Handbook
for the 2018 Annual Regular Shareholders’ Meeting

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.

Transcend Information, Inc.
Handbook for the 2018 Annual Regular Shareholders’ Meeting
TABLE OF CONTENTSMEETING PROCEDURE ........................................................................................................................ 1
MEETING AGENDA ................................................................................................................................ 2
REPORT ITEMS ..................................................................................................................................... 3
PROPOSED ITEMS ................................................................................................................................ 4
DISCUSSION AND ELECTION ITEMS .............................................................................................. 6
OTHER BUSINESS AND SPECIAL MOTION ................................................................................... 7
ATTACHMENT
I：BUSINESS REPORT ......................................................................................................................... 8
II：AUDIT REPORT OF AUDIT COMMITTEE .............................................................................. 10
III：2017 PARENT COMPANY ONLY FINANCIAL STATEMENTS AND INDEPENDENTAUDITORS’ REPORT ........................................................................................................... 11
IV：2017 CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’REPORT .................................................................................................................................. 22
V：THE NOMINATION LIST OF DIRECTORS ............................................................................. 33
VI：THE CONCURRENT POSITIONS OF DIRECTORS ............................................................. 36
APPENDIX
I：RULES AND PROCEDURES OF SHAREHOLDERS’ MEETING ........................................... 37
II：ARTICLES OF INCORPORATION ............................................................................................ 40
III：PROCEDURES FOR ELECTION OF DIRECTOR ................................................................. 46
IV：SHAREHOLDINGS OF ALL DIRECTORS .............................................................................. 48

Transcend Information, Inc.
2018 ANNUAL REGULAR SHAREHOLDERS’ MEETING PROCEDURE

1. Call the Meeting to Order
2. Chairman's Remarks
3. Report Items
4. Proposed Items
5. Discussion and Election Items
6. Other Business and Special Motion
7. Meeting Adjourned~1~Transcend Information, Inc.
2018 ANNUAL REGULAR SHAREHOLDERS’ MEETING AGENDA(Translation)
Time: 9:00 a.m., Thursday, June 14, 2018
Place: No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan (Transcend Information, Inc.)
Chairman's Remarks
I. Report Items(1) To report the business of 2017.
(2) Audit Committee’s review report.
(3) To report 2017 employees’ profit sharing bonus and directors’ compensation.
(4) The status of guarantees provided by the Company as of the end of 2017.
II. Proposed Items(1) Adoption of 2017 Business Report and Financial Statements.
(2) Adoption of the proposal for distribution of 2017 earnings.
III. Discussion and Election Items(1) To approve cash distribution from capital surplus.
(2) Election of directors.
(3) To release the prohibition on directors from participation in competing business.
IV. Other Business and Special Motion~2~

I. Report Items(1) To report the business of 2017.
Explanatory Notes:
Please refer to page 8 to 9 for Attachment I.
(2) Audit Committee’s review report.
Explanatory Notes:
Please refer to page 10 for 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.
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).

~3~

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 page 8 to 9 for Attachment I, and page 11 to 32 for Attachment III
and IV)
C. It is submitted for ratification.
Resolution:(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 page 5 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:~4~

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~5~

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:(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 page 33 for Attachment V: the nomination list of directors.
D. It is submitted for election.
Resolution:~6~

(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 page 36 for Attachment VI: the concurrent positions of directors.
C. It is submitted for approval.
Resolution:

IV. Other Business and Special Motion

V. Meeting Adjourned~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-HSIN

0-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~

APPENDIX I
TRANSCEND INFORMATION INC.
RULES AND PROCEDURES OF SHAREHOLDERS’ MEETING
Article 1：Except for the regulation, regular Shareholders' Meeting of the Company (the "Meeting") shall be conducted inaccordance with these Rules and Procedures.

Article 2：An attendance book shall be prepared for signing in of the attended shareholders in the Shareholders' Meeting, or attended
shareholders shall submit the attendance card for the purpose of signing in. The number of shares represented by attended
shareholders shall be calculated in accordance with the attendance book signing by the shareholders and the attendancecards submitted by the shareholders.

Article 3：The attendance and voting of Shareholders' Meeting shall be calculated based on the shares.

Article 4：The Meeting shall be held at the head office of the Company or at any other appropriate place that is convenient for theshareholders to attend. The time to start the Meeting shall not be earlier than 9:00 a.m. or later than 3:00 p.m.

Article 5：The Chairman of the Board of Directors shall be the chairman presiding at the Meeting in the case that the Meeting isconvened by the Board of Directors. If, for any reason, the Chairman of the Board of Directors cannot preside at the
Meeting, the Vice Chairman of the Board of Directors shall preside at the Meeting. If, no Vice Chairman or for any
reason, the Vice Chairman of the Board of Directors cannot preside at the Meeting, the chairman may designate one
managing director to do so on the chairman's behalf. If there is no managing director, the chairman may designate one
director to preside at the Meeting. If the chairman does not designate a representative, the managing directors or directors
shall mutually select a chair from among themselves..
If the Meeting is convened by any other person entitled to convene the Meeting, such person shall be the chairman topreside at the Meeting. When two or more parties meet this description, they shall mutually select a chair from among
themselves.

Article 6：The Company may appoint designated counsel, CPA or other related persons to attend the Meeting. Persons handlingaffairs of the Meeting shall wear identification cards or badges.

Article 7： The process of the Meeting shall be tape-recorded or videotaped and these tapes shall be preserved for at least one year.

Article 8：Chairman shall call the Meeting to order at the time scheduled for the Meeting. If the number of shares represented by theshareholders present at the Meeting has not yet constituted the quorum at the time scheduled for the Meeting, thechairman may postpone the time for the Meeting. The postponements shall be limited to two times at the most andMeeting shall not be postponed for longer than one hour in the aggregate. If after two postponements no quorum can yet
be constituted but the shareholders present at the Meeting represent more than one - third of the total outstanding shares,
tentative resolutions may be made in accordance with Section 1 of Article 175 of the Company Law of the Republic of~37~

China.
If during the process of the Meeting the number of outstanding shares represented by the shareholders present becomes
sufficient to constitute the quorum, the chairman may submit the tentative resolutions to the Meeting for approval inaccordance with Article 174 of the Company Law of the Republic of China.

Article 9：The agenda of the Meeting shall be set by the Board of Directors if the Meeting is convened by the Board of Directors.
Unless otherwise resolved at the Meeting, the Meeting shall proceed in accordance with the agenda.
The above provision applies mutatis mutandis to cases where the Meeting is convened by any person, other than the
Board of Directors, entitled to convene such Meeting.
Unless otherwise resolved at the Meeting, the chairman cannot announce adjournment of the Meeting before all the
discussion items (including special motions) listed in the agenda are resolved.
The shareholders cannot designate any other person as chairman and continue the Meeting in the same or other place after
the Meeting is adjourned. However, in the event that the Chairman adjourns the Meeting in violation of these Rules andProcedures, the shareholders may designate, by a majority of votes represented by attended shareholders, one person as
chairman to continue the Meeting.

Article 10：When a shareholder present at the Meeting wishes to speak, a Speech Note should be filled out with summary of the
speech, the shareholder's number (or the number of Attendance Card) and the name of the shareholder. The sequence ofspeeches by shareholders should be decided by the chairman.
If any shareholder present at the Meeting submits a Speech Note but does not speak, no speech should be deemed tohave been made by such shareholder. In case the contents of the speech of a shareholder are inconsistent with thecontents of the Speech Note, the contents of actual speech shall prevail.
Unless otherwise permitted by the chairman and the shareholder in speaking, no shareholder shall interrupt the speechesof the other shareholders, otherwise the chairman shall stop such interruption.

Article 11：Unless otherwise permitted by the chairman, each shareholder shall not, for each discussion item, speak more than twotimes (each time not exceeding 5 minutes). In case the speech of any shareholder violates the above provision or
exceeds the scope of the discussion item, the chairman may stop the speech of such shareholder.

Article 12：Any legal entity designated as proxy by a shareholder(s) to be present at the Meeting may appoint only one
representative to attend the Meeting.
If a corporate shareholder designates two or more representatives to attend the Meeting, only one representative canspeak for each discussion item.

Article 13：After the speech of a shareholder, the chairman may respond himself/herself or appoint an appropriate person to respond.

Article 14：The chairman may announce to end the discussion of any resolution and go into voting if the Chairman deems it
appropriate.

~38~Article 15：The person(s) to check and the person(s) to record the ballots during a vote by casting ballots shall be appointed by thechairman. The person(s) checking the ballots shall be a shareholder(s).
The result of voting shall be announced at the Meeting and placed on record.

Article 16：During the Meeting, the chairman may, at his discretion, set time for intermission.

Article 17：Except otherwise specified in the Company Law or the Articles of Incorporation of the Company, a resolution shall be
adopted by a majority of the votes represented by the shareholders present at the Meeting. The resolution shall bedeemed adopted and shall have the same effect as if it was voted by casting ballots if no objection is voiced after
solicitation by the chairman.

Article 18：If there is amendment to or substitute for a discussion item, the chairman shall decide the sequence of voting for suchdiscussion item, the amendment or the substitute. If any one of them has been adopted, the others shall be deemedvetoed and no further voting is necessary.

Article 19：The chairman may conduct the disciplinary officers or the security guard to assist in keeping order of the Meeting place.
Such disciplinary officers or security guards shall wear badges marked "Disciplinary Officers" for identification
purpose.

Article 20：These Rules and Procedures shall be effective from the date it is approved by the Shareholders' Meeting. The same
applies in case of revision.

~39~

APPENDIX II
TRANSCEND INFORMATION INC.
ARTICLES OF INCORPORATION
Section I - General Provisions
Article 1：The Corporation shall be incorporated, as a company limited by shares, under the Company Law of the Republic of China,
and its name shall be 創見資訊股份有限公司 in the Chinese language, and Transcend Information, Inc. in the English
language.

Article 2：The scope of business of the Corporation shall be as follows:
1.

CC01110 Computers and Computing Peripheral Equipments Manufacturing2.

CC01120 Data Storage Media Manufacturing and Duplicating

3.

F113050 Wholesale of Computing and Business Machinery Equipment

4.

F118010 Wholesale of Computer Software

5.

F119010 Wholesale of Electronic Materials

6.

F401010 International Trade

7.

I301010 Software Design Services

8.

CC01080 Electronic Parts and Components Manufacturing

9.

F401021 Restrained Telecom Radio Frequency Equipments and Materials Import

10. CC01101 Restrained Telecom Radio Frequency Equipments and Materials Manufacturing
11. ZZ99999 In addition to licensing business, business law may prohibit or restrict non-business.

Article 3：The Corporation shall have its head office in Taipei City, Taiwan, Republic of China, and shall be free, upon the
resolutions of Board of Directors to set up branch offices in Republic of China and abroad wherever and whenever the
Corporation deems it necessary or advisable to carry out any or all of its activities.
Article 4：The total amount of the Corporation’s reinvestment shall not be subject to the restriction of not more than forty percent of
the Corporation’s paid-up capital as provided in the Company Law but shall not be more than the Corporation’s paid-up
capital. The Corporation may provide endorsement and guarantee and act as a guarantor. Any matters regarding thereinvestment shall be resolved in accordance with the resolutions of the Board of Directors.

Article 5：Public announcements of the Corporation shall be made in accordance with the Article 28 of the Company Act.

Section II - Capital Stock
Article 6：The total capital stock of the Corporation shall be in the amount of 5,000,000,000 New Taiwan Dollars, divided into
500,000,000 shares, at ten New Taiwan Dollars each. The Board of directors is authorized to issue the shares in separate
installments as required. A total of 25,000,000 shares among the above total capital stock should be reserved for issuing
employee stock options. The Board of directors is authorized to issue employee stock options from time to time.
~40~Article 6-1：If the Corporation issue employee stock options on the exercise price under the market price, it shall be issued after the
resolution of the Shareholders’ meetings in accordance with relevant rules and regulations of the Republic of China.

Article 6-2：The Corporation may issue shares without printing share certificate(s), but shares issued shall be registered with asecurities depository enterprise.
Article 7：All stock transaction conducted by shareholders of the Corporation shall follow the “Guidelines for Stock Operations for
Public Companies”.

Article 8：Registration for transfer of shares shall be suspended 60 days immediately before the date of regular meeting ofshareholders, and 30 days immediately before the date of any special meeting of shareholders, or within 5 days before theday on which dividend, bonus, or any other benefit is scheduled to be paid by the Corporation.

Section III - Shareholders’ meetings
Article 9：Shareholders’ meetings of the Corporation are of two types, namely: (1) regular meetings and (2) special meetings.
Regular meetings shall be convened at least once a year, and within 6 months after the close of each fiscal year.
Special meetings shall be convened in accordance with applicable laws and regulations whenever necessary. Written
notices shall be sent to all shareholders, at least 30 days in advance; and at least 15 days in advance, in case of special
meetings.

Article 10：If a shareholder is unable to attend a meeting, he/she may appoint a proxy to attend it by using the proxy form issued by
the Company and specifying the scope of proxy. Shareholder attendance by proxy shall be subject to the Company Law
and also to the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies
issued by the competent authority.

Article 11：Each share of stock shall be entitled to one vote.

Article 12：Except as provided in the Company Law of the Republic of China, shareholders’meetings may be held if attended byshareholders more than one half of the total issued and outstanding capital stock of the Corporation, and resolutions
shall be adopted at the meeting with the concurrence of a majority of the votes held by shareholders present at themeeting. Pursuant to Article 177-1 of the Company Act, the shareholders may vote via written form or an electronic
voting system, and the manner or voting shall be clearly stated in each meeting notice.

Section IV - Directors
Article 13：The Corporation shall have seven to eleven Directors. The Board of Directors is authorized to determine the number of
Directors, to be elected by the shareholders meeting from among candidates with legal capacity. The term of office for
Directors shall be 3 years, and all Directors shall be eligible for re-election. Once the term of office is expired and it~41~

can’t elect directors immediately, directors can extend and continue the performance of their duties until the election of
directors to take office. The aggregate shareholding percentages of the entire bodies of directors shall comply with theregulations prescribed by the securities supervisory authorities. The board of directors is authorized to resolve the rates
of directors’ remuneration based on the extent of their participation in the Company’s business operations or value of
their contribution, at a level consistent with general practices in the industry. The company may acquire liability
insurance for all directors within their term of office, and the board of directors is authorized to resolute the scope of
insurance.

Article 13-1：To harmonize with Article 14-2 of the Securities and Exchange Act, there shall be at least three independent directors
among the Company's directors. A candidate nomination system shall be adopted, and the shareholders meeting shallelect all directors (including independent directors) from among those listed on the slate of director candidates. The
relevant regulations of the competent securities authority shall be followed regarding the professional qualifications,shareholding, moonlighting restrictions, nomination and election, and other compliance requirements regarding
independent directors.

Article 13-2：In compliance with Articles 14-4 of the ROC Securities and Exchange Law, the Corporation shall establish an Audit
Committee, which shall consist of all independent directors. The Audit Committee shall exercise their functions inaccordance with the ROC Company Law, Securities and Exchange Law, other relevant regulations and the procedure ofcorporation.

Article 13-3：(Deleted)

Article 14：The board of directors shall consist of the directors of the company, and the chairman of the board of directors shall beelected from among the directors by a majority of directors in attendance at a meeting attended by at least two-thirds ofthe directors. The chairman of the board of directors shall represent the Company in external matters. The board of
director may set up any functional committee.

Article 15：Board of Directors Meetings shall be convened by the Chairman of the Board of Directors. Except as otherwise provided
in the Company Law of the Republic of China, a meeting of the Board of Directors may be held if attended by amajority of total Directors and resolutions shall be adopted with the concurrence of the majority of the Directors present
at the meeting.

Article 15-1：Each director shall be given at least 7 days advance notice of the convening of a board of directors meeting of the
Corporation. In emergency circumstances, however, a meeting may be convinced on shorter notice. The meeting noticereferred to in the preceding paragraph shall specify the reasons for convening the meeting, and shall be made in writing,by e-mail, or by facsimile.

Article 16：The Chairman of the Board of Directors shall preside over all meetings of the Board of Directors. If the Chairman of theBoard of Directors is on leave or cannot exercise powers or perform duties for any reason, an acting chairman shall be
designated in accordance with Article 208 of the Company Act. Directors shall attend meetings of the board of directors~42~

in person. If a director is unavailable to attend a meeting in person, the director may appoint a proxy for the given
meeting specifying the scope of the authorized powers to authorize another director to attend the meeting on the
director's behalf, provided that a director may represent only one other director at a meeting.

Article 17：The Board of the Directors is organized by directors, the duties are as follows:1.

To propose concerning appropriation of net profits or covering of losses.

2.

To propose increasing or decreasing capital3.

To establish or dissolve branches

4.

To approve budget and final reports

5.

Other duties in accordance with Company Act or given by the resolution of shareholders’meeting

Article 18：(Deleted)

Article 19：(Deleted)

Section V - Managerial Officers
Article 20：The Company may have managerial officers, whose appointment, dismissal, and remuneration shall be handled inaccordance with Article 29 of the Company Act.

Section VI - Accounting
Article 21：After the close of each fiscal year, the Board of Directors shall prepare 1.Business Report 2. Financial Statements and3.Proposal Concerning Appropriation of Net Profits or Covering of Losses, and submitted to the regular shareholders’meeting for acceptance:

Article 22：If the Company has earnings after the annual final accounting, it shall pay remuneration to employees at the minimum of
1% of the profit, and pay remuneration to directors at the maximum of 0.2% of the profit. However, the Company's
accumulated losses shall have been covered.
Employees’ remuneration could be paid by cash or stock, and in the event of stock payment, employees shall mean the
Company’s employees and employees serving with affiliates who meet specific requirements. Such specificrequirements shall be prescribed by the board of directors.

Article 22-1：If the Company has earnings after the annual final accounting, it shall be allocated in the following order:
1. To pay taxes.
2. To cover accumulated losses, if any.
3. To appropriate 10% legal reserve unless the total legal reserve accumulated has already reached the amount of theCompany’s authorized capital.
4. To set aside special reserve in accordance with the regulations
5. To reserve certain amount, on the premise that there is no effect on the Company’s normal operations and no~43~

violation of regulations, for maintaining stability of dividends.
6. For any remainder, the board of directors shall propose allocation ratios and propose them at the shareholders’meeting.
Regarding the special reserve under subparagraphs 4, the Company shall set aside special reserve, equal to the debit
balance which happens at the current year on other equity items (including Unrealized loss on financial instrument,
cumulative translation adjustment, and unrecognized pension cost, which can be combined if there are unrealized gain.),from the current earnings after tax and unappropriated retained earnings prior year. If the debit balance is cumulative
before, the Company shall set aside special reserve not to distribute it from the unappropriated retained earnings prioryear. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the
distributable earnings.

Article 22-2：The Company distributes dividends taking into consideration the Company's economic environment and growth phases,
future demands of funds, long-term financial planning, and the cash flows that the stockholders desire. Cash dividends
shall account for at least 5% of the total dividend distributed.

Section VII - Supplementary Provisions
Article 23：In regard to all matters not provided for in these Articles of Incorporation, the Company Act of the Republic of China
shall govern.

Article 24：These Articles of Incorporation were adopted on August 23, 1989.
The first amendment was made on January 28, 1991.
The second amendment was made on May 25, 1992.
The third amendment was made on September 1, 1992.
The fourth amendment was made on July 30, 1994.
The fifth amendment was made on June 8, 1995.
The sixth amendment was made on July 8, 1997.
The seventh amendment was made on August 15, 1997.
The eighth amendment was made on September 12, 1997.
The ninth amendment was made on June 20, 1998.
The 10th amendment was made on September 15, 1998.
The 11th amendment was made on June 12, 1999.
The 12th amendment was made on April 15, 2000.
The 13th amendment was made on April 9, 2001.
The 14th amendment was made on June 10, 2002.
The 15th amendment was made on June 3, 2003.
The 16th amendment was made on June 11, 2004.
The 17th amendment was made on June 13, 2005.
The 18th amendment was made on June 14, 2006.
The 19th amendment was made on June 11, 2007.
~44~

The 20th amendment was made on June 13, 2008.
The 21th amendment was made on June 16, 2009.
The 22th amendment was made on June 17, 2010.
The 23th amendment was made on June 10, 2011.
The 24th amendment was made on January 5, 2012.
The 25th amendment was made on June 13, 2013.
The 26th amendment was made on June 12, 2014.
The 27th amendment was made on June 14, 2016.

Transcend Information Inc.
Chairman: Shu, Chung-Wan~45~

APPENDIX III
TRANSCEND INFORMATION INC.
PROCEDURES FOR ELECTION OF DIRECTOR
Article 1：Elections of directors shall be conducted in accordance with these Procedures.
Elections of both directors (including independent directors) at this Corporation shall be conducted in accordance with thecandidate nomination system and procedures set out in Article 192-1 of the Company Act. This Corporation shall review
the qualifications, education, working experience, background, and the existence of any other matters set forth in Article
30 of the Company Act with respect to nominee directors and may not arbitrarily add requirements for documentation ofother qualifications. It shall further provide the results of the review to shareholders for their reference, so that qualified
directors will be elected.
Article 2：In the election of directors of this Company, each share shall have voting rights equivalent to the number of seats to beelected and such voting rights can be combined to vote for one person or divided to vote for several persons. The electionof independent directors and non-independent directors shall be held together; provided, however, that the number of
independent directors and non-independent directors elected shall be calculated separately.

Article 3：The Board of Directors shall prepare ballots equivalent to the number of seats to be elected and note the number of voting
rights to distribute to the attended shareholders.

Article 4：Before the election, the Chairman shall appoint several persons each to check and record the ballots to carry out related
duties.

Article 5：In the election of directors of this Company, the ballot box used for voting shall be prepared by Board of Directors andchecked in public by the person to check the ballots before voting.

Article 6：If the candidate is a shareholder of this Company, voters shall fill in the "candidate" column the candidate's name andshareholder's number. If the candidate is not a shareholder of this Company, voters shall fill in the "candidate" column thecandidate's name and the candidate's ID number. If the candidate is a government agency or a legal entity, the full nameof the government agency or the legal entity or the name of their representative shall be filled in the column. When there
are several representatives, the name of their representative must be filled in the column, respectively.

Article 7：Ballots shall be deemed void under the following conditions:
1. Ballots not prepared in accordance with the rules;
2. Blank ballots placed in the ballot box;
3. Illegible writing or altered ballots;
4. If the candidate is a shareholder of this Company, the name or shareholder's number of the candidate filled in theballot inconsistent with the shareholders' register. If the candidate is not a shareholder of this Company, the name or
ID number of the candidate filled in the ballot is incorrect;
5. Ballots with other written characters or symbols in addition to candidate's name, shareholder's number (ID number)~46~

and the number of votes cast for the candidate;
6. Ballots not filled in the candidate's name or shareholder's number (ID number);
7. Two or more candidates filled in one ballot.
Article 8：In the election of directors equal to the number stated in the Article of Incorporation of this Company, candidates who
acquire more votes sequentially should win the seats of directors. If two or more persons acquire the same number ofvotes and the number of such persons exceeds the specified seats available, such persons acquiring the same votes shalldraw lots to decide who should win the seats available, and the Chairman shall draw lots on behalf of the candidate who
is not present. If the director elected was checked that his/ her personal information is un-conformed or he/ she is notapplied for related regulations, the position left vacant by such decision shall be filled by the candidate with the next
highest number of votes in the original election.

Article 9：The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, shallbe announced by the chair on the site.
The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring
personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article
189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article 10：This Company shall issue notifications to the directors elected.

Article 11：Matters on which these Bylaws are silent shall be handled in accordance with the Articles of Incorporation of the
Corporation, the Company Act, and applicable laws and regulations.

Article 12：These Rules shall be effective from the date it is approved by the Shareholders' Meeting. The same applies in case ofrevision.

~47~

APPENDIX VI
TRANSCEND INFORMATION INC.
SHAREHOLDINGS OF ALL DIRECTORS
1. Minimum Required Shareholding and Shareholding of all Directors:
Title
Minimum Required Shareholding by
Current Shareholding
all Directors(Shares)
Directors

17,074,470

16,000,000

Note 1: The period of Book closure is from April 16, 2018 to June 14, 2018.
Note 2: The Company has three independent directors, and the minimum required shareholding by all
Directors except for independent directors is downsized to 80% of the minimum required
based on Article 2, paragraph 2 of “Rules and Review Procedures for Director and Supervisor
Share Ownership Ratios at Public Companies”.
2. Company’s current Directors’ shareholding are as follows on April 16, 2018:
Title

Name

Current Shareholding(Shares)
9,990,453

Chairman

SHU,CHUNG-WAN

Director

SHU,CHUNG-CHENG

Director

LIN, CHIN-YU

3,103

Director

CHUI, LI-CHU

0

Director

HSU, CHIA-HSIAN

674,244

Director

CHIU, CHIH-HENG

162,572

6,244,098

Independent Director CHEN,YI-LIANG

0

Independent Director CHEN,LO-MIN

0

Independent Director WANG,YI-HSIN

0
Total

17,074,470~48~