WT — Audit Report / Information 2018

Nov 13, 2018

WT MICROELECTRONICS CO., LTD.

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS

DECEMBER 31, 2018 AND 2017

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

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of WT Microelectronics Co., Ltd.

Opinion

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

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

Basis for opinion

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

Key audit matters

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

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Key audit matters for the parent company only financial statements of the current period are stated as follows:

Recognition of supplier rebates

Description

Refer to Note 4(12) for accounting policies on supplier rebates.

The Company is primarily engaged in sale of electronic and communication components. In line with industry practice, the Company has entered into rebate arrangements with its suppliers for various kinds and quantities of inventories. The Company calculates the amount of supplier rebates in accordance with the arrangement, and recognises it as a deduction of accounts payable to suppliers, and also a deduction of cost of sales or inventory depending on whether the inventories have been sold. The Company pays the net purchase price, after confirmation that the rebate is granted and the credit memo from its suppliers has been received.

As the terms of different types of supplier rebates vary and changes frequently, and the calculation is complex, the Company relies on the information system to gather related transaction information, and manually matches each inventory category with its corresponding rebate term to calculate the supplier rebate that should be recognised. Since the supplier rebate is material to the parent company only financial statements, and requires more audit effort to address this audit matter, the recognition of supplier rebate has been identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

• A. Obtained an understanding and assessed the internal controls related to supplier rebates, and tested the effectiveness of relevant internal controls to verify whether major supplier rebates had been reviewed by responsible management, and the inventory cost had been correctly deducted and paid in net amount based on the credit memo approved by suppliers;

• B. Performed trend analysis on the ratio of supplier rebates to corresponding transaction amount;

• C. Sampled supplier rebates and tested whether the transaction quantities which were used in the calculation were consistent with its original transaction data, and obtained arrangements and calculation worksheets to ensure that the rebate recognition was consistent with the arrangements;

• D. Sampled the supplier rebates which were recognised before balance sheet date but have not yet been

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confirmed by suppliers, verified its consistency and reasonableness with subsequent credit memos approved by suppliers after the balance sheet date, and confirmed that there was no material differences; and

• E. Performed confirmation of selected material accounts payable, examined whether there is a significant difference between the amount of supplier rebates recognised based on the arrangements and the amount indicated in the suppliers’ confirmation, and investigated the differences, if any.

Impairment assessment of investments accounted for using equity method and goodwill

Description

Refer to Notes 4(13) and 4(18) for accounting policies on investments accounted for using equity method and goodwill impairment, Note 5(2) for the uncertainty of accounting estimates and assumptions in relation to goodwill impairment, and Notes 6(5) and 6(7) for details of investments accounted for using equity method and goodwill impairment.

The Company and its subsidiaries (the “Group”) acquired 100% shares of stock of target companies or electronic components distribution business by cash or through exchange of shares of stock. The purchase price was allocated to the net identifiable assets acquired at fair value in accordance with the accounting policies on business combinations. The goodwill which was generated from purchase price allocation was presented in “Investments accounted for using equity method” and “Intangible assets - goodwill”.

Relative to the aforementioned acquired company and distribution business, some distribution business were managed by other operating segments in the same district after the acquisition due to management purpose. After identifying the smallest cash generating unit which can generate independent cash flow, the Group used the expected future cash flows of each cash generating unit and proper discount rate to determine recoverable amount of goodwill, and assesses whether goodwill may be impaired. The above expected future cash flows of each cash generating unit are based on its own financial forecast for the next 5 years. As the assumptions used in the forecast requires management judgement and involves a high degree of uncertainty that may have a material effect in determining the recoverable amount of investments accounted for using equity method and goodwill impairment assessment, we consider the impairment assessment of goodwill a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

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• A. Assessed the consistency of smallest cash generating unit which was identified by management and used in goodwill allocation, and the lowest level at which management monitored the goodwill;

• B. Assessed management’s assessment process of each cash generating unit and determined whether the future cash flows used in valuation model for the next 5 years are consistent with the operating plan which was approved by the Board of Directors;

• C. As the recoverable amount was determined by value-in–use, ascertained reasonableness of each estimated growth rate, discount rate and other significant assumptions and performed the following:

• (a) Compared the reasonableness of estimated growth rate with historical data, economic and external industry forecast information;

• (b) Compared discount rate assumptions with respect to cash generating units’ capital cost and similar return on assets; and

• (c) Checked the parameters of valuation model and the setting of calculation formula.

• D. Compared the higher of recoverable amount and book value of each cash generating unit to verify the appropriateness of impairment assessment.

Assessment of allowance for inventory valuation losses

Description

Refer to Note 4(12) for accounting policies on inventory valuation, Note 5(2) for the uncertainty of accounting estimates and assumptions in relation to inventory valuation, and Note 6(4) for details of inventory valuation. As at December 31, 2018, the Company’s inventories and allowances for inventory valuation losses were NT$34,445,437 thousand and NT$678,676 thousand, respectively.

The Company is primarily engaged in sales of various kinds of electronic components. Due to rapid technology innovations, short lifespan of electronic products and fluctuations in market prices, there is a higher risk of inventory losses due from market value decline or obsolescence. For non-obsolete inventories, the net realisable value is estimated based on the estimated selling price in a certain period around balance sheet date. For aged inventories and individually determined as obsolete inventories, the net realisable value is determined based on historical experience of inventory usage and sales discount. Since the amount of inventory is material, inventory types are various, sources of information in calculating the net realisable value of each type of inventories are many, and the identification of obsolete and damaged inventory and its net realisable value are subject to management’s judgement, we consider the assessment of allowance for inventory valuation losses a key audit matter.

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How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

• A. Obtained an understanding and evaluated the process of inventory and warehouse management, examined the annual plan and participated in stock take to assess the effectiveness of management’s identification and controls on obsolete inventory;

• B. Obtained an understanding of the Company’s nature of business and industry and assessed whether the provision policies and procedures were applied reasonably and consistently in all the periods; and

• C. Obtained the net realisable value statement of each inventory, assessed whether the estimation policy was consistently applied, and tested relevant parameters, including the original data for sales and purchases and obtained supporting documents.

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

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

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

Those charged with governance, including supervisors, are responsible for overseeing the Company’s financial reporting process.

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

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material

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misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

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

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

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

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

• D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• E. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• F. Obtain sufficient appropriate audit evidence regarding the parent company only financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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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.

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

For and on behalf of PricewaterhouseCoopers, Taiwan March 22, 2019

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

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

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WT MICROELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(3) 7 6(3) 7 6(4) 6(2) 12(4) 6(5) 6(6) 6(7) 6(26)	December31,2018 AMOUNT % $ 361,779 1 12,348,685 16 9,658,282 12 814,646 1 740,199 1 33,766,761 43 211,472 - 57,901,824 74 12,175 - - - 18,773,483 24 473,628 1 228,117 - 408,584 1 117,260 - 20,013,247 26 $ 77,915,071 100	December31,2017	December31,2017
		AMOUNT $ 361,779 12,348,685 9,658,282 814,646 740,199 33,766,761 211,472 57,901,824 12,175 - 18,773,483 473,628 228,117 408,584 117,260 20,013,247 $ 77,915,071	AMOUNT $ 398,883 9,541,275 4,281,760 608,035 4,715 21,257,304 128,824 36,220,796 - 12,175 18,031,583 428,680 61,338 367,186 87,282 18,988,244 $ 55,209,040	%
Current assets 1100 Cash and cash equivalents 1170 Accounts receivable, net 1180 Accounts receivable, net - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventories 1410 Prepayments 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non-current 1543 Financial assets carried at cost - non-current 1550 Investments accounted for using equity method 1600 Property, plant and equipment 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				1 17 8 1 - 39 -
				66
				- - 32 1 - 1 -
				34
				100

(Continued)

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WT MICROELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December31,2018 December31,2017 Notes AMOUNT % AMOUNT % 6(8) $ 16,486,561 21 $ 12,451,991 22 6(9) 1,348,885 2 1,149,289 2 6(10) 3,537 - 7,777 - 6(20) and 7 2,145,327 3 - - 31,458,629 40 16,097,844 29 7 313,360 - 1,469,396 3 6(11) 899,979 1 700,121 1 7 3,871 - 7,121 - 287,843 - 315,707 1 6(12)(13) 1,937,468 3 - - 6(20) 519,642 1 - - 7 196,434 - 439,261 1 55,601,536 71 32,638,507 59 6(12) - - 1,216,527 2 6(13) 122,860 - 982,120 2 6(26) 368,005 1 276,261 1 6(14) 15,794 - 14,691 - 506,659 1 2,489,599 5 56,108,195 72 35,128,106 64 6(16) 5,551,889 7 5,522,227 10 24,217 - 392 - 6(17) 8,773,382 11 8,660,739 15 6(18) 1,741,965 2 1,489,975 3 109,102 - - - 5,749,889 8 4,516,703 8 6(19) ( 143,568) - ( 109,102) - 21,806,876 28 20,080,934 36 9 $ 77,915,071 100 $ 55,209,040 100	December31,2017	December31,2017
			%
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2120 Financial liabilities at fair value through profit or loss - current 2130 Contract liabilities - current 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2220 Other payables - related parties 2230 Current income tax liabilities 2320 Long-term liabilities, current portion 2365 Refund liabilities - current 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2530 Bonds payable 2540 Long-term loans 2570 Deferred income tax liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Share capital - common stock 3130 Certificates of entitlement to new shares from convertible bonds Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3XXX Total equity Commitments and contingent liabilities 3X2X Total liabilities and equity			22 2 - - 29 3 1 - 1 - - 1
			59
			2 2 1 -
			5
			64
			10 - 15 3 - 8 -
			36
			100

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

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WT MICROELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

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

Items

YearendedDecember31 2018 2017 Notes AMOUNT % AMOUNT % 6(20) and 7 $ 213,640,619 100 $ 146,986,637 100 6(4) and 7 ( 209,128,174 ) ( 98) ( 142,930,078 ) ( 97) 4,512,445 2 4,056,559 3 6(24) and 7 ( 1,586,704 ) ( 1) ( 1,346,283 ) ( 1) ( 448,318 ) - ( 428,874 ) ( 1) ( 199,519 ) - ( 183,318 ) - 12(2) ( 5,387 ) - - - ( 2,239,928 ) ( 1) ( 1,958,475 ) ( 2) 2,272,517 1 2,098,084 1 6(21) 17,579 - 16,852 - 6(22) 35,478 - ( 42,231 ) - 6(23) ( 1,011,645 ) ( 1) ( 662,788 ) - 1,831,184 1 1,423,027 1 872,596 - 734,860 1 3,145,113 1 2,832,944 2 6(26) ( 366,884 ) - ( 313,047 ) - $ 2,778,229 1 $ 2,519,897 2 6(14) ( $ 2,291 ) - ($ 18,897 ) - 6(27) ( 320,963 ) - 8,530 - 6(26) 1,297 - 3,213 - ( 321,957 ) - ( 7,154 ) - 6(19) 569,283 - ( 1,074,520 ) ( 1) 6(27) 13,669 - ( 214,082 ) - 582,952 - ( 1,288,602 ) ( 1) $ 260,995 - ($ 1,295,756 ) ( 1) $ 3,039,224 1 $ 1,224,141 1 6(28) $ 5.02 $ 5.26 $ 4.71 $ 4.89

4000 Operating revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Impairment loss determined in accordance with IFRS 9 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of subsidiaries, associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Losses on remeasurements of defined benefit plans 8330 Share of other comprehensive (loss) income of subsidiaries, associates and joint ventures accounted for using equity method 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Other comprehensive loss that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8380 Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using equity method 8360 Other comprehensive income (loss) that will be reclassified to profit or loss 8300 Total other comprehensive income (loss) for the year 8500 Total comprehensive income for the year Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

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

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WT MICROELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

2017 Balance at January 1, 2017 Profit for the year Other comprehensive loss Total comprehensive income (loss) Issuance of common stock for cash Share-based payments Appropriations of 2016 earnings: Legal reserve Cash dividends Conversion of convertible bonds Changes in equity of associates accounted for using equity method Balance at December 31, 2017 2018 Balance at January 1, 2018 Effects of retrospective application Adjusted balance at January 1, 2018 Profit for the year Other comprehensive loss Total comprehensive income (loss) Appropriations of 2017 earnings: Legal reserve Special reserve Cash dividends Conversion of convertible bonds Disposal of financial assets at fair value through other comprehensive income Balance at December 31, 2018	Notes		Share	capital	capital		Capital reserves				Retained earnings				O	therequityinterest				Totalequity
			Share capital - commonstock		Certificates of bond-to-stock conversion				Legal reserve		Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreignoperations		Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income		Unrealised gain or loss on available- for-sale financial assets
	6(14)(19)(26) 6(16) 6(18) 6(16) 6(14)(19)(26) 6(18) 6(16)		$ 4,715,196 - - - 750,000 - - - 57,031 - $ 5,522,227 $ 5,522,227 - 5,522,227 - - - - - - 29,662 - $ 5,551,889		$ - - - - - - - - 392 - $ 392 $ 392 - 392 - - - - - - 23,825 - $ 24,217	$ 6,372,059 - - - 2,100,000 49,037 - - 140,164 ( 521 ) $ 8,660,739 $ 8,660,739 - 8,660,739 - - - - - - 112,643 - $ 8,773,382			$ 1,320,029 - - - - - 169,946 - - - $ 1,489,975 $ 1,489,975 - 1,489,975 - - - 251,990 - - - - $ 1,741,965		$ - - - - - - - - - - $ - $ - - - - - - - 109,102 - - - $ 109,102	$ 3,315,686 2,519,897 ( 7,154 ) 2,512,743 - - ( 169,946 ) ( 1,141,780 ) - - $ 4,516,703 $ 4,516,703 ( 75,668 ) 4,441,035 2,778,229 ( 4,785 ) 2,773,444 ( 251,990 ) ( 109,102 ) ( 1,381,423 ) - 277,925 $ 5,749,889		$ 162,084 - ( 1,137,136 ) ( 1,137,136 ) - - - - - - ($ 975,052 ) ($ 975,052 ) - ( 975,052 ) - 582,952 582,952 - - - - - ($ 392,100 )	$ - - - - - - - - - - $ - $ - 843,629 843,629 - ( 317,172 ) ( 317,172 ) - - - - ( 277,925 ) $ 248,532		$ 1,017,416 - ( 151,466 ) ( 151,466 ) - - - - - - $ 865,950 $ 865,950 ( 865,950 ) - - - - - - - - - $ -		$ 16,902,470 2,519,897 ( 1,295,756 ) 1,224,141 2,850,000 49,037 - ( 1,141,780 ) 197,587 ( 521 ) $ 20,080,934 $ 20,080,934 ( 97,989 ) 19,982,945 2,778,229 260,995 3,039,224 - - ( 1,381,423 ) 166,130 - $ 21,806,876

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

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WT MICROELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortisation Impairment loss determined in accordance with IFRS 9/Provision for doubtful accounts Net (income) loss on financial liabilities at fair value through profit or loss Share-based payments Share of profit of subsidiaries, associates and joint ventures accounted for using equity method Loss on disposal of property, plant and equipment, net Interest expense Interest income Dividend income Changes in operating assets and liabilities Changes in operating assets Accounts receivable Accounts receivable - related parties Other receivables Inventories Prepayments Changes in operating liabilities Financial liabilities at fair value through profit or loss Contract liabilities Accounts payable Accounts payable - related parties Other payables Other current liabilities Accrued pension liabilities Cash (outflow) inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows (used in) from operating activities

Notes 2018 2017 $ 3,145,113 $ 2,832,944 6(24) 47,630 38,108 6(24) 5,773 7,162 12(2) 5,387 50,741 6(22) ( 73,458 ) 6,862 6(15) - 49,037 ( 1,831,184 ) ( 1,423,027 ) - 187 6(23) 492,004 353,953 6(21) ( 14,737 ) ( 10,815 ) 6(21) - ( 440 ) ( 2,323,463 ) 3,601,939 ( 5,376,522 ) ( 985,777 ) ( 220,293 ) 960,095 ( 12,509,457 ) ( 4,686,978 ) ( 82,648 ) ( 30,540 ) 69,218 915 1,728,700 - 15,360,785 1,841,825 ( 1,156,036 ) 871,087 180,476 15,165 173,800 ( 276,471 ) ( 1,188 ) ( 1,650 ) ( 2,380,100 ) 3,214,322 14,737 10,815 975,455 750,335 ( 451,555 ) ( 337,775 ) ( 343,105 ) ( 253,364 ) ( 2,184,568 ) 3,384,333

(Continued)

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WT MICROELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES (Increase) decrease in other receivables - related parties Proceeds from capital reduction of financial assets carried at cost Acquisition of investments accounted for using equity method Proceeds from capital reduction of subsidiaries Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Net cash payments for business combination Acquisition of intangible assets (Increase) decrease in other non-current assets Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term borrowings Increase in short-term notes and bills payable Proceeds from long-term loans Repayments of long-term loans Issuance of common stock for cash Cash dividends paid Net cash flows from (used in) financing activities Effect of exchange rate changes Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Notes 2018 2017 7 ($ 721,803 ) $ 1,731,641 - 5,700 - ( 3,495,949 ) - 1,380 6(6) ( 92,578 ) ( 31,254 ) - 28 6(29) ( 169,290 ) - 6(7) ( 3,262 ) ( 4,810 ) ( 34,504 ) 3,587 ( 1,021,437 ) ( 1,789,677 ) 6(30) 4,784,570 ( 4,962,591 ) 6(30) 191,630 949,303 6(30) - 982,120 6(30) ( 738,540 ) - 6(16) - 2,850,000 6(19) ( 1,381,423 ) ( 1,141,780 ) 2,856,237 ( 1,322,948 ) 312,664 ( 435,627 ) ( 37,104 ) ( 163,919 ) 398,883 562,802 $ 361,779 $ 398,883

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

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WT MICROELECTRONICS CO., LTD. NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017

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

1. HISTORY AND ORGANISATION

WT Microelectronics Co., Ltd. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). The Company is primarily engaged in the development and sales of electronic and communication components.

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

FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only financial statements were authorised for issuance by the Board of Directors on March 22, 2019.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

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

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

follows:
	Effective date by
	International
	Accounting
New Standards,Interpretations and Amendments	Standards Board
Amendments to IFRS 2, ‘Classification and measurement of share-based payment	January 1, 2018
transactions’
Amendments to IFRS 4, ‘Applying IFRS 9, Financial instruments with IFRS 4,	January 1, 2018
Insurance contracts’
IFRS 9, ‘Financial instruments’	January 1, 2018
IFRS 15, ‘Revenue from contracts with customers’	January 1, 2018
Amendments to IFRS 15, ‘Clarifications to IFRS 15, Revenue from contracts with	January 1, 2018
customers’
Amendments to IAS 7, ‘Disclosure initiative’	January 1, 2017
Amendments to IAS 12, ‘Recognition of deferred tax assets for unrealised losses’	January 1, 2017
Amendments to IAS 40, ‘Transfers of investment property’	January 1, 2018
IFRIC 22, ‘Foreign currency transactions and advance consideration’	January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 1,	January 1, 2018
‘First-time adoption of International Financial Reporting Standards’
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 12,	January 1, 2017
‘Disclosure of interests in other entities’
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IAS 28,	January 1, 2018
‘Investments in associates and joint ventures’

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Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment. A. IFRS 9, ‘Financial instruments’

• (a) Classification of debt instruments is driven by the entity’s business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present subsequent changes in the fair value of an investment in an equity instrument that is not held for trading in other comprehensive income.

• (b) The impairment losses of debt instruments are assessed using an ‘expected credit loss’ approach. An entity assesses at each balance sheet date whether there has been a significant increase in credit risk on that instrument since initial recognition to recognise 12-month expected credit losses (‘ECL’) or lifetime ECL (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment would be calculated on the book value of net carrying amount (i.e. net of credit allowance). The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component.

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

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

• The Company has elected not to restate prior period financial statements and recognised the cumulative effect of initial application as retained earnings at January 1, 2018, using the modified retrospective approach under IFRS 15. The significant effects of adopting the modified transition as of January 1, 2018 are summarised below:

• (a) Under IFRS 15, liabilities in relation to expected volume discounts and refunds to customers are recognised as refund liabilities, but were previously presented as accounts receivable - allowance for sales returns and discounts in the balance sheet. As of January 1, 2018, the balance amounted to $685,883.

• (b) Under IFRS 15, liabilities in relation to customer contracts are recognised as contract liabilities, but were previously presented as advance sales receipts in the balance sheet. As of January 1, 2018, the balance amounted to $416,627.

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

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

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

the Company

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

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

Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment. The quantitative impact will be disclosed when the assessment is complete. IFRS 16, ‘Leases’

IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognise a 'right-of-use asset' and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.

The Company expects to recognise the lease contract of lessees in line with IFRS 16. However, the Company does not intend to restate the financial statements of prior period (referred herein as the “modified retrospective approach”). On January 1, 2019, it is expected that ‘right-of-use asset’ and lease liability will be increased by $357,581 and $357,581, respectively.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

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

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

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

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

• (2) Basis of preparation

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

  • (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

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

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

• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations asendorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

• C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Company has elected to apply modified retrospective approach whereby the cumulative impact of the adoption was recognised as retained earnings or other equity as of January 1, 2018 and the financial statements for the year ended December 31, 2017 were not restated. The financial statements for the year ended December 31, 2017 were prepared in compliance with International Accounting Standard 39

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(‘IAS 39’), International Accounting Standard 11 (‘IAS 11’), International Accounting Standard 18 (‘IAS 18’) and related financial reporting interpretations. Please refer to Notes 12(4) and (5) for details of significant accounting policies.

(3) Foreign currency translation

• A. The parent company only financial statements are presented in NT dollars, which is the Company’s functional and presentation currency.

• B. Foreign currency transactions and balances

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

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

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

• (d) All other foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• C. Translation of foreign operations

• (a) The operating results and financial position of all the Company entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

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

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

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

• (b) When the foreign operation partially disposed of or sold is an associate or joint arrangement, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, if the Company retains partial interest in the former foreign associate or joint arrangement after losing significant influence over the former foreign associate, or losing joint control of the former

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joint arrangement, such transactions should be accounted for as disposal of all interest in these foreign operations.

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

• (d) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

(4) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realised within twelve months from the balance sheet date;

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

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

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

• (b) Liabilities arising mainly from trading activities;

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

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

(5) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

Effective 2018

• A. These are financial assets that are not measured at amortised cost or at fair value through other comprehensive income and are held for trading if acquired principally for the purpose of selling

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or repurchasing in the short term. Derivatives are also categorised as financial labilities held for trading unless they are designated as hedges.

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

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

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

Effective 2018

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

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

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition relating to the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(8) Accounts and notes receivable

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

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

• C. The Company’s operating pattern of accounts receivable that are expected to be factored is for the purpose of receiving contract cash flow and selling, and the accounts receivable are subsequently measured at fair value, with any changes in fair value recognised in other comprehensive income.

• (9) Impairment of financial assets

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

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(10) Derecognition of financial assets

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

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

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

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

(11) Operating leases (lessor)

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(12) Inventories

• A. The cost of inventories includes the purchase price, import duties and other costs directly attributable to the acquisition of goods. The discount, allowance and others alike should be deducted from the cost.

• B. Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the applicable variable selling expenses.

(13) Investments accounted for using equity method / subsidiaries and associates

• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

• B. Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Company are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise the losses in proportion to the ownership.

• D. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

• E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly

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or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

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

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

• H. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• I. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for using equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• J. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• K. Pursuant to the “Rules Governing the Preparation of Financial Statements by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the consolidated financial statements. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the consolidated financial statements.

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(14) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 26 ~ 55 years Office equipment 2 ~ 5 years Other assets 2 ~ 10 years

(15) Operating leases (lessee)

Payments made under an operating lease (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the lease term.

• (16) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 50 ~ 55 years.

(17) Intangible assets

• A. Goodwill arises in a business combination accounted for by applying the acquisition method.

• B. Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 3~5 years.

(18) Impairment of non-financial assets

• A. The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognising impairment loss for an asset in prior years no longer

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exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

• B. The recoverable amount of goodwill shall be evaluated periodically. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.

• C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

• (19) Borrowings

• A. Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

• B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

• (20) Convertible bonds payable

• Convertible corporate bonds issued by the Company contain conversion options (that is, the bondholders have the right to convert the bonds into the Company’s common shares by exchanging a fixed amount of cash for a fixed number of common shares). The Company classifies the bonds payable and derivative features embedded in convertible corporate bonds on initial recognition as a financial liability or an equity instrument (‘capital surplus—share options’) in accordance with the substance of the contractual arrangement and the definitions of a financial asset, a financial liability and an equity instrument. Convertible corporate bonds are accounted for as follows:

• A. The host contracts of bonds are initially recognised at fair value. Any difference between the initial recognition and the redemption value is accounted for as the premium or discount on bonds payable and subsequently is amortised in profit or loss as an adjustment to ‘finance costs’ over the period of circulation using the effective interest method.

• B. The embedded conversion options which meet the definition of an equity instrument are initially recognised in ‘capital surplus—share options’ at the residual amount of total issue price less the

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amount of financial assets or financial liabilities at fair value through profit or loss and bonds payable as stated above. Conversion options are not subsequently remeasured.

• C. Any transaction costs directly attributable to the issuance are allocated to each liability or equity component in proportion to the initial carrying amount of each abovementioned item.

• D. When bondholders exercise conversion options, the liability component of the bonds (including ‘bonds payable) shall be remeasured on the conversion date. The book value of common shares issued due to the conversion shall be based on the adjusted book value of the abovementioned liability component plus the book value of capital surplus – share options.

• (21) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

  • (a) Defined contribution plans

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

• (b) Defined benefit plans

  • i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of highquality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

  • ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

  • iii. Past service costs are recognised immediately in profit or loss.

• C. Employees’, directors’ and supervisors’ remuneration

• Employees’ remuneration and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

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- (22) Employee share based payment

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

• B. The grant date of cash capital increase reserved for employee preemption is the date at which the entity and the employee agree to a share-based payment arrangement, being when the entity and the counterparty have a shared understanding of the terms and conditions of the arrangement.

• (23) Income tax

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

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

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

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

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date, unrecognised and recognised deferred tax assets are reassessed.

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

• F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from research and development expenditures to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

• (24) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(25) Revenue recognition

• A. The Company sells electronic and communication components. Sales are recognised when the control of the products has been transferred, being when the products are delivered to the customer, and there is no unfulfilled obligation that could affect the customer acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

• B. The goods are often sold with volume discounts based on aggregate sales over a 12-month period. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated sales discounts and allowances. Accumulated experience is used to estimate and provide for the sales discounts and allowances, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. The sales usually are made with a credit term of 90~120 days. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Company does not adjust the transaction price to reflect the time value of money.

• C. A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. The customer pays at the time specified in the payment schedule. If the payments exceed

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the merchandise provided, a contract liability is recognised.

• (26) Business combinations

• A. The Company uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Company measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

• B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquire recognised and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognised directly in profit or loss on the acquisition date.

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

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. The related information is addressed below:

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

• Revenue recognition on a net/gross basis

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

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to which it expects to be entitled in exchange for arranging for the other party to provide its goods or services.

Indicators that the Company controls the goods or services before it is provided to a customer include the following:

• A. The Company is primarily responsible for the provision of goods or services;

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

• C. The Company has discretion in establishing prices for the goods or services.

• (2) Critical accounting estimates and assumptions

• The Company makes estimates and assumptions based on the expectation of future events that are believed to be reasonable under the circumstances at the end of the reporting period. The resulting accounting estimates might be different from the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:

• A. Impairment assessment of goodwill

The impairment assessment of goodwill relies on the Company’s subjective judgement, including identifying cash-generating units, allocating assets and liabilities as well as goodwill to related cash-generating units, and determining the recoverable amounts of related cash-generating units. Please refer to Note 6(7) for the information of goodwill impairment.

• B. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

1. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits	December 31,2018 4,872 $ 356,907 361,779 $	December 31,2017
		1,074 $ 397,809 398,883 $

The Company transacts with a variety of financial institutions all with good credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

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

Effective 2018 Items December 31, 2018 Non-current items: Equity instruments $ 12,175

• A. The Company has elected to classify certain strategic investments in the aforementioned equity instruments, including emerging stocks and unlisted stock, as financial assets measured at fair value through other comprehensive income.

• B. Please refer to Note 6(19) for information on changes in fair value recognised in other comprehensive income for the year ended December 31, 2018. Please refer to Note 6(21) for details of dividend income recognised in profit or loss of equity instruments at fair value through other comprehensive income held at end of year.

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

• D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

• E. Information on financial assets at cost as of December 31, 2017 is provided in Note 12(4).

(3) Notes and accounts receivable

Notes and accounts receivable
	December 31,2018			December 31,2017
Notes receivable	$		250,613	$		102,584
Accounts receivable			13,083,932			10,710,895
Less: Allowance for sales returns and discounts	(		788,008)	(		1,110,047)
Allowance for uncollectible accounts	(		197,852)	(		162,157)
Notes and accounts receivable, net			12,348,685			9,541,275
Overdue receivables			48,638			44,112
Less: Allowance for uncollectible accounts	(		48,638)	(		44,112)
Overdue receivables, net (shown as ‘other
non-current assets’)			-			-
		$	12,348,685		$	9,541,275

• A. The Company entered into a factoring agreement with a domestic financial institution to sell its accounts receivable. Under the agreement, the Company is not obligated to bear the default risk of the transferred accounts receivable, but is liable for the losses incurred on any business dispute. The Company does not have any continuing involvement in the transferred accounts receivable. Thus, the Company derecognised the transferred accounts receivable, and the related information is as follows:

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Accounts receivable transferred (Amount derecognised) Amount advanced Amount retained	December 31,2018 December 31,2017 28,486,250 $ 24,255,113 $ 27,791,275 $ 23,718,836 $ 694,975 $ 536,277 $

  - (a) The above amounts retained are shown as ‘other receivables’. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

  - (b) As of December 31, 2018 and 2017, the interest rates for amounts advanced ranged between 2.4480%~4.0200% and 1.712%~3.22%, respectively.

  - (c) As of December 31, 2018 and 2017, the total limits of the accounts receivable factoring were $48,368,322 and $42,388,000, respectively.

  - (d) As of December 31, 2018 and 2017, the Company has issued a promissory note of $56,328,114 and $37,023,760, respectively, as performance guarantee against any business dispute.

• B. The Group took out a credit insurance on the accounts receivable from certain main customers, whereby 80%~90% of the receivable amount can be covered when the receivables are uncollectible. The Group’s maximum exposure to credit risk at balance sheet date is the carrying amount of notes and accounts receivable less 80%~90% covered amount of the insured accounts receivable.

• C. The Company does not hold any collateral.

• D. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

• (4) Inventories

12(2). Inventories
	December 31,2018				December 31,2017
Merchandise inventory	$			34,445,437	$	22,098,277
Less: Allowance for inventory valuation losses	(			678,676)	(	840,973)
			$	33,766,761	$	21,257,304
The cost of inventories recognised as expense for the	year:
				Years ended	December 31,
				2018		2017
Cost of inventories sold		$		209,135,073	$	142,862,551
Loss on disposal of inventory				173,621		-
(Gain on reversal of) loss on decline in market price	(			180,477)		67,507
Loss on physical inventory	(			43)		20
			$	209,128,174	$	142,930,078

The Company reversed a previous inventory write-down as certain inventory which were previously provided with allowance were subsequently disposed during the year ended December 31, 2018.

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(5) Investments accounted for using equity method

December 31, 2018 December 31, 2017

Subsidiaries: Wintech Microelectronics Holding Limited Morrihan International Corp. Techmosa International Inc. Maxtek Technology Co., Ltd. BSI Semiconductor Pte. Ltd. Nuvision Technology Inc. MSD Holdings Pte. Ltd. Milestone Investment Co.,Ltd. Sinyie Investment Co.,Ltd. AboveE Technology Inc.	8,815,533 $ 8,745,556 $ 3,737,104 3,523,693 2,080,880 2,053,747 2,259,315 1,929,180 747,806 713,645 790,392 702,819 223,531 214,602 64,676 94,178 44,820 44,769 9,426 9,394 18,773,483 $ 18,031,583 $

• A. Please refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2018 for the information regarding the Company’s subsidiaries.

• B. The Company acquired all shares of Maxtek Technology Co., Ltd. through stock swap at $27 (in dollars) per share with total acquisition consideration of $1,895,949 in October 2017. Please refer to Note 6(29) for related information.

• C. The Company invested $1,600,000 in the capital increase raised by the subsidiary, Morrihan International Corp., in 2017 to increase the subsidiary’s working capital. The disclosures on acquisition of securities are provided in Note 13(1).

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(6) Property, plant and equipment

At January 1, 2018 Cost Accumulated depreciation and impairment 2018 Opening net book amount Additions Depreciation charge Closing net book amount At December 31, 2018 Cost Accumulated depreciation and impairment At January 1, 2017 Cost Accumulated depreciation and impairment 2017 Opening net book amount Additions Disposals Depreciation charge Closing net book amount At December 31, 2017 Cost Accumulated depreciation and impairment

Buildings Office Land and structures equipment Others Total 225,459 $ 217,449 $ 227,930 $ 119,009 $ 789,847 $ - 81,916) ( 169,255) ( 109,996) ( 361,167) ( 225,459 $ 135,533 $ 58,675 $ 9,013 $ 428,680 $ 225,459 $ 135,533 $ 58,675 $ 9,013 $ 428,680 $ - - 47,163 45,415 92,578 - 6,656) ( 28,429) ( 12,545) ( 47,630) ( 225,459 $ 128,877 $ 77,409 $ 41,883 $ 473,628 $ 225,459 $ 217,449 $ 231,203 $ 153,958 $ 828,069 $ - 88,572) ( 153,794) ( 112,075) ( 354,441) ( 225,459 $ 128,877 $ 77,409 $ 41,883 $ 473,628 $ Buildings Office Land and structures equipment Others Total 225,459 $ 217,449 $ 222,493 $ 118,885 $ 784,286 $ - 75,260) ( 164,141) ( 109,136) ( 348,537) ( 225,459 $ 142,189 $ 58,352 $ 9,749 $ 435,749 $ 225,459 $ 142,189 $ 58,352 $ 9,749 $ 435,749 $ - - 25,532 5,722 31,254 - - - 215) ( 215) ( - 6,656) ( 25,209) ( 6,243) ( 38,108) ( 225,459 $ 135,533 $ 58,675 $ 9,013 $ 428,680 $ 225,459 $ 217,449 $ 227,930 $ 119,009 $ 789,847 $ - 81,916) ( 169,255) ( 109,996) ( 361,167) ( 225,459 $ 135,533 $ 58,675 $ 9,013 $ 428,680 $

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(7) Intangible assets

ntangible assets
		Goodwill		Software		Total
At January 1, 2018
Cost	$	208,132	$	64,976	$	273,108
Accumulated amortisation and
impairment	(	158,309)	(	53,461)	(	211,770)
	$	49,823	$	11,515	$	61,338
2018
Opening net book amount	$	49,823	$	11,515	$	61,338
Additions		169,290		3,262		172,552
Amortisation charge (shown as
‘general and administrative
expenses’)		-	(	5,773)	(	5,773)
Closing net book amount	$	219,113	$	9,004	$	228,117
At December 31, 2018
Cost	$	377,422	$	68,240	$	445,662
Accumulated amortisation and
impairment	(	158,309)	(	59,236)	(	217,545)
	$	219,113	$	9,004	$	228,117
		Goodwill		Software		Total
At January 1, 2017
Cost	$	271,971	$	68,240	$	340,211
Accumulated amortisation and
impairment	(	158,309)	(	59,236)	(	217,545)
	$	113,662	$	9,004	$	122,666
2017
Opening net book amount	$	113,662	$	13,867	$	127,529
Adjustment	(	63,839)		-	(	63,839)
Additions		-		4,810		4,810
Amortisation charge (shown as
‘general and administrative
expenses’)		-	(	7,162)	(	7,162)
Closing net book amount	$	49,823	$	11,515	$	61,338
At December 31, 2017
Cost	$	208,132	$	64,976	$	273,108
Accumulated amortisation and
impairment	(	158,309)	(	53,461)	(	211,770)
	$	49,823	$	11,515	$	61,338

A. The Company signed the business transfer agreement with STC Corporation in June 2018 and acquired part of the company’s electronic components distribution business. The business

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acquisition date was set in October 2018. The information regarding the intangible assets arising from the transfer is provided in Note 6(29).

• B. In 2017, the acquisition price was adjusted pursuant to the contingent consideration provision in the business transfer agreement signed in 2011 with Kei Kong Electronic Ltd. As a result, the goodwill from the business was also adjusted in the amount of $63,839.

• C. The Company evaluated the impairment of recoverable amount of the goodwill at each reporting date and used the value-in-use calculation as basis for recoverable amount. These calculations use future cash flow projections based on financial budgets approved by the management covering a five-year period.

• The future cash flows were estimated based on the annual revenue, gross profit and other operating expenses in the future. The Company’s estimated average annual revenue growth rate is 5%~10%, and adopted discount rate is the pre-tax ratio of weighted average capital cost to reflect risk of related cash-generating units. Based on the aforementioned assessment, no recognition of impairment loss of goodwill was recognised for the years ended December 31, 2018 and 2017.

(8) Short-term borrowings

2018 and 2017. hort-term borrowings
Credit loans Loan facilities Interest rate range Contract period	December 31,2018 16,486,561 $ 19,556,306 $ 0.57%~3.8266% 2018/1/26~2019/8/29	December 31,2017
		12,451,991 $ 25,900,515 $ 0.9066%~2.7696% 2017/1/24~2018/8/29

Please refer to Note 8 for details of the collaterals of abovementioned secured borrowings.

(9) Short-term notes and bills payable

Commercial paper Amortisation of discount ( Coupon rate	December 31,2018 December 31,2017 1,350,000 $ 1,150,000 $ 1,115) 711) ( 1,348,885 $ 1,149,289 $ 0.57%~0.88% 0.53%~0.85%

The notes and bills were issued under securities and acceptance offered by the financial institutions to fund short-term capital. The issuance period is within 90 days.

(10) Financial liabilities at fair value through profit or loss

Items Current items: Forward foreign exchange contracts Cross currency swap contracts	December 31,2018 2,055 $ 1,482 3,537 $	December 31,2017 3,720 $ 4,057 7,777 $

• A. The Company recognised net gain of $70,433 and net loss of $6,862 on financial assets held for trading (shown as ‘other gains and losses’) on financial liabilities and at fair value through profit

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or loss for the years ended December 31, 2018 and 2017, respectively.

• B. The non-hedging derivative instruments transactions and contract information are as follows:

• (a)

		December	31,2018
	Contract	amount
	(Notional	principal)
Derivative financial liabilities	(In thousands)		Contractperiod
Current items:
Forward foreign exchange contracts	USD (BUY)	17,000	2018.11.28~2019.3.28
Cross currency swap contracts	USD (BUY)	10,000	2018.12.26~2019.2.26
		December	31,2017
	Contract	amount
	(Notional	principal)
Derivative financial liabilities	(In thousands)		Contractperiod
Current items:
Forward foreign exchange contracts	USD (BUY)	12,000	2017.12.5~2018.3.20
Cross currency swap contracts	USD (BUY)	15,000	2017.12.21~2018.3.21

• (b) The Company entered into forward foreign exchange contracts to sell USD to hedge exchange rate risk of foreign currency. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

• (c) The cross currency swap contracts signed by the Company are to fulfill capital movement. For exchange rate, principals denominated in two currencies are exchanged at the same exchange rate at the initial and final exchanges. Thus, there is no foreign exchange risk. For interest rate, to hedge the exchange risk of floating rate, the Company exchanged fixed rate of NTD for floating rate of USD. However, these cross currency swap contracts are not accounted for under hedge accounting.

• C. For the derivative transactions, the Company deals with a variety of financial institutions all with high credit quality, so it expects that the probability of counterparty default is remote.

(11) Other payables

Other payables
Salaries and bonuses payable Finance cost payable Insurance expense payable Cost to technical services payable Freight payable Others	December 31,2018 429,401 $ 112,859 66,419 58,097 43,423 189,780 899,979 $	December 31,2017
		355,169 $ 59,139 33,824 56,181 45,371 150,437 700,121 $

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(12) Bonds payable

Bonds payable Less: Discount on bonds payable Less: Bonds payable, current portion

December 31,2018 1,074,200 $ 7,452) ( 1,066,748 1,066,748) ( - $	December 31,2017 1,242,200 $ 25,673) ( 1,216,527 - 1,216,527 $

• A. The issuance of domestic convertible bonds by the Company:

• (a) The terms of the domestic unsecured convertible bonds issued by the Company are as follows:

  • i. The Company issued $1,500,000, 0%, fifth domestic unsecured convertible bonds, as approved by the regulatory authority. The bonds mature 3 years from the issue date (July 7, 2016 ~July 7, 2019) and will be redeemed in cash at face value at the maturity date. The bonds were listed on the Taipei Exchange on July 7, 2016.

  • ii. The bondholders have the right to ask for conversion of the bonds into common shares of the Company during the period from the date after one month of the bonds issue to the maturity date, except for the stop transfer period as specified in the terms of the bonds or the laws/regulations. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.

  • iii. The conversion price of the bonds is set up based on the pricing model as specified in the terms of the bonds (with the conversion price at $40.5 per share), and is subject to adjustments if the condition of the anti-dilution provisions occurs subsequently. On December 31, 2018, the conversion price was $31.3 per share.

  • iv. Under the terms of the bonds, all bonds redeemed (including bonds repurchased from securities trading markets), matured and converted are retired and not to be re-issued; all rights and obligations attached to the bonds are also extinguished.

• B. Regarding the issuance of convertible bonds, the equity conversion options amounting to $40,362 were separated from the liability component and were recognised in ‘capital surplus-share options’ as of December 31, 2018, in accordance with IAS 32.

• C. As of December 31, 2018, the convertible bonds converted into 12,591 thousand common shares totaled $425,800 at par value.

• D. For the years ended December 31, 2018 and 2017, the amortised discount of bonds payable was $16,351 and $17,579, respectively.

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(13) Long-term loans

Type of loans Period Mid-term borrowings (Bank SinoPac) 2017/10/3~2019/10/3 Mid-term borrowings (The Export-Import Bank of the Republic of China) 2017/1/25~2020/1/25 Range of interest rates Less: Long-term borrowings, current portion Type of loans Period Syndicated loans (Mega Bank and 7 other banks) 2013/12/18~2018/12/18 Mid-term borrowings (Bank SinoPac) 2017/10/3~2019/10/3 Mid-term borrowings (The Export-Import Bank of the Republic of China) 2017/1/25~2020/1/25 Range of interest rates

Credit line Amount 1,500,000 $ 625,000 $ 368,580 368,580 1,868,580 $ 993,580 870,720) ( 122,860 $ 1.05%~3.7526% December 31,2018 Credit line Amount 1,333,333 $ - $ 1,500,000 625,000 357,120 357,120 3,190,453 $ 982,120 $ 1.06%~2.589% December 31,2017

Range of interest rates

• A. The Company has signed a syndicated loan agreement whereby the Company is obligated to avail of borrowings equivalent to a certain percentage of the credit line during the period from six months after the date of first drawdown. If the total borrowings do not reach the minimum availment amount as specified in the loan agreement, the Company is required to pay a commitment fee of 0.1% per annum based on the unavailed portion of the credit line. As of December 31, 2017, the Company has not used any of the aforementioned syndicated loans. However, in June 2018, the Company applied for the cancellation of the credit line in advance. As of December 31, 2018, the undrawn credit line of the syndicated loans had all been cancelled.

• B. The loan is classified as long-term liabilities since the term of the loan is more than one year and the Company plans to re-finance. Under the syndicated loan agreement, the credit line decreases equally during the remaining contract period from 3 years after the date of first drawdown.

• C. Under the Bank SinoPac borrowing contract, the Company should maintain the required current ratio, gearing ratio and interest coverage ratio based on the annual and semi-annual parent company only financial statements during the terms of the syndicated loans.

• D. The Company’s liquidity risk is provided in Note 12.

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(14) Pensions

• A. Defined benefit pension plan

• (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

• (b) The amounts recognised in the balance sheet are as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability (assets) (shown as ‘other non-current liabilities / assets’)	December 31,2018 110,691 $ 94,897) ( 15,794 $	December 31,2017 103,594 $ 88,903) ( 14,691 $

• (c) Movements in net defined benefit liabilities (assets) are as follows:

Year ended December 31,2018 Balance at January 1 Current service cost Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Balance at December 31	Present value of defined benefit obligations 103,594 $ 1,078 1,243 105,915 - 2,527 2,249 4,776 - 110,691 $	Fair value ofplan assets 88,903 $ - 1,067 89,970 2,485 - - 2,485 2,442 94,897 $	Net defined benefit liability (asset)
			14,691 $ 1,078 176 15,945 2,485) ( 2,527 2,429 2,471 2,442) ( 15,974 $

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Year ended December 31,2017 Balance at January 1 Current service cost Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Balance at December 31	Present value of defined benefit obligations 82,989 $ 886 1,244 85,119 - 3,748 14,727 18,475 ( - 103,594 $	Net defined Fair value benefit ofplan assets liability (asset) 85,545 $ 2,556) ($ - 886 1,283 39) ( 86,828 1,709) ( 422) ( 422 - 3,748 - 14,727 422) 18,897 2,497 2,497) ( 88,903 $ 14,691 $

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2018 and 2017 is given in the Annual Labour Retirement Fund Utilisation Report announced by the government.

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

Discount rate Future salary increases	Years ended December 31,	Years ended December 31,
	2018 1.0% 3.0%	2017
		1.2% 3.0%

Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

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Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31,2018 Effect on present value of defined benefit obligation ( December 31,2017 Effect on present value of defined benefit obligation (	Increase Decrease 0.25% 0.25% 3,146) $ 3,263 $ 3,134) $ 3,255 $ Discount rate	Increase Decrease 0.25% 0.25% 2,915 $ 2,832) ($ 2,931 $ 2,843) ($ Future salaryincreases

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2019 amount to $2,469.

• (g) As of December 31, 2018, the weighted average duration of the retirement plan is 12 years.

• B. Defined contribution pension plan

• (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• (b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2018 and 2017 were $32,550 and $29,185, respectively.

(15) Share-based payment

• A. For the year ended December 31, 2017, the Company’s share-based payment arrangements were as follows:

Type of arrangement Cash capital increase reserved for employee preemption	Grant date 2017.11.13	Quantity granted Contractperiod Vesting conditions 5,479 thousand shares - Vested immediately

• B. The fair value of stock options granted on November 13, 2017 is measured as follows:

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Type of arrangement Cash capital increase reserved for employee preemption	Grant date 2017.11.13	Exercise Stock price price (in dollars) (in dollars) $46.95 $38	Expected price volatility -	Expected option life -	Expected dividend -	Risk-free Fair value interest per unit rate (in dollars) - $8.95

Compensation cost of share-based payment of $49,037 was recognised for cash capital increase reserved for employee preemption for the year ended December 31, 2017.

(16) Share capital

• A. As of December 31, 2018, the Company’s authorised capital was $10,000,000, consisting of 1 billion shares of ordinary stock (including 82 million shares reserved for employee stock options), and the paid-in capital was $5,551,889 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

• B. Movements in the number of the Company’s ordinary shares (including certificate of entitlement to new shares from convertible bonds) outstanding are as follows:

At January 1 Cash capital increase Shares converted from bonds At December 31	2018 Shares(in thousands) 552,262 - 5,349 557,611	2017
		Shares(in thousands)
		471,519 75,000 5,743 552,262

• C. For the fourth quarter of 2018, convertible bonds amounting to $75,800 in total par value were requested for conversion into 2,422 thousand ordinary shares. The amount was recorded under ‘certificate of entitlement to new shares from convertible bonds’ because the change in registration has not yet been completed as of December 31, 2018.

(17) Capital surplus

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

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B. For the information relating to capital surplus-share options, please refer to Note 6(12).

At January 1 Conversion of convertible bonds At December 31 At January 1 Issue of common stock for cash Share-based payments Conversion of convertible bonds Recognition of change in equity of associates in proportion to the Company’s ownership At December 31		2018	Net change in equity of associates 8,159 $ - 8,159 $ Net change in equity of associates 8,680 $ - - - 521) ( 8,159 $
	Sharepremium 8,565,163 $ 118,956 8,684,119 $	Treasury share transactions Stock options 40,742 $ 46,675 $ - 6,313) ( 40,742 $ 40,362 $ 2017
	Sharepremium 6,268,305 $ 2,100,000 49,037 147,821 - 8,565,163 $	Treasury share transactions Stock options 40,742 $ 54,332 $ - 7,657) ( - - - - - - 40,742 $ 46,675 $

(18) Retained earnings

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. Special reserve shall be set aside or reversed as required by regulations or the Competent Authority when necessary. The remainder, if any, along with beginning unappropriated earnings is the accumulated distributable earnings. The amounts of abovementioned accumulated distributable earnings to be reserved or to be allocated and the way of distribution shall be determined based on the Company’s dividend policy, taking into account the indispensability of taking the earnings to back up the capital needs. The appropriation shall be proposed by the Board of Directors and resolved by the shareholders.

• B. The Company’s dividend policy is regulated by the Board of Directors taking into consideration the Company’s operations, future investment plans, capital budget and internal/external situations. As the Company is in the growth stage, most of retained earnings will be used to support business development and investment requirements and consequently, the minimum cash dividend and extra dividend policy is adopted by the Company. The Company’s dividend

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policy is summarised below:

At least 40% of the Company’s earnings shall be appropriated as stock dividends and cash dividends, taking into account profits in the future and capital needs, and cash dividends shall account for at least 10% of the total dividends distributed. In the event the total earnings appropriation exceeds 30% of the Company’s paid-in capital before appropriation, cash dividends shall account for at least 20% of the total dividends distributed.

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

• D. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• E. According to the resolutions adopted by the stockholders during their meetings in June 2018 and 2017, the distribution information of the Company’s 2017 and 2016 earnings is as follows:

Years ended December 31,

Legal reserve Special reserve Cash dividends	Dividends per share Amount (in dollars) 251,990 $ 109,102 1,381,423 2.5 $ 1,742,515 $ 2017	2016
		Dividends per share Amount (in dollars) 169,946 $ - 1,141,780 2.4 $ 1,311,726 $

• (a) As of March 22, 2019, the appropriation of the Company’s earnings has not yet been resolved by the Board of Directors.

• (b) Information on the appropriation of the Company’s earnings as resolved by the Board of Directors and approved by the stockholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

• F. For the information relating to employees’ compensation and directors’ and supervisors’ remuneration, please refer to Note 6(25).

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(19) Other equity items

(19)	Other equity items	Other equity items	Other equity items
(20)	Operating revenue Unrealised gains (losses) Currency on valuation translation Total At January 1, 2018 865,950 $ 975,052) ($ 109,102) ($ Effects on retrospective application of IFRS 9 22,321) ( - 22,321) ( Valuation adjustment on equity instruments - Subsidiaries 317,172) ( - 317,172) ( Disposals reclassified as retained earnings - Subsidiaries 277,925) ( - 277,925) ( Currency translation differences: - Translation of foreign operations - 569,283 569,283 - Subsidiaries and associates - 13,669 13,669 At December 31, 2018 248,532 $ 392,100) ($ 143,568) ($ Unrealised gains (losses) Currency on valuation translation Total At January 1, 2017 1,017,416 $ 162,084 $ 1,179,500 $ Valuation adjustment on equity instruments - Subsidiaries 151,466) ( - 151,466) ( Currency translation differences: - Translation of foreign operations - 1,074,520) ( 1,074,520) ( - Subsidiaries and associates - 62,616) ( 62,616) ( At December 31, 2017 865,950 $ 975,052) ($ 109,102) ($ Contract revenue 2018 2017 Sale of electronic components 213,486,599 $ 146,760,710 $ Other operating revenue 154,020 225,927 213,640,619 $ 146,986,637 $ Years ended December 31,
		2018 213,486,599 $ 154,020 213,640,619 $	2017
			146,760,710 $ 225,927 146,986,637 $

• A. The Company’s revenue from customers’ contracts primarily arise from the transfer of goods at a point in time. Please refer to Statement 6 for revenue information by category.

• B. The Company has recognised the following revenue-related contract liabilities provisions for estimated sales discounts:

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Refund liabilities-sales discounts and returns Contract liabilities-advance sales receipts

December 31,2018	December 31,2018
$	519,642
$	2,145,327

(21) Other income

Other income Refund liabilities-sales discounts and returns Contract liabilities-advance sales receipts	519,642 $ 2,145,327 $	519,642 $ 2,145,327 $
Interest income Dividend income Other income	Years ended December 31,
	2018 14,737 $ - 2,842 17,579 $	2017
		10,815 $ 440 5,597 16,852 $

(22) Other gains and losses

Other gains and losses		$	17,579	16,852 $	16,852 $
			Years ended	December 31,
			2018		2017
Gain (loss) on financial assets and liabilities at fair		$	70,433	($	6,862)
value through profit or loss - derivatives
Foreign exchange loss, net	(		35,838)	(	31,448)
Gain on financial assets at fair value through profit
or loss - equity instruments			3,025		-
Other losses	(		2,142)	(	3,921)
	$		35,478	($	42,231)

(23) Finance costs

Finance costs
Interest expense Bank borrowings Convertible bonds Interest on short-term notes Financing charges on accounts receivable factoring Other finance costs	Years ended December 31,
	2018 467,687 $ 16,351 7,966 509,645 9,996 1,011,645 $	2017
		331,189 $ 17,579 5,185 298,536 10,299 662,788 $

(24) Expenses by nature

Expenses by nature
Employee benefit expense Depreciation Amortisation	Years ended December 31,
	2018 1,043,814 $ 47,630 5,773 1,097,217 $	2017
		910,143 $ 38,108 7,162 955,413 $

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(25) Employee benefit expense

Employee benefit expense
Employee benefit expense Wages and salaries Labour and health insurance fees Pension costs Directors’ remuneration Other personnel expenses	Years ended December 31,
	2018 838,777 $ 54,797 33,804 9,000 107,436 1,043,814 $	2017
		726,141 $ 49,945 30,032 9,000 95,025 910,143 $

• A. For the years ended December 31, 2018 and 2017, the Company had 688 and 623 employees, excluding 4 and 4 directors, respectively.

• B. In accordance with the Articles of Incorporation of the Company as approved by the stockholders on June 3, 2016, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 3% for directors’ and supervisors’ remuneration.

• C. For the years ended December 31, 2018 and 2017, employees’ compensation was accrued at $31,900 and $28,740, respectively; while directors’ and supervisors’ remuneration was accrued at $12,000 and $12,000, respectively. The aforementioned amounts were recognised in salary expenses. The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on distributable profit of current year for the years ended December 31, 2018 and 2017.

• Employees’ compensation and directors’ and supervisors’ remuneration for 2017 as resolved by the directors during its meeting were in agreement with those amounts recognised in profit or loss for 2017.

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

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(26) Income tax

A. Income tax expense

(a) Components of income tax expense

e tax ome tax expense Components of income tax expense
Current tax: Current tax on profit for the year Tax on undistributed surplus earnings Total current tax Deferred tax: Origination and reversal of temporary differences Impact of change in tax rate ( Total deferred tax Income tax expense	Years ended December 31,
	2018 2017 238,218 $ 362,158 $ 77,023 37,950 315,241 400,108 65,053 87,061) ( 13,410) - 51,643 87,061) ( 366,884 $ 313,047 $	2017

• (b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

follows:
Remeasurement of defined benefit obligations Impact of change in tax rate	Years ended December 31,
	2018 2017 458 $ 3,213 $ 839 - 1,297 $ 3,213 $

B. Reconciliation between income tax expense and accounting profit

			Years ended	December 31,	December 31,
			2018		2017
Tax calculated based on profit before tax
and statutory tax rate		$	629,023	$	481,600
Effect from items disallowed by tax regulation	(		325,752)	(	206,503)
Additional 10% tax on undistributed earnings			77,023		37,950
Effect from changes in tax regulation	(		13,410)		-
Income tax expenses		$	366,884	$	313,047

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

					2018	2018
							Recognised
					Recognised		in other
					in profit	comprehensive
		January1			or loss		income		December 31
Deferred tax assets:
Allowance for sales
returns and discounts	$	185,227	$		54,945	$	-	$		240,172
Reserve for inventory
obsolescence and market
price decline		149,466	(		9,719)		-			139,747
Unrealised foreign
exchange loss		8,731	(		8,731)		-			-
Others		23,762			3,606		1,297			28,665
	$	367,186		$	40,101	$	1,297	$		408,584
Deferred tax liabilities:
Unrealised foreign
exchange gain	$	-	($		5,777)	$	-	($		5,777)
Foreign investment income
using equity method	(	276,261)	(		85,967)		-	(		362,228)
Others		-			-		-			-
	($	276,261)	($		91,744)	$	-	($		368,005)

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2017

Recognised in profit January1 or loss Deferred tax assets: Allowance for sales returns and discounts 133,150 $ 52,077 $ Reserve for inventory obsolescence and market price decline 137,989 11,477 Unrealised foreign exchange loss - 8,731 Others 2,555 17,994 273,694 $ 90,279 $ Deferred tax liabilities: Unrealised foreign exchange gain 29,133) ($ 29,133 $ Foreign investment income using equity method 243,879) ( 32,382) ( Others 31) ( 31 273,043) ($ 3,218) ($

Recognised in other comprehensive income December 31 - $ 185,227 $ - 149,466 - 8,731 3,213 23,762 3,213 $ 367,186 $ - $ - $ - 276,261) ( - - - $ 276,261) ($

• D. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

are as follows:
Deductible temporary differences	December 31,2018 13,741 $	December 31,2017
		13,741 $

• E. The Company has assessed that the taxable temporary differences arising on investments in subsidiaries will not reverse in the foreseeable future. Accordingly, the Company did not recognise the full amount as deferred tax liabilities. As of December 31, 2018 and 2017, the temporary differences of unrecognised deferred tax liabilities were $3,640,781 and $5,338,854, respectively.

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

• G. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Company has assessed the impact of the change in income tax rate.

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(27) Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method

using equity method
		Years ended	December 31,
		2018			2017
Subsidiaries and associates:
Components of other comprehensive income that
will not be reclassified to profit or loss
- Valuation adjustment on equity instruments	($	317,172)		$	-
- Net (loss) gain on defined benefit plan	(	3,791)			8,530
	(	320,963)			8,530
Components of other comprehensive income that
will be reclassified to profit or loss
- Valuation adjustment on equity instruments		-	(		151,466)
- Currency translation differences		13,669	(		62,616)
		13,669	(		214,082)
	($	307,294)	($		205,552)

	- Valuation adjustment on equity instru - Currency translation differences	ments - ( 13,669 ( 13,669 ( 307,294) ($ ($	ments - ( 13,669 ( 13,669 ( 307,294) ($ ($	151,4 62,6 214,0 205,5
(28)	Earnings per share Basic earnings per share Profit for the year Diluted earnings per share Profit for the year Assumed conversion of all dilutive potential ordinary shares Conversion of convertible bonds Employees’ compensation Profit for the year plus assumed conversion of all dilutive potential ordinary shares	Year ended December 31,2018
		Amount after tax 2,778,229 $ 2,778,229 16,351 - 2,794,580 $	Weighted average number of ordinary shares outstanding (shares in thousands) 553,629 553,629 38,315 831 592,775	Earnings per share (in dollars)
				5.02 $ 4.71 $

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Basic earnings per share Profit for the year Diluted earnings per share Profit for the year Assumed conversion of all dilutive potential ordinary shares Conversion of convertible bonds Employees’ compensation Profit for the year plus assumed conversion of all dilutive potential ordinary shares	Year ended December 31,2017	Year ended December 31,2017
	Amount after tax 2,519,897 $ 2,519,897 17,579 - 2,537,476 $	Weighted average number of ordinary shares Earnings outstanding (shares per share in thousands) (in dollars) 479,475 5.26 $ 479,475 38,989 790 519,254 4.89 $

(29) Business combinations

• A. In accordance with the resolution adopted by the stockholders in June, 2017, the Company decided to acquire all shares of Maxtek Technology Co., Ltd. (Maxtek) through stock swap at $27 (in dollars) per share. Total acquisition consideration was $1,895,949, and the effective date was October 1, 2017. Maxtek engages mainly in the sales of integrated circuits and other electronic components. The purpose for the acquisition was to integrate resources and expand operating scales and enhance competition, as well as, to improve the diversity of the Group’s product and customer services. Please refer to Note 6(31) in the consolidated financial statements for the year ended December 31, 2018.

• B. The Company acquired part of the electronic component distribution business of STC Corporation.

• (a) In June 2018, the Group signed a business transfer agreement with STC Corporation, acquiring part of the company’s electronic component distribution business in cash. The record date of the transfer was October 5, 2018.

• (b) If the gross profit exceeds US$4 million during the period from July 2018 to June 2020, 70% of excess amounts shall be paid in cash as additional consideration as stipulated in a contingent consideration agreement, which were included in considerations payable amounting to $169,920 (US$5,500 thousand) under the business transfer agreement. The Company has evaluated the possibility of contingent events that may occur based on the cost of distribution business.

• (c) STC Corporation is a distributor of electronic components with the greater Korea region as its primary market.

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• (d) The actual consideration payment will be adjusted during the period from July 2018 to June 2020 according to the conditions stipulated in the business transfer agreement.

• (e) As of December 31, 2018, the allocation of the purchase price of the acquisition is still in

process, and the Company has hired experts to assess the fair value of the identifiable assets.

(30) Changes in liabilities from financing activities

At January 1, 2018 Changes in cash flow from financing activities Interest expense from amortisation of short-term notes and bills payable Reclassification to long-term liabilities - current portion Interest expense from amortisation of convertible bonds Conversion of convertible bonds At December 31, 2018		Short-term borrowings (Note)	Short-term notes and bills payable Bondspayable Long-term loans Liabilities from financing activities-gross
		12,451,991 $ 4,784,570 - 1,187,468 - - 18,424,029 $	1,149,289 $ 1,216,527 $ 982,120 $ 15,799,927 $ 191,630 - 738,540) ( 4,237,660 7,966 - - 7,966 - 1,066,748) ( 120,720) ( - - 16,351 - 16,351 - 166,130) ( - 166,130) ( 1,348,885 $ - $ 122,860 $ 19,895,774 $

Note: Including long-term liabilities - current portion

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Company Techmosa International Inc. Subsidiary of the Company Nuvision Technology Inc. Subsidiary of the Company Morrihan International Corp. Subsidiary of the Company WT Microelectronics (Honk Kong) Limited Indirectly reinvested subsidiary of the Company WT Solomon QCE Limited Indirectly reinvested subsidiary of the Company WT Technology Pte. Ltd. Indirectly reinvested subsidiary of the Company WT Microelectronics Singapore Pte. Ltd. Indirectly reinvested subsidiary of the Company Wintech Microelectronics Ltd. Indirectly reinvested subsidiary of the Company WT Technology Korea Co., Ltd. Indirectly reinvested subsidiary of the Company Wonchang Semiconductor Co., Ltd. Indirectly reinvested subsidiary of the Company JCD Optical Corporation Limited Indirectly reinvested associates of the Company Qwave Technology Co., Ltd. Indirectly reinvested associates of the Company

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(2) Significant related party transactions

A. Operating revenue

nificant related party transactions Operating revenue
Sales of goods: - Subsidiaries Morrihan International Corp. WT Microelectronics (Honk Kong) Limited WT Technology Pte. Ltd. Others	Years ended December 31,
	2018 45,867,046 $ 18,715,251 10,434,535 20,335,425 95,352,257 $	2017
		76,818 $ 14,887,430 14,356,700 14,955,740 44,276,688 $

The collection terms with related parties were 90 days and the products were categorised and priced after referring to the inventory cost, market and other transaction conditions.

B. Purchases

Purchases
Purchases of goods: -Subsidiaries -Associates	Years ended December 31,
	2018 2017 11,180,686 $ 6,410,608 $ 14 149 11,180,700 $ 6,410,757 $

The credit term to related parties is 90 days and the purchase prices were categorised and priced after referring to market prices and other transaction conditions.

C. Receivables from related parties

Receivables from related parties
Accounts receivable: - Subsidiaries Morrihan International Corp. WT Microelectronics (Honk Kong) Limited Others	December 31,2018 6,582,968 $ 878,546 2,196,768 9,658,282 $	December 31,2017
		20,345 $ 2,469,783 1,791,632 4,281,760 $

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D. Payables to related parties

Payables to related parties
Accounts payable: - Subsidiaries Nuvision Technology Inc. Techmosa International Inc. Others	December 31,2018 232,957 $ 68,153 12,250 313,360 $	December 31,2017
		742,826 $ 698,018 28,552 1,469,396 $

E. Contract liabilities – current (Advance sales receipts)

ontract liabilities–current (Advance sales receipts)
Contract liabilities – current (Advance sales receipts): - Subsidiaries WT Technology Pte. Ltd. Nuvision Technology Inc. Wintech Microelectronics Ltd.	December 31,2018 1,300,782 $ 439,225 361,209 2,101,216 $	December 31,2017
		- $ - 379,078 379,078 $

F. Commissions

(a) Commissions expense

Years ended December 31,	Years ended December 31,
elated parties) 2018 60,374 $ December 31,2018 3,871 $	2017
	73,582 $ December 31,2017
	7,121 $

-Subsidiaries

(b) Commissions payable (shown as ‘other payables to related parties)

• Subsidiaries

G. Loans to others

Loans to related parties:

(a) Outstanding balance (shown as ‘other receivables’) :

- Subsidiaries

December 31,2018 721,803 $	December 31,2017
	- $

For the years ended December 31, 2018 and 2017, the interest rate was 1.8% for the abovementioned loans to related parties. Please refer to table 1 for details of loans to subsidiaries.

• (b) Interest income

subsidiaries. Interest income
- Subsidiaries	December 31,2018 10,701 $	December 31,2017
		9,705 $

H. Endorsements and guarantees provided to related parties

(a) As of December 31, 2017, the Company’s Chairman provided guarantees for the Company’s partial bank borrowing facilities. There is no such circumstances for the year ended December

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31, 2018.

• (b) As of December 31, 2018 and 2017, the balances of provision of endorsements and guarantees to subsidiaries for bank borrowings and purchase guarantees were as follows. The details are provided in Note 13(1)B.

provided in Note 13(1)B.
	December 31,2018		December 31,2017
- Subsidiaries	$	10,444,809	$	4,847,171
Key management compensation
		Years ended December 31,
		2018		2017
Salaries and other short-term employee benefits	$	86,339	$	117,147
Post-employment benefits		713		1,251
Share-based payments		-		806
	$	87,052	$	119,204

(3) Key management compensation

8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) Contingencies

None.

(2) Commitments

A. Operating lease commitments

Most of the Company’s operating leases are for the lease of offices and warehouses which can be renewed at market price at the end of the lease period. The total minimum future lease payments are as follows:

are as follows:
Not later than one year Later than one year but not later than five years Over 5 years	December 31,2018 107,609 $ 241,942 27,435 376,986 $	December 31,2017
		44,759 $ 75,571 43,896 164,226 $

B. Outstanding letters of credit

The amounts of outstanding letters of credit for the purchase of inventories by the Company are as follows:

Outstanding letters of credit

	December 31,2018	December 31,2017
	1,656,445 $	654,720 $

C. Provision of endorsements and guarantees

Please refer to Note 7(2) H for the provision of endorsements and guarantees to subsidiaries for bank borrowings.

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10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt. The Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as ‘total borrowings’ as shown in the consolidated balance sheet less cash and cash equivalents. Total equity is calculated as ‘equity’ as shown in the consolidated balance sheet.

In 2018 and 2017, the Company’s strategy was to maintain the financial debt ratio below 250%.

(2) Financial instruments

• A. Financial instruments by category

• The types of financial instruments held by the Company include cash and cash equivalents, financial assets measured at fair value through other comprehensive income/available-for-sale financial assets, net accounts receivable, other receivables, other current assets, short-term borrowings, short-term notes and bills payable, financial liabilities measured at fair value through profit or loss, accounts payable, other payables, bonds payable, and long-term loans. Please refer to Note 6 and the balance sheets for more information.

• B. Risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts and foreign currency option contracts are used to hedge certain exchange rate risk. In addition, foreign exchange risk is managed by matching the payment periods of foreign currency assets and liabilities.

• (b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close cooperation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• (c) Information about derivative financial instruments that are used to hedge certain exchange

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rate risk are provided in Note 6(10).

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Company operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company in various functional currency, primarily with respect to the USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities.

• ii. Management has set up a policy to manage their foreign exchange risk against their functional currency.

• iii. The Company hedges foreign exchange rate by using forward exchange contracts. However, the Company does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Note 6(10).

• iv. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD Foreign operations USD:NTD Financial liabilities Monetary items USD:NTD	December 31,2018	December 31,2018
	Foreign currency amount (in Exchange thousands) rate 739,772 $ 30.715 321,607 30.715 733,660 30.715	Book value (NTD) 22,722,097 $ 9,833,752 22,534,367	Sensitivityanalysis
			Degree of variation 1% 1%	Effect on profit or loss
				227,221 $ 225,344

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December 31, 2017

December 31,2017
v. The total exchange loss, including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2018 and 2017, amounted to $35,838 and $31,448, respectively. Foreign currency Degree Effect amount (in Exchange Book value of on profit thousands) rate (NTD) variation or loss (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 471,221 $ 29.76 14,023,537 $ 1% 140,235 $ Foreign operations USD:NTD 326,997 29.76 9,720,685 Financial liabilities Monetary items USD:NTD 127,080 29.76 3,781,901 1% 37,819 Sensitivityanalysis	Sensitivityanalysis

Price risk

• i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

• ii. The Company’s investments in equity securities comprise shares issued by the domestic and foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, for the year ended December 31, 2018, other components of equity would have increased/decreased by $122, as a result of other comprehensive income classified equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• i. The Company’s main interest rate risk arises from bank borrowings with variable rates and advance receipt of factoring accounts receivable, which expose the Company to cash flow interest rate risk. During the years ended December 31, 2018 and 2017, the Company’s borrowings at variable rate were mainly denominated in US Dollars.

• ii. The Company’s borrowings are measured at amortised cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

• iii. If the borrowing interest rate had increased/decreased by 25 basis point with all other

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variables held constant, profit, net of tax for the years ended December 31, 2018 and 2017 would have increased/decreased by $48,312 and $36,568, respectively. The main factor is that changes in interest expense result on floating rate borrowings.

• (b) Credit risk

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

• ii. The Company manages their credit risk taking into consideration the entire Company’s concern. For banks and financial institutions, only approved by FSC are accepted. According to the credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii. If the contract payments were past due over 90 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. The default occurs when the contract payments are past due over 180 days.

• iv. The ageing analysis of accounts receivable (including overdue receivables) and notes receivable is as follows:

eceivable is as follows:
Not past due Up to 90 days 91 to 180 days Over 180 days	December 31,2018 19,743,307 $ 2,257,319 81,595 171,236 22,253,457 $	December 31,2017
		11,881,006 $ 1,934,873 11,031 202,394 14,029,304 $

• (i) The above ageing analysis was based on days past due.

• (ii) Abovementioned notes receivable are not past due.

• v. The Company assesses the expected credit losses of its accounts receivable as follows:

• (i) Accounts receivable that are significantly past due are assessed individually for their expected credit losses;

• (ii) The remaining receivables are segmented according to the Company’s credit ratings of its customers. Different loss rates or provision matrices are applied to the different segments when estimating expected credit losses;

• (iii) Loss rates, calculated from historical and current information, are adjusted according to forward-looking information such as the business indicators published by the

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National Development Council.

• (iv) As of December 31, 2018, loss allowances of accounts receivable calculated from individual assessment or using the loss rate methodology and provision matrix are as follows:

December 31, 2018 Expected loss rate Total book value Loss allowance	Individual 100.00% 90,272 $ 90,272 $	GroupA & B 0.05% 16,278,713 $ 8,139 $	GroupC 0.00%~2.06% 5,403,663 $ 17,201 $	GroupD 2.48%~50.52% 480,809 $ 130,878 $	Total
					22,253,457 $
					246,490 $

• Company A: Customers with excellent credit rating and the Company’s subsidiaries Company B: Customers with fine credit rating

• Company C: Customers with normal credit rating

Company D: Rated as other than A, B and C

• vi. Movements in relation to the Company applying the modified approach to provide loss allowance for accounts receivable (including overdue receivables) are as follows:

At January 1_IAS 39 Adjustments under new standards At January 1_IFRS 9 Provision for impairment At December 31	2018
	Account receivable
	206,269 $ 34,834 241,103 5,387 246,490 $

• vii. Credit risk information for the year ended December 31, 2017 is provided in Note 12(4).

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. The Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities (Note 6(13)) at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance, compliance with internally assessed financial ratio targets and, if applicable external regulatory or legal requirements.

• ii. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Company treasury. The Company treasury invests surplus cash in interest bearing current accounts, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned

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forecasts, and expects to readily generate cash inflows for managing liquidity risk.

• iii. The table below analyses the Company’s non-derivative financial liabilities and netsettled or gross-settled derivative financial liabilities into relevant maturity Companyings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

December 31, 2018

Bonds payable Long-term borrowings	Less than Between 1 Between 2 1year and 2years and 5years Total 1,074,200 $ - $ - $ 1,074,200 $ 870,720 122,860 - 993,580 1,944,920 $ 122,860 $ - $ 2,067,780 $

Non-derivative financial liabilities:

December 31, 2017

Bonds payable Long-term borrowings	Less than Between 1 Between 2 1year and 2years and 5years Total - $ 1,242,200 $ - $ 1,242,200 $ - 863,080 119,040 982,120 - $ 2,105,280 $ 119,040 $ 2,224,320 $

Except for the abovementioned, the Company’s non-derivative financial liabilities are due in one year.

Derivative financial liabilities

As of December 31, 2018 and 2017, all derivative financial liabilities of the Company are due in one year.

• iv. The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value information

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

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. This includes the fair value of all investments in publicly listed companies.

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• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. This includes the fair value of all investments in derivative financial instruments.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investment without active market is included in Level 3.

• B. The carrying amounts of financial instruments not measured at fair value, including cash and cash equivalents, notes and accounts receivable, other receivables, other current assets, shortterm borrowings, short-term notes and bills payable, accounts payable, other payables, corporate bonds payable and long-term borrowings, are approximate to their fair values.

• C. The related information of financial instruments measured at fair value by level on the basis of the nature, characteristics and risks are as follows:

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

December 31, 2018 Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivative instrument December 31, 2017 Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivative instrument	Level 1 - $ - $ Level 1	Level 2 - $ 3,537 $ Level 2 7,777 $	Level 3 12,175 $ - $ Level 3 - $	Total 12,175 $ 3,537 $ Total 7,777 $
	- $

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

• i. The instruments the Company used market quoted prices as their fair values (that is, Level

  • 1) are listed below by characteristics:

Market quoted price

Listed shares

Closing price

• ii. Except for financial instruments with active markets, the fair value of other financial

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instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the parent company only balance sheet date.

• iii. When assessing non-standard and low-complexity financial instruments, for example, cross currency swap contracts, the Company adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• iv. The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate.

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

• vi. The Company takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Company’s credit quality.

• D. For the years ended December 31, 2018 and 2017, there was no transfer between Level 1 and Level 2.

• E. The following chart is the movement of Level 3 for the years ended December 31, 2018 and 2017:

2017:
At January 1 Adjustment on transfer under IFRS 9 At December 31	Equitysecurities
	2018 - $ 12,175 12,175 $	2017
		- $ - - $

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

• F. The following is the qualitative information of significant unobservable inputs and sensitivity

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analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non-derivative equity instrument: Unlisted shares	Significant Fair value at Valuation unobservable December 31,2018 technique input 12,175 $ N/A Latest transaction price without active market	Range Relationship (weighted of inputs average) to fair value N/A N/A

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

• A. Summary of significant accounting policies adopted in 2017

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

  • i. Financial assets at fair value through profit or loss are financial assets (liabilities) held for trading. Financial assets (liabilities) are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as financial assets (liabilities) held for trading unless they are designated as hedges.

  • ii. Financial assets (liabilities) at fair value through profit or loss are initially recognised at fair value. Related transaction costs are expensed in profit or loss. These financial assets (liabilities) are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognised in profit or loss.

• (b)Impairment of financial assets

  • i. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

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

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

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

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

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

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

  • (vi) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets,

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although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group;

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

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

• iii. When the Group assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets:

Financial assets carried at cost

• The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognised in profit or loss. Impairment loss recognised for this category shall not be reversed subsequently. Impairment loss is recognized by adjusting the carrying amount of the asset through the use of an impairment allowance account.

• B. The reconciliation of carrying amount of financial assets transferred from December 31, 2017, IAS 39, to January 1, 2018, IFRS 9, were as follows:

IAS 39 Transferred into and measured at fair value through other comprehensive income- equity Impairment loss adjustment IFRS 9	Available- for-sale-equity- non-current Measured at fair value through other comprehensive income-equity- Measured non-current at cost - $ 12,175 $ 12,175 12,175) ( - - 12,175 $ - $	Total 12,175 $ - - 12,175 $	Retained Other earnings equity - $ - $ - - 22,321 22,321) ( 22,321 $ 22,321) ($ Effects

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• C. The reconcilation of allowance for impairment from December 31, 2017, as these are impaired under IAS 39, to January 1, 2018, as these are expected to be impaired under IFRS 9, are as follows:

IAS 39 Impairment loss adjustment ( IFRS 9	Accounts receivable 9,541,275 $ 34,834) 9,506,441 $

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

• Financial assets at cost

The significant accounts as of December 31, 2017 are as follows: Financial assets at cost IFRS 9	9,506,441 $
Items Non-current items: Unlisted shares	December 31,2017
	12,175 $

• (a) According to the Company’s intention, its investment in unlisted stocks should be classified as ‘available-for-sale financial assets’. However, as unlisted stocks are not traded in active market, and no sufficient industry information of companies similar to unlisted companies’ financial information cannot be obtained, the fair value of the investment in unlisted stocks cannot be measured reliably. The Company classified those stocks as ‘financial assets measured at cost’.

• (b) As of December 31, 2017, no financial assets measured at cost held by the Company was pledged to others.

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

• (a) Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables. Because the counterparties of the Company and performing parties are banks with good credit and financial institutions and government organisations with investment grade or above have no significant compliance concern, there is no significant credit risk.

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

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• (c) The credit quality of notes and accounts receivable that were neither past due nor impaired was in the following categories based on the Company’s Credit Quality Control Policy:

Group A Group B Group C Group D Group E	December 31,2017
	2,389,177 $ 1,392,026 3,820,952 57,552 4,221,404
	11,881,111 $

Company A: Customers with excellent credit rating Company B: Customers with fine credit rating Company C: Customers with normal credit rating Company D: Rated as other than A, B or C. Company E: the Company’s subsidiaries

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

as follows:
Up to 30 days 31 to 180 days 181 to 365 days Over 365 days	December 31,2018
	1,765,478 $ 161,886 2,988 11,572
	1,941,924 $

The above aging analysis was based on past due date.

• (e) As of December 31, 2017, the Company’s accounts receivable that were impaired amounted to $206,269.

Movements in allowance for individual provision for doubtful accounts were as follows:

At January 1 Provision for doubtful accounts At December 31	2017
	155,528 $ 50,741
	206,269 $

(5) Effects of initial application of IFRS 15 and information on application of IAS 11 and IAS 18 in 2017

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

Revenue recognition

• (a) The Company sells electronic and communication components. Revenue is measured at the fair value of the consideration received or receivable taking into account value-added tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary

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course of the Company’s activities. Revenue arising from the sales of goods is recognised when the Company has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.

• (b)The Company offers customers volume discounts and estimates such discounts and returns based on historical experience. Provisions for such liabilities are recorded when the sales are recognised. The volume discounts are estimated based on the anticipated annual sales quantities.

• B. In line with IFRS 15 requirements, the Company changed the presentation of certain accounts in the balance sheet as follows:

• (a) Under IFRS 15, liabilities in relation to expected volume discounts and refunds to customers are recognised as contract liabilities, but were previously presented as accounts receivable - allowance for sales returns and discounts in the balance sheet. As of January 1, 2018, the balance amounted to $685,883.

• (b) Under IFRS 15, liabilities in relation to customer contracts are recognised as contract liabilities, but were previously presented as other current liabilities-advance sales receipts in the balance sheet. As of January 1, 2018, the balance amounted to $416,627.

13. SUPPLEMENTARY DISCLOSURES

• (1) Significant transactions information

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

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

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

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

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

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

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

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.

• I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6(10).

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• J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

(2) Information on investees

• Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 8.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies

• in the Mainland Area: Please refer to Note 13(1).

14. SEGMENT INFORMATION

Not applicable.

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WT Microelectronics Co., Ltd.

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Loans to others Year ended December 31, 2018

Number (Note 1)	WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS (SHANGHAI) CO., LTD. WT MICROELECTRONICS CO., LTD. MORRIHAN INTERNATIONAL CORP. WT MICROELECTRONICS CO., LTD. MAXTEK TECHNOLOGY CO., LTD. WT MICROELECTRONICS CO., LTD. HONGTECH ELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. LACEWOOD INTERNATIONAL CORP. WT MICROELECTRONICS (HONG KONG) LIMITED WT SOLOMON QCE LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED BRILLNICS (HK) LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED WINTECH MICROELECTRONICS LTD. WT MICROELECTRONICS (SHENZHEN) CO., LTD. WT MICROELECTRONICS (SHANGHAI) CO., LTD. BSI SEMICONDUCTOR PTE. LTD. WT MICROELECTRONICS SINGAPORE PTE. LTD. MORRIHAN SINGAPORE PTE. LTD. WT MICROELECTRONICS SINGAPORE PTE. LTD. MSD HOLDING PTE. LTD. WT MICROELECTRONICS SINGAPORE PTE. LTD. Creditor Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended December 31, 2018	Balance at December 31, 2018	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Item Value Collateral	Item Value Collateral	Limit on loans granted to a singleparty	8,722,750 $ 8,722,750 8,722,750 8,722,750 8,722,750 1,762,480 3,544,966 8,862,415 735,513 513,352 212,927 91,956 Ceiling on total loansgranted	Footnote
0 0 0 0 0 1 2 2 3 4 5 6		Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties	Y Y Y Y Y Y Y Y Y Y Y Y	897,500 $ 1,200,000 350,000 350,000 309,750 766,875 154,150 681,450 187,044 294,263 238,080 86,730	896,300 $ - 350,000 350,000 307,150 - 153,575 675,730 - 291,793 - 86,002	- $ - 307,150 307,150 107,503 - 153,575 534,441 - 291,793 - 86,002	1.00% 1.80% 1.80% 1.80% 1.80% 2.00% 2.60% 2.00% 1.00% 2.3%~2.7 88% 2.00% 2.30%	2 2 2 2 2 2 2 2 2 2 2 2	- $ - - - - - - - - - - -	Business Operation Business Operation Business Operation Business Operation Business Operation Business Operation Business Operation Business Operation Business Operation Business Operation Business Operation Business Operation	- $ - - - - - - - - - - -	- - - - - - - - - - - -	- $ - - - - - - - - - - -	2,180,688 $ 2,180,688 2,180,688 2,180,688 2,180,688 1,762,480 886,242 8,862,415 735,513 513,352 212,927 91,956		Note 3 Note 3 Note 3 Note 3 Note 3 Note 2 Note 3 Note 2 Note 2 Note 2 Note 2 Note 2

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

(1)The Company is ‘0’.

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

Note 2: The policy for loans granted mutually between overseas subsidiaries of which the Company directly or indirectly holds 100% of their voting shares is as follows: ceiling on total loans granted by an overseas subsidiary to all overseas subsidiaries and limit � on loans granted by an overseas subsidiary to a single overseas subsidiary are the Creditor's net assets.

Note 3: The policy for loans between the Company and subsidiaries is as follows: limit on loans granted by subsidiary to a single party is 10% of the subsidiary’s net assets, based on the most recent audited financial statements of the company; ceiling on total loans granted by an subsidiary is 40% of the subsidiary’s net assets.

Note 4: The net assets referred to above are based on the latest audited or reviewed financial statements.

Table 1, Page 1

WT Microelectronics Co., Ltd.

Provision of endorsements and guarantees to others Year ended December 31, 2018

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1)	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements / guarantees provided for a singleparty (Note 3)	Maximum outstanding endorsement / guarantee amount as of December 31,2018	Outstanding endorsement / guarantee amount at December 31, 2018	Actual amount drawn down	Amount of endorsements / guarantees secured with collateral	Ratio of accumulated endorsement/guarante e amount to net asset value of the endorser/guarantor company	Ceiling on total amount of endorsements / guarantees provided (Note 3)	Provision of endorsements / guarantees by parent company to subsidiary	Provision of endorsements / guarantees by subsidiary to parent company	N N N N N N N N N Y Y N N N N Y N N N N Provision of endorsements / guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser / guarantor (Note 2)
0 0 0 0 0 0 0 0 0 0 0 0 0 1 2 3 4 4 4 5	WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. TECHMOSA INTERNATIONAL INC. MORRIHAN INTERNATIONAL CORP. WT MICROELECTRONICS (SHANGHAI) CO., LTD. MAXTEK TECHNOLOGY CO., LTD. MAXTEK TECHNOLOGY CO., LTD. MAXTEK TECHNOLOGY CO., LTD. HONGTECH ELECTRONICS CO., LTD.	NUVISION TECHNOLOGY INC. MAXTEK TECHNOLOGY CO., LTD. HONGTECH ELECTRONICS CO., LTD. WT SOLOMON QCE LIMITED WT MICROELECTRONICS (HONG KONG) LIMITED WT TECHNOLOGY KOREA CO., LTD. WONCHANG SEMICONDUCTOR CO., LTD. MORRIHAN SINGAPORE PTE. LTD. LACEWOOD INTERNATIONAL CORP. WT MICROELECTRONICS (SHANGHAI) CO., LTD. WT MICROELECTRONICS (SHENZHEN) CO., LTD. TECHMOSA INTERNATIONAL INC. MORRIHAN INTERNATIONAL CORP. TECHMOSA INTERNATIONAL INC. MORRIHAN INTERNATIONAL CORP. WT MICROELECTRONICS (SHANGHAI) CO., LTD. HONGTECH ELECTRONICS CO., LTD. LACEWOOD INTERNATIONAL CORP. MAXTEK TECHNOLOGY CO., LTD. HONGTECH ELECTRONICS CO., LTD.	2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 1 3 3 1 1	17,445,501 $ 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 1,209,309 2,989,730 876,582 1,610,410 1,610,410 1,610,410 547,151	350,000 $ 262,000 154,875 619,500 2,168,250 89,280 1,549 309,750 247,800 3,342,900 1,574,762 185,850 1,239,000 10,000 14,000 56,113 555,980 225,484 9,500 9,500	350,000 $ 262,000 153,575 614,300 2,150,050 64,502 1,536 307,150 245,720 3,328,928 1,554,158 184,290 1,228,600 10,000 14,000 53,778 313,575 214,575 9,500 9,500	350,000 $ 135,239 69,136 307,150 2,150,050 43,444 85 - - 1,614,261 761,855 19,863 1,228,600 10,000 14,000 26,889 9,500 - 9,500 9,500	- - - - - - - - - - - - - - - 10,756 - - - -	1.60% 1.20% 0.70% 2.82% 9.86% 0.30% 0.01% 1.41% 1.13% 15.27% 7.13% 0.85% 5.63% 0.66% 0.37% 4.91% 15.58% 10.66% 0.47% 1.39%	17,445,501 $ 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 17,445,501 1,209,309 2,989,730 876,582 1,610,410 1,610,410 1,610,410 547,151	Y Y Y Y Y Y Y Y Y Y Y Y Y N N N N N N N	N N N N N N N N N N N N N N N N N N N N		Note 4 Note 4 Note 4 Note 4 Note 4

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

(1) The Company is ‘0’.

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

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following three categories:

• (1) Having business relationship.

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

(3) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

Note 3: The total endorsements and guarantees of the Company to others or mutually between subsidiaries should not be in excess of 80% of the endorser/ guarantor’s net assets, and for a single party the Company and its subsidiaries hold more than 50% of common shares should not be in excess of 80% of the Company’s net assets. The net assets referred to above are based on the latest audited or reviewed financial statements. Note 4: The Company's subsidiaries' guarantee for customs duties to itself.

Table 2, Page 1

WT Microelectronics Co., Ltd.

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

Expressed in thousands of NTD

Table 3

(Except as otherwise indicated)

Securities held by	Type of securities	Name of securities	Relationship with the securities issuer	General ledger account(Note 1)		As of December 31,2018	As of December 31,2018		Footnote
					Number of shares	Book value	Ownership (%)	Fair value
WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. NUVISION TECHNOLOGY INC. WINTECH MICROELECTRONICS HOLDING LTD. WINTECH MICROELECTRONICS HOLDING LTD. MILESTONE INVESTMENT CO.,LTD. MAXTEK TECHNOLOGY CO., LTD. HONGTECH ELECTRONICS CO., LTD.	Common stock Common stock Common stock Common stock Common stock Common stock Common stock Preferred shares Common stock Common stock Common stock	TERAWINS, INC. AIPTEK INTERNATIONAL INC. SANJET TECHNOLOGY CORP. CORERIVER SEMICONDUCTOR CO., LTD. FORTUNE SERVICE INNOVATION FUND I EIRGENIX, INC. AMBARELLA INC. LIFEMAX HEALTHCARE INTERNATIONAL CORPORATION. GRAND FORTUNE SECURITIES CO.,LTD FITIPOWER INTEGRATED TECHNOLOGY INC. FITIPOWER INTEGRATED TECHNOLOGY INC.	None None None None None None None None None None None	2 2 2 2 2 2 1、2 2 2 2 2	666,248 309,929 43,588 28,570 30,000 711,587 282,664 2,702,703 5,637,500 2,967,505 759,652	5,963 $ - 205 2,675 300 22,059 303,697 30,715 42,681 109,501 28,031	2.19 0.27 0.14 0.73 3.00 0.48 0.88 0.79 2.33 1.82 0.47	5,963 $ - 205 2,675 300 22,059 303,697 30,715 42,681 109,501 28,031

Note 1 : Code of general ledger accounts: 1- Financial assets at fair value through other comprehensive income - current Note 1 : Code of general ledger accounts: 2- Financial assets at fair value through other comprehensive income - non-current

Table 3, Page 1

WT Microelectronics Co., Ltd.

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

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Year ended December 31, 2018

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases (sales) Sales Sales Sales Sales Sales Sales Sales Sales Sales Purchases Purchases Purchases Sales Sales	Amount 45,867,046 $ 18,715,251 10,434,535 6,966,792 6,168,945 2,503,727 2,338,450 1,450,374 686,785 4,413,815 4,367,513 2,288,238 1,718,915 1,336,343	Percentage of total purchases (sales)	Credit term	Unitprice Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions	Credit term	Balance 6,582,968 $ 878,546 - - 897,976 794,442 407,472 - 15,075 68,153) ( - 232,957) ( 348,946 113,045	Percentage of total notes/accounts receivable (payable)
WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. NUVISION TECHNOLOGY INC. NUVISION TECHNOLOGY INC.	MORRIHAN INTERNATIONAL CORP. WT MICROELECTRONICS (HONK KONG) LIMITED WT TECHNOLOGY PTE. LTD. WINTECH MICROELECTRONICS LTD. WT MICROELECTRONICS SINGAPORE PTE. LTD. WT SOLOMON QCE LIMITED WT TECHNOLOGY KOREA CO., LTD TECHMOSA INTERNATIONAL INC. WONCHANG SEMICONDUCTOR CO., LTD. TECHMOSA INTERNATIONAL INC. MORRIHAN INTERNATIONAL CORP. NUVISION TECHNOLOGY INC. WT TECHNOLOGY PTE. LTD. WT MICROELECTRONICS (HONK KONG) LIMITED	Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates			21 9 5 3 3 1 1 1 - 2 2 1 16 12	Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month		No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference		31 4 - - 4 4 2 - - - - 1 25 8

Table 4, Page 1

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases (sales) Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	Amount 890,981 $ 3,270,593 846,130 319,794 191,041 170,040 542,295 153,878 134,067 1,247,139 109,006 838,190 5,314,228 2,319,354 379,343	Percentage of total purchases (sales)	Credit term	Unitprice Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions Based on product, market price of inventory cost and other trading conditions	Credit term	Balance 347,876 $ 1,509,833 85,240 - 49,143 25,132 - 39,279 36,777 - - 283,185 782,989 - 32,416	Percentage of total notes/accounts receivable (payable)
NUVISION TECHNOLOGY INC. MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. TECHMOSA INTERNATIONAL INC. TECHMOSA INTERNATIONAL INC. TECHMOSA INTERNATIONAL INC. MAXTEK TECHNOLOGY CO., LTD. MAXTEK TECHNOLOGY CO., LTD. HONGTECH ELECTRONICS CO., LTD. WINTECH MICROELECTRONICS LTD. WINTECH MICROELECTRONICS LTD. WT TECHNOLOGY (H.K.) LIMITED	WT SOLOMON QCE LIMITED WT SOLOMON QCE LIMITED MORRIHAN SINGAPORE PTE. LTD. WINTECH MICROELECTRONICS LTD. WT TECHNOLOGY PTE. LTD. WT MICROELECTRONICS (HONK KONG) LIMITED WT MICROELECTRONICS (HONK KONG) LIMITED WINTECH MICROELECTRONICS LTD. WT TECHNOLOGY PTE. LTD. LACEWOOD INTERNATIONAL CORP. HONGTECH ELECTRONICS CO., LTD. MAXTEK TECHNOLOGY CO., LTD. WT MICROELECTRONICS (SHANGHAI) CO., LTD. WT MICROELECTRONICS (SHENZHEN) CO., LTD. WT TECHNOLOGY KOREA CO., LTD	Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates			8 6 5 1 - - 3 1 1 13 1 23 70 30 91	Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month Closes its accounts 90 days after the end of each month		No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference		25 23 1 - 1 - - 3 2 - - - 100 - 86

Table 4, Page 2

WT Microelectronics Co., Ltd.

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

Year ended December 31, 2018

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	6,582,968 $ 897,976 878,546 794,442 407,472 348,946 347,876 232,957 113,045 1,509,833 283,185 782,989 Balance as at December 31,2018	13.94 6.96 11.18 4.02 8.60 5.65 3.05 4.69 11.61 4.15 3.87 8.28 Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount 32,171 $ - - - 285,354 - - - - - - -	Action taken
WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. NUVISION TECHNOLOGY INC. NUVISION TECHNOLOGY INC. NUVISION TECHNOLOGY INC. NUVISION TECHNOLOGY INC. MORRIHAN INTERNATIONAL CORP. HONGTECH ELECTRONICS CO., LTD. WINTECH MICROELECTRONICS LTD.	MORRIHAN INTERNATIONAL CORP. WT MICROELECTRONICS SINGAPORE PTE. LTD. WT MICROELECTRONICS (HONK KONG) LIMITED WT SOLOMON QCE LIMITED WT TECHNOLOGY KOREA CO., LTD WT TECHNOLOGY PTE. LTD. WT SOLOMON QCE LIMITED WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS (HONK KONG) LIMITED WT SOLOMON QCE LIMITED MAXTEK TECHNOLOGY CO., LTD. WT MICROELECTRONICS (SHANGHAI) CO., LTD.	Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates				Subsequent collection Subsequent collection	6,553,571 $ 897,976 831,351 781,510 407,472 - 347,876 232,957 113,045 1,509,833 283,185 782,989	- - - - - - - - - - -

Note: Information of loans between the Company and subsidiaries, please refer to table 1.

Table 5, Page 1

Significant inter-company transactions during the reporting period

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

WT Microelectronics Co., Ltd.

Year ended December 31, 2018

Number (Note1)	Companyname	Counterparty	Relationship (Note2)		Transaction(Note4)	Transaction(Note4)
				General ledgeraccount	Amount	Transaction terms	Percentage of total operating revenues or totalassets (Note 5)
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 2 2 2 2 2 2 3 3 3 4 4 5	WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. NUVISION TECHNOLOGY INC. NUVISION TECHNOLOGY INC. NUVISION TECHNOLOGY INC. NUVISION TECHNOLOGY INC. NUVISION TECHNOLOGY INC. NUVISION TECHNOLOGY INC. MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. TECHMOSA INTERNATIONAL INC. TECHMOSA INTERNATIONAL INC. TECHMOSA INTERNATIONAL INC. MAXTEK TECHNOLOGY CO., LTD. MAXTEK TECHNOLOGY CO., LTD. HONGTECH ELECTRONICS CO., LTD. HONGTECH ELECTRONICS CO., LTD.	MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. WT MICROELECTRONICS (HONK KONG) LIMITED WT MICROELECTRONICS (HONK KONG) LIMITED WT TECHNOLOGY PTE. LTD. WINTECH MICROELECTRONICS LTD. WT MICROELECTRONICS SINGAPORE PTE. LTD. WT MICROELECTRONICS SINGAPORE PTE. LTD. WT SOLOMON QCE LIMITED WT SOLOMON QCE LIMITED WT TECHNOLOGY KOREA CO., LTD WT TECHNOLOGY KOREA CO., LTD TECHMOSA INTERNATIONAL INC. WONCHANG SEMICONDUCTOR CO., LTD. TECHMOSA INTERNATIONAL INC. MORRIHAN INTERNATIONAL CORP. NUVISION TECHNOLOGY INC. NUVISION TECHNOLOGY INC. WT TECHNOLOGY PTE. LTD. WT TECHNOLOGY PTE. LTD. WT MICROELECTRONICS (HONK KONG) LIMITED WT MICROELECTRONICS (HONK KONG) LIMITED WT SOLOMON QCE LIMITED WT SOLOMON QCE LIMITED WT SOLOMON QCE LIMITED WT SOLOMON QCE LIMITED MORRIHAN SINGAPORE PTE. LTD. WINTECH MICROELECTRONICS LTD. WT TECHNOLOGY PTE. LTD. WT MICROELECTRONICS (HONK KONG) LIMITED WT MICROELECTRONICS (HONK KONG) LIMITED WINTECH MICROELECTRONICS LTD. WT TECHNOLOGY PTE. LTD. LACEWOOD INTERNATIONAL CORP. HONGTECH ELECTRONICS CO., LTD. MAXTEK TECHNOLOGY CO., LTD. MAXTEK TECHNOLOGY CO., LTD.	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Sales Accounts receivable Sales Accounts receivable Sales Sales Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Sales Purchases Purchases Purchases Accounts payable Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Sales Sales Sales Sales Sales Sales Sales Sales Accounts receivable	45,867,046 $ 6,582,968 18,715,251 878,546 10,434,535 6,966,792 6,168,945 897,976 2,503,727 794,442 2,338,450 407,472 1,450,374 686,785 4,413,815 4,367,513 2,288,238 232,957 1,718,915 348,946 1,336,343 113,045 890,981 347,876 3,270,593 1,509,833 846,130 319,794 191,041 170,040 542,295 153,878 134,067 1,247,139 109,006 838,190 283,185	(Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3)	17 7 7 1 4 3 2 1 1 1 1 - 1 - 2 2 1 - 1 - - - - - 1 2 - - - - - - - - - - -

Table 6, Page 1

Table 6

WT Microelectronics Co., Ltd.

Significant inter-company transactions during the reporting period

Year ended December 31, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note1)	Companyname	Counterparty	Relationship (Note2)		Transaction(Note4)	Transaction(Note4)
				General ledgeraccount	Amount	Transaction terms	Percentage of total operating revenues or totalassets (Note 5)
6 6 6 7	WINTECH MICROELECTRONICS LTD. WINTECH MICROELECTRONICS LTD. WINTECH MICROELECTRONICS LTD. WT TECHNOLOGY (H.K.) LIMITED	WT MICROELECTRONICS (SHANGHAI) CO., LTD. WT MICROELECTRONICS (SHANGHAI) CO., LTD. WT MICROELECTRONICS (SHENZHEN) CO., LTD. WT TECHNOLOGY KOREA CO., LTD	3 3 3 3	Sales Accounts receivable Sales Sales	5,314,228 $ 782,989 2,319,354 379,343	(Note 3) (Note 3) (Note 3) (Note 3)	2 1 1 -

• Note 1: The information of transactions between the Company and the consolidated subsidiaries should be noted in “Number” column. (1) Number 0 represents the Company. (2) The consolidated subsidiaries are numbered in order from number 1. Note 2: The transaction relationships with the counterparties are as follows: (1) The Company to the consolidated subsidiary.

• (2) The consolidated subsidiary to the Company.

(3) The consolidated subsidiary to another consolidated subsidiary. Note 3: The prices and terms to related parties were similar to third parties. The credit term is 90 days after the end of each month. Note 4: For sales, purchases and account receivables, transactions reaching NT$100 million or 20% of paid-in capital or more should be disclosed. Note 5: In calculating the ratio, the transaction amount is divided by consolidated total assets for balance sheet accounts and is divided by consolidated total revenues for income statement accounts. Note 6: Information of loans between the Company and subsidiaries, please refer to table 1.

Table 6, Page 2

WT Microelectronics Co., Ltd.

Names, locations and other information of investee companies (not including investees in Mainland China)

Year ended December 31, 2018

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Balance at December 31, 2018 Balance at December 31, 2017 Initial investment amount	Balance at December 31, 2018 Balance at December 31, 2017 Initial investment amount	Shares held	as at December 31,2018	as at December 31,2018	Net profit (loss) of the investee for the year ended December 31,2018	Investment income (loss) recognised by the Company for the year ended December 31,2018	Footnote
						Number of shares	Ownership (%)	Book value
WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS CO., LTD. WINTECH MICROELECTRONICS HOLDING LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED	WINTECH MICROELECTRONICS HOLDING LIMITED TECHMOSA INTERNATIONAL INC. MORRIHAN INTERNATIONAL CORP. BSI SEMICONDUCTOR PTE. LTD. NUVISION TECHNOLOGY INC. ABOVEE TECHNOLOGY INC. MILESTONE INVESTMENT CO., LTD. SINYIE INVESTMENT CO., LTD. MSD HOLDINGS PTE. LTD. MAXTEK TECHNOLOGY CO., LTD. PROMISING INVESTMENT LIMITED WINTECH INVESTMENT CO., LTD. WINTECH MICROELECTRONICS LTD. WINTECH MICROELECTRONICS LIMITED	British Virgin Islands Taiwan Taiwan Singapore Taiwan Taiwan Taiwan Taiwan Singapore Taiwan Mauritius Belis Belis British Virgin Islands	Holding company Sale of electronic components Sale of electronic components Sale of electronic components Sale of electronic components Information software and service i d t General investment General investment Sale of electronic components Sale of electronic components General investment General investment Sale of electronic components Holding company	3,644,147 $ 1,781,829 3,106,620 486,289 323,030 41,856 61,985 52,000 215,559 1,895,949 1,914,543 645,659 92,148 154	3,644,147 $ 1,781,829 3,106,620 486,289 323,030 41,856 61,985 52,000 215,559 1,895,949 1,914,543 645,659 92,148 154	115,323,691 73,949,070 283,760,000 7,544,002 28,216,904 500,000 4,500,000 2,900,000 200,001 70,220,331 62,332,506 21,020,957 3,000,100 5,000	99.65 100.00 100.00 100.00 99.91 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	8,815,533 $ 2,080,880 3,737,104 747,806 790,392 9,426 64,676 44,820 223,531 2,259,315 3,229,831 1,029,087 84,114 6	315,879 $ 342,793 484,786 18,859 317,619 33 7,527 50 3,580 340,344 265,024 132,063 9,426) ( -	315,879 $ 342,793 484,786 18,859 317,333 33 7,527 50 3,580 340,344 Note 1 Note 1 Note 1 Note 1	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Table 7, Page 1

Investor	Investee	Location	Main business activities	Balance at December 31, 2018 Balance at December 31, 2017 Initial investment amount	Balance at December 31, 2018 Balance at December 31, 2017 Initial investment amount	Shares held	as at December 31,2018	as at December 31,2018	Net profit (loss) of the investee for the year ended December 31,2018	Investment income (loss) recognised by the Company for the year ended December 31,2018	Footnote
						Number of shares	Ownership (%)	Book value
WINTECH MICROELECTRONICS HOLDING LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED WINTECH MICROELECTRONICS HOLDING LIMITED PROMISING INVESTMENT LIMITED PROMISING INVESTMENT LIMITED PROMISING INVESTMENT LIMITED PROMISING INVESTMENT LIMITED PROMISING INVESTMENT LIMITED WINTECH INVESTMENT CO., LTD. WINTECH INVESTMENT CO., LTD. WINTECH INVESTMENT CO., LTD. WT MICROELECTRONICS SINGAPORE PTE. LTD.	WT TECHNOLOGY PTE. LTD. JCD OPTICAL (CAYMAN) CO., LTD. SUPREME MEGA LTD. ANIUS ENTERPRISE CO., LTD. MEGA SOURCE CO., LTD. JOY CAPITAL LTD. RAINBOW STAR GROUP LIMITED WT MICROELECTRONICS (HONK KONG) LIMITED NINO CAPITAL CO., LTD. RICH WEB LTD. WT TECHNOLOGY (H.K.) LIMITED WT SOLOMON QCE LIMITED WT MICROELECTRONICS SINGAPORE PTE. LTD. WT MICROELECTRONICS (MALAYSIA) SDN. BHD. WT TECHNOLOGY KOREA CO., LTD. WT MICROELECTRONICS (THAILAND) LIMITED.	Singapore Cayman Islands Seychelles Seychelles Seychelles Seychelles British Virgin Islands Hong Kong Samoa British Virgin Islands Hong Kong Hong Kong Singapore Malaysia South Korea Thailand	Sale of electronic components Holding company Holding company Sale of electronic components Sale of electronic components General investment General investment Sale of electronic components Holding company Holding company Sale of electronic components Sale of electronic components Sale of electronic components Sale of electronic components Sale of electronic components Sale of electronic components	153,575 $ 72,914 562,453 - - 36,858 30,715 384,786 9,552 705,660 3,921 809,866 33,720 3,688 559,225 2,848	153,575 $ 72,914 562,453 - - 36,858 30,715 384,786 9,552 705,660 3,921 809,866 33,720 3,688 559,225 2,848	5,000,000 5,869,093 14,917,000 1 1 1,200,000 18,924 12,527,632 311,000 22,974,430 1,000,000 110,000,000 1,500,000 500,000 3,800,000 300,000	100.00 23.07 47.98 100.00 100.00 17.65 24.65 100.00 100.00 100.00 100.00 100.00 100.00 100.00 95.47 100.00	2,184,277 $ 86,146 57,694 - - 30,795 31,405 1,762,480 36,823 735,620 109,307 585,570 239,016 3,764 785,487 3,720	568 $ 49,502) ( 189,705) ( - - 5,146) ( 2,512) ( 193,594 140) ( 3,858 3,085 64,626 79,686 105) ( 59,303 371) (	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Subsidiary Associates Associates Subsidiary Subsidiary Associates Associates Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Table 7, Page 2

Investor	Investee	Location	Main business activities	Balance at December 31, 2018 Balance at December 31, 2017 Initial investment amount	Balance at December 31, 2018 Balance at December 31, 2017 Initial investment amount	Shares held	as at December 31,2018	as at December 31,2018	Net profit (loss) of the investee for the year ended December 31,2018	Investment income (loss) recognised by the Company for the year ended December 31,2018	Footnote
						Number of shares	Ownership (%)	Book value
SINYIE INVESTMENT CO., LTD. MORRIHAN INTERNATIONAL CORP. MORRIHAN INTERNATIONAL CORP. BSI SEMICONDUCTOR PTE. LTD. BSI SEMICONDUCTOR PTE. LTD. TECHMOSA INTERNATIONAL INC. TECHMOSA INTERNATIONAL INC. MAXTEK TECHNOLOGY CO., LTD. MAXTEK TECHNOLOGY CO., LTD. MAXTEK TECHNOLOGY CO., LTD. MAXTEK TECHNOLOGY CO., LTD. BEST WINNER INTERNATIONAL DEVELOPMENT LTD.	WINTECH MICROELECTRONICS HOLDING LIMITED HOTECH ELECTRONICS CORP. ASIA LATEST TECHNOLOGY LIMITED WT TECHNOLOGY KOREA CO., LTD. WONCHANG SEMICONDUCTOR CO., LTD. MORRIHAN SINGAPORE PTE. LTD. TECHMOSA INTERNATIONAL HOLDING LTD. HONGTECH ELECTRONICS CO., LTD. LACEWOOD INTERNATIONAL CORP. BEST WINNER INTERNATIONAL DEVELOPMENT LTD. QWAVE TECHNOLOGY CO., LTD. MAXTEK INTERNATIONAL (HK) LIMITED	British Virgin Islands Taiwan Mauritius South Korea South Korea Singapore Anguilla Taiwan British Virgin Islands British Virgin Islands Taiwan Hong Kong	Holding company Sale of electronic components Holding company Sale of electronic components Sale of electronic components Sale of electronic components Holding company Sale of electronic components Sale of electronic components Holding company Sale of electronic components Sale of electronic components	69,042 $ 14,770 37,771 53,276 24,089 210,451 - 115,000 194,366 69,840 40,000 23,526	69,042 $ 14,770 37,771 53,276 24,089 155,820 - 115,000 194,366 69,840 40,000 23,526	407,469 500,000 1,120,000 180,472 53,505 9,500,000 1 11,500,000 29,500 21,000 4,000,000 6,000,000	0.35 100.00 100.00 4.53 100.00 100.00 100.00 100.00 100.00 100.00 40.00 100.00	46,882 $ 31,976 46,339 28,641 185,005 212,927 17,515 683,939 567,788 67,024 40,305 18,460	315,878 $ 711 624 59,303 13,659 9,194 249 142,992 432 1,598) ( 2,385 1,710) (	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associates Subsidiary

Note 1: Profit (loss) of investee has been included in the investor, and will not be disclosed separately.

Table 7, Page 3

WT Microelectronics Co., Ltd.

Information on investments in Mainland China

Table 8

Year ended December 31, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2018	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2018	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2018	Accumulated amount of remittance from Taiwan to Mainland China as of December31,2018	Net income of investee for the year ended December 31, 2018	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2018 (Note2)	Book value of investment in Mainland China as of December31,2018	Accumulated amount of investment income remitted back to Taiwan as of December31,2018	Footnote
					Remitted to Mainland China	Remitted back toTaiwan
SHANGHAI WT MICROELECTRONICS CO., LTD. WT MICROELECTRONICS (SHENZHEN) CO., LTD. WT MICROELECTRONICS (SHANGHAI) CO., LTD. MORRIHAN INTERNATIONAL TRADING (SHANGHAI) CO., LTD. JCD OPTICAL CORPORATION	International trade, entrepot trade and etc. International trade, entrepot trade and etc. International trade, entrepot trade and etc. International trade, entrepot trade and etc. Production and sale of optoelectronic material and components	9,215 $ 697,938 1,079,632 40,851 125,932	2 2 2 3 2	9,215 $ 645,668 588,192 30,715 20,395	- $ - - - -	- $ - - - -	9,215 $ 645,668 588,192 30,715 20,395	138) ($ 3,858 17,818 624 48,012) (	100.00 100.00 100.00 100.00 23.07	138) ($ 3,858 17,818 624 11,076) (	36,732 $ 735,513 1,095,727 46,339 60,128	- $ - - - -	Note 5 Note 6 Note 7 Note 4 Note 8

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December31,2018	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commissionof MOEA
WT MICROELECTRONICS CO., LTD.	$ 1,294,185	$ 2,025,256	13,084,554 $

Note 1: The investment methods are classified into the following three categories:

(1) Directly investing in Mainland China.

(2) Through investing in companies in the third area, which then invested in the investee in Mainland China.

(3) Others.

Note 2: Investment gains or losses were recognised based on reviewed financial statements.

Note 3: The amount disclosed was 60% of net assets and based on Investment Commission, MOEA Regulation No. 09704604680 announced on August 29, 2008. Note 4: This is a China subsidiary which was reinvested through the company in the third area when Morrihan International Corp. was acquired in September 2009. Note 5: This is a China company which was invested through the company, NINO CAPITAL CO., LTD., in the third area.

Note 6: This is a China company which was invested through the company, RICH WEB LTD., in the third area.

Note 7: This is a China company which was reinvested through the company, WINTECH MICROELECTRONICS HOLDING LIMITED, in the third area. Note 8: This is a China company which was reinvested through the company, JCD OPTICAL (CAYMAN) CO., LTD., in the third area.

Table 8, Page 1

WT MICROELECTRONICS CO., LTD. DETAILS OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

STATEMENT 1

Items Petty cash and cash on hand Cash in banks Demand deposits Checking accounts Foreign currency deposits	USD 9,635 Thousand Exchange rate 30.715 SGD 523 Thousand Exchange rate 22.48 HKD 2,098 Thousand Exchange rate 3.921 EUR 3 Thousand Exchange rate 35.20 RMB 2,947 Thousand Exchange rate 4.4815 Summary	Amount
		4,872 $ 20,065 7,598 329,244 361,779 $

(Remainder of page intentionally left blank)

Statement 1, Page 1

WT MICROELECTRONICS CO., LTD. DETAILS OF ACCOUNTS RECEIVABLE DECEMBER 31, 2018 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

STATEMENT 2

Customer name Non-related parties A customer B customer C customer Others Less: Allowance for bad debts Related parties Morrihan International Corp. WT Microelectronics Singapore Pte. Ltd. WT Microelectronics (Hong Kong) Limited WT Solomon QCE Limited WT Technology Korea Co., Ltd Others	Summary (	Amount Note 701,740 $ 648,391 546,086 The balance of each customer has not exceeded 5% of the 10,650,320 accounts receivable. 12,546,537 197,852) 12,348,685 6,582,968 $ 897,976 878,546 794,442 407,472 96,878 9,658,282 22,006,967 $

Statement 2, Page 1

WT MICROELECTRONICS CO., LTD. DETAILS OF INVENTORIES DECEMBER 31, 2018 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) STATEMENT 3

Amount

Items Merchandise inventory Less: Allowance for inventory valuation losses	Summary (	Cost 34,445,437 $ 678,676) 33,766,761 $	Net realisable value 38,575,087 $	Notes

(Remainder of page intentionally left blank)

Statement 3, Page 1

WT MICROELECTRONICS CO., LTD. MOVEMENT SUMMARY OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD YEAR ENDED DECEMBER 31, 2018 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

STATEMENT 4

Name Wintech Microelectronics Holding Ltd. Morrihan International Corp. Techmosa International Corp. Maxtek Technology Co., Ltd BSI Semiconductor Pte. Ltd. Nuvision Technology, Inc. MSD Holdings Pte. Ltd. Milestone Investment Co., Ltd. Sinyie Investment Co., Ltd. AboveE Technology Inc.	Opening	Amounts 8,745,556 $ 3,523,693 2,053,747 1,929,180 713,645 702,819 214,602 94,178 44,769 9,394 18,031,583 $ balance	Additi	Amount(Note 1) 662,727 $ 569,568 349,042 377,179 34,161 326,072 8,929 7,527 51 32 2,335,288 $ ons	Reduc	Amount(Note 2)) 592,750) ($ 356,157) ( 321,909) ( 47,044) ( - 238,499) ( - 37,029) ( - - 1,593,388) ($ tions		Endingbalance	Amount 8,815,533 $ 3,737,104 2,080,880 2,259,315 747,806 790,392 223,531 64,676 44,820 9,426 18,773,483 $	Marketprice or	Totalprice 8,862,415 $ 3,737,162 1,511,626 2,013,013 513,352 790,392 91,956 67,707 44,820 9,426 17,641,869 $ valueper share	Pledged to others as collaterals
	Number of shares 115,323,691 283,760,000 73,949,070 70,220,331 7,544,002 28,216,904 200,001 4,500,000 2,900,000 500,000		Number of shares - - - - - - - - - -		Number of shares - - - - - - - - - -		Number of shares 115,323,691 283,760,000 73,949,070 70,220,331 7,544,002 28,216,904 200,001 4,500,000 2,900,000 500,000	Ownership (%) 99.65% 100.00% 100.00% 100.00% 100.00% 99.91% 100.00% 100.00% 100.00% 100.00%		Price - - - - - - - - - -
												None None None None None None None None None None

Note 1: It arose from gains and other comprehensive income on investments in subsidiaries accounted for using equity method.

Note 2: It arose from cash dividends from subsidiaries and losses and other comprehensive income on investments in subsidiaries accounted for using equity method.

Statement 4, Page 1

WT MICROELECTRONICS CO., LTD. DETAILS OF ACCOUNTS PAYABLE DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

STATEMENT 5

Customer name	Summary	Amount Notes 13,020,994 $ 2,553,660 3,623,035 4,797,972 3,622,759 The balance of each customer has not exceeded 5% of the 3,840,209 accounts receivable. 31,458,629 232,957 68,153 12,250 313,360 31,771,989 $
Non-related parties: D Company E Company F Company G Company H Company Others Related parties Nuvision Technology Inc. Techmosa International Inc. Others

Statement 5, Page 1

WT MICROELECTRONICS CO., LTD. DETAILS OF OPERATING REVENUE YEAR ENDED DECEMBER 31, 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

STATEMENT 6

Items Analog IC IC Memory Application-Specific IC Discrete Devices Microcontroller Unit Mixed-signal IC Microprocessor Chipset Logic IC Optical Electronic Components Image sensors IC Others	Quantity (in thousands) 7,363,726 1,200,144 222,189 7,364,677 594,388 556,779 23,338 134,426 815,215 741,263 7,885 1,054,117	Amount
		109,110,180 $ 15,891,496 15,533,281 14,709,080 14,166,847 6,887,540 5,836,347 4,701,244 2,829,056 2,741,756 877,972 20,355,820
		213,640,619 $

Statement 6, Page 1

WT MICROELECTRONICS CO., LTD. DETAILS OF OPERATING COST YEAR ENDED DECEMBER 31, 2018 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

STATEMENT 7

Items		Amount
Inventory at the beginning of the year	$	22,098,277
Add: Purchased		221,498,162
Less: Inventory at the end of the year	(	34,445,437)
Inventory transferred to sample expenses	(	12,285)
Inventory transferred to research expenses	(	3,644)
Cost of sales		209,135,073
Gain on reversal of decline in market price	(	180,477)
Loss on physical inventory and disposal of inventory		173,578
Operating costs	$	209,128,174

Statement 7, Page 1

WT MICROELECTRONICS CO., LTD. DETAILS OF OPERATING EXPENSES YEAR ENDED DECEMBER 31, 2018 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

STATEMENT 8

Items Wages and salaries Freight Entertainment expense Rent expense Insurance expense Employee benefits/welfare Traveling expense Impairment loss determined in accordance with IFRS 9 Other expenses	Sellingexpenses 586,026 $ 273,664 137,146 80,945 53,488 85,220 50,522 - 319,693 1,586,704 $	Administrative expenses 117,717 $ 1,579 7,905 59,014 49,089 700 8,047 - 204,267 448,318 $	Research and development expenses 135,034 $ - 861 3,372 10,585 - 10,358 - 39,309 199,519 $	Impairment loss determined in accordance with IFRS9 - $ - - - - - - 5,387 - 5,387 $	Total 838,777 $ 275,243 145,912 143,331 113,162 85,920 68,927 5,387 563,269 2,239,928 $	Notes
						The balance of each expense account has not exceeded 3% of the accounts payable

Statement 8, Page 1