as of the financial statements date which represents the percentage of the estimated total contract cost. Because construction contract accounting treatment involves high level of estimation and judgment, revenue recognition has been identified as a key audit matter in our audit.

We performed our audit procedures by:

Our principal audit procedures include the effectiveness test of internal control execution related to the timing and correctness of revenue recognition. Select samples of new construction contract during the reporting period of the Company, and review the contracts and related documents; we obtained the annual project revenue statistics of the Company, and calculated the validity of the recognition amount of the project revenue.

2. Accounts receivable impairment assessment

For the accounting policies of the impairment assessment of accounts receivable, please refer to Note 4 (f) Financial instruments; for the accounting estimates and assumptions of the uncertainly, please refer to Note 5(a) Impairment assessment of accounts receivable; For the description of the impairment assessment of accounts receivable, please refer to Note6(d) Receivable and net accounts receivable.

Description of Key Audit Matters:

The Company recognized expected credit loss in accordance to the Company’s policy of allowance for bad debts, and established its estimation based on its client’s credit risk, historical experiences of credit loss, and the rational expectation of future economic status. Since the accounting treatment of expected credit losses involves high level of estimation and judgment, the assessment of impairment of accounts receivable has been identified as a key audit matter in our audit.

3-2

We performed our audit procedures by:

Our principal audit procedures include (i) understanding the accounting policies of notes receivable, accounts receivable, and their impairment assessment; (ii) implementing sampling procedures to examine accuracy of accounts receivable aging report; (iii) analyzing the changes of aging of accounts receivable in each period; (iv) performing random examination of the historical collection records; (v) examining subsequent events to evaluate the reasonableness of the Company’s recognition of allowance for impairment losses.

3. Financial instruments assessment

For the accounting policies related to the assessment of financial instruments, please refer to Note 4 (f) Financial Instruments; Financial instruments of accounting estimates and assumptions uncertainty, please refer to Note 5 (c) Financial assets impairment; For the description of the financial instruments assessment, please refer to Note 6 (y) Financial value and level information.

Description of Key Audit Matters:

The valuation for accounting treatment of financial instruments of the Company, which involves the exercise of professional judgments on valuation techniques and important parameters. Therefore, the valuation of financial instruments has been identified as a key audit matter in our audit.

We performed our audit procedures by:

Our principal audit procedures included (i) performing an assessment over the investment cycle of its initial recognition and disclosures on financial statements, which involved in internal control procedures for fair value measurement performed by the management (ii) Appointed our valuation specialists to assess the reasonableness of valuation techniques and to test the key parameters of financial assets without active market prices, wherein valuation models were used to ensure that the applied valuation techniques were in accordance with IFRS 13 “Fair Value Measurement”.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

The management is responsible for the preparation and fair presentation of the Company's financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as the management determines is necessary to enable the preparation of the Company's financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance including members of the Audit Committee are responsible for overseeing the Company’s financial reporting process.

3-3

Auditors’ Responsibilities for the Audit of the Financial Statements

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

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

3-4

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Company's financial statements of the year ended December.31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Jung-Lin, Lee and Tzu-Hui, Lee.

KPMG

Taipei, Taiwan (Republic of China) March 25, 2019

Notes to Readers

The accompanying parent company only financial statements are intended only to present the statement of financial position, financial performance and its cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and parent company only financial statements, the Chinese version shall prevail.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) UNITED INTEGRATED SERVICES CO., LTD.

Balance Sheets

December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2018 Amount % $ 5,802,022 33 149,575 2 - - 1,002,722 6 3,035 - 2,789,672 16 66,904 - - - 44,134 - 1,041,684 6 14,485 - 2,003,552 11	December 31,	December 31, 2017 Amount % - - 46,135 - - - 1,184,121 9 77,150 1 4,501,567 34 415,774 3 147,587 1 - - 3,205 - 6,642 -
	Amount
	10,038,362 55	6,382,181 48
12,917,785 74
	334,415 2 118,983 1 2,004 -	309,270 2 89,318 1 1,712 -
- - 7,879 - 1,636,961 9 2,314,018 13 560,187 3 1,341 - 84,696 - 6,551 - 218,682 1
	455,402 3	400,300 3
	10,493,764 58	6,782,481 51
	1,905,867 11	2,382,334 18
	374,156 2	611,987 5
	1,515,740 9 112,888 1 2,780,424 16	1,394,285 11 133,666 1 1,992,541 15
4,830,315 26
	4,409,052 26	3,520,492 27
	565,261 3	(112,888) (1)
	7,254,336 42	6,401,925 49
	$ 17748100 100	13184406 100
$ 17,748,100 100	,,	,,

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) UNITED INTEGRATED SERVICES CO., LTD.

Statements of Comprehensive Income

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

2018	% 98 2	2017	% 96 4
Amount 9,352,741 220,976		Amount 6,992,538 265,106
9,573,717	100	7,257,644	100
7,109,722 167,948	75 2	5,730,275 157,901	80 2
7,277,670	77	5,888,176	82
2,296,047	23	1,369,468	18
32,363 604,691 36,070 36,733	- 6 - -	26,641 460,719 42,099 -	- 6 1 -
709,857	6	529,459	7
1,586,190	17	840,009	11
373,337 91,091 139,197 (6,298) 497,540	4 1 1 - 5	297,223 (320,494) 93,894 (6,281) 540,197	4 (4) 1 - 7
1,094,867	11	604,539	8
2,681,057 533,491	28 6	1,444,548 230,000	19 3
2,147,566	22	1,214,548	16
(21,830) (954,501) (133) 9,567	- (10) - -	(29,593) - (510) 5,031	- - - -
(966,897)	(10)	(25,072)	-
- (31,987) 6,397	- - -	34,780 (17,100) 3,098	- - -
(25,590)	-	20,778	-
(992,487)	(10)	(4,294)	-
$ 1,155,079	12	1,210,254	16
$	9.42		5.10
$	9.27		5.00

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) UNITED INTEGRATED SERVICES CO., LTD.

Statements of Changes in Equity

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

Share capital	Capital surplus		Retained earnings	Retained earnings			Total other equity interest	Total other equity interest		Treasury stock	Total equity 6,618,912
						Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Unrealized gains (losses) on available-for-sal e financial assets	Total other equity interest
Common stock		Legal reserve	Special reserve	Unappropriated retained earnings	Total retained earnings
$ 2,382,334	610,422	1,239,086	63,220	2,458,110	3,760,416	(23,896)	-	(109,770)	(133,666)	(594)
- -	- -	- -	- -	1,214,548 (25,072)	1,214,548 (25,072)	- (14,002)	- -	- 34,780	- 20,778	- -	1,214,548 (4,294)
-	-	-	-	1,189,476	1,189,476	(14,002)	-	34,780	20,778	-	1,210,254
- - - - - -	- - - 294 268 1,003	155,199 - - - - -	- 70,446 - - - -	(155,199) (70,446) (1,429,400) - - -	- - (1,429,400) - - -	- - - - - -	- - - - - -	- - - - - -	- - - - - -	- - - - - 594	- - (1,429,400) 294 268 1,597
2,382,334 -	611,987 -	1,394,285 -	133,666 -	1,992,541 (55,443)	3,520,492 (55,443)	(37,898) -	- 1,583,250	(74,990) 74,990	(112,888) 1,658,240	- -	6,401,925 1,602,797
2,382,334	611,987	1,394,285	133,666	1,937,098	3,465,049	(37,898)	1,583,250	-	1,545,352	-	8,004,722
- -	- -	- -	- -	2,147,566 (12,396)	2,147,566 (12,396)	- (25,590)	- (954,501)	- -	- (980,091)	- -	2,147,566 (992,487)
-	-	-	-	2,135,170	2,135,170	(25,590)	(954,501)	-	(980,091)	-	1,155,079
- - - - (476,467)	- - (238,233) 402 -	121,455 - - - -	- (20,778) - - -	(121,455) 20,778 (1,191,167) - -	- - (1,191,167) - -	- - - - -	- - - - -	- - - - -	- - - - -	- - - - -	- - (1,429,400) 402 (476,467)
$ 1,905,867	374,156	1,515,740	112,888	2,780,424	4,409,052	(63,488)	628,749	-	565,261	-	7,254,336

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) UNITED INTEGRATED SERVICES CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

AAAA Cash flows from (used in) operating activities: A10000 Profit before tax A20000 Adjustments: A20010 Adjustments to reconcile profit (loss): A20100 Depreciation expense A20200 Amortization expense A20300 Expected credit loss for bad debt expense(reversal of provision) A20400 Net loss (gain) on financial assets or liabilities at fair value through profit or loss A20900 Interest expense A21200 Interest income A21300 Dividend income A22400 Share of profit of associates and joint ventures accounted for using equity method A22500 Loss (gain) on disposal of property, plant and equipment A23100 Gain on disposal of investments A23500 Impairment loss on financial assets A20010 Total adjustments to reconcile profit (loss) A30000 Changes in operating assets and liabilities: A31000 Changes in operating assets: A31125 Increase in contract assets A31130 Decrease in notes receivable A31150 Decrease(increase) in accounts receivable A31160 Decrease(increase) in accounts receivable due from related parties A31170 Decrease in construction contracts receivable A31200 Increase in inventories A31230 Decrease(increase) in prepayments A31240 Decrease(increase) in other current assets A31000 Subtotal of changes in operating assets A32000 Changes in operating liabilities: A32125 Increase in Contract liabilities A32130 Increase (decrease) in notes payable A32140 Increase (decrease) in notes payable to related parties A32150 Increase (decrease) in accounts payable A32160 Increase (decrease) in accounts payable to related parties A32170 Decrease in construction contracts receivable A32200 Increase in provisions A32230 Increase (decrease) in other current liabilities A32240 Increase in net defined benefit liability A32000 Subtotal of changes in operating liabilities A30000 Subtotal of changes in operating assets and liabilities A20000 Total adjustments A33000 Cash inflow (outflow) generated from operations A33100 Interest received A33500 Income taxes refund (paid) AAAA Net cash flows from (used in) operating activities BBBB Cash flows from (used in) investing activities: B00010 Acquisition of financial assets at fair value through other comprehensive income B00200 Proceeds from disposal of financial assets designated at fair value through profit or loss B00300 Acquisition of available-for-sale financial assets B01400 Proceeds from capital reduction of financial assets at cost B01800 Acquisition of investments accounted for using equity method B02700 Acquisition of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B03800 Increase (decrease) in refundable deposits B04200 Decrease in other receivables B04300 Increase in other receivables due from related parties B04500 Acquisition of intangible assets B06500 Increase in other financial assets B06700 Increase in other non-current assets B07600 Dividends received BBBB Net cash flows from (used in) investing activities CCCC Cash flows from (used in) financing activities: C03100 Increase in guarantee deposits received C04500 Cash dividends paid C04600 Proceeds from issuing shares CCCC Net cash flows from (used in) financing activities EEEE Net increase (decrease) in cash and cash equivalents E00100 Cash and cash equivalents at beginning of period E00200 Cash and cash equivalents at end of period	2018 $ 2,681,057 12,082 1,909 36,733 15,206 6,298 (139,197) (356,400) (497,540) (241) - -	2017 1,444,548 14,391 4,773 (15,024) (24,489) 6,281 (93,894) (257,432) (540,197) 5 (5,747) 3,300
	(921,150)	(908,033)
	(321,246) 91 (2,174,528) (50,650) - (4,916) (982,965) 31,029	- 376,977 2,548,222 10,955 177,492 (5,136) 644,723 (2,173)
	(3,503,185)	3,751,060
	1,393,209 195,396 38,960 1,426,053 13,425 - 10,149 242,357 3,314	- (111,018) (40,246) (1,102,664) (54,875) (300,580) 4,731 (116,140) 2,354
	3,322,863	(1,718,438)
	(180,322)	2,032,622
	(1,101,472)	1,124,589
	1,579,585 128,791 (147,966)	2,569,137 83,357 (354,587)
	1,560,410	2,297,907
	(826) 1,806 - - (10,382) (4,678) 2,580 744 181,854 9,498 (90) (77,334) (563) 80,902	- 63,063 (1,310) 5,132 (2,579) (2,830) - 4,862 26,312 9,619 (718) (832,621) (344) 414,614
	183,511	(316,800)
	292 (1,429,400) (476,467)	(232) (1,429,400) -
	(1,905,575)	(1,429,632)
	(161,654) 5,963,676	551,475 5,412,201
	$ 5,802,022	5,963,676

See accompanying notes to parent company only financial statements.

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

United Integrated Services Co., LTD (the “Company”) was incorporated as a company limited by shares under the provisions of the Ministry of Economic Affairs, R.O.C on September 13, 1982, named as United Technology And Engineering Co., Ltd.. The Company changed its organization to shares of common stock , and was named as United Linkfast Co., Ltd. on March 14, 1990. On October 30, 1990, the Company merged with Linkfast System Co., Ltd. The continuing company was United Linkfast Co., Ltd., and renamed as United Integrated Services Co., Ltd. on May 29, 2002. The registered address of the Company is 6F., No.297 Sec.6 , Roosevelt Rd., Wenshan Dist., Taipei City, Taiwan(R.O.C). On July 29, 2003, the Company merged with TAI-QUN Technology Co., Ltd. by cash consideration method. The continuing company is United Integrated Services Co., Ltd..

The Company and its subsidiaries (collectively referred herein as the “Company”) are primarily engaged in: (1) Contracting various running water projects, instrument control projects, refrigerating and air-conditioning projects, installation of clean rooms and the manufacture and transaction related to it. (2) Traffic surveillance & control system engineering building, computer control monitoring system of factory, monitoring system of engineering environment, the design and installation of toll collection engineering system and the transaction related to it. (3) Various electrical and mechanical engineering contracts for transmission and distribution of electric power. (4) The design, installation, maintenance and the trading of related equipment of various computerized automatic monitoring engineering system.(5) Contracting of various computer and communication system integration projects and the manufacturing and trading of related software and hardware. (6) Installation and design of the controlling equipment in computer room. (7) Technical advisory services for the planning and design of projects. (8) Import of restrained telecom radio frequency equipment.

(2) Approval date and procedures of the financial statements

The parent company onlyfinancial statements were approved by the Board of Directors for issuance on March 25, 2019.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2018.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

New, Revised or Amended Standards and Interpretations Amendment to IFRS 2 “Clarifications of Classification and Measurement of Share-based Payment Transactions”

Amendments to IFRS 4 “Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts”

Effective date per IASB January 1, 2018

January 1, 2018

IFRS 9 “Financial Instruments”Financial Instruments”

IFRS 9 “Financial Instruments”Financial Instruments” January 1, 2018 IFRS 15 “Revenue from Contracts with Customers” January 1, 2018 Amendment to IAS 7 “Statement of Cash Flows -Disclosure Initiative” January 1, 2017 Amendment to IAS 12 “Income Taxes- Recognition of Deferred Tax Assets January 1, 2017 for Unrealized Losses” Amendments to IAS 40 “Transfers of Investment Property” January 1, 2018 Annual Improvements to IFRS Standards 2014–2016 Cycle: Amendments to IFRS 12 January 1, 2017 Amendments to IFRS 1 and Amendments to IAS 28 January 1, 2018 IFRIC 22 “Foreign Currency Transactions and Advance Consideration” January 1, 2018

Except for the following items, the Company believes that the adoption of the above IFRSs would not have any material impact on its financial statements. The extent and impact of signification changes are as follows:

(i) IFRS 15 “Revenue from Contracts with Customers”

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces the existing revenue recognition guidance, including IAS 18 “Revenue” and IAS 11 “Construction Contracts”. The Company applies this standard retrospectively with the cumulative effect, it need not restate those contracts, but instead, continues to apply IAS 11, IAS 18 and the related Interpretations for comparative reporting period. The Company recognizes the cumulative effect upon the initially application of this Standard as an adjustment to the opening balance of retained earnings on January 1, 2018.

The Company uses the practical expedients for completed contracts, which means it need not restate those contracts that have been completed on January 1, 2018.

The following are the nature and impacts on changing of accounting policies:

1) Providing services

The Company provides services and designs related to the projects. In the past, if the services under a single arrangement were provided in different reporting periods, then the consideration was allocated on a relative fair value basis to different services, while services revenue was recognized using the stage-of-completion method. Under IFRS 15, the total consideration in the service contracts will be allocated to all services based on their stand-alone selling prices. The stand-alone selling prices will be determined based

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

on the list prices at which Company sells the services in separate transactions.

2) Construction contracts

Contract revenue is recognized to the extent that it is will probable that the contract result in revenue and can be measured reliably, including the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments. When a claim or variation is recognized, the measure of contract progress or contract price is revised, and the cumulative contract position is reassessed at each reporting date. Under IFRS 15, claims and variations will be included in the contract accounting when they are approved.

3) Impacts on financial statements

The following tables summarize the impacts of adopting IFRS15 on the Company’s financial statements for the year ended 2018:

December 31, 2018	December 31, 2018	December 31, 2018
Balances prior to the adoption of IFRS 15 $ 1,002,722 - $ 5,893,713 1,063 -	Impact of changes in accounting policies (1,002,722) 1,002,722	Balance upon adoption of IFRS 15
	(5,893,713) (1,063) 5,894,776

(ii) IFRS 9 “Financial Instruments”

IFRS 9 replaces IAS 39 “Financial Instruments: Recognition and Measurement” which contains classification and measurement of financial instruments, impairment and hedge accounting.

As a result of the adoption of IFRS 9, the Company adopted the consequential amendments to IAS 1 “Presentation of Financial Statements” which requires impairment of financial assets to be presented in a separate line item in the statement of profit or loss and OCI. Previously, the Company’s approach was to include the impairment of trade receivables in administrative expenses. Additionally, the Company adopted the consequential amendments to IFRS 7 Financial Instruments: Disclosures that are applied to disclosures about 2018 but generally have not been applied to comparative information.

The significant changes of accounting policies are as follows:

1) Classification of financial assets and financial liabilities

IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL). The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. The standard eliminates the previous IAS 39

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

categories of held to maturity, loans and receivables and available for sale. Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never bifurcated. Instead, the hybrid financial instrument as a whole is assessed for classification. For an explanation of how the Company classifies and measures financial assets and accounts for related gains and losses under IFRS 9, please see note 4(f).

The adoption of IFRS 9 did not have any a significant impact on its accounting policies on financial liabilities.

2) Impairment of financial assets

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with the ‘expected credit loss’ (ECL) model. The new impairment model applies to financial assets measured at amortized cost, contract assets and debt investments at FVOCI, but not to investments in equity instruments. Under IFRS 9, credit losses are recognized earlier than they are under IAS 39 – please see note4(f).

3) Transition

The adoption of IFRS 9 have been applied retrospectively, except as described below,

‧Comparative periods have been restated only for retrospective application of the cost of hedging approach for forward points. Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of IFRS 9 are recognized in retained earnings and reserves as on January 1, 2018. Accordingly, the information presented for 2017 does not generally reflect the requirements of IFRS 9 and therefore is not comparable to the information presented for 2018 under IFRS 9.
‧The following assessments have been made on the basis of the facts and circumstances that existed at the date of initial application.
- － The determination of the business model within which a financial asset is held.
- － The designation and revocation of previous designations of certain financial assets and financial liabilities as measured at FVTPL.
- － The designation of certain investments in equity instruments not held for trading as at FVOCI.
4) Classification of financial assets on the date of initial application of IFRS 9

The following table shows the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for each class of the Company’s financial assets as of January 1, 2018.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Financial Assets Cash and equivalents Equity instruments Trade and other receivables Other financial assets	IAS39		IFRS9	Carrying Amount 5,963,676 42,323 121,722 9,595 2,591,462 1,352,732 1,314,736
	Measurement categories Loans and receivables Fair value through profit or loss Available-for-sale (note 1) Financial assets at cost(note 2) Financial assets at cost(note3) Loans and receivables Loans and receivables	Carrying Amount

Note1: Under IAS39, the Company classified the investment of the equity instruments as available-for-sale financial asset. The Company assessed their business model and followed the rules of IFRS 9, classifying the investment to FVTPL at the date of initial application. Therefore, the Company recognized an increase of $21,372 thousand in those assets, an increase of $74,990 thousand in other equity interest, and a decrease of $53,618 thousand in retained earnings were recognized on January 1, 2018.
Note2: Under IAS39, the Company classified the investment of the equity instruments as financial asset measured at cost. The Company assessed their business model and followed the rules of IFRS 9, classifying the investment to FVTPL at the date of initial application. Therefore, the Company recognized a decrease of $655 thousand in those assets, and a decrease of $655 thousand in retained earnings on January 1, 2018.
Note3: The equity instrument stands for the strategic investment that the Company intends to hold it for a long period of time. The Company classified the investment to FVOCI at the date of initial application. Consequently, the Company recognized an increase of $1,583,250 thousand in those assets, and an increase of $1,583,250 thousand in retained earnings on January 1, 2018.

The following table reconciles the carrying amounts of financial assets under IAS 39 to the carrying amounts under IFRS 9 upon transition to IFRS 9 on January 1, 2018.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

2017.12.31 IAS 39 Carrying Amount $ 42,323 110,600 - -	Reclassifications - (110,600) 100,350 10,250	Remeasurements - - 21,372 (655)	2018.1.1 IFRS 9 Carrying Amount	2018.1.1 Retained earnings - - (53,618) (655)	2018.1.1 Other equity
					- - 74,990 -
$ 152,923	-	20,717	173,640	(54,273)	74,990
$ 1,008,212 -	(1,008,212) 1,008,212	- 1,583,250		- -	- 1,583,250
$ 1,008,212	-	1,583,250	2,591,462	-	1,583,250

(b) The impact of IFRS endorsed by FSC but not yet effective

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2019 in accordance with Ruling No. 1070324857 issued by the FSC on July 17, 2018:

New, Revised or Amended Standards and Interpretations IFRS 16“Leases” IFRIC 23“Uncertainty over Income Tax Treatments” Amendments to IFRS 9“Prepayment features with negative compensation” Amendments to IAS 19“Plan Amendment, Curtailment or Settlement” Amendments to IAS 28“Long-term interests in associates and joint ventures” Annual Improvements to IFRS Standards 2015–2017 Cycle	Effective date per IASB
	January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019

New, Revised or Amended Standards and Interpretations
IFRS 16“Leases”
IFRIC 23“Uncertainty over Income Tax Treatments”
Amendments to IFRS 9“Prepayment features with negative compensation”
Amendments to IAS 19“Plan Amendment, Curtailment or Settlement”
Amendments to IAS 28“Long-term interests in associates and joint ventures”
Annual Improvements to IFRS Standards 2015–2017 Cycle

Effective date
per IASB

January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019

(i) IFRS 16“Leases”

IFRS 16 replaces the existing leases guidance, including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

IFRS 16 introduces a single and an on-balance sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. In addition, the nature of expenses related to those leases will now be changed since IFRS 16 replaces the straight-line operating lease expense with a depreciation charge for right-of-use assets and interest expense on lease liabilities. There are recognition exemptions for short-term leases and leases of low-value items. The lessor accounting remains similar to the current standard – i.e. the lessors will continue to classify leases as finance or operating leases.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

1) Determining whether an arrangement contains a lease

On transition to IFRS 16, the Company can choose to apply either of the following:

‧ IFRS 16 definition of a lease to all its contracts; or
‧ a practical expedient that does not need any reassessment whether a contract is, or contains, a lease.

The Company plans to apply the practical expedient to grandfather the definition of a lease upon transition. This means that it will apply IFRS 16 to all contracts entered into before January 1, 2019 and identified as leases in accordance with IAS 17 and IFRIC 4.

2) Transition

As a lessee, the Company can apply the standard using either of the following:

‧ retrospective approach; or
‧ modified retrospective approach with optional practical expedients.

The lessee applies the election consistently to all of its leases.

On January 1, 2019, the Company plans to initially apply IFRS 16 using the modified retrospective approach. Therefore, the cumulative effect of adopting IFRS 16 will be recognized as an adjustment to the opening balance of retained earnings at January 1, 2019, with no restatement of comparative information.

When applying the modified retrospective approach to leases previously classified as operating leases under IAS 17, the lessee can elect, on a lease-by-lease basis, whether to apply a number of practical expedients on transition. The Company will use these practical expedients after assessment as follows:

‧ apply a single discount rate to a portfolio of leases with similar characteristics.
‧ adjust the right-of-use assets, based on the amount reflected in IAS 37 onerous contract provision, immediately before the date of initial application, as an alternative to an impairment review.
‧ apply the exemption not to recognize the right-of-use assets and liabilities to leases with lease term that ends within 12 months of the date of initial application.
‧ exclude the initial direct costs from measuring the right-of-use assets at the date of initial application.
‧ use hindsight when determining the lease term if the contract contains options to extend or terminate the lease.
3) So far, the most significant impact identified is that the Company will have to recognize the new assets and liabilities for its operating leases of offices, warehouses, and factory facilities. It is estimated that the above difference may increase the right to use assets and

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

lease liabilities of January 1, 2019 by $16,390 and $16,390, respectively, and the retained earning will be reduced by $59. Besides, TheCompanydoes not expect the adoption of IFRS 16 to have any impact on its ability to comply with the revised maximum leverage threshold loan covenant. And for the contract of the intermediate lessor of the sub-leasing transaction for the Company , no adjustments are required after evaluation.

The actual impacts of adopting the standards may change depending on the economic conditions and events which may occur in the future.

As of the date, the following IFRSs that have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Effective date New, Revised or Amended Standards and Interpretations per IASB Amendments to IFRS 3 “Definition of a Business” January 1, 2020 Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between Effective date to an Investor and Its Associate or Joint Venture” be determined by IASB IFRS 17 “Insurance Contracts” January 1, 2021 Amendments to IAS 1 and IAS 8 “Definition of Material” January 1, 2020

Those which may be relevant to the Company are set out below:

Issuance / Release Dates October 31, 2018	Standards or Interpretations Amendments to IAS 1 and IAS 8“Definition of Material”	Content of amendment
		The amendments clarify the definition of material and how it should be applied by including in the definition guidance that until now has featured elsewhere in IFRS Standards. In addition, the explanations accompanying the definition have been improved. Finally, the amendments ensure that the definition of material is consistent across all IFRS Standards.

The Company is evaluating the impact on its financial position and financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Company completes its evaluation.

(4) Summary of significant accounting policies

The significant accounting policies presented in the financial statements are summarized as follows. The following accounting policies have been applied consistently throughout the presented periods in the financial statements

(a) Statement of compliance

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

The parent company onlyfinancial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(b) Basis of preparation
(i) Basis of measurement

The financial statements have been prepared on a historical cost basis, unless, otherwise stated:

1) Fair value through profit or loss financial assets
2) Fair value through other comprehensive profit or loss, financial assets as measured by fair value (available-for-sale).
3) The net liability of the defined benefit asset is measured by the fair value of plan assets less the present value of the defined benefit obligation and the effect of the ceiling.

(ii) Functional and presentation currency

The functional currency of each individual consolidated entity is determined based on the primary economic environment in which the entity operates. The Company's consolidated financial statements are presented in New Taiwan dollars, which is Company's functional currency. The assets and liabilities of foreign operations are translated to the Company's functional currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated to the Company's functional currency at the average rate. Foreign currency differences are recognized in other comprehensive income. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

(c) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the Company entities at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are remeasured to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the year adjusted for the effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of translation.

Foreign currency differences arising from remeasurement are recognized in profit or loss, except for the difference resulting from available for sale equity investment which is recognized in other comprehensive income arising from the remeasurement.

(ii) Foreign operation

The assets and liabilities of foreign operating, including goodwill and fair value adjustments

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

arising from the acquisition, are translated to the Company's functional currency in New Taiwan Dollars at the exchange rates at the reporting date. The income and expenses of foreign operations, are translated to the Company's functional currency at the average rates. Foreign currency differences are recognized in other comprehensive income, and presented in the foreign currency translation adjustments in equity.

When disposing of a foreign operating agency for loss of control, joint control or significant influence. The cumulative exchange difference associated with the foreign operating agency is fully reclassified as profit or loss. When some of the subsidiaries contain subsidiaries of foreign operating agencies, the relevant cumulative exchange difference is re-owned to non-controlling interests proportionally. When partial disposal of investments involving affiliates or joint ventures of foreign operating agencies, the relevant cumulative exchange differences are reclassified to profit and loss on a pro-rata basis.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign currency gains and losses arising from such items are considered to form part of a net investment in the foreign operation, and are recognized in other comprehensive income, and presented in the translation reserve in equity.

(d) Classification of current and non-current assets and liabilities
(i) An entity shall classify an asset as current when:
- 1) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
- 2) It holds the asset primarily for the purpose of trading;
- 3) It expects to realize the asset within twelve months after the reporting period; or
- 4) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

An entity shall classify all other assets as non-current.

(ii) An entity shall classify a liability as current when:
1) It expects to settle the liability in its normal operating cycle;
2) It holds the liability primarily for the purpose of trading;
3) The liability is due to be settled within twelve months after the reporting period even if refinancing or a revised repayment plan is arranged between the reporting date and the issuance date of the financial statements; or
4) It does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

An entity shall classify all other liabilities as non current.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(iii) Other

The Company is mainly engaged in the planning, designation and construction contracting of various projects. Its business cycle is about three to five years. Due to assets and liabilities related to the engineering business, are based on operating cycle as the standard for dividing current or non-current.

(e) Cash and cash equivalents

Cash comprises cash in hand and demand deposits. Cash equivalent refers to short term investments with high liquidity that are subject to insignificant risk of changes in their fair value, and can be cashed into fixed amount of money. The definition of time deposit within 3 months is similar to that of cash equivalent; however, the purpose of holding time deposit is for short term cash commitment rather than investment.

(f) Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual rights or obligations of the instruments.

(i) Financial assets (applicable from January 1, 2018)

Financial assets are classified into the following categories: measured at amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL).

The Company shall reclassify all affected financial assets only when it changes its business model for managing its financial assets.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset measured at amortized cost is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at amortized cost reduced by impairment losses using the effective interest method. Interest income, foreign exchange gains and losses, and impairment loss are recognized as profit or loss. Any gain or loss on derecognition is recognized as profit or loss.

2) Fair value through other comprehensive income (FVOCI )

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

A financial asset measured at FVOCI is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment losses, deriving from debt investments are recognized in profit or loss; whereas dividends deriving from equity investments are recognized as income in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses of financial assets measured at FVOCI are recognized in OCI. On derecognition, gains and losses accumulated in OCI of equity investments are reclassified to profit or loss. However, gains and losses accumulated in OCI of debt investments are reclassified to retain earnings instead of profit or loss.

Dividend income derived from equity investments is recognized on the date that the Company’s right to receive payment is established, which in the case of quoted securities is normally the ex-dividend date.

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets and accounts receivable (except for those presented as accounts receivable but measured at FVTPL). On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets in this category are measured at fair value at initial recognition. Attributable transaction costs are recognized in profit or loss as incurred. Subsequent changes that are measured at fair value, which take into account any dividend and interest income, are recognized in profit or loss.

4) Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

‧ the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
‧ how the performance of the portfolio is evaluated and reported to the Company’s management;
‧ the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
‧ the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

5) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and accounts receivable, leases receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI, accounts receivable and contract assets.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward-looking information.

The Company considers a financial asset to be in default when the financial asset is more than 90 days past due, or the borrower is unlikely to pay its credit obligations to the Company in full.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

‧ significant financial difficulty of the borrower or issuer;
‧ a breach of contract such as a default or being more than 90 days past due;
‧ the disappearance of an active market for a security because of financial difficulties.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is recognized in other comprehensive income instead of reducing the carrying amount of the asset. The Company recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

6) Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the assets expire, or when the Company transfers substantially all the risks and rewards of ownership of the financial assets.

(ii) Financial assets (applicable before January 1, 2018)

The Company classifies financial assets into the following categories: financial assets at fair value through profit or loss, financial assets carried at cost, available-for-sale financial assets, and receivables.

1) Fair value through profit or loss (FVTPL)

Financial asset and derivative instruments, excluding designated and effective hedging instrument, are classified as held for trading if acquired principally for the purpose of selling or repurchasing in the short term. Financial assets in this category are measured at fair value at initial recognition. Attributable transaction costs are recognized in profit or loss as incurred. Subsequent changes measured at fair value are recognized in profit or loss. A regular way purchase or sale of financial assets shall be recognized and derecognized, as applicable, using trade-date accounting.

Financial assets are measured at fair value upon initial recognition. The fair value of shares of companies listed in Taiwan refers to the closing price of the reporting period. Open-end Funds, whose fair value refers to the net value of the fund assets on the report date.

2) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the other categories of financial assets. Available for sale financial assets are recognized initially at fair value, plus, any directly attributable transaction cost. Subsequent to initial recognition, they are measured at fair value, and changes therein, other than impairment losses, dividend income, and foreign currency differences on available for sale debt instruments, are recognized in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognized, the gain or loss accumulated in equity is reclassified to profit

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

or loss, and is included in non-operating income and expense. The purchase disposal of financial assets are recognized using trade date accounting.

3) Financial assets carried at cost

Equity commodity investments whose fair value cannot be reliably measured, measured at the cost of the original recognition. If there is objective evidence of impairment, the impairment loss is recognized, and the impairment loss is not reversed. Stock dividends are only noted as an increase in the number of investment shares, and are not classified as investment income. Cost of sale is calculated by weighted average method.

4) Notes receivable and accounts receivable, other receivables

Notes receivable and accounts receivable are claims arising from the sale of goods or services, other receivables are arising from non-operating activities. At initial recognition, the costs of the financial assets are valued at their fair value plus the direct acquisition costs, and are subsequently measured at their amortized cost minus impairment loss using the effective interest method.

5) Impairment of financial assets

A financial asset is impaired if, and only if, there is an objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset that can be estimated reliably.

The objective evidence that financial assets are impaired includes default or delinquency by a debtor, restructuring of an amount due to the Company on terms that the Company would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers, economic conditions that correlate with defaults, or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is accounted for as objective evidence of impairment.

The Company considers evidence of impairment for receivables at both a specific asset and collective level. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics. If objective evidence of an impairment exists, an impairment loss should be recognized. An impairment loss in respect of a financial asset is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Collateral and proceeds from insurance should also be considered when determining the estimated future cash flows. Losses are recognized in profit or loss and are reflected in an allowance account against receivables. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss. However, the reversing amount cannot exceed the amortized balance of the assets assuming no impairment was recognized in prior periods.

An impairment loss in respect of a financial asset measured at cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

impairment loss is not reversible in subsequent periods.

An impairment loss in respect of a financial asset is deducted from the carrying amount, except for trade receivables, for which an impairment loss is reflected in an allowance account against the receivables. When it is determined a receivable is uncollectible, it is written off from the allowance account. Any subsequent recovery of receivable written off is recorded in the allowance account. Changes in the amount of the allowance account are recognized in profit or loss.

Impairment losses on available for sale financial assets are recognized by reclassifying the losses accumulated in the fair value reserve in equity to profit or loss.

Impairment losses recognized on an available for sale equity security are not reversed through profit or loss. Any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognized in other comprehensive income, and accumulated in other equity.

If, in a subsequent period, the fair value of an impaired available for sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognized, then the impairment loss is reversed, with the amount of the reversal recognized in profit or loss.

Impairment losses and recoveries are recognized in profit or loss. Recovery and loss on doubtful debts of account receivables are included in operating expense; others are included in non-operating income and expense.

6) Derecognition of financial assets

The Company derecognizes financial assets when the contractual rights of the cash inflow from the asset are terminated, or when the Company transfers substantially all the risks and rewards of ownership of the financial assets.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received or receivables and any cumulative gain or loss that had been recognized in other comprehensive income and presented in other － equity unrealized gains or losses from available for sale financial assets is recognized in profit or loss, and included in non-operating income and expense.

The Company separates the part that continues to be recognized and the part that is derecognized, based on the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part derecognized and the sum of the consideration received for the part derecognized, and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income shall be recognized in profit or loss, and is included in non operating income and expense. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair values of those parts.

(iii) Financial liabilities and equity instruments
1) Other financial liabilities

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Financial liabilities not classified as held for trading or designated as at fair value through profit or loss, which comprise loans and borrowings, and trade and other payables, are measured at fair value plus any directly attributable transaction cost at the time of initial recognition. Subsequent to initial recognition, they are measured at amortized cost calculated using the effective interest method. Interest expense not capitalized as capital cost is recognized in profit or loss, and is recorded under non operating income and expenses.

2) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligation has been discharged or cancelled or has expired.

The difference between the carrying amount of a financial liability removed and the consideration paid (including any non cash assets transferred or liabilities assumed) is recognized in profit or loss, and is included in non operating income and expense.

3) Offsetting of financial assets and liabilities

The Company presents financial assets and liabilities on a net basis when the Company has the legally enforceable right to offset, and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

(g) Inventories

The cost of inventories consists of all costs of purchase, costs of conversion, and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories includes an appropriate share of fixed production overhead based on normal capacity and allocated variable production overhead based on actual output. However, unallocated fixed production overhead arising from lower or idle capacity is recognized in cost of goods sold during the period. If actual capacity is higher than normal capacity, fixed production overhead should be allocated based on actual capacity. The method of valuing inventories is the weighted average method.

Inventories are measured at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses at the end of the period. When the cost of inventories is higher than the net realizable value, inventories are written down to net realizable value, and the write down amount is charged to current year's cost of goods sold. If net realizable value increases in the future, the cost of inventories is reversed within the original write down amount, and such reversal is treated as a reduction of cost of goods sold.

(h) Construction contract (applicable before January 1, 2018)

If the results of the construction contract can be reliably estimated, the income and costs are recognized separately on the balance sheet date with reference to the degree of completion of the contractual activities, and the degree of completion is measured by the ratio of the contract costs incurred to date to the estimated total contract costs. Except where the degree of completion is not representative. In the event of a change in contract work, a claim and a bonus, it will be included in the contract income only if the amount can be reliably measured and is likely to be received.

If the total contract cost is likely to exceed the total contract revenue, all expected losses are

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

immediately recognized as expenses.

Construction contracts in progress are presented as the amount due from customers for contract work in the balance sheets for all contracts in which costs incurred plus recognized profits exceed progress billings and recognized losses. If progress billings exceed costs incurred plus recognized profits exceed recognized losses, then the difference is presented as amount due to customers for contract work in the balance sheets. The amount of money received before the relevant work is carried out is included in other current liabilities. The amount of project billing, which the customer has not paid, is included in construction contracts receivable.

(i) Investment affiliate

Affiliated companies are the Company that has a significant impact on their financial and operating policies, but not enough to have ability to control them. When the Company holds 20% to 50% of the voting rights of the investee company, assumes it has significant influence.

Under the equity method, the original acquisition is measured at cost. Investment costs include the cost of the transaction. The carrying amount of the investment-related company includes the goodwill recognized at the original investment subtract any accumulated impairment loss.

The consolidated financial report includes from the date of significant influence to the date of loss of significant influence. After adjusting for consistency with the Company’s accounting policies, the Company recognizes the amount of profit or loss and other comprehensive gains and losses of each of the investment-related enterprises in proportion to equity.

Unrealized profits resulting from the transactions between the Company and an associate are eliminated to the extent of the Company’s interest in the associate. Unrealized losses on transactions with associates are eliminated in the same way, except to the extent that the underlying asset is impaired.

When the Company's share of losses equals or exceeds its interest in the affiliated enterprise, the Company will stop recognizing those losses. And only within the scope of legal obligation, constructive obligation, or payments made on behalf of the investee company, recognizes the additional losses and related liabilities.

(j) Investment in associate

Investments in associates are accounted for using the equity method and are recognized initially at cost. Unrealized profits resulting from the transactions between the Company and an associate are eliminated to the extent of the Company’s interest in the associate. Unrealized losses on transactions with associates are eliminated in the same way, except to the extent that the underlying asset is impaired.

Changes in ownership interests in subsidiaries that do not result in a loss of control are deemed as equity transactions with owners.

(k) Property, plant and equipment

(i) Recognition and measurement

Property, plant and equipment are measured at cost, less, accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributed to the

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

acquisition of the asset, and any borrowing cost that is eligible for capitalization.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately, unless the useful life and the depreciation method of a significant part of an item of property, plant and equipment are the same as the useful life and depreciation method of another significant part of that same item.

The gain or loss arising from the derecognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and it shall be recognized as non operating income and expense.

(ii) Subsequent cost

Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Company. The carrying amount of those parts that are replaced is derecognized. Ongoing repairs and maintenance are expensed as incurred.

(iii) Depreciation

The depreciable amount of an asset is determined after deducting its residual amount,and it shall be allocated on a systematic basis over its useful life. Items of property and equipment with the same useful life may be grouped in determing the depreciation charge. The remainder of the items may by depreciated separately. The depreciation charge for each period shall be recognized in profit or loss.

Land has an unlimited useful life and therefore is not depreciated.

The estimated useful lives for the current and comparative years of significant items of property and equipment are as follows:

property and equipment are as follows:
Buildings	3~55 years
Machinery equipment	3~12 years
Plant equipment	50 years
Transportation equipment	5~6 years
Office equipment	3~8 years
Lease improvement	5 years

Depreciation methods, useful lives, and residual values are reviewed at each reporting date. If expectations differ from the previous estimates, the changes are accounted for as a change in an accounting estimate.

(l) Leases

Leases in which the Company assumes substantially all of the risks and rewards of ownership are classified as finance leases. On initial recognition, the lease asset is measured at an amount equal to the lower of its fair value or the present of the minimum lease payments. Subsequent minimum lease payments are attributable to finance cost and the reduction of the outstanding liabilities, and the finance cost is allocated to each period during the lease term using a constant periodic rate of interest on the remaining balance of the liability.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Other leases are operating leases and are not recognized in the Company's statement of financial position. Payments made under an operating lease (excluding insurance and maintenance expenses) are recognized in profit or loss on a straight line basis over the term of the lease. Lease incentives received are recognized as an integral of the total lease expense over the term of the lease. Any benefit provided by the lessor for the purpose of reaching the agreement is accounted for as a reduction of lease expense on a straight line basis.

(m) Intangible assets

Intangible assets except goodwill acquired by the Company are measured at cost less accumulated amortization and cumulative impairment. Subsequent expenditures can be capitalized only when they can increase the future economic benefits of the relevant specific assets, and all other expenses are recognized in profit or loss when incurred. Amortization is the amortizable amount after the asset cost is deducted from the residual value. From the availability, the intangible assets of the Company are the cost of obtaining computer software, amortization based on estimated straight-line method for three to five years. The amortization charge for each period shall be recognized in profit or loss.

Review the residual value of intangible assets, amortization period and amortization method at least annually at the end of the financial year. If there is a change, it is regarded as a change in accounting estimates.

(n) Impairment of non-financial assets

The carrying amounts of the The Company ‘s non-financial assets, other than assets arising from construction contracts, deferred tax assets, and assets arising from employee benefits, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Assets, excluding goodwill, accumulated impairment losses recognized in previous years, will be revolved if they do not exist or decrease thereafter. Increase the book value of the assets to the recoverable amount, except that the assets are not deducted from the impairment losses, and the depreciation or amortization should be deducted.

The recoverable amount is the fair value of individual assets or cash-generating units less the cost of sales and its value in use. If the recoverable amount of an individual asset or a cash-generating unit is less than the carrying amount, the book value adjustment of the individual asset or cash-generating unit is reduced to the recoverable amount and recognize the impairment loss. The impairment loss is immediately recognized in the current profit and loss.

The Company reassesses at each reporting date whether there is any indication that the impairment loss recognized by non-financial assets other than goodwill in previous years may no longer exist or decrease. If there is any change in the estimate used to determine the recoverable amount, then the derogation loss is lost. To increase the carrying amount of individual assets or cash-generating units to their recoverable amount, only if the individual asset or cash-generating unit in the previous year does not recognize the impairment loss and deduct the carrying amount after depreciation or amortization should be included.

(o) Provisions

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an ouflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

monetary market time value of money and the risks specific to the liability.The unwinding of the discount is recognized as interest cost.

The Company shall provide one-thousandth of the total contract amount for the completed project within one year of the period-end settlement for the project warranty reserve. When the actual expenditure occurs, the provision is reversed, and if there is a deficiency, it is listed as the annual expense.

When the Company anticipates that the inevitable cost of performing a contractual obligation exceeds the expected economic benefit from the contract, the Company will recognize the liability provision for the onerous contract. The liability provision is measured at the lower of the present value of the estimated cost of terminating the contract and the estimated net cost of continuing the contract, and all impairment losses of assets related to the contract are recognized before the recognition of the liability provision for the onerous contract.

(p) Revenue from contracts with customers (applicable from January 1, 2018)

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’s main types of revenue are explained below.

(i) Sale of goods

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

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

(ii) Consulting Services

The Company is engaged in providing construction consulting and design services. Revenue from providing services is recognized in the accounting period in which the services are rendered. For fixed price contracts, revenue is recognized based on the actual service provided at the end of the reporting period as a proportion of the total services to be provided. The proportion of services provided is determined based on surveys of work performed.

(iii) Construction contracts

The Company enters into contracts to build constructions. Because its customer controls the asset as it is constructed, the Company recognizes revenue over time on the basis of the construction costs incurred to date as a proportion of the total estimated costs of the contract. The consideration promised in the contract includes fixed and variable amounts. The customer pays the fixed amount based on a payment schedule. For some variable considerations,

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

accumulated experience is used to estimate the amount of variable consideration, using the expected value method. For other variable considerations, the Company estimates the amount of variable consideration using the most likely amount. Considering the progress of a public construction is highly susceptible to factors outside the Company’s control and, therefore, completion bonus is usually constrained, the Company recognizes revenue only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If the Company has recognized revenue, but not issued a bill, then the entitlement to consideration is recognized as a contract asset. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional.

If the Company cannot reasonably measure its progress towards complete satisfaction of the performance obligation of a construction contract, the Company shall recognize revenue only to the extent of the costs expected to be recovered.

A provision for onerous contracts is recognized when the Company expects the unavoidable costs of performing the obligations under a construction contract exceed the economic benefits expected to be received under the contract.

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management.

For constructions, the Company offers a standard warranty to provide assurance that they comply with agreed-upon specifications and has recognized warranty provisions for this obligation.

(q) Contract costs (applicable from January 1, 2018)
(i) Incremental costs of obtaining a contract

The Company recognizes the incremental costs of obtaining a contract with a customeras an asset, if the Company expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Company applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred, if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

(ii) Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Company recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

‧The costs relate directly to a contract or to an anticipated contract that the Company can

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

specifically identify;

‧The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and
‧The costs are expected to be recovered.

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Company recognizes these costs as expenses when incurred.

(r) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

(ii) Defined benefit plans

A defined benefit plan is a post employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The discount rate is the yield at the reporting date (market yields of high quality corporate bonds or government bonds) on bonds that have maturity dates approximating the terms of the Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Company, the recognized asset is limited to the total of the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Company. An economic benefit is available to the Company if it is realizable during the life of the plan, or on settlement of the plan liabilities.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized immediately in profit or loss.

Remeasurements of the net defined benefit liability (asset), which comprise (1) actuarial gains and losses, (2) the return on plan assets (excluding interest) and (3) the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The Company can reclassify the amounts recognized in other comprehensive income to retained earnings.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(iii) Short term employee benefits

Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short term cash bonus or profit sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(s) Income tax

Income tax expenses include both current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes shall be recognized in profit or loss.

Current taxes comprise the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes shall not be recognized for the exceptions below:

(i) Assets and liabilities that are initially recognized but are not related to the business combination and have no effect on net income or taxable gains (losses) during the transaction.
(ii) Temporary differences arising from equity investments in subsidiaries or joint ventures where there is a high probability that such temporary differences will not reverse.
(iii) Initial recognition of goodwill.

Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period.

A deferred tax asset should be recognized for unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profit will be available against which they can be utilized. Such deferred tax assets shall also be reviewed at each reporting date, and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(t) Earnings per share

Disclosures are made of basic and diluted earnings per share attributable to ordinary equity holders of the Company. The basic earnings per share is calculated based on the profit attributable to the ordinary shareholders of the Company divided by weighted average number of ordinary shares outstanding. The diluted earnings per share is calculated based on the profit attributable to ordinary shareholders of the Company, divided by weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(u) Operating segments

The company has disclosed departmental information in the consolidated financial report, so individual financial reports do not disclose departmental information.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the parent company onlyfinancial statements in conformity with the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the parent company onlyfinancial statements is as follows:

The Company has less than 20%% of the voting or potential voting rights of Wholetech System Hitech Limited and JG Environmental Technology Co., Ltd.. However, the Company has determined that it has significant influence because it has representation on the Board of Directors of Wholetech System Hitech Limited and JG Environmental Technology Co., Ltd..

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows:

(a) The loss allowance of trade receivable

The Company has estimated the loss allowance of trade receivable that is based on the risk of a default occurring and the rate of expected credit loss. The Company has considered historical experience, current economic conditions and forward-looking information at the reporting date to determine the assumptions to be used in calculating the impairments and the selected inputs. The relevant assumptions and input values, please refer to Note 6 (d).

(b) Income recognition

The Company is based on the completion of the construction contract, and the contracted revenue is recognized over time, and the degree of completion is measured by the proportion of contract costs incurred to date and the estimated total contract cost. The Company considers the nature of each project, the estimated construction period, the project, the construction process, the construction method and the estimated amount of the contract to be estimated. Any change in the basis of the above estimates may result in a significant adjustment to the estimated amount.The income recognition,please refer to Note 6 (u).

(c) Fair value of financial instruments

The fair value of financial instruments in non-active markets or without open market quotes is determined by the evaluation model or counterparty quotation. When using the evaluation model to determine fair value, all models use only observable data as input values without artificial adjustment. The observable input value is based on the principle of long-term stable market-used parameters. Avoid differences in cross-period financial reporting due to changes in data sources, and the model must be repeatedly adjusted and verified to ensure that the output is sufficient to properly reflect the

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

value of the asset.

Detailed information on the main assumptions used in determining the fair value of the financial instruments ,for a detailed sensitivity analysis of these assumptions, please refer to Note 6 (y).

(d) Measurement of Defined benefit obligation

Defined benefit costs and net defined benefit liabilities (assets) under defined benefit pension plans are calculated using the Projected Unit Credit Method. The Company determine the appropriate actuarial assumptions, and comprise the discount rate and future salary increase rate. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability. Please refer to Note6 (r) for the material actuarial assumptions and sensitivity analysis of actuarial.

(6) Explanation of significant accounts

(a) Cash and cash equivalents

Cash on hand and petty cash Demand deposits Time deposits Cash and cash equivalents per statements of cash flow	December 31, 2018 $ 3,205 1,337,360 4,461,457	December 31, 2017 2,785 1,184,792 4,776,099
	$ 5,802,022	5,963,676

Please refer to note 6(y) for the disclosure of the sensitivity analysis and interest rate risk of the financial assets and financial liabilities of the Company.

(b) Financial assets measured at fair value through profit or loss－current

Financial asset measured at fair value through profit or loss: Stock listed on markets Stocks unlisted on domestic markets Valuation adjustment Total	December 31, 2018 $ 117,896 175,345 (143,666)	December 31, 2017 117,896 - (75,573)
	$ 149,575	42,323

From January 1 to December 31 in 2018, the Company recognized the dividend income $13,159 as the financial assets listed above as being measured at fair value through profit and loss.

Stock affairs by public Valuation adjustment Total	December 31, 2017 $ 175,345 (74,995)
	$ 100,350

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Statements of changes in loss of valuation adjustment：

Beginning balance Changes in current period Total	December 31, 2017 $ (109,775) 34,780
	$ (74,995)

(i) As of December 31, 2017, the financial assets at fair value through other comprehensive income of the Company had not pledged as collateral for long-term borrowings.
(ii) These investments above were classified as financial assets at fair value through other comprehensive income on December 31, 2017.
(d) Notes and accounts receivable

Notes receivable-unrelated parties Accounts receivable-unrelated parties Accounts receivable－related parties Less: allowance for impairment Total	December 31, 2018 $ 3,035 2,840,679 66,904 51,007	December 31, 2017 3,125 723,577 16,254 71,700
	$ 2,859,611	671,256

The Company holds part of the accounts receivable by the business model of collecting contractual cash flows. Therefore, the accounts receivable are measured at amortized cost starting from January 1, 2018.

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables on December 31, 2018. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information. The expected credit losses of the note receivables and trade receivables for the year ended December 31, 2018 was as followed:

Not overdue Overdue 0~60 days Overdue 61~120 days Overdue 121~365 days Overdue one year past due	Gross carrying amount $ 2,817,744 10,514 28,473 3,303 50,584	Weighted-aver age expected credit loss rate		Lifetime expected credit loss - 105 285 33 50,584
		1% 1% 1% 100%
	$ 2,910,618			51,007

As of December 31, 2017, the Company applies the incurred loss model to consider the loss allowance provision of notes and accounts receivable, and the aging analysis of notes and accounts receivable, which were past due but not impaired, was as follows:

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

Not overdue Overdue one year past due	December 31, 2017 $ 731,397 11,559
	$ 742,956

The movement in the allowance for impairment with respect to notes and accounts receivable during the year was as follows:

2018 $ 71,700 -	2017	Collectively assessed impairment 86,724 (15,024) -
	Individually assessed impairment - - -
71,700 23,007 (43,700)
$ 51,007	-	71,700

The Company provides for the above-mentioned allowance for bad debts based on the industry characteristics of historical payment behavior and the credit rating of customers who have extensive

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

analysis of the subject matter.

The Company has not provided the notes and accounts receivable as collateral or provided as collateral.

(e) Construction Contracts

Construction revenue recognized in profit or loss for the year ended December 31, 2017 was as follows:

Construction revenue recognized in current profit or loss Accumulated costs incurred Add:Accumulated profit recognized arising from the construction Accumulated costs and profit recognized (less, losses recognized) less:Progress billings Amount due from customers for contract work – presented as an asset Amount due to customers for contract work – presented as a liability Accumulating advance received(Payment received before work)	2017 $ 6,992,538
	$ 33,840,793 3,322,774
	37,163,567 40,983,658
	$ -
	$ 681,476 4,501,567
	$ 5,183,043
	$ 15,731

(f) Inventories

December 31, 2018 Cost Allowance for Impairment Carrying Amount $ 50,678 (12,046) 38,632 21,272 (19,032) 2,240 14,925 (11,663) 3,262 6,532 (6,532) -	December 31, 2018 Cost Allowance for Impairment Carrying Amount $ 50,678 (12,046) 38,632 21,272 (19,032) 2,240 14,925 (11,663) 3,262 6,532 (6,532) -	December 31, 2018 Cost Allowance for Impairment Carrying Amount $ 50,678 (12,046) 38,632 21,272 (19,032) 2,240 14,925 (11,663) 3,262 6,532 (6,532) -
Cost $ 50,678 21,272 14,925 6,532	Allowance for Impairment (12,046) (19,032) (11,663) (6,532)
$ 93,407	(49,273)	44,134
December 31, 2017 Cost Allowance for Impairment Carrying Amount $ 57,469 (21,893) 35,576 20,356 (18,830) 1,526 14,233 (12,117) 2,116 1,685 (1,685) -
Cost $ 57,469 20,356 14,233 1,685	Allowance for Impairment (21,893) (18,830) (12,117) (1,685)
$ 93,743	(54,525)	39,218

As of 2018 and 2017, as the inventory is reduced to the net realizable value, the gain from price recovery of inventory (inventory valuation losses) is recognized as $5,252 and $4,158, respectively, and has been recognized as the increase or decrease in the cost of goods sold.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

As of December 31, 2018 and 2017, the Company's inventories were not provided as pledged assets.

(g) Prepayments

Domestic purchase of materials Foreign purchases Prepaid project Engineering Prepaid insurance Association investment screen Others Total	December 31, 2018	December 31, 2017 45,374 10,361 134 - 1,654 - 1,195
	$ 109,840 888,539 - 3,312 20,009 19,516 468
	$ 1,041,684	58,718

(h) Financial assets measured at fair value through profit or loss－non-current

Financial assets measured at fair value through profit or loss: Unlisted company stock Valuation adjustments Total Financial assets measured at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income Unlisted stocks (overseas) Valuation adjustment Total	December 31, 2018 $ 36,300 (28,421)
	$ 7,879
	December 31, 2018 $ 1,008,212 628,749
	$ 1,636,961

(i) Financial assets measured at fair value through other comprehensive income

(i) The Company held equity instrument investment, not held for trading purposes, which have been designated as measured at fair value through other comprehensive income. These －
investments were classified as inancial assets at cost non-current on December 31, 2017. These equity instrument investments have been announced in September 2007 in the Republic of China to merge the company with a dividend of $341,871.
(ii) Financial assets measured at fair value through other comprehensive income in 2018- Valuation adjustment changes are as follows:

2018- Valuation adjustment changes are as follows:
Beginning balance Effect of retrospective application Add: Recognition for current period	2018 $ - 1,583,250 (954,501)
	(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Total Financial assets carried at cost－non-current Stock investment－ Jiangxi Construction Engineering Group Co.,Ltd. Taiwan Electronic Data Processing Co.. WK Technology Fund Hannspree Inc. (Cayman) Total	$ 628,749
	December 31, 2017 $ 1,008,212 6,600 3,650 -
	$ 1,018,462

－ (j) Financial assets carried at cost non-current

The Company has received a dividend of $248,943 from Jiangxi Construction Engineering Group Co., Ltd. in July 2017.

The shareholders meeting of WK Technology Fund decided to reduce the capital repayment in July 2017. The capital reduction ratio is 17,665%. The legal procedures have been completed and the shares have been returned to the Company.

Hannspree Inc. (Cayman) shareholders' meeting decided to go through the liquidation process in November 2017, so the Company will deduct its own account and estimate the relevant recoverable amount of $15 (accounting for other current assets), and the amount was recovered on October 15, 2018.

The above unlisted (cabinet) stock investment held by the Company was measured at cost reducted impairment loss on December 31, 2017. Because the range of reasonable fair value estimates is significant and the probability of various estimates cannot be reasonably assessed, the management of the Company believes that its fair value cannot be reliably measured. These assets are classified as financial assets at fair value through other comprehensive gains and losses or at fair value through profit or loss at December 31, 2018. After the assesment, the Company did not propose impairment losses in 2017. The Company is estimated using the net equity of the company as the recoverable amount at the time of the impairment test.

(k) Investments accounted for using equity method

The investments accounted for using equity method of the company on reporting date are as follows:

Affiliates Associates Total	December 31, 2018 $ 1,557,204 756,814	December 31, 2017 1,429,879 752,728
	$ 2,314,018	2,182,607

(i) Affiliates

Please refer to the consolidated financial statement for the year ended 2018.

(ii) Associates

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Due to the capital increase of Ablerex electronics co., Ltd., the Company has payment of 62 shares amounting to $2,579 on December 31, 2018.

1) The details of the significant associates are as follows:

Name of associates	Existing relationship with the Company	The main operating place / register country	Proportion of equity and voting right	Proportion of equity and voting right
			December 31, 2018	December 31, 2017 33.30%
Ablerex electronics co., Ltd.	Selling of Manufacturing of UPS	Taiwan	33.30%

For those listed companies that are significant to the consolidated company, the fair value is as follows:

Ablerex electronics co., Ltd.	December 31, 2018 $ 1,485,000	December 31, 2017 1,737,000

A summary of the financial information of the significant associates were as follows:

Summary of financial information of

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Net assets attributed to non-controlling interest Net assets attributed to investee Revenue Net income of continued operations Other comprehensive income (loss) Total comprehensive income (loss) Total comprehensive income attributed to non-controlling interest Total comprehensive income attributed to investee Beginning equity of the associate attributable to the Company Current total comprehensive income of the associate attributable to the Company Increase shareholding in the current period	December 31, 2018 $ 1,763,345 947,340 (1,078,347) (103,598)	December 31, 2017 1,778,637 970,679 (1,080,486) (98,184)
	$ 1,528,740	1,570,646
	$ 11,097	9,554
	$ 1,517,643	1,561,092
	2018 $ 2,530,613	2017 2,395,346
	$ 74,916 (4,323)	80,539 (16,387)
	$ 70,593	64,152
	$ 1,543	923
	$ 69,050	63,229
	2018 $ 521,571 22,996 -	2017 543,026 20,926 2,579

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

Dividends received from affiliated companies in the current period The share of the net assets of the affiliated companies at the end of the period Add:Goodwill Ending balance of the equity of the associate attributable to the Company	(37,466) (44,960)
	507,101 521,571 116 116
	$ 507,217 521,687

2) Not significant associates

Summary of respectively not significant associates recognized under the equity method were as follows:

Balance of not significant associate’s equity Attributable to the Company: Income from continued operation Other comprehensive income Total comprehensive income	December 31, 2018 $ 249,813	December 31, 2017 231,041
	2018 $ 39,272 (1,246)	2017 33,924 (725)
	$ 38,026	33,199

As of 2018 and 2017 in the preparation of the financial report, the investee company evaluated by the equity method is evaluated according to the equity method based on the financial report of the investee company audited by other accountants. As of 2018 and 2017, the investment interests recognized by the equity method were $63,636 and $60,142.

(iii) Guarantee

The Company did not pledge its Investment using the equity method.

(l) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company were as follows:

Land	Buildings	Machinery	Plant equipment	Transportation Equipment	Office equipment	Leashelod Improvements	Total
$ 398,538 - -	63,519 - -	92,016 - (14,264)	156,400 85 -	4,610 4,400 -	56,687 193 (991)	2,076 - -	773,846 4,678 (15,255)
$ 398,538	63,519	77,752	156,485	9,010	55,889	2,076	763,269
$ 398,538 - -	63,519 - -	92,446 248 (678)	156,300 100 -	3,545 1,065 -	55,370 1,417 (100)	2,076 - -	771,794 2,830 (778)
$ 398,538	63,519	92,016	156,400	4,610	56,687	2,076	773,846
$ 1,160 - -	32,377 1,432 -	78,527 4,200 (11,967)	35,064 4,222 -	3,473 704 -	51,848 1,217 (950)	1,468 307 -	203,917 12,082 (12,917)

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

Balance at December 31, 2018 Balance at January 1, 2017 Depreciation Disposal Balance at December 31, 2017 Carrying value: December 31, 2018 January 1, 2017 December 31, 2017	$ 1,160 33,809 70,760 39,286 4,177 52,115 1,775 203,082
	$ 1,160 30,945 72,570 30,776 3,175 50,620 1,053 190,299 - 1,432 6,635 4,288 298 1,323 415 14,391 - - (678) - - (95) - (773)
	$ 1,160 32,377 78,527 35,064 3,473 51,848 1,468 203,917
	$ 397,378 29,710 6,992 117,199 4,833 3,774 301 560,187
	$ 397,378 32,574 19,876 125,524 370 4,750 1,023 581,495
	$ 397,378 31,142 13,489 121,336 1,137 4,839 608 569,929

(m) Intangible assets

The cost and amortization of the intangible assets of the Company were as follows:

Costs: Balance at January 1, 2018 Additions Amortization Balance at December 31, 2018 Balance at January 1, 2017 Additions Amortization Balance at December 31, 2017	Computer software $ 1,809 - (468)
	$ 1,341
	$ 1,778 718 (687)
	$ 1,809

For the years ended December 31, 2018 and 2017, the amortization expenses amounted to $468 and $687, respectively, were reported as operating expenses and operating costs in the consolidated statements of comprehensive income.

(n) Other current assets and non-current assets
(i) Details of other current assets of the Company are as follows:

Other financial assets Construction refundable deposits Construction bid bond Dividend receivable Liquidation receivable of subsidiary Other	December 31, 2018 $ 1,392,071 1,493 7,500 584,938 - 17,550	December 31, 2017 1,314,736 3,156 2,500 92,275 86,000 17,201
	$ 2,003,552	1,515,868

The other financial assets are time deposit certificates with maturity of three to twelve months. For the years ended December 31, 2018 and 2017, the balances were $1,390,371 thousand and $980,676 thousand respectively. And the restricted deposits were $1,700 and $334,060 respectively.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(ii) Details of other non-current assets of the Company are as follows:

Refundable deposits Other	December 31, 2018 $ 3,969 2,582 $ 6,551	December 31, 2017 4,712 3,371 8,083

Other financial assets are mainly deposit certificates with a maturity of more than 12 months.

(o) Provisions

Balance at January 1, 2018 Increase in provisions Provisions used during the year Balance at December 31, 2018 Balance at January 1, 2017 Increase in provisions Provisions used during the year Balance at December 31, 2017	Warranty $ 3,205 12,173 (2,024)
	$ 13,354
	$ 7,936 5,313 (10,044)
	$ 3,205

The Company shall provide one-thousandth of the total contract amount for the completed project within one year of the period-end settlement for the project warranty preparation. When the actual occurrence occurs, the preparation is reversed. And if there is a deficiency, it is listed as the annual payment.

(p) Operating leases

Lessee

Non-cancellable rental payables of operating leases were as follows:

Less than 1 year 1 to 5 years	December 31, 2018 $ 4,197 18,237	December 31, 2017 5,092 280
	$ 22,434	5,372

The Company leases offices and warehouse under operating leases. The leases typically run for a period of 1 to 3 years, with an option to renew the lease.

For the years ended December 31, 2018 and 2017, lease expenses were $5,030 and $8,239, respectively.

(q) Employee benefits
(i) Defined benefit plans

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

The following table shows a reconciliation between the present value of the defined benefit obligation and the fair value of plan assets:

benefit obligation and the fair value of plan assets:
The present value of the defined benefit obligations Fair value of plan assets The net defined benefit liability	December 31, 2018 $ (431,883) 97,468	December 31, 2017 (414,292) 105,022
	$ (334,415)	(309,270)

The details of the employee benefit liabilities of the Company are as follows:

Short-term compensated absence liabilities (Accounts payable and other current liabilities)	December 31, 2018 $ 2,346	December 31, 2017 17,930

The Company established the pension fund account for the defined benefit plan in Bank of Taiwan. The plan, under the Labor Standards Law, provides benefits based on an employee's length of service and average monthly salary for the six-month period prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labors. Minimum annual distributions of the funds by the Bureau shall be no less than the earnings attainable from the two-year time deposits with the interest rates offered by local banks.

The Company's Bank of Taiwan labor pension reserve account balance amounted to $97,467 at the end of the reporting period. For information on the utilization of the labor pension fund assets including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of defined benefit plan obligation

The movements in present value of the Company’s defined benefit plan obligation for the years ended December 31, 2018 and 2017 were as follows:

Defined benefit obligation at 1 January Current service costs and interest Remeasurements of the net defined benefit liability (asset) －Return on plan assets (excluding amounts included in net interest expense) Benefits paid by the plan Defined benefit obligation at 31 December	2018 $ 414,292 8,116 24,592 (15,117)	2017 379,233 8,406 29,008 (2,355)
	$ 431,883	414,292

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

3) Movements in fair value of defined benefit plan assets

The movements in the fair value of the defined benefit plan assets for the years ended December 31, 2018 and 2017 were as follows:

Fair value of plan assets, January 1 Interest revenue Remeasurements of the net defined benefit liability (asset) －Return on plan assets (excluding amounts included in net interest expense) Contributions made Benefits paid by the plan Fair value of plan assets, December 31	2018 $ 105,022 1,423 2,761 3,379 (15,117)	2017 101,910 1,591 (585) 3,643 (1,537)
	$ 97,468	105,022

4) Expenses recognized in profit or loss

The expenses recognized on profit or loss for the years ended December 31, 2018 and 2017 were as follows:

2017 were as follows:
Current service cost Net interest on the defined benefit liability (asset)	2018 $ 2,504 4,189	2017 2,488 4,327
	$ 6,693	6,815

5) Remeasurement in the net defined benefit liability recognized in other comprehensive income

the Company’s remeasurement in the net defined benefit liability recognized in other comprehensive income for the years ended December 31, 2018 and 2017 were as follows:

Cumulative amount, January 1 Recognized during the period Cumulative amount, December 31	2018 $ 130,394 21,830	2017 100,801 29,593
	$ 152,224	130,394

6) Actuarial assumptions

The following are the Company’s principal actuarial assumptions at the reporting dates:

Discount rate Future salary increases rate	2018 0.97% 2.00%	2017 1.35% 2.50%

The Company expects to make contributions of $5,547 to the defined benefit plans in the

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

next year starting from the reporting date of 2018.

The weighted average duration of the defined benefit obligation is 12.00 years.

7)

Sensitivity analysis

As of December 31, 2018 and 2017, the present value of defined benefit obligation impact was as follow:

impact was as follow:
December 31, 2018 Discount rate (0.50%) Future salary increase rate (0.25%) December 31, 2017 Discount rate (0.50%) Future salary increase rate (0.50%)	The impact of defined benefit obligation Increase Decrease $ (20,068) 21,528 10,304 (10,002) (19,624) 21,073 10,073 (9,772)
	Increase $ (20,068) 10,304 (19,624) 10,073

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions remain constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of the pension liabilities in the balance sheets.

The method and assumptions used on current sensitivity analysis are the same as those of the prior year.

(ii) Defined contribution plans

The Company has made monthly contributions equal to 6% of each employee's monthly wages to the labor pension personal account at the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act. Under this defined contribution plan, the Company contributes a fixed amount to the Bureau of the Labor Insurance without additional legal or constructive obligations.

The Company’s pension costs under the defined contribution plan were $27,665 and $31,114 for the years ended December 31, 2018 and 2017, respectively. Payments were made to the Bureau of Labor Insurance.

(iii) The Company reported expense for the years ended December 31, 2018 and 2017 were as follows:

Operating expense Selling expense Administration expense Research & Development expense	2018 $ 16,357 - 17,296 705	2017 22,257 333 13,797 1,542

(Continued)

34,358

37,929

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(r) Income tax

According to the amendments to the "Income Tax Act” enacted by the office of the President of the Republic of China (Taiwan) on February 7, 2018, an increase in the corporate income tax rate from 17% to 20% is applicable upon filing the corporate income tax return commencing 2018.

(i) Income tax expenses

The amounts of income taxes of the Company were as follows:

Current tax expense Current period Adjustments of prior year's income tax Deferred income tax expense Origination and reversal of temporary differences Adjustment of tax rates Income taxes relating to continuing operations	2018 $ 474,923 4,788	2017 181,340 3,814
	479,711	185,154
	49,207 4,573	44,846 -
	$ 533,491	230,000

Income taxes expense (benefit) recognized directly in other comprehensive income for the years ended December 31, 2018 and 2017 were as follows:

Items that could not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plan Items that will subsequently be reclassified to profit or loss: Exchange differences on translation of foreign financial statements	2018 $ 9,567	2017 5,031
	6,397	3,098
	$ 15,964	8,129

Reconciliations of the Company’s income tax expense and the profit before tax for the years ended December 31, 2018 and 2017 were as follows:

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

Income before tax Income tax calculated on pretax accounting income at statutory rate Temporary differences Tax- exempt income Deferred tax Adjustment of tax rates Permanent difference Income tax adjustments on prior years Others Total	2018 $ 2,681,057	2017 1,444,548
	$ 536,211 (49,207) (13,337) 49,207 4,573 1,256 4,788 -	245,573 (44,846) (16,328) 44,846 - (3,069) 3,814 10
	$ 533,491	230,000

(ii) Recognized deferred tax assets and liabilities
i. Unrecognized deferred income tax assets

The Deferred income tax assets that have not been recognized by the Company are as follows:

The court adjudged to pay the payment and interest Impairment loss	December 31, 2018 $ 29,620 (4,428)	December 31, 2017 25,090 -
	$ 25,192	25,090

ii. Recognized deferred income tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for the years ended December 31, 2018 and 2017 were as follows:

Deferred tax liabilities:

Unrealized exchange interest $ - - -	Investing in foreign interests	cumulative translation adjustment	Total
	89,295 36,058 -	23 - (6,393)	89,318 36,058 (6,393)
$ -	125,353	(6,370)	118,983
$ - - -	23,529 65,766 -	3,121 - (3,098)	26,650 65,766 (3,098)

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

comprehensive income Balance at December 31, 2017 $ - Deferred tax assets: Defined benefit plans Unrealized warranty Balance at January 1, 2018 $ 29,470 2,648 Recognized in profit or loss - 2,497 Recognized in other 9,567 - comprehensive income Balance at December 31, 2018 $ 39,037 5,145 Balance at January 1, 2017 $ 24,439 3,452 Recognized in profit or loss - (804) Recognized in other 5,031 - comprehensive income Balance at December 31, 2017 $ 29,470 2,648
	$ -		89,295		23	89,318
		Unrealized warranty 2,648 2,497 -	Bad debt loss limit 10,925 (6,513) -	Inventory price loss 9,269 585 -	Other 40,540 (14,292) -	Total 92,852 (17,723) 9,567
$ 29,470 - 9,567
$ 39,037		5,145	4,412	9,854	26,248	84,696
$ 24,439 - 5,031		3,452 (804) -	8,488 2,437 -	9,976 (707) -	20,545 19,995 -	66,900 20,921 5,031
$ 29,470		2,648	10,925	9,269	40,540	92,852

(iii) Examination and approval

The ROC income tax authorities have examined the income tax returns of the Company all year through 2016.

(s) Capital and other equity
(i) Capital stock

As of December 31, 2018 and 2017, the Company’s government registered total authorized capital and issued capital stock both amounted to $3,000,000 with $10 par value per share.

On October 3, 2018, the company was approved by FSC to reduce cash capital by returning share prices (or the capital stock), the capital decreased 476,467 thousand dollars in total. The net capital was $1,905,867 and $2,382,334 thousand dollars on December 31, 2018 and 2017, respectively.

(ii) Capital surplus

The components of capital surplus were as follows:

Consolidation premium Share premium Conversion premium of corporate bonds Treasury share transactions Other	December 31, 2018 $ 6,938 49,987 215,672 77,158 24,401	December 31, 2017 6,938 288,220 215,672 77,158 23,999
	$ 374,156	611,987

In accordance with the ROC Company Act , realized capital surplus can be used to increase share capital or to distribute as cash dividends after offsetting losses. The aforementioned capital surplus includes share premiums and donation gains. In accordance with the Securities

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Offering and Issuance Guidelines, the amount of capital surplus to increase share capital shall not exceed 10 percent of the actual share capital amount.

(iii) Retained earnings

In accordance with the Company's articles of incorporation, in the event that the annual audit renders earnings, the Company shall pay taxes according to law and cover cumulative losses before setting aside 10% to be the legal reserve; if the legal reserve has reached the Company's paid-in capital size, however, it is allowed not to set aside further earnings. From the remainder the special reserve shall be set aside or reversed as required by law and any further remainder after that shall be brought forth in the shareholder's meeting based on the Earnings Distribution Proposal prepared by the Board of Directors along with accumulated retained earnings for a decision on assignment of dividend bonus to shareholders.

The Company's current industrial development is in the growth stage, capital requirements for increased operating income over the next few years, so adopt the residual dividend policy.The cash dividend in the surplus distribution should be at least 25 percent of the total dividend. Distribution of surplus in the preceding paragraph, which are initially proposed by the Board of Directors to the operational and capital expenditure needs,and drafted a case to submitted to the Shareholders' meeting to resolve.

1) Legal reserve

In accordance with the Company Act as amended in January 2012, that companies must retain 10% of their annual net earnings, as defined in the Act, until such retention equals the amount of issued share capital. When a company incurs no loss, it may, pursuant to a resolution to be adopted by the shareholders' meeting as required, distribute its legal reserve by issuing new shares or cash. Only the portion of legal reserve which exceeds 25% of the issued share capital may be distributed.

2) Special earnings reserve

As the Company adopted for the exemptions allowed under IFRS 1 "First-time Adoption of International Financial Reporting Standards" during the Company's first-time adoption of the IFRS as endorsed by the FSC, unrealized revaluation increments and cumulative translation adjustments of $42,036, which were previously recognized in shareholders' equity were reclassified to retained earnings. In accordance with Regulatory Permit No.1010012865 as issued by the FSC on April 6, 2012, a special reserve is appropriated from retained earnings for the aforementioned reclassification. In addition, during the use, disposal or reclassifications of relevant assets, this special reserve is reverted to distributable earnings proportionately. The carrying amount of special reserve amounted to $42,036 as of December 31, 2018.

A portion of current period earnings and undistributed prior period earnings shall be reclassified as a special earnings reserve during earnings distribution. The amount to be reclassified should be equal to the difference between the total net current period reduction of special earnings reserve resulting from the first time adoption of IFRSs and the carrying amount of other shareholders' equity as stated above. Similarly, a portion of undistributed prior period earnings shall be reclassified as a special earnings reserve (which does not qualify for earnings distribution) to account for cumulative changes to

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

other shareholders' equity pertaining to prior periods due to the first time adoption of IFRSs. Amounts of subsequent reversals pertaining to the net reduction of other shareholders' equity shall qualify for additional distributions.

3) Distribution of retained earnings

Among the distributable earnings for the year ended December 31, 2016 and 2017, the company distributed cash dividends of $5.00 and $6.00 per share for the years ended December 31, 2018 and 2017, respectively. The board of shareholders also distributed cash of $1 per share by additional paid-in capital. Other relevant information can be found on Market Observation Post System.

(iv) Treasury stock

1) In accordance with the the Securities Exchange Law,the number of shares bought back under the preceding paragraphs may not exceed ten percent of the total number of issued and outstanding shares of the company. The total amount of the shares bought back may not exceed the amount of retained earnings plus premium on capital stock plus realized capital reserve.
2) The shares bought back by the Company in accordance with the Securities Exchange shall not be pledged. Before transfer, the shareholder's rights shall not be enjoyed.
3) The shares of the Company sold by the Company's subsidiaries in 2018 and 2017 were 0 thousand shares and 32 thousand shares, respectively. As of the December 31, 2018 and 2017, the Company's subsidiaries hold shares of the Company of 0 thousand shares and 0 thousand shares ,respectively.
4) According to the rules of the Company’s articles, since January 1, 2002, the Company’s shares which subsidiaries hold are view as treasury shares. However, at the end of the period, the subsidiary holds the difference between the market price of the Company's stock and the book value, the Company should calculate its financial assets evaluation loss according to the shareholding ratio, and propose the special surplus reserve without the same amount. If there is a rebound in the post-evaluation, the Company will have to revolve the special surplus reserve based on the shareholding ratio. The above mentioned provision or reversal of special surplus reserve shall be treated in conjunction with the reduction of shareholders' equity of other non-custodial shares.
(v) Other equities (net for tax)

Balance as of January 1, 2018 Effects of retrospective application Balance at January 1, 2018 after adjustments Exchange differences on translation financial statements of foreign subsidiaries accounted for using equity method Unrealized gains (losses) from financial assets	Foreign exchange differences arising from foreign operations $ (37,898) -	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income - 1,583,250	Available-for-sale financial assets (74,990) 74,990	Total (112,888) 1,658,240
	(37,898) (25,590) -	1,583,250 - (954,501)	- - -	1,545,352 (25,590) (954,501)

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

measured at fair value through other comprehensive income Balance as of December 31, 2018 Balance as of January 1, 2017 Exchange differences on translation financial statements of associates accounted for using equity method Unrealized gains (losses) from available-for-sale financial assets Balance as of December 31, 2017	$ (63,488) 628,749 - 565,261
	$ (23,896) - (109,770) (133,666) (14,002) - - (14,002) - - 34,780 34,780
	$ (37,898) - (74,990) (112,888)

(t) Earnings per share

The calculation of the Company’s basic earnings per share and diluted earnings per share for the years ended December 31, 2018 and 2017, was as follows:

(i) Basic earnings per share

Net income attributable to common shareholders of the Company Weighted-average number of common shares Basic earnings per share (in NT dollars) ii) Diluted earnings per share Net income attributable to common shareholders of the Company (diluted) Weighted-average number of common shares (basic) Impact of potential common shares: Effect of employees' bonuses Weighted-average number of shares outstanding (diluted) Diluted earnings per share (in NT dollars) (u) Revenue from contracts with customers (i) Disaggregation of revenue Major products/services line:： Construction in Progress Service and Design Sales	2018 $ 2,147,566	2017 1,214,548
	228,051	238,233
	$ 9.42	5.10
	2018 $ 2,147,566	2017 1,214,548
	228,051 3,544	238,233 4,765
	231,595	242,998
	$ 9.27	5.00
	2018 $ 9,352,741 136,609 84,367
	$ 9,573,717

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Type of contract： Fixed price contract Material-based contract	$ 9,489,350 84,367
	$ 9,573,717

For details on revenue for 2017, please refer to note 6(e) and (w).

(ii) Contract balances

Accounts receivable Less: allowance for impairment Total Contract assets-Construction in Progress Contract liabilities-Construction in Progress	December 31, 2018 $ 2,840,679 51,007	January 1, 2018 723,577 71,700
	$ 2,789,672	651,877
	$ 1,002,722	681,476
	$ 5,894,776	4,501,567

For details on notes receivable, accounts receivable, and loss allowance for impairment, please refer to note 6(d).

Please refer to Note 6(e) for the Construction in Progress contract in December 31, 2017.

The beginning balance of the contractual liabilities for the year ended December 31, 2018 was recognized as income in the amount of $4,460.

Changes in contractual assets and contractual liabilities are mainly due to differences between the time when the Company transfers goods or services to customers and fulfills the performance obligation and the time of payment by the customer. Other significant changes are as follows:

Degree of completion measurement Adjustments resulting from contract modifications	For the three months ended December 31, 2018 Contract assets Contract liabilities $ - - 621,639 2,497,351
	Contract assets $ - 621,639

(v) Revenue

The Company’s revenue for the year ended December 31, 2017 were as follows :

Construction revenue Service revenue Design revenue	2017 $ 6,992,538 155,482 109,624
	$ 7,257,644

(w) Remuneration to employees and directors

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

In accordance with the Articles of Incorporation, 6% to 10% of employee compensation and no more than 2% of directors and supervisors compensation should be distributed if there is profit for the period. However, if the company has accumulated losses, the earnings shall first be offset against any deficit. Employees entitled receive share or cash, include the employees of the subsidiaries meeting certain requirements.

The Company estimated its remuneration to employees amounting to $300,000 thousand and $163,000 thousand, as well as it directors' $27,000 thousand and $24,000 thousand for the years ended December 31, 2018 and 2017, respectively. The estimated amounts mentioned above are based on the net profit before tax of each respective ending period, multiplied by the percentage of the remuneration to employees and directors as specified in the Company's article. The estimations are recorded under operating expenses and cost. Related information would be available at the Market Observation Post System website. The aforementioned remuneration to employees and directors are consistent to the estimated amounts disclosed in the Company's consolidated financial statements.

(x) Non-operating income and expenses

(i) Other income

The Company’s other income for the years ended December 31, 2018 and 2017 were as follows:

follows:
Rental income Dividend income Gain on reversal of bad debts Other income－other Revenue from sale of scraps Others Other income－other Other gains	2018 $ 4,673 356,400 - 10,358 1,906	2017 4,422 257,432 15,024 11,676 8,669
	12,264	20,345
	$ 373,337	297,223

ii) Other gains and losses

The Company’s other gains and losses for the years ended December 31, 2018 and 2017 were as follows:

Loss on disposal of property, plant and equipment Gain (loss) on disposal of investments Gain (loss) on disposal of foreign currency exchange Loss on financial assets at fair value through profit or loss Gain (loss) on reversal of impairment loss of financial assets Other gains and losses Other gains and losses, net	2018 $ (3,415) 3,514 124,785 (15,206) - (18,587)	2017 (5) 5,185 (336,168) 24,489 (3,300) (10,695)
	$ 91,091	(320,494)

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

iii) Finance costs

The Company’s finance costs for the years ended December 31, 2018 and 2017 were as follows:

Others

==> picture [172 x 25] intentionally omitted <==

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

2018 2017
$ 6,298 6,281
----- End of picture text -----

(y) Financial instruments

(i) Credit risk
1) Credit risk exposure

The carrying amounts of financial assets and contract assets are the maximum exposure to credit risk. As of December 31, 2018 and 2017, the amounts of the maximum exposure to credit risk are $8,661,633 and $6,674,471, respectively.

The Company assesses the financial condition of its customers continuously to reduce the credit risk of accounts receivable and requires its customers to provide guarantees and collateral if it is necessary. The Company regularly evaluates the likelihood of recovery of accounts receivable and recognizes the allowance for bad debts. Therefore, the expected credit losses are in the expectation of the Company.

2) Concentration of credit risk

When the transaction of financial instruments is concentrated in a single industry or region, the ability to oblige the contract would be impacted by similar factors, thereby causing concentration of credit risk. As of December 31, 2018 and 2017, notes receivable and accounts receivables concentrated on few counter-parties are as follows:

Name of client	December 31, 2018 Carrying amount the maximum exposure to credit risk ％ $ 712,645 712,645 25.52 1,417,420 1,417,420 50.75 538,738 538,738 19.29
Taiwan Semiconductor Manufacturing Co., Ltd. Micron Technology Taiwan Co., Ltd. Total
	$ 2,668,803 2,668,803 95.56

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

Name of client	December 31, 2017 Carrying amount the maximum exposure to credit risk ％ $ 278,405 278,405 42.50 115,027 115,027 17.56 98,493 98,493 15.04
Taiwan Semiconductor Manufacturing Co., Ltd. Winbond Electronics Corp. HennsTouch Solution In Corporated Total
	$ 491,925 491,925 75.10

(ii) Liquidity risk

The contractual maturities of financial liabilities are as follows:

Carrying amount	Contractual cash flows	Within 6 months	6-12 months	1-2 years	2-5 years	More than 5 years - 114,162 - -
$ 280,491 2,722,370 15,221 2,004	241,531 2,722,370 15,221 2,004	241,531 1,745,857 15,221 -	- 28,838 - -	- 179,361 - -	- 654,152 - 2,004
$ 3,020,086	2,981,126	2,002,609	28,838	179,361	656,156	114,162
$ 46,135 1,261,271 15,329 1,712	46,135 1,261,271 15,329 1,712	46,135 343,977 15,329 -	- 118,767 - 521	- 65,733 - -	- 694,787 - 1,191	- 38,007 - -
$ 1,324,447	1,324,447	405,441	119,288	65,733	695,978	38,007

The Company does not expect that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

(iii) Currency risk

1) Risk exposure

The Company's financial assets and financial liabilities exposed to significant currency risk were as follows:

Financial assets Monetary assets USD CNY SGD Finance liabilities	December 31, 2018	December 31, 2018	December 31, 2018	December 31, 2017 Foreign currency Exchange rate (dollars) TWD 145,066 29.76 4,317,164 194,512 4.57 888,920 485 22.26 10,796	December 31, 2017 Foreign currency Exchange rate (dollars) TWD 145,066 29.76 4,317,164 194,512 4.57 888,920 485 22.26 10,796
	Foreign currency	Exchange rate (dollars) 30.72 4.47 22.49	TWD	Foreign currency	Exchange rate (dollars) 29.76 4.57 22.26
	$ 108,129 230,365 153		3,321,723 1,029,732 3,438	145,066 194,512 485

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Monetary assets
USD		9,078	30.72	278,876	5,711	29.76	169,959
EUR		257	35.16	9,036	194	35.57	6,901
JPY		416	0.2800	117	416	0.2600	108
CNY	-		4.47	-	385	4.57	1,759
SGD		662	22.49	14,888	29	22.26	646

2) Sensitivity analysis

The Company's exposure to foreign currency risk arose from cash and cash equivalents, accounts and other receivables, loans and borrowings, accounts payable and other payables that were denominated in foreign currencies. If the NTD against the USD, EUR, CNY and JPY had appreciated (depreciated) by 1%, the Company's net income before tax would have increased (decreased) by $32,416 and $41,811, for the years ended December 31, 2018 and 2017, respectively, with all other variable factors remaining constant. The analysis was performed on the same basis for both periods.

3) Foreign exchange gain and loss on monetary item

Since the Company has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For the years ended December 31, 2018 and 2017, foreign exchange gain (loss) (including realized and unrealized abortions) amounted to $124,785 thousand and $336,168 thousand, respectively.

(iv) Interest rate risk analysis

Please refer to the note on liquidity risk management for the interest rate exposure of the Company's financial assets and liabilities.

If the interest rate had increased or decreased by 0.25%, the Company’s net income after tax would have increased or decreased by $7,249 thousand and $7,451 thousand for the years ended December 31, 2018 and 2017, respectively, with all other variable factors remaining constant.

Since there were no loan for the year ended 2018 and 2017, the changes of interest do not have significant impact on the Company.

(v) Fair value information
1) Categories and fair value of financial instruments

To provide disclosure information, the Company classifies the measurement of fair value based on fair value hierarchy which reflects the significance of the inputs during the measurement. The Company categorizes fair value into the following levels:

a) Level 1

Level 1 inputs are quoted prices in active markets for identical financial instruments. An active market is a market in which all the following conditions exist:

i) The items traded within the market are homogeneous.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

ii) Willing buyers and sellers can normally be found at any time.

iii) Prices are available to the public.

b) Level 2

Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly (i.e., prices) or indirectly (i.e. derived from prices).

c) Level 3

Level 3 inputs are valuation parameters which are not based on the information available in the market or the quoted price from the counter party. For example, historical volatility used in option pricing models is an unobservable input since it cannot represents the expected value of future volatility of the entire market participants.

The fair value of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income (available for sale financial assets) is measured on a recurring basis. The carrying amount and fair value of the Company’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and for equity investments that has no quoted prices in the active markets and whose fair value cannot be reliably measured, disclosure of fair value information is not required:

Financial assets at fair value through profit or loss Designation as financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Unquoted equity instrument measured at fair value Total		December 31, 2018	December 31, 2018	December 31, 2018	Total 157,454 1,636,961 1,794,415
	Carrying amount $ 157,454 1,636,961 $ 1,794,415		Fair value
		Level 1 34,631 - 34,631	Level 2 114,944 - 114,944	Level 3 7,879 1,636,961 1,644,840

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

	December 31, 2017	December 31, 2017	December 31, 2017	December 31, 2017
Carrying amount $ 42,323 100,350 $ 142,673		Fair	value
	Level 1 42,323 - 42,323	Level 2		Level 3
				- - -

2) Transfer between Level 1 and Level 2

There were no transfer between Level 1 and Level 2 for the year ended December 31, 2018 and 2017.

3) Reconciliation of Level 3 fair values

January 1, 2018 Recognized as profit or loss Recognized as other comprehensive income Ending balance (Beginning balance) December 31, 2017	Fair value through profit or loss	Total 2,601,057 (1,716) (954,501)
	Designation as at fair value through profit or loss
		1,644,840
	$ - -	-

Total gains or losses mentioned above were recognized in other gains and losses or unrealized gains and losses from financial assets fair value through other comprehensive income.

4) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

Financial assets designated as financial assets measured at fair value through profit or losses, equity investments and financial assets measured at fair value through other comprehensive income are categorized into Level 3.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

The equity investments which are lack of active market and categorized into Level 3 have numerous significant unobservable inputs. The significant unobservable inputs of equity investments without active market are independent between each other. Hence, there is no correlation between each significant unobservable inputs.

Quantified information of significant unobservable inputs was as follows:

Item Financial asset at fair value through profit or loss－ equity investments without an active market Financial asset at fair value through profit or loss－ equity investments without an active market Financial assets at fair value through other comprehensive income－equity investments without an active market	Valuation technique Comparable Company Net asset value method Comparable Company	Significant unobservable inputs ‧Price Book Ratio (January 1, 2018 was 1.28 ,and December 31, 2018 was 1.22) ‧Lack of market liquidity discount ( January 1, 2018 and December 31, 2018 are 17.50%) ‧Lack of market liquidity discount (both of January 1, 2018 and December 31, 2018 were 17.5%) ‧controlling discount (both of January 1, 2018 and December 31, 2018 are 22.48%) ‧Price Book Ratio (January 1, 2018 was 1.72 and December 31, 2018 was 0.97) ‧Lack of market liquidity discount (January 1, 2018 was 17.50% and December 31, 2018 was 23.90%%)	Inter-relationship between significant unobservable inputs and fair value measurement
			‧ The higher the multiplier growth rate, the higher the fair value ‧ Lack of market liquidity. The higher the discount, the lower the fair value ‧ Lack of market liquidity. ‧ The higher the discount, the lower the fair value ‧ The higher the controlling discount, the lower the fair value ‧The higher the multiplier growth rate, the higher the fair value ‧Lack of market liquidity. The higher the discount, the lower the fair value

5) Sensitivity and reasonableness of Level 3 fair value

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

While under different models or using different parameters may lead to different results, fair value measurement for financial instruments is reasonable.

The following tables shows the valuation impacts changes in input parameters on Level 3 financial instruments:

financial instruments:
December 31, 2018 Financial asset at fair value through profit or loss Equity investments without an active market Equity investments without an active market Equity investments without an active market Financial assets at fair value through other comprehensive income Equity investments without an active market Equity investments without an active market	Input	Assumptions	Fair Value through Profit and Loss		Fair value through other comprehensive income
			Favourable	Unfavourable	Favourable	Unfavourable
	Liquidity discount Controlling discount Price Book Ratio Liquidity discount Price Book Ratio	10% 10% 10% 10% 10%	144 82 505 - -	(144) - (82) - (505) - - 215,107 - 163,696		- - - (215,107) (163,696)

6) Estimated fair value of financial instruments not carried at fair value
a) Fair value information

The Company’s financial instruments that are not measured at fair value include cash and cash equivalents, note receivables, account receivables, other receivables, refundable deposits, note payables, account payables, other payables, guarantee deposits and part of other financial assets. Because their book value is reasonably approximated to fair value, the Company does not disclose their fair value.

b) Valuation techniques

The methods and assumptions that the Company used in estimating the financial instruments not measured at fair value are as follows:

Since the maturity date is close and the future receipt and reimbursement price is similar to the book value, the fair value of cash and cash equivalents, receivables, other receivables, payables and other payables are measured at book value at the reporting date.

(z) Financial risk management
(i) Overview

The Company is exposed to the following risks arising from financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

This note discloses information about the Company’s exposure to the aforementioned risks, and its goals, policies, and procedures regarding the measurement and management of these risks.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(ii) Risk management framework

The Company's financial risk management policies are established to manage the exchange rate risks, interest rate risks, credit risks and liquidity risks related to operating activities. To reduce the related financial risk, the Company dedicated to identify, analyze and avoid the uncertainty of the market, hoping to reduce the potential unfavorable impact on the Company’s financial performance caused by the changes of the market. The important financial activities of the Company were reviewed by the board of directors and internal control systems. The Company complies strictly with the financial procedure related to the overall financial risk management and the distinction between responsibility and accountability.

(iii) Credit risk

1)Notes receivable and accounts receivable

Credit risk is the risk that a Company company will incur financial losses due to the inability of customers or counterparties of financial instruments to perform its contractual obligations. The Company is required to conduct management and credit risk analysis for each of its new customers before the terms and conditions of the contract and delivery are set in accordance with the internal credit policy. The internal risk control system assesses the credit quality of customers by considering their financial status, past experiences and other factors. The main credit risk derives from cash and cash equivalents, derivative financial instruments, deposits in banks and in financial institutions. Furthermore, credit risk may derives from customers, including unreceived receivables and committed transaction.

2) Guarantees

According to the Company’s policy, the Company can only provide financial guarantees to its subsidiary. As of December 31, 2018 and 2017, the Company provided endorsement guarantee amounted to $0 and $1,187,075, respectively.

(iv) Liquidity risk

Liquidity risk is the risk that the Company cannot pay cash or deliver other financial assets to settle financial liabilities or meet its obligations.

The Company manages and maintains sufficient cash and cash equivalents to support the Company’s operations and mitigate the effects of fluctuations on cash flows. The management supervises the utilization of bank financing quotas and ensures the compliance of loan terms.

As of December 31, 2018 and 2017, the unutilized short-term line of financing of the Company were $2,205,627 and $2,177,799, respectively.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, and optimize investment returns.

1) Currency risk

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

The Company is a multinational institution and therefore exposes to currency risk deriving from many different currencies, mainly from USD and RMB. The relevant currency risk stems from future commercial transactions, recognized assets and liabilities, and net investments in foreign operating agencies.

2) Interest rate risk

The short-term loans of the Company are debts with floating interest rates. Therefore, changes in market interest rates will lead to changes in the interest rate of short-term loans, resulting in fluctuations of future cash flows.

3) Other market price risk

The Company invests listed equity securities and therefore exposes to equity price risk. This equity investment is not held for trading but for strategic purposes. Hence, the Company does not trade these investments frequently. The Company management controls the related risks by holding different risk portfolios.

(aa) Capital management

The Company manages its capital to ensure that the Company will be able to operate under the premises of going concerns and growth while maximizing the return to shareholders through the optimization of the debt and equity balance.

The Company’s strategy for managing the capital structure is to lay out the plan of product development and expand the market share considering the growth and the magnitude of industry and further developing an integral plan founded on the required capacity, capital outlay, and magnitude of assets in long-term development. Ultimately, considering the risk factors such as the fluctuation of the industry cycle and the life cycle of products, the Company determines the optimal capital structure by estimating the profitability of products, operating profit ratio, and cash flow based on the competitiveness of products. The management of the Company periodically examines the capital structure and contemplates on the potential costs and risks involved while exerting different financial tools. In general, the Company implements prudent strategy of risk management.

tools. In general, the Company implements prudent strategy of	risk management.	risk management.
Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-capital ratio	December 31, 2018 $ 10,493,764 5,802,022		December 31, 2017 6,782,481 5,963,676
	$ 4,691,742		818,805
	$ 7,254,336		6,401,925
		64.68%	12.79%

(ab) Cash flows information of buying property, plant and equipment

The supplementary information of property, plant and equipment bought by the Company are as follows:

Increase in property, plant and equipment

2018 $ 4,678	2017 2,836

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Cash payments

$ 4,678 2,836

(7) Related-party transactions

(a)

(b) Names and relationship with related parties

The related parties which have transactions with the Company during the coverage period of the consolidated financial report are as follows:

Name of related party Relationship with the Company United Integrated Services BVI Subsidiary of the Company Jiangxi United Integrated Services Ltd. Subsidiary of the Company Singapore United Integrated Services Ltd. Subsidiary of the Company Su Yuan (Shanghai) Trading Ltd. Subsidiary of the Company Suzhou Han Tai System Integrated Ltd. Subsidiary of the Company Beijing Han He Tang Medical Instrument Subsidiary of the Company method Ltd. Wholetech System Hitech Limited Investee evaluated under equity method Ablerex Electronics Co., Ltd. Investee evaluated under equity method JG Environmental Technology Co., Ltd Investee evaluated under equity method UniMEMS Manufacturing Co., Ltd. Related party AIRREX Co., Ltd. Related party FU-KUO ENGINEERING CO., Ltd. Related party Huayuan Engineering Co., Ltd. Related party Dentsu Engineering Co., Ltd. Related party Hao Hao Motor Technician Office Related party Sheng Yang Integration Co., Ltd. Related party All directors, supervisors, general managers The main management of the Company and deputy general managers

(c) Significant transactions with related parties
(i) Construction revenue

The construction revenue from related parties were as follows:

Affiliates Associates Other related parties	2018 $ 75,375 - 29	2017 355,401 13,609 -
	$ 75,404	369,010

There is no significant difference between the collection terms of the Company and of the same businesses.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(ii) Construction cost

The amounts of purchase from related parties were as follows:

Affiliates Associates Other related parties	2018 - 20,157 173,087	2017 506 136,165 26,159
	193,244	162,830

There is no significant difference between the terms of payment of the Company and of the same businesses.

(iii) Receivable to related parties

The detail of the Company’s receivable to related parties were as follows:

Account Accounts receivable Dividends receivable Long-term receivables-related party (Principal) Long-term receivables-related party (Interest)	Type of related parties Affiliates Affiliates Affiliates Affiliates	December 31, 2018 $ 66,904 584,938 150,688 67,994	December 31, 2017 16,254 92,275 163,687 64,493
		$ 870,524	336,709

(iv) Payable to related parties

The details of the Company’s payable to related parties were as follows:

Account Accounts payable Notes payable Other payable	Type of related parties Affiliates Associates Other related parties Associates Other related parties	December 31, 2018 $ 27,366 19,224 65,607 38,960 125,964	December 31, 2017 26,751 21,877 28,522 - 147,587
		$ 277,121	224,737

Other payables above includes contract fee disbursements, salaries and interests, etc. Please refer note 12 (c) for further information.

(v) Endorsement

The summary of the company being the association guarantor of the related parties is as follows:

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

(vi) (vii)	Affiliates Leases Name of related party Leases term of the lease Associate 1F., No.1、3, Ln. 7, Baogao Rd., Xindian Dist., New Taipei City 231, Taiwan (R.O.C.) 2017.06.01~ 2019.05.31 Parking Space Rental 2017.06.01~ 2019.05.31 Other related paties No.18, Aly. 2, Ln. 261, Xinghua Rd., Shanhua Dist., Tainan City 741, Taiwan (R.O.C.) 2017.08.01~ 2019.04.30 Finance costs Other related parties－Dentsu Engineering	December 31, 2018 $ -	December 31, 2017 1,187,075
		Rent revenue 2018 2017 $ 4,290 4,290 72 108 194 - $ 4,556 4,398
		2018 $ 4,290 72 194
		$ 4,556
		2018 $ 6,298	2017 6,281

(viii) Property transaction

Due to the capital increase of affiliated companies, the Company has payment of 461 shares amounting to $10,382 on December 31, 2018.

(ix) The Company recognizes unrecoverable loss of $13,726 in September, 2018, due to the suspension of business of other related parties.

(d) Key management personnel transactions

The salaries and bonus for the key management personnel are as follows:

Short-term employee benefits Post-employment benefits (8) Pledged assets	2018 $ 183,622 2,183	2017 125,628 2,041
	$ 185,805	127,669

The carrying values of pledged assets were as follows:

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

Pledged assets Restricted assets (other current assets) Restricted assets (other non-current assets)	Object Required of engineering performance bond Required of engineering performance bond	December 31, 2018 $ 1,700 619 $ 2,319	December 31, 2017 334,060 56 334,116

(9) Commitments and contingencies

(a) As of December 31, 2018 and 2017, the Company's commitments and contingencies were as follows:
(i) As of December 31, 2018 and 2017, guaranteed notes received from construction contractors for performance guarantees or maintenance guarantees amounted to $8,895,380 and $8,220,800, respectively.
(ii) As of December 31, 2018 and 2017, guaranteed notes issued to construction contractors for performance guarantees or maintenance guarantees amounted to $160,776 and $148,337, respectively.
(iii) As of December 31, 2018 and 2017, guaranteed notes issued for bank loans and letters of credits amounted to $400,000 and $400,000, respectively.
(iv) As of December 31, 2018 and 2017, guaranteed letters offered by banks for contract performance guarantees amounted to $8,794 and $338,279, respectively.
(v) As of December 31, 2018 and 2017, the total contract price of contracted construction projects amounted to $56,142,981 and $45,162,940, respectively, and the contract payments received by the Company amounted to $38,135,241 and $39,452,153, respectively.
(vi) As of December 31, 2018 and 2017,the total subcontract price of subcontracted construction projects amounted to $3,330,180 and $812,745, respectively, and the contract payment paid by the Company amounted to $2,326,278 and $519,882, respectively.
(vii) As of December 31, 2018 and 2017,the outstanding letters of credits issued by the Company for purchasing equipment amounted to $212,332 and $0, respectively.
(b) Significant liability

Among the construction contracts entered by the Company, 225 of them have not been completed. As of December 31, 2018, the following table presents the main contracts (including contracts with total prices over 100 million) of the Company:

Proprietor	Date of project	Description	Warranty service period	Restrictions	Note
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2010/05/03~ 2011/12/31	TSMC F14 N65 BK CODE 103 new machines engineering	One year	Delay penalty：one thousandth of total contract price per day	2

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2011/11/28~ 2012/07/01	TSMC F12 P6 C/R PACKAGE STAGE-1	One year	Delay penalty：one thousandth of total contract price per day	1
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2012/05/14~ 2013/07/31	TSMC F6 BUMPPING engineering	One year	Delay penalty：one thousandth of total contract price per day	1
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2012/05/25~ 2013/10/31	F12 P6 CCD EXPANSION-EDC2 F12 P4 SITE	One year	Delay penalty：one thousandth of total contract price per day	1
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2012/10/01~ 2013/10/31	TSMC F14 P5 MEP PACKAGE	One year	Delay penalty：one thousandth of total contract price per day	1
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2013/01/25~ 2014/12/31	TSMC F4 HOOK UP工程 EXHAUST, CAP, FILTER	One year	Delay penalty：one thousandth of total contract price per day	1
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2013/11/20~ 2014/12/31	TSMC F14 P6 POWER HOOK UP FACTORY ADDITIONAL ENGINEERING	One year	Delay penalty：one thousandth of total contract price per day	1
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2014/01/20~ 2014/12/31	TSMC F14 OFFIC TESTING C/R AND UTILITY PACKAGE	One year	Delay penalty：one thousandth of total contract price per day	2
UNITED INTEGRATED SERVICES CO., Ltd.( Singapore )	2014/06/23~ 2014/12/31	SINGAPORE AU L4B POWER MTM PROJECT	One year	Delay penalty：one thousandth of total contract price per day	1
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2014/10/01~ 2015/12/31	TSMC F12 P7 MEP PACKAGE	One year	Delay penalty：one thousandth of total contract price per day	2
ADVANCED SEMICONDUCTOR ENGINEERING, INC. ASE	2015/02/11~ 2015/12/31	New construction of K22 plane construction factory in ASE by Kaohsiung Plant	One year	Delay penalty：one thousandth of total contract price per day	2
MICRON MEMORY TAIWAN CO., Ltd.	2015/08/03~ 2016/03/01	Micron’s new construction of 25%+50%	One year	Delay penalty：one thousandth of total contract price per day	2
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2015/09/25~ 2016/07/31	TSMC BP03 MEP+CR PACKAGE	One year	Delay penalty：one thousandth of total contract price per day	2
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2015/09/20~ 2016/07/31	TSMC F15 P5 MEP PACKAGE (STAGE 1)	One year	Delay penalty：one thousandth of total contract price per day	2
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2015/09/20~ 2016/07/31	TSMC F15 P5 MEP PCW PACKAGE	One year	Delay penalty：one thousandth of total contract price per day	2

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2015/11/01~ 2016/12/31	TSMC F15 P5 CLEAN ROOM PACAKGE	One year	Delay penalty：one thousandth of total contract price per day	2
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2016/02/20~ 2016/12/31	TSMC F15 P6 CR PACKAGE (STAGE 1)	One year	Delay penalty：one thousandth of total contract price per day	2
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2016/03/01~ 2017/03/01	TSMC F15 P6 MEP PACKAGE STAGE 1 (EQUIPMENT/LABOR/MAT ERIAL)	One year	Delay penalty：one thousandth of total contract price per day	2
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2016/03/01~ 2017/12/31	TSMC F15 P5 MEP PACKAGE (STAGE 1) (UPS)	One year	Delay penalty：one thousandth of total contract price per day	2
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2016/10/01~ 2018/12/31	TSMC F15 P6 CR SCAD TEM addition engineering	One year	Delay penalty：one thousandth of total contract price per day	2
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2016/11/01~ 2017/12/31	TSMC by Nanjing CHINA CLEANROOM PACKAGE EQ (STAGE 1)	One year	Delay penalty：one thousandth of total contract price per day	2
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2017/03/01~ 2018/06/30	TSMC F 12 P4 EUV MEP+CR engineering	One year	Delay penalty：one thousandth of total contract price per day	2
UNITED INTEGRATED SERVICES CO., Ltd.( Singapore )	2017/10/31~ 2018/12/31	SSMC Expansion project	One year	Delay penalty：one thousandth of total contract price per day	1
MICRON MEMORY TAIWAN CO., Ltd.	2017/11/13~ 2018/06/30	new construction of F500 Micron-TCP plant	One year	Delay penalty：one thousandth of total contract price per day	1
Systems on silicon manufacturing company Pte. Ltd.	2018/02/12~ 2018/06/30	new construction of SSMC factory - equipment procurement	One year	Delay penalty：one thousandth of total contract price per day	1
MICRON MEMORY TAIWAN CO., Ltd.	2018/02/14~ 2019/03/01	new construction of Micron F11 CUB 1B	One year	Delay penalty：one thousandth of total contract price per day
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2018/04/13~ 2018/12/31	TSMC F15P7 C/R PROJECT A	One year	Delay penalty：one thousandth of total contract price per day	1
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2018/04/30~ 2019/02/28	TSMC F18 P1 MEP-A PACKAGE	One year	Delay penalty：one thousandth of total contract price per day
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2018/04/30~ 2019/02/28	TSMC F18 P1 MEP-B PACKAGE	One year	Delay penalty：one thousandth of total contract price per day
TAIWAN SEMICONDUCTOR	2018/04/30~201 9/02/28	TSMC F18 P1 FIRE PACKAGE	One year	Delay penalty：one thousandth of total

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

MANUFACTURING COMPANY LIMITED				contract price per day
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2018/05/03~ 2019/04/30	TSMC F18 P1 C/R	One year	Delay penalty：one thousandth of total contract price per day
Yangtze River Storage Technology	2018/06/04~ 2018/09/30	Yangtze River Storage National Storage Base (Phase I) Industrial equipment pipeline of Import equipment	One year	Delay penalty：one thousandth of total contract price per day	1
MICRON MEMORY TAIWAN CO., Ltd.	2018/04/07~ 2018/12/31	Build up for MTB warehouse	One year	Delay penalty：one thousandth of total contract price per day
ASE TEST, INC.	2018/07/17~ 2019/07/31	A2 E100 expansion project	One year	Delay penalty：one thousandth of total contract price per day
ASE TEST, INC.	2018/07/01~ 2018/09/03	K22 6F TEST	One year	Delay penalty：one thousandth of total contract price per day	2
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2018/07/27~ 2018/12/31	TSMC-F18P1 EBO	One year	Delay penalty：one thousandth of total contract price per day	1
KOPIN TAIWAN CORPATION	2018/08/24~ 2019/03/31	New construction of TURN-KEY	One year	Delay penalty：one thousandth of total contract price per day
AU Optronics Corporation	2018/12/04~ 2019/05/31	L3DIJP Project	One year	Delay penalty：one thousandth of total contract price per day
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2018/12/15~ 2019/12/31	TSMC F18 P2 MEP-A PACKAGE	One year	Delay penalty：one thousandth of total contract price per day
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2018/12/15~ 2019/12/31	TSMC F18 P2 MEP-B PACKAGE	One year	Delay penalty：one thousandth of total contract price per day
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2018/12/15~ 2019/12/31	TSMC F18 P2 FIRE PACKAGE	One year	Delay penalty：one thousandth of total contract price per day
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2018/12/15~ 2019/12/31	TSMC F18 P2 PCW PACKAGE	One year	Delay penalty：one thousandth of total contract price per day
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED	2018/12/20~ 2019/12/31	TSMC F18 P2 C/R PACKAGE	One year	Delay penalty：one thousandth of total contract price per day

Note 1: The contract is unable to settle for the final acceptance is not completed by the owners. Hence, the Company does not have further responsibility and penalty.

Note 2: The additional project has not been completed, but the date of projects is same as the period

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

of main contract.

(10) Losses due to major disasters: None.

(11) Subsequent events: None.

(12) Other

(a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

follows:
By function By nature	Years ended December 31 2018			Years ended December 31 2017
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits
Salary	466,417	483,134	949,551	512,971	349,677	862,648
Labor and health insurance	24,826	27,322	52,148	33,864	24,284	58,148
Pension	16,357	18,001	34,358	22,257	15,672	37,929
Remuneration of directors	-	30,180	30,180	-	18,180	18,180
Others	5,550	5,709	11,259	4,624	3,093	7,717
Depreciation	1,133	10,949	12,082	1,441	12,950	14,391
Amortization	1,234	675	1,909	3,895	878	4,773

The Company has 690 and 716 employees on December 31, 2018 and 2017, respectively. Among them, the number of board directors that are not employees at the same time is 5 and 2, respectively.

(b) Some of the directors of the company were convicted by the Taiwan High Court (hereinafter referred to as the "High Court") of violating the provisions of the Securities and Exchange Act. Kindly find Judgment contents which impact the Company's activities are as follows:
(i) The primary judgment contents

Director Chen, former director Wang and other involved parties were prosecuted by Taipei District Prosecutor’s Office on June 5, 2002, as illegally transferred Company’s fund more than $1.3 billion to Dentsu Engineering Co., Ltd. (hereinafter referred to as Dentsu Corporation), Fuguo Engineering Co., Ltd., and Huayuan Engineering Co., Ltd, then transferred the fund to themselves. In accordance with the facts, proofs and explanation provided by the defendants, the primary judgment contents given by Taipei District Prosecutor’s Office on August,31, 2015 (Finance Criminal Procedure Code No. 17 Act 2013) as in: he court accepted the facts that part of the payment out of NTD 1.3 billion was paid for relevant project costs and wages incurred, and the rest was paid by Dentsu Corporation on behalf of the Company to settle urgent additional expenses, then the Company refunded the abovementioned amount. And there is no evidence to prove that the defendants committed embezzlement and breach of trust, therefore, the Court believed the defendants did not commit such crimes.However, the Court also believed that Dentsu Corporation shall be a relative party of the Company, but the notes of the financial statements did not disclose the abovementioned fact that Dentsu Corporation paid expenses on behalf of the Company, therefore, the defendants were convicted guilty by the Court of providing false financial statements. Both defendants and the prosecutor disagreed with the judgment and appealed to the High Court. The appeal was rejected in High Court,

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

due to the former Director Wang is deceased (Taiwan High Court Case of No. 2015 Gim Sun Zon Su 40). On July 25 2017, the High Court convicted the defendants not guilty of embezzlement and breach of trust, because lack of evidence, the prosecutor accepted the judgment and stopped appealing. However, regarding the defendants were convicted guilty by the High Court of providing false financial statement, two of them were in probation without appeal. Director Chen has appealed to the third instance and is still under processing by the High Court. The second instance was revoked by the High Court on July 25, 2017 (Supreme Court Civil Judgment of No. 2017 Tai-Shang-Tzu 3336).

(ii) Company Risk Response Strategy

The Company, set up by former Director Wang, always maintains its good performance and profitability amongst all in the same industries and distribute almost all of the profit to Directors. Former Director Wang had shown his loyalty to the Company without selling any shares since the Company had been listed. Director Chen has been assisting in the Company for decades without hesitation. The massive contribution to the Company given by them prolongs its profitability and stability. In accordance with the judgment of the first and second instance, the management is pleased to know the defendants had been found not guilty of embezzlement and breach of trust. The management is sorry to know about the judgment of false financial statement of the second instance. However, because the Supreme Court has cancelled the appeal of the second instance submitted by Director Chen and the management is waiting for the final judgment.

(iii) Operational Impact

The abovementioned judgment does not have any operational impact to the Company. The Company acquired support from various aspects, e.g. the staffs,buyers and suppliers. The project operation and financial status of the Company is stable and on growing.

(iv) Statement of Supplementary Civil Action to the Defendants

Securities and Futures Investors Protection Centre (hereinafter referred to as the SFIPC) filed a letter on September 27, 2013, requesting Supervisor of the Company to file lawsuit against the defendants seeking for compensation. The Company could not conclude any damages or evaluate the result of civil action before the final judgment. Supervisors of the Company decided to pursue the Civil and Criminal Litigation (hereinafter referred to as the CCL) against defendants under the strong will of the SFIPC on October 29, 2013, seeking for compensation.

The CCL was transferred to civil court after the judgment of Taipei District Court on August 31, 2015 (Taipei District Court Case of No. 2013 Gim Zon Su 17). The civil court rejected the lawsuit because the defendants had been found not guilty of embezzlement and breach of trust as per judgment given by Taipei District Court on March 01, 2016, under Taipei District Court Case of No. 2015 Gim 62. In the 10 days period of counter-appeal, Supervisor of the Company accepted the abovementioned judgment given which the defendants had been found not guilty of embezzlement and breach of trust, base on facts, proofs and relevant rules and regulations.

(v) The SFIPC advocated to remove the defendants’ directorship on December 05, 2013.

As the abovementioned, the former Director Wang had been running the Company stably, profitably, and in good will. Except the content of the indictment, the SFIPC could not prove the defendants the incompatibility as a Director. In the interim shareholders’ meeting on

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

February 06, 2014, most of the shareholders agreed and accepted the defendants work continuously as Directors. In the annual shareholders’ meeting in 2015, the defendants obtained most of the supports from shareholders. Taipei District Court declared that SFIPC lost in the lawsuit on June 18, 2015, but appealed. Due to the former Director Wang’s decease, the SFIPC withdraw the appeal, and amended the lawsuit to request the dismissal of directorship of the two defendants from June 16, 2015, to June 15, 2018. Taipei District Court rejected the lawsuit that amended by the SFIPC at the beginning of February, 2016, in the second instance. The SFIPC appealed the third instance on March 28, 2016, and the Supreme Court dismissed the second instance result on September 28, 2018 (Supreme Court No. 2658 Act 2017), and revision is being processed. The lawsuit does not impact on any operation and financial status of the Company.

(vi) The SFIPC represented the investors to file a lawsuit to the Company, Directors, former Board of Directors and etc., seeking for compensation of NTD 243 million. As abovementioned, the Company is well developed, stable and profitable on a long term basis. No false information in finance while running operational cost in accordance with per defendants stated. The final judgment result of Director Chen is still pending, the Company reserves the right to purse any legal action. The lawsuit does not impact to the normal operation of the Company.
(vii) The SFIPC requested defendants responsible for damages while illegally transferred NTD1.3 billion and seeking for compensation to the Company. The High Court convicted the defendants no guilty in breach and transferred the lawsuit to the Subordinate Court simultaneously. Subordinate Court convicted the defendants no guilty in breach and dismissed the SFIPC lawsuit on March 22, 2018.
(c) The Company was requested to make payment of $104,559 to Dentsu Corporation for project cost, and $21,405 for wages to former Director Wang from January 2001 to April 2012, in accordance with the judgment of Subordinate Court on September 2, 2014.

The Company had accrued the project cost and wages of the third quarter in 2014, into annual financial statement (recognized as construction cost and management expenses separately) as the judgment stated. The Company prepared interest estimation of $27,921 as of December 31, 2018. (Please refer to Note 7)

The Company does not process any payment of product cost, wages and interest as abovementioned as of the reporting date.

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(13) Other disclosures

(a) Information on significant transactions:

The following is the information on significant transactions required by the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" for the Company for the years ended December 31, 2018:

(i) Loans extended to other parties:

Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:	Loans extended to other parties:
													Unit: thousand dollars
No.	Name of lender	Name of borrower	Financial statement account	Related party	Highest balance of financing to other parties during the year (Note 2)	Ending balance (Note 2)	Amount actually drawn	Range of interest rates t	Purposes of fund financing for he borrowers	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral		Financing limit for each borrowing company (Note 2)	Maximum financing limit for the lender (Note 2)
													Item	Value
0	UNITED INTEGRATED SERVICES CO., Ltd.	UNITED INTEGRATED SERVICES CO. LTD.( SINGAP ORE)	Other receivables	Yes	122,860	122,860	-	3%	2	-	Operating capital	-		-	1,450,867	2,901,734
0	UNITED INTEGRATED SERVICES CO., Ltd.	UNITED INTEGRATED SERVICES CO., Ltd.( JIANGXI)	Other receivables	Yes	180,411	172,172	150,756 (Note 4)	3%	2	-	Operating capital	-	-	-	1,450,867	2,901,734

Note 1: The maximum amount and the ending balance of the current period are the amount, not the actual amount of the movement.

Note 2: The total amount of the Company's externally handled funds and loans does not exceed 40% of the Company's net worth, and the loan for a single business fund is not more than 20% of the Company's net worth. Note 3: The capital loan and nature are as follows:

There are business contacts for 1

The need for short-term financing is 2

Note 4: The transactions within the Company were eliminated in the consolidated financial statements.

(ii) Guarantees and endorsements for other parties:

		Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for one party (Note 1)	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged on guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsement / guarantees to third parties on behalf of subsidiary	Subsidiary endorsement / guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of company in Mainland China
		Name	Relationship with the Company (Note 2)
0	Su Yuan Trading (Shanghai) Co., Ltd.		2	2,901,734	290,560	-	-	-	- %	4,352,602	Y	N	Y
0	UNITED INTEGRA TED SERVICE S CO., Ltd.	UNITED INTEGRATED SERVICES CO., Ltd.( JIANGXI)	2	2,901,734	540,657	-	-	-	- %	4,352,602	Y	N	Y

Note 1: The aggregate amount of endorsements/guarantees that the Company as a whole is permitted to make shall not exceed 60% of the Company's net worth, and the aggregate amount of endorsements/guarantees for any single entity shall not exceed 40% of the Company's net worth. The remaining can not exceed 10% of the Company's net worth.

Note 2: The relationship between the guarantee and the guarantor are as follows:

(1) Transactions between the companies.
(2) The Company directly or indirectly holds more than 50% voting right.
(3) When other companies directly or indirectly hold more than 50% voting rights of the Company.
(4) The Company directly or indirectly holds more than 90% voting right.
(5) A company that is mutually protected under contractual requirements based on the needs of the contractor.

(6) A company that is endorsed by all the contributing shareholders in accordance with their shareholding ratio due to joint investment relationship.

(7) Under the Consumer Protection Act, performance guarantees for pre-sale contracts for companies in the same industry.

(iii) Securities held at the end of the period (excluding investment in subsidiaries, associates and joint ventures):

				Unit: thousand dollars/thousand of shares	Unit: thousand dollars/thousand of shares	Unit: thousand dollars/thousand of shares	Unit: thousand dollars/thousand of shares	Unit: thousand dollars/thousand of shares
Name of holder	Category and name of security	Relationship with company	Account title	Ending balance				Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company 〃〃〃〃	stock－Nanya Technology Corporation stock－Taichung Commercial Bank Co., Ltd. stock－Acer stock－Chunghwa Telecom Co., Ltd stock－Powerchip Technology Corporation totals	- - - - -	Financial assets at fair value through profit or loss - current 〃〃〃〃	63 95 1,400 26 8,128 -	3,490 973 27,230 2,938 114,944	- % - % 0.05 % - % 0.34 % - %	3,490 973 27,230 2,938 114,944 -
					149,575

(Continued)

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

==> picture [554 x 206] intentionally omitted <==

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

〃 stock－Taiwan - Financial assets at fair value 2,495 5,040 9.65 % 5,040
Electronic Data through profit or
Processing Corp. loss–non- current
〃 stock－Pu-Xun Venture - 〃 723 2,839 1.67 % 2,839
Capital
〃 stock－Aetas - 〃 91 - 0.30 % -
Technology Inc.
〃 stock－Zowie - 〃 15 - 0.23 % -
Technology Corporation
〃 stock－Glandtex - 〃 1 - 0.05 % -
Corporation
〃 stock－Promos - 〃 2 - - % -
Technologies Inc.
totals - 7,879 - % -
〃 stock－Jiangxi - Financial assets at fair value Note 1 1,636,961 19.80 % 1,636,961
Construction through other
comprehensive
income –non- current
----- End of picture text -----

Note 1: Registered with the amount of capital contribution.

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

					Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars
Name of party	Counter-party	Nature of relationship	Ending balance	Turnover rate (Note 1)	Overdue amount		Amounts received in subsequent period	Allowances for bad debts
					Amount	Action taken
United Integrated Services Co., Ltd	UNITED INTEGRATED SERVICES CO., Ltd.( JIANGXI)	subsidiary	183,567	-	-	-	1,928	-

Note: The transactions within the Company were eliminated in the consolidated financial statements.

(ix) Trading in derivative instruments: None.
(b) Information on investees:

The following are the information on investees for the years ended December 31, 2018 (excluding information on investees in Mainland China):

									Unit: tho	usand dollars/tho	usand of shares
Name of investor	Name of investee	Location	Main businesses and products	Origin	al cost	E	nding balanc	e	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2018	December 31, 2017	Shares (thousands)	Percentage of ownership	Carrying value
The Company	ABLEREX ELECTRONICS CO., LTD.	Taiwan	Sale and purchase of UPS	189,852	189,851	14,987	33.30%	507,217	74,916	24,364
〃	WHOLETECH SYSTEM HITECH LIMITED	Taiwan	Gas pipeline engineering	61,367	61,367	9,946	13.61%	199,792	259,884	35,379
〃	UNITED INFORMATION SYSTEMS (BVI) CO., Ltd.	BVI	Investment activities	567,643	567,643	17,698	100.00%	670,166	29,654	29,654	Note 2
〃	UNITED INTEGRATED SERVICES CO., Ltd.( Singapore )	Singapore	Clean room system construction	34,040	34,040	-	100.00%	189,750	24,440	24,440	Note 2
〃	UNIMEMS MANUFACTURING CO., Ltd.	Taiwan	Machinery and Equipment Manufacturing	19,000	19,000	2,095	19.49%	-	-	-
〃	JG NVIRONMENTAL TECHNOLOGY CO., Ltd.	Taiwan	Machinery and Equipment Manufacturing	47,874	37,491	3,488	18.92%	49,805	21,958	3,893
WHOLETECH SYSTEM HITECH LIMITED	WHOLETECH SYSTEM HITECH LIMITED	BVI	Investment activities	170,884	170,884	5,400	100.00%	199,036	66,148	66,148
〃	WHOLETECH SYSTEM HITECH INC.	Mauritius	Investment activities	110,559	110,559	3,500	100.00%	162,755	18,714	18,714
WHOLETECH SYSTEM HITECH LIMITED	WHOLETECH SYSTEM HITECH(S) PTE. Ltd.	Singapore	Construction of water, gas pipelines and sewage systems, gas production, distribution of fuel gas main systems, etc.	30,865	30,865	200	100.00%	49,987	4,027	4,027

(Continued)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

WHOLETECH SYSTEM HITECH INC.	WHOLETECH GROUP INTERNATIONAL TRADING LIMITED	Mauritius	Investment activities	110,559	110,559	3,500	100.00%	162,755	18,714	18,714
WHOLETECH SYSTEM HITECH(S) PTE. LTD.	WHOLETECH SYSTEM HITECH（M）SDN. BHD.	Malaysia	Construction of water, gas pipelines and sewage systems, gas production, distribution of fuel gas main systems, etc.	855	855	100	100.00%	(4,970)	(1,268)	(1,268)
ABLEREX ELECTRONICS CO.,LTD.	Ablerex Electronics (Samoa) Corporation Limited	Samoa	Holding company	217,445	217,445	6,635	100.00%	491,877	(46,676)	(46,924)
〃	Joint Rewards Trading Corporation	B.V.I.	Provide management services	104	104	3	100.00%	77	(38)	(38)
〃	Ablerex Corporation	USA	Sales of uninterruptible power equipment and systems, solar equipment and related systems, etc.	8,303	8,303	250	100.00%	52,436	1,850	1,851
〃	Ablerex International Corporation Limited	Hong Kong	Sales of uninterruptible power equipment and systems, solar equipment and related systems, etc.	43	43	10	100.00%	30,350	487	487
〃	Ablerex Electronics (S) Pte Limited	Singapore	Sales of uninterruptible power equipment and systems, solar equipment and related systems, etc.	48,008	48,008	2,141	100.00%	84,747	7,617	5,584
〃	Ablerex Electronics U.K. Limited	UK	Holding company	4,674	4,674	100	100.00%	5,826	3,362	2,716
〃	Ablerex JP	Japan	Sales of uninterruptible power equipment and systems, solar equipment and related systems, etc.	9,253	9,253	3	100.00%	4,826	(81)	(112)
Ablerex Samoa	Ablerex Overseas	Hong Kong	Holding company	217,445	217,445	6,635	100.00%	496,073	(46,642)	-
Ablerex UK	Ablerex IT	Italia	Sales of uninterruptible power equipment and systems, solar equipment and related systems, etc.	4,674	4,674	100	100.00%	5,826	3,362	-
Ablerex SG	Ablerex TH	Thailand	Sales of uninterruptible power equipment and systems, solar equipment and related systems, etc.	256	256	280	70.00%	1,125	787	-
Ablerex USA	Ablerex LATAM	USA	Sales of uninterruptible power equipment and systems, solar equipment and related systems, etc.	15,358	-	4	100.00%	13,624	100	(1,702)
JG ENVIRONMENTAL TECHNOLOGY CO., Ltd.	ASIA INTELLIGENCEINVESTME NTSLIMITED	BVI	Investment activities	30,282	15,524	-	100.00%	27,748	3,702	3,702

Note 1: The investment benefits of the current period are recognized by the investment company.

Note 2: Reconciliated in the preparation of consolidated report.

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

					Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars	Unit: thousand dollars
Name of investee	Main businesse and products	Tota amount of paid-in capital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2018	Investment flow		Accumulated outflow of investment from Taiwan as of December 31, 2018	Net income (losses) of the investee	Percentage of ownership	Investment income (loss) (note 2)	Book value as of December 31, 2018	Accumulated remittance of earnings in current period
					Outflow	Inflow
Su Yuan Trading (Shanghai) Co., Ltd.	Semiconductor, clean room and electromechanical	NT$ 3 1,000	(2)	NT$ 34,495 USD 1,000	-	-	NT$ 34,495 USD 1,000	35,333	100.00%	NT$ 35,333	NT$ 257,219	-
UNITED INTEGRATED SERVICES CO., Ltd.( JIANGXI)	Electromechanical business and pipeline engineering business	NT$ 453 100,000	(1)	NT$ 338,573 RMB 100,000	-	-	NT$ 338,573 RMB 75,000	506,414	75.00%	NT$ 379,810	NT$ 697,287	494,990 RMB 90,112
Suzhou Hantai System Integration Co., Ltd.	Construction hardware , materials production and sales	NT$ 381 12,000	(2)	NT$ 381,660 USD 12,000	-	-	NT$ 381,660 USD 12,000	(8,359)	100.00%	NT$ (8,359)	NT$ 308,737	-
iangxi Construction Engineering Group Co., Ltd.	Various types of building construction	NT$ 5,113,1 1,043,500	(1)	NT$ 1,008,212 RMB 1,043,500	-	-	NT$ 1,008,212 RMB 206,000	-	19.80%	NT$ -	NT$ 1,636,961	NT$ 1,131,076 RMB -
Beijing Hanhe Tang Medical Devices Co., Ltd.	Distribution agency for medical equipment, import and export of goods, after-sales service	NT$ 3 1,000	(2)	NT$ 30,187 USD 1,000	-	-	NT$ 30,187 USD 1,000	(1,245)	100.00%	NT$ (1,245)	NT$ 6,315	-

Note 1: Investment method

(1) Investing in the mainland through companies in another country

(2) Establishing a company through the investment in the third region to reinvest in the mainland.

(ii) Limitation on investment in Mainland China:

Company name	Accumulated investment in Mainland China as of December 31, 2018	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
United Integrated Services Co., Ltd.	1,798,283 (USD59,165)	1,825,134 (USD59,165)	4,352,602

(iii) Significant transactions with investees in Mainland China:

The details of significant transactions invested directly or indirectly in Mainland China in 2018 ( the transactions were written off in the consolidated financial statements.) is provided in the description of ''Related information on material transactions'' and ''The business relationship between the parent and the subsidiaries and significant transactions between them.''

(14) Segment information:

Please refer to the consolidated financial statement for the year ended 2018.

(Continued)

United Integrated Services Co., LTD

Statement of cash and cash equivalents

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Item Cash in stock and foreign currency Cash in banks	Description Cash Petty cash Demand deposits Time deposits Foreign currency deposits (Note)	Amount $ 2,335 870 3,205 1,134,176 1,212,560 3,452,081 5,798,817 $ 5,802,022

Note: Including demand deposits US$6,349thousand and time deposits US$101,000 thousand @$30.72, demand deposits JPY$554 thousand @$0.28 demand deposits RMB$1,270and time deposits RMB$32,800 thousand @$4.47, demand deposits SGD$104 thousand @$22.49.

United Integrated Services Co., LTD

－ Statement of financial assets measured at fair value through profit or loss current

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Shares or units	Interestr ate (%)		Acquisition cost 19,928 890 94,045 3,033 175,345	Fair	value Total amount 3,490 973 27,230 2,938 114,944 - -	Fair value changes is attributable to the changes in credit risk - - - - - - -
				Unit price 55.00 10.20 19.45 113.00 14.14
63 $ - 93 - 1,400 - 26 - 8,128 -	- - - - -
			293,241 (143,666)
		$ 149,575			149,575	-

United Integrated Services Co., LTD

－ Statement of changes in financial assets measured at fair value through profit or loss non-current

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Beginning Balance Shares or units Fair value 2,303 $ 28,249 903 9,031 - (27,685) $ 9,595	Addition Shares or units Amount 192 826 - - - - 826	Decrease Shares or units Amount - - 181 1,806 - 736 2,542	Decrease Shares or units Amount - - 181 1,806 - 736 2,542	Ending Balance Shares or units Fair value 2,495 29,075 722 7,225 - (28,421) 7,879	Ending Balance Shares or units Fair value 2,495 29,075 722 7,225 - (28,421) 7,879
	Shares or units 192 - -	Shares or units - 181 -		Shares or units 2,495 722 -

$ 9,595			2,542		7,879

United Integrated Services Co., LTD

－ Statement of available-for-sale financial assets non-current

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Beginning Balance Shares or units Fair value - $ 1,008,212 - 1,583,250 $ 2,591,462	Beginning Balance Shares or units Fair value - $ 1,008,212 - 1,583,250 $ 2,591,462	Addition Shares or units Amount - - - - -	Decrease Shares or units Amount - - - 954,501 954,501	Decrease Shares or units Amount - - - 954,501 954,501	Ending Balance Shares or units Fair value - 1,008,212 - 628,749 1,636,961	Ending Balance Shares or units Fair value - 1,008,212 - 628,749 1,636,961
Shares or units		Shares or units	Shares or units		Shares or units
- -		- -	- -		- -
	$ 2,591,462			954,501		1,636,961

Note 1: Note 2:

United Integrated Services Co., LTD

Statement of notes receivable

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Client name Unrelated Parties: Giga Medical Instrument Ltd. Jilong Enterprise Co., Ltd. Jianye Enterprise Other(The balance of each household is less than 5% of the balance of the subject)	Description Operating Operating Operating Operating	Amount $ 1,137 945 483 470	Note

		$ 3,035

United Integrated Services Co., LTD

Statement of trade receivables

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Client name Related Parties: Su Yuan Trading (Shanghai) Co., Ltd. Beijing Hanhe Tang Medical Devices Co., Ltd. Unrelated Parties: Taiwan Semiconductor Manufacturing Company, Limited Financial Information Service Co., Ltd. ASE TEST, INC Micron Memory Taiwan Micron Technology Taiwan Advanced Semiconductor Engineering, Inc HannStar Display Corporation AU Optronics Corporation Other (The balance of each household is less than 5% of the balance of the subject) Less: Allowance for bad debts	Description Operating Operating Operating Operating Operating Operating Operating Operating Operating Operating Operating	Amount $ 66,113 791	Note

		66,904
		712,645 2,297 20,435 1,417,420 538,738 11,104 17,377 7,034 113,629 2,840,679
		2,907,583 51,007
		$ 2,856,576

United Integrated Services Co., LTD

Statement of changes in Contract Assets and Contract Liabilities

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Contract Assets

Name of Project	Beginning Balance $ 1,899,893 1,825,084 1,920,534 4,180,818 630,971 1,847,170 2,013,568 923,939 1,695,823 20,225,766	Addition Contract cost Gain on Contract 4,432 1,075 6,297 178,431 562 196,699 24,048 1,862 10,228 427,678 23,807 157 15,651 1,555 12,568 153,354 76,028 - 6,936,101 1,374,664	Addition Contract cost Gain on Contract 4,432 1,075 6,297 178,431 562 196,699 24,048 1,862 10,228 427,678 23,807 157 15,651 1,555 12,568 153,354 76,028 - 6,936,101 1,374,664	Decrease Loss on Contract Complete and output - - - 2,009,812 - 2,117,795 - - - - - - - - - 1,089,861 5,990 - 126,989 7,963,553	Decrease Loss on Contract Complete and output - - - 2,009,812 - 2,117,795 - - - - - - - - - 1,089,861 5,990 - 126,989 7,963,553	Ending Balance 1,905,400 - - 4,206,728 1,068,877 1,871,134 2,030,774 - 1,765,861 20,445,989		Contract Liabilities	Contract Liabilities	Ending Balance 1,935,495 2,009,812 2,117,797 4,701,215 1,109,821 2,258,812 2,270,210 1,089,860 2,038,395 18,610,637	Contract Assets - - - - - - - - - 1,002,722	Contract liability 30,092 - - 494,487 40,945 387,697 239,436 - 272,534 4,429,585
		Contract cost 4,432 6,297 562 24,048 10,228 23,807 15,651 12,568 76,028 6,936,101		Loss on Contract - - - - - - - - 5,990 126,989			Beginning Balance 1,935,495 1,993,341 2,117,797 4,664,331 998,974 2,050,392 2,044,886 1,089,860 1,832,418 22,256,164	Addition - 16,471 - 36,884 110,847 208,420 225,324 - 205,977 9,438,490	Complete and output - - - - - - - - - 13,084,017
F210 F330 F370 F380 F390 F400 F410 F430 F450 Other
	$ 37,163,566	7,109,722	2,335,475	132,979	13,181,021	33,294,763	40,983,658	10,242,413	13,084,017	38,142,054	1,002,722	5,894,776

United Integrated Services Co., LTD

Statement of inventories

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Item Merchandise inventory Finished Goods Work in process Raw Materials Total Less: Allowance to reduce inventory to market and loss of bad debts	Amount Cost Net realizable value $ 6,532 - 14,925 3,263 21,272 2,239 50,678 38,632	Amount Cost Net realizable value $ 6,532 - 14,925 3,263 21,272 2,239 50,678 38,632	Note
	Cost $ 6,532 14,925 21,272 50,678

	93,407 49,273	44,134

	$ 44,134

Statement of other current assets

Item Prepaid expenses Prepayment for purchases	Description Insurance expenses Clean and safety fee Prepaid rents Remuneration of Investment Board Prepaid construction Other Domestic purchase of materials Foreign purchases	Amount $ 20,009 3,312 121 19,516 (111) 458 43,305 109,840 888,539 998,379 $ 1,041,684	Note

United Integrated Services Co., LTD

Statement of Other Current Assets

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Item Other receivables Refundable deposits Other financial assets Other current assets Temporary payments	Description Repatriate investment revenue receivable Other Contract deposits Time deposits Tax Other	Amount $ 584,938 15,756	Note

		600,694
		1,493
		1,392,071
		94 1,700
		7,500
		9,294
		$ 2,003,552

United Integrated Services Co., LTD

Statement of changes in investments accounted for using the equity method

For the year ended December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Beginning Balance Shares Amount	Beginning Balance Shares Amount	Addition Shares Amount - 24,364 - 35,379 - 29,654 - 26,269 - - 461 14,276 - 379,811 509,753	Addition Shares Amount - 24,364 - 35,379 - 29,654 - 26,269 - - 461 14,276 - 379,811 509,753	Decrease Shares Amount - 38,834 - 25,768 - 9,582 - - - - - 5,331 - 298,827 378,342	Decrease Shares Amount - 38,834 - 25,768 - 9,582 - - - - - 5,331 - 298,827 378,342	Ending Balance	Ending Balance	Market Value or Net Assets Value(Note 2) Amount Unit price 507,217 33.00 199,792 28.75 670,166 - 189,750 - - - 49,805 - 697,288 - 2,314,018	Total amount 494,571 285,948 670,166 189,750 - 49,805 697,288	Note
Shares		Shares - - - - - 461 -		Shares		Shares 14,987 9,946 17,698 - 2,095 3,488 -	Percentage of ownership (%)
				- - - - - - -			- - - - - - -			Note 4 Note 5 Note 6 Note 4 Note 8 Note 9
	$ 1,622,904		509,753		378,342			2,314,018	2,387,528

Note 1: Registered with the amount of capital contribution.

Note 2: If there is no open market price for a long-term equity investment, the net value or book value of the equity at the balance sheet date is its fair market value.

Note 3: In the current period, the increase in the investment income of the investee company and the sale of the parent company's stock by the subsidiary are regarded as adjustments to the treasury stock transaction. The decrease in the current period is the distribution of cash dividends and the subsidiary's liquidation.

Note 4: The increase in the current period recognizes the investment interests of the invested company and increases the shareholding. The decrease is the distribution of cash dividends, the determination of actuarial losses and the cumulative conversion adjustments.
Note 5: The increase in the current period recognizes the investment interests of the invested company. The decrease is the distribution of cash dividends, the determination of the actuarial loss of benefits, and the cumulative conversion adjustment.

Note 6: The increase in the current period recognizes the investment interests of the invested company, and the decrease in the current period is the cumulative conversion adjustment.

Note 7: The increase in the current period recognizes the investment interests and the cumulative conversion adjustments of the invested company.

Note 8: The increase in the current period recognizes the investment interests and capital reserve changes of the investee company. The decrease in the current period is the distribution of cash dividends and accumulated conversion adjustments.

Note 9: The increase in the current period recognizes the investment interests of the invested company, and the decrease in the current period is the distribution of cash dividends and accumulated conversion adjustments.

United Integrated Services Co., LTD

Statement of changes in property, plant and equipment

For the year ended December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Please refer to note six (l).

Statement of changes in accumulated depreciation of property, plant and equipment

Please refer to note six (l).

Statement of Changes in Intangible Assets

Please refer to note six (l).

Statement of Deferred Tax Assets

December 31, 2018

Please refer to note six (r)two (b).

United Integrated Services Co., LTD

Statement of other non-current assets

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Item Deferred Charges Guarantee Deposits Paid: Construction Deposits Housing deposit Admission deposit Other (the balance of each household is less than 5% of the balance of the subject) Subtotal Other	Description	Amount $ 287 228 1,521 2,100 120 3,969 2,295 $ 6,551

Statement of notes payable

Vendor Name AIRREX Co., Ltd. Unrelated Parties: Done Jie Enginering Co., Ltd. Hao Cheng Industrial Co., Ltd. CDFP Co., Ltd. Chyi Lee Industry Co., Ltd.	Description operating operating operating operating operating	Amount $ 38,960 38,960 30,686 27,741 20,514 17,723 144,867 $ 280,491

United Integrated Services Co., LTD

Statement of account payables

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Vendor Name Contruction Retainage Received: Related Parties: Fu-Kuo Engineering Co., Ltd. Dentsu Engineering Co., Ltd. Huayuan Engineering Co., Ltd. AIRREX Co., Ltd. Wholetech System Hitech Limited JG Environmental Technology Co., Ltd Subtotal Unrelated Parties: TIME MAX ENTERPRISE LIMITED Other(the balance of each household is less than 5% of the balance of the subject Contruction Playble: Related Parties: Uuited Integrated Service(BVI) AIRREX Co., Ltd. JG Environmental Technology Co., Ltd Hao Hao Motor Technician Office Subtotal Unrelated Parties: Kedge Construction Co., Ltd. Mega Fluid Systems Co., Ltd Uangyih-Tech Industrial Co., Ltd Dasheng Steel Co., Ltd. Jinyi Industrial Co., Ltd. CDFP Co., Ltd Pu Ventilation Machinery Co., Ltd Liangxin Line Co., Ltd. Third Party Co., Ltd Yuehua Engineering Co., Ltd. Topline System Engineering CO., LTD Shihlin Electric Co., Ltd.(Taipei’s branch) Weo Ying Co., Ltd Hao Cheng Industrial Co., Ltd Daling Refrigeration Machinery Co., Ltd. Value Valves Co., Ltd Other(the balance of each household is less than 5% of the balance of the subject)) Subtotal	Description operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating operating	Amount $ 5,300 3,100 2,936 80 13 1,829	Note

		13,258
		79,393 825,812
		905,205
		27,366 49,406 17,382 4,785
		98,939
		140,133 43,657 35,883 66,929 15,386 24,577 33,659 35,064 14,613 28,516 87,676 26,585 39,692 30,889 25,462 30,951 1,209,086
		1,704,968
		$ 2,722,370

United Integrated Services Co., LTD Statement of other payables- related parties December 31, 2018 (Expressed in thousands of New Taiwan Dollars)

Item	Description the package fees and salary $ Statement of provisions－current Description Amount $ 13,354 Statement of other payables Description Amount Employee bonus and board compensation $ 355,081 Business tax 129,381 Salary allowance 127,481 Labor and health insurance premium 11,174 Other 4,047 30,011 $ 657,175		Amount 125,964
Related Parties: Dentsu Engineering Co., Ltd. Item Engineering warranty reserve Item Other accrued expenses: Other payables-other:		$
			Note Note
	$ 657,175

United Integrated Services Co., LTD

Statement of other current liabilities

December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Item Other current liabilities:	Description Sales revenue received in advance Temporary receipts Receipts under custody Other notes payable Other (each household balance is less than 5% of the balance)	Amount $ 1,063 4,894 1,072 453 118 $ 7,600

－ Statement of provisions non-current

Item Employee benefits provision	Description Amount A retirement pension of employee $ 334,415 Statement of deferred tax liabilities	Amount $ 334,415	Note

Please refer to note six (r) two (b).

United Integrated Services Co., LTD

Statement of operating revenue

For the year ended December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Item Engineering service income: Percentage of completion method - Completed engineering income Percentage of completion method - Unfinished engineering income Subtotal Service revenue Design Fees Income Net operating income	Quantity	Amount $ 1,313,213 8,039,528 9,352,741 104,137 116,839 $ 9,573,717
	- - - -

Statement of operating costs

Item Cost of engineering : Raw materials used Labor Engineering costs Professional service costs Cost of design Fees Total operating costs	Amount Subtotal Total $ 6,175,697 505,663 428,362 7,109,722 102,794 65,154 $ 7,277,670	Amount Subtotal Total $ 6,175,697 505,663 428,362 7,109,722 102,794 65,154 $ 7,277,670
	Subtotal $ 6,175,697 505,663 428,362

United Integrated Services Co., LTD

Statement of engineering cost

For the year ended December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Item Components Utilities Insurance Miscellaneous expenses Postage and phone expense Supplies expense Allowance for entertainment Traveling expense Rent expense Shipping expenses Allowance for overtime meal Training expense Repair and maintenance expense Overtime pay Allocated Depreciation and amortizations Advertisement Stamp duty Amortizations Labor fee Group insurance License tax Fuel tax Clean and safety fee Other expense Total	Description	Amount $ 121,515 2,665 7,675 1,100 686 3,119 2,992 3,520 6,855 34,939 194 295 691 45,851 1 501 7 4 49 21,497 204 28 32 733 173,209
		$ 428,362

United Integrated Services Co., LTD

Statement of amortizations

For the year ended December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Item Salary and wages Employee benefits Overtime pay Depreciation Repair and maintenance expense Insurance Taxes Miscellaneous expenses Utilities Postage and phone expense Transportation fee Book and magazines fee Stationery printing fee Export cost Allowance for entertainment Traveling expense Traveling expense Advertisement Participation fee Other expense Amortizations Warranty fee Other miscellaneous expenses Total	Description	Amount $ 13,290 129 941 1,675 113 83 15 162 40 38 305 1 47 157 257 1,576 83 212 172 6 56 12,203 802 $ 32,363

United Integrated Services Co., LTD

Statement of administrative expenses

For the year ended December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Item Salary and wages Employee benefits Overtime pay Food stipend Retirement pension Training expense Rent expense Depreciation Repair and maintenance expense Insurance Taxes Miscellaneous expenses Utilities Postage and phone expense Transportation fee Book and magazines fee Supplies expense Allowance for entertainment Traveling expense Shipping expenses Advertisement Professional service fees Amortizations Donations Other miscellaneous expenses	Description	Amount $ 454,942 10,204 2,879 5 33,653 46 3,182 5,477 570 50,774 1,874 2,037 1,086 1,976 271 16 668 102 121 40 9 10,991 381 850 22,537 $ 604,691

United Integrated Services Co., LTD

Statement of the research and development expenses

For the year ended December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Item Salary and wages Employee benefits Overtime pay Retirement pension Rent expense Depreciation Repair and maintenance expense Insurance Miscellaneous expenses Utilities Postage and phone expense Transportation fee Stationery printing fee Allowance for entertainment Traveling expense Shipping expenses Research and development expenses Professional service fees Amortizations Other miscellaneous expenses Total	Description	Amount $ 25,172 278 1,018 705 601 3,796 3 1,703 44 116 127 50 36 16 25 24 810 916 238 392 $ 36,070

Statement of the net other income(expenses)

Please refer to note six (x).

United Integrated Services Co., LTD

Statement of finance costs

For the year ended December 31, 2018

(Expressed in thousands of New Taiwan Dollars)

Please refer to note six (x).

Statement of Labor, Depreciation and Amortization by Function

Please refer to note twelve (a).

AI assistant

UIS — Audit Report / Information 2018

52058_rns_2018-11-14_c55c2840-486b-43aa-8811-fcefce7c8c9e.pdf

UNITED INTEGRATED SERVICES CO., LTD

Table of contents

Independent Auditors’ Report

Opinion

Basis for Opinion

Other Matter

Key Audit Matters

1. Revenue recognition

We performed our audit procedures by:

2. Accounts receivable impairment assessment

Description of Key Audit Matters:

3. Financial instruments assessment

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Financial Statements

KPMG

Notes to Readers

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) UNITED INTEGRATED SERVICES CO., LTD.

Balance Sheets

December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) UNITED INTEGRATED SERVICES CO., LTD.

Statements of Comprehensive Income

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) UNITED INTEGRATED SERVICES CO., LTD.

Statements of Changes in Equity

For the years ended December 31, 2018 and 2017

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) UNITED INTEGRATED SERVICES CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

Notes to the Financial Statements

For the years ended December 31, 2018 and 2017

(1) Company history

(2) Approval date and procedures of the financial statements

(3) New standards, amendments and interpretations adopted:

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(i) IFRS 15 “Revenue from Contracts with Customers”

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

2) Construction contracts

3) Impacts on financial statements

(ii) IFRS 9 “Financial Instruments”

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(4) Summary of significant accounting policies

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(ii) Functional and presentation currency

(c) Foreign currency

(ii) Foreign operation

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(iii) Other

(f) Financial instruments

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

UNITED INTEGRATED SERVICES CO., LTD.

Notes to the Financial Statements

(ii) Financial assets (applicable before January 1, 2018)

2) Available-for-sale financial assets

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

3) Financial assets carried at cost

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(g) Inventories

(h) Construction contract (applicable before January 1, 2018)

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(i) Investment affiliate

(j) Investment in associate

(k) Property, plant and equipment

UNITED INTEGRATED SERVICES CO., LTD. Notes to the Financial Statements

(ii) Subsequent cost

UIS Audit Report / Information 2018