Transcend Information, Inc.
2018 ANNUAL REGULAR SHAREHOLDERS’ MEETING MINUTES(This English version is a translation based on the original Chinese version.
Where any discrepancy arises between the two versions, the Chinese version shall prevail.)
Time: 9:00 a.m., June 14, 2018
Place: Transcend Information, Inc. (No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan)
Total share represented by shareholders present in person or by proxy are 349,615,742 shares(including 316,080,041 shares casted electronically), which is 81.16% of the total 430,761,675
outstanding shares.
Attended Directors:
Shu, Chung-Wan, the chairman of Board of Directors
Attended Independent Directors:
Wang, Yi-Hsin, the convener of Audit Committee, Chen, Yi-Liang, and Chen, Lo-Min
Attendees:
Lin Chun-Yao, the independent auditors of the Pricewaterhouse Coopers
Li, Dan, the lawyer of World Patent & Trademark Office
Chairman: Shu, Chung-Wan

Recorder: Chen, Hung-Jen

Call meeting to order: The aggregate shareholding of the shareholders present in person or by proxy
constituted a quorum. The Chairman called the meeting to order.
Chairman's Remarks: (Omitted)
I. Report Items(1) To report the business of 2017.
Please refer to Attachment I.
(2) Audit Committee’s review report.
Please refer to Attachment II.
(3) To report 2017 employees’ profit sharing bonus and directors’ compensation.
Explanatory Notes:
A. The remuneration of 2017 profit to employees would be NT$ 33,279,537 (distributed in cash);and that to directors would be NT$ 4,500,000.

~1~B. The estimated remuneration to employees is NT$ 34,779,100 and the different amount should
be NT$ 1,499,563; the estimated remuneration to directors is NT$ 4,944,736 and the different
amount should be NT$ 444,736.
C. The difference will be recognized as expense in the statement of income in 2018.
(4) The status of guarantees provided by the Company as of the end of 2017.
Explanatory Notes:
The Company provided a guarantee for Transcend Japan Inc. amounting to JPY 2,000,000
thousand, and the actual amount of guarantee draw down is JPY 0 by the end of 2017. Pursuant to
the Company’s “Procedures for Endorsement and Guarantee”, the limit of guarantee was NT$
8,199,318 thousand (approximate JPY 31,000,000 thousand).
II. Proposed Items(1) Adoption of 2017 Business Report and Financial Statements.
(Proposed by the Board of Directors)
Explanatory Notes:
A. The parent company only financial statement and consolidated financial statement of theCompany for the year of 2017 have been audited by independent auditors, Mr. Chun-Yao, Linand Mr. Chien-Hung Chou, of the Pricewaterhouse Coopers.
B. The Business Report, Independent Auditors’ Report and Financial Statements are hereby also
attached. (Please refer to Attachment I, III and IV)
C. It is submitted for ratification.
Resolution:

Shares represented at the time of voting:(including votes casted electronically

349,613,742
316,080,041 )Voting Results*
Votes in favor:
332,984,781 votes (302,419,080 votes)
Votes against:
144,356 votes (144,356 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 16,484,605 votes (13,516,605 votes)*including votes casted electronically (number in brackets)
RESOLVED, the above proposal was approved as proposed.

~2~% of the total
represented share present
95.24%
0.04%
0.00%
4.71%

(2) Adoption of the proposal for distribution of 2017 earnings.
(Proposed by the Board of Directors)
Explanatory Notes:
A. For appropriations of 2017 earnings, the Company will distribute cash dividend of NT$
2,498,417,715 (NT$5.80 per share) from the available retained earnings of 2017 after setting
aside legal reserve and special reserve.
B. Please refer to next page for the chart of 2017 earnings distribution.
C. Cash dividends will be distributed proportionately according to shareholders’ sharesownership registered in the Common Stockholders’ Roster as of the date of record.
D. To avoid the change in the total amount of common shares outstanding resulting from buybackof company shares, or transfer or cancellation of treasury stock, it is proposed that the
Chairman of the Board be authorized to adjust the cash to be distributed to each commonshare.
E. It is submitted for ratification.
Resolution:

Shares represented at the time of voting:(including votes casted electronically

349,613,742
316,080,041 )Voting Results*
Votes in favor:
333,097,584 votes (302,531,883 votes)
Votes against:
33,553 votes (33,553 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 16,482,605 votes (13,514,605 votes)*including votes casted electronically (number in brackets)
RESOLVED, the above proposal was approved as proposed.

~3~% of the total
represented share present
95.27%
0.00%
0.00%
4.71%

Transcend Information, Inc.
The Chart of 2017 Earnings Distribution
For the year ended December 31, 2017
(Expressed in New Taiwan dollar)
Item

AmountUnappropriated retained earnings at beginning

4,706,153,350

Add: Adjustment on unappropriated earnings for 2017

1,771,639

Adjusted unappropriated retained earnings

4,707,924,989

Add: Net income for 2017

2,655,716,602

Less: Legal reserve (10%)( 265,571,660)

Add: Reversal of Special reserve

98,441,026

Retained earnings available for appropriation as ofDecember 31, 2017
Less: Items of distribution Cash dividend to shareholders
Unappropriated retained earnings at end

Chairman：Shu, Chung-Wan

Remarks

7,196,510,957
2,498,417,715

Cash dividend(NT$5.80 per share)

4,698,093,242

General Manager：Shu, Chung-Cheng~4~

Accounting Supervisor：Chen, Hung-Jen

III. Discussion and Election Items(1) To approve cash distribution from capital surplus.
(Proposed by the Board of Directors)
Explanatory Notes:
A. To comply with Article 241 of the Company Act.
B. The capital surplus derived from the issuance of new shares at a premium totaling NT$
86,152,335 will be distributed in cash of NT$0.20 per share.
C. Cash dividends will be distributed proportionately according to shareholders’ sharesownership registered in the Common Stockholders’ Roster as of the date of record.
D. To avoid the change in the total amount of common shares outstanding resulting from buybackof company shares, or transfer or cancellation of treasury stock, it is proposed that the
Chairman of the Board be authorized to adjust the cash to be distributed to each commonshare.
E. It is submitted for approval.
Resolution:

Shares represented at the time of voting:(including votes casted electronically

349,613,742
316,080,041 )Voting Results*
Votes in favor:
333,098,584 votes (302,532,883 votes)
Votes against:
32,553 votes (32,553 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 16,482,605 votes (13,514,605 votes)*including votes casted electronically (number in brackets)
RESOLVED, the above proposal was approved as proposed.

~5~% of the total
represented share present
95.27%
0.00%
0.00%
4.71%

(2) Election of directors.
(Proposed by the Board of Directors)
Explanatory Notes:
A. Three-year term of the current directors started from June 12, 2015 and concluded on June 11,2018. To comply with Article 195 of the Company Act, in case no election of new directors is
effected after expiration of the term of office of existing directors, the term of office ofout-going directors shall be extended until the time new directors have been elected andassumed their office.
B. The shareholders’ meeting shall elect 9 directors (including 3 independent directors).
Three-year term of the new directors will start from June 14, 2018 and conclude on June 13,
2021.
C. According to the regulations and Articles of Incorporate, a candidate nomination system shallbe adopted. Please refer to Attachment V: the nomination list of directors.
D. It is submitted for election.
Resolution:
The list of persons elected as directors:(NON-INDEPENDENT DIRECTORS)

Shareholder Account NO./ID NO.
1
2
E2206*****
A1223*****
3
N1234*****Name
SHU, CHUNG-WAN
SHU, CHUNG-CHENG
CHUI, LI-CHU
WANG, JEN-MING
HSU, CHIA-HSIAN
LI, TSENG-HO

Numbers of Votes(including votes casted electronically)
358,888,168
322,012,750
321,618,604
321,352,027
321,171,162
320,973,021(INDEPENDENT DIRECTORS)

Shareholder Account NO./ID NO.
A2204*****
E1002*****A1234*****Name
WANG,YI-HSIN
CHEN,YI-LIANG
CHEN,LO-MIN~6~

Numbers of Votes(including votes casted electronically)
320,614,811
320,408,992
320,224,019

(3) To release the prohibition on directors from participation in competing business.
(Proposed by the Board of Directors)
Explanatory Notes:
A. Pursuant to Article 209 of Company Act, it is proposed to release non-competition restrictions
on the newly-elected directors, who may participate in investment or operation of anothercompany that engages in the same or similar business scope, under the premise that no harm to
the Company's interest.
B. Please refer to Attachment VI: the concurrent positions of directors.
C. It is submitted for approval.
Resolution:

Shares represented at the time of voting:(including votes casted electronically

349,613,742
316,080,041 )Voting Results*
Votes in favor:
332,054,046 votes (301,488,345 votes)
Votes against:
127,628 votes (127,628 votes)
Votes invalid:
0 votes (0 votes)
Abstention and no votes: 17,432,068 votes (14,464,068 votes)*including votes casted electronically (number in brackets)% of the total
represented share present
94.97%
0.03%
0.00%
4.98%

RESOLVED, the above proposal was approved as proposed.

IV. Other Business and Special Motion
Speech from shareholders: shareholder registered number 103580 had questions and comments about
the investment of the associate, product quality, and industrial product technologies development, thequestions were responded by the Chairman.
There is no other special motion, the meeting was adjourned.

V. Meeting Adjourned

Note: This document is extracted from the meeting; the details are subject to the audio and video recording.

~7~

Attachment I

TRANSCEND INFORMATION INC.
BUSINESS REPORTIn 2017, the global supply of the memory chips was tight and price continued to rise through thefirst half of the year. In the second half of the year, as the technology of 3D NAND Flash is mature
with an improving yield rate, supply and demand for NAND flash products became in a balance andresulted in stable prices. However, DRAM price still kept on the rise due to tight supply. During 2017,
Transcend strived to expand products and technologies in diverse applications. In addition to
constantly investing in high value-added embedded products for embedded applications, Transcend
has heavily developed strategic products to keep solid operating performance in the rapidly changing
memory market. Hereby, we would like to thank our valued shareholders, clients, suppliers andemployees for your continued supports of Transcend.
Transcend’s consolidated revenue totaled NT$ 21 billion in 2017. Consolidated gross profit
totaled NT$ 5.53 billion. Gross profit rate is 26.4 percent. Operating income totaled NT$ 4 billion.
Income before tax totaled NT$ 3.31 billion. Net income totaled NT$ 2.66 billion. EPS is NT$ 6.17
calculated at the weighted average of outstanding share capital amounting to 4.3 billion.
With excellent brand management, Transcend has received many prestigious awards by its
exceptional product design and brand image. For the eleventh year in a row, Transcend has beenranked as Interband’s Top 20 Best Taiwan Global Brands. Transcend also won Taiwan ExcellenceAwards for the fourteenth consecutive year and Japan’s Good Design Award for the third year,
demonstrating that Transcend’s outstanding product design is internationally recognized.
As a leading brand in the market, continuous innovation and improvement are the driving force
behind the growth of Transcend. We have successfully expanded into embedded market in recent years.
Besides developing industrial-grade SSDs for embedded applications, Transcend also provides a fullrange of embedded solutions that are suitable for a variety of demanding industrial environment. For
the consumer market, we focused on developing strategic products this year and had successfully
penetrated into dash camera and body camera market. We launched new DrivePro Body body camera
series tailored for professionals and new series of dash cameras with various practical functions, which
creates product differentiation in the market. In addition, Apple Solutions has been the pillar of thestrategic product lines. We also released a range of innovative upgrade solutions this year for Apple
users looking for greater performance and reliability.

~8~Transcend focuses not only on sales performance, but also on corporate governance. We aim todisclose adequate information in order to provide comprehensive corporate information to ourshareholders and investors. For cooperate social responsibility, we have sponsored sport activities inhigh school and universities, including the High School Basketball League (HBL), University
Basketball Association (UBA) and the Black Panther High School Baseball Tournament. We
continued to execute the long-term Baseball Mentoring Program aimed at underprivileged school
baseball teams for the third year, expecting to serve as a platform for young promising athlete to fulfill
their dreams. As a result, we received both “Sports Activists Award” and “Long-term SponsorshipAward” from the Sports Affairs Council this year as our continuing contribution to promote sports in
Taiwan.
Looking to 2018, price of DRAM is expected to remain on an upward trend due to supply
shortage, while price of NAND Flash will begin to drop and see in an oversupply situation thanks toincreased production and improved yield rate. Thus, an effective inventory management and flexible
pricing strategy will be the crucial key in the face of price fluctuation and competitive industry
environment. Transcend will also strive to build up long-term collaborative relationship with suppliers,
maintain healthy inventory level, and review pricing strategy regularly to ensure reasonable prices andto generate profit.
Transcend continues to implement automated productions system as well as optimizes the
manufacturing processes and equipment to improve productivity and decrease manufacturing costs.
We also leverage various marketing programs to expand into new channels and promote new products
in an effort to enhance our brand awareness and create market value. As a multinational enterprise,Transcend pays attention to the internal communication of the company, shares up-to-date market
information, keeps information in sync, and ensures that the headquarters policy can be implemented
to the entire enterprise to enhance the enterprise competitiveness.
Here again we sincerely thank all of our shareholders, for your continued support and for theconfidence that you have placed in us. We will make every effort to keep Transcend operational
excellence and look forward to sharing our progress with you.

Chairman：Shu, Chung-Wan
General Manager：Shu, Chung-Cheng
Accounting Supervisor：Chen, Hung-Jen~9~

Attachment II

Audit Report of Audit Committee

The Board of Directors has prepared the Company’s 2017 Business Report, Financial Statements andEarnings Distribution Proposal. Transcend Corporation’s Financial Statements have been audited andcertified by Mr. Chun-Yao, Lin and Mr. Chien-Hung Chou, the CPA of the Pricewaterhouse Coopers.
The Business Report, Financial Statements and Earnings Distribution Proposal have been reviewed
and considered to be complied with relevant rules by the undersigned, the audit committee ofTranscend Corporation. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of
the Company Act, we hereby submit this report.

The audit Committee of Transcend Corporation

Chairman of the audit Committee: Wang, Yi-ShinMarch 08, 2018~10~

Attachment III
REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Transcend Information, Inc.

OpinionWe have audited the accompanying balance sheets of Transcend Information, Inc. (the“Company”) as
at December 31, 2017 and 2016, and the related statements of comprehensive income, of changes inequity and of cash flows for the years then ended, and notes to the financial statements, including asummary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at December 31, 2017 and 2016, and its financial performanceand its cash flows for the years then ended in accordance with the “Regulations Governing the
Preparations 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 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 ethicalresponsibilities in accordance with the Code. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.

~11~Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the context
of our audit of the financial statements as a whole and, in forming our opinion thereon, we do notprovide a separate opinion on these matters.
Key audit matters for the Company’s financial statements of the current period are stated as follows:
Evaluation of inventories

Description
Please refer to Notes 4(8), 5(2) and 6(4) to the financial statements for the details of the information
about Company’s inventory accounting policy, estimates and assumption and allowance for inventory
evaluation losses.
The percentage of the Company’s inventories in total assets is material and the Company applies
judgements and estimates in determining the net realizable value of inventories on balance sheet date.
The Company mainly produces DRAM and flash memory, and due to those products having short life
cycle and belong to a highly competitive industry, the market prices change frequently. Since theCompany’s inventories and the allowance for inventories evaluation losses are material to its financial
statements, the evaluation of inventories has been identified as a key audit matter.
How our audit addressed the matter
Our audit procedures performed in respect of the above key audit matter included the following:
A. Obtained an understanding of the Company’s operation and industry. Assessed the reasonablenessof the policy and procedures to recognize allowance for inventory evaluation losses.
B. Obtained an understanding of the Company’s inventory control procedures. Reviewed annual
inventory count plan and observed the annual physical count of inventory in order to assess theeffectiveness of inventory internal control.
C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information
to assess the reasonableness of allowance for inventory evaluation losses.

~12~Estimation of allowance for sales discountDescription
In consideration of business volume, the Company provides a variety of business incentives to specificcustomers or products, and based on that, the Company can estimate the allowance for sales discountmonthly. Please refer to Note 6(3) to the financial statements for the details of the information about
estimation of allowance for sales allowance.
Since the contracts are numerous and the result could affect the net revenue in the financial statements,
the estimation of allowance for sales discount has been identified as a key audit matter.
How our audit addressed the matter
Our audit procedures performed in respect of the above key audit matter included the following:
A. Obtained an understanding of the Company’s operation, industry and the procedure to recognise
allowance for sales discount.
B. Obtained an understanding of the Company’s sales procedures and interviewed management toassess the appropriateness of sales allowance contracts and internal control on estimation ofallowance.
C. Obtained the evaluation list of allowance for sales discount, and tested material sales allowance
contracts and recalculated it to assess the reasonableness of allowance in the Company’s
determination.

Responsibilities of management and those charged with governance for the financial
statements
Management is responsible for the preparation and fair presentation of the financial statements inaccordance with the “Regulations Governing the Preparations of Financial Reports by Securities
Issuers”, and for such internal control as management determines is necessary to enable thepreparation of financial statements that are free from material misstatement, whether due to fraud or
error.

~13~

In preparing the financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.
Those charged with governance, including audit committee, are responsible for overseeing theCompany’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with ROC GAAS will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintainprofessional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due tofraud 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 notdetecting 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 overrideof internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

~14~







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 financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Company to express an opinion on the financial statements. We areresponsible for the direction, supervision and performance of the audit. We remain solely
responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal 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 andother matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.

~15~

From the matters communicated with those charged with governance, we determine those matters thatwere of most significance in the audit of the 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 regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, we determinethat a matter should not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of such communication.

March 8, 2018------------------------------------------------------------------------------------------------------------------------------------------------The accompanying 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 ofChina. 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, theaccompanying financial statements and report of independent accountants are not intended for use by those who are notinformed about the accounting principles or auditing standards generally accepted in the Republic of China, and theirapplications 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 thetranslation.

~16~

TRANSCEND INFORMATION, INC
BALANCE SHEETS(Expressed in thousands of New Taiwan Dollars)
December 31, 2017
AMOUNT%

Assets

December 31, 2016
AMOUNT%

Current assets
Cash and cash equivalents$

3,241,924

14

active market - current

738,877

Notes receivable, net$

1,560,837

7

3

366,295

1

5,862

-

5,348

-

1,718,543

7

1,815,255

8

Accounts receivable- related parties, net

796,093

4

1,184,712

5

Other receivables

100,120-

141,234

1

Inventories, net

5,050,568

22

4,818,926

21

Other current financial assets

6,840,736

30

8,638,735

37

9,960

-

12,480-18,502,683

80

18,543,822

80

68,874-

179,5801

method2,427,143

11

2,499,769

11

Property, plant and equipment, net

1,724,494

7

1,653,180

7

Investment property, net

207,7301

210,371

1

Deferred tax assets

120,018

1

53,944-

Other non-current assets

103,636-

78,219-Non-current Assets

4,651,895

20

4,675,063

20

23,154,578

100

23,218,885

100

Investment in debt instrument without

Accounts receivable, net

Other current assets, others
Current Assets
Non-current assets
Available-for-sale financial assets non-current
Investments accounted for using equity

Total Assets$(Continued)

~17~

$

TRANSCEND INFORMATION, INC
BALANCE SHEETS(Expressed in thousands of New Taiwan Dollars)
December 31, 2017
AMOUNT%

Liabilities and Equity

December 31, 2016
AMOUNT%

Current liabilities
Accounts payable$

1,226,819

5

Accounts payable - related parties

537,129

Other payables$

1,702,172

7

2570,3593

292,5821

335,590

1

3,641

-

324

-

Current tax liabilities

415,1932

90,367-

Other current liabilities

4,900

-

4,166

-

Current Liabilities

2,480,264

10

2,702,97811

Deferred tax liabilities

158,072

1

167,769

1

Other non-current liabilities

17,947-

21,204-Non-current Liabilities

176,019

1

188,97312,656,283

11

2,891,951

12

4,307,617

19

4,307,617

19

4,691,385

20

4,799,075

20

Legal reserve

4,037,210

17

3,748,946

16

Special reserve

145,689

1

21,691-

7,363,641

32

7,595,294

33

145,689)-

20,326,934

88

23,218,885

100

Other payables - related parties

Non-current liabilities

Total Liabilities
Equity attributable to owners of parent
Share capital
Common stock
Capital surplus
Capital surplus
Retained earnings

Unappropriated retained earnings
Other equity interest
Other equity interest(

47,247)

Total Equity- (20,498,295

89

23,154,578

100

Significant contingent liabilities andunrecognized contract commitments
Significant events after the balance sheet
date
Total Liabilities and Equity$$

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

~18~

TRANSCEND INFORMATION, INC.
STATEMENTS OF COMPREHENSIVE INCOME(Expressed in thousands of New Taiwan Dollars, except Earnings Per Share)

Items
Operating Revenue
Operating Costs
Gross Profit
Unrealized gross profit on sales tosubsidiaries
Realized gross profit on sales tosubsidiaries
Gross Profit, net
Operating Expenses
Sales and marketing expenses
Administrative expenses
Research and development expenses
Total operating expenses
Operating Profit
Non-operating Income and Expenses
Other income
Other gains and losses
Finance costs
Share of loss of associates and joint
ventures accounted for under equity
methodTotal non-operating income andexpensesProfit before Income Tax
Income tax expense
Profit for the Year
Other Comprehensive Income (Loss)
Components of other comprehensive
income (loss) that will not bereclassified to profit or loss
Gains (losses) on remeasurements ofdefined benefit plans
Share of other comprehensive loss of
associates and joint ventures accounted forunder equity method, components of othercomprehensive loss that will not bereclassified to profit or loss
Components of other comprehensive
income (loss) that will be reclassified to
profit or loss
Exchange differences on translation offoreign financial statements
Unrealized gain (loss) on
available-for-sale financial assets
Income tax related to components of othercomprehensive income that will bereclassified to profit or loss
Other comprehensive income (loss) for theyear
Total Comprehensive Income
Earnings Per Share
Basic earnings per share
Diluted earnings per share$((

Years ended December 31
2017
2016
AMOUNT%AMOUNT
20,007,792
100$
21,324,583
15,301,168) (76) (17,220,152) (4,706,624
24
4,104,431
48,746)

- (

%
100
81)
19

94,548)-94,5484,752,426

24

34,5594,044,442

19446,113) (179,009) (169,238) (794,360) (3,958,066

2) (
1) (
1) (
4) (
20

536,210) (178,309) (150,689) (865,208) (3,179,234

2)
1)
1
4)
15

(
(

152,323734,243) (
297)

1
4) (
- (

127,822
185,333) (1,631)

1
1)-(

87,619) (1)

46,023-($669,836) (3,288,230
632,513) (2,655,717

4) (
16
3) (
13
$

13,119)3,166,115
283,478) (2,882,637

15
1)
14

$

2,402

- ( $

4,263)

-

(

630)

- (

344)

-

(

30,179)- (143,703) (1)

123,490

1 (

4,724)

-

5,131

-

24,429-128,605) (2,754,032

1)
13

(
(
(
(

(

$

100,2142,755,931

$
$

1 (
14
$

6.17
6.16

$
$

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

~19~

6.69
6.68

TRANSCEND INFORMATION, INC.
STATEMENTS OF CHANGES IN EQUITY(Expressed in thousands of New Taiwan Dollars)
Equity attributable to owners of the parent
Retained earnings

Capital surplus

Common stock

Additional
paid-in capital

Donated assets
received

Net assets
from merger

Legal reserve

$

$

$

$

$

Unappropriatedretained earnings

Other equity interest
Exchangedifferences on
Unrealized gaintranslation ofor loss on
foreign financial
available-for-salestatements
financial assets

Total equity

-

$

$

$ 20,502,081

SpecialreserveYear ended December 31, 2016
Balance at January 1, 2016

4,307,617

4,759,841

4,106

35,1283,426,756$

7,990,324

77,060($98,751 )Appropriation of 2015
earnings(Note 1)
Legal reserve

-

-

-

-

322,190-(322,190 )--Special reserve

-

-

-

-

-

21,691(

21,691 )--Cash dividends

-

-

-

-

-

-

(

2,929,179 )

-

-

-

-

-

-

-

-

2,882,637--

Net income for the year
Other comprehensive loss for theyear
Balance at December 31, 2016

-

-

-

-

-

4,607 ) (119,274 ) ((2,929,179 )
2,882,637-($

4,307,617$

4,759,841

$

4,106

$

35,128$3,748,946$

21,691$

7,595,294($

42,214 ) ($103,475 )

4,724 ) ($ 20,326,934

128,605 )$4,307,617$

4,759,841

$

4,106

$

35,128$3,748,946$

21,691$

7,595,294($

42,214 ) ($103,475 )$ 20,326,934

Year ended December 31, 2017
Balance at January 1, 2017
Appropriation of 2016
earnings(Note 2)
Legal reserve

-

-

-

-

288,264-(

288,264 )--Special reserve

-

-

-

-

-

123,998(

123,998 )---Cash dividends

-

-

-

-

-

-

(

2,476,880 )

-

-

(
(

2,476,880 )Cash payment from capitalsurplus

-

-

-

-

-

-

-

-

Net income for the year

-

-

-

-

-

-

2,655,717--

2,655,717

Other comprehensive income(loss) for the year

-

-

-

-

-

-

1,772

(

25,048 )123,490

100,214

7,363,641($

67,262 )20,015$ 20,498,295

Balance at December 31, 2017$

4,307,617($

107,690 )

4,652,151

$

4,106

$

35,128$4,037,210$

145,689$

Note 1: Directors' remuneration amounting to $5,040 and employees' compensation amounting to $35,704 had been deducted from the Statement of Comprehensive Income in 2015.
Note 2: Directors' remuneration amounting to $4,239 and employees' compensation amounting to $32,042 had been deducted from the Statement of Comprehensive Income in 2016.

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

~20~

$

107,690 )TRANSCEND INFORMATION, INC.
STATEMENTS OF CASH FLOWS(Expressed in thousands of New Taiwan Dollars)
Years ended December 31
2017
2016
CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax
Adjustments
Adjustments to reconcile profit (loss)
Unrealized gross profit on sales to subsidiaries
Realized gross profit on sales to subsidiaries
Loss on disposal of investments
Net loss on financial assets at fair value through profit or loss
Share of loss of associates and joint ventures accounted for using equity
method(Gain on reversal of bad debts) provision for bad debt expense
Net gain on financial liabilities at fair value through profit or loss
Depreciation
Interest income
Interest expense
Dividend income(Gain) loss on disposal of property, plant and equipment
Changes in operating assets and liabilities
Changes in operating assets
Notes and accounts receivable
Other receivables
Inventories
Other current assets, others
Changes in operating liabilities
Accounts payable
Other payables
Other payables - related parties
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Dividends received
Interest received
Interest paid
Income tax paid
Net cash flows from operating activities$

3,288,230

48,746
94,548 )106,075
-

(

(

(
(
(

(

(

494,691
44,959231,642 )
2,520

(
(
(

(

(
(

3,166,115

94,54834,559 )15,768(87,6199,874 )
120,657
143,570 )297
8,973 )
10,273 )508,583 )43,008 )
3,317
734
855 )
3,146,519
8,973
139,725297 )
378,327 )2,916,593(($

46,023 )1,392
13 )127,654
119,234 )
1,631
8,574 )
184(((

91,635 )1,186 )
599,778 )
3,088
210,379
37,078238
2,032
34,136 )2,724,969
312,775
107,924
1,631 )
540,595 )2,603,442(((

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other current financial assets
Decrease in other current financial assets
Acquisition of investment in debt instrument without active markets
Proceeds from disposal of investment in debt instrument without active
markets
Proceeds from disposal of available-for-sale financial assets
Acquisition of property, plant and equipment (including investment
property)
Proceeds from disposal of property, plant and equipment(Increase) decrease in other non-current assets
Net cash flows from investing activities(

2,112,846 )
3,910,845
2,734,320 )((

4,931,250 )
4,759,528
2,786,377 )(

2,361,738
128,121((3,027,999-

195,539 )16,482
25,417 )1,349,064(

2,584,570 )2,584,570 )
1,681,087
1,560,837
3,241,924((((

60,030 )90
31,627 )21,667 )((CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings
Cash dividends paid (including cash payment from capital surplus )Net cash flows used in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(
(

$

$

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

~21~492,375 )2,929,179 )
3,421,554 )
839,779 )2,400,616
1,560,837

Attachment IV
REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE
PWCR17000300
To the Board of Directors and Shareholders of Transcend Information, Inc.

OpinionWe have audited the accompanying consolidated balance sheets of Transcend Information, Inc. and its
subsidiaries (the “Group”) as at December 31, 2017 and 2016, and the related consolidated statementsof comprehensive income, of changes in equity and of cash flows for the years then ended, and notes
to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at December 31, 2017 and 2016, and its
consolidated financial performance and its consolidated cash flows for the years then ended inaccordance with the “Regulations Governing the Preparations of Financial Reports by Securities
Issuers” and the International Financial Reporting Standards, International Accounting Standards,
IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

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

~22~

Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressedin the context of our audit of the consolidated financial statements as a whole and, in forming our
opinion thereon, we do not provide a separate opinion on these matters.
Key audit matters for the Group’s consolidated financial statements of the current period are stated asfollows:
Evaluation of inventories

Description
Please refer to Notes 4(9), 5(2) and 6(4) to the consolidated financial statements for the details of theinformation about Group’s inventory accounting policy, estimates and assumption and allowance forinventory evaluation losses.
The percentage of the Group’s inventories in total assets is material and the Group applies judgements
and estimates in determing the net realizable value of inventories on balance sheet date. The Group
mainly produces DRAM and flash memory, and due to those products having short life cycle andbelong to a highly competitive industry, the market prices change frequently. Since the Group’s
inventories and the allowance for inventories evaluation losses are material to its financial statements,
the evaluation of inventories has been identified as a key audit matter.

How our audit addressed the matter
Our audit procedures performed in respect of the above key audit matter included the following:
A. Obtained an understanding of the Group’s operation and industry. Assessed the reasonableness ofthe policy and procedures to recognize allowance for inventory evaluation losses.
B. Obtained an understanding of the Group’s inventory control procedures. Reviewed annual
inventory count plan and observed the annual physical count of inventory in order to assess theeffectiveness of inventory internal control.
C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information
to assess the reasonableness of allowance for inventory evaluation losses.
~23~

Estimation of allowance for sales discountDescription
In consideration of business volume, the Group provides a variety of business incentives to specificcustomers or products, and based on that, the Group can estimate the allowance for sales discountmonthly. Please refer to Note 6(3) to the consolidated financial statements for the details of theinformation about estimation of allowance for sales allowance.
Since the contracts are numerous and the result could affect the net revenue in the consolidated
financial statements, the estimation of allowance for sales discount has been identified as a key audit
matter.

How our audit addressed the matter
Our audit procedures performed in respect of the above key audit matter included the following:
A. Obtained an understanding of the Group’s operation, industry and the procedure to recognise
allowance for sales discount.
B. Obtained an understanding of the Group’s sales procedures and interviewed management to assess
the appropriateness of sales allowance contracts and internal control on estimation of allowance.
C. Obtained the evaluation list of allowance for sales discount, and tested material sales allowance
contracts and recalculated it to assess the reasonableness of allowance in the Group’s
determination.

Other matter –Parent company only financial reports
We have audited and expressed an unqualified opinion on the parent company only financial
statements of Transcend Information, Inc. as at and for the years ended December 31, 2017 and 2016.

~24~

Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the “Regulations Governing the Preparations of Financial Reports by
Securities Issuers” and the International Financial Reporting Standards, International AccountingStandards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory
Commission, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’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 Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance, including audit committee, are responsible for overseeing the Group’s
financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with ROC GAAS will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintainprofessional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting from
~25~











error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group tocease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal 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 andother matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.

~26~

From the matters communicated with those charged with governance, we determine those matters thatwere of most significance in the audit of the consolidated financial statements of the current period andare 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 ofdoing so would reasonably be expected to outweigh the public interest benefits of such
communication.

Lin, Chun-Yao

Chou, Chien-Hung

For and on behalf of PricewaterhouseCoopers, Taiwan
March 8, 2018------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results ofoperations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions otherthan the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of suchfinancial statements may differ from those generally accepted in countries and jurisdictions other than the Republic ofChina. Accordingly, the accompanying consolidated financial statements and report of independent accountants are notintended 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 thetranslation.

~27~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Expressed in thousands of New Taiwan Dollars)

Assets

December 31, 2017
AMOUNT%

Notes

December 31, 2016
AMOUNT%

Current assets
Cash and cash equivalents

6(1)Investment in debt instrument without

6(2)3,645,914

16

active market - current

738,877

Notes receivable, net
Accounts receivable, net

6(3)Accounts receivable- related parties, net

7$

Other receivables$

1,842,670

8

3366,295

2

5,862

-

5,348

-

2,499,773

11

2,841,228

12

-

-

21,369-114,346

1

146,619

1

Inventories, net

6(4)5,241,150

23

5,166,821

23

Other current financial assets

6(5)6,899,661

30

8,702,590

38

44,210-36,389-19,189,793

84

19,129,329

84

68,874-

179,5801

173,1221

282,61012,706,923

12

2,740,210

12

Other current assets, others
Current Assets
Non-current assets
Available-for-sale financial assets -6(6)non-current
Investments accounted for using equity

6(7)methodProperty, plant and equipment, net

6(8), 7 and 8

Investment property, net

6(9)269,4621

277,316

1

Deferred tax assets

6(20)133,9541

77,759-Other non-current assets

6(10)228,3531

204,25013,580,688

16

3,761,725

16

22,770,481

100

22,891,054100

Non-current Assets
Total Assets$(Continued)

~28~

$

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Expressed in thousands of New Taiwan Dollars)

Liabilities and Equity

December 31, 2017
AMOUNT%

Notes

December 31, 2016
AMOUNT%

Current liabilities
Accounts payable$

1,740,266

8-

48,218-347,6192

390,533

2

233

-

-

-

Current tax liabilities

412,3452

96,138-Other current liabilities

31,414-

44,415-Current Liabilities

2,066,617

92,319,570

10

Accounts payable - related parties

7

Other payables
Other payables - related parties

1,237,552

5

37,454$Non-current liabilities
Deferred tax liabilities

6(20)158,4631

167,817

1

Other non-current liabilities

6(11)47,106-76,733-

205,5691

244,55012,272,186

10

2,564,120

11

4,307,617

19

4,307,617

19

4,691,385

20

4,799,075

21

Legal reserve

4,037,210

18

3,748,946

16

Special reserve

145,689

1

21,691-

7,363,641

32

7,595,294

33

145,689)-

20,326,934

89

22,891,054100

Non-current Liabilities
Total Liabilities
Equity attributable to owners of parent
Share capital6(12)Common stock
Capital surplus

6(13)Capital surplus
Retained earnings

6(14)Unappropriated retained earnings
Other equity interest6(15)Other equity interest(

47,247)

Total Equity
Significant contingent liabilities and- (20,498,295

90

22,770,481

100

9unrecognized contract commitments
Significant events after the balance sheet

11

date
Total Liabilities and Equity$$

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

~29~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(Expressed in thousands of New Taiwan Dollars, except Earnings Per Share)

Items
Notes
Operating Revenue
6(16) and 7
Operating Costs
6(4)(19) and 7
Gross Profit
Operating Expenses
6(19)Sales and marketing expenses
Administrative expenses
Research and development expenses
Total operating expenses
Operating Profit
Non-operating Income and Expenses
Other income6(17)Other gains and losses
6(18) and 7
Finance costs
Share of loss of associates and joint
6(7)ventures accounted for under equity
methodTotal non-operating income andexpensesProfit before Income Tax
Income tax expense
6(20)Profit for the Year
Other Comprehensive Income (Loss)
Components of other comprehensive
income (loss) that will not bereclassified to profit or loss
Gains (losses) on remeasurements of
6(11)defined benefit plans
Share of other comprehensive loss of
associates and joint ventures accounted forunder equity method, components of othercomprehensive loss that will not bereclassified to profit or loss
Components of other comprehensive
income (loss) that will be reclassified to
profit or loss
Exchange differences on translation of
6(15)foreign financial statements
Unrealized gain (loss) on
6(6)(15)
available-for-sale financial assets
Income tax related to components of other 6(15)(20)comprehensive income that will bereclassified to profit or loss
Other comprehensive income (loss) for theyear
Total Comprehensive Income
Net profit attributable to:
Owners of parent
Comprehensive income attributable to:
Owners of parent
Earnings Per Share
Basic earnings per share
Diluted earnings per share

$
(

(
(
(
(

Year ended December 31
2017
2016
AMOUNT%AMOUNT
20,964,853
100 $
22,104,915
15,438,009) (74) (17,153,222) (5,526,844
26
4,951,693

%
100
78)
22

945,861) (414,097) (169,238) (1,529,196) (3,997,648

4) (
2) (
1) (
7) (
19

1,089,435) (403,824) (150,689)
1,643,948) (3,307,745

5)
2)
7)
15

(
(

163,495
739,406) (
297)

1
4) (
- (

138,978
166,253) (2,502)

1
1)-(

108,858)- (34,601)-($

685,066) (3,312,582
656,865) (2,655,717

3) (
16
3) (
13 $

64,378)3,243,367
360,730) (2,882,637

15
2)
13

$

2,402

- ($

4,263)

-

(

630)

- (

344)

-

(

30,179)- (143,703) (1)

123,490- (4,724)

-

5,131

-

24,429-($$100,2142,755,931

- ($
13 $

128,605) (2,754,032

1)
12

$

2,655,717

13$

2,882,637

13$

2,755,931

13$

2,754,032

12

6.17
6.16

$
$

6(21)
$
$

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

~30~

6.69
6.68

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(Expressed in thousands of New Taiwan Dollars)
Equity attributable to owners of the parent
Retained earnings

Capital surplus

Notes

Common stock

Additional
paid-in capital

Donated assets
received

Net assets
from merger

Legal reserve

$

$

$

$

$

Unappropriatedretained earnings

Other equity interest
Exchangedifferences on
Unrealized gaintranslation ofor loss on
foreign financial
available-for-salestatements
financial assets

Total equity

-

$

$

$ 20,502,081

SpecialreserveYear ended December 31, 2016
Balance at January 1, 2016
Appropriation of 2015 earnings

4,307,617

4,759,841

4,106

35,1283,426,756$

7,990,324

77,060($98,751 )6(14)Legal reserve

-

-

-

-

322,190-(322,190 )--Special reserve

-

-

-

-

-

21,691(

21,691 )--Cash dividends

-

-

-

-

-

-

(

2,929,179 )

-

-

-

-

-

-

-

-

2,882,637--

Net income for the year
Other comprehensive loss for the 6(6)(15)
year
Balance at December 31, 2016

-

-

-

-

-

4,607 ) (119,274 ) ((2,929,179 )
2,882,637-($

4,307,617$

4,759,841

$

4,106

$

35,128$3,748,946$

21,691$

7,595,294($

42,214 ) ($103,475 )

4,724 ) ($ 20,326,934

128,605 )$4,307,617$

4,759,841

$

4,106

$

35,128$3,748,946$

21,691$

7,595,294($

42,214 ) ($103,475 )$ 20,326,934

Year ended December 31, 2017
Balance at January 1, 2017
Appropriation of 2016 earnings

6(14)Legal reserve

-

-

-

-

288,264-(

288,264 )--Special reserve

-

-

-

-

-

123,998(

123,998 )--Cash dividends

-

-

-

-

-

-

(

2,476,880 )

-

-

(
(

Cash payment from capitalsurplus

Balance at December 31, 2017

2,476,880 )

6(14)
-

Net income for the year
Other comprehensive income(loss) for the year

-

-

-

-

-

-

-

-

-

(

107,690 )
-

-

-

-

-

2,655,717--

2,655,717

107,690 )

-

-

-

-

-

-

1,772

(

25,048 )123,490

100,214

7,363,641($

67,262 )20,015$ 20,498,295

6(6)(15)$

4,307,617$

4,652,151

$

4,106

$

35,128$4,037,210$

145,689$

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

~31~

$

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Expressed in thousands of New Taiwan Dollars)
Years ended December 31
2017
2016

Notes
CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax
Adjustments
Adjustments to reconcile profit (loss)
Net loss on financial assets at fair value through profit or loss
Share of loss of associates and joint ventures accounted for using equity
method(Gain on reversal of bad debts) provision for bad debt expense
Loss on disposal of investments
Net gain on financial liabilities at fair value through profit or loss
(Gain) loss on disposal of property, plant and equipment
Depreciation
Interest income
Interest expense
Dividend income
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Other current assets, others
Changes in operating liabilities
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Dividends received
Interest received
Interest paid
Income tax paid
Net cash flows from operating activities$

3,312,582$-

3,243,367
15,7686(7)6(3)6(6)(18)
6(18)
6(18)
6(19)
6(17)

(

6(18)

(

108,858
6,353 )
106,075
10,421 )205,723
145,127 )297
8,973 )

(
(

(

514 )
349,976
21,36936,11874,329 )7,821 )(((((

502,714 )
10,764 )42,914 )233
13,001 )27,225 )3,291,075
8,973
141,282297 )
401,076 )3,039,957

(
(

(
(

34,601
1,449
13 )
289
229,566
120,589 )2,502
8,574 )((((

4,389 )
361,242
12,022 )968 )653,065 )
16,097(((

151,154
10,342 )23,601
8,323
3,645
3,281,642
8,574
109,279
2,502 )
622,848 )2,774,145(((

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other current financial assets
Decrease in other current financial assets
Acquisition of investment in debt instrument without active markets
Proceeds from disposal of investment in debt instrument without active
markets
Proceeds from disposal of available-for-sale financial assets
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in other current financial assets
Net cash flows from investing activities(

2,112,846 )
3,915,775
2,734,320 )

(

6(8)
6(8)

2,361,738
128,121
195,132 )
16,725
24,103 )1,355,958(((

4,931,250 )
4,760,666
2,786,377 )(

3,309,487
47,607 )147
18,544 )286,522((

CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings
Cash dividends paid (including cash payment from capital surplus )Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

6(14)

(
(
(

$

2,584,570 )2,584,570 )
8,101 )
1,803,244
1,842,670
3,645,914

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

~32~

(
(
(
(
(
$

940,725 )2,929,179 )
3,869,904 )
11,455 )820,692 )2,663,362
1,842,670

Attachment V
TRANSCEND INFORMATION INC.
THE NOMINATION LIST OF DIRECTORS(NON-INDEPENDENT DIRECTOR)
Name

Shares

Education

Experience

Present position
Chief Executive Officer:- Transcend Information. Inc.
Chairman of the board of directors:- Taiwan IC Packaging Corporation
Director:- C-TECH Corporation- Transcend Information Trading GmbH
Hamburg

SHU,
CHUNG-

Department of Electrical Project Manager of
9,990,453 Engineering, National

Representative juristic person:
Hewlett-Packard Development- Hitron Technologies Inc.

WAN

Cheng Kung University

Company, L.P.
- WK Technology Fund VI Ltd.
- WK Technology Fund VII Ltd.
- WK Technology Fund VIII Ltd.
Supervisor:- Wan An Technology Inc.
President:- Transcend Information Trading GmbH
Hamburg
President:- Transcend Information. Inc.
Chairman of the board of directors:- C-TECH Corporation- Cheng Chuan Technology Development
Inc.

Department of Civil
SHU,
CHUNG-- Shu Min Investment Inc.
6,244,098

Engineering, National

None

Executive director:

Taipei Institute of
CHENG- Transcend Information (Shanghai).,Ltd
Technology- Transtech Trading(Shanghai) Co. Ltd.
Director:- Wan An Technology Inc.
- Won Chin Investment Inc.
- Wan Min Investment Inc.
- Wan Chuan Investment Inc.

~33~

Name

Shares

Education

Experience

Present position- Saffire Investment Ltd.
- Memhiro Pte. Ltd.
- Transcend Japan Inc- Transcend (H.K.) Limited-Supreme Electronics Co., Ltd.
Consultant:- Taiwan IC Packaging Corporation

CHUI,

0

Department of French,
None

LI-CHU

Tamkang University

HSU,

Department of AutomaticCHIA-

674,244 Control Engineering,

Supervisor of Won Chin Investment Inc.

President of China area of
None
Transcend Information Inc.

HSIAN
WANG,

Feng Chia University
0

JEN-MING

University of Illinois

Sales director of Transcend

Sales Vice President of Transcend

MBA

Information, Inc.

Information Inc

Master of Information
LI,
TSENG-0Management of National R&D Director of Transcend
Factory Chief of Transcend Information, Inc.
Taiwan University ofInformation, Inc.

HO
Science and Technology(INDEPENDENT DIRECTOR)
Name

Shares

Education

Experience

Present position- Professor of Department of Accounting,National Taipei University

WANG,
YI-HSIN0- Professor of Department of- Independent Director of United BioPharma

Accounting, National Chung

Inc.

Hsing University- Director of First Financial Holding Co. Ltd.

Ph.D, Accounting- Library Curator and Vice

- Chairperson of Accounting Research andUniversity of Kentucky

President of National Taipei

Development Foundation

University- President of the Trend Research- Independent Director of Bestcom

Foundation

Infotech Corp.

- Supervisor of Telecom Technology Center- Chairperson of the Institute of Internal
Auditors

~34~

Name

Shares

Education

Experience

Present position- President of Symphox
Information Co., Ltd.
- President of China area of
Hewlett-Packard Development
Company, L.P.
- CFO of China area of-Master of Business

Hewlett-Packard Development

Administration,

Company, L.P.

University of California - Business Development President - Director of Homeyen Networks. Co., Ltd.
CHEN,

0

YI-LIANG

at Los Angelesof Asia area of Hewlett-Packard- Director of Tai Hwa Oil Industrial Co., Ltd.

-Department of Business

Development Company, L.P.

- Independent Director of Lextar Electronics

Administration,- Financial Vice President ofCorporation

National ChengChi

Taiwan area of Hewlett-Packard

University

Development Company, L.P.
- Finance manager of Taiwan areaand Sales manager of southernarea of Hewlett-Packard
Development Company, L.P.
- Independent Director of Nano-Op
Co., Ltd.
- Global Executive Vice President
and International Chief Operating
Officer of Diebold Inc.
- President of Asia area of Diebold

Department of Business
CHEN,

0

Inc.

- Independent Director of Hitron

Administration, National

LO-MIN- President of Great China Business Technologies Inc.
ChengChi University
division of Royal Philips- President of NCR China Co., Ltd.
- Vice President of Taiwan branchof NCR Corp.

~35~

Attachment VI
TRANSCEND INFORMATION INC.
THE CONCURRENT POSITIONS OF DIRECTORS
Category

Name

Concurrent Position■Chairman of Taiwan IC Packaging Corporation■Director of C-TECH Corporation■Representative juristic person of

Director

SHU- Hitron Technologies Inc.
CHUNG-WAN- WK Technology Fund VI Ltd.
- WK Technology Fund VII Ltd.
- WK Technology Fund VIII Ltd.
■Chairman of- C-TECH Corporation- Cheng Chuan Technology Development Inc.
- Shu Min Investment Inc.
■Director of

Director

SHU- Wan An Technology Inc.
CHUNG-CHENG- Won Chin Investment Inc.
- Wan Min Investment Inc.
- Wan Chuan Investment Inc.
- Supreme Electronics Co., Ltd.
■Consultant of Taiwan IC Packaging Corporation■Independent Director of United BioPharma Inc.
■Director of First Financial Holding Co. Ltd.

Independent
Director

WANG YI-HSIN■Chairman of Accounting Research and Development Foundation■President of the Trend Research Foundation■Chairman of the Institute of Internal Auditors

Independent
Director■Director of Homeyen Networks. Co., Ltd.
CHEN YI-LIANG ■Director of Tai Hwa Oil Industrial Co., Ltd.
■Independent Director of Lextar Electronics Corporation

Independent
Director

CHEN LO-MIN■Independent Director of Hitron Technologies Inc.

~36~