Transcend Information, Inc.
2016 ANNUAL REGULAR SHAREHOLDERS’ MEETING MINUTES(This English version is a translation based on the original Chinese version.
Where any discrepancy arises between the two versions, the Chinese version shall prevail.)

Time: 9:00 a.m., June 14, 2016
Place: Transcend Information, Inc. (No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan)
Total share represented by shareholders present in person or by proxy are 380,665,652 shares(including 375,876,368 shares casted electronically), which is 88.37% of the total 430,761,675
outstanding shares.
Attended Directors: Shu,Chung-Wan, the chairman of Board of Directors; Chiu, Chih-Heng, thedirector
Attended Independent Directors: Wang, Yi-Hsin, the convener of Audit Committee
Attendees: Lin, Chun-Yao, the independent auditors of the Pricewaterhouse Coopers
Li, Dan, the lawyer of World Patent & Trademark Office
Chairman: Shu,Chung-Wan

Recorder: Lu, Chih-Yuan

Call meeting to order: The aggregate shareholding of the shareholders present in person or by proxy
constituted a quorum. The Chairman called the meeting to order.
Chairman's Remarks: (Omitted)

I. Discussion Items
Discussion Item (1)Subject: Amend the Articles of Incorporation. (Proposed by the Board of Directors)
Explanatory Notes:
a. To comply with Article 170 of the Company Act.
b. To comply with Article 235, 235-1 and 240 of the Company Act.
c. The date of the annual meeting of the shareholders is confirmed and the company hereby proposes
to amend Article 24 of the Articles of Incorporation.
d. Please refer to Attachment I, Comparison table for the Articles of Incorporation.
e. It is submitted for approval.
-1-Resolution:
Votes in favor: 315,749,553 votes (including 311,144,252 votes casted electronically), 82.95% of
the total represented share present;
Votes against: 313,355 votes (including 313,355 votes casted electronically);
Votes invalid: 0 votes (including 0 votes casted electronically);
Abstention and no votes: 64,602,744 votes (including 64,418,761 votes casted electronically)
Resolved, the above proposal was approved as proposed.

II. Report Items(1) The operating result of 2015(Please refer to Attachment II)(2) Audit Committee’s review report(Please refer to Attachment III)(3) 2015 remuneration report of employees and directors
Explanatory Notes:
The remuneration of 2015 profit to employees would be NTD 35,703,755 (distributed by cash); andthat to directors would be NTD 5,040,000. The estimated remuneration to employees is NTD
34,908,959 and the different amount should be NTD 794,796; the estimated remuneration to directors
is NTD 6,328,785 and the different amount should be NTD 1,288,785. The difference will berecognized as expense in the statement of income in 2016.
(4) The status of endorsements and guarantees
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 1,500,000 thousand by the end of 2015.
Pursuant to the Company’s “Procedures for Endorsement and Guarantee”, the limit of guarantee was
NTD 8,200,832 thousand (approximate JPY 28,400,000 thousand).

III. Proposed Items(1) Adoption of 2015 Business Report and Financial Statements (Proposed by the Board of Directors)
Explanatory Notes:
a. The separate financial statement and consolidated financial statement of the Company for the year-2-

of 2015 have been audited by independent auditors, Mr. Chun - Yao, Lin and Mr. Chien - Hung
Chou, of the Pricewaterhouse Coopers. The Business Report, Independent Auditors’ Report and
Financial Statements are hereby also attached. (Please refer to Attachment II、IV and V)
b. It is submitted for ratification.
Resolution:
Votes in favor: 316,080,688 votes (including 311,475,387 votes casted electronically), 83.03% of
the total represented share present;
Votes against: 2,140 votes (including 2,140 votes casted electronically);
Votes invalid: 0 votes (including 0 votes casted electronically);
Abstention and no votes: 64,582,824 votes (including 64,398,841 votes casted electronically)
Resolved, the above proposal was approved as proposed.

(2) Adoption of the proposal for distribution of 2015 earnings (Proposed by the Board of Directors)
Explanatory Notes:
a. For appropriations of 2015 earnings, the Company will distribute cash dividend of NTD
2,929,179,390 from the available retained earnings of 2015 after setting aside legal reserve andspecial reserve.
b. Please refer to page 4 for the chart of 2015 earnings distribution.
c. Cash dividends will be distributed proportionately according to shareholders’ shares ownershipregistered 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 buyback ofcompany shares, or transfer or cancellation of treasury stock, it is proposed that the Chairman of theBoard be authorized to adjust the cash to be distributed to each common share.
e. It is submitted for ratification.
Resolution:
Votes in favor: 316,083,688 votes (including 311,478,387 votes casted electronically), 83.03% of
the total represented share present;
Votes against: 2,140 votes (including 2,140 votes casted electronically);
Votes invalid: 0 votes (including 0 votes casted electronically);
Abstention and no votes: 64,579,824 votes (including 64,395,841 votes casted electronically)
Resolved, the above proposal was approved as proposed.

-3-

Transcend Information, Inc.
The Chart of 2015 Earnings Distribution
For the year ended December 31, 2015
(Expresses in of New Taiwan dollars)
Item

AmountUnappropriated retained earnings at beginning

Remarks

4,770,705,070

Add: Adjustment on unappropriated earnings for2015(

2,282,862)

Adjusted unappropriated retained earnings

4,768,422,208

Add: Net income for 2015

3,221,902,194

Less: Legal reserve (10%)

322,190,219

Less: Special reserve

21,690,772

Retained earnings available for appropriation asof December 31, 2015

7,646,443,411

Less: Items of distribution Cash dividend to shareholders
Unappropriated retained earnings at end

Chairperson:
Shu, Chung-Wan

2,929,179,390

Cash dividend(NTD $6.8 per share)

4,717,264,021

Managerial Officers:
Shu, Chung-Cheng-4-

Accounting Officers:
Lu, Chih-Yuan

IV. Special Motions
There is no special motion, the meeting was adjourned.
V. Meeting Adjourned-5-Attachment I
TRANSCEND INFORMATION INC.
COMPARISON TABLE FOR THE “ARTICLES OF INCORPORATION”
Proposed Amendment

Currently in EffectExplanation

Section III - Shareholders’ meetings

Section III - Shareholders’ meetings

To comply with Article 170 of the

Article 9：

Article 9：Company Act.

Shareholders’ meetings of the

Shareholders’ meetings of the

Corporation are of two types, namely:

Corporation are of two types, namely:(1) regular meetings and (2) special(1) regular meetings and (2) special

meetings.

meetings.

Regular meetings shall be convened at

Regular meetings shall be convened

least once a year, and within 6 months

within 6 months after the close of each

after the close of each fiscal year.

fiscal year. Special meetings may beSpecial meetings shall be convened inconvened in accordance withaccordance with applicable laws andapplicable laws and regulations

regulations whenever necessary.

whenever necessary. Written notices

Written notices shall be sent to all

shall be sent to all shareholders for theshareholders, at least 30 days inconvening of shareholders’ meetings,

advance; and at least 15 days inat least 30 days in advance, in case ofadvance, in case of special meetings.

regular meetings; and at least 15 daysin advance, in case of special meetings.

Section VI - Accounting

Section VI - Accounting

For the trend for expenditure of

Article 22：

Article 22：

employee bonus shares, employees are

If the Company has earnings after the

If the Company has earnings after the

not the subject of earnings distribution.

annual final accounting, it shall pay

annual final accounting, it shall be

To comply with Article 235, 235-1 andremuneration to employees at theallocated in the following order:

240 of the Company Act, an fixedminimum of 1% of the profit, and pay

1. To pay taxes.

amount or ratio of distributable profit

remuneration to directors at the

2. To cover accumulated losses, if any.

by the current year as employees' andmaximum of 0.2% of the profit.

3. To appropriate 10% legal reserve

directors’ compensation shall be

However, the Company's accumulated

unless the total legal reserve

definitely specified in the Articles oflosses shall have been covered.

accumulated has already reached theIncorporation.

Employees’ remuneration could beamount of the Company’s authorized

To comply with Rule No.

paid by cash or stock, and in the event

capital.

10402427800 issued by the MEA, theof stock payment, employees shall

4. To set aside special reserve in

Company shall definitely specify amean the Company’s employees andaccordance with the regulations

maximum ratio of distributable profit-6-

Proposed Amendment

Currently in Effect

employees serving with affiliates who

5. To reserve certain amount, on theby the current year as directors’

meet specific requirements. Suchpremise that there is no effect on thecompensation.

specific requirements shall beCompany’s normal operations and no

The Policy about employees' andprescribed by the board of directors.

violation of regulations, for

directors’ compensation is defined inmaintaining stability of dividends.

Article 22; the original Paragraph 1 to

6. To pay remuneration to directors

5 and 8 of Article 22 are defined inand supervisors at 0.2% of the balance

Article 22-1; original Article 22-1 isafter withholding the amounts under

defined in Article 22-2

subparagraphs 1 to 5.
7. To pay bonus to employees at 1%
minimum of the balance after
withholding the amounts undersubparagraphs 1 to 5. (The employees
to receive stock bonus may include
Transcend’s employees and employees
serving with affiliates who meet
specific requirements. Such specificrequirements shall be prescribed by theboard of directors.)
8. For any remainder, the board of
directors shall propose allocation ratios
and propose them at the shareholders’meeting.
Regarding the special reserve undersubparagraphs 4, the Company shallset aside special reserve, equal to thedebit balance which happen at thecurrent 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-7-

Explanation

Proposed Amendment

Currently in EffectExplanation

retained earnings prior year. If thedebit balance is cumulative before, theCompany shall set aside special
reserve not to distribute it from theunappropriated retained earnings prioryear. When debit balance on other
equity items is reversed subsequently,
the reversed amount could be includedin the distributable earnings.
Article 22-1

Original Paragraph 1 to 5 and 8 of

For the trend for expenditure of

If the Company has earnings after the

Article 22.

employee bonus shares, employees areannual final accounting, it shall be

not the subject of earnings distribution.

allocated in the following order:

To comply with Article 235, 235-1 and1. To pay taxes.

240 of the Company Act, an fixed

2. To cover accumulated losses, if any.

amount or ratio of distributable profit

3. To appropriate 10% legal reserveby the current year as employees' andunless the total legal reserve

directors’ compensation shall be

accumulated has already reached thedefinitely specified in the Articles ofamount of the Company’s authorized

Incorporation.

capital.

To comply with Rule No.

4. To set aside special reserve in

10402427800 issued by the MEA, theaccordance with the regulations

Company shall definitely specify a

5. To reserve certain amount, on the

maximum ratio of distributable profit

premise that there is no effect on theby the current year as directors’Company’s normal operations and nocompensation.

violation of regulations, for

The Policy about employees' andmaintaining stability of dividends.

directors’ compensation is defined in

6. For any remainder, the board of

Article 22; the original Paragraph 1 todirectors shall propose allocation ratios

5 and 8 of Article 22 are defined inand propose them at the shareholders’

Article 22-1; original Article 22-1 ismeeting.

defined in Article 22-2

Regarding the special reserve undersubparagraphs 4, the Company shallset aside special reserve, equal to the-8-Proposed Amendment

Currently in EffectExplanation

debit balance which happens at thecurrent 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 unappropriatedretained earnings prior year. If thedebit balance is cumulative before, theCompany shall set aside special
reserve not to distribute it from theunappropriated retained earnings prioryear. When debit balance on other
equity items is reversed subsequently,
the reversed amount could be includedin the distributable earnings.

Article 22-2

Original Article 22-1.

For the trend for expenditure of

The Company distributes dividends

employee bonus shares, employees aretaking into consideration the

not the subject of earnings distribution.

Company's economic environment andTo comply with Article 235, 235-1 andgrowth phases, future demands of

240 of the Company Act, an fixed

funds, long-term financial planning,

amount or ratio of distributable profit

and the cash flows that theby the current year as employees' andstockholders desire. Cash dividends

directors’ compensation shall beshall account for at least 5% of thedefinitely specified in the Articles of

total dividend distributed.

Incorporation.
To comply with Rule No.
10402427800 issued by the MEA, theCompany shall definitely specify amaximum ratio of distributable profit
by the current year as directors’compensation.

-9-

Proposed Amendment

Currently in EffectExplanation
The Policy about employees' anddirectors’ compensation is defined in
Article 22; the original Paragraph 1 to
5 and 8 of Article 22 are defined in
Article 22-1; original Article 22-1 isdefined in Article 22-2

Article 24

Article 24

Article 9, 22 and 22-1 of the Articles

These Articles of Incorporation wereThese Articles of Incorporation wereof Incorporation were amended andadopted on August 23, 1989.
The first amendment was made on

adopted on August 23, 1989.
The first amendment was made on

Article 22-2 of the Articles ofJanuary 28, 1991.

January 28, 1991.

resolution of 5th Board of Directors

The second amendment was made on

The second amendment was made on

Meeting in 2015.

May 25, 1992.

May 25, 1992.

The third amendment was made on

The third amendment was made on

September 1, 1992.

September 1, 1992.

The fourth amendment was made on

The fourth amendment was made on

July 30, 1994.

July 30, 1994.

The fifth amendment was made on

The fifth amendment was made on

June 8, 1995.

June 8, 1995.

The sixth amendment was made on

The sixth amendment was made on

July 8, 1997.

July 8, 1997.

The seventh amendment was made on

The seventh amendment was made on

August 15, 1997.

August 15, 1997.

The eighth amendment was made on

The eighth amendment was made on

September 12, 1997.

September 12, 1997.

The ninth amendment was made on

The ninth amendment was made on

June 20, 1998.

June 20, 1998.

The 10th amendment was made on

The 10th amendment was made on

September 15, 1998.

September 15, 1998.

The 11th amendment was made on

The 11th amendment was made on

June 12, 1999.

June 12, 1999.

The 12th amendment was made on

The 12th amendment was made on

April 15, 2000.

April 15, 2000.

The 13th amendment was made on

The 13th amendment was made on- 10 -

Incorporation was added by theProposed Amendment

Currently in Effect

April 9, 2001.

April 9, 2001.

The 14th amendment was made on

The 14th amendment was made on

June 10, 2002.

June 10, 2002.

The 15th amendment was made on

The 15th amendment was made on

June 3, 2003.

June 3, 2003.

The 16th amendment was made on

The 16th amendment was made on

June 11, 2004.

June 11, 2004.

The 17th amendment was made on

The 17th amendment was made on

June 13, 2005.

June 13, 2005.

The 18th amendment was made on

The 18th amendment was made on

June 14, 2006.

June 14, 2006.

The 19th amendment was made on

The 19th amendment was made on

June 11, 2007.

June 11, 2007.

The 20th amendment was made on

The 20th amendment was made on

June 13, 2008.

June 13, 2008.

The 21th amendment was made on

The 21th amendment was made on

June 16, 2009.

June 16, 2009.

The 22th amendment was made on

The 22th amendment was made on

June 17, 2010.

June 17, 2010.

The 23th amendment was made on

The 23th amendment was made on

June 10, 2011.

June 10, 2011.

The 24th amendment was made on

The 24th amendment was made on

January 5, 2012.

January 5, 2012.

The 25th amendment was made on

The 25th amendment was made on

June 13, 2013.

June 13, 2013.

The 26th amendment was made on

The 26th amendment was made on

June 12, 2014.

June 12, 2014.

The 27th amendment was made on
June 14, 2016.

- 11 -

Explanation

Attachment II

TRANSCEND INFORMATION INC.
BUSINESS REPORT2015 was a year with significant challenges for memory module industry. As Flash and DRAM
market supply exceeded demand, the prices of Flash and DRAM steadily decreased, therefore driving
down profit margin of the end-user products. Transcend, as a leading manufacturer of storage andindustrial-grade products, has executed our business strategy of deriving a greater portion of revenue
from high-margin projects, especially in industrial and embedded applications, and developing new
products to fulfill the demands of various applications needs. Despite that memory market was
shrinking in 2015, Transcend’s profit remained at the leading position in Taiwan. Hereby, we would
like to thank our valued shareholders, clients, suppliers and employees for your continued supports ofTranscend.
Transcend’s consolidated revenue totaled NT$24.9 billion in 2015. Consolidated gross profit
totaled NT$4.7 billion. Gross profit rate is 18.9 percent. Operating income totaled 3.05 billion. Income
before tax totaled 3.71 billion. Net income totaled 3.22 billion. EPS is NT$ 7.48 calculated at theweighted average of outstanding share capital amounting to 4.3 billion.
With our excellent brand operation, Transcend has been awarded by its innovative products andsuperior product quality. For the ninth year in a row, Transcend Information appears on Interbrand's
Best Taiwan Global Brands ranking. Our cutting-edge products have won Taiwan Excellence Awardfor eleventh consecutive year. Moreover, Transcend’s DrivePro 520 Dual Lens Car Video Recorderand JetDrive Lite Expansion Cards received the prestigious "Good Design Award 2015" for the top
design quality.
As a leading brand in the market, Transcend has managed to satisfy the fast-changing industrial
environment and demands of customers. This year, the solid state drives (SSD) market is expected to
grow due to their advantages over traditional hard disk drives. Since the price of SSD dropped to asweet spot that stimulate surging demands, Transcend’s sales revenue of SSD has reached record high.
Meanwhile, by broadening industrial product portfolio and offering customized solutions, Transcend
has generated steady profit growth with consistent increase of market share of industrial and embedded
applications. In addition to industrial products, we also invest in strategic products such as body
cameras and car video recorders to expand the memory applications in the multimedia market.

- 12 -

Transcend focuses not only on sales performance, but also on corporate social responsibility.
Through a concerted effort to strengthen information disclosure, Transcend ranked in the top 20% oflisted company on “Corporate Governance Evaluation” conducted by the Securities and Futures
Institute (SFI) in 2014. Besides, we have sponsored sport activities in high school and universities,
including the High School Basketball League (HBL) and the Black Panther High School BaseballTournament, for over five years. We also kicked off a long-term Basball Mentoring Program aimed atunderprivileged school children last year, expecting to serve as a platform for young promisingathletes to fulfill their baseball dreams. Last year was the second year we received the “Sports
Activists Award” from the Sports Affairs Council as our continuing contribution to promote sports in
Taiwan.
Looking to 2016, memory market will still struggle with the oversupply problem and falling
DRAM and NAND Flash prices. Besides, the rising China supply chain competing in the market may
also be an influential factor to the future memory industry. Thus, the ability to quickly respond to themarket's changing needs is the key to remain a company’s revenue and profit.
In addition to implementing effective inventory management and purchasing strategy, Transcend
will continue to invest in research and development, as well as provide integrated service to our clients
through our 13 branches worldwide. Owing to the drastic drops in SSD pricing and its rising
popularity, we think we have a good opportunity for profitable growth during the year to come. Also,
we will continue to innovate with strategy product lines in consumer market to fulfill a broad range ofmultimedia applications.
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- 13 -

Accounting Supervisor：Lu, Chih-Yuan

Attachment III

Audit Report of Audit Committee

The Board of Directors has prepared the Company’s 2015 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:

March 10, 2016

- 14 -

Wang, Yi-Shin

Attachment IV
REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Stockholders of Transcend Information, Inc.
We have audited the accompanying separate balance sheets of Transcend Information, Inc. as ofDecember 31, 2015 and 2014 and the related separate statements of comprehensive income, of changes
in equity, and of cash flows for the years ended December 31, 2015 and 2014. These separate financial
statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
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. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

- 15 -

In our opinion, the separate financial statements referred to in the first paragraph present fairly, in allmaterial respects, the financial position of Transcend Information, Inc. as of December 31, 2015, andDecember 31, 2014, and financial performance and cash flows for the years then ended in conformity
with the "Rules Governing the Preparation of Financial Statements by Securities Issuers".

March 10, 2016
Taipei, Taiwan
Republic of China------------------------------------------------------------------------------------------------------------------------------------------------The accompanying separate financial statements are not intended to present the financial position and results of operations
and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the
Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial
statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China.
Accordingly, the accompanying separate financial statements and report of independent accountants are not intended foruse by those who are not informed about the accounting principles or auditing standards generally accepted in the Republicof 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.

- 16 -

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

December 31, 2015
AMOUNT%

December 31, 2014
AMOUNT
%

10,867,629

45

15,768Current assets
Cash and cash equivalents$$

10,807,417

40-

53,545-607,9173

585,525

2

959

-

-

-

2,000,096

8

1,709,341

6

parties, net

914,0174

1,178,290

5

Other receivables

128,7381

254,029

1

Inventories, net

4,219,148

18

6,041,633

22

Other current assets

15,568-14,175-Current Assets

18,769,840

79

20,643,955

76

184,3041

232,6391

method2,928,897

12

4,087,977

15

Property, plant and equipment

1,718,153

7

1,798,337

7

Investment property, net

213,2961

214,878

1

Deferred tax assets

42,780-64,006-

Other non-current assets

46,592-

88,941-

Non-current Assets

5,133,950

21

6,486,778

24

23,903,790

100

27,130,733

100

Current financial assets at fair value
through profit or loss
Current bond investments without active
marketNotes receivable, net
Accounts receivable, net
Accounts receivable due from related

Non-current assets
Available-for-sale financial
assets-non-current
Investments accounted for using equity

Total Assets$(Continued)

~17~

$

TRANSCEND INFORMATION, INC.
SEPARATE BALANCE SHEETS(Expressed in thousands of New Taiwan Dollars)
December 31, 2015
AMOUNT%

Liabilities and Equity

December 31, 2014
AMOUNT%

Current liabilities
Short-term borrowings$

492,3752

13$506,400

2

-

-

-

-

-

7

-

1,495,689

6

3,090,479

12

Accounts payable to related parties

566,4633

1,679,508

6

Other payables

298,5121

350,741

1

86

-

988

-

Current tax liabilities

269,3361

271,173

1

Other current liabilities

2,134

-

3,442

-

Current Liabilities

3,124,608

13

5,902,738

22

Deferred tax liabilities

259,1101

485,121

2

Other non-current liabilities

17,991-

24,269-Non-current Liabilities

277,1011

509,39023,401,709

14

6,412,128

24

4,307,617

18

4,307,617

16

4,799,075

20

4,799,075

18

Legal reserve

3,426,756

14

3,053,235

11

Unappropriated retained earnings

7,990,324

34

8,504,167

31

21,691)-54,511-

20,502,081

86

20,718,605

76

23,903,790

100

27,130,733

100

Financial liabilities at fair value throughprofit or loss - current
Notes payable
Accounts payable

Other payables to related parties

Non-current liabilities

Total Liabilities
Share capital
Common stock
Capital surplus
Capital surplus
Retained earnings

Other equity interest
Other equity interest(

Total Equity
Commitments and contingent liabilities
Significant subsequent event
Total Liabilities and Equity

$

~18~

$

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

Items
Operating Revenue
Operating Costs
Gross Profit
Unrealized gain fromintercompany transaction
Realized gain from intercompany
transaction
Gross Profit, net
Operating Expenses
Sales and marketing expenses
General and 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 gain 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
Components of othercomprehensive income that will
not be reclassified to profit or loss
Losses on remeasurements ofdefined benefit plans
Components of othercomprehensive income that will bereclassified to profit or loss
Cumulative translation differences
for foreign operations
Unrealized loss onavailable-for-sale financial assets
Income tax on othercomprehensive income
Total Comprehensive Income
Earnings Per Share
Basic earnings per share
Diluted earnings per share$(

For the years ended December 31,
2015
2014
AMOUNT%AMOUNT%
24,021,076
100 $
26,325,967
100
20,267,171) (84) (21,777,028) (83)
3,753,905
16
4,548,939
17(

34,559)- (70,857)-70,8573,790,203

16

87,8894,565,971

17

572,201) (198,052) (134,062) (904,315) (2,885,888

2) (
1) (
1) (
4) (
12

629,163) (205,987) (174,011) (1,009,161) (3,556,810

2)
1)
1)
4)
13

(

144,734
502,588
1,657)

2- (172,465
430,406
6,248)

1
2-(

2,415)-

151,325-$

643,250
3,529,138
307,236) (3,221,902

2
14
1) (
13 $

747,948
4,304,758
569,553) (3,735,205

3
16
2)
14

($

2,283)- ($(33,575)

(

(
(
(
(

(

$
$
$

86)

-

-

92,968-48,335)- ($31,783)-

5,708
3,143,417

- (
13 $

15,805)3,780,499

14

7.48
7.47

~19~

$
$

8.67
8.66

TRANSCEND INFORMATION, INC.
SEPARATE STATEMENTS OF CHANGES IN EQUITY(Expressed in thousands of New Taiwan Dollars)
Capital Reserves

Retained Earnings

Common stock

Additional
paid-in capital

Capital surplus,
donated assets
received

Capital surplus,
net assets frommergerLegal reserve

Unappropriatedretained earnings

Other equity interest
Currencytranslation
Unrealized gain or
differences ofloss onavailable-for-saleforeign
operations
financial assets

$

$

$

$

$

2,733,339$$

Total equity$ 19,824,209

For the year ended December 31, 2014
Balance at January 1, 2014

4,307,617

4,759,841

4,106

35,128

7,975,047

27,764($

18,633 )Appropriations of 2013 earnings: (Note 1)
Legal reserve

-

-

-

-

319,896(

319,896 )--Cash dividends

-

-

-

-

-

(

2,886,103 )--Net income for the year

-

-

-

-

-

3,735,205--

Other comprehensive income for the year

-

-

-

-

-

(

Balance at December 31, 2014

86 )

(

2,886,103 )
3,735,205

77,163(31,783 )45,294$

4,307,617$

4,759,841

$

4,106

$

35,128$3,053,235$

8,504,167$

104,927($

50,416 )$ 20,718,605$

4,307,617$

4,759,841

$

4,106

$

35,128$3,053,235$

8,504,167$

104,927($

50,416 )$ 20,718,605

For the year ended December 31, 2015
Balance at January 1, 2015
Appropriations of 2014 earnings: (Note 2)
Legal reserve

-

-

-

-

373,521(373,521 )--Cash dividends

-

-

-

-

-

(

3,359,941 )--Net income for the year

-

-

-

-

-

3,221,902--

Other comprehensive income (loss) for the year

-

-

-

-

-

(

3,426,756$

Balance at December 31, 2015$

4,307,617$

4,759,841

$

4,106

$

35,128$Note 1: Directors’ remuneration amounting to $5,192 and employees’ remuneration (bonus) amounting to $25,962 had been deducted from the separate statement of income in 2013.
Note 2: Directors’ remuneration amounting to $6,049 and employees’ remuneration (bonus) amounting to $30,243 had been deducted from the separate statement of income in 2014.

~20~

2,283 )
7,990,324(

3,359,941 )
3,221,902(

27,867 )(48,335 )(78,485 )$77,060($98,751 )$ 20,502,081

TRANSCEND INFORMATION, INC.
SEPARATE STATEMENTS OF CASH FLOWS(Expressed in thousands of New Taiwan Dollars)Year ended December 31
2015
2014
CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax for the year
Adjustments to reconcile profit before tax to net cash provided by operating
activities:
Income and expenses having no effect on cash flows
Unrealized gain from intercompany transaction
Realized gain from intercompany transaction
Net gains on financial assets at fair value through profit or loss
Gain on disposal of financial assets
Share of gain of associates and joint ventures accounted for using equity
methodProvision for bad debt expense
Depreciation expense
Net loss on financial liabilities at fair value through profit or loss
Interest expense
Interest income
Dividend income
Gain on disposal of property, plant and equipment
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Notes and accounts receivable
Other receivables
Inventories
Other current assets
Net changes in liabilities relating to operating activities
Notes and accounts payable
Other payables
Other payables to related parties
Other current liabilities
Other non-current liabilities
Cash generated from operations
Cash dividends received
Interest received
Interest paid
Income tax paid
Net cash provided by operating activities$

3,529,138

34,55970,857 )
37,777
343 )

(
(

(
(

(

(
(
(
(
(

4,304,758

70,857
87,889 )53,545 )10,804 )

(
(
(

2,415
3,550
133,619
13
1,657
136,145 )11,016 )
-

(

(
(
(

164,053 )
13,781 )525 )40,750 )118,351
1,822,485
1,393 )((((

137,464 )11,555 )1,328,465 )
1,048 )

2,707,842 )
52,229 )902 )1,308 )
759
2,661,538
1,170,843
143,085
1,657 )
508,078 )3,465,731(($

151,325 )
12,463
126,323-

863,255
73,637988
1,173 )
22,8883,513,542
13,781
159,087
6,248 )
448,865 )3,231,297(((

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of bond investments without active markets
Disposal of bond investments without active markets
Acquisition of property, plant and equipment (including investment
property)
Proceeds from disposal of property, plant and equipment
Increase in investments accounted for using equity method(Increase) decrease in other non-current assets
Net cash used in investing activities(

751,339 )729,290(

765,473 )
265,265(

51,853 )42,34931,553 )(64,341 )695
103,008 )
70,564 )
737,426 )

(

(
(
(

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Payment of cash dividends (including cash distribution of capital reserve)
Net cash used in financing activities(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

~21~

(
(
(

$

14,025 )3,359,941 )
3,373,966 )
60,212
10,807,417
10,867,629

(
(
(
$

211,260
2,886,103 )
2,674,843 )
180,972 )
10,988,389
10,807,417

Attachment V
REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR15000292
To the Board of Directors and Stockholders of Transcend Information, Inc.
We have audited the accompanying consolidated balance sheets of Transcend Information, Inc. and its
subsidiaries as of December 31, 2015 and 2014 and the related consolidated statements of comprehensive
income, of changes in equity, and of cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
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. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Transcend Information, Inc. and its subsidiaries as of December 31,
2015 and 2014, and their financial performance and cash flows for the years then ended in conformity
with the “Rules Governing the Preparations of Financial Statements by Securities Issuers” and theInternational Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations,and SIC Interpretations as endorsed by the Financial Supervisory Commission.

~22~

We have also audited the parent company only financial statements of Transcend Information, Inc. (notpresented herein) as of and for the years ended December 31, 2015 and 2014, and have expressed an
unqualified opinion on such financial statements.

March 10, 2016
Taipei, Taiwan
Republic of China~23~

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

December 31, 2015
AMOUNT%

Assets

December 31, 2014
AMOUNT%

Current assets
Cash and cash equivalents$

11,195,368

46

15,768$

11,565,344

44-

53,545-897,1804

637,025

3

959

-

-

-

3,203,340

13

2,993,131

11

9,347

-

-

-

Other receivables

129,0311

283,316

1

Inventories, net

4,513,756

19

6,364,987

24

Other current assets

52,486-44,515-Current Assets

20,017,235

83

21,941,863

83

184,3041

232,6391

317,5551

332,59312,995,091

13

3,160,974

12

Investment property, net

290,5811

298,614

1

Deferred tax assets

72,777-92,319

1

Other non-current assets

185,7061

234,2381

Non-current Assets

4,046,014

17

4,351,377

17

24,063,249

100

26,293,240

100

Current financial assets at fair value
through profit or loss
Current bond investments without active
marketNotes receivable, net
Accounts receivable, net
Accounts receivable- related parties, net

Non-current assets
Available-for-sale financial
assets-non-current
Investments accounted for using equity
methodProperty, plant and equipment, net

Total Assets$(Continued)

~24~

$

Liabilities and Equity

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Expressed in thousands of New Taiwan Dollars)
December 31, 2015
AMOUNT%

December 31, 2014
AMOUNT%

Current liabilities
Short-term borrowings$

901,425

4

profit or loss - current

13

Notes payable$

903,300

4

-

-

-

-

-

8

-

1,589,112

73,202,531

12

Accounts payable to related parties

58,560-74,185-

Other payables

366,9322

475,052

2

Current tax liabilities

280,8611

319,927

1

Other current liabilities

36,092-60,063-Current Liabilities

3,232,995

14

5,035,066

19

Deferred tax liabilities

259,3481

485,378

2

Other non-current liabilities

68,825-54,191-

Non-current Liabilities

328,1731

539,5692

3,561,168

15

5,574,635

21

4,307,617

18

4,307,617

16

4,799,075

20

4,799,075

18

Legal reserve

3,426,756

14

3,053,235

12

Unappropriated retained earnings

7,990,324

33

8,504,167

32

21,691)-54,511

1

parent20,502,081

85

20,718,605

79

Total Equity

20,502,081

85

20,718,605

79

24,063,249

100

26,293,240

100

Financial liabilities at fair value throughAccounts payableNon-current liabilities

Total Liabilities
Share capital
Common stock
Capital surplus
Capital surplus
Retained earnings

Other equity interest
Other equity interest(

Total equity attributable to owners of

Significant contingent liabilities andunrecognized contract commitments
Significant subsequent event
Total Liabilities and Equity

$

~25~

$

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

Items
Operating Revenue
Operating Costs
Gross Profit
Operating Expenses
Sales and marketing expenses
General and 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) gain of associates andjoint ventures accounted for underequity method
Total non-operating income andexpensesProfit before Income Tax
Income tax expense
Profit for the Year
Other Comprehensive Income
Components of othercomprehensive income that will not
be reclassified to profit or loss
Losses on remeasurements ofdefined benefit plans
Components of othercomprehensive income that will bereclassified to profit or loss
Cumulative translation differences
for foreign operations
Unrealized loss on available-for-salefinancial assets
Income tax on other comprehensive
incomeTotal Comprehensive Income
Net Profit attributable to:
Owners of parent
Comprehensive Income attributableto:Owners of parent
Earnings Per Share
Basic earnings per share
Diluted earnings per share$(

Year ended December 31
2015
2014 (Adjusted)
AMOUNT%AMOUNT
24,913,287
100 $
27,219,495
20,211,736) (81) (21,678,630) (4,701,551
19
5,540,865

(
(
(
(

%
100
80)
20

1,096,006) (419,887) (134,062) (1,649,955) (3,051,596

4) (
2) (
1) (
7) (
12

1,180,034) (439,532) (174,011) (1,793,577) (3,747,288

4)
1)
1)
6)
14

(

162,637
517,669
3,636)

1
2- (193,524460,0218,209)

1
1-(

15,038)

-

8,330

-

$

661,632
3,713,228
491,326) (3,221,902

3
15
2) (
13 $

653,666
4,400,954
665,749) (3,735,205

2
16
2)
14

($

2,283)- ($(33,575)

(

(

86)

-

-

92,968-48,335)- (31,783)

-

$

5,708
3,143,417

- (
13 $

15,805)3,780,499

14$

3,221,902

13$

3,735,205

14$

3,143,417

13$

3,780,499

14

7.48
7.47

$
$

$
$

~26~

8.67
8.66

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(Expressed in thousands of New Taiwan Dollars)

Capital Reserves

Equity attributable to owners of the parent
Retained Earnings

Common stock

Additional
paid-in capital

Capital surplus,
donated assets
received

Capital surplus,
net assets frommergerLegal reserve

$

$

$

$

$

Unappropriatedretained earnings

Other equity interest
Currencytranslation
Unrealized gain or
differences ofloss onforeignavailable-for-sale
operations
financial assets

Total equity

2,733,339$$$ 19,824,209

Year ended December 31, 2014
Balance at January 1, 2014

4,307,617

4,759,841

4,106

35,128

7,975,047

27,764($

18,633 )Appropriation of 2013 earnings
Legal reserve

-

-

-

-

319,896(

319,896 )--Cash dividends

-

-

-

-

-

(

2,886,103 )--Net income for the year

-

-

-

-

-

3,735,205--

Other comprehensive income (loss) for the year

-

-

-

-

-

(

Balance at December 31, 2014

86 )

(

2,886,103 )
3,735,205

77,163(31,783 )45,294$

4,307,617$

4,759,841

$

4,106

$

35,128$3,053,235$

8,504,167$

104,927($

50,416 )$ 20,718,605$

4,307,617$

4,759,841

$

4,106

$

35,128$3,053,235$

8,504,167$

104,927($

50,416 )$ 20,718,605

Year ended December 31, 2015
Balance at January 1, 2015
Appropriations of 2014 earnings
Legal reserve

-

-

-

-

373,521(373,521 )--Cash dividends

-

-

-

-

-

(

3,359,941 )--Net income for the year

-

-

-

-

-

3,221,902--

Other comprehensive loss for the year

-

-

-

-

-

(

3,426,756$

Balance at December 31, 2015$

4,307,617$

4,759,841

$

~27~

4,106

$

35,128$2,283 )
7,990,324(

3,359,941 )
3,221,902(

27,867 )(48,335 )(78,485 )$77,060($98,751 )$ 20,502,081

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Expressed in thousands of New Taiwan Dollars)Year ended December 31
2015
2014
CASH FLOWS FROM OPERATING ACTIVITIESConsolidated profit before tax for the year
Adjustments to reconcile profit before tax to net cash provided by operating
activities:
Income and expenses having no effect on cash flows
Net loss (gain) on financial assets at fair value through profit or loss
Gain on disposal of financial assets
Share of loss (gain) of associates and joint ventures accounted for using
equity method
Provision for bad debt expense
Net loss on financial liabilities at fair value through profit or loss
Depreciation
Interest income
Interest expense
Dividend income
Loss on disposal of property, plant and equipment
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Other current assets
Net changes in liabilities relating to operating activities
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash generated from operations
Cash dividends received
Interest received
Interest paid
Income tax paid
Net cash provided by operating activities

$

(

(
(

(
(
(

3,713,228

(
(
(
(
(

(
(

53,545 )13,023 )15,0382,549
13243,897
143,861 )3,636
11,016 )960(

8,330 )
13,200236,547
176,359 )8,209
13,781 )1,800

8)1,613,419 )
15,625 )108,120 )23,971 )12,351
3,846,310
11,016
179,906
3,636 )
731,172 )3,302,424((

4,400,954

37,7784,888 )

959 )
213,426 )
9,347 )
118,240
1,851,231
7,971 )

(

$

(
(

4,158
274,609 )23,247 )1,289,048 )8,204 )(((((

1,207 )
532,947
28,384
81,242
10,0504,756
3,460,894
13,781
170,818
8,209 )
525,162 )3,112,122((

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of bond investments without active markets
Acquisition of bond investments without active markets
Acquisition of property, plant and equipment (including investment
property)
Proceeds from disposal of property, plant and equipment
Increase in investments accounted for using equity method
Decrease (increase) in other non-current assets
Net cash used in investing activities

1,463,601
1,722,585 )((

87,083 )381
48,532
297,154 )(364,425
862,978 )((

23,399 )9,939
103,008 )
70,658 )685,679 )(((CASH FLOWS FROM FINANCING ACTIVITIES(Decrease) increase in short-term borrowings
Payment of cash dividends
Net cash used in financing activities
Effect of foreign exchange rate changes
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(
(
(
(
(
$

- 28 -

14,025 )3,359,941 )
3,373,966 )
1,280 )
369,976 )
11,565,344
11,195,368

(
(
(
$

343,560
2,886,103 )2,542,543 )
41,93974,161 )
11,639,505
11,565,344